Brice & Brice

[2007] FamCA 170

FAMILY COURT OF AUSTRALIA

BRICE & BRICE [2007] FamCA 170

APPEAL – From decision of Federal Magistrate – Wife challenged division of property as to 62.5% to herself and 37.5% to the husband, which would have her paying $12,500 to him and allocating to him $42,000 from her superannuation – Parties had been married 25 years and had three children – Very modest asset pool  ($120,000 plus $133,000superannuation)– On appeal the appellant sought 80% of the assets – The appellant focused on three areas of argument; that monies expended by the husband post-separation ought to have been added back to the pool; that the wife’s contributions at 57.5% were undervalued; and that the Federal Magistrate should have made a larger adjustment in her favour  in respect of s75(2) factors – discussion on appropriateness of a four step process in property cases -No material error of principle or material error of fact can be discerned and the outcome was not plainly unjust –  Appeal dismissed.

Family Law Act 1975 (Cth)

Chorn and Hopkins (2004) FLC 93-204
Dow-Sainter (1980) FLC 90-890; (1979) 6 Fam LR 684
Hickey and Hickey and Attorney-General for the Commonwealth (Intervenor) (2003) FLC 93-143
JEL v DDF (2001) FLC 93-075
Kowaliw and Kowaliw (1981) FLC 91-092
Line and Line (1997) FLC 92-729
Myerthall (1977) FLC 90-273
Norbis and Norbis (1986) 161 CLR 513; (1986) FLC 91-712
OSF & OJK (2004) FLC 93-191
Phillips (2002) FLC 93-104
Russell and Russell (1999) FLC 92-877; 25 Fam LR 629
Woollams (2004) FLC 93-195

APPELLANT: MS BRICE

RESPONDENT: MR BRICE

FILE NUMBER: MLM 9837 of 2005

APPEAL NUMBER: SA 66 of 2006

DATE DELIVERED: 7 March 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE KAY

HEARING DATE: 23 FEBRUARY 2007

LOWER COURT JURISDICTION: Federal Magistrates Court

LOWER COURT JUDGMENT DATE: 26 September 2006

LOWER COURT MNC: [2006] FMCAfam 657

REPRESENTATION

COUNSEL FOR THE APPELLANT: MS SMALLWOOD

SOLICITORS FOR THE APPELLANT: M K STEELE & GIAMMARIO

COUNSEL FOR THE RESPONDENT: MR POULTON

SOLICITORS FOR THE RESPONDENT: MAHONS LAWYERS

Orders

1. That the appeal be dismissed

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Kay delivered this day will for all publication and reporting purposes be referred to as Brice and Brice.

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SA 66  of 2006
File Number: MLM 9837  of 2005

MS BRICE

Appellant

And

MR BRICE

Respondent

REASONS FOR JUDGMENT

1. This is an appeal against orders for alteration of property interests that were made by Walters FM on 27 September 2006.

2. I heard this appeal sitting as a single judge of the Family Court of Australia pursuant to arrangements made under s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”). 

3. The effect of the orders was to divide the assets accumulated by the parties as to 62.5 per cent in favour of the wife and 37.5 per cent in favour of the husband.  To give effect to those orders the wife was ordered to pay the husband $12,500 and that in addition a sum of $42,152.63 be allocated to the husband out of the interest of the wife in her superannuation entitlements.  The wife was to receive the husband’s interest in the former matrimonial home.

4. By her amended Notice of Appeal the wife seeks to be relieved of the obligation to pay the husband the $12,500 and to have the allocated sum reduced to $11,753.  This would have the effect of increasing the wife’s share of the assets as identified by the Federal Magistrate to 80 per cent.

Background

1. The husband is now 46 and the wife 45.  They commenced cohabitation in November 1980 and were married in July 1982.  They separated in December 2005 after spending 25 years together.

2. They have three children, J born December 1986, S born August 1990 and R born March 1995.  The three children remain living with the wife in the former matrimonial home.

