Benjamin & Bardot

[2010] FamCAFC 252

FAMILY COURT OF AUSTRALIA

BENJAMIN & BARDOT [2010] FamCAFC 252

FAMILY LAW – APPEAL – From a Family Court Judge – Property

FAMILY LAW – APPEAL – PROPERTY - ADD-BACKS – Whether the orders of the trial Judge were in error in failing properly to take into account a liability of the wife as an indirect contribution of the husband – Where the wife borrowed money to pay for rental accommodation expenses – Chorn & Hopkins (2004) FLC 93-204 considered – Reasonable living expenses – Whether the trial Judge erred in failing to properly take into account the contributions of the husband – Norman & Norman [2010] FamCAFC 66 considered

FAMILY LAW – APPEAL – PROPERTY - SUPERANNUATION – Whether the trial Judge erred in his approach to s 75(2) of the Family Law Act 1975 (Cth) with respect to the husband’s superannuation interest – Coghlan & Coghlan (2005) FLC 93-220 considered

HELD – per Faulks DCJ and Le Poer Trench J:

Grounds 1 and 5: Add-Backs and Contributions – There is no requirement for a trial Judge to attribute a percentage assessment to each individual contribution in respect of each individual piece of property – A trial Judge is required to undertake an overall assessment of the respective contributions of the parties – the trial Judge did not err in his approach to the parties’ respective contributions

Grounds 4 and 7: The trial Judge was not required to treat the husband’s superannuation interest separately from the property or financial resources of the parties by references to factors that may have been attributable to that interest – The trial Judge was required to have regard to evidence properly adduced about the nature of the superannuation interest – There was no evidence before the trial Judge which would have enabled an adjustment pursuant to s 75(2) of the Family Law Act 1975 (Cth) to have been made as urged by the husband

HELD – per Boland J:

Grounds 1 and 5: The husband sought to isolate a single factual matter to demonstrate appealable error – Norbis & Norbis (1986) 161 CLR 513 and Farmer & Bramley (2000) FLC 93-060 considered – Approach taken by the husband was an over zealous concentration of one aspect of contribution – The trial Judge did not err in his assessment of contributions

Grounds 4 and 7: The trial Judge had no evidence about the form, nature and characteristics of the husband’s superannuation entitlement – Neither party sought a splitting order and respective superannuation entitlements were agreed – Orders of the trial Judge were to be realised from the proceeds of sale of the matrimonial home – No appealable error demonstrated in the circumstances – The trial Judge’s assessment of the parties’ respective contributions and factors pursuant to s 75(2) of the Family Law Act 1975 (Cth) was the proper exercise of a broad discretion

Appeal dismissed with costs.

Family Law Act 1975 (Cth): s 75(2), s 79(1), s 79(2), s 79(4)
Family Law Rules 2004: Chapter 19

Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All E.R. 343
Chorn & Hopkins (2004) FLC 93-204
Coghlan & Coghlan (2005) FLC 93-220
Farmer & Bramley (2000) FLC 93-060
Mallet v Mallet (1984) 156 CLR 605
Norbis & Norbis (1986) 161 CLR 513
Norman & Norman [2010] FamCAFC 66
Water Board v Moustakas (1988) 180 CLR 491

APPELLANT: Mr Benjamin

RESPONDENT: Ms Bardot

FILE NUMBER: SYF 4244 of 2006

APPEAL NUMBER: EA 4 of 2009

DATE DELIVERED: 20 December 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Faulks DCJ, Boland and Le Poer Trench JJ

HEARING DATE: 15 April 2010

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 26 November 2008

LOWER COURT MNC: [2008] FamCA 1011

REPRESENTATION

COUNSEL FOR THE APPELLANT: Ms M. De Vere

SOLICITOR FOR THE APPELLANT: Watts McCray Lawyers

COUNSEL FOR THE RESPONDENT: Mr M. Kearney

SOLICITOR FOR THE RESPONDENT: Gayle Meredith & Associates

Orders

1. The appeal EA 4 of 2009 is dismissed. 

2. The appellant, Mr Benjamin, pay the costs of and incidental to the appeal, as agreed and failing agreement in accordance with Chapter 19 of the Family Law Rules 2004.

IT IS NOTED that publication of this judgment under the pseudonym Benjamin & Bardot is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 4  of 2009
File Number: SYF 4244  of 2006

Mr Benjamin

Appellant

And

Ms Bardot

Respondent

REASONS FOR JUDGMENT

Faulks DCJ & Le Poer Trench J

Introduction

1. This was an appeal from orders of his Honour, O’Ryan J, of 26 November 2008 with respect to the distribution of the property of the parties pursuant to s 79(1) of the Family Law Act 1975 (Cth) (‘the Act’). The appellant husband is Mr Benjamin and the respondent wife is Ms Bardot. For convenience, we shall refer to the appellant and the respondent as the husband and wife respectively.

2. There were fifteen grounds of appeal identified in the Notice of Appeal filed 24 December 2008, but 11 of these were abandoned at the hearing of the appeal.  Following a discussion about the background of the parties’ dispute and the findings of the trial Judge, the remaining grounds of appeal are set out hereunder in our Judgment. 

3. As a matter of practice and where necessary throughout our Judgment, we have replicated the pursued grounds of appeal, the relevant paragraphs of his Honour’s Judgment, as well as the submissions and relevant evidence before the trial Judge without correction.

Orders made by the Trial Judge

1. The orders made by O’Ryan J with respect to the parenting issues that were in dispute between the parties (orders (1) to (13)) essentially provided for sharing of parental responsibility between the parties for the children, and for the children to primarily reside with the wife and for the children to spend substantial and significant time with the husband.  The orders with respect to the parenting arrangements between the parties are not subject of this appeal.

2. The orders made by O’Ryan J with respect to the property of the parties (orders (14) to (18)) essentially involved the parties’ effecting the sale of a property known as K, New South Wales (NSW) (“the [K] property”), with the proceeds to be distributed between the parties 47.6 per cent to the wife and the balance of 52.38 per cent to the husband.  His Honour also made declarations about sole legal and beneficial ownership of property in the parties’ respective possession (including superannuation interests).  There was an order for the wife to indemnify the husband with respect to liabilities arising from a mortgage secured on a property known as C, NSW (“the [C] property”).  There was also an Order about personal guarantees given by the wife for office plant and equipment and other liabilities in the wife’s name arising from her position as either director or shareholder of a corporation known as A Pty. Ltd. (“[A] Pty. Ltd.”).  A similar order was made for the husband to indemnify the wife against any resulting liabilities that may arise from transactions he may have entered into.  

3. Orders (19) to (22) made by O’Ryan J concerned the parties’ obligations (specifically the husband’s) for child support.  His Honour ordered departure from the Child Support Agency’s (CSA) assessments with respect to the husband, such that he was to pay the sum of $2,008.67 per month for both children.  The husband was also ordered to pay an administrative assessment in accordance with the Child Support (Assessment) Act 1989 (Cth) subsequent to 1 July 2013, with requisite increases occurring each year in line with the Child Support Inflation Factor as determined. O’Ryan J also ordered departure from the CSA assessment for school fees such that the husband pay 67.23 per cent and the wife pay 32.77 per cent of the private school tuition fees and associated expenses for the children’s attendance at the private school until the happening of a child support terminating event. His Honour also ordered that any payments of non‑periodic child support by the husband pursuant to his orders not be credited against any periodic support payable by the husband pursuant to his Honour’s orders.

4. O’Ryan J noted that departure was made on the grounds that the assessment resulted in an unjust and inequitable determination of the level of child support because of the income, earning capacity and financial resources of each of the parties, and the costs of maintaining the children were significantly affected because the children were being cared for and educated in the manner that was expected by their parents.

