C & C

[2005] FamCA 548

[2005] FamCA 548

FAMILY LAW ACT 1975

IN THE FULL COURT

OF THE FAMILY COURT OF AUSTRALIA   

AT PERTH  Appeal No. WA 07 of 2004

File No. PT2033 of 2002

BETWEEN:

C

Appellant Wife

- and –

C

Respondent Husband

REASONS FOR JUDGMENT

CORAM:  Finn, Warnick and Le Poer Trench JJ
DATE OF HEARING:        7 July 2004
DATE OF JUDGMENT:     30 June 2005

APPEARANCES:

Mr Dowding of Senior Counsel (instructed by Holden Barlow) appeared on behalf of the appellant wife.

Dr Dickey of Queens Counsel appeared on behalf of the respondent husband.

APPEAL SUMMARY

MATTER:  C and C
APPEAL NUMBER:  WA 7 of 2004
  (PT 2033 of 2002) 
CORAM:  Finn, Warnick and Le Poer Trench JJ
DATE OF HEARING:  7 July 2004
DATE OF JUDGMENT:                30 June 2005

CATCHWORDS: FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Trial Judge’s orders for property settlement originally based on an incorrect calculation of the value of the assets due to an arithmetical error – By agreement between the parties, the trial Judge re-determined the s 75(2) and just and equitable matters on the basis of the re-calculated asset pool and using the original findings as to the parties’ contribution-based entitlements – The wife appealed against findings in both the original judgment and the subsequent judgment of the trial Judge – CONTRIBUTIONS – Whether the trial Judge erred in redetermining the proceedings on the basis of the initial findings as to contributions – The appellant not prevented from appealing the initial findings as to contributions because of her agreement that the second determination proceed on the basis of the initial contributions findings – Whether the trial Judge correctly determined the parties’ contribution based entitlements – SECTION 75(2) FACTORS – Whether the trial Judge placed sufficient weight on evidence concerning the husband’s deception and attempts to reduce his assets acquired post-separation – Whether the trial Judge erred in finding that the wife was likely to be provided with financial support from a friend who had assisted the wife financially in the past – Whether the trial Judge erred in determining the wife’s earning capacity – Whether the trial Judge erred in making a 15% adjustment in the wife’s favour on the basis of earning disparity between the parties – Whether the trial Judge erred in applying the 15% adjustment figure in her second judgment.

Caselaw cited:

Norbis (1986) FLC 91-712

Chorn v Hopkins (2004) FLC 93-204

Appeal dismissed.

Directions made for the filing of written submissions as to costs.

1. This is an appeal by the wife against an order for property settlement made by Penny J on 22 March 2004 in proceedings between the wife and the husband. We will refer to the provisions of her Honour’s order after explaining the somewhat unusual background to the making of the order as well as the factual background generally to this appeal.

Background

1. Save as otherwise indicated, we do not understand there to be any dispute in relation to the following background matters.

2. The husband and the wife (who were aged about 43 and 42 respectively at the time of her Honour’s orders) commenced to live together in a town on the northern coast of Western Australia in July 1994. The wife had two children from her previous marriage who were then aged about 7 and 5.

3. At the time the parties commenced to cohabit the wife owned a home and the husband owned a unit. Both properties were in Perth and were rented.

4. In January 1995 the parties, together with the wife’s children, relocated to Perth. They moved into the home owned by the wife and carried out renovations to that property. Both parties obtained employment.

5. In May 1996 the wife’s home was sold and its proceeds used towards the purchase of a new home at C (“the former matrimonial home”), which the parties occupied some months later.

6. The parties married on 17 January 1998. They separated on 26 March 2000, with the wife (and presumably the children) remaining in the former matrimonial home.

7. On 15 March 2002 the husband filed an application for property settlement, with the wife filing a response on 15 May 2002.

8. The parties’ cross applications for property settlement were heard by Penny J on 26 and 27 August 2003. At that hearing the wife was represented by Mr Dowding SC and the husband appeared on his own behalf.

9. On 19 December 2003 her Honour delivered a judgment and made orders which essentially provided for the husband to transfer his interest in the matrimonial home to the wife (who was thereafter to indemnify the husband in respect of the mortgage) and the husband was to pay the wife the sum of $41,783.

The judgment and orders of 19 December 2003

1. At the commencement of her judgment, her Honour recorded that the parties’ relationship had “deteriorated significantly after separation”, and that after the husband had filed proceedings for property settlement, he had “set upon a course of conduct designed to hide from the wife and the Court his income and reduce his available assets.” Her honour also recorded that the husband’s employer D Pty Ltd and another company to which his services were contracted, T Co, had “both assisted the husband in this deception.”

2. Her Honour then went on to set out the “particulars of the deception” which essentially related to the husband’s being in employment (when he claimed not to be) and being paid his salary overseas.  Her Honour ultimately concluded (at paragraph 24) that the husband had “committed perjury relating to the lies told in (his) affidavits” and that she would forward her judgment and relevant documents to the Director of Public Prosecutions for investigation as to whether charges should be laid against the husband and certain persons from D Pty Ltd and T Co. Her Honour also said (at paragraph 25) “I shall take the husband’s conduct into account when determining the matter.”

3. Then having set out a brief history of the parties and their marriage (largely in terms we have already recorded), her Honour set out schedules of the parties’ assets and liabilities.

4. The schedule of the parties’ assets (which had been agreed, save for the item of the wife’s furniture which her Honour determined should be valued at $8,000, being the midpoint between the parties’ estimates) as set out by her Honour was as follows (at paragraph 36):

Assets
Former matrimonial home …	445,000.00
Husband’s property on [G] Road	125,000.00
Husband’s property at [M] Street	407,000.00
Husband’s funds in HSBC	2,415.00
Husband’s cash	1,430.00
Wife’s Camry motor vehicle	5,000.00
Wife’s furniture and chattels	8,000.00
Husband’s furniture and chattels	5,000.00
Wife’s superannuation	20,353.00
Husband’s shares	24,295.00
Husband’s superannuation	98,410.00
Husband’s Land Cruiser	11,000.00
$1,054,493.00

1. We mention at this point that while each item and its value shown in her Honour’s schedule are accepted by both parties to be correct, it is common ground that her Honour’s calculation of a total of $1,054,493 is incorrect, and that the correct total should be $1,152,903. In other words her Honour undervalued the parties’ assets by $98,410.

2. So far as the parties’ liabilities were concerned, her Honour recorded that both parties agreed that the mortgages on the former matrimonial home and on a property which the husband had acquired after separation should be taken into account. In addition her Honour determined that each party’s credit card debts should be taken into account.  However, she refused to take into account certain other significant liabilities of each of the parties. 

3. The schedule of the liabilities taken into account by her Honour was as follows (at paragraph 46):

Liabilities
Mortgage on [the former matrimonial home]	$171,043.00
Mortgage on the husband’s [M] Street property	386,557.00
Credit card of husband	6,530.00
Credit card of wife	9,000.00
$573,130.00
Net Assets	$481,363.00

1. Thus, the total of the liabilities which her Honour was prepared to take into account was $573,130, and the value of the net assets as found by her Honour was $481,363. (Although as we have explained above, that figure should have been $98,410 greater.)

2. Her Honour then considered the parties’ contributions. She concluded that on the basis of their contributions, the apportionment of the parties’ assets should be 65% to the husband and 35% to the wife. However, her Honour then determined that there should be an adjustment of 15% in favour of the wife on account of certain of the matters contained in s 75(2) of the Family Law Act 1975 (“the Act”).

