COURTNAY & COURTNAY
[2015] FamCAFC 108
•12 June 2015
FAMILY COURT OF AUSTRALIA
| COURTNAY & COURTNAY | [2015] FamCAFC 108 |
| FAMILY LAW – APPEAL – PROPERTY – Whether the primary judge erred in findings of fact – Where the primary judge did mistake the amount of unaccounted sale proceeds for a property but where such error did not inform the overall assessment of contributions and was immaterial – Where the wife made substantial financial and homemaking contributions – Where the wife was the primary income-earner – Where the husband did not work in his profession for part of the marriage – Where the husband invested and diminished the value of his superannuation – Where the husband refused to offset his losses – Where the husband failed to properly disclose his property interests and provide evidence of his contributions – Appeal dismissed. |
| Family Law Act 1975 (Cth) s 75(2), s 79, s 117(1), (2) and (2A) |
De Winter & De Winter (1979) FLC 90-605
| APPELLANT: | Mr Courtnay |
| RESPONDENT: | Ms Courtnay |
| FILE NUMBER: | BRC | 8446 | of | 2011 |
| APPEAL NUMBER: | NA | 59 | of | 2013 |
| DATE DELIVERED: | 12 June 2015 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May, Murphy and Kent JJ |
| HEARING DATE: | 27 May 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 September 2013 |
| LOWER COURT MNC: | [2013] FCCA 1273 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Page QC |
| SOLICITOR FOR THE APPELLANT: | Milburns Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Thiele |
| SOLICITOR FOR THE RESPONDENT: | McDuff & Daniel Lawyers |
Orders
The appeal be dismissed.
The appellant pay the respondent’s costs, failing agreement to be assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Courtnay & Courtnay has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 59 of 2013
File Number: BRC 8446 of 2011
| Mr Courtnay |
Appellant
And
| Ms Courtnay |
Respondent
REASONS FOR JUDGMENT
By notice of appeal filed on 9 October 2013, Mr Courtnay (“the husband”) appeals orders of Judge Coates made on 11 September 2013 altering the property interests of the husband and Ms Courtnay (“the wife”).
Those orders provided that the property of the parties to the marriage be divided in the proportion of 65 per cent to the wife and 35 per cent to the husband, with the proceeds of sale of the former matrimonial home (“Property K”) distributed between the parties to effect that outcome.
The value of the property of the parties to be divided was found to be $1,272,509.03. Orders were made about specific items of property and superannuation each party is to retain. The assets included the remaining proceeds of sale of the former matrimonial home, some $270,696.03 (each party having previously received $50,000), superannuation interests comprising $611,416 within the wife’s Superannuation Account A, the husband’s Superannuation Account B of $165,300, and Superannuation Account C valued at $38,839. The remaining assets included various chattels retained by the husband and wife valued at $53,150 and $12,315 respectively.
There was agreement between the parties as to who would retain certain assets and their value. The primary controversy between the parties for determination by the trial judge was the relative contributions of the parties.
Apart from agreed values, the wife sought an “add back” to the pool of property to be divided. The judge noted that the wife sought $16,000 to be added back as the husband had expended this amount in legal fees. It was apparently conceded that at least $13,000 should be added back. However the judge accepted the evidence of the wife that it should be $16,000 as legal fees “…should be met from their respective resources after trial unless there is a costs order”.
Grounds of Appeal
There is only one ground of appeal, as follows:
In determining the facts which form the qualitative findings as to the contributions of the parties, the Trial Judge erred in that he made various findings of fact contrary to the uncontroverted evidence before him such that the 30% disparity determined by him in relation to the contributions of the parties was outside the range of reasonable outcomes possible in this matter, such errors being as follows:
(a)That the Wife paid $50 a week more than the Husband on the mortgage in respect of [Property K];
(b)That the Wife paid all household expenses from mid 2004;
(c)That funds unaccounted for by the Husband from the proceeds of sale of [Property K] amounted to $50,000 when the evidence was that such sum was $5,000;
(d)That the Husband failed to disclose an investment of $70,000 in an [Investment Account A] which was used for the purchase of shares;
(e)That the husband was responsible in part for losses to the value of his self-managed superannuation;
(f)That the payment of child support in relation to the children of the Husband’s former marriage had continued over a period which affected the extent of the Husband’s ability to contribute.
The wife opposes the appeal. Counsel for the wife submitted that the trial judge was not in error in the respects identified, but if so, that the errors are “de minimus” and do not vitiate the exercise of discretion.