5. The grounds of appeal in relation to his Honour’s orders about child support were abandoned by the husband. 

Relevant Background

1. It was conceded by counsel for both parties that the factual findings made by O’Ryan J were not controversial (Transcript, 15 April 2010, 4; submissions of the respondent wife 27 May 2009, [2]). Consequently, we do not propose to repeat the findings of fact as determined by O’Ryan J which appear extensively in his Judgment at paragraphs 37 to 160. The significant milestone events of the parties’ history are simply stated.

2. The husband was born in September 1953.  The wife was born in April 1964. The parties were married in March 1998 and separated in January 2006.  The parties were divorced on 4 June 2007.  There are two children of the marriage, M born in 1999 and B born in 2001.  The wife took brief periods of leave from her business during the respective periods when the children were born.

3. The wife acquired the C property with a mortgage in March 1993 for $286,000.  She resided in this property until the parties commenced to reside in the K property.  The parties resided in the K property for most of the duration of the marriage, except during September 2000 and June 2001 when renovations were undertaken to the K property and the parties resided in the C property.

4. In January 1996, the husband established S Pty. Ltd. with Mr J.

5. The husband acquired the K property with the aid of a mortgage in October 1996 for $400,000.

6. During the hearing before O’Ryan J, the husband contended that he had approximately $810,467 worth of assets, and a mortgage debt of $311,688 at the date of the parties’ marriage.  The wife contended that she had assets worth $442,621, and a mortgage debt of $256,000.

7. In November 1998, the wife became sole director of A Pty Ltd.  Since November 1998, A Pty Ltd  has owned and operated the business known as U, the entity by which the respondent wife conducted her town planning trading business. 

8. The parties respectively worked in the financial management and town planning sectors and held different positions in private sector organisations during their relationship. 

Judgment of the Trial Judge

1. At paragraph 8, his Honour found that the assets of the parties, including superannuation interests, had a net value of $1,829,354. It was contended by the husband that there should be a 70 per cent contribution-based entitlement in his favour, and that any adjustment to the wife pursuant to s 75(2) of the Act would be “measured at no more than five percent” (paragraph 9). The wife contended that there should be a contributions-based entitlement of 57.5 per cent in her favour, with an additional 10 per cent adjustment for s 75(2) factors.

2. O’Ryan J concluded that the assets and liabilities of the parties were as follows (paragraph 215):

   $

   1.      [C] property (w)  660,000

   2.      Net sale proceeds [K] (h)  977,340

   3.      Investments (h)  -

   4.      Investments (h)  -

   5.      Contents of [K] (h)  35,912

   6.      Husband’s jewellery (h)  442

   7.      Contents in [C] (w)  16,085

   8.      Wife’s jewellery (w)  11,405

   9.      Husband’s life policy (h)  13,359

   10.    Husband’s interest in [ABC] estate (h)  22,000

   11.    Husband’s Bank accounts (h)  35,995

   12.    Wife’s Bank account (w)  136

   13.    Husband’s 65 Bank shares (h)  2,600

   14.    Wife’s 24 shares (w)  125

   15.    Husband’s 2,500 Options (h)  -

   16.    Husband’s Motor car (h)  12,000

   17.    [A] Pty Ltd (w)  1,071

   18.    Dividend payable by [A] Pty Ltd (w)  163,500

   19.    Wife’s legal fees paid (w)  127,955

   20.    Husband’s legal fees paid (h)  122,878

   21.    Wife’s Super (w)  32,072

   22.    Husband’s Super (h)  203,272

   Total   2,438,147

   Less

   23.    Mortgage on [C] (w)  256,000

   24.    Wife’s credit card debts (w)  23,453

   25.    Wife’s debt to step-father for rent (w)  122,071

   26.    Wife’s debt to [A] Pty. Ltd. (w)  207,269

   Total  (608,793)

   Balance  $1,829,354

The findings about the parties’ respective contributions

1. It is necessary to record what his Honour found in relation to the respective contributions of the parties, which were detailed in paragraphs 212 and 213, as well as paragraphs 217 to 233 of his Honour’s reasons. 

2. At paragraph 212, his Honour determined that since January 2006 (the date of separation), the husband had the “benefit of significant amounts of money from various sources” and that he had primarily disposed of the funds that he had received.  His Honour specifically found that “while there may be some justification for suspicion about what the Husband [did] with the significant funds he had available” he concluded that the expenditure was not “unreasonable or extravagant”.  Consequently, O’Ryan J declined to include the sums of $69,964 (a retrenchment payment received by the husband on 31 August 2007) and $53,997 (a line of credit) into the pool of property. 

3. At paragraph 213, O’Ryan J included in the property pool the amount of money the wife had borrowed from her step-father to pay for rented accommodation (a debt of approximately $122,071) as a liability.  His Honour also included the wife’s credit card debts totalling $23,453 as a liability, as well as a debt to A Pty. Ltd. of $207,269.  O’Ryan J found that the wife’s expenditure in relation to these various liabilities was not unreasonable.

4. At paragraph 216, O’Ryan J found that the husband would never receive any financial benefits in the future from two shareholdings.  His Honour was satisfied on the balance of the evidence that the husband had made full financial disclosure.

5. His Honour considered the respective contributions of each of the parties at paragraphs 217 to 232.

6. At paragraph 217, O’Ryan J noted the period of cohabitation was approximately eight years and that there were two children of the marriage aged nine and seven years respectively. 

7. At paragraph 218, his Honour found that the husband had contributed $188,314 in equity in the K, NSW property, and the wife had contributed $119,000 in equity from the C, NSW property at the commencement of the relationship.  His Honour noted that the wife did not “make any significant repayments of interest or principle in respect of the loan” she obtained from her mother and her stepfather in relation to that property.

8. At paragraph 219, his Honour found that there was no financial benefit obtained by the husband from his investment in S Pty Ltd. and that that entity had no value.

9. At paragraph 220, his Honour found that the husband sold shares of $27,071, and received proceeds of $88,674.74 from the sale of shares in a publicly listed company.  The total share sale proceeds the husband received, on his Honour’s findings, was $115,745.  At paragraph 221, O’Ryan J found that the wife received $80,353.33 in total share sale proceeds, noting that at the commencement of the relationship her share portfolio was valued at $33,110.95.

10. At paragraphs 222 to 234, his Honour found that the husband had a superannuation interest of $41,528, two life insurance policies valued at $17,652, $4,057 in savings, as well as a motor vehicle and a boat and boat trailer.  His Honour found that the wife had a superannuation interest of $8,000, $10,497 in savings, and her business valued at $15,063, as well as furniture and jewellery.  

11. His Honour concluded, at paragraph 225, that the husband had greater assets than the wife at the commencement of cohabitation, in the sum of $179,000, compared to the wife’s $114,000.

12. At paragraph 227, his Honour considered the respective salaries of the parties between the 1999 and 2007 financial years, concluding at paragraph 228, that the husband’s “income from paid employment was significantly greater than that of the Wife which included the rental and dividend income which the Wife received”. 

13. At paragraph 229, O’Ryan J found that after the parties were married, the wife undertook the majority of home-maker duties, as well as her having the greater responsibility for the care and support of the parties’ children.  His Honour found that during the marriage the husband worked long hours and travelled frequently.  At paragraph 230, his Honour found that since separation, the husband had had significant periods of care of the children and had paid child support and education expenses.

14. At paragraph 231, his Honour found that since separation the husband had received $186,333 in share sale proceeds, funds from the estate of his mother and from a Bank and was likely to receive $22,180 from the winding-up of a trust managed by his brother overseas.

15. At paragraph 232, O’Ryan J observed that the wife had lived in rental accommodation since separation, and that the husband occupied the K, NSW property for 18 months until its sale in July 2007. 