3. Throughout the marriage, save for periods surrounding the birth of the children, the wife had worked at various educational institutions as an administrative assistant.  The husband was also in full employment for most of the marriage, working in a variety of unskilled or semi-skilled occupations, the last of which involved him working as a school bus driver.

4. In 1984 the parties had a lottery win which enabled them to pay $60,000 towards the purchase of a home in E.  That home was sold in 1994 and the net proceeds of sale were then applied to the purchase of a home at P.  When that home was sold some six years later, the parties’ equity in it, according to the wife’s evidence, had shrunk from about $100,000 to $40,000.  The net proceeds were applied towards the acquisition of a home at M which was acquired with the assistance of a borrowing secured by mortgage of $185,000.  The M property remained the matrimonial home for the parties until separation and it is still occupied by the wife and the children.  At the time of the trial the amount owing under the mortgage had grown to $210,000.

5. The child S, now aged 16, has long suffered from chronic encopresis.  He does not feel any sensation of the need for or onset of bowel movements.  He suffers from severe constipation and regular leakage of liquid faeces.  He soils his pants between one and three times each day.  He regularly soils his bed.  His condition means that his clothing and bedding must be regularly washed and the cost of keeping him clean in useable clothing is significantly larger than it might have been if he did not suffer from the condition.  The wife has been the parent who has mainly, if not exclusively, borne the burden of attending to the child S’s problems and the extra household duties that have arisen as a result thereof.

6. Throughout the marriage the husband smoked tobacco (roll-your-own cigarettes) and consumed significant amounts of alcohol.  The wife asserted that the husband was regularly totally intoxicated and that his behaviour when intoxicated was often abusive and grossly inappropriate.  She said that she had nervous breakdowns in 1995 and 2005 with accompanying depression, panic attacks and anxiety. 

7. The husband for his part asserted that his drinking was “basically purely recreational” and of a far smaller nature than that described by the wife.  He said that he had suffered a back injury in 2003 that had left him suffering from depression which was exacerbated by a thyroid condition and the drugs associated with it.  He said that when feeling significant pressure both in the household and in his place of employment he decided to leave his employment and visit his elderly mother in England.  He was away from Australia in December 2005 until mid-February 2006.  His return to Australia prompted the wife to move for an order that she and the children be given sole and occupation of the former matrimonial home.  She was successful in obtaining that order.  The husband then took himself to Cairns where he remained until August 2006 when he returned to Melbourne.

The judgment

1. After setting out some basic background facts the Federal Magistrate then made reference to what he perceived to be the appropriate process to be undertaken in determining a claim for alteration of property interest.  For reasons that do not appear to be entirely relevant to the case at hand, his Honour thought it appropriate to repeat views that he had previously expressed in the decision of OSF & OJK (2004) FLC 93-191 that the process required him to:

   1.        determine the pool of property;

   2.        assess the extent of each parties’ contributions; and,

   3.        consider the matters set out in s 75(2) in so far as they are relevant.

2. He then said (footnotes omitted):

   10.Under section 79(2), the court is required to be satisfied that the order to be made is just and equitable — and not simply that the underlying percentage division of the net value of the parties’ property is appropriate.  In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered.

   11.One of the most recent authorities dealing with the correct approach to be applied in property settlement cases is the Full Court decision in Hickey and Hickey and Attorney-General for the Commonwealth (Intervenor) (2003) FLC 93-143, where their Honours said:

   The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79.  That approach involves four inter-related steps.  Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case …

   12.…It is my view, however, the testing of any proposed orders by reference to section 79(2) is not a fourth substantive step (properly so called) in the property settlement exercise, and there is no fourth step in that sense.

3. His Honour cited as authority for the proposition set out in paragraph 12, his own decision in Leslie (2004) FMCAfam 357 and a decision of Faulks DCJ in B & B (2006) FamCA 883. He might also have sought strength in some observations of Thackray AJ (as he then was) in Woollams (2004) FLC 93-195 at paragraph 46 but any joy that the Federal Magistrate might have felt by reading the words of support at that paragraph would need to be quickly dampened by the earlier criticism of his judgment in OSF & OJK at paragraph 40.