There is no doubt that a discretionary judgment, based on a mistake of fact will not survive the appellate process simply because the result reached is not unreasonable (De Winter & De Winter (1979) FLC 90-605).
However, the mistake of fact may not have affected the final result or is negligible so that error by a primary judge may not attract appellate intervention.
As will be discussed, there are two central factors in this case which are of fundamental importance to assessing the materiality of any of the errors asserted by the husband. First are the findings made as to the wife’s substantial contributions, both financial and as a homemaker and parent. Second is the fact that the trial judge made serious adverse findings against the husband concerning his failure to make full and true disclosure particularly as to his expenditure of substantial capital to which both parties had contributed.
Background and reasons of the primary judge
At the time of the trial the husband was aged 62 and the wife 54. They had been married for 27 years as at their separation.
The judge considered that the husband made a greater initial contribution at the commencement of the relationship, having applied part of a $19,000 property settlement from a previous marriage towards the purchase of a block of land. The judge mistakenly referred to this property as Property K, but clearly intended to refer to the allotment at Property L.
It was submitted on behalf of the wife that this initial contribution was matched by her paying $50 a week more towards the parties’ mortgage than the husband and caring for the children in addition to working as a school teacher. The judge concluded, despite the husband’s greater initial contributions, that the parties’ contributions were equal until 2004. As the judge observed, the real dispute in relation to contributions relates to the facts and circumstances after 2004.
The husband was dismissed from his employment as a teacher after an incident involving a student in 2003. In December 2004, the husband accepted a voluntary redundancy package after a brief period of reinstatement to a teaching role at a different school. The redundancy package included a payment of $53,000.
The judge rejected the husband’s assertion that the 2003 incident and subsequent investigation affected his ability to work as a teacher, rather that he simply refused to work in that capacity. This finding was not challenged in the appeal. The wife continued to work on a full time basis as a teacher and increased her superannuation fund contributions, whilst the husband undertook casual jobs as a tradesman and an entertainer.
The judge found that after December 2004, when the husband retired from his employment as a teacher at the age of 54, the wife made the greater financial and non-financial contributions. The judge considered that there was no evidence to contradict the wife’s claim that from mid-2004, when the parties’ discharged their mortgage, she alone paid the majority of household expenses. The husband, it was found, had instead applied his income (and later superannuation pension payments) to the on-going purchase of personal and luxury items such as boats, model trains and records. Very few of these items were included in the list of available property for distribution.
At the time of his retirement, the sum of $527,041, being the husband’s accumulated superannuation interest from when he commenced working in 1972, was transferred into a self-managed fund. In 2008 he had $633,173 in his self-managed super fund. On 9 September 2010, when funds were transferred to Investment Account A, only $222,544 remained.
The husband’s explanation was that the decline in these monies was caused by failed investments due to poor market conditions and the need for pension payments to meet the cost of living. Those pension payments amounted to approximately $108,000 between 2006 and 2010. The judge rejected the husband’s claim that the wife had control over the self-managed super fund.
The wife’s case was that the husband had refused to work as a teacher to restore or offset the loss of superannuation funds. The wife also submitted that as the husband had failed to make adequate disclosure, his assertions including those about how those superannuation monies had been expended should not be accepted.
The evidence given by the husband in this respect proved unreliable. It became apparent that the husband transferred some of the funds contained within the Investment Account A fund into an account maintained by a financial advisory firm. The husband initially maintained that the self-managed super fund had been closed. After the wife’s investigation it became clear that the self-managed super fund was still operational. It was included in the table of assets in the reasons with a value of $38,839.
The trial judge rejected the husband’s evidence that he was unaware of the fund’s operation - the husband having asserted that a fund manager failed to transfer the entire amount into the Superannuation Account B as instructed.
Other allegations were made by the wife about the husband’s failure to disclose including the purchase of a gambling software system in 2005 costing some $9,600. Clearly there was limited and thus incomplete disclosure regarding the husband’s online gambling.
The judge noted that no disclosure had been made of the husband’s income from casual employment. Reference was made to other transactions which were unexplained including the husband’s evidence, that a sum of $70,000 contained in Investment Account A had been used to purchase shares. The husband’s disclosure of shareholdings was limited and proved unreliable.
The judge concluded on the issue of disclosure:
90.The husband said his affidavit reveals all of his financial dealings – however, in the light of the matters I have referred to so far, I find that he has not revealed all of his financial dealings and it is impossible to know what the true state of affairs is.
