CLAUGHTON & NORTHEY
[2015] FamCAFC 213
•12 November 2015
FAMILY COURT OF AUSTRALIA
| CLAUGHTON & NORTHEY | [2015] FamCAFC 213 |
| FAMILY LAW – APPEAL – PROPERTY – Where the trial judge assessed the overall entitlement of the parties as at 65 per cent to the appellant and 35 per cent to the respondent – Where the appellant complains that the trial judge erred in the approach taken to reach that result, or failed to provide adequate reasons for that exercise of discretion – Where the appellant does not challenge the established facts but does take issue with the trial judge’s discretionary conclusion reached as a result of consideration of those established facts – Where the appellant asserts that the evidence does not support the trial judge’s findings as to the contributions of the parties and the relevant s 75(2) factors – Where there is no error by the trial judge – Where there is no merit in any of the grounds of appeal – Appeal dismissed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the appellant seeks to adduce further evidence – Where the evidence is not to demonstrate error by the trial judge but is evidence to be before the court in the event that the discretion is re-exercised – Where the appeal is dismissed and there is no need to receive the further evidence – Application dismissed. FAMILY LAW – APPEAL – COSTS – Where the respondent sought an order for costs in the event that the appeal was dismissed – Where the appellant’s senior counsel conceded that if the appeal was dismissed there should be an order for costs – Costs ordered in favour of the respondent to be assessed on a party/party basis in default of agreement. |
| Family Law Act 1975 (Cth) – s 75(2) |
| Bennett and Bennett (1991) FLC 92-191 Chapman & Chapman (2014) FLC 93-592 Dickons & Dickons (2012) 50 Fam LR 244 Fields & Smith (2015) FLC 93-638 Gronow v Gronow (1979) 144 CLR 513 Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 Mallett v Mallett (1984) 156 CLR 605 Petruski & Balewa (2013) 49 Fam LR 116 Singerson & Joans [2014] FamCAFC 238 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Stanford v Stanford (2012) 247 CLR 108 Steinbrenner & Steinbrenner [2008] FamCAFC 193 |
| APPELLANT: | Mr Claughton |
| RESPONDENT: | Ms Northey |
| FILE NUMBER: | MLC | 8359 | of | 2012 |
| APPEAL NUMBER: | SOA | 48 | of | 2014 |
| DATE DELIVERED: | 12 November 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 27 February 2015 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 17 July 2014 |
| LOWER COURT MNC: | [2014] FCCA 1260 [2014] FCCA 1832 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Crutchfield QC with Ms Tulloch |
SOLICITOR FOR THE RESPONDENT: | J A Middlemis |
| COUNSEL FOR THE RESPONDENT: | Mr R Smith |
| SOLICITOR FOR THE RESPONDENT: | O’Farrell Robertson McMahon |
Orders
The appeal be dismissed.
The application in an appeal filed on 23 January 2015 be dismissed.
The husband pay the costs of the wife of the appeal with such costs to be assessed on a party/party basis in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Claughton & Northey has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
|
Appeal Number: SOA 48 of 2014
File Number: MLC 8359 of 2012
| Mr Claughton |
Appellant
And
| Ms Northey |
Respondent
REASONS FOR JUDGMENT
Introduction
By Amended Notice of Appeal filed on 23 September 2014 Mr Claughton (“the husband”) appeals against orders for property settlement made by Judge Burchardt on 17 July 2014 and 20 August 2014. Ms Northey (“the wife”) opposes the appeal.
In summary the orders appealed against provide for the sale of real estate, the receipt by the wife of the net proceeds of sale, the payment of a further amount by the husband to the wife, the sale of other real estate in the event that that payment is not made in full, and the splitting of the husband’s interest in superannuation.
On 23 January 2015 the husband filed an application in an appeal seeking to admit into evidence before this court the affidavit of a valuer, Mr P, sworn on 15 January 2015. That application was opposed by the wife.
Background
The husband was born in 1961 and was aged 53 years at the time the trial judge made his orders.
The wife was born in 1962 and was aged 52 years at that time.
The parties commenced cohabitation when they married in mid-2000.
There is one child of the marriage, X (“the child”), who was born in 2001.
The wife also had two children from a prior relationship and they lived with the parties.
The parties separated under the same roof in mid-2005 with the physical separation occurring in August 2012.
