CKC and RRC
[2006] FamCA 1290
•1 December 2006
FAMILY COURT OF AUSTRALIA
| CKC & RRC | [2006] FamCA 1290 |
APPEAL – FROM DECISION OF FAMILY COURT JUDGE – PROPERTY SETTLEMENT – FUTURE NEEDS – In property settlement proceedings, the trial Judge assessed contributions at 70/30 in favour of the wife – Following a consideration of s 75(2) factors, the trial Judge adjusted to a division of two-thirds to the wife and one-third to the husband – In relation to future needs, the trial Judge found, inter alia, that the wife’s earning capacity was greater than the amount she was earning at trial as a casual school assistant – This finding was based on equivalent salary the wife was receiving in previous employment at a bank and the trial Judge found that the wife had the “physical and mental capacity” to undertake that or similar work – The wife argued that, there being no evidence that any particular work was available to the wife where she might be remunerated at a similar level to the husband, the trial Judge’s finding regarding the wife’s earning capacity was not open to him – As far as earning capacity of a party is a relevant s 75(2) factor, it is a concept comprised of capabilities and/or qualifications possessed by the party and the availability of opportunity to exercise those capacities in the workforce for predictable reward, at least within a range – In the absence of evidence about the workplace, it was not open to his Honour to conclude that she could exercise whatever capacities she had to earn the salary that she had previously been receiving.
| Family Law Act 1975 (Cth) |
| G and G [2004] FamCA 1179 Mitchell and Mitchell (1995) FLC 92-601 |
APPELLANT: CKC
RESPONDENT: RRC
FILE NUMBER: SYF303 of 2004
APPEAL NUMBER: EA109 of 2005
DATE DELIVERED: 1 December 2006
PLACE DELIVERED: Brisbane
JUDGMENT OF: KAY, WARNICK AND MAY JJ
HEARING DATE: 11 September 2006
LOWER COURT JURISDICTION: Family Court of Australia
LOWER COURT JUDGMENT DATE: 22 August 2005
| APPELLANT: | CKC |
| COUNSEL FOR THE APPELLANT: | Mr Simpson |
| Kells the Lawyers |
| RESPONDENT: | RRC |
| COUNSEL FOR THE RESPONDENT: | Mr Miller |
| Rita Thakur & Associates |
Orders
1.That the appeal be allowed.
2.That order 9.5 of the orders of 22 August 2005 be varied by deletion of the words “to pay 49.12 percent of the balance to the husband” and the insertion in lieu of the words “to pay to the husband $256,134 plus or minus 30 percent of the difference between the balance and $582,413.”
3.That each of the parties be at liberty to make, by way of written submissions filed and served within 21 days of the date hereof;
(i)application with respect to the costs of the appeal;
(ii)application for extension of time within which leave to appeal the costs orders made at first instance;
(iii)submissions in support of any proposed appeal against the costs orders.
4.That each party have a further 14 days from service upon that party to provide an answer in writing, to any submissions served upon that party.
5.That each party have a further 7 days to file and serve a written reply to any answer served upon that party.
6.That each party endorse upon any submissions, answer or reply the date and means of service on the other party.
FAMILY COURT OF AUSTRALIA AT SYDNEY |
APPEAL NUMBER: EA109 of 2005
FILE NUMBER:
| CKC |
Appellant
And
| RRC |
Respondent
REASONS FOR JUDGMENT
On 22 August 2005 Mullane J delivered judgment on issues between the parties about alteration of property interests and the residence of their children. The proceedings before us are the wife’s appeal against the orders altering property interests.
Mullane J found that the parties commenced cohabitation from about April 1989. They have two children, “L” born in December 1993 (11½ years approximately at trial) and “B” born in May 1997 (8 years old at trial). The husband and wife separated, albeit they remained living under one roof, from 1 January 2004 and they remained in those circumstances at trial.
His Honour found a property pool of approximately $1,280,000. He assessed contributions at 70/30 to the wife. However, on a review of s 75(2) factors and of what would constitute a just and equitable result, he adjusted to a division of two-thirds to the wife, one-third to the husband. Mullane J also ordered that the wife bear 70% of any additional taxation and penalties, arising because of tax avoidance in the husband’s operation of a courier business during cohabitation.
On appeal, the wife sought orders based on a 75 percent division of assets in her favour and an equal responsibility for taxation.