4. Whilst it is not germane to the outcome of this appeal, I would say that until the matter is altered either by legislative change or by decision of the High Court, in my view the issue is entirely well settled.  There is a four-step exercise to be undertaken as is described in the passage quoted from the decision of Hickey above.  In step two the Court ought reach a conclusion on how the pool of assets defined in step one should be divided having regard to the considerations to which the Court must pay its attention under s 79(4)(a), (b) and (c).  In step three the Court needs to evaluate what further adjustments ought to be made having regard to the considerations to which it has been directed by reason of the remaining subsections of 79(4), particularly 79(4)(e) which incorporates the provisions of s 75(2).  At the fourth step the Court must step back and determine whether a combination of steps two and three leads to a result which is just and equitable.  If it does not, then further adjustments may then be made to ensure a just and equitable outcome.  This is a substantive power and not merely a power that relates to form.  It may of course be argued that step four is unnecessary in light of the provisions of s 75(2)(o) which enables the Court to take into account:

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

   If such a fact or circumstance is that an order otherwise arrived at is not just and equitable, then in theory that could be taken into account under that sub-section.

5. That application of the general principle that the Court can take into account a wide range of factors in determining what order is appropriate in property cases can be seen in the early Full Court decision of Myerthall (1977) FLC 90-273 at 76,458; 3 Fam LR 11,324 at 11,327 where the Court said:

   We consider it to be of the utmost importance that legal practitioners recognize that evidence concerning the former matrimonial home, where there is litigation concerning this, should be properly led before the judge hearing the application. Depending on the orders that are being sought, this evidence should not be restricted merely to its value. The particular property may have intrinsic value for the parties because of its proximity to favoured schools or to the residences of close friends or relatives. It may also be of particular value because the mortgage on the property may be subject to very favourable interest rates at a time when current borrowing may involve much higher interest rates.

6. The formal consideration of a fourth step appears to have first been recognised by the Full Court in Russell and Russell (1999) FLC 92-877, 25 Fam LR 629 (coram Ellis, Finn and Mushin JJ) at paragraph 80:

   Furthermore, it must be remembered in this regard that under s 79(2) of the Act, the court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets. Indeed we take the opportunity to emphasise that in what his Honour has termed “the fourth stage”, that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.

7. The concepts were again discussed in the decision of JEL v DDF (2001) FLC 93-075 where Holden and Guest JJ (with whom Kay J agreed in principle) said:

   140.This is why the ``fourth step'', namely whether the result is just and equitable, becomes important. In Clauson and Clauson (1995) FLC ¶92-595 the Full Court (Barblett DCJ, Fogarty and Mushin JJ) recognised, albeit in a discussion of the s 75(2) factors, that the application of percentages does not necessarily result in a just and equitable result, when it said at 81,911:

   “There is, we think, at times a tendency to assess s 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.''

8. Walters FM’s view that s 79(2) is not a source of substantive power would appear to be out of step with authorities that bind him. If the sum of the parts created by s 79(4)(a), (b) and (c) contributions and s 79(4)(e) considerations add up to too much or too little then further adjustments may be made in order to meet the overriding dictate that an order must not be made unless it is just and equitable. A further example of the application of this principle can be seen in the decision of the Full Court in Phillips (2002) FLC 93-104 especially at paragraph 68.

9. Enough, however, of this digression because ultimately it does not reflect on anything that appears to have affected the decision made by the Federal Magistrate nor is it likely to affect the conclusions reached by me in relation to the appeal.