The husband lived and worked on his family’s farm for most of his life. His parents also lived on the farm until they went into care.
The wife with her two children moved to live on the farm upon marriage.
By the time of the marriage the husband had inherited most of the farm property, and later he effectively bought his sisters out of the balance of the farm property for $50,000.
In 2004 the parties added to the farm by purchasing a property at M for $145,000 subject to a mortgage. That property was subsequently leased out.
For a period of approximately 18 months after separation under the same roof, the husband worked in Melbourne.
For a time the wife operated a business despite suffering from multiple sclerosis, which condition is ongoing.
The trial before his Honour was not only about property settlement, but was also about parenting issues, and in that regard his Honour ordered that the child live with the wife, that the parties have equal shared parental responsibility, and until further order the child spend time with the husband, initially supervised but then becoming partially unsupervised. The question of the time the child spends with the husband was adjourned, and a family report was ordered whilst therapeutic counselling continued for the child, and the parties themselves engaged in counselling.
The reasons for judgment of the trial judge
There are two sets of reasons that need to be considered. Following the trial before his Honour in April 2014, on 25 June 2014 he delivered reasons for judgment in relation to the parenting and the property settlement issues, and he made orders in relation to the former. With the latter, he gave the parties the opportunity to agree on the form of orders, but no agreement was reached, and on 17 July 2014 his Honour delivered brief reasons for judgment and made the orders for property settlement. However, his Honour deferred making the superannuation splitting order until procedural fairness had been afforded to the relevant superannuation funds. That occurred, and his Honour made those further orders on 20 August 2014.
The reasons for judgment delivered on 25 June 2014
At the commencement of the reasons his Honour indicated that “there should be an adjustment of the property pool as to 65 per cent to [the husband] and 35 per cent to [the wife]” (at [4]).
His Honour then set out the matters that were agreed, primarily comprising the background facts referred to above.
As to the time the husband worked in Melbourne, his Honour observed that “it would seem inescapable to me that [the wife] must have continued to run the farm in his absence. It should be noted that the farm is not just agricultural land but involves substantial activities in [an associated activity]” (at [15]).
Further, his Honour recorded that “[the husband] has the skill to and has, from time to time, worked in the construction industry as a [skilled tradesman]” (at [16]).
His Honour then identified some of the issues in dispute, namely “[the husband’s] extent of earnings and capacity to earn and a similar issue as to the extent to which [the wife’s] multiple sclerosis prevents her, or is likely to prevent her, from working” (at [27]).
His Honour then canvassed in significant detail the evidence of each of the parties and all of their witnesses. Predominantly that evidence related to the parenting issues, and just touched on the wife’s ability to work as a result of her health. In 2005 the wife obtained a sole parent benefit, but went on to a disability pension when she was diagnosed with multiple sclerosis in 2007, and she now uses a walking frame. She has been unable to continue her business because of her health. She also suffers from arthritis which affects her ability to work as well.
His Honour recorded that between 2005 and 2012 (whilst the parties remained separated under the same roof) the husband paid the wife’s car registration and insurance, and he also paid for home help, power, telephone, gas, firewood and mechanical repairs to her car. At the time of the trial the husband was assessed to pay $450 per month child support.
His Honour then noted that the wife cooked for the husband’s parents until they moved into care, and recorded that the husband supported the wife’s two children financially prior to separation.
As to the husband’s health and his ability to work, his Honour said this at [160] and [161]:
160.[The husband] confirmed that his health was good and he has a licence to perform [trades] work. He said that he was not qualified as a [skilled tradesman]. His responses to questions about his capacity to work were in my view combative and bullying.
161.He said he had a fulltime job running the farm and (omitted) which ran at a loss in 2012. He said he would make more money in construction than as a farmer. He confirmed that he had not spoken to banks about refinancing from the farm. He said the houses on the farm would be easier to sell because the land was marginal and would be difficult to sell.
As to the credit of the parties, his Honour made this finding (at [211]):
… [The husband] clearly thinks that [the wife] only stuck around to try and get the maximum amount of money out of him and waited until his father’s estate was finalised before she moved out. As it happens, I think he is correct.
However, unsurprisingly, this finding was not used by his Honour in reaching his decision. It is clearly not relevant to the decision.