3. Accordingly her Honour concluded (at paragraph 64) that the parties’ assets should be “divided equally between them,” and she went on to say (without detailing the precise assets and their value in the possession of each party) that the husband should therefore “retain the assets in his possession and pay to the wife the sum of $41,783”. Her Honour further said:

   65.In my view, such a result would be just and equitable.  The wife could apply the funds received by her to reduce her mortgage to $130,000.  She will then have the security of a home, a more manageable mortgage, a car, furniture and some superannuation.  As stated previously, the husband would retain his investment property, his residence, cash, furniture, chattels and almost $100,000 in superannuation.  He also, of course, retains his significant earning capacity.

4. Her Honour’s orders then provided that:

   ·within 30 days the husband should transfer his interest in the former matrimonial home to the wife and that she should thereafter indemnify him in relation to the mortgage;

   ·within 30 days the husband would pay the wife the sum of $41,783; and

   ·each party would otherwise retain the property in his or her possession or control.

Events subsequent to the judgment of 19 December 2003

1. Following the delivery of the judgment and the making of orders by her Honour on 19 December 2003, the husband apparently wrote to her Honour’s Associate pointing out the error in her Honour’s calculation of the gross value of the parties’ assets at $1,152,903 and the consequent error in the net value of the assets at $481,363 rather than at the correct figure of $579,773.  He also apparently claimed that on an equal division of the correct net value, the wife should pay him the sum of $8,423 rather than him having to pay the wife the sum of $41,783 (as had been ordered by her Honour).

2. The matter was therefore re-listed before her Honour on 11 February 2004.  On that occasion, the husband appeared for himself as he had at the original trial and the wife was represented by Counsel.

3. The transcript of the hearing reveals that at the outset, her Honour acknowledged her arithmetical error. She then proposed that her orders could be set aside by consent (pursuant to the provisions of s 79A), and that she could consider again the s 75(2) factors on the basis of the correct net asset figure. It will be necessary for us to set out later certain passages of the transcript before her Honour. But it is sufficient to say here that the transcript indicates that the course proposed by her Honour was apparently accepted by the parties and a timetable was arranged for written submissions from the parties.

4. Written submissions were then subsequently filed by the husband on 25 February 2004 and on behalf of the wife on 10 March 2004. 

The judgment and orders of 22 March 2004

1. Her Honour delivered a further judgment on 22 March 2004.  She commenced that judgment by referring to the arithmetical error, and to the different results which would be arrived at when her determination that there should be an equal division of the parties’ assets was applied to the incorrect net asset figure and to the correct net asset figure (being either that the husband would have to pay the wife the sum of $41,783 or that the wife would have to pay the husband the sum of $8,432).  Her Honour then continued:

   3.The error in addition could not be remedied by the application of the “slip rule” as I had taken into account the fact that the wife would receive $41,783 when determining whether the distribution of the assets was just and equitable. The error in addition had no effect on my determination in relation to contributions. Both parties agreed my findings in relation to contributions would remain as determined by me in the judgment, that is that the husband would receive 65% of the assets and the wife 35%. It was agreed that I would determine again the issue of s 75(2) factors, taking into account the new total, and then decide whether the distribution of assets was just and equitable.

   4.An apportionment in the sum of 15% of the net assets of $579,773 would result in an apportionment to the wife in favour of s 75(2) factors of $86,965. An apportionment of 15% in her favour on the incorrect total amounted to an apportionment in her favour of $72,204. I am satisfied that taking into account the relevant s 75(2) factors as set out in my judgment an apportionment in favour of the wife of 15% is still an appropriate one.

   5.In my judgment I determined that a 15% apportionment which would result in the wife being able to reduce her mortgage to $130,000 and keep the items in her possession, would be just and equitable.  Although a 15% apportionment on the new total would, in fact, result in the wife paying the husband $8,432, I am satisfied that such a result is just and equitable.  She has an earning capacity of at least $40,000 and is likely to receive financial support from Mr [J] in the future.  I am satisfied that an equal division of the assets of the parties is still an appropriate one.

2. Her Honour then made orders which in their engrossed form are as follows:

   1Within 30 days the husband is to transfer to the wife all his right, title and interest in the former matrimonial home … and the wife is to indemnify the husband in relation to [the] mortgage … to BankWest Australia Limited.

   2Within 30 days and upon the husband providing to the wife a signed transfer pursuant to paragraph 1 hereof, the wife pay to the husband the sum of $8,432.

Scope of the wife’s appeal

1. The wife’s original notice of appeal (filed 19 April 2004) stated that it was Order 2 of the orders of 22 March 2004 which was the subject of the appeal.  That original notice of appeal contained six grounds of appeal, three of which (grounds 1 to 3) were directed to findings and/or conclusions contained in the judgment of 19 December 2003, and with the remaining three (grounds 4 to 6) being directed to findings and conclusions in the judgment of 22 March 2004.

2. An amended notice of appeal was then filed on behalf of the wife on 24 June 2004.  That notice of appeal was still directed only to Order 2 of the orders of 22 March 2004, but it added two additional grounds (grounds 1A and 1B) which were directed to the findings and conclusions in the judgment of 19 December 2003. 

3. During the hearing of the appeal on 7 July 2004, the wife sought and was granted (over objection) leave to add a further ground of appeal (ground 7) which asserted error on the part of her Honour when she held (in paragraph 3 of the judgment of 22 March 2004) that:

   both parties agreed the finding in relation to contribution would remain as determined… in the judgment that is that the husband would received (sic) 65% of the assets and the wife 35%.

4. Because of this late further amendment by the wife to her grounds of appeal, we made directions at the conclusion of the hearing on 7 July 2004 to permit the husband’s Counsel to make further written submissions to us in relation to the amended ground (with a right of reply also being provided to the wife).  Counsel for the husband subsequently advised the Appeals Registrar that he did not wish to make any further submissions.

5. In her original notice of appeal and amended notices of appeal, the wife sought that if the appeal against her Honour’s order was successful, then this Court should order that “the husband pay to Bankwest the sum of $70,000 in reduction of the mortgage over the [former] matrimonial home.”

The trial Judge’s treatment of the parties’ contributions

1. It will be convenient to deal first with the complaint made in the additional ground (ground 7) on which the wife was permitted to rely at the hearing of the appeal.  The full terms of that ground are as follows:

   7.Her Honour erred in holding that both parties agreed the finding in relation to contribution would remain as determined by her Honour in the Judgment that is that the husband would received (sic) 65% of the assets and the wife 35%.

   When

   (a)the parties have done no more than agree on a process under Section 79A

   (b)The Trial Judge had made it clear that she would not move on the issue of contribution and if objection to her finding was raised it would have to be the subject of an Appeal.

2. We consider that this ground has no substance when regard is had to the following extracts from the transcript of the hearing on 11 February 2004.  Having acknowledged her arithmetical error at the commencement of the hearing, her Honour said (Transcript 11.2.04 at p 3):

   HER HONOUR: … The other way it seems to me – and [Counsel for the wife] can tell me what he thinks about this as well as you – is that by consent I can set the orders aside and then I can consider again the 75(2) factors because I can tell you I’m not going to change on contribution but because I use that figure for the next step and then I’ll consider that aspect again and I can give you a judgment on that.

   …

   HER HONOUR: Now, perhaps you have a think about that and I’ll talk to [Counsel for the wife] and see what he thinks about that because I don’t know that it’s in anyone’s interests go to appeal but if you have to you will.  [Counsel for the wife], what do you think about that.

3. A little later, her Honour explained again what she proposed to do in the following way (Transcript 11.2.04 at p 4):

   HER HONOUR: Well, what I’m going to do -- what I’m thinking of doing is setting aside the orders that I’ve made now because they’re wrong and considering again the section 75(2) factors. What I’m saying is that there was no error up to the contribution stage as far as I’m concerned and I would never do that differently. Now, if you want me to do that differently you’re going to have to appeal it.

