C & C

[2006] FamCA 191

[2006] FamCA 191

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA
AT BRISBANE      No. NA74 of 2005

(No. BRM6447 of 2004)

BETWEEN:
  C

Appellant Wife
(Respondent to Cross-Appeal)

AND:
  C

Respondent Husband
(Cross-Appellant)

BEFORE THE HONOURABLE JUSTICE WARNICK

REASONS FOR JUDGMENT

Dates of Hearing:              1 February 2006

Date of Judgment:            3 March 2006

Appearances:  Mr McGregor of Counsel, instructed by K L King & Associates, Solicitors, appeared on behalf of the Applicant Wife

Mr Galloway of Counsel, instructed by Stacks Gray Lawyers, appeared on behalf of the Respondent Husband

C and C  NA74 of 2005 (BRM6447 of 2004)

Heard:           1 February 2006
Delivered:     3 March 2006

CATCHWORDS:

APPEAL FROM FEDERAL MAGISTRATES COURT – PROPERTY – VALUE OF PROPERTY – MISTAKE – Orders made splitting the property on a 50/50 basis – The Federal Magistrate made an error in determining the value of the former matrimonial home.

CROSS APPEAL – PROPERTY SETTLEMENT – CONTRIBUTIONS – Husband argued Federal Magistrate erred in assessing equal contributions between the parties – Husband had care of the 2 children of the marriage during 7 year period of the marriage when the wife lived overseas.

COSTS – OFFER TO SETTLE – Orders made – Husband argued discretion of the Federal Magistrate miscarried as the wife made no written offer to settle.

CASELAW CITED:

G and G [2004] FamCA 1179

Ruscoe and Walker (2002) FLC 93-093

Appeal allowed.  Matter remitted to Jarrett FM for re-hearing.

Cross-appeal dismissed.  Husband ordered to pay wife’s costs.

1. This appeal must succeed on the issue of the valuation of the former matrimonial home of the husband and wife and consequently the application for property settlement will be remitted for (at the least, depending on the result of a cross-appeal) reconsideration of valuation and, in the light of the impact of any reassessment and its impact on the monetary element of other orders, whether the husband should have (as the orders appealed provided) the opportunity of exchanging payment for a transfer of the wife’s interest in the home, or the home be forthwith sold.

2. While technically the appeal succeeds because of an error made by the trial Magistrate, so unsatisfactory were the circumstances in which the issue was presented to his Honour, that a mis-step in trying to find a path through the difficulties is unsurprising.

3. Jarrett FM heard the wife’s application for property settlement on 26 August 2005.  In his reasons for the orders made shortly after, on 2 September 2005, he recorded that the wife had sought that the parties’ property (which his Honour determined to be in the sum of $614,464.00 net) be divided equally, but that the husband had sought 80%-85% of that property.

4. The wife succeeded in obtaining an equal division, but she appealed nonetheless, on the basis indicated, namely that a mistake had been made in the determination of the value of the former matrimonial home, which was by far the major asset of the parties.

5. The husband cross-appealed, essentially on the basis that the learned Magistrate had erred in assessing contributions as equal, particularly given a period of about 9 or 10 years between 1994 and 2004, when the wife lived overseas for about 7 years and the husband remained in the former matrimonial home with the 2 children of the parties.

6. In the event of success of the cross-appeal, given the result of the appeal, the appropriate order would be that the application for property settlement be remitted for rehearing in its entirety.

7. After the orders made in disposition of the application for property settlement, the wife obtained an order that the husband pay her $9,074.50 costs of the application.  The husband was given leave to appeal that order (by adding a ground to his cross-appeal).

8. I will deal firstly with the reasons for the outcome of the appeal, which can be discussed without any need to outline the evidence relating to contributions.  After doing so, I will refer to the principles applicable to the cross-appeal, before discussion of the grounds of cross-appeal, (excluding as to the costs order).  I will then move to a conclusion in respect of those grounds of the cross-appeal and the consequences of that conclusion.  Finally, I will deal with the appeal against the costs order.

The appeal

1. Background to the valuation issue

1. On 7 September 2004, Jarrett FM ordered that the parties agree on an expert valuer to value the former matrimonial home.  This was done and Mr H valued the home, which was only partially completed, at $580,000.

2. The wife was dissatisfied with the valuation.  On 22 April 2005, Jarrett FM granted the wife leave to obtain evidence from a Mr E, a valuer.  Mr E valued the home at $700,000.