By an amended notice of appeal and abandonment of a ground therein, three grounds remained. These essentially asserted:
i)error in aspects of the assessment of s 75(2) factors;
ii)that the trial Judge undervalued the wife’s contributions at the commencement of and during cohabitation; and
iii)ordering the wife to bear 70% of such liability for tax as might be determined was wrong.
Although in the amended notice of appeal all of the property orders were appealed, in the orders sought in the amended notice, the only changes proposed were a reduction in the percentage of proceeds (from a sale of property as ordered) that the husband was to receive and to the percentage of taxation that the wife was to bear, from 70% to 50%.
The grounds of, and argument on, appeal
error in aspects of the assessment of s 75(2) factors
Ground one asserted that the trial Judge “erred in the assessment of adjustments pursuant to s 75(2) factors” as particularised in three subparagraphs. The first of these was:
“1(a)by failing to properly consider that the wife is seven years older than the husband and the impact this has on her future earning capacity.”
Relevantly to this argument, counsel for the wife submitted in his summary of argument that:
“The consequence of that age difference was a relevant matter to be taken into account pursuant to s 75(2A) as it meant both
(i)that the wife had a significantly shorter working life available to her within which to economically rehabilitate herself; …
(ii)it increased the difficulty in her obtaining employment.”
The wife was 50 years of age at trial, the husband 43. Both enjoyed “reasonable health”. From prior to the marriage to May 2004, when she took a voluntary redundancy, the wife was a bank employee. At trial, she was employed on a fulltime casual basis, as a school assistant.
Mullane J recorded these facts in his reasons. However, he did not discuss inferences that might have been drawn about the “working life” of either party. Nor, in those circumstances, did he patently give weight to the age disparity between the parties. The absence of consideration of these matters constitutes the alleged error.
We see no merit in the argument where:
•In submissions at trial, then counsel for the wife did no more than refer to the age differential.
•As was submitted by counsel for the husband on appeal, the wife had presented no evidence in her case to establish that she had difficulty obtaining employment by reason of her age, nor as to her intentions with respect to the number of years for which she proposed to continue employment.
Ground 1(b) was that the trial Judge erred in assessing s 75(2) factors:
“1(b)by failing to give proper weight to the finding that the wife contributed to the husband’s income and earning capacity through his acquisition of teaching qualifications during the marriage, and that this has left him in a stronger financial position than the wife in future.”
Prior to the parties’ marriage and for some years during cohabitation, the husband operated a courier business. He sold the business in 1999. In the last couple of years of operation, it produced income (including undeclared income) of $21,000-$25,000. Even allowing for changes in the value of the monetary unit, that is probably more than the order of annual income over operation of the business during cohabitation.
After the sale of the business, the husband was not in paid work for some years. In March 2000 he commenced studies for a Bachelor of Education degree. He graduated in late 2002 and in March 2003 commenced fulltime employment as a teacher. At trial, the husband was earning some $55,762 per annum.
Counsel for the wife’s argument is not that the trial Judge failed to recognise the factor, but that he gave it insufficient weight.
Under the heading “Matters under subsection 75(2) of the Family Law Act” Mullane J said:
“197.The wife has indirectly contributed to the husband’s income and earning capacity. Through studies as a fulltime student for three years during the marriage he acquired his teaching qualifications. Also his university fees were paid from the parties’ resources.”
Then, under the heading “SUBSECTION 79(2) OF THE FAMILY LAW ACT”, he said:
“203.The other significant factor is the wife’s contribution to the husband’s income and earning capacity by way of him acquiring his teaching qualifications during the marriage.”
Whether insufficient weight was given to this factor may only be discerned in the context of all relevant s 75(2) factors and the ultimate assessment of their significance. We will address that question after considering the final argument in relation to s 75(2).
Ground 1(c) was that the trial Judge erred in assessing s 75(2) factors:
“1(c) by finding that the wife’s earning capacity is not lower than the husband’s.
Mullane J said of the earning capacity of each party:
“186.The income of the husband (per Exhibit W4) is $1,072 per week from his work and a small amount from interest and dividends. . He has the physical and mental capacity to continue that work and $1,072 per week is his present earning capacity. The wife’s present weekly income comprises:
Wages $700
Interest $183
Dividends $ 43
Family Tax Benefits $ 83Total $1,005
187.The wife’s earning capacity is greater than the $700 she earns as a casual school assistant. When she left her employment with the [bank] in May 2004, her taxable income from that work was about $46,492 for the year to date and that is an average of about $977 per week. On the balance of probabilities she has the physical and mental capacity to undertake that or similar work and her earning capacity is more than $1,000 per week.”