   [THE HUSBAND]: Yeah.

   HER HONOUR: Right; but I did use that wrong figure when I dealt with 75(2) factors and what I could do is re-think that issue – redetermine that issue – on the basis of the true figures and then decide what I do and then make a decision.

4. After her Honour had further explained her proposal to the husband, she enquired of Counsel for the wife what his client’s position was.  The following exchange then occurred (Transcript 11.2.04 at p 6-8):

   [COUNSEL FOR THE WIFE]: My instructions are, your Honour, that we would consent to an order that the order be recalled and that your Honour re-exercise your discretion in the light of the material as it is demonstrated to you is correct; that is, the arithmetical correction ---

   HER HONOUR: Yes.

   [COUNSEL FOR THE WIFE]: --- and then you then apply the principles that you --- the third and fourth stage if you like ---

   HER HONOUR: That’s right, yes.

   [COUNSEL FOR THE WIFE]: --- to those facts.

   HER HONOUR: [The husband], do you ---

   [COUNSEL FOR THE WIFE]: We don’t wish to make any further submissions to your Honour about it. We believe the submissions we made last time cover the issues of section 75(2).

   HER HONOUR: 75(2).  All right.  [The husband], do you want to have a think about it because I’m very --- I don’t want to push you into a situation which you might regret afterwards.  As it stands at the moment you have a right of appeal.  There’s not (sic) doubt about that. A mistake has been made.  You’ve got other grounds.  I mean, now might be the time to do it.  If you feel seriously about the other grounds you can do it all in one hit, put it that way.

   [THE HUSBAND]: No, ma’am.  I’m quite happy to allow you the opportunity to review the judgment.

   HER HONOUR: All right.  Well, if you want to make more submissions to me --- so what I would be looking at is the 75(2) factors and what percentage that should be given and whether it’s just and equitable.  They’re the next steps.

   [THE HUSBAND]: Exactly.

   HER HONOUR: They’re my next two steps.  Now, we can do it on the basis that you can make written submissions if you would like, or oral ones but perhaps you would prefer written ones ---

   [THE HUSBAND]: I think ---

   HER HONOUR: [Counsel for the wife] says he’s got nothing more to say.  He said it all at the trial.  So if I gave you, say, a further 7 days to make those submissions would that be appropriate for you?  Is that enough time?

   …

   HER HONOUR: No, 14 days you can have as long as it’s acceptable to you.

   [THE HUSBAND]: Yes.  That would be ---

   HER HONOUR: Do the parties agree today then that I can recall the orders that I have made --- I’ve previously made?

   [COUNSEL FOR THE WIFE]: Yes, your Honour.

   HER HONOUR: [The husband], you agree?  All right. …

1. Then, after some other matters not presently relevant were discussed, the following, virtually final, exchange occurred (Transcript 11.2.04 at p 10-11):

   HER HONOUR: … so the orders then will be that within 14 days the husband will file any submissions in relation to the exercise of my discretion pursuant to section 75(2) and in relation to an order being just and equitable. The wife have further 7 days to respond and upon receipt of those submissions and on the basis that I’ll take into account what was said for the wife at the trial I will then make a decision in relation to the final orders that should be made.

   [THE HUSBAND]: And presumably what I said at the trial.

   HER HONOUR: And what you said as well, yes.  I have your submissions there and your papers for the judge.  All right.  Yes?

   [COUNSEL FOR THE WIFE]: Your Honour, I suppose just for --- you know, to make it clear, we’re very content with the orders you make.  Do I understand that it’s in your Honour’s mind that what has happened is we’ve consented to a 79A and requested you to re-exercise your discretion ---

   HER HONOUR: Yes, that’s right.

   [COUNSEL FOR THE WIFE]: --- based on the evidence that has been given ---

   HER HONOUR: Yes.

   [COUNSEL FOR THE WIFE]: --- with liberty to make those submissions.

   HER HONOUR: Yes.  That’s correct.

2. In light of the above-quoted extracts of transcript, we consider that her Honour was entitled to say in her second judgment that both parties had agreed that her findings in relation to contributions would remain as determined in her earlier judgment. However, we would interpret that statement by her Honour as having application only in relation to the re-exercise of the discretion by her which was made necessary because of the arithmetical error and which was apparently carried out pursuant to the provisions of s 79A(1A) of the Act.

3. There is nothing in the above extracts from the transcript which can be interpreted as any form of concession by the wife that she would not pursue her rights of appeal in relation to her Honour’s assessment of the parties’ contributions.  Thus, while we consider that there is no substance in the ground (ground 7) which asserts that her Honour erred in holding that both parties had agreed that the contribution finding in her first judgment would remain undisturbed for purposes of her second judgment, we are nevertheless prepared to consider the ground of appeal (ground 1A) which is directed to the assessment of contributions. 

4. We recognise that it might be said that if the wife was dissatisfied with her Honour’s assessment of contributions, she should have filed a notice of appeal against the orders of 19 December 2003 within the required time (that is, by 19 January 2004 as the Rules then stood).  However, given the very different effect on the wife of the orders of 19 December 2003 and those of 22 March 2004, we are of the view that her Honour’s two judgments should be read as one (in so far as that can be done) for the purposes of determining whether in making the order of 22 March 2004, her discretion miscarried in any way.

5. Accordingly as we have said, we are prepared to consider the wife’s ground of appeal which is directed to her Honour’s assessment of the parties’ contributions.  That ground is in the following terms:

   1AThe decision of the learned trial Judge [paragraph 58 of the Judgment] that the apportionment of the parties’ assets, taking into account contributions alone, should be 65% to the husband and 35% to the wife is against the evidence and the weight of evidence and wrong in law and further, or alternatively, the learned trial Judge has failed to give any reasons or adequate reasons for coming to that conclusion having regard to:

   (a)Her finding that the wife’s initial contribution was 25% compared with the admission by the husband in his affidavit [2AB 150 paragraph 8] that the wife’s initial contribution was 33%.

   (b)The finding [at paragraph 57 of the Judgment] that during the marriage the wife did all the grocery shopping, cooking and general organisation of the home.

   (c)The finding that between at least separation and February 2003 the husband was working and deceived the Court as to his financial position and received at least $103,876 which he did not disclose.

   (d)The finding that since February 2003 the husband had elected not to work and has holidayed.  [Judgment paragraph 59].

   (e)The fact that since separation the husband has hidden his earnings or a portion of his earnings from the asset pool and yet all of the money received by the wife and retained by her since separation has been part of the assessment of the pool.

   (f)The finding [Judgment paragraph 3] that the husband set upon a course of conduct designed to hide from the wife and the Court his income and reduce his available assets and procured his employer and another company to whom his services were contracted to participate in the deception.

   (g)The fact that the wife was unable to adequately identify the true assets of the husband at the time of trial.

   (h)The Court ought to have made adverse findings against the husband as to the existence of those assets and thus have them form part of the asset pool or made an allowance under section 75(2) for them.

6. Notwithstanding the opening eight lines of ground 1A, it would seem that only paragraphs (a) and (b) of the ground are actually directed to the issue of contributions.  This interpretation is confirmed, at least to some extent, by the fact that the only written submissions made on behalf of the wife which expressly challenge her Honour’s conclusion regarding contributions, and which appear under the heading “Contributions”, are as follows:

   68.The learned trial Judge appears to have given very little value for the five years of cohabitation in which the wife did all the grocery shopping, cooking and general organisation of the home.  In our submission on a re-assessment those matters should have elevated the wife’s contribution to at least 45/55% not 35/65% (see: Ferraro and Ferraro (1993) FLC 92-335; McLay and McLay (1996) FLC 92-667.