3. In his outline of case, the husband relied upon the affidavit of Mr H.  So did the wife in an Outline of Case filed 1 April 2005.  Of course, that was 3 weeks before the wife obtained the order allowing her to obtain evidence from Mr E.  It appears that an amended Outline of Case may have been filed closer to the hearing, but in any event it also included Mr H’s affidavit as a document relied upon and made no mention of Mr E’s affidavit.

4. At paragraph 39 of his reasons for judgment, the learned Magistrate referred to the orders just mentioned but said:

   “…at the trial, however, both parties relied upon the affidavit of [Mr H] and neither party sought to put before me any other valuations.”

1. Argument on appeal

1. For the wife, it is contended that his Honour was wrong in these two findings, namely that she had relied upon Mr H’s affidavit and as well, that she had not sought to put before him any other valuations.  To establish these errors counsel for the wife relies particularly on exchanges at the close of evidence and during submissions before the Federal Magistrate.

2. For the husband, while it is not denied that the exchanges during the hearing between both counsel and the Federal Magistrate are clearly based upon the understanding that the competing valuations were in evidence, it is argued that the learned Magistrate must have subsequently realised that the valuation of Mr E was not formally before him and as Mr H’s affidavit was referred to in each party’s Outline of Case, he concluded that both parties had relied upon Mr H’s affidavit.

3. Nonetheless, as earlier indicated, what took place at the hearing is inconsistent with any other position but that, (notwithstanding the content of Outline of Case documents), all concerned regarded Mr E’s affidavit as being in evidence.  When he was cross-examining the husband, counsel for the wife asked:

   “All right.  Well, let’s just have a look at what the valuers say.  [Mr E] said, “At the date of inspection was in an incomplete state with the property never having been completed after the original owner/builder construction having been undertaken in excess of a decade ago.”  Right.  You agree that it’s incomplete, don’t you?  So you know that it’s not finished? ---The house not finished, yes.”

4. At that time, there was no objection suggesting that Mr E’s evidence was not part of the wife’s case.

5. Following completion of the wife’s evidence, counsel for the wife said:

   “MR McGREGOR:  I’m not aware that any of my other witnesses is required for cross-examination.  There’s the issue about the value of the former matrimonial home which, really, whether anybody needs to be cross-examined or not depends upon whether it’s conceded that that has to be sold and I don’t know what the position is, because our case is it’ll have to be sold.  It seemed that the husband, really, was conceding that unless there’s a small amount that he has to pay to the wife.  So, I’m really in my learned friend’s hands in relation to that.”

6. Counsel for the husband (Mr Canning) responded by saying that he would take instructions and after some discussion about whether other witnesses were required, the trial Magistrate indicated that he would stand the matter down so “…you can sort out what you are going to do with the valuer.”.  The Federal Magistrate also indicated that he believed that there had been a concession by the husband that the house had to be sold or might have to be sold.  When court resumed, the following exchange occurred:

   “MR CANNING:  I can address on valuation, your Honour, that my instructions are that the applicant says he can borrow money, he says he can borrow up to a figure of some – in his estimation - $200,000.  Perhaps, then, if an order was considered, it would be an order that he would have to pay the respondent a certain amount, whatever amount ordered by the Court within a certain time.  If it wasn’t paid, then the house be sold.

   FEDERAL MAGISTRATE:  Well, does anybody want to cross-examine the valuer?

   MR MCGREGOR:  There were two valuations that your Honour will realise quite a difference between the two of them.  I wasn’t intending to because it is my submission – will be my submission that the true market value is what it fetches on the open market.

   FEDERAL MAGISTRATE:  Well, I just want to know whether anybody to cross-examine on it [sic], and you tell me no, Mr McGregor?

   MR MCGREGOR:  No, your Honour.

   FEDERAL MAGISTRATE:  You tell me no, Mr Canning.

   MR CANNING:  No, your Honour.

   FEDERAL MAGISTRATE:  All right, well, I will hear your submissions.

   MR MCGREGOR:  Thank you, your Honour.  Can I hand up a list of assets and liabilities contended for by the wife?

   …

   MR MCGREGOR:  There are differences in item number 1, the value of the house.”

7. Counsel for the wife then addressed, including a final submission that “Orders should be framed for the sale of the home”.