As earlier seen, the wife was 50 years of age at trial. Since leaving the bank she had applied unsuccessfully for employment, though not in the banking field.
Also relevant to her employment capacity was that the arrangement for the children put in place by Mullane J’s parenting orders was for week-about shared care. Though the children had been minded in various external caring arrangements at times while the parties were together, the availability of the parties then was different to that post-separation and the wife gave evidence that she currently wished to be available to care for the children outside school hours and the employment she had at trial permitted that.
The wife’s evidence in chief was that her employment at the high school might last until the end of the term. She had made applications to other schools for positions, but was unsuccessful. Apart from those positions she had also applied for two positions with the Child Support Agency. She made no applications for employment during 2005.
The following exchanges during cross-examination of the wife are relevant:
“There’s no reason why you couldn’t seek full time employment is there?---Not that I can recall”.
“And really, you’ve made no effort in 2005 at all to obtain full time employment have you?---No, because the hours I’m working at present fit in with my family life”.
…
“Any field that you choose, you could seek permanent work couldn’t you?---I could.”
“Would give you more security if you obtained permanent work as opposed to casual work wouldn’t it?”---That’s correct.”
…
“Or is it the case that you are not doing that so far this year because you don’t want to do it until after this case is completed?”---If I had a permanent job they may not give me leave to attend to the Court.
Is that why you haven’t applied for a permanent position?”---Yes, because I believe that we need to get the proceedings over and done with because if I just started a job I don’t think it would look very good, from an employee’s point of view, if I then turned round and said I have to have all this time off.”
…
“Right, certainly you intend to seek permanent employment once this case is over don’t you?---I may not
Why wouldn’t you?---Because I may be able to continue on a casual basis in the school system for a long period of time and be close to my home.
The children have been accustomed to having child care for much of their lives haven’t they, when not at school or pre-school?---That’s correct.
That’s nothing new for them is it?---No, however, I was normally in a fairly local area.
And you were in permanent employment, full time, for the majority of the time that you and your husband had been living together weren’t you?---I have been in permanent employment since 1973.”
At trial, when then counsel for the wife, Mr Roberts, was making closing submissions, the trial Judge said:
“[Counsel for the husband] will say, no doubt, that there isn’t any evidence that the wife has sought to exercise the earning capacity that she has since her redundancy. The positions that she has applied for have been positions that have not been as remunerative as employment in the similar field for which she is qualified by her skills and experience.”
During the exchange that followed, Mullane J further said:
“But she hasn’t applied to any bank or financial institution for employment in that field?”
And later:
“And she doesn’t say that she’s not going to do that in the future?”
His Honour then said:
“So when it comes to her earning capacity, is there any reason why it shouldn’t be deemed to be what it would have been if she was in that sort of employment.
MR ROBERTS: Well because she isn’t in that sort of – in that position any more. She’s been employed – she’s been out of the [bank] for a year. It may be difficult to get a similar – there aren’t that many banks about.
HIS HONOUR: Well I don’t have any evidence about that.…
HIS HONOUR: There’s no evidence by anybody with any expertise in the employment industry to say that she cant get that employment now.”
Later, Mr Roberts said:
“…Whether she’ll get the same – she’s 50 years old. That’s a factor that may be relevant in terms of future prospects of employment in the same industry that she was in before.…”
In the appeal, counsel for the wife argued that, there being no evidence that any particular work was available to the wife for which she might be remunerated at $1,000 a week, the finding of the learned trial Judge that her earning capacity was more than $1,000 a week was not open to him.
On the other hand, counsel for the husband submitted that, there being no evidence before the trial Judge that such employment was not available to the wife, the finding was open.
We accept the thrust of counsel for the wife’s argument that, in so far as earning capacity of a party is a relevant s 75(2) factor, it is a concept comprised of two aspects:
•capabilities and/or qualifications possessed by the party; and
•the availability of opportunity to exercise those capacities in the workforce, for predictable reward, at least within a range.
In Mitchell and Mitchell (1995) FLC 92-601 the Full Court of the Family Court said:
“Importantly, and particularly in more recent times, there is the notorious circumstance that there is a significant gap between theory and reality for employment…”
In our view, in the absence of evidence about the workplace, given that the wife was out of the banking industry, temporarily working in the school system receiving $700 a week, and aged nearly 51 years, it was not open to his Honour to conclude that she could exercise whatever capacities she had, to earn the salary that she had previously been receiving.