16. In paragraph 233, his Honour concluded:

    233. In all the circumstances, I am of satisfied that when regard is had to the greater assets the Husband had at the commencement of cohabitation and the assets he has received since separation, he made a greater contribution than the Wife.  I assess the contribution based entitlements of the parties, expressed as a percentage of their net assets, including superannuation interests, as to 62.50 per cent or $1,143,346.25 to the Husband and 37.50 per cent or $686,007.75 to the Wife.

17. In paragraphs 234 to 240, O’Ryan J took into account matters pursuant to s 75(2) of the Act. His Honour noted the age and the good health of the parties, and found that the husband had a greater earning capacity than the wife, as well as “significantly” greater income. His Honour found that the wife would have greater responsibility for the care of the children, but that the husband would pay a greater amount for school fees and periodic child support. Based on his findings with respect to the contribution-based entitlements of the parties, his Honour found that the husband would have assets greater in value than the wife of $457,338.50.

18. On the question of the husband’s superannuation interest, his Honour stated at paragraph 239:

    239. On behalf of the Husband it was submitted that I would also take into account that the Husband’s entitlement will include a superannuation interest of $203,272.  I am not sure how I am to do that given the agreed present value.  However no submissions were made on behalf of the Wife.

19. At paragraph 240, his Honour concluded that the orders he proposed to make would “have no effect on the earning capacity of either party”.

20. At paragraph 241, his Honour found:

    241. In all the circumstances, matters that favour the Wife are the greater earning capacity of the Husband, the greater income of the Husband, the greater assets of the Husband and the greater responsibility of the Wife for the day to day care of the children.  The important matters that favour the Husband are his age and his greater financial contribution to the support and education of the children.  I am satisfied that there should be an adjustment to the contribution based entitlement of the Wife to reflect consideration of the matters described above.  In the result I am of the view that there should be an adjustment of 10 per cent or $183,000 of the net assets of the parties to the contribution based entitlement of the Wife.

21. At paragraphs 242 and 243, O’Ryan J concluded that the husband would receive an entitlement of 52.5 per cent or $960,411, and the wife would receive an entitlement of 47.5 per cent or $868,943.  At paragraph 245, O’Ryan J determined that $977,340 was held in a controlled moneys account from the proceeds of sale of the K, NSW property.  His Honour determined that 52.38 per cent or $511,953 would be distributed to the husband, and 47.62 per cent or $465,387 would be distributed to the wife.  

Grounds of Appeal

1. The husband submitted the following grounds of appeal (which are replicated as drafted by the solicitors for the appellant husband without correction by us):

   a)1.         That His Honour erred, in having concluded that the wife’s liability to [her step-father] for rent should be included as a liability (para 213), in failing to have regard to the increased contributions thereby made by the husband.

   b)…

   c)4. That His Honour erred in the assessment under s75(2) to have regard to the fact that the husband would retain superannuation of a value of $203,272 which represented 24% of his property settlement which was an asset to which he had no present entitlement and as such called for an adjustment in his favour under s75(2).

   d)5.         That His Honour’s findings as to contribution in favour of the husband at 62.5% was against the weight of the evidence.

   e)…

   7.That His Honour erred in making an adjustment under s75(2) of 10%.

2. A written summary of argument dated 29 April 2009 was prepared by Mr Schonell (recently appointed Senior Counsel at the time of Judgment).  However, Ms De Vere of counsel appeared before us on 15 April 2010.   Mr Kearney prepared a written summary of argument dated 27 May 2009, and appeared before us on 15 April 2010. 

Orders sought

1. The husband initially sought alternative orders from the orders of O’Ryan J that the K property be sold and the proceeds be distributed between the parties as to 19.6 per cent to the wife and 80.4 per cent to the husband.  Before us, Ms De Vere stated that a cash amount of $667,447.94 should have been received by the husband as his entitlement.  In practical terms, this would mean a payment by the wife to the husband of approximately $156,000.    

Relevant Law

1. The principles applicable to an appeal against a discretionary judgment are well settled.  There is the often quoted statement of their Honours, Dixon, Evatt & McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. His Honour, Brennan J, in Norbis v Norbis (1986) 161 CLR 513, stated (at 539 – 540):

   f)The difficulties in the way of developing guidelines beset an appellate review of the exercise of discretion under s.79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v. Satterthwaite [1948] 1 All ER 343 at p.345 Asquith LJ stated the rationale of an appellate court’s approach:

   “…It is, of course, not enough for the wife to establish that this court might, or would, have made a different order.  We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.”

2. We turn to the grounds of appeal as pursued before us. 

Ground 1

• That His Honour erred, in having concluded that the wife’s liability to [her step-father] for rent should be included as a liability (para 213), in failing to have regard to the increased contributions thereby made by the husband.

Ground 5

• That His Honour’s findings as to contribution in favour of the husband at 62.5% was against the weight of the evidence.

1. The essence of ground 1, as contended by counsel for the husband, is that the trial Judge either failed actually, or alternatively properly, to take into account the husband’s indirect contribution to the liability that the wife incurred as a result of her borrowing money from her step-father, to meet the cost of her rental accommodation post‑separation.  Ground 5 was argued concurrently with ground 1. 

2. Counsel for the husband conceded that the overall contribution finding in the husband’s favour of 62.5 per cent was not inappropriate, except with respect to the discrete liability owed by the wife to her step-father. 

3. Counsel for the husband contended that the inclusion of $122,071 as a joint liability of the parties demonstrated the husband’s support for the wife after the parties separated.  Ms De Vere submitted that the amount of $122,071 included as it was as a liability in the property pool represented 6.6 per cent of the net asset pool.  It was further submitted that an additional adjustment of approximately 3.3 per cent should have been made in the husband’s favour as a result of this purported indirect contribution.

4. Counsel for the wife submitted that the husband effectively sought to isolate one component of the assessment of the parties’ contributions.  It was further submitted that this approach failed to take into account the holistic assessment the trial Judge made of all of the parties’ respective contributions. Counsel submitted that his Honour’s ultimate exercise of discretion had been properly guided by the weighing of those contributions as he did. 

5. It was not suggested by the husband that the trial Judge should not have included the liability in the property pool. 

6. It was acknowledged by counsel for the husband that the evidence before the trial Judge was that the wife had received the benefit of a year’s free accommodation from her step‑father, and that the husband had lived in rental accommodation between June 2007 until the date of the final hearing.

7. In the written summary of argument, counsel for the husband submitted that the wife’s counsel at trial had conceded that the husband had made an indirect contribution to the wife post-separation if the liability were to be included in the property pool.  Counsel referred us to the transcript of proceedings before his Honour of 5 November 2008 (at 199), where Mr Campton (counsel for the wife at trial) stated:

   MR CAMPTON: The next issue in contention in the balance sheet is the wife’s debt to [her step-father].  You heard [her step-father] give his evidence.  He’s, in effect, been subsidising the wife by way of a loan; he was very clear in that he wanted it back.  There doesn’t appear to be a submission to the effect that he’ll forgive the loan or otherwise will make it available to my client, those moneys.  True it is, if it’s included as a debt of the parties post separation, that there is an indirect contribution made to it by the husband, because it’s in the pool.  But your Honour also has to take into account the capacity of the husband, subsequent to separation, to make that contribution be reference to his income or his property.  (Emphasis added)

8. We note that Mr Kearney conceded, as did Mr Campton at trial before O’Ryan J, that there may be an indirect financial contribution made by the husband in relation to the loan for rent as included in the property pool, but that to take account of this contribution in isolation would be erroneous. 

9. The transcript of proceedings of 5 November 2008 (at 176) also reveals that counsel for the husband at trial made the following final submission to the trial Judge:

   MR SCHONELL: If you Honour is to bring to account as a liability, the debt to [her step-father], then it’s a contribution on the husband’s part as well.

   HIS HONOUR: And why, briefly?