8. However, counsel for the wife did not address the prospect that the husband would be given the opportunity of purchasing the wife’s interest in the home and in that circumstance, what should be done with the differences in valuation.

9. Counsel for the wife may, not without some justification, have been content with the belief that, there being competing and very divergent written assessments of value before the court, in the absence of cross-examination the Federal Magistrate would reach the conclusion that to determine value the home had to be sold on the open market, which was the position contended for by the wife.

10. Counsel for the husband then addressed and said this in respect of the valuations:

    “In relation to the valuations of the property, the father relies on the valuation that was done by [Mr H] that is before the Court.  The husband relies on that because it was the Court – [Mr H] was the Court-appointed valuer, and it was the value agreed to by the parties.  The husband says that it is more appropriate to take his valuation.

    FEDERAL MAGISTRATE:  But I gave leave to get other valuations, didn’t I?

    MR CANNING:  Yes, your Honour, you did.

    FEDERAL MAGISTRATE:  Yes.  So just because he is the Court-appointed expert doesn’t mean much.  What it means is I was satisfied at some time in the past that there should be leave to put in another valuation or get another valuation, and I think that was done, but nobody has bothered to cross-examine the valuers.  So I have got two valuation reports, one saying it is worth 580, the other saying 700; which one do I pick, and on what basis?

    MR CANNING:  Well, your Honour, there is, in my submission, there is not much between them in relation to the unimproved land valuations.  [Mr H] says $450,000, and the second valuation – it is [Mr E], I believe – says $500,000.  [Mr E] did have some valuations that were available to him that [Mr H] didn’t.

    However, my submission is that the main difference between the two valuations is what each valuer considers is going to be the cost of bringing the house up to a standard that would fit in with the other properties in the street.  [Mr H] says in his valuation that he believes it will cost more than [Mr E] is saying, and he has made his valuation on that basis, and that is my submission in relation to why his valuation should be accepted.

    FEDERAL MAGISTRATE:  Right.”

11. Counsel for the husband then moved to speak of other matters.

12. As to what this imbroglio meant, his Honour’s treatment of it and submissions on appeal about it:

    ·   I reject the submission that it was open to the trial Magistrate to look back at the Outline of Case documents, note that the only valuation evidence nominated by each party in those documents was that of Mr H, and conclude, as he did in paragraph 39, that both parties relied on Mr H’s affidavit and neither sought to put before him any other valuation.  To so conclude would be to negate the exchanges recorded, which clearly indicate that his Honour and counsel for each party proceeded on the basis that the evidence of both Mr E and Mr H was before the Court.  The conduct of the hearing clearly overtook documents initially presented.

    ·   Even if it be that, amidst the ambiguous circumstances presented to the Federal Magistrate, there was support for findings that both parties had relied upon Mr H’s evidence and neither party had sought to put before the court any other valuation then, in the circumstances, where that proposition sits so much at odds with what was clearly the understanding during the hearing, the only fair course would have been to call counsel back before the court.

    ·   An order for the immediate sale of the home would have rendered unnecessary a determination of the valuation.  However, this is not what his Honour did.

    ·   It may have been open to the learned Magistrate, notwithstanding the absence of cross-examination of the valuers, to make a determination of valuation based upon the terms of the written evidence.  But this he did not do.

    ·   Similarly it could not be said, as it was by counsel for the husband during his address at trial, because of the exchanges, during submissions at trial that the parties agreed on the valuation of Mr H, and as the learned Magistrate himself pointed out, even if such a proposition might have been available before the wife obtained leave to obtain other evidence, developments since then needed to be considered.  Those developments established a lack of agreement.

13. For these reasons, I find that the learned Magistrate erred in his findings of agreement about the value of the former matrimonial home and that neither party sought to put before him valuations other than that of Mr H.

14. Both counsel indicated the view that the proper course, if merit was found in the appeal, was to remit only the issue of valuation and the effect of a determination as to value on the question of whether the husband should be given the opportunity to pay the wife a sum in exchange for her share of the home, as against an order for immediate sale.

15. The question of remission for a limited rehearing was discussed in Ruscoe v Walker (2002) FLC 93-093. While the limitations there were less restrictive than proposed here, and while concern about exclusion of evidence of any events subsequent to the orders appealed does arise, in the interests of finality, and in view of the narrowness of the valuation question and the position taken by counsel, I am satisfied that the course proposed is proper.