10. The Federal Magistrate then identified the property of the parties to include:

    Matrimonial home  $300,000

    Less mortgage  ($210,000)          

    Net equity  $90,000

    Wife’s BMW Motor vehicle  3,000

    Wife’s Toyoto Corolla motor vehicle  500

    Husband’s superannuation  36,276

    Wife’s superannuation entitlements  133,767

    Wife’s personal loan   (10,000)

    Wife’s credit cards  (15,400)

    Wife’s legal fees  6,000

    Husband’s legal fees  1,000

    Total  $245,143

    Of that pool, $207,867 has been retained by the wife and $37,276 by the husband. 

1. His Honour then turned to consider issues of contribution, finding

   20.The wife is somewhat critical of the husband for certain events which (she says) caused the husband to be unemployed on at least one occasion, but at the end of the day it must be said that both parties have made a significant financial contribution to the acquisition, conservation and improvement of the property that now comprises the available pool.

2. His Honour noted the wife’s contribution towards S’s care. 

3. His Honour rejected a submission by the wife that the husband could have and should have worked harder than he did. 

4. He found the parties were suffering from depression, either in a medical sense of the term or, alternatively, in the lay sense.  He found that this caused the marital relationship to become dysfunctional and the husband’s method of coping with that was to retreat and “self-medicate with alcohol”. 

5. Whilst not deciding whether it was $50 or $60 per week as suggested by the husband or $90 to $100 per week as suggested by the wife, he accepted that

   [I]n the context of this marriage, and this family - that expenditure [on alcohol and tobacco] on the part of the husband was excessive.

6. He found that the husband’s decision to leave his employment was foolish and irresponsible but needed to be understood in the context of a very stressful marriage breakdown.  He found that the decisions that the husband made at the time of the breakdown of the marriage and subsequently, resulted in the husband being in a position where he could not make a significant financial contribution to the welfare of the family. 

7. He declined to treat as wastage the monies spent by the husband in his travel to England and his self-support.  His Honour made reference to $7000 taken by way of annual leave and long service leave saying:

   39.I find that, notwithstanding the fact that the husband received some $7000, there has not been wastage in the usual sense that one hears about in cases such as this.  I understand the sorts of stresses that are placed upon spouses in the circumstances of a marriage breakdown.  On the evidence before me, it would appear that the husband did not have support in this country.  There is no evidence to the contrary.  He saw fit to travel to the United Kingdom to be with his mother.  I understand why he may have decided to take such a step, although I do not condone it.  It would appear from the evidence that the wife did not oppose the husband's decision to travel to the UK. I also understand why she may have adopted such a position.  After all, it was probably convenient for her not to have the husband around from the date of separation.

8. When speaking of tensions in the household prior to separation he said:

   40.The evidence reveals that the situation in the home had been very difficult prior to the husband's departure for the UK.  I accept the wife's description of the husband's rather antisocial behaviour at that time.  Still, although the parties had verbal altercations, and although the husband behaved in an insensitive manner from time to time, this is not a case in which there was any domestic violence in the usual sense.

9. His Honour found that the wife was the principal caregiver for the children, that the husband had also done some household chores and assisted in the care and supervision of the children.  He found the wife was the principal but not sole homemaker and caregiver for the children up to the date of separation.  He acknowledged that what he described as a heavy responsibility fell upon the wife’s shoulders to care for the children after separation without assistance from the husband. 

10. His Honour then assessed the contributions of the wife up to the time of separation as “slightly greater significance than those of the husband” and concluded that a division up to that date favouring the wife by 5 per cent, that is 52.5 to the wife, 47.5 to the husband would be appropriate.

1. His Honour then considered post-separation contributions determining that they had fallen entirely on the shoulders of the wife and ought lead to a readjustment of the contribution over the entire 25 year period of the marriage when those matters are factored in to be assessed as to 57.5 per cent to the wife and 42.5 per cent to the husband.  This created a 15 per cent differential in the division of the pool between the parties based on his Honour’s assessment of their overall contributions.

2. His Honour then turned to identify what were described as “the s 75(2) factors”.  He found as follows:

   ·Neither party’s emotional health was in a robust state but the wife’s state of health generally was better than that of the husband.