7. It will be observed that this submission on its face only has relevance to paragraph (b) of ground 1A.  However, we will refer first to paragraph (a) of ground 1A which is concerned with her Honour’s conclusion in relation to the parties’ initial contributions.  

8. In paragraphs 47 to 49 of her first judgment her Honour made the following findings about the parties’ initial contributions:

   47.At the time the parties commenced living together the wife says her assets consisted of the equity in [her Perth] property, her motor vehicle, shares, bank accounts and furniture totalled $99,527.  The husband disputes the wife’s valuation.

   48.The wife valued [her Perth] property at the time the parties commenced living together in 1994 at $120,000.  The property sold in 1997 for $126,000.  The wife says that the husband was anxious to sell the property and that a greater sum could have been received for it had they been prepared to wait.  Even taking this into account, the wife conceded that the value she has put on [her Perth] property at the commencement of cohabitation was too high.  The husband states that at the commencement of cohabitation the property was more likely to be valued at $105,000.  I agree that the husband’s assessment of the value is more realistic than the wife’s.  The wife conceded that she did not have funds in the BankWest account…  The husband estimates that the wife’s assets were worth approximately $46,000 at the commencement of cohabitation.  After considering the evidence, in my opinion, the husband’s assessment of the value at that time is more accurate than the wife’s.

   49.The wife says at the time the parties cohabitated the husband had assets of approximately $61,000, excluding his superannuation of $40,000.  The husband says that his assets were valued at $135,000, including superannuation.  He was not challenged on these figures and I accept them as being accurate.  The husband’s initial financial contribution was, therefore, three times greater than the wife’s and significant given that the asset pool is now approximately $480,000.

9. True it is that in paragraph 8 of his affidavit filed 4 April 2003 the husband had deposed:

   8.At the commencement of cohabitation I contributed $105,107 (67%) and my wife contributed $51,523 (33%) to the net asset pool of $156,630.  The contributions comprised assets, investments and cash on hand as shown in Annexure A.

   While this paragraph might have constituted an admission by the husband, it was, we suggest, clearly an admission that was made as part of a “package”.  In other words, the husband was not making a bare admission of the value of the wife’s contributions, but was only making an admission on a comparative basis, of propositions about the assets that he had and their value and those that the wife had and their value.  It is clear that the wife did not act on any admission made by the husband and questions of initial contributions were litigated.  In these circumstances it was not established that it was not open to the trial Judge to make the findings that she did.  We would also observe in passing that whilst we have concerns about the finding of the trial Judge as to the value of the husband’s assets at the commencement of cohabitation not being based on admissible evidence, this matter was not the subject of complaint by either party to the appeal. 

10. Paragraph (b) of ground 1A is directed to the last sentence of paragraph 57 of her Honour’s first judgment.  Paragraph 57, which needs to be read as a whole, should also be read with paragraph 58; those paragraphs are as follows (emphasis added):

    57.During the course of the marriage the wife worked, as did the husband.  The husband had a close relationship with the wife’s son [R], and assisted with his homework, took him fishing and coached his soccer team.  The husband would also assist the wife with the household chores.  The wife did all the grocery shopping, cooking and general organisation of the home.

    Conclusions on contribution

    58.There is no doubt that the husband’s initial financial contribution and financial contribution during the marriage and after separation have been significantly larger than the wife’s.  Both have made a non financial contribution to the homes in which they have resided.  The wife has made a greater contribution to the welfare of the family.  In my view, the apportionment of the parties’ assets, taking into account contributions alone, are 65 per cent to the husband and 35 per cent to the wife.

11. It will thus be seen that her Honour found that the husband as well as the wife made some domestic contribution, although her Honour did find that the greater contribution in that regard had been made by the wife.

12. Nevertheless, when the contributions of all types referred to by her Honour in paragraph 58 are considered, we do not consider that her Honour’s assessment of all those contributions at 65-35% in favour of the husband was beyond “the generous ambit in which reasonable disagreement is possible” (per Brennan J in Norbis (1986) FLC 91-712 at 75,178).

13. Thus we conclude that to the extent that ground 1A is directed to her Honour’s findings in relation to, and ultimate assessment of, the parties’ contributions, it is without substance.

The husband’s deception and attempted reduction of assets

1. It will be seen, however, that paragraphs (c) to (h) in ground 1A are all directed to what can be broadly called the husband’s deception or non-disclosure and his attempts to diminish his assets. It was not satisfactorily explained to us what relevance those matters had to the trial Judge’s assessment of the parties’ contributions (if indeed they were intended to have any relevance).  However, it was clear from both oral and written submissions on behalf of the wife, that she relied heavily on her Honour’s treatment of this conduct on the part of the husband in support of her appeal generally.

2. The issue of the husband’s conduct would also seem to inform ground 1B and also, at least in part, ground 1 (which on its face is primarily directed to her Honour’s 15% adjustment in favour of the wife on account of the s 75(2) matters). Ground 1B and the paragraphs of ground 1 which appear to be directed to the husband’s conduct are as follows:

   1BThe finding of the learned trial Judge that the net asset pool for the purposes of dividing between the parties was $481,363 was against the evidence and the weight of the evidence and wrong in law and further, the learned trial Judge failed to give reasons or adequate reasons as to her findings in that:

   (a)There was no finding that the asset pool was or ought to be greater as a result of the husband’s receipt of funds.

   (b)That if the allowance for the conduct and matters referred to in the previous paragraph were not taken into account in assessing contributions they ought to have been taken into account when assessing the asset pool or alternatively in assessing the section 75(2) factors.

   …

   1The decision of the learned trial Judge, which limited the apportionment in favour of the wife to 15%, failed to take into account relevant considerations and fell below the reasonable exercise of discretion; in that:

   …

   b.the learned trial judge failed to take into account, or in the alternative took insufficient account of, the husband’s perjury, and his conspiracy with two employers, to deceive the wife and the Court about his employment and income during the period of separation;

   c. the learned trial judge failed to take into account, or in the alternative took insufficient account of, the consequences of such perjury and conspiracy on the wife’s financial position during the period of separation, in particular, the necessity for the wife to obtain an unsecured loan from a friend to meet the costs of mortgage repayments and maintenance on the former matrimonial home and to secure legal advice and assistance to prove the aforementioned perjury and conspiracy;

   …

3. Having regard to the oral and written submissions in support of these grounds, the wife’s complaints in relation to her Honour’s treatment of the husband’s non-disclosure of his earnings after the parties separated can be summarised in the following way. When discussing the husband’s non-disclosure at the commencement of her judgment, her Honour said that she would “take the husband’s conduct into account when determining the matter” (see paragraph 12, above), but her Honour did not then take such conduct into account in any significant way. Her Honour should, according to the wife’s case before us, have included in the asset pool a notional sum in the order of $104,000 (on account, as we understand it, of monies earned but not accounted for by the husband), or alternatively have made a greater s 75(2) adjustment in favour of the wife on account of the husband’s non-disclosure.

4. Because of the seriousness of this issue, it is necessary that we set out the greater part of her Honour’s findings regarding what she described as the husband’s deception:

   4.For at least the past five years, apart from some brief periods where the husband worked for other agencies, he has worked on contract for [D Pty Ltd].  [D Pty Ltd] provide contract labour to industry.  In 2002 they provided the husband’s services to [T Co].  The arrangement was that the husband would render time sheets to [D Pty Ltd], who would then provide details of the work done by the husband to [T Co].  [D Pty Ltd] would then be reimbursed by that company and pay the husband.  Up until September 2002 payments to the husband had always been made in Australia.