16. Counsel for the wife also argued in support of the appeal that the evidence did not support an order giving the husband the opportunity to buy out the wife’s interest in the home.  I was taken to the husband’s evidence about his capacity to raise funds and to a statement after the close of evidence, “on instructions” by counsel for the husband, about that capacity.  Since the issue must be reconsidered, I do not think it necessary or wise to make any comment about this argument.

The cross-appeal

1. general

1. The cross-appeal as filed contained 5 grounds. (As indicated earlier, a sixth ground added by leave at the hearing was in respect of an appeal against the costs order). Ground 4 was abandoned and ground 2, which asserted a failure to determine that the parties had separated in either 1993 or 1994 was not pursued in those terms, counsel acknowledging that the crucial area of findings was as to the contributions made, if any, whether the parties had separated or not. Ground 1 merely asserted that the trial Judge had erred in law and in fact such that the exercise of his discretion had miscarried. Ground 5, which seemed to go to a factor relevant under section 75(2) of the Family Law Act was not addressed.

2. This approach left the challenge contained in ground 3 to the assessment of contributions.

1. ground 3

1. This ground was also amended by leave at the hearing so that it ultimately read:

   “3.           The trial Judge erred in determining that the parties’ contributions to the date of trial were equal and in particular the trial Judge failed:-

   (a)To give adequate reasons for his determination

   (b)To find that the Husband had made a significantly greater contribution by reason of his care for the children of the marriage, without sufficient assistance from the Wife.

   (c)To find that the wife had contributed far less of her income, if any, to the welfare of the family.

   PARTICULARS

   (i)The Wife's earnings consisted of "retail income" retained by her, and of "royalty income" paid by [HL] into her Australian bank account;

   (ii)The Wife in fact retains almost the whole benefit of the "royalty income" for her own use.

   In the circumstances the trial judge erred in finding that the Wife contributed either $56,000.00 or $64,000.00 to the welfare of the family (Judgment, paragraph 48)”

Ground 3(a)

1. The question of adequacy of reasons was not addressed except in the sense that it was argued that the findings and conclusions made were not supportable, or findings that should have been made were not made.

Grounds 3(b) and (c)

1. Grounds (b) and (c) can be considered together.  They really relate to the Federal Magistrate’s assessment of contributions, both financial and non-financial, made by the parties between 1993/94 and 2004.  Discussion of the Federal Magistrate’s treatment of these contributions will be best understood if they are outlined and placed in the broader context of the parties’ relationship.

1. background

1. Each of the husband and wife was born in the Philippines and migrated to Australia in about 1974.  They commenced cohabitation upon marriage in September 1976.  Two children were born, JH in July 1977 and JE in November 1985.  Both these children were independent by time of trial.  Each of the husband and wife was 56 years of age at trial.

2. Neither party had any assets of significance at the commencement of the relationship.  Each party was in employment.  The learned Magistrate said:

   “5.    Both parties continued to work full-time even after the children were born.  They also pursued other income earning activities such as making special Philippine bread for sale.  The wife also sold dresses and made cakes which she sold at a profit.”

3. The parties bought and sold some real estate and in 1987 after moving to Queensland from Melbourne, purchased a cleaning business.  It had “…substantial contracts and at one time…up to 17 employees.”  The learned Magistrate accepted the wife’s evidence that both parties worked hard in the cleaning business but that in 1992 it “went into decline”.

4. The learned Magistrate said:

   “…I found generally that the husband was an unreliable witness.…”

5. His Honour then recorded that the wife’s evidence was that, because of the downturn in the cleaning business, she needed to identify another source of income.  She became involved as a consultant for the sale of certain health and diet products and with the consent and encouragement of the husband, in October 1994 she travelled to the Philippines to set up a distribution network for the health and diet products there.  It was common ground between the parties that between then and May 2004, the wife was absent from Australia for 84 complete months, ie. 7 years.

6. Importantly to the issues raised in the appeal, as to financial arrangements during the decade under discussion, the learned Magistrate made the following findings:

   “22.  … She was paid a retainer by the company concerned and that was paid directly into her bank account in Australia.  She organised a friend to have access to that account because the husband, she says, refused to accept responsibility for it.

   23.    In paragraph 30 of her affidavit filed on 1 April 2005 she sets out the amounts received by her by way of retainer for the years 1994 to 2004 I accept the evidence about those matters.