   MR SCHONELL: Briefly why, because the debt reduces the pool of assets.  The debt is directly referable to the payment of the wife’s rent, in an indirect way, he is in effect, contributing to her rent.

   HIS HONOUR: Yes.  I understand that…

10. Ms De Vere conceded that the amount the wife incurred in respect of indebtedness for the purpose of meeting the costs of rental accommodation was neither unreasonable or extravagant (Transcript of proceedings, 15 April 2010, 6 – 7).  However, it was submitted that the wife could have alternatively serviced her rental accommodation costs from her income rather than borrowings. 

11. It could not, however, be demonstrated that the husband had made such a submission about the wife’s capacity to meet the rental accommodation costs from her own income before the trial Judge.  Ms De Vere did submit that it was incumbent upon the trial Judge to consider all of the available evidence about the wife’s circumstances in determining whether the expenditure was reasonable or not.  We are not persuaded that his Honour did not undertake this assessment. 

12. On this point, we agree with counsel for the wife that the husband now seeks to pursue issues not previously raised at trial, and it is now impermissible to raise them before us on appeal: see generally Water Board v Moustakas (1988) 180 CLR 491, 497 – 498 per Mason CJ, Wilson, Brennan and Dawson JJ.

13. It was acknowledged by the counsel for the husband that the trial Judge’s findings with respect to the reasonableness of the expenditure by the wife on the rental accommodation were not in contention. 

Relevant law with respect to contributions: Norman & Norman [2010] FamCAFC 66

1. In relation to assessing the respective contributions of parties, the Full Court of the Family Court of Australia (Finn, May & Murphy JJ) in Norman & Norman [2010] FamCAFC 66 relevantly stated (at [38] to [42]):

   38…Further, it is not necessary to prove that any particular form of contribution is connected with any particular part of the property (See Shaw and Shaw (1989) FLC 92-010; Napthali and Natpthali (1989) FLC 92-021).

   39. Of course, the nature, form and characteristics of property, and the manner and timing of its acquisition, may have an impact upon the manner in which contributions are assessed and, in an appropriate case, the court might determine to exclude it by reason of those matters.

   40. Here, though, the parties specifically included the property in an agreed list of property submitted to his Honour at the commencement of the trial. The trial transcript reveals that the wife’s trial counsel made a specific admission that “step one in the proceedings is settled and there is a defined pool, an agreed pool”.

   41. The trial Judge was entitled to rely upon the assertion that the “pool” of property was uncontested and his Honour plainly did so.

   42. Thus, a second difficulty confronting the appellant on this ground is that, absent features not asserted to be present in the instant case, a party is bound on appeal by the case argued below (see Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 (at 71); Coulton v Holcombe (1986) 162 CLR 1 (at 7)).
   (Emphasis added)

Discussion

1. When questioned counsel for the husband conceded that, had the wife drawn down on a joint savings account of the parties, it would have been reasonable for a trial Judge not to add back the amount (reasonably) expended on rental accommodation by the wife in those circumstances. 

2. Consequently, it seems to us that an illogical and unfair distinction was being drawn by the husband to the wife’s loan from her step‑father.  Counsel for the husband relied on the fact that the wife had made a conscious decision to borrow from her step-father rather than paying her rent from her income.  It was further submitted that the liability should have either been maintained by the wife or that the husband’s indirect contribution should have been acknowledged if the liability were included. 

3. This is effectively, a challenge to the weight that the trial Judge gave to the components of each of the parties’ respective contributions. Alternatively, the trial Judge could have taken into account the wife’s liability to [her step-father] as a factor pursuant to s 75(2) of the Act. This may have led his Honour to conclude that the wife was entitled to a further adjustment in her favour.

4. Ground 1 must fail.  The trial Judge was entitled to take into account the liability of the wife to her step-father in the property pool as a joint liability of the parties.  The trial Judge was also entitled to assess the contributions holistically.  His Honour did this meticulously, taking into account the respective and differing contributions of each of the parties, attaching such weight as he considered was proper in the circumstances: see generally Gronow & Gronow (1979) 144 CLR 513, at 519 (per Stephens J).

5. The trial Judge was entitled, in the circumstances of the case and in light of what the Full Court stated in Chorn & Hopkins ((2004) FLC 93-204, 79,314, paragraph 24, per Finn, Kay & May JJ)), to treat the liability incurred by the wife as reasonable and necessary living expenditure post-separation prior to a property settlement being determined by the Court. We also consider that, in light of the (reasonable and proper) concession of Ms De Vere before us that had the wife alternatively drawn down on joint savings of the parties to service the cost of rental accommodation, this could properly be taken into account as a joint liability without there being some counter-veiling adjustment made to the husband for a purported contribution.

6. Alternatively, we consider that the trial Judge could have taken the wife’s liability into account pursuant to s 75(2) of the Act. Counsel for the husband conceded that if we were to re-exercise the discretion of the trial Judge (as it was submitted we should if the appeal were allowed) any determination the husband’s contributions might be properly regarded as greater might reasonably be offset by an adjustment under s 75(2) of the Act in the wife’s favour. This would have the effect of rendering this ground of appeal nugatory.

7. We acknowledge Mr Kearney’s calculations based on his Honour’s assessment of the respective contributions of the parties (submissions of the wife, 27 May 2009), [42] & [43]).  We also acknowledge, as Mr Kearney did before us, that these calculations do not especially assist us.  Mr Kearney further submitted that the trial Judge had assessed “the directly identified financial contributions… [against] the entirety of the gamut of other contributions made by the parties after separation” (Transcript of proceedings, 15 April 2010, 31).  We agree with this submission. 

8. In addition, the submissions on behalf of the husband fail to take into account the payment of approximately $46,845 made by [her step-father] to the wife for rental accommodation expenses for the period when the parties separated until December 2006. His Honour could reasonably have regarded this sum as a post-separation contribution of the wife in his assessment under s 79 of the Act.

9. The husband’s drawing down on the line of credit for the renovations to the matrimonial home could be taken into account similarly.  The example proffered by Mr Kearney, that the “logical extension” of the husband’s submission would be for the husband’s payment of rent post‑separation which reduced the total property pool would also need to be similarly viewed as an indirect financial contribution of the wife, resonates with us. 

10. As the Full Court stated in Norman (above), there is no requirement for a trial Judge attribute a percentage assessment to each individual contribution in respect of each individual piece of property.  A trial Judge is required to undertake an overall assessment of the respective contributions of the parties. 

11. We do not detect any error in his Honour’s assessment of the parties’ respective contributions.  

12. We thus find no merit in Ground 1.  As a consequence, we consider that Ground 5 is also without merit.  

Ground 4

• That His Honour erred in the assessment under s75(2) to have regard to the fact that the husband would retain superannuation of a value of $203,272 which represented 24% of his property settlement which was an asset to which he had no present entitlement and as such called for an adjustment in his favour under s75(2).

1. This appeal ground attacks the trial Judge’s treatment of the husband’s interests in superannuation pursuant to either s 75(2)(b), s 75(2)(f)(ii) or s 75(2)(o) of the Act.

2. Section 75(2)(b), s 75(2)(f)(ii), s 75(2)(n) and s 75(2)(o) of the Act relevantly provide as follows:

   (b)       the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

   …

   (c)       …the eligibility of either party for a pension, allowance or benefit under:

   (i)any superannuation fund or scheme, whether the fund or scheme was established or operates, within or outside Australia;

   …

   (n)the terms of any order made or proposed to be made under section 79 in relation to:

   (i)the property of the parties;

   …

   (o)       any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. 

3. It was submitted by counsel for the husband that the trial Judge should have, but did not, properly consider the fact that the husband’s superannuation interest was not immediately accessible to him.  This was said to be significant because the value of the husband’s superannuation interest constituted between one fifth and one quarter of the total property pool. 