   5.In September 2002, and after the husband had commenced proceedings for property settlement in this Court, he asked Mr [H] from [D Pty Ltd] if he could be paid overseas.  The husband’s evidence was that he told Mr [H] that he “had an ex-wife who was trying to take (him) to the cleaners”.  The husband confirmed that the purpose of being paid overseas was to hide from the wife the income he was receiving, and minimise the asset pool to be divided between them.  According to the husband’s evidence, Mr [H] was well aware of the purpose of this arrangement.

   6.From the beginning of October 2002 to the end of February 2003 the husband was working for [T Co] with his labour being provided by [D Pty Ltd].  During this period the husband continued to complete time sheets and provide them to [D Pty Ltd].  He was being paid $730 a day and for approximately eight weeks worked seven days per week.  The husband claimed expenses associated with the contract direct to [T Co].  The income he earned was eventually paid to him in Singapore through a company known as [AM Co].  The husband had no association with this company and the payment, it appears, was arranged by Mr [H] at [D Pty Ltd].

   7.The husband stated, when cross-examined, that at the time this arrangement was put in place, he was hopeful a trial in this Court would have taken place before he took possession of the funds earned by him for working during this period.  He described the money as being “parked” for him.

   8.In November 2002 the wife’s solicitors wrote to [D Pty Ltd] seeking information about the employment status of the husband.  Mr [H] at [D Pty Ltd] at first refused to provide information without the consent of the husband.  On 15 November 2002 Mr [H], on behalf of [D Pty Ltd], wrote to the wife’s solicitors.  In that letter he stated as follows:

   “[The husband’s] contract with [D Pty Ltd] came to an end on 23/06/2002.

   [The husband’s] contract came to an end due to the project he was working on being completed.

   [The husband] had three contracts with [D Pty Ltd], the periods being July 1995, July 1996 and the latest June 2000.  All these contracts came to an end due to project completions.”

   9.The wife’s solicitors also wrote to [T Co].  On 15 November 2002 … the Human Resources Manager, wrote to the wife’s solicitors stating that the husband ceased working for them on 6 September 2002, leaving when the project he had been contracted to work on reached completion.

   10.The husband was, not surprisingly, cross-examined in relation to the letter from [D Pty Ltd].  He stated that while the completion date for the contract was 26 June 2002, he in fact continued working on that contract until September 2002.  When shown the letter, the husband said Mr [H] had obviously received approval from him to supply the information.  He later stated Mr [H] did not write the letter on his instructions.  I do not believe him when he says this.

   11.The husband was also cross-examined about the letter from [T Co] to the wife’s solicitors.  Mr Dowding, on behalf of the wife, asked the husband why a major international company would write a letter which did not tell the truth about the husband’s employment.  The husband stated in relation to the letter that “it may have had some of my input”.

   12.On 1 November 2002 the husband filed an affidavit sworn on 30 October 2002.  It was filed to oppose the wife’s application seeking orders that the husband make a contribution towards the mortgage repayments on the former matrimonial home and in support of his application that the house be sold.  In that affidavit the husband described himself as being unemployed.    In paragraph 13 of that affidavit the husband stated as follows:

   “I have not worked since 6th September 2002 and do not have the financial means to make mortgage repayments on [the former matrimonial home] in addition to rental payments on my accommodation.”

   13.When cross-examined about the fact that this statement was incorrect, the husband described it as a “misleading technicality”.  It was not a misleading technicality, it was a lie.  At that time the husband was employed by [D Pty Ltd] to work for [T Co] and was earning $730 a day. 

   14.In the affidavit the husband described himself as having found rental accommodation at $175 per week, where he has been living since 30 June 2001 while he awaits the outcome of these proceedings.  The husband failed to say that, in fact, he had purchased a property in [M] Street, which he had rented out.  The wife only found out the husband had purchased this property when she subpoenaed documents from BankWest.

   15.In paragraph 14 of the affidavit the husband stated as follows:

   “I have recently borrowed money from my mother in the UK in order to meet my financial commitments and general living expenses.[”]

   16.The only reason the husband needed to borrow money from his mother was because his income was being paid off-shore and he had no intention of accessing that money until such time as these proceedings were over. 

   17.The husband admitted at trial that over the month of November he was working seven days per week and on 18 November 2002, when he was in the Family Court telling the magistrate that he was unemployed, he actually rendered a time sheet for work completed on that day. 

   18.In January 2003 the wife caused subpoenas to be served upon [D Pty Ltd] and [T Co] to produce material relating to the husband's employment.  The return date of the subpoenas was 10 February 2003.  Neither [T Co] or [D Pty Ltd] produced any documentation showing that at that time the husband was working for them, although [D Pty Ltd] had been in possession of time sheets provided by the husband from October to February 2003.

   19.In March 2003 the husband swore an affidavit of discovery purporting to set out all the documents in his possession or control.  He disclosed employment contracts with [D Pty Ltd] ceasing on 6 September 2002.  He failed to produce any time sheet documents or any other indication of employment with either [D Pty Ltd] or [T Co] from 6 September 2002. 

   20.The husband confirmed that when he stated in the affidavit that he did not have any other documents in his possession or control relating to the matter, it was untrue. 

   21.The wife’s solicitors subsequently issued another subpoena to [T Co] and pursuant to that subpoena invoices were produced by them.  There were only three invoices, one dated 22 January 2002 and two dated 19 March 2003.  The husband stated that these invoices were only rendered because [T Co] were wondering why [D Pty Ltd] had not invoiced them for the husband's services.  The invoices subsequently rendered were for $70,581, $27,430 and $5,864.  From these funds [D Pty Ltd] took the proportion owing to them and the remainder was paid into a bank account in Singapore with the Hong Kong and Shanghai Bank in the husband's name.  According to the husband the amount earned by him from September to February, after deduction of the amount owing to [D Pty Ltd], was $85,000.  There is no independent verification of this amount.  The husband says he took approximately $30,000 of that money in cash when he went to the United Kingdom to have a holiday.  He says that he collected another $10,000 on his way back through Singapore.  Subsequently, $51,000 remained in that account.

   22.On 4 April 2003 the husband filed a Statement of Financial Circumstances for the purpose of trial.  In that document the husband failed to disclose the monies held by [D Pty Ltd] on his behalf.  The husband lied in that document.

   23.I have recited in some detail the particulars of the lies the husband was prepared to tell on oath in relation to his employment.  While it is not the first time a litigant in this Court has lied about their income it is, however, the first time in my experience where two employers were prepared to conspire with the husband to hide from the Court the fact that he was working.

   24.In my view, the husband has committed perjury relating to the lies told in the affidavits.  The conduct of the husband, Mr [H] and [T Co] may have amounted to an attempt to pervert the course of justice.  I intend to forward this judgment and the relevant documents to the Director of Public Prosecutions and ask that the police investigate whether charges should be laid against the husband, Mr [H] from [D Pty Ltd] and [the human resources manager] from [T Co]. 

   25.In relation to the husband’s non-disclosure of assets, the Full Court in Weir v Weir (1993) FLC 92-338 stated at p 79,593 as follows:

   “… Once it has been established that there has been a deliberate non-disclosure, …, then the court should not be unduly cautious about making findings in favour of the innocent party.  To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”

   I shall take the husband’s conduct into account when determining this mater.

1. The only further reference made by her Honour in either of her judgments to the husband’s non-disclosure was made in the context of her determination as to what liabilities of the parties should be taken into account in calculating the net value of their property.  Again, because of the significance of this issue we set out in full what her Honour said (emphasis added):

   38.The personal liabilities claimed by the husband in his Statement of Financial Circumstances on 1 August 2003 are $42,157.00, being his estimate of income tax payable on the funds earned by him which were paid through Singapore, $6,530.00, being monies owed on his Visa card and $16,701.00, being funds owed by him to [R Pty Ltd], trustee of the … Family Trust.  At trial the husband said that he estimated his tax liability to be approximately $30,000.00, and his debts in relation to the family trust to be $10,148.00. 