   24.    The wife alleges that of the amounts left by her in Australia $80 per week was used specifically to pay for a carer for the party's child [JE].

   25.    The wife said, in cross-examination, that whilst she was in the Philippines she received an income from certain retailing activities and that she retained that in the Philippines for the purposes of funding her living expenses.  She returned to Australia from time to time and she was able to come make some contributions to the family when she returned.  I accept her evidence that she would purchase items for the family including groceries and the like when she was in Australia.  She also paid for the registration of her car in Australia that the parties' oldest child used.

   26.    From 1999 onwards, the wife spent increasingly longer periods of time in the Philippines.  During that time her retainer income (to which I have earlier referred) was used to pay her credit cards which she used to fund her distribution network in the Philippines.  She also used those credit cards to purchase school uniforms and books for [JE] as well as other things he needed.

   …

   28.    When she returned to Australia from time to time, I accept that she returned to the former matrimonial home and family.  She continued to support the family by making available to the family in Australia her retainer and she supported herself through the use of her income derived in the Philippines. 

   …

   30.    The wife alleges that the parties remained a family and when she was able to do so she would take the husband on overseas holidays.…

   33.    After the wife commenced her business interests in the Philippines, the party's two sons remained living in the former matrimonial home.…

   34.    The wife alleges that when she left to commence her business interests in the Philippines she organised for a friend of hers to be a nanny for the party's youngest child [JE].  It is not clear on evidence for how long that continued but I am satisfied that the wife met the cost of that from her retainer payments that were received in Australia from the business.”

1. When he came to assess contributions, the learned Magistrate said:

   “47.  This was a very long marriage.  That is so whether I accept the husband's date of separation or the wife's.  At the commencement of their relationship they had no assets to speak of and they immediately set about working very hard for the advancement of their family.  Neither party raised any particular matter about contributions prior to their alleged separation.  The position of each party was that, taking into account the parties’ initial contributions and their contributions not only to their property but to the welfare of the family, contributions up to separation should be seen as equal.

   48.    The husband argues that he has made a greater contribution since 1993 because he was effectively abandoned by the wife.  I do not accept that submission.  I'm satisfied that the wife attempted to commence a business in the Philippines with the husband's consent and with the hope that it would return to the parties are [sic] considerable income.  Notwithstanding the wife's lengthy absences from Australia I am satisfied that she continued to contribute financially to the welfare of the family by reason of the royalties that she left in Australia.  On her evidence that amounted to about $56,000 and on the husband's evidence about $64,000. 

   49.    I do not think that any criticism can be made of the wife that she utilised her own income derived in the Philippines for her own support while she was in that country.…

   50.    The husband's contributions since the wife's departure to the Philippines in 1994 comprised not only financial contributions but also contributions to the welfare of the family.  He was plainly left with on-going care and control of the two children.  That is so notwithstanding that he had some assistance from the nanny organised by the mother. 

   51.    Moreover, the husband has paid the mortgage on the former matrimonial home and has continued to keep the rates and other costs of ownership attended to.  There is some evidence that he has fallen behind from time to time and it seems that that could be because the husband is given to gambling some of his income.  He admitted as much in the course of cross-examination.  Whilst the husband has met the mortgage and the other costs of ownership of the former matrimonial home, he has done so with some financial assistance from the wife ($64,000 over about eight years) and he has had the benefit of living in the former matrimonial home.  He has not sought to improve that property by completing the building workers left outstanding. 

   52.    In all the circumstances I am satisfied that I should assess each party's contributions to the acquisition, conservation and improvement of the property up to the date of trial as equal.”

1. arguments on appeal

1. The focus of the challenge to the learned Magistrate’s treatment of the wife’s contributions during the decade in question was on the last 2 sentences (seen above) of paragraph 48, namely:

   “48.  …Notwithstanding the wife's lengthy absences from Australia I am satisfied that she continued to contribute financially to the welfare of the family by reason of the royalties that she left in Australia.  On her evidence that amounted to about $56,000 and on the husband's evidence about $64,000.”

2. Counsel for the husband has clearly interpreted the clause in the last sentence, “…that amounted to about $56,000…” (my underlining) as quantifying the wife’s contribution to the welfare of the family” referred to in the preceding sentence.  This quantification he argued was demonstrably wrong.  But in my view, looking only at the two sentences, “that amount to about $56,000” might equally and only relate to “the royalties that she left in Australia”, not the amount of the wife’s contributions.