   ·The husband was likely to overcome the problems he currently confronts in the not too distant future.

   ·The pool of assets is extremely modest.

   ·The wife has a physical and mental capacity for appropriate gainful employment earning $40,000 per annum.

   ·She can increase her income by taking in boarders or taking board from the eldest child.

   ·The husband has an earning capacity in the order of $40-45,000 per annum but would be unlikely to obtain employment for some weeks or months.

   ·That it would be very difficult for the husband to obtain employment if he did not have a motor vehicle and did not have a permanent place of residence.

   ·The wife has care of two children, one of whom requires a considerable amount of input and supervision.

   ·It will be some time before the husband commences to pay any significant amount of child support.

   ·That a standard of living that would be reasonable for the wife would be to retain the former matrimonial home.

   ·That a standard of living that would be reasonable for the husband is to give him a chance to establish a reasonable standard of living.

3. His Honour then concluded that an appropriate further adjustment would be to add another 5 per cent of the pool to the wife’s entitlement, bringing the final division to 62.5 per cent for the wife and 37.5 per cent for the husband.  This outcome would mean that the wife would receive the first 25 per cent of the pool and the balance be divided equally between the parties.

4. His Honour then concluded that to give effect to his proposed division of property and to meet the husband’s needs for a motor vehicle and some rental, an order of $12,500 cash and an allocation of $42,152.63 of the wife’s superannuation would meet the requirements of the order.

The appeal

1. In her amended Notice of Appeal the wife sought to be relieved of the obligation to pay the husband $12,500 and sought to have the base amount of her superannuation allocated to the husband reduced from $42,152.63 to $11,753.  It was submitted on her behalf that this would have the effect of increasing the wife’s share of the pool of assets as identified by the trial judge from 62.5 per cent up to 80 per cent.  It was further submitted that this really represented a division of 70/30 in favour of the wife of a pool of assets that she would have had the Federal Magistrate consider was appropriate for division, that pool to be increased by a number of notional add-backs of monies already received by the husband.

2. Although the amended Notice of Appeal contained 11 grounds and 29 sub-grounds, the matter was argued before me stressing three areas.  They were:

   ·    Monies expended by the husband at or after the date of separation that ought to have been added back into the pool;

   ·    The wife should have been given greater credit for the contributions made by her in the course of the marriage, especially in light of the husband’s asserted negative contributions.

   ·    Greater consideration should have been given to an adjustment in favour of the wife in respect of s 75(2) factors.  Under the general rubric of s 75(2) it was not open to the Federal Magistrate to make findings about the state of health of the husband in the absence of any medical evidence.

Pool issues

1. Ms Smallwood, counsel for the wife, submitted that the pool of assets (which are set out in paragraph 21 above) should have been increased by the notional addition of:

   ·    proceeds of sale of motor bike in October 2005 for $3000;

   ·    long service leave $7500;

   ·    increase in credit card liability $2000;

   ·    proceeds of sale of BMW $1500;

   ·    proceeds of sale of Falcon $500

   Total: $14,500.

2. The issue of there being potential add-backs into the pool assets was not touched upon at all in the affidavits relied upon by the parties as their evidence in chief at the trial.  In opening Mr Skerlj on behalf of the wife defined them as:

   …There was long-service leave and associated benefits he received when he ceased his employment shortly before travelling to England in November 2005.  That’s $7500.  There was an amount of $2000 that represented a withdrawal from one of the credit cards that I’ve already indicated to your Honour, the liability of $15,400.  2000 of that was withdrawn by the husband, we say not for any family purposes.  That was done in about August of this year at a point in time that coincided, we would say, with an automatic withholding by the Child Support Agency of a potential refund to the husband. 

   There was a payment ordered by the court by your Honour on 13 August of $500, ultimately to be determined by the trial.  I understand that these matters are not in contention in terms of the amounts.  They might be in contention as to whether they ought to be included.  There was a sale of a motorbike before the husband went overseas for $3000.  There was a sale of a BMW car for $1500 and there was a Falcon motor car that the parties had gifted to their son and when the husband returned from England assumed possession of and the wife has put that in at $500.  Those items, your Honour, total $15,000.