As to the significant financial issues, his Honour made the following findings:
222.So far as what might be described as the financial issues are concerned, it is clear that [the husband] already inherited substantial amounts of land before the relationship and in due course he effectively inherited the family farm (less the distributions to his sisters). The [wife] had no meaningful input to this outcome whatsoever.
223.The [husband] worked fulltime, whether on the farm or for a period of time … in Melbourne. The [wife] was clearly the major homemaker (I roundly reject [the husband’s] assertion that it was a shared care arrangement when he was living at the farm) as [the child’s] alignment to his mother would not otherwise be explicable.
224.The [wife] did conduct a hobby business of her own but its earnings were very limited and she is not now in a state of health to be able to continue to work, either in that capacity or indeed in any other. The [husband] however does have work prospects albeit that he may well stay on the farm where his future earnings are uncertain.
225.The [wife] must have given some measure of assistance to [the husband’s] parents in their later years, given the state of their ill health. It is a matter to be taken into consideration although of its nature it is not susceptible of precise computation and on any view would not have been a massive consideration.
At [261] his Honour set out the agreed schedule of the assets, liabilities, and superannuation of the parties, and recorded that the total of the net assets and superannuation was $1,749,604.
His Honour then referred to and applied the principles emanating from the High Court decision in Stanford v Stanford (2012) 247 CLR 108, and recorded the proposals of the parties as follows:
264.The [husband] sought that [the wife] be given the [M] property free of encumbrance as her share of the property pool. This would equate to approximately 13 per cent of the pool on the figures set out in the table above. The [wife] sought that there be a distribution of 60 per cent to 40 per cent in [the husband’s] favour.
His Honour then turned to consider the respective contributions of the parties and said this:
266.This matter may be dealt with shortly. The reality is that all of the real property, with the exception of the [M] property, together with the plant and equipment effectively comes from [the husband]. He inherited it either before the commencement or following the end of the relationship. The real property constitutes the vast bulk of the asset pool.
267.The relationship was, as [the husband’s] submissions state, only one of some five years, but as is often the case, the true position is more opaque. While the parties’ separated under one roof, they continued to conduct their affairs to an extent together. The [wife] must have had some role in running the farm and [associated] activities during the 18 months that [the husband] worked in Melbourne. This was all after separation in 2005 on any view. Likewise, [the wife] must have had some role in helping look after [the husband’s] parents up until the father’s death in 2010.
268.Further [the wife] appears to have continued to provide food, cooking and other services for the husband until he actually moved out of the property in which they lived.
269.The wife’s contribution from her earnings in her business must be set at a very minimal level. It was her own case that she made very little money at it. As is always the case in such matters, assessments such as these are matters of impression and involve judgment in a broad sweep.
270.In my view [the husband] should receive a loading of some 30 per cent in his favour in this regard.
As to the s 75(2) factors found in the Family Law Act 1975 (Cth) (“the Act”), his Honour described the position as being “the other way” (at [271]). His Honour concluded at [274] that, “… there should be a 15 per cent adjustment in [the wife’s] favour in this regard.” His Honour confirmed his finding as to the husband’s health and earning capacity, and then made the following finding:
272.Although it is a significant finding to make, the bitterness that [the husband] obviously feels about [the wife’s] financial claims is so clear and so great that I am prepared to find and do find that he has taken such steps as he is able to ensure that his income has been minimised of recent times. Whatever the future holds for him, he will make a living. He has substantial unencumbered property in any event.
In relation to the wife, his Honour accepted that because of her health, “she will not be able to work in the future” and she will be reliant on government benefits and child support, she having “the responsibility for the care and expense of looking after [the child]” (at [273]).
His Honour then found that in all the circumstances, an outcome that provided the wife with 35 per cent of the property pool, including superannuation, was just and equitable.
His Honour concluded by saying that subject to any agreement of the parties, they should each retain the chattels in their respective possession.
The reasons for judgment delivered 17 July 2014
His Honour referred to his finding that there should be a division of the net property pool and superannuation in the proportion of 65 per cent / 35 per cent in favour of the husband, and translated that into figures, namely net assets to the value of $604,940 together with $7,421.75 for superannuation to the wife.
His Honour then considered what pieces of real estate should be sold to provide the wife with her entitlement, and what should be done if there was not an initial sale, and if the sales realised less than the agreed values.