3. However, a sentence in paragraph 51 (quoted above) is also pertinent:

   “Whilst the husband has met the mortgage and the other costs of ownership of the former matrimonial home, he has done so with some financial assistance from the wife ($64,000 over about eight years)…”

4. While clearly the $64,000 quantifies the amount of “financial assistance form the wife”, the reference does not mean that the learned Magistrate overlooked or mistook evidence about the purposes for which that amount was used.

5. In this vein, counsel for the wife submitted that it was important when assessing the Federal Magistrate’s treatment of the wife’s contributions to refer back to the paragraphs, namely paragraphs 22 to 34 in the reasons of Jarrett FM, set out earlier in these reasons.  In those paragraphs the learned Magistrate made findings such as:

   “26.  From 1999 onwards, the wife spent increasingly longer periods of time in the Philippines.  During that time her retainer income (to which I have earlier referred) was used to pay her credit cards which she used to fund her distribution network in the Philippines.  She also used those credit cards to purchase school uniforms and books for [JE] as well as other things he needed.”

6. In my view it is clear that the Federal Magistrate was not under any misapprehension that the whole of monies left in Australia was spent on the family in Australia.

7. Counsel for the husband drew my attention to passages of cross-examination of the wife to demonstrate that the wife admitted spending monies left in Australia for purposes other than “welfare of the family” (excluding herself).  Apart from (I accept) so demonstrating, the passages (and some later passages when the topic was revisited) indicate some confusion of terminology between “retainer”, “retail” and “royalty” income, but I am not persuaded anything turns on that confusion.

8. But the ground of appeal and the submissions of counsel for the husband went further than arguing that there had been a mistake as to the amount contributed by the wife to the welfare of the family.  Counsel argued that even the total amount left in Australia represented only an annual amount of the order of $5,400 and he said that was a very low amount compared with the husband’s earnings.  Thus, counsel submitted, especially in combination with the husband’s care of the children from 1994 to 2004, the husband made greater contributions than the wife.

9. A disparity in income contributed will far from necessarily lead to unequal weight given to contributions.  In my view, numerous authorities accommodate an approach whereby if a party during cohabitation earned sufficient to support himself/herself and make some albeit modest contributions to other family outgoings, then that role might be assessed as a fulsome contribution equal to that of the other party, notwithstanding that the latter earned greater income..

10. Similarly, though the husband both worked and cared for the children, these activities far from necessarily amount to a “dual contribution”, particularly having regard to the age of the older child in 1994 (namely, 17 years) and the availability, albeit not for the entirety of the period, of a child-carer.  As well, the decade in question represents only a little less than one-third of the period of contributions.

11. Absent error of fact, the question is whether the approach of the learned Magistrate was within discretion.  I discussed the principles applicable to appeals in such circumstances in G and G [2004] FamCA 1179. Some of the statements I quoted there are also pertinent to the level of satisfaction necessary before an appellate court will find a mistake of fact. In G and G, I said:

    “82.  The statements of principle applicable to appeals from discretionary judgments are familiar.  Revisiting those statements, one is struck by the regularity with which the width of discretion of the trial court and the caution that the appeal court should exercise, are stressed.  This is demonstrated by adding emphasis within some of the often quoted statements of principle.  In Bellenden (formerly Satterthwaite  v Satterthwaite) (1948) 1 All,ER 343 at 345, Asquith LJ stated the rationale of an appellate court’s approach:

    “…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.” (emphasis added)

    83.    In Norbis v Norbis (1986) 161 CLR 513; (1986) FLC 91‑712 at 75,178 Brennan J stated:

    “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.” (emphasis added)

    84.    Kitto J in Australian Coal & Shale Employees Federation v. The Commonwealth (1953) 94 CLR 621 at 627 said:

    “…there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.”

    85.    In Gronow & Gronow (1979) 144 CLR 513 at 520, Stephen J said:

    “…an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight.”

    86.    Finally, in CDJ & VAJ (1998) 197 CLR 172 at 231, touching upon the features applicable to the exercise of discretion in the Family Court, Kirby J said:

    “1.…The reference to ‘plainly wrong” is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.