3. In her evidence in chief the wife said that a motor bike was sold to enable the husband to purchase a ticket to go to England to see his mother.  She was also aware that he received some $7500 long service leave before travelling. 

4. In his oral evidence the husband said that he had received about $7000 from annual leave and long service leave.  $1000 of that was paid towards his solicitors and the balance was dwindled away living in England for three months.  

5. He was asked some questions in cross-examination about the $2000 that he had withdrawn from the credit card in August 2006 and he indicated that he still had $1300 of it, having spent the rest to get to Melbourne from Cairns. 

6. The issues relating to these potential add-backs were not otherwise canvassed in the evidence.

7. I have already made reference to some of the areas of the judgment where the Federal Magistrate dealt with the issues raised relating to the husband’s expenditure (see paragraph 28 above).  Additionally he said at paragraph 34 of his judgment:

   The husband saw fit to obtain some $7000 by way of annual leave and long service leave.  He then used that amount to travel to the United Kingdom, and to support himself while he was there for a period of approximately three months (or perhaps a little more).

8. That finding is incorrect in that it overlooks the evidence relating to the sale of the motor bike that was actually used to travel to the United Kingdom, although it is accurate in that it otherwise describes how the annual leave and long service leave sums were disposed of. 

9. There is no reference in the judgment to the proceeds of the BMW $1500 or the Falcon $500 but the Federal Magistrate says of the increase in the credit card:

   …It appears that the husband still has in his possession some $1300 of that $2000.  At the end of the day, however, nothing is going to turn on the fact that the husband has that relatively modest amount of money in his possession.

10. The issue of adding back into a pool monies that have been expended by one party has been the subject of several decisions, many of which are collated by the Full Court in its decision in Chorn and Hopkins (2004) FLC 93-204. There the Full Court (Finn, Kay and May JJ) said:

    24We will refer again later in these reasons to the decision in Townsend [(1995) FLC ¶92-569 ], but we would in the present context draw attention to the following observations by later Full Courts:

    “2.11 There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge. ([M & M] [1998] FamCA 42, 1 May 1998, per Baker, Kay and Chisholm JJ.) 

    ... 

    46. Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. ([C & C] [1998] FamCA 143, 8 October 1998, per Nicholson CJ, Ellis, Kay JJ.)''

11. In particular, as the Full Court said in Line and Line (1997) FLC 92-729 at 4.71:

    …where, after separation, a party to proceedings under s 79 applies joint funds for his or her sole benefit those funds may be brought back to account in those proceedings as a distribution of property in favour of that party.

12. The cases identify that there is a discretion in the trial judge to increase the pool of assets in relation to any such expenditure but they do not mandate any such requirement.

13. Generally speaking before an appellate court could be persuaded to intervene in the failure to require a party to properly account for post-separation expenditure, the Court would expect to see some of the matters identified by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092, namely that a party had acted recklessly, negligently or wantonly with the matrimonial assets.

14. Ultimately the decision whether or not to treat this type of expenditure as a premature distribution of assets is a matter of discretion.  In this case Walters FM determined that the expenditure involved in the trip to England and the husband’s self-support for several months ought not be seen as a premature distribution of assets for which he ought now be brought to account.  In my view that was an approach reasonably open to the learned Federal Magistrate and not one which would attract appellate intervention.

The assessment of contributions

1. Ms Smallwood submitted that the factors identified by the Federal Magistrate should have led to an assessment of contributions that favoured the wife in a range of 60-65 per cent in lieu of the 57.5 per cent as assessed by the Federal Magistrate.  She sought to rely upon the weight to be given to:

   ·    The wife’s past care of the child S;

   ·    Excessive expenditure by the husband on alcohol and tobacco;

   ·    The foolish and irresponsible conduct of the husband in leaving his employment; and finally

   ·    The wastage by the husband in taking a trip to England.