…
98.I do not accept that the husband explained his use of funds as I was urged to accept in submissions, when his answers in cross-examination were very evasive and argumentative, as submitted on behalf of the wife.
99.The legal issue is that there is no explanation, that is no disclosure, as to the usage of all funds. I conclude that he has engaged in non-disclosure of relevant financial information and that his affidavit explaining his version of events has significant holes in it.
(original emphasis)
The judge then returned to consider the contributions of the parties. There was no dispute that the wife was the primary care provider for the parties’ children. This contribution was made more difficult because the older two of the three children have “psychological conditions”. The judge found the wife had met various costs associated with providing for the children with little contribution from the husband. This was not denied by the husband. The judge concluded that the husband had chosen to “minimally” contribute to the welfare of the family.
At trial, the wife's superannuation entitlement represented about 48 per cent of the total property and superannuation available to be divided. The wife's superannuation entitlement had increased from about $265,000 in 2004 to about $611,000 at the date of trial. The wife joined the fund in April 1981, about a year or so before cohabitation commenced.
Considerable criticism was made of the husband leaving the former matrimonial home in a state of disrepair whilst the parties were attempting to sell the property. He resided alone in the property post separation paying only for the utilities. The wife kept up the insurance and later paid for substantial repairs necessary to effect sale of the property.
The judge concluded his discussion about contributions:
134.As to safeguarding his own dwindling resources in his investments, the husband simply slowed his working prospects from 2004, engaging in [casual employment] and what appears to be reliance on investment of money, while refusing to entertain to any great extent proper employment within the teaching profession when it must have been apparent that his total fund was reducing quickly.
135.On that basis, contributions until 2004 were equal, but from late 2004 the husband’s contributions are less than that of the wife. She says she should receive 65 percent uplift. I agree.
Of some importance in the consideration of this appeal, it can be seen that the findings in relation to the parties’ contribution based entitlements is independent of the conclusions in relation to non-disclosure.
The judge considered whether an adjustment should be made having regard to the factors contained in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). Their ages, health and earning capacity were considered. The husband contended that he was at an “advanced age” and his employment prospects were bleak. The wife did not ask the judge to make any adjustment in her favour.
The judge considered the husband’s submission about the living standard enjoyed by the parties and noted that the living standard can be within control of a party and in this case, it is closely linked with how each party looked after his or her funds. The judge referred to the conduct of the husband, including his purchase of a gambling program and his depletion of his super fund. Consequentially, the judge declined to make an adjustment under the s 75(2) factors.
The Appeal
As can be seen the reasons and the appeal are focussed on:
·the allegations by the wife of the husband’s non-disclosure and waste; and
·the contributions made by the parties.
The findings of the primary judge in relation to non-disclosure were a critical part of the reasons. Findings as to lack of disclosure are adverse credit findings. The husband's counsel conceded in written submissions about his own client that "the husband struggled with his evidence". His Honour found the husband's demeanour "dismissive and argumentative when asked why there was no disclosure" and that "[h]is attitude did not improve as the wife's case was put that he refused to disclose or disclosed information generally so late that no proper investigation could be undertaken".
The appeal ground maintains there was an error in assessment of contributions.
Crucial to the specific findings about contributions are two matters to be noted at the outset.
The husband contended in trial submissions that contributions should be assessed as equal. That contention provides a crucial context for the specific contributions findings.