   39.In support of the husband’s claim in relation to his taxation liability he has produced a draft of a taxation return prepared by his accountant.  The husband agreed that he had no intention of lodging this document with the Australian Taxation Office in the form in which it had been provided to the wife’s solicitors.  The husband also agreed that there was no independent verification available of his taxable income for the year ended 30 June 2003, which he claimed to be $118,480.  In this taxation return the husband has not included any rental income he received from the [M] Street property, which should have been included.  The husband purchased the [M] Street property in August 2002 and it was rented until April 2003.  Off set against this the husband would be claiming the mortgage payments and other expenses relating to that property during the time it was rented.  It is likely these payments and expenses would have far exceeded the rent and the husband may have significant deductions. 

   40.Given the husband’s lack of candour in relation to his financial affairs, his own acknowledgement that the taxation return would not be forwarded to the Australian Taxation Office and a lack of independent verification of matters raised in that document, I do not intend to take into account the husband’s taxation debt as a liability of the parties.

   41.In relation to the … Family Trust, I do not accept that the husband intends to pay to the trust his debt which he says is now $10,148.  The wife and the wife’s children also owe various amounts to the Family Trust.  It is highly unlikely any of them intend to repay those debts.  The wife’s sister is owed money by the trust in the sum of $34,928.  Should she make a claim against the trust for that sum both the husband, the wife and her children may have to repay their loan accounts to discharge that debt.  I have no evidence that [the wife’s sister] intends to take that step.  There has been no demand by the trust for repayment.  I do not intend to take into account as a liability of either the husband or the wife the debt to the trust.

2. In relation to the wife’s claim made before us that her Honour should have added back into the pool a notional asset of $104,000 (being, as we understand it, the sum of the income figures set out in paragraph 21 of her Honour’s judgment), it must be pointed out that before her Honour, Counsel for the wife sought that the figure of $85,000 be taken into account and also that the husband’s tax liability be disregarded as will be seen from the following passage from the transcript of Counsel’s submissions to her Honour (Transcript 27.8.03 at p 104-106):

   HER HONOUR: All right.  So that’s why --- Now, the unknown bank accounts.  If we can go back to them.

   [COUNSEL FOR THE WIFE]: Yes.  Now, that’s the contentious issue I submit to your Honour.

   HER HONOUR: I’m struggling with that.

   [COUNSEL FOR THE WIFE]: Well, let me put it this way.  There is evidence that the husband --- there is evidence that has been uncovered that for some period up until February of 2003, the husband had diverted funds of some $80,000 to Singapore.  That comes from the tender – exhibits there ---

   HER HONOUR: Yes.  No, that’s all right.  I know ---

   [COUNSEL FOR THE WIFE]: That comes from the tender.  Now, we say the difficulty there, you Honour, is that we don’t know whether we’ve uncovered the iceberg or the tip of the iceberg.  I mean, I accept that he has hidden some portion of his income but quite frankly we don’t accept that his evidence is credible and we don’t know whether that is all his income or some of income.

   I particularly draw your attention to the fact that he previously used the … Family trust as the vehicle for payment to him of his wages.  He has used the wife’s sister as a vehicle for distributing money to which she never received and I can’t conclude on the evidence that we have uncovered the whole story.

   I don’t believe you Honour can make a finding of the existence of a sum of money but in my submission you can make a finding that it is appropriate to take into account in a general way the deceit of the husband and the belief that you may not know what he has received or how he has disposed of it.

   If you are --- if you read line 4, the Hong Kong and Shanghai Bank at $84,000, I would frankly conclude that your Honour had got it about right and whilst there may be some other money around we’re not able to prove it.  If, on the other hand, you were to take it at his valuation, in my submission, you would not be satisfied that the money is not in existence, and indeed, that there may not be other money in existence.  I mean, the man is capable --- and the man is capable of having earned since February of 2003, money and has given evidence --- oral evidence that he hasn’t worked since then and in my submission not a very satisfactory explanation of why he hasn’t.

   Had he been working at that number you would have expected to see another 80 or 90 thousand dollars somewhere which is why, your Honour, we have not conceded the tax debt because at the end of the day this document that he has produced he’s admitted is not a tax debt.  It claims to be a PAYG statement.

   HER HONOUR: I don’t think it should be taken into account.  He’s had the use of all the funds.

   [COUNSEL FOR THE WIFE]: Yes.

   HER HONOUR: Why should she have to jointly pay the ---

   [COUNSEL FOR THE WIFE]: Yes, effectively.

   HER HONOUR: She’s got no benefit from it ---

   [COUNSEL FOR THE WIFE]: Yes.

   HER HONOUR: --- so why should she be responsible for the tax?

   [COUNSEL FOR THE WIFE]: Yes.  So, your Honour, they’re the difficult areas, I think, in assessing the assets and liabilities of the parties …

3. We assume that the $84,000 figure referred to by Counsel in the above-quoted submissions is the figure of $85,000 received by the husband which her Honour referred to in paragraph 21 of her judgment (quoted at paragraph 52, above). 

4. As will have been seen from paragraph 40 of her judgment (quoted at paragraph 53, above) her Honour did not ultimately take into account the husband’s tax liability (which was apparently estimated by the husband to be in the region of $30,000).  Thus, the husband was left to bear this debt without account being taken of it in the property settlement.

5. Somewhat curiously, however, her Honour appears to  have made no reference in her judgment to the submission made on behalf of the wife that a notional sum should be added back into the asset pool on account of the husband’s undisclosed earnings during the separation period.  She certainly did not explain why she rejected that submission.  Thus, to the extent ground 1B complains of a failure on the part of her Honour to give reasons for not increasing the asset pool because of the funds received by the husband after separation, that ground has substance.

6. However, having reflected on this matter, we have concluded that we should not allow the appeal and interfere with her Honour’s decision on account of this omission on her part.  Our reasons for this conclusion are as follows.

7. First, it is clear from the passages of her Honour’s judgment where she dealt with what she termed the husband’s deception (see paragraph 52, above), that she viewed very seriously the husband’s conduct.  Yet, it is important to observe, she did not make a finding that she did not have an accurate account of the husband’s income and assets by the end of the trial.

8. Furthermore, notwithstanding the attempts before us by Counsel for the wife to refute the submissions of Counsel for the husband designed to establish that all earnings of the husband could be accounted for, we have not been persuaded of the existence of funds that would enable us to add any particular notional figure to the asset pool.  We are certainly not persuaded that a new trial would be warranted on account of this matter.

9. Finally, it must be borne in mind that the husband’s non-disclosure related to post-separation earnings in which the wife could be said to have little or no interest (see the discussion of post-separation earnings in Chorn v Hopkins (2004) FLC 93-204).

10. Similarly, if her Honour did not make a finding that there were, or were likely to be, undisclosed assets or funds in the husband’s possession or control, it is difficult to see why she would then be required to make any additional adjustment in the wife’s favour under s 75(2) on account of any undisclosed assets or funds. Again, it has to be remembered that the funds which the husband tried to hide were post-separation earnings, and it must also be remembered that one of the reasons for the 15% s 75(2) adjustment made by her Honour in favour of the wife was an account of the husband’s significantly greater earning capacity.

11. Moreover, in relation to the matter of the husband’s greater earning capacity, her Honour proceeded on the basis that that earning capacity would be “at least $145,000 a year”. She made this finding notwithstanding that the husband had not worked for six months prior to the trial, and had estimated an income of $118,000 in the year prior to the trial. We therefore do not find any substance in the complaint that her Honour erred in not making a greater s 75(2) adjustment in favour of the wife on account of the husband’s conduct.