We think the correct position in relation to the comparative earning capacities of the parties was that the husband had a capacity that he was exercising. In that sense he was more secure than the wife, who had a capacity in the sense of qualifications, capabilities and experience to earn as much as the husband, but was not in fact exercising that capacity.
However, we also think that the prospect of the wife exercising her capacity to its fullest was an available inference. That is to say that, while a trial Judge may not be able to find on the balance of probabilities that capacities will be exercised or exercisable to the fullest, it may be a finding relevant to s 75(2) factors that, on the balance of probabilities, a realistic prospect exists that that capacity will be exercised.
In summary on this point, we think that his Honour erred in finding that the wife had a capacity to earn $1,000 a week or more, in so far as that finding involved the inference that jobs were or would be available to enable her to receive that amount.
Whether, in the light of the inference that we consider was available, the erroneous conclusion of Mullane J made any difference to the outcome in the context of the other relevant s 75(2) factors, we consider later.
Whether in the assessment of s 75(2) factors the trial judge gave insufficient weight to the contributions by the wife to the husband’s income and earning capacity, because he acquired teaching qualifications during the marriage
Mullane J took account of the following factors when addressing s 75(2)factors:
•The ages of the parties and their health;
•The income of the husband;
•The income of the wife and her earning capacity;
•The particular asset/liability position in which the proposed division on the basis of the assessment of contributions would leave each party;
•The arrangements for the children’s care, which his Honour found would be equally shared, including financial support;
•The commitments necessary to support each, which his Honour thought likely to be roughly equal;
•That the wife’s superannuation, though vested was preserved until age 55 and that the husband’s had not vested nor a vesting age been established;
•The indirect contribution of the wife to the husband’s income and earning capacity;
•The length of cohabitation; and
•The possibility of taxation and penalties and his Honour’s conclusion that they ought be shared in the same proportion as the assessment of the parties’ contributions.
When he turned to matters relevant under s 79(2) of the Act, his Honour mentioned two matters. Firstly, he referred to the wife’s much stronger position than the husband on the assessed division based on contributions, a factor which he said supported
“an adjustment in favour of the husband. But it must be noted that if the amount to which the husband is entitled is increased, the income of the wife from interest is likely to be less.”
He then said:
“The other significant factor is the wife’s contribution to the husband’s income and earning capacity…”
and concluded that a just and equitable division would be the ratio of 2:1 in the wife’s favour.
It is clear from this discussion by his Honour that he placed significant weight on the wife’s contributions to the husband’s income and earning capacity.
But the question remains: was that enough in the end result, which saw an adjustment in the husband’s favour from the contributions assessment, of about 3.3 percent?
In G and G [2004] FamCA 1179, Warnick J discussed what had been said in a number of cases with regard to the breadth of the trial Judge’s discretion in circumstances such as the instant case as follows:
“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)”
The wife, on the contributions assessment, had a sum about $460,000 greater than that to be received by the husband. The adjustment for s 75(2) factors meant a sum of about $42,240. In the light of the authorities and the position that the wife’s contribution to the husband’s earning capacity was but one of a number of other factors correctly identified by his Honour, we are unable to be persuaded that his Honour’s adjustment in the husband’s favour of effectively 3.3 percent on account of s 75(2) factors was manifestly unjust. That is not to say that if we re-exercise the discretion, we may not arrive at a different result.
Ground 3 was:
“3.His Honour erred in his assessment pursuant to s 79(4) of the wife’s contributions to the property and welfare of the family, by failing to give proper weight to the significant financial contributions made by and on behalf of the wife at the commencement of and during the marriage.”