The wife wanted the properties at M, N, and the B block to be sold, leaving the husband to pay approximately an additional $100,000. However, if the properties were not sold then other properties were to be sold including properties the husband sought to retain.
The husband wanted to transfer the M and N properties to the wife, and borrow the amount required to make up the balance of her entitlement.
His Honour noted that the B block had in fact been sold, and would realise $55,000, and that “the [M] and [N] properties may be worth substantially less than the agreed values put to the Court” (at [8]).
In deciding what orders should be made his Honour concluded as follows:
10.The practical problems that now arise do so because the parties adopted agreed valuations which it seems highly likely do not reflect the reality on the ground. I do not put this in any way as a criticism of the parties. It represented the only way in which the Court could be enabled to produce a decision as to the proportional distribution of the pool, but the question now arises what is to be done. It is clearly inappropriate to order that the wife have transferred to her three properties, two of which may not be realisable at all. The wife needs money. She cannot work and has [the child] to look after.
The Grounds of appeal and orders sought
The grounds of appeal set out in the Amended Notice of Appeal were as follows:
1.The learned trial judge erred in law in misapplying the approach to be taken in cases involving the final division of matrimonial assets, liabilities and financial resources pursuant to Section 79 of the Family Law Act 1975.
2.The learned trial judge erred in the exercise of his discretion in failing to give any or sufficient weight to:
a.The financial contributions made by the husband at the commencement of the parties’ relationship;
b.The financial contributions made by the husband to the wife’s two children from a previous relationship;
c.The length of the parties’ relationship from June 2000 until separation in mid-2005 (the wife applying for and receiving Centrelink benefits from June 2005);
d.The assets received by the husband by way of an inheritance post-separation; and
e.The financial support provided by the husband to the wife and her children post-separation.
3.The learned trial judge erred in the exercise of his discretion in giving undue or excessive weight to:
a.An assumption made that the wife “continued to run the farm in his absence”, notwithstanding the wife’s osteoarthritis, subsequent diagnosis with multiple sclerosis, use of a walking frame and entitlement to the disability pension from 2007; and
b.The husband’s earning capacity and assets.
4.The learned trial judge erred in the exercise of his discretion in making orders for final property settlement prior to the making of final parenting orders as matters relevant to Section 75(2)(c) have not yet been finally determined.
5.The learned trial judge erred in law failing to give adequate reasons for the exercise of his discretion.
6.The said orders were against the evidence and the weight of the evidence.
7.The learned trial judge erred in the exercise of his discretion in the form of orders made whereby:
a.The respondent is to receive the whole of her entitlement by way of a cash amount rather than by taking a transfer of certain assets plus a lesser cash payment; and
b.The appellant is required to sell properties known as “[Property C]”, “[Property H]” and “[Property F]” in default of his making a cash payment to the respondent.
8.These grounds of appeal have been prepared without the appellant’s practitioners having an opportunity to fully consider the transcript. Accordingly, upon the transcript becoming available it may be necessary to amend these grounds of appeal and/or to add additional grounds of appeal.
In the husband’s written summary of argument he advised that Grounds 7 and 8 were not pursued, and at the hearing before this court the husband’s senior counsel advised that Ground 4 was not being pursued either.
In his written summary of argument the husband grouped some of the grounds of appeal together, and I propose to follow the same course in addressing the grounds of appeal.
Discussion
Grounds 1 and 5
It is plain from the commencement of his Honour’s reasons for judgment delivered on 25 June 2014 that the overall entitlement of the parties to the net property pool, including superannuation, should be 65 per cent to the husband and 35 per cent to the wife.
These grounds complain that his Honour either erred in the approach that he took to reach that result, or that his Honour failed to provide adequate reasons for that exercise of discretion.
His Honour correctly identified the assets, liabilities and superannuation entitlements of the parties (at [261]), and addressed whether it was just and equitable to make orders adjusting or altering those property interests (at [262]-[263]). His Honour also correctly recorded the ultimate proposals of the parties (at [264]). His Honour then turned, as he was required to do, to consider the respective contributions of the parties (at [266]-[269]), and concluded, as referred to above, at [270] as follows:
In my view [the husband] should receive a loading of some 30 per cent in his favour in this regard.
Pausing there, this is where it is said that his Honour committed his principal error. It is submitted that this paragraph proceeds on an “unstated assumption” that the starting point for the division of the property pool is one of equality, and that is not an approach that is open (Mallett v Mallett (1984) 156 CLR 605).