4. Ms De Vere conceded that none of the grounds of appeal was directed to whether or not the trial Judge’s orders were just and equitable to make, pursuant to s 79(2) of the Act (Transcript of proceedings, 15 April 2010, 22).

5. Counsel for the husband drew our attention to the submissions of Mr Schonell before the trial Judge where he relevantly stated (Transcript of proceedings, 5 November 2008, 178):

   MR SCHONELL: What would call for or militate against an adjustment under s 75(2) is that about 10 per cent of the pool of assets, depending on what your Honour finds the pool to be, or $200,000, rests in the husband’s hands as superannuation, and clearly that is a factor that your Honour can take into account moving into the future, that whilst it represents a fund that will grow in time for him, it is not a fund that is immediately accessible given his age and also too, given the obligations he has into the future to support his children. There is no evidence before your Honour that he is going to leave the workforce early, and your Honour would otherwise just assume that he will continue in the workforce. But that is a factor that your Honour would take into account under section 75(2) that would militate against, if your Honour were to find a larger adjustment than 5 per cent for that reason, given how it relates to the pool.

6. Ms De Vere submitted that Mr Schonell had made this submission as a concession that there should be an adjustment to the wife, pursuant to s 75(2) of the Act, of no more than 5 per cent for the reasons identified.

7. In response to her Honour Boland J, Ms De Vere made the following concession (Transcript of proceedings, 15 April 2010, 23 – 24):

   BOLAND J:   I could well understand the argument you are putting to us if his Honour had had an expert report by one of the well-recognised experts in superannuation and he said this was a private, self-managed fund, it comprised of shares or it comprised of real property, there might be a real difference as to the mix of assets held in that fund.  If there was some evidence as to the balancing off of the tax benefits and the opportunity lost if you had otherwise been able to invest that money at this point in time, but you have got to remember it is accruing interest, less whatever the administration fees are.  But his Honour doesn't have any of that in front of him, and absent that, I am just at a loss to know how he could make the sort of findings you are now urging that his Honour should have made.

   MS DE VERE:   I absolutely agree and concede that his Honour didn't have any of that evidence that your Honour indicates may have assisted his Honour, but it still doesn't take away from knowing it is superannuation.  It is very clear it is superannuation and still looking at it as between these two parties, on the evidence and in the circumstances of these two parties, it still required consideration that wasn't given.

1. Ms De Vere also conceded that the husband’s superannuation interest may attract beneficial taxation treatment (Transcript of proceedings, 15 April 2010, 17). 

2. In response to the submissions of the husband, Mr Kearney made the following submissions.  First, his Honour was only obliged to consider, and did consider, the relevant matters pursuant to s 75(2) of the Act which relate to superannuation. Second, it was submitted that this ground of appeal is predicated on there having been sufficient evidence before his Honour to take into account the matters the husband considered relevant, such as his intentions regarding his retirement and the impact his retirement or continued working would have on his accessibility to his superannuation interest. Mr Kearney submitted there was no evidence before the trial Judge to enable such consideration. In particular, there was no evidence before the trial Judge as to taxation benefits his superannuation interest may attract, what rules or regulations there may be about accessibility to his interest and how the circumstances of the husband related to those rules or regulations. Mr Kearney also submitted that it was inappropriate, that an inference be drawn in relation to these factors as submitted by the husband.

Relevant law as to the treatment of a superannuation interest: Coghlan & Coghlan (2005) FLC 93-220 

1. Given the submissions made by counsel for the husband, it is appropriate to refer to the judgment of the majority (Bryant CJ, Finn & Coleman JJ) in the decision of the Full Court of the Family Court of Australia of Coghlan & Coghlan at pages 79,642 to 79,646 (specifically paragraphs 40, 44, 47, 48, 53, 56, 57 to 68). For convenience, we hereunder set out specifically paragraphs 60 to 68:

   60. It is relevant to say at this point that we agree with the views expressed by the Full Court in paragraph 89 of its decision in Hickey, to the effect that there is no requirement on parties to obtain a valuation in accordance with the Regulations (at least if no splitting order is sought at the outset of the trial).  However, as we have indicated in the last paragraph, if in the course of hearing the matter, the Court reached the conclusion that a splitting order was required for the purpose of achieving a just and equitable order, then a valuation under the Regulations would have to be obtained. 

   61. Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.

   62. The parties’ contributions to all items on that list (including the superannuation interest) would then be assessed on either a global or an asset by asset basis. It might then be necessary in the s 75(2) context to have regard to the parties’ future superannuation entitlements (having regard of course to any division proposed on the basis of their contributions), with consideration then being given to the overall justice and equity of any proposed award or order (including any proposed splitting order). Indeed, this is the approach which the Full court has used on its re-exercise of the trial Judge’s discretion in Ilett and Ilett (which will be delivered contemporaneously with the decision in this case). 

   63. However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise).  This of course is the approach which the trial Judge adopted in this case.

   64. Then for the reasons we earlier gave, whether or not a splitting order is sought on either party’s application, the parties’ contributions to both the property (as defined in s 4(1)) and also to the superannuation interests should be assessed. The other factors in s 79(4)(d), (e), (f) and (g) would then need to be considered. Specifically in the context of s 79(4)(e), that is the s 75(2) factors, any division of the property (as defined in s 4(1)) and any “division” of any superannuation interest (in the sense of an allocation of the base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interest, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would also need to be considered. The overall justice and equity of the ultimate award (including any proposed splitting order or the need for such an order) would then be considered.

   65. In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case.  If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:

   (a)      value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);

   (b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;

   (c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and

   (d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.

   66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.

   67. If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.

   68. When we refer to “the real nature” of the relevant superannuation interest, we are referring to the fact that notwithstanding that its value according to the Regulations may well be calculated to be a very significant amount, that superannuation interest may be no more than a present or future periodic sum, or perhaps a future lump sum, the value of which at date of receipt is unknown.

Discussion

1. Ms De Vere submitted that the “unique” nature of a superannuation interest (particularly the husband’s in this case) meant that the trial Judge must consider other factors which may be relevant to the interest in question.  This appears to be because of what was said in Coghlan about superannuation interests being a “different species of asset” (paragraph 40 above). 

2. Section 79(2) of the Act provides that the Court must not make an order unless it is satisfied that it is just and equitable to make an order. The majority in Coghlan said as much in 47, 56, 58 and 67 above. 

3. A Judge must take into account the matters pursuant to s 75(2) of the Act “so far as they relevant” (see Coghlan, paragraph 48). We do not consider that requires a trial Judge to treat superannuation interests separately from property or financial resources by reference to factors that may be attributable to such interests.  Rather, we consider that what is required is proper evidence as to the nature of the superannuation interest, (including factors such as those identified by the husband in this case) as to the accessibility of the interest to a party. 

4. The majority in Coghlan suggested that there is no general obligation on parties to obtain a valuation of a superannuation interest in accordance with the Family Law (Superannuation) Regulations 2001 if no splitting order is sought at the outset of the trial, although this may be desirable. Conversely, there is such a requirement if a splitting order is sought at any stage during the trial, with the relevant matters pursuant to Part VIIIB of the Act to be taken into account accordingly.

5. Critical to the husband’s submissions is what was emphasised by the majority in Coghlan in paragraphs 61 to 64, in particular that (at paragraph 62):

   62.…it might…be necessary in the s 75(2) context to have regard to the parties’ future superannuation entitlements (having regard of course to any division proposed on the basis of their contributions), with consideration then being given to the overall justice and equity of any proposed award or order (including any proposed splitting order).

6. We also note that the majority in paragraph 66 emphasised that the following factors might be taken into account pursuant to s 79(4) of the Act as relevant:

   66….the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund. 