The trial Judge dealt with what were fairly extensive and detailed contributions, nonetheless in a succinct way as follows:
“175.The parties made the following joint and equal contributions:
· As joint purchasers and owners for 3.5 years of the J Street property and as borrowers and mortgagors for the loan of $90,000 in 1990 from the Commonwealth Bank;
· as joint borrowers for more than 15 years of the loan of $50,000 in 1990 by the husband’s parents;
· as joint borrowers for a short period of the loan of $10,000 in 1992 by the husband’s parents;
· a contribution on their behalf by the husband’s parents by waiving interest on the $50,000 loan for 2 years and on the $10,000, apparently for less than 2 years;
· a contribution on their behalf by the husband’s parents by waiving rental for the parties’ occupation of the house at [“U”] for 26 months;
· as joint purchasers and owners for about 2 years of the land at [“WB”] and as borrowers and mortgagors in respect of loans of $15,000 from each of the Commonwealth Bank and CBOA Credit Union Ltd;
· as joint purchasers and owners for more than 10 years of the [“A”] property and as borrowers and mortgagors in respect of the 1995 loans by the Commonwealth Bank of $110,000 and $90,000;
· payment of the mortgage payments and other outgoings on the home for the last 19 months; and
· as providers of the children’s accommodation, financial support and care for the 19 months since separation.
176.The applicant husband made the following additional contributions:
· initial contributions in 1989 of a car bought in 1984 for $7,000, savings of $10,000, his courier business which cost $28,000 in 1987, 2 blocks of land at[“R”] worth about $75,000, the household furniture and appliances described in his affidavit and liabilities being a business loan on which he owed about $19,000 and a small mortgage debt on the land;
· as owner and lessor of the [B] unit for 11 years and as borrower and mortgagee for the $84,000 lent in 1989 by the Commonwealth Bank;
· as owner of the [R] land for about 8 months and borrower for a small mortgage debt;
· contributions by him and on his behalf by his employer to his superannuation;
· as borrower in respect of the small business loan of about $19,000 for about 8 months,
· about $276,337 in taxable income from paid work during cohabitation;
· performed most of the back-filling and landscape work for the retaining wall for the car port at the home;
· installed a new washing machine and dryer in the laundry;
· installed the safe in the bedroom and installed timber Venetian blinds, curtains, curtain rods and rails;
· built a rockery in the front yard and raised a vegetable garden bed in the back yard;
· used a cherry picker to remove several large trees from the front of the home, removed a date palm from the front of the home, and installed laser light roofing over the rear pergola;
· his parenting contribution during cohabitation; and
· his homemaking contributions.
177.The respondent wife made the following further contributions:
· she brought into the relationship in 1989 her [B] unit in which she had an equity of about $62,000, a laser car that cost $12,000 in 1985 and was sold in 1992 for $5,500, household furniture, about $4,000 in a credit union account in her name, and superannuation entitlements with the [bank’s] Superannuation Fund worth about $119,000;
· as owner of the [B] unit for about 6 months;
· $9,435 in 2001 received by way of a victim’s compensation payment;
· the benefit to the parties of lower interest charged on staff loans from the [bank];
· a subsidy if more than $10,000 from her employer towards health insurance premiums for the family;
· $84,473 by way of inheritance in 2002;
· $130,119 in 2004 received by way of redundancy payment, about $60,000 of which related to service before or after cohabitation (calculated by reference to annexure BD to wife’s affidavit by including amounts expressed to be for service pre 1978 or pre 1983, and pro rata calculations for other amounts referrable to periods of service that include the period of cohabitation);
· extensive physical work she performed with the children and [Mr and Mrs “L”] moving topsoil from the driveway of the home to the garden beds;
· $139,416 received in 2004 from her superannuation entitlements;
· about $606, 344 in taxable income from paid work during cohabitation;
· contributions by her and on her behalf by her employer reflected in her remaining superannuation;
· a greater role than the husband in the parenting of the children during cohabitation, particularly because of her role in her periods of maternity leave; and
· greater homemaking contributions than the husband.
178.The joint and equal contributions of the parties are substantial.
179.Of the other contributions, the wife’s initial contributions were nearly double the husbands. Her contributions from her earnings from paid work were more than double the husband’s. The contributions from superannuation paid and from contributions reflected in her remaining entitlements are many times greater than the contributions by and on behalf of the husband reflected in his superannuation.
180.The wife also contributed about $235,000 from compensation, inheritance, health insurance and redundancy payments received. The husband made no such contributions.
181.The wife’s other parenting contributions were greater than the husband’s. Her homemaking contributions were greater than his. Her contribution by way of interest saving on staff loans was significant.
182.The remaining contributions of the parties were roughly equal.
183.On balance the ratio of the parties’ contributions is about 70:30 in the wife’s favour but on the basis that their entitlements are calculated by adjusting the pool of present property and liabilities as follows:
(1)add back assets disposed of by one of them since separation and not included in their present property;
(2)to disregard debts incurred by either of them since separation for his or her own purposes; and
(3)deduct any savings or other property provided from post separation earnings.”