Plainly if one only had regard to [270] in considering this complaint, it would have significant credence, but it is necessary to look at the entirety of the reasons that relate to the issue of the contributions of the parties to properly consider this complaint.
In that regard, the relevant paragraphs are [222]-[225] and [266]-[270]. I have set out these paragraphs above.
It is readily apparent from those paragraphs that his Honour did not commence his consideration with a presumption of equality. His Honour clearly described the respective contributions of the parties and he can be seen to apply the requisite holistic approach to the assessment of the same (Dickons & Dickons (2012) 50 Fam LR 244; Singerson & Joans [2014] FamCAFC 238).
Thus, how his Honour expressed his conclusion in [270] can be explained not as demonstrating error, but as infelicitous, in the same way as similar expressions were treated in Singerson & Joans.
I also observe that in her final submissions to the trial judge, counsel for the husband spoke in terms of making “an adjustment with respect to [the wife’s] contributions”, and indeed identified the percentage the wife should receive as “an appropriate adjustment with respect to contributions” (transcript 10.4.14, page 310, lines 7-9). That terminology is also problematic given that it is not a case of identifying a percentage entitlement for one party and then making “an adjustment” in favour of the other party. Indeed, that was also the approach suggested by the husband’s senior counsel in his oral submissions to this court. He submitted that a starting point should have been 100 per cent to the husband, because he made all of the financial contributions, and then adjust from there. Plainly that is not in accordance with authority.
I also observe that in paragraph 20 of his written summary of argument the husband submits that there is no discernible reason provided by his Honour why “the financial contributions by the husband of effectively 100 per cent were eroded over the five year period to 80 per cent…”. That too demonstrates a misapprehension of how a trial judge should address the assessment of contributions. It is not a case of commencing at 100 per cent and then that percentage being eroded. It is an holistic exercise where all contributions are addressed and weighed one against the other.
His Honour of course should have been alert to the dangers of using the expression that he did, but to repeat, his Honour in doing that did not commit an error of law when the entirety of his reasons are considered.
As the Full Court said in Chapman & Chapman (2014) FLC 93-592 (per Strickland and Murphy JJ):
100.Convenient shorthand used in the making of submissions often sees them couched in terms of “adjustment” to an “otherwise” equal distribution. While understandable enough, doing so is fraught with the potential for error. The “compartmentalisation” or labelling of contributions and the language of adjustment can produce errors of the type identified by this Court in Bolger & Headon [2014] FamCAFC 27 or Dickons & Dickons [2012] FamCAFC 154.
101.The task of assessing contributions is a holistic one involving the assessment of all contributions of all types across the whole of the cohabitation and, if relevant, before and after cohabitation. While shorthand submissions of the type earlier identified were made to her Honour, and while her Honour referred to those submissions (at [184]) in similar terms when reaching her conclusions, the comprehensive reasons read as a whole reveal that her Honour approached the assessment of contributions in the manner dictated by existing authority.
As I have found, that is also the case here.
In his written summary of argument in support of Ground 1, the husband’s senior counsel suggests that his Honour’s treatment of the relevant s 75(2) factors supports the complaint. In [274] his Honour concludes as follows in relation to s 75(2):
In all the circumstances in my opinion there should be a 15 per cent adjustment in the [wife’s] favour in this regard.
However, there is no error here. It is a common and accepted approach by trial judges to make an adjustment to the result of the contribution assessment, by identifying a percentage change in favour of one of the parties on the basis of a consideration of s 75(2). This is all that his Honour was doing here.
Turning to the alternative claim of a lack of adequate reasons for the exercise of his discretion, I am not persuaded that that claim is made out either.
The principles to be applied in assessing the adequacy of the reasons are well settled (e.g. see Bennett and Bennett (1991) FLC 92-191), and require in summary that a trial judge disclose his or her reasoning sufficient to reveal the path by which the result has been reached. Further, and importantly, it is unnecessary for a trial judge to make a finding in relation to every fact, or decide every issue raised in the case, or to reason from one fact to the next (Soulemezis v Dudley(Holdings) Pty Ltd (1987) 10 NSWLR 247; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, at 385-6).