12. In reaching the conclusion which we have, we should not be taken as underestimating the seriousness of the conduct of the husband and of his business associates.  It was obviously entirely appropriate that her Honour referred the material for criminal investigation.

The position of Mr J

1. Ground 2 and ground 6 contained in the notice of appeal finally relied on by the wife at the hearing of the appeal, are in the following virtually identical terms:

   2.The finding of the learned trial Judge that Mr [J], was likely to provide the wife with financial support in the future was against the evidence and contrary to law [wrong in law – ground 6], in that:

   a.there was no evidence to support such a finding;

   b.the learned trial Judge failed to give any, or any adequate, reasons for the finding.

2. In her first judgment, her Honour made the following findings concerning the wife’s relationship with Mr J and the financial assistance which he had given her up to the time of the trial (emphasis added):

   43.The expenses claimed by the wife apart from her credit card debts relate to a debt of $20,000 to a Mr [J], her boyfriend, $5,000 to [Ms W] and $30,000 being a debt owed by the … Family Trust to her sister,…  In relation to the debt to Mr [J], the wife stated that $20,000 borrowed from Mr [J] went to pay legal fees.  I do not intend to take into account this sum as a liability of the parties.  Mr [J] has also provided $4,500 in mortgage payments.  As the wife will be given credit for her financial contributions since separation to the mortgage, I do not intend to take into account this sum as a debt as this would be double counting.

   …

   62.The wife is not cohabiting with Mr [J], although he has provided her with funds to assist in these proceedings and with maintenance and mortgage payments on the former matrimonial home.  It is likely he will continue to provide her with financial support.

3. In the final paragraph of her second judgment, her Honour again made reference to Mr J, saying (at paragraph 5):

   She has an earning capacity of at least $40,000 and is likely to receive financial support from Mr [J] in the future.

4. We do not understand there to be any complaint about her Honour’s treatment of the debt owed to Mr J on account of legal fees (particularly in circumstances where legal fees were not added into the asset pool; see the exchange between her Honour and Counsel for the wife at Transcript 27.8.03 at p 106). Rather, it is her Honour’s treatment of Mr J as being in the nature of a financial resource for the purposes of the s 75(2) adjustment which is the subject of the wife’s complaint.

5. The evidence to which we were referred concerning the wife’s relationship with Mr J and his financial assistance is the following passage from the wife’s cross-examination by the husband (Transcript 27.8.03 at p 60-61):

   [THE HUSBAND]: Okay.  … is it true that you’ve had your current --- you had a current boyfriend.  Is true?--- [THE WIFE] Yes, I do have a boyfriend.

   [THE HUSBAND]: Okay, and that would be Mr [J], is it? --- Yes, it is Mr [J].

   Have you been going out with him for some time now? Over 2 years? --- Over 2 years.  Yes.

   And is it true that your boyfriend contributes significantly to your costs? --- Of what costs are you referring?

   Costs in general.  Does he contribute significantly to your costs?

   HER HONOUR: Does he contribute at all to what --- your costs? --- I have --- no.  He contributes to financial matters which are court cases, mortgage and maintenance and things like that to my house that I have borrowed money from.  That’s all he has contributed to.

   So he contributes to court --- so legal fees he has paid? --- Yes.  He has paid some legal fees.  He has paid some mortgage repayments for me.  He has helped pay the maintenance that I have had done on my house because I can’t afford it at the moment due to the proceedings that have taken so long to conclude, and that’s why he has financed, but I have borrowed money off him and I intend to pay it all back.

6. Given the wife’s evidence of the extent of financial support which Mr J had provided to wife in the past, we are of the view that it was open to her Honour to regard Mr J as a source of some financial support to the wife.  We take this view notwithstanding the evidence of the wife that she intended to pay Mr J back all the monies he had advanced.  The fact that she made no reference to the payment of any interest on these advances or to any deadline for repayment must lead to the conclusion that Mr J was of some considerable financial benefit to the wife.

7. Though the challenge in these grounds is to the making of the finding rather than to the weight placed upon it, we think it appropriate to point out that the question of the support in the future by Mr J for the wife was not for her Honour a significant one. Immediately after referring to it as the last s 75(2) factor discussed, her Honour said:

   63.In these circumstances, particularly taking into account the significant difference in the income earning capacities of the parties, the fact that the husband not only has an income from his employment, but from an investment property and the fact that the husband has the opportunity to make significant contributions to superannuation in the future, there should be an apportionment in favour of the wife of 15 per cent.

The wife’s income

1. In her first judgment, when considering the s 75(2) matters, her Honour said (at paragraph 60) “the wife has the capacity to earn approximately $40,000 per year.”

2. Then, in her second judgment her Honour said (at paragraph 5) “[the wife] has an earning capacity of at least $40,000.”

3. Ground 5 is directed to these findings by her Honour and is in the following terms:

   5.The finding of the learned trial Judge that the wife has an earning capacity of at least $40,000 (emphasis added) was against the evidence and contrary to law; in that:

   a.the previous finding of the learned trial judge was that the wife had an earning capacity of “approximately $40,000” and that the husband had an earning capacity of “at least $145,000”;

   b.the learned trial judge imported into her new finding, on the wife’s earning capacity, a connotation that was absent from her original decision and was not supported by evidence;

   c.the learned trial judge failed to give any, or any adequate reasons for the new finding.

4. We understood from the written submissions of Counsel for the wife that the essence of the complaint contained in ground 5 is that “[t]here was never any suggestion the wife could earn more than $40,000.”

5. However, Counsel for the husband referred us to the wife’s financial statement (sworn and filed on 2 April 2003) which showed average weekly salary and wages of $828, which would represent an annual salary of over $42,000, and also to the cross-examination of the wife where she admitted to a current gross salary of $853 per week.

6. It was thus open to her Honour to find that the wife had an earning capacity of “approximately $40,000” or “at least $40,000”, and therefore ground 5 has no merit.

The disparity in the parties’ financial positions and the wife’s mortgage liability under the judgment of 19 December 2003

1. We have earlier referred to ground 1 in the context of discussing the trial Judge’s treatment of the husband’s non-disclosure.  However, ground 1 also challenges the 15% adjustment in favour of the wife on account of the overall disparity in the parties’ financial positions and does so in the following terms:

   1The decision of the learned trial Judge, which limited the apportionment in favour of the wife to 15%, failed to take into account relevant considerations and fell below the reasonable exercise of discretion; in that:

   a.the learned trial judge failed to consider the real impact of such apportionment, in monetary terms, on the wife’s financial position and, in particular, the wife’s ability to meet future mortgage repayments on the former matrimonial home;

   …

   d.the learned trial judge failed to take into account, or in the alternative took insufficient account of, the significant disparity in the respective financial positions of the husband and the wife;

   e.the decision could not, reasonably, be said to follow the learned trial judge’s findings that the husband had an earning capacity of at least $145,000 a year, additional income from shares and an investment property, superannuation of approximately $100,000 and no obligation to support any other person, whereas the wife had an earning capacity of approximately $40,000, superannuation valued at approximately $20,000 and two children to support.

2. Her Honour’s findings and conclusions in her first judgment in relation to the parties’ future financial positions were as follows:

   Section 75(2) factors

   59.The wife is aged 43 and the husband 42.  They are both in good health.  The wife has an obligation to support the two children ….  The husband has the ability to earn a very significant income.  In 2001 he earned $145,000.  He says that in 2002 he earned $118,000.  I do not accept that as correct, as there is no independent proof of his earnings.  He has elected not to work since February 2003, to prepare for the trial in this matter.  In my view, the husband has the capacity to earn at least $145,000 a year, and will continue to do so.  He has no obligation to support any other person.  As a result of my judgment he will retain the unit in [G] Road, which provides him with an income, the home in which he resides at [M] Street, shares and superannuation.  He will have a mortgage on the [M] Street property.