7. These factors and this assessment could not be undertaken by the trial Judge in this case as no evidence, other than the husband’s age, had been properly adduced in respect of the husband’s entitlement.  We agree with counsel for the wife’s submission that no evidence was adduced before the trial Judge as to the form, nature and characteristics of the husband’s superannuation entitlements, other than an amount of $20,000 had been rolled over as an unpreserved entitlement.  We also accept that the husband indicated in the course of his evidence that he did not intend to retire, however, there were no submissions made about the effect of this decision upon his entitlement to his superannuation interest.  Accordingly, it could not have been possible for the trial Judge to take those factors into account as the husband now submits he should have.  Indeed, had his Honour done so by inference without proper evidence, he may well have fallen into error: see House v The King (above). 

8. There is no suggestion by Ms De Vere in the grounds of appeal that the trial Judge’s orders were not just and equitable. 

9. The trial Judge took into account a range of factors pursuant to s 75(2) of the Act and made an adjustment of 10 per cent in the wife’s favour. In the circumstances of this case, and given the nature of the evidence that was before his Honour at trial, we do not ourselves consider that his Honour erred in making the orders that he did.

10. We note also that the wife had, in contrast to the husband, a significantly smaller superannuation entitlement (approximately 3 per cent of the property pool). 

11. We consider that ground 4 must fail. 

Ground 7

• That His Honour erred in making an adjustment under s75(2) of 10%.

1. As this ground was principally argued in conjunction with the substantive ground of appeal in relation to the attack on the trial Judge’s treatment of the husband’s superannuation, we do not propose to consider this ground of appeal. 

2. To the extent that this is a criticism of the exercise of the discretion of the trial Judge overall, we note the statement of his Honour, Brennan J, above in Norbis.  We detect no error by the trial Judge in making this adjustment.  His Honour’s discretion fell within the “generous ambit within which reasonable disagreement is possible”. 

3. We consider this ground of appeal is also without merit.

Conclusion

1. We conclude that none of the grounds of appeal has been made out.  The appeal will be dismissed. 

Costs

1. Counsel for the husband sought a costs certificate pursuant to the relevant provisions of the Federal Proceedings (Costs) Act 1981 (Cth) in the event that the husband was successful in relation to any of the grounds of appeal. If unsuccessful, Ms De Vere urged us not to make an order against her client in relation to costs of the appeal.

2. Mr Kearney on behalf of the wife submitted that even if the appeal was successful, we should make an order for costs as 11 grounds of appeal were initially argued, and then not pursued on the day of the hearing.  Alternatively, Mr Kearney sought a costs certificate pursuant to the relevant provisions of the Federal Proceedings (Costs) Act 1981 (Cth).

3. The appeal has been wholly unsuccessful. The husband will pay the wife’s costs of and incidental to the appeal, as agreed and failing agreement in accordance with Chapter 19 of the Family Law Rules 2004.

Boland J

Introduction

1. I have had the benefit of reading in draft the reasons of Faulks DCJ and Le Poer Trench J.  I agree with their Honours that the appeal should be dismissed and with the orders they propose.  I also agree with their Honours’ conclusion the husband should pay the costs of and incidental to the appeal.

2. The trial Judge heard the parties competing parenting, property and child support departure applications over seven hearing days.  His Honour found the parties had net assets, including the husband’s self managed superannuation fund, of $1,829,354.00.  His Honour determined those assets should be divided as to 52.50 per cent or $960,411.00 to the husband, and 47.50 per cent or $868,943.00 to the wife.

3. As recorded by the majority, this is the husband’s appeal against his Honour’s property orders made under s 79 of the Family Law Act 1975 (Cth) (“the Act”). The husband sought, in the event the appeal was allowed, that we re‑determine the property proceedings and increase his percentage entitlement by 8.3 per cent. The wife resisted the appeal.

4. Although the Notice of Appeal filed on 24 December 2008 contained 15 grounds of appeal, 11 of those grounds, including grounds directed to the orders made departing from the administrative assessment of child support under the Child Support (Assessment) Act 1989 (Cth), were abandoned at the hearing of the appeal.

5. Two issues were agitated on behalf of the husband as demonstrating error by the trial Judge. First, it was asserted that his Honour, by including as a liability in the list of assets and liabilities of the parties, a liability of the wife of $122,071.00 to her stepfather for rent he paid on her behalf post separation, had failed to give appropriate weight to the husband’s indirect contribution to that debt, and thus had failed to give appropriate weight to the husband’s post separation contributions. Secondly, it was asserted his Honour had erred in respect of his treatment of the husband’s superannuation entitlement. It was submitted that his Honour had failed to take into account under s 75(2) the fact that the husband’s superannuation entitlement in a self managed fund represented approximately 21 per cent of the total assets received by him by way of property settlement, and that entitlement was not immediately available to him.

6. I propose to refer briefly to his Honour’s discussion leading to and his contribution determination.  This exercise involves the consideration of grounds 1 and 5 of the grounds of appeal.  I will then consider the superannuation challenge (grounds 4 and 7).

7. Before turning to the two challenges I observe that there was no contention by either party that any factual matter recorded by the trial Judge was in error. Nor was there any challenge to his Honour’s determination of the assets and liabilities to be divided between the parties.  His Honour’s careful and detailed recitation of relevant historical matters is found in paragraphs 37 to 160 of his reasons for judgment (see Benjamin & Bardot [2008] FamCA 1011).

The Law

1. It is appropriate that I record that this appeal is an appeal against a discretionary judgment. The principles applicable are well known (see Mallet v Mallet (1984) 156 CLR 605 and Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All E.R. 343).In Mallet Mason J said at 621:

   It has been accepted, at least since the judgment of Gibbs J. in De Winter v. De Winter, that a judgment of the Family Court in determining what order should be made under s. 79 of the Family Law Act 1975 (Cth), as amended, is exercising a judicial discretion and that the well settled principle governing an appeal from the exercise of that discretion applies to the Full Court of the Family Court when it hears and determines an appeal from the making of an order under the section. The Full Court, in determining the appeal cannot substitute its opinion for that of the primary judge unless it is shown that he made some error in exercising the discretion, i.e., by acting on a wrong principle, by allowing extraneous or irrelevant factors to influence him, by failing to take into account some material consideration or by mistaking the facts: House v. The King; Australian Coal and Shale Employees’ Federation v. The Commonwealth. And in some cases the exercise of the discretion may be vitiated by the primary judge’s failure to give sufficient weight to a relevant factor. However, an appellate court needs to view this ground of appeal with considerable caution, as Stephen J. noted in Gronow v. Gronow:

   “The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involved conflicting assessments of matters of weight.” [footnotes omitted]

The asserted error in respect of the wife’s liability to her stepfather

1. The husband’s counsel before us relied on written submissions prepared by Mr Schonell SC.  In those submissions Mr Schonell referred to the trial Judge’s determination, at paragraph 215, that the wife’s debt to her stepfather was included in the list of the parties’ assets and liabilities at Item 25 at $122,071.00.  Senior counsel pointed out that his Honour had referred to the wife’s debt to her stepfather as $114,886.00 (paragraph 213 reasons for judgment).  However, before us, Ms De Vere, counsel for the husband, conceded that the sum of $122,071.00 was consistent with the evidence adduced before the trial Judge, and no error in respect of quantum of the debt was pursued.

2. The written submissions further asserted:

   At paragraphs 217 to 233, his Honour assessed the respective contributions of the parties.  His Honour gave no credit or recognition to the contribution by the husband to the wife’s post-separation support. The issue of such a contribution is not identified by his Honour.  It was acknowledged as an indirect contribution by counsel for the wife (AB 6 page 1527 line 45).  In light of the concession His Honours failure to address it and by so doing failed to have regard to a significant matter in the assessment of the husband’s contribution overall.