Counsel for the wife handed up a summary of direct financial contributions which showed the wife contributing 86 percent of that category. He also compared the parties’ wages contribution, which he said favoured the wife 68.7 percent. He argued that what made this case remarkable was that, not only had the wife made, from various financial sources, the far greater monetary contributions, but her parenting and home making contributions were also greater. Accordingly, counsel for the wife submitted 70/30 was below the range of a reasonable assessment of contribution. He argued the assessment should be 75 percent.
We think that in any case with facts even broadly similar to those here, with extensive and varied contributions during a marriage of nearly 14 years, to which 2 children were born, it cannot be suggested that there is no range of discretion available.
Having regard to what we earlier said of the authorities relating to appellate interference with an exercise of discretion, we are not persuaded that an assessment of 70 percent was an appealable error, particularly where the trial Judge described joint and equal contributions as significant.
Ground 6 was:
“6.His Honour erred in ordering that the wife bear 70% of such liability for tax as might be determined consequent upon the non disclosure by the husband of income derived by him during the marriage in circumstances where…
i)His Honour had brought the whole of the non declared income to account as a contribution by the husband; and/or
ii)making the order by reference to his contribution based assessment rather than by reference to the adjustment effected by his final order.
Relevantly, his Honour said:
“200.Under paragraph 75(2)(o) of the Act the justice of the case requires the court to take into account that the husband is likely to receive amended income tax assessments and be liable to pay additional tax and penalties. The amounts payable are not quantified. However, the taxable income in question was used for the parties’ purposes and the avoidance of the tax and expenditure of the funds were undertaken by the parties jointly. Justice and equity therefore requires that the parties share the liability for any additional tax and penalties assessed in the same proportions as their contributions; 70:30 with the wife indemnifying the husband for 70 percent.”
As to paragraph ii) of this ground, counsel for the husband conceded that taxation ought be borne in the proportions by which the pool of assets was divided. As said by Mullane J in the passage quoted immediately above, the tax arose from the period of cohabitation and the parties were complicit in its avoidance and enjoyed the benefits that flowed from it. While it seems clear that his Honour intended exactly what his orders provided, our view is that, though we do not say the course his Honour took was not open, the debt is primarily one to be notionally included in the pool and that the preferred course, therefore, is that it be borne as conceded.
As to ground 6(i), counsel for the wife argued that the wife should bear no more than equal responsibility for the debt, because of the trial Judge’s findings about the way it came about and because the husband had already had the benefit of the undeclared income for the purpose of the trial Judge’s assessment of the parties’ contributions.
However, the latter point could only be an error in so far as it failed to account for taxation and there is no indication that his Honour ignored taxation in the weight that he gave to the husband’s contributions.
As to the first part of the argument, notwithstanding the findings about the parties’ complicity in the tax avoidance, we repeat that we see the issue primarily as a question of inclusion of the tax debt to ascertain the true net pool. If the debt had been quantified prior to the cessation of cohabitation, on the findings of the trial Judge, it would have been well open to him to include it in the pool, with the consequence that the wife bore it in the proportion of the net pool she received.
Re-exercise of discretion
In summary, the only aspect in which we find error in the trial Judge’s consideration of the matter is the inference drawn in relation to the wife’s earning capacity.
Counsel for the wife conceded that the s 75(2) factors, in particular the disparity of assets on a contributions basis, could justify an adjustment up to 2.5 percent if the wife was credited with a 75/25 assessment of contributions. We do not think that in the context of those factors that we earlier outlined, 2.5 percent would be the limit, although the adjustment would not be great.
Given however that the disparity is less than that urged upon us and given that the husband remains in secure employment whilst at its highest the wife has a realistic prospect to exercise an earning capacity that may bring a similar income to that of the husband, we conclude that no further adjustment ought be made for s 75(2) factors.
Terms of the orders on appeal
The trial Judge’s orders included an order that the parties sell the former matrimonial home and that after costs of sale, mortgage debt, rates adjustment and repayment of a loan from the husband’s parents, the balance be divided in a fixed percentage to the husband, the remainder to the wife. During the hearing of the appeal, it became apparent that the order for division of the sale proceeds was defective, in that it did not permit a proportionate sharing of any variation upwards or downwards in the net sale price from the value of the house and liabilities included in the asset table. The parties agreed that this needs correction.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of this Honourable Full Court
Date: 1 December 2006