    2.Such reasons for appellate restraint…have particular relevance to appeals within, and from, the Family Court of Australia.  This is because of the functions and purposes of that Court and the difficulty and evaluative decisions which it often has to make.  The peculiar nature of decisions relating to the intensely personal questions of the division of the property of parties to a failed marriage and the welfare of their children makes it essential that those who decide appeals respect the onerous responsibilities of those whose decisions they review.  They need to recognise that it is of the very nature of such decisions, including those relating to the residence of children, that any two decision-makers may, with complete integrity and upon the same material, often come to differing conclusions.” (emphasis added)

    87.    While I think one must be careful not to lose the ordinary sense of a passage by focussing excessively on one or two words, I note that the passages refer to the ambit being wide enough, at a minimum, to contain reasonable disagreement.  In other words, something more even than actual disagreement is required before interference is justified.  Attention is then drawn to the strength of disagreement, to determine whether the appellate court may interfere or not.

    88.    It seems reasonable to imagine that, along the continuum of levels of disagreement, before a conclusion is reached that the result below was plainly wrong or manifestly excessive, the appellate Judge may pass through a stage of uncomfortable uncertainty about the result below, of which uncertainty that result is entitled to the “benefit of the doubt”.

    89.    Reinforcing the proper reluctance of an appellate court to interfere, is the observation that a trial Judge, in exercising a discretion, may have an advantage over the appellate court in reviewing that exercise.  We are, of course, familiar with discussion of the advantage of a trial Judge, particularly in relation to conclusions about the credibility of witnesses.  But there are other reasons for such advantages beyond the opportunity to observe witnesses.

    90.    In Fox v Percy [2003] HCA 22, the High Court considered a decision of the Court of Appeal of the Supreme Court of New South Wales, reversing a judgment of the District Court of that State, following a review by the Court of Appeal of findings of fact based on the trial Judge’s assessment of the credibility of witnesses, but which findings were inconsistent with other incontrovertibly established facts.

    91.    In discussing the powers and functions of the Court of Appeal, Gleeson CJ, Gummow and Kirby JJ said: [para 23]

    “[the appellate court] …must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record.  These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share.  Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial.  Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.” (emphasis added)

12. Applying the principles and approach discussed, I consider:

    (i)no mistake of fact in respect of the wife’s financial contributions established;

    (ii)the assessment by the learned Magistrate of contributions well within the ambit of discretion.

Appeal against the costs order

1. The ground added by leave read:

   “6.    That the trial Judge erred in ordering on 27 October 2005 that the husband pay the wife’s costs of the proceedings.”

2. As to what constituted that alleged error, in his written summary of argument counsel for the husband said:

   “11.  …His Honour had taken the written submissions of the parties and appears to have decided on an order for costs on the basis that the Wife had sought an equal division of the parties’ assets in her application, although she had made no written offer.  It is submitted here that, whilst costs are discretionary, the discretion of the learned Federal Magistrate miscarried:-

   (a)The question of whether or not the parties separated in 1993 or 1994 was a point of real contention and upon it depended the extent of contribution and hence property settlement;

   (b)There was nothing in the issue that showed that the Husband was taking an unreasonable, or untenable position. (Prima facie his position was supported by the evidence).”

3. The above submissions are somewhat “defensive in nature”.  They do not undermine the positive reasons in support of the costs order set out in the learned Magistrate’s judgment.

4. His Honour said:

   “3.    The financial position of the parties is disparate.  The findings about their respective financial positions that I made in my reasons for judgment are as follows:

   54.The husband earns about $50,000.00 per annum via his business although I have some concerns about the accuracy of that figure.  He discloses in his financial statement an average weekly income of $950 (gross) and total personal expenditure of $619 (including costs for [JE]).  There is no evidence to suggest that the husband will not continue to conduct the cleaning business and derive an income from that source.  He has no superannuation entitlements and he has no other debts.

   55.The wife does not presently work.  She is in receipt of social security.  I do not expect her to be out of employment for long and I am satisfied that she is a resourceful woman who will secure for herself a source of income in the not too distant future.  It is difficult to make any assessment of what it is that the wife might ultimately earn.  Plainly enough, however, she has considerable skills in selling that will lead her to remunerative employment.