It is submitted by the husband that it is not possible to follow his Honour’s “line of reasoning to his conclusion that the wife should receive 35 per cent of the asset pool”. However, it is plain that his Honour effectively found that the respective contributions of the parties should be assessed at 80 per cent / 20 per cent in favour of the husband, and that there should be an adjustment of 15 per cent in favour of the wife as a result of considering the relevant s 75(2) factors, resulting in 35 per cent overall to the wife (and thus 65 per cent overall to the husband).
There is no merit in these grounds of appeal.
Grounds 2, 3(a) and 6
The complaints made in Ground 2 are commonly known as “weight challenges”. What is at issue is a discretionary conclusion reached from established facts, none of which are challenged on appeal.
For an appellate court to find that a trial judge’s discretionary conclusion is wrong, there must be a discernible proper foundation, and that foundation cannot be merely that it would have reached a different conclusion on the same facts. In Gronow v Gronow (1979) 144 CLR 513, Stephen J said at 520:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight …
This is the hurdle that the husband faces here.
In his reasons for judgment, at [53], [55], [67], [222], [266] and [267], the trial judge clearly identified all of the matters referred to in Ground 2 as being matters to be taken into account in the exercise of his discretion in assessing the respective contributions of the parties, and it follows logically that his Honour did take them into account. Thus, what is the discernible foundation for saying that his Honour was “plainly wrong”, and his decision was “no proper exercise of his judicial discretion”? It can be nothing other than this court would reach a different conclusion than that of the trial judge, and thus this challenge must fail.
It also does not advance the argument to cite, as the husband does, the oft-quoted passage of Coleman J from the Full Court decision in Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234], and suggest that here the “leap from words to figures is so great, and so unheralded by the discussion that precedes it as to render the reasoning process defective”. That still fails to provide a foundation beyond the argument that the findings would have led this court to a different result.
As to Ground 3(a) (and Ground 6), the challenge has a different focus, namely that the assumption made by his Honour as to the wife’s role in running the farm and in assisting the husband’s parents is not supported by the evidence, and thus this exercise of the discretion miscarried.
His Honour’s findings appear in [267] quoted above.
The husband submits that the evidence about the wife’s health as set out in [61] of the reasons for judgment would suggest that she was not capable of undertaking the roles identified by his Honour. However, that is not only speculation on the part of the husband, but also, and at the very least, there was a significant period of time following separation under the same roof before the wife was diagnosed with multiple sclerosis, and during which time she could have undertaken these roles.
In relation to the husband’s parents, it is also said that his Honour erred in his findings as to when they were on the farm and able to be assisted by the wife. In [267] his Honour recorded that the husband’s father died in 2010. Earlier, in [14] he had recorded that it was “in either June 2009 or 2010”. The husband says that is was in 2009, and that would appear to be correct. Thus, clearly his Honour erred in suggesting it was 2010, but that says nothing about whether or not the wife assisted in his care up until his death, which is what his Honour was concerned about.
As for the husband’s mother, the husband says that she did not live on the farm after 2007. That is not inconsistent with either what his Honour said at [14], or at [267], and in any event does not speak against the wife assisting the husband’s mother until she went into care.
Thus, it is not the case that his Honour’s finding about the wife assisting the husband’s parents is not supported by the evidence, and this again just becomes a weight challenge which is no better based than Ground 2.
Finally, there is a vague suggestion in the husband’s written summary of argument (at paragraphs 13 and 20) that error by his Honour in the exercise of his discretion can be demonstrated by considering the results of other cases. However, there was no attempt to support this by identifying the comparable cases, and in any event the Full Court on at least two occasions has decried that approach (Petruski & Balewa (2013) 49 Fam LR 116; Fields & Smith (2015) FLC 93-638).
Grounds 3(b) and 6
Plainly his Honour took into account the husband’s earning capacity when considering what if any adjustment to make pursuant to s 75(2).
I have already quoted what his Honour found in this regard at [160] and [161], and at [271] and [272], and there are clearly two specific findings made by his Honour about the husband’s earning capacity; first, that he could make more money as a contractor […] than as a farmer; secondly, that the husband “has taken such steps as he is able to ensure that his income has been minimised of recent times”.
As to the first finding, the evidence comes from the husband’s tax returns and his cross-examination. His tax returns indicate that in the relevant years, he made a loss on primary production whereas he declared wages from his [other] work. His cross-examination was as follows:
MR SERRA: Have you made efforts to obtain full-time work in [other areas]?---I have a full-time job running a farm ….