   60.The wife has the capacity to earn approximately $40,000 per year.  As a result of this judgment, she will retain her motor vehicle, furniture and chattels, superannuation and the former matrimonial home.  She has a commitment to support her children, which is off-set to some extent by the child support she receives from her first husband.

   61.The husband’s superannuation is valued at approximately $100,000.  The wife’s is $20,000.  The husband’s prospects for his old age are significantly better than the wife’s.

   62.The wife is not cohabiting with Mr [J], although he has provided her with funds to assist in these proceedings and with maintenance and mortgage payments on the former matrimonial home.  It is likely he will continue to provide her with financial support.

   63.In these circumstances, particularly taking into account the significant difference in the income earning capacities of the parties, the fact that the husband not only has an income from his employment, but from an investment property and the fact that the husband has the opportunity to make significant contributions to superannuation in the future, there should be an apportionment in favour of the wife of 15 per cent. 

   Conclusion on division of assets

   64.The assets of the parties should be divided equally between them.  The husband should, therefore, retain the assets in his possession and pay to the wife the sum of $41,783.

   Just and equitable

   65.In my view, such a result would be just and equitable.  The wife could apply the funds received by her to reduce her mortgage to $130,000.  She will then have the security of a home, a more manageable mortgage, a car, furniture and some superannuation.  As stated previously, the husband would retain his investment property, his residence, cash, furniture, chattels and almost $100,000 in superannuation.  He also, of course, retains his significant earning capacity.

1. While acknowledging that another Judge may have made a more generous s 75(2) adjustment in favour of the wife, we are not persuaded that the 15% adjustment made in favour of the wife, having regard to the matters mentioned by her Honour, was outside (in the sense of being below) “generous ambit within which reasonable disagreement is possible.”

2. We would also observe that a factor such as the comparative earning capacities of the parties was also to be considered in the overall context of the matter, in particular that the relationship, at six years of cohabitation, was a relatively short one and that there were no children of the marriage, so no burden of child care arising from the relationship limited the employment capacity of either party.

3. The practical outcome of her Honour’s overall decision that the property should be divided equally between the parties so far as it affected the wife’s position to pay the mortgage was the subject of the following separate challenge in ground 3 which is in the following terms:

   3.The finding of the learned trial judge that a payment of $41,783 by husband to the wife was just and equitable since it would enable the wife to have the security of a home by virtue of a more manageable mortgage, fell below the reasonable exercise of discretion; in that:

   a.the evidence before the Court was that a larger amount was required in order to lower the mortgage to a level where the wife could, reasonably, afford the repayments;

   b.the learned trial judge failed to give any, or any adequate, reasons for the finding.

4. This ground is clearly directed to paragraph 65 of her Honour’s first judgment which we have earlier set out but here repeat in part:

   65.In my view, such a result would be just and equitable.  The wife could apply the funds received by her to reduce her mortgage to $130,000.  She will then have the security of a home, a more manageable mortgage, a car, furniture and some superannuation.  …

5. With respect to the wife and her advisers, we think that they place too much weight on her Honour’s statement that the result of the 50-50% division of the net pool, which her Honour had at that time calculated as being $481,363, was that the wife would have “a more manageable mortgage”.  That result would clearly flow from her Honour’s equal division of the net value of the assets (as she understood it to be).  However, neither the wife’s “papers for the Judge” nor the final submissions of Counsel for the wife to her Honour, suggest that the wife’s case at trial was conducted on the basis that the mortgage should be reduced to any particular level, or that her Honour’s determination should be expressed in anything other than percentage terms.   

6. We see her Honour’s reference to “a more manageable mortgage” as being no more than an assessment of the consequences of her 50-50% division of a net pool of $481,363 and not as an integral part of her determination.  Her determination was that the net pool, which she understood to be $481,363, should be divided equally between the parties.  Thus we consider that there is no substance in ground 3.

The application of the original 15% s 75(2) adjustment in the second judgment

1. Finally, we come to the wife’s complaint concerning her Honour’s application in her second judgment of the same s 75(2) adjustment (being 15%) as she had made in her first judgment. This complaint is contained in ground 4 which is as follows:

   4.The decision of the learned trial judge to rescind her previous order, that the husband pay the wife $41,783, and to order instead that the wife pay the husband $8,432, fell below the reasonable exercise of discretion; in that:

   a.the decision was to correct an arithmetical error in the previous decision regarding the value of the parties[’] assets;

   b.the decision was to give effect to the previous decision regarding the 15% apportionment to the wife;

   c.having expressly held that the previous order, for payment by the husband of $41,783, was a matter that went [to] the justice and equity of the previous decision, the learned trial judge failed to give any, or any adequate reasons, as to why such payment was no longer just or equitable;

   d.the learned trial judge failed to reconsider or to adequately reconsider the relevant s.75(2) factors;

   e.the learned trial judge failed to reconsider, or did not adequately reconsider, whether the decision was, in all the circumstances, just and equitable;

   f.the learned trial judge failed to consider, or did not adequately consider, the real impact of the decision, in monetary terms, on the financial position of the wife;

   g.the learned trial judge failed to take into account, or in the alternative took insufficient account of, the significant disparity in the respective financial positions of the husband and the wife;

   h.the learned trial judge failed to give any reasons, or any adequate reasons as to why she determined the matter in the way that she did.

2. We have earlier set out in full the essential passages from her Honour’s judgment of 22 March 2004 and do not need to repeat them here.

3. Again, what we have just said above concerning the wife’s mortgage commitments is relevant in the present context.   That is, that we do not understand that the wife’s need for the mortgage repayment to be limited to a particular amount was an integral part of her case before her Honour.

4. It also seems to us that the submissions on behalf of the wife in support of this ground overlooked the fact that her Honour was in her second judgment effectively distributing another $98,000 between the parties.  On her 50-50% division, this would mean that the wife would have additional assets to the value of about $49,000. The manner in which this additional value was to be distributed between the parties was not, in our view, to the point, particularly in circumstances where we do not understand the trial to have been conducted on the basis of each party receiving particular assets or bearing particular liabilities.  Rather, the trial seems to have been conducted on the basis of an outcome expressed in percentage terms.

5. Thus, while we acknowledge that her Honour’s reasons in her second judgment for making the 15% adjustment on account of the s 75(2) matters were brief, we do not think that they were inadequate. Nor do we think that the result arrived at was beyond a just and equitable result. It certainly cannot be asserted that in her second judgment her Honour overlooked what she had said in her earlier judgment regarding the reduction of the mortgage as a result of the outcome of the second judgment. Her Honour expressly referred to that matter when she said in paragraph five of her second judgment:

   In my judgment I determined that a 15% apportionment which would result in the wife being able to reduce her mortgage to $130,000 and keep the items in her possession, would be just and equitable. 

6. However, she then went on to say that she was satisfied that the “15% apportionment on the new total” would also be just and equitable. 

Conclusion

1. As we have found no substance in any of the wife’s grounds of appeal, the appeal must be dismissed.

Costs of the appeal

1. It was agreed at the conclusion of the hearing of the appeal that we would make directions for the filing of written submissions in relation to the costs of the appeal following the delivery of this judgment.

Orders

1. That the appeal be dismissed.

2. (a)       That each party be at liberty to file and serve any written submissions in relation to the costs of the appeal within 28 days of the date hereof.

(b)That each party have a further 28 days in which to file and serve any written submissions in answer to any submissions filed by the other party.

(c)That each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.

I certify that the preceding 94 paragraphs are a true copy of the reasons for judgment of this Honourable Full Court

Associate