3. Before us counsel for the husband asserted that the debt represented 6.6 per cent of the asset pool, and as a consequence she asserted a further adjustment in favour of the husband of 3.3 per cent should have been made by the trial Judge.

The trial Judge’s reasons – contribution

1. It is useful at this point to refer to his Honour’s assessment of the parties’ respective contributions.  Having recorded the contributions made by each of the parties at paragraphs 217 to 232, his Honour analysed and made relevant findings based on the evidence before him.  At paragraph 225, the trial Judge found that the husband’s initial contributions exceeded those of the wife with the husband bringing into the relationship assets of approximately $179,000.00 and the wife having assets of approximately $114,000.00.

2. At paragraph 228, his Honour made findings under s 79(4)(a) and (b):

   I am satisfied that during the relationship and since the separation of the parties, the Husband’s income from paid employment was significantly greater than that of the Wife including the rental and dividend income that the Wife received.  However, I also take into account that the Wife made no payments of principle in respect of the mortgage loan she obtained from her mother and stepfather to purchase the [C] unit and paid only a small amount of interest which I have referred to above. 

3. At paragraph 229 his Honour dealt with the parties’ respective contributions under s 79(4)(c) as follows:

   After the parties were married the Wife undertook the majority of home making including shopping, cooking meals and housecleaning.  The Wife did receive some assistance from a cleaner who came to the home once a week and which the Wife paid for.  As well after the children were born the Wife undertook the majority of the care of the children.  The Husband worked long hours leaving home at 7:15 am and frequently returning home at night after the children had been fed and bathed.  As well the Husband frequently travelled interstate and on occasions overseas.  The Wife gave evidence about some of the responsibilities she had for the care of the children such as taking them to consult with health professionals and to social, sporting and extracurricular activities.  The Wife has also been the parent who dealt with matters that arose in respect of the children’s schools and after school care.  This responsibility of the Wife has continued since separation.  For example on Friday of each week the Wife collects the child [B] from school and takes her to an appointment with a speech therapist and after the session returns the child to school.  In summary I am satisfied that during the relationship and since the separation of the parties the Wife has had a greater responsibility for the care and support of the children.  In my view the Wife was the primary carer of the children and the Husband was the primary income earner.

4. In the following paragraph the trial Judge recorded that the husband had, post separation, cared for the parties’ children for significant periods, and had paid child support and education expenses.

5. In dealing with post separation contributions his Honour said

   231.Since separation the Husband has also received a total of $186,333 from the sale of shares, the estate of his late mother and the …Bank account.  The … Trust is a family trust which involves the Husband’s siblings as beneficiaries.  It is managed by the Husband’s eldest brother…who resides [overseas].  The Husband contended that he has received no cash distributions from the trust and any dividends that arose were put back into the trust or to help with the living expenses of his mother.  The trust is in the process of being wound up and the Husband estimated that his distribution of assets will be approximately $22,180 at current exchange rates.

   232.Upon separation the Wife moved out of the [K] property and the Husband remained in occupation for about 18 months until its sale in July 2007.  In the period post separation the Wife has lived in rental accommodation.

6. In paragraphs 233 of his reasons for judgment the trial Judge, under the heading “Conclusion”, set out his overall contribution findings.  He said:

   In all the circumstances, I am of satisfied that when regard is had to the greater assets the Husband had at the commencement of cohabitation and the assets he has received since separation, he made a greater contribution than the Wife.  I assess the contribution based entitlements of the parties, expressed as a percentage of their net assets, including superannuation interests, as to 62.50 per cent or $1,143,346.25 to the Husband and 37.50 per cent or $686,007.75 to the Wife.

Discussion

1. Counsel for the husband, notwithstanding the assertion that the rent liability represented 6.6 per cent of the total pool of assets and liabilities, and that the husband sought an adjustment in his favour of 3.3 per cent as his indirect contribution to the rent paid, acknowledged that the Court has eschewed a strict mathematical approach to the assessment of contribution.

2. I think it is important to remember  that in Norbis v Norbis (1986) 161 CLR 513 at 524 Mason and Deane JJ in their joint reasons spoke about the assessment of contribution as follows:

   … The Family Court has rightly criticized the practice of giving over-zealous attention to the ascertainment of the parties’ contributions, and we take this opportunity of expressing our unqualified agreement with that criticism, noting at the same time that the ascertainment of the parties’ financial contributions necessarily entails reference to particular assets in the manner already indicated.

3. Finn J in Farmer & Bramley (2000) FLC 93-060, in dealing with a complaint that the trial Judge’s determination of a particular monetary sum was not revealed by the reasons, at paragraph 49, explained:

   … it has to be said, that it is not generally possible in the exercise of the discretion under s 79 to say or to ascertain why a particular award is ultimately arrived at. Given that awards under s 79 are virtually never calculated with mathematical precision, no amount of enumeration of, or indeed of evaluation of, contributions, or of the s 75(2) matters, or indeed of any of the matters listed in s 79(4), can ever explain exactly why a particular figure, or more usually a percentage, is eventually arrived at (other than that it is within the recognised “range”)…

4. The attack mounted in grounds 1 and 2 is, in essence, an attempt to isolate one single factual matter and to focus on that matter to demonstrate appealable error.  The flaw in that process is identified in Norbis in the passage I have set out above. It represents an over zealous concentration on one aspect of contribution.  I am satisfied an overall reading of his Honour’s reasons discloses that he :

·carefully recorded and assessed the financial and non financial  contributions made by the husband and wife,  or on their behalf,  during their cohabitation;

·took into account and assessed the contributions made to the welfare of the family, and the payment of child support;

·considered, and assessed initial contributions, contributions during the marriage and post separation contributions including the husband’s receipt of his inheritance; and

·based on that assessment came to the conclusion the myriad of contributions made by each of the parties should be assessed at 62.5 per cent in favour of the husband and 37.5 per cent by the wife.

1. Nothing to which I was referred demonstrated appealable error by the trial Judge exercising his undisputed broad discretion under s 79 in his contribution assessment.

2. Before leaving this topic I note that counsel for the husband submitted that his Honour should have taken into account the wife’s decision to incur the debt and not meet her living expenses out of her available income. (transcript, 15 May 2010, p 7). The written submissions prepared on behalf of the husband do not include this asserted error. No submission to this effect was made to the trial Judge at the conclusion of the hearing.  

3. I am satisfied the submission is without merit.  The trial Judge recorded in paragraph 92 of his reasons the wife had, after separation, sold shares and borrowed monies to meet the costs of support for herself and the children including rent. His Honour later found (at paragraph 213) the evidence did not permit a finding that her expenditure was unreasonable or extravagant. Further, no submission was made to the trial Judge that the wife should have been able to meet these expenses from her own funds.

4. I am satisfied that grounds 1 and 5 lack merit.

The superannuation challenge

1. Grounds 4 and 7 are closely linked and were argued together by counsel for the husband.

2. It was asserted that the trial Judge, in making the adjustment he arrived at for relevant factors under s 75(2), erred in failing to make an adjustment in the husband's favour because the husband, who was to retain his interest in his self managed superannuation fund of $203,272.00, had no present entitlement to that interest. It was therefore asserted that the 10 per cent adjustment in the wife’s favour was in error.

3. As with the written submissions in respect of the contribution grounds, the submissions focussed on a mathematical approach to attack his Honour’s adjustment under s 75(2) in favour of the wife. It was asserted that the superannuation interest represented 11.1 per cent of the pool, and that as part of the husband’s entitlement it represented 21.16 per cent.

4. Although ground 7 as drafted was not expressed to be a challenge to a lack of adequate reasons, it was on that basis his Honour’s adjustment made in the wife’s favour of 10 per cent was challenged in the husband’s written submissions.