   …

   6.     The wife says that the husband’s conduct is sufficient to attract an order for costs.  In particular, she argues that:

   a)In his application filed 30 July 2004, the husband sought orders that he pay to the wife the sum of $20,000.00 as a full and final property settlement and that she retain her interest in certain property in her name.  That amounted to less than 5% of the total property pool.  The husband’s position at trial remained as set out in his application.  His case outline document sought orders in the same terms as his application.  That order was sought in circumstances where, even on the husband’s version of events:

   i)The parties were married [in September 1976];

   ii)There were two (2) children of the marriage;

   iii)Neither party bought assets into the marriage or received substantial inheritances during the marriage;

   iv)At least until her move to Queensland in 1987, the wife worked full time in addition to caring for the children, and between 1987 and when she left in 1993 to go to the Philippines, the wife worked on a part time basis;

   v)There is no suggestion that at least until 1993 the wife was not the primary carer for the children.

   b)From the outset the wife sought an equal division of property.  I accept the wife’s submission that the husband pursued an inherently unsuccessful position.  Even if the relevant issues of fact (such as the date of separation of the parties and the parties’ post-separation contributions) had all been decided in the husband’s favour, his position was clearly unachievable.  In pursuing such an unrealistic outcome, the husband acted unreasonably and in party [sic], at least involved the wife in the costs of the litigation.

   c)The husband failed to provide a forensic accountant, who was ordered to prepare a valuation of the husband’s cleaning business, with correct income figures for the business’ annual income.  I accept the husband’s submissions, however, that his omission did not extend the trial or involve the wife in any additional costs.

   …

   9.     The wife argues that he [sic] response filed at the outset of these proceedings constitutes an offer to the husband to accept a certain set of orders in finalisation of her claim.  I accept that submission.  The response, however, does not constitute an offer for the purposes of s.117(2A(f) of the Act.  I accept the husband’s submission that what s.117(2A)(f) requires is some offer of compromise between the parties, not simply a statement of position.  I am of the view, however, that the wife’s claim in her response was no mere ambit claim.  As I ultimately found, it represented a just and equitable division of the parties’ assets between them.  The same cannot be said of the orders sought by the husband in his application – it was clearly an ambit claim.

   10.    By s 117(2A)(g), the court must take into account “such other matters as the court considers relevant”.  In this regard I consider the husband’s non-disclosure of income relevant.  Indeed, the husband’s conduct in this regard was positively misleading.…

   11.    In the circumstances, I am satisfied that the wife ought to have an order for costs of the application against the husband.…”

5. Nothing has been argued that shows that any of the factors taken into account in the wife’s favour were irrelevant.  Against them, that the husband may have unsuccessfully  pursued an issue that was not itself unreasonable or untenable, is of virtually no moment.  The conclusion of the learned Magistrate was clearly open to him.

6. There is no merit in the appeal against the costs order.

Costs

1. In my view, the appeal had obvious merits.  The cross-appeal has failed.  I am aware of the parties’ respective financial circumstances.  I consider the wife should recover her costs of the appeal and the cross-appeal.

ORDERS

1. That the appeal be allowed.

2. That orders 1, 2 and 3 of the orders made 2 September 2005 be set aside.

3. That the application of the wife for property settlement be remitted to Jarrett FM for:

   (i)Based upon the evidence before him at trial and such cross-examination as the learned Magistrate sees fit to allow, the determination of the value of the former matrimonial home of the husband and wife as at 2 September 2005 and any necessary adjustment to the calculation of the pool of assets flowing from such determination.

   (ii)Based on the evidence before him at trial and such other evidence as he sees fit to allow, reconsideration of whether it is now appropriate, (in the light of the determination of the valuation of the former matrimonial home and the mathematical effect of that on the sum which the husband would need to pay to the wife in accordance with the conclusions set out in the reasons for judgment of 2 September 2005, (other than as to value of the former matrimonial home), in exchange for her interest in the former matrimonial home, that the husband be granted by order the opportunity to exchange payment for the wife’s said interest or whether the former matrimonial home should be forthwith presented for sale.

1. That the cross-appeal against the orders of 2 September 2005 be dismissed.

2. That the appeal against the order for costs made 27 October 2005 be dismissed.

3. That the husband pay the wife’s costs of and incidental to the appeal and the cross-appeal as agreed, and in default of agreement, as assessed.

   I certify that the preceding 59 paragraphs

   are a true copy of the Reasons for Judgment

   herein of the Honourable Justice Warnick.

   ………………………………….
     Associate

   Date:  3 March 2006