But as I’ve just noted, certainly in most years – well, in 2012 anyway – you made a loss on the farm, didn’t you?---Well, I’m not an accountant, and naturally things are hard, and with depreciation, that’s the way the tax system is structured. I think any business person would try and run their business at a loss.
What I’m putting to you is this, Mr [Claughton]. In terms of finances, you would be better off not being a farmer and spending more time in [other work]. Do you agree with that proposition?---Are you talking about financial?
Financial, yes. I’m talking about - - - ?---Moneywise, or financial, one’s health and what they enjoy doing?
I made it very clear – I hope I make it clear, Mr [Claughton] – I’m talking about financial. From a financial point of view, do you agree with me that you would be much better off working in [other work] and not in farming?---I think every farmer would be much better right across Australia if they work in that sort of industry. Financial, yes.
I’m just talking about you, Mr [Claughton], not other farmers. Do you agree with me that, in summary, if we look at the financial years ’11 to ’13, you made a very, very minimal return on the assets invested in the farm?---Yes.
(Transcript 9.4.14, p 216, lines 12-35)
In my view, that evidence, although it ultimately lacked some specificity, sufficiently supports his Honour’s finding as to the husband’s earning capacity.
As to the second finding, as can be seen there is the husband’s own statement at transcript 9.4.14, p 216, lines 17-18 above, and there is his Honour’s own statement when his Honour interrupted the cross-examination of the husband as follows:
MR SERRA: And do you agree with me as well, again, strictly financially speaking, if you were to sell your farm and equipment and invest that money in a safe account or a term deposit - - -
MS TULLOCH: Your Honour, the flaw in what my learned friend is about to put to the witness is this, that the farm is not only a farm but it’s where he lives, and so – and I think my learned friend needs - - -
HIS HONOUR: Well, perhaps I can assist everybody. It’s obviously correct. It’s a matter that doesn’t even really need cross-examination, that if Mr [Claughton] was to realise the assets he possesses and invest them, he would make a lot more than the income disclosed by his tax returns, even if he kept one or more of the properties, because, even allowing for the ingenuity of the account and depreciation schedules and the like, and the notorious desire of farmers to declare as little profit as possible to the taxman, it’s clear that that would be the economic outcome and Mr Serra doesn’t really need to put the questions, because it’s self-evident that that’s the case.
(Transcript 9.4.14, p 216, line 37 – p 217, line 5)
As far as I can see there was no evidence before his Honour that would allow him to say as he did during cross-examination that farmers have a “notorious desire to declare as little profit as possible to the taxman” (emphasis added), however, I do not consider that that was either a central finding, or indeed a finding that his Honour relied upon.
However, it was open to his Honour, on the basis of the husband’s own comment to find as he did in [272] that “he has taken such steps as he is able to ensure that his income has been minimised in recent times”. That finding is not, as suggested by the husband in his written summary of argument, a finding “that the husband had deliberately reduced his income due to his bitterness about the wife” (emphasis added).
It has not been demonstrated to this court that it was not open to his Honour to in effect find that the husband’s earning capacity was greater than the wife’s, and there is nothing to suggest that his Honour was plainly wrong in how he took this into account in the exercise of his discretion. In other words, the weight challenge fails.
Conclusion
Given that none of the grounds of appeal have succeeded, the appeal must be dismissed.
Application in an appeal filed on 23 January 2015
In this application, as referred to above, the husband sought to adduce further evidence, namely the affidavit of a valuer sworn on 15 January 2015. That evidence comprised valuations of three of the pieces of real estate owned by the husband. However, at the commencement of the hearing of this appeal, the husband’s senior counsel advised that the evidence was not being presented to demonstrate error by the trial judge, but as evidence to be before the court in the event that the appeal was successful, and this court was able to re-exercise the discretion. On the basis that I propose dismissing the appeal, I do not need to receive this further evidence, and I propose to dismiss the application.
Costs
At the conclusion of the hearing I received submissions from the parties as to costs depending on the result.
If the appeal was to be dismissed the wife sought an order for costs against the husband. In that event, the husband’s senior counsel conceded that there should be an order for costs. Accordingly, I will make the order sought by the wife.
I certify that the preceding eighty-seven (87) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
12 November 2015.
Associate:
Date: 12 November 2015
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