2. There are notorious difficulties that face an appellant in urging an appellate tribunal to interfere with an exercise of discretion.  This is particularly so in property cases where, as the High Court has said in Norbis and Norbis (1986) 161 CLR 513 at 540; (1986) FLC ¶91-712 at 75,178 (per Brennan J):

   The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community.  The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.

3. A finding of 57.5 as to 42.5 per cent by way of contributions represents a finding that the wife has put in over a third more into this marriage than has the husband (1.35:1).  Whilst many may argue that that finding does not adequately recognise the extra difficulties that the wife has laboured under, I cannot say that it is so far out of the range that it attracts appellate interference.

Section 75(2) factors

1. Ms Smallwood sought to emphasise that again there were a number of factors which clearly favoured a further adjustment in favour of the wife.  She began by challenging the findings in paragraphs 52 and 53 where the Federal Magistrate said:

   52.I turn now to deal with the section 75(2) factors.  The first is the age and state of health of each of the parties.  I have already recorded the ages of the parties.  Neither party’s emotional health is in a robust state the present time, but I find that the wife's state of health generally is better than that of the husband.

   53.I find that the husband is certainly in need of professional assistance in the form of counselling, and perhaps psychological or psychiatric help as well.  He said during the course of his evidence in the witness box today that he is depressed and has felt suicidal.  That concerned me to the extent that I called in the Dispute Resolution Coordinator of this Court to assist the parties to deal with children's issues, which in my view had come before the court prematurely, and before the parties had undergone the sort of counselling process that they should have undertaken.

2. In fairness to the Federal Magistrate one ought also include the findings in paragraph 54 that would indicate that whatever the findings were in paragraphs 52 and 53 they were unlikely to have a long-term effect upon the husband’s capacity to adequately provide for himself and to begin to contribute properly in relation to the support of the remaining dependent children. 

3. She also sought to challenge the finding that the husband had the need for a motor vehicle and she sought to emphasise the wife’s needs to support herself and the children in the absence of any reliable support from the husband.

4. As the Full Court observed in Dow-Sainter (1980) FLC ¶90-890 at 75,616; (1979) 6 Fam LR 684 at 688, the task of the trial judge in dividing up a small asset pool is extremely difficult:

   Such situations are not uncommon in this court being caused by the brutal and inescapable fact, that when two parties separate, property which may have allowed them to get a reasonably comfortable standard of living, is simply not sufficient when divided.

5. Walters FM was extremely conscious of the difficult task that faced him in having to do justice between both the father and the mother.  There were simply inadequate amounts to go around.  The Federal Magistrate endeavoured as best he could to strike the very difficult balance that he was required to do.  His task was made a little easier when counsel for the wife said to the Court in the course of addresses, after the Federal Magistrate had already indicated that he was thinking of requiring a payment of about $12,500:

   …whether what your Honour’s indicated are possibilities are doable from my client.  The situation is that my instructions are that my client has sought finance from the bank and the extent that she [is] able to get a loan that would cover in effect the existing mortgage and the credit cards on the basis of her income and no other monies coming in.  That’s pretty close to all she can borrow.  If the court were to make an order for a payment of an amount in the vicinity of what your Honour was indicating, your Honour will see that she has family with her and she will have to borrow it and to the extent that her family do not want to see her without a house.  There would be some assistance forthcoming in that regard.

6. In the appeal before me Ms Smallwood properly accepted that in light of that concession it could not be said that a nil order for payment to the husband was necessary for the retention of the home which was clearly something that was for the benefit of both the wife and the children.

7. I can detect no material error of principle, no material error of fact and do not conclude that the outcome was plainly unjust.  For these reasons I am of the view that the appeal ought to be dismissed. 

8. Neither party sought an order for costs in the event that the appeal was dismissed.

I certify that the preceding sixty two (62) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kay

Associate: 

Date:  7 March 2007