The trial Judge’s consideration of s 75(2) and the husband’s superannuation

1. The trial Judge’s recording of the husband’ superannuation interest was understandably brief.  His Honour recorded, at paragraph 222, that at the commencement of cohabitation the husband had a superannuation interest having a total value of $41,528.

2. At paragraph 239 of his reasons the trial Judge explained:

   On behalf of the Husband it was submitted that I would also take into account that the Husband’s entitlement will include a superannuation interest of $203,272.  I am not sure how I am to do that given the agreed present value.  However no submissions were made on behalf of the Wife.

Discussion

1. It must be remembered that the husband did not seek a splitting order in respect of his superannuation interests, and the trial was conducted on the basis the superannuation interests of the parties would be treated as property of them available for division. Its value was an agreed value. Before us the husband did not seek, in the event that we allowed the appeal, that on the redetermination of the competing s 79 claims we should make a splitting order in respect of his superannuation. I infer in those circumstances it is the husband’s desire to retain his superannuation interest in its entirety.

2. We were not directed to any evidence adduced by the husband about his self managed superannuation fund, save and except the reference by the wife’s counsel to the transcript of 4 November 2008.  The husband’s financial statement disclosed an accumulation interest. At the end of the hearing the schedule of assets and liabilities prepared for the trial Judge at Item 25 (Appeal Book 6: 1311) disclosed the husband asserted his interest in “[O] and [I] rolled over into self managed fund with $20,000 thereafter withdrawn.”

3. The following evidence was adduced from the husband in the course of his cross examination: 

   All right.  You sent [sic] a lot of effort to prepare the updated affidavit that you’ve put into evidence with his Honour’s leave today concerning your financial transactions.  Is there any reason why you didn’t put any particulars as to your superannuation dealings in that affidavit? --- No, just that superannuation moneys that were there, I then withdrew the 20,000 to pay for legal fees and the like and the other moneys are still there.

   All right.  Well, where did you put the $20,000? --- It would have gone into the Streamline account.

   That’s the account, [number]? --- That’s correct.

   All right.  And what was the date you say you did that transfer? --- I can’t remember the exact date – it was September, I think it was.

   All right I’ll show you your - - -? ---October

   - - - bundle of bank statements again.  The top one is the September statement [number]? --- Or was it October.  It could have been October.

   All right. You see, you haven’t produced any statement for October; have you? --- I haven’t – I haven’t got a statement for October.

   All right? ---  It should come about mid-November 2008.

   Was it the case that you didn’t want your ex-wife to have any knowledge of this superannuation fund you’d established? --- No.

   All right. Well, you knew – you read her affidavit from September during September; didn’t you? --- Yes.

   And you read in that affidavit that she made reference to a particular corporate entity of which you were the sole shareholder and director – this is at paragraph 51, your Honour – [P] Proprietary Limited? --- Yes, I haven’t got it in front of me but I - - -

   And that’s an entity of which you are the sole shareholder and director; is that right? --- That’s the trustee company for the superannuation fund, yes.

   You’re the sole shareholder and director; aren’t you?--- I am, yes.

   All right. And she wanted to know about what your interests in that company was; didn’t she? --- Well, I’m the sole shareholder in that company.

   All right. And was the way she was to find out was to turn up to Court yesterday and to receive some documents from you? --- I think yesterday that was the case. (transcript, 5 November 2008, p 67- 68)

4. The submissions made to the trial Judge on behalf of the husband at the conclusion of the hearing in respect of his superannuation entitlement were brief.  Mr. Schonell, SC submitted:

   What would call for or militate against an adjustment under 75(2) is that about 10 per cent of the pool of assets, depending on what your Honour finds the pool to be, or $200,000, rests in the husband’s hands as superannuation, and clearly that is a factor that you Honour can take into account moving into the future, that whilst it represents a fund that will grow in time for him, it is not a fund that is immediately accessible given his age and also too, given the obligations he has into the future to support his children. There is no evidence before your Honour that he is going to leave the workforce early, and your Honour would otherwise just assume that he will continue in the workforce. But that is a factor that you Honour would take into account under section 75(2) that would mitigate against, if your Honour were to find a larger adjustment than 5 per cent for that reason, given how it relates to the pool. (transcript, 5 November 2008, p 178).

5. Counsel for the wife submitted:

   I again, your Honour, return to the position of what is available to the husband by way of that platform with [AM], and its origins.  In relation to Mr Schonell’s submission concerning superannuation, the husband’s age is significant.  The husband is 55.  The husband’s evidence is that he’s been engaged in the financial sector for all his life and no doubt he’s been hoping to obtain some benefit from the recent changes to the superannuation legislation.  So it’s not a disadvantage for the husband to retain his superannuation and one might imagine that is why he doesn’t proffer a superannuation splitting order. (transcript, 5 November 2008 p 207)

6. At the hearing the husband’s counsel did not direct us to any relevant evidence about the husband’s self managed fund.  The following exchange occurred between myself and counsel for the husband:

   BOLAND J: I could well understand the argument you are putting to us if his Honour had had and expert report by one of the well-recognised experts in superannuation and he said this was a private, self-managed fund, it comprised of shares or it comprised of real property, there might be a real difference as to the mix of assets held in that fund.  If there was some evidence as to the balancing off of the tax benefits and the opportunity lost if you had otherwise been able to invest that money at this point in time, but you have got to remember it is accruing interest, less whatever the administration fees are.  But his Honour doesn’t have any of that in front of him, and absent that, I am just at a loss to know how he could make the sort of findings you are now urging that his Honour should have made.

   MS DE VERE: I absolutely agree and concede that his Honour didn’t have any of that evidence that your Honour indicates may have assisted his Honour, but it still doesn’t take away from knowing it is superannuation.  It is very clear it is superannuation and still looking at it as between these two parties, on the evidence and in the circumstances of these two parties, it still required consideration that wasn’t given. (transcript, 15 April 2010, p 23-24)

7. It was also conceded by the husband’s counsel that there was no ground asserting his Honour’s orders were not just and equitable.

8. The trial Judge was in a difficult position.  As I earlier noted, the only relevant evidence before his Honour was the agreed value of the husband’s superannuation fund.  His Honour did have evidence about the husband’s experience and qualifications in the financial sector, and his age (55 years).

9. It is difficult to see what more his Honour could have done in circumstances where he had no evidence before him of the form, nature and characteristics of the husband’s superannuation entitlement. Both parties sought the adjustment between them under s 79 should be from the proceeds of sale of the matrimonial home, neither sought a splitting order, and their respective superannuation entitlements were agreed. In these circumstances I am satisfied no appealable error was demonstrated in his Honour’s consideration of the husband’s superannuation entitlement under s 75(2)(f).

10. The asserted error in the adjustment made under s 75(2) of 10 per cent is, as was the contribution challenge, essentially a challenge to the exercise of discretion by the trial Judge. His Honour took into account in reaching the adjustment:

    ·the age and state of health of the parties;

    ·that the husband had a considerably greater earning capacity than the wife;

    ·the husband’s contribution entitlements meant he had an entitlement to assets of $457,338.50 more than the wife’s contribution based entitlement; and

    ·the wife in the future would have greater responsibility for the care of the children. 

1. These factors his Honour balanced against the husband’s ongoing child support responsibilities including school fees and expenses.  I agree with the submission made on behalf of the wife that that 10 per cent adjustment was within the permissible range.

2. Accordingly, I am satisfied there was no error by his Honour in his consideration of the husband’s superannuation interest, or in the adjustment he made in favour of the wife under s 75(2).

3. In summary, I am satisfied that the four grounds of appeal relied on by the husband are without merit, and the appeal should be dismissed. 

I certify that the preceding 142 (one-hundred and forty-two) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Faulks DCJ, Boland & Le Poer Trench JJ) delivered on 20 December 2010.

Senior Legal Associate:

Date:  20 December 2010