Second, in assessing the materiality of the errors asserted by the appellant it bears emphasising that the following centrally important factors, in summary and paraphrased form, follow from the findings of the trial judge and plainly informed the trial judge’s ultimate determination overall of the parties’ respective contribution based entitlements:
a)The parties had cohabited for 21 years as at 2004 and cohabited for a further six (6) years thereafter. Eight (8) years elapsed between 2004 and the trial;
b)As at 2004 each of the parties had historically worked as teachers, pooling their respective incomes for the benefit of the family (three children born respectively in 1986, 1991 and 1993). Upon the husband’s retirement in 2004 his accumulated superannuation and redundancy payment (to each of which the wife had contributed over 21 years) was worth about $586,000 combined and increased in value, by accretions, to about $633,000 as at 2008;
c)From 2004 onwards there was only the wife’s income as the sole source of income from remunerative employment available to the family. Significant disparity in income earning between the parties commenced in 2004 and continued over the following years of the relationship, in circumstances where the husband did not, but was capable of, work as a teacher;
d)The wife’s superannuation entitlement increased in value from about $265,000 in 2004 to about $611,000 as at trial. The husband’s superannuation entitlement decreased over the same period from a high point of $633,000 to about $200,000 at trial. In other words, between 2004 and trial the wife’s superannuation entitlement increased in value by about $346,000 whilst the husband’s superannuation entitlement decreased by about $430,000 in value, in circumstances where the husband elected not to engage in remunerative employment as a teacher. Notably, at trial the wife’s superannuation represented about 48 per cent of the property and superannuation available to be divided;
e)The wife’s income from employment from 2004 onwards (the two younger children were aged 13 and 11 respectively in 2004 with all or most of their secondary education ahead of them) was the main source of financial support for the family;
f)The wife was, and remained, the primary carer of the children throughout (in circumstances where two of them had health issues) whilst the husband “…chose to contribute to the welfare of the family minimally.” (Reasons at [109] and [133]);
g)Over four (4) years the husband drew down from capital (to which the wife had contributed) approximately $87,000 or an average of about $22,000 per year. The judge found (at [162]) that “[t]here was really no persuasive evidence in his case that upon his ‘retirement’, he set out to ensure that his money was used in community with that of the wife – the evidence being that he simply set out to spend as he chose…”. Thus the drawdown of that income reduced a capital sum that, given the trial judge’s finding as to the husband’s capacity for work, can be seen to have otherwise been amenable to s 79 orders and to which both parties had contributed;
h)After separation in February 2011 the husband occupied the former matrimonial home and prior to its sale had not met any costs other than utilities and services. (Reasons at [121]). Moreover, the husband “…left the home in a state of disrepair and damage”; and the wife paid for repairs in order to effect the sale (Reasons at [121] and [122]), as well as paying for the insurance (Reasons at [123]).
Before dealing with the specific details of the grounds of appeal it is necessary to note that some of the submissions made by counsel on behalf of the husband did not reflect the grounds of appeal. This included an apparent challenge to the adequacy of the reasons and a failure to have regard to relevant considerations. For example, it was contended that the judge did not consider an affidavit of the husband. Reference to the transcript and, indeed, to his Honour’s reasons demonstrate this assertion to be without foundation. These “additional matters”, although not the subject of objection during the hearing did not assist the deliberative process. There is no basis for the “additional” challenges.
Grounds of appeal
Asserted Factual Errors
It is necessary to deal with these sections of the appeal separately, first to note what the judge said in the reasons and then to consider the evidence at trial.
(a) That the Wife paid $50 a week more than the Husband on the mortgage in respect of Property K
The first asserted factual error is said to be the judge’s finding that the wife paid $50 more a week to service the mortgage of Property K. In the reasons the judge found:
33.The parties otherwise bought and sold several houses. There is a submission in the wife’s case that until 2004 the contributions were about equal. Despite some submissions which went to the husband’s greater initial contribution and what was called by him as being substantial work on the various houses, I was then met with a submission that a little more weight ought be accorded to his efforts or at least that his initial contributions should be treated as equal. The husband had a greater initial contribution, and some of the cash went to [Property K], however the wife paid $50 a week more than the husband on the mortgage, continued working and raised the children.
It is contended that the judge failed to have regard to the affidavit of the husband filed 26 November 2012. Apart from there being no ground of appeal directed to such an error, it is plain from the transcript that his Honour referred to a number of paragraphs from that affidavit.
The husband’s affidavit filed 26 November 2012 reveals in paragraph 86 that he contended the parties made approximately equal contributions to the mortgage payments for Property K.
The wife makes reference to the Property K mortgage in her affidavit of 23 September 2011 and 6 November 2012 where she says that from their wages they paid $150.00 each per month.
In other words, in their affidavit evidence, the husband and wife did not disagree about their respective contribution to Property K mortgage payments.
However, at trial, counsel for the husband cross-examined the wife regarding the parties’ contributions to mortgage repayments. Commencing at line 10 of page 19 on the transcript of 27 February 2013:
[Counsel for the husband]: And [Property K], do you agree with the proposition that you made more or less equal contributions to the mortgage?‑‑‑[The wife]: No, I don’t. If you look in my bank statements you will see I was paying $50 more a fortnight than my husband was.
[Counsel for the husband]: Ma’am, I suggest to you … the position is that as he has outlined in his affidavit at paragraph 86?‑‑‑[The wife]: No.
[Counsel for the husband]: In relation to those properties of all those properties?‑‑‑ [The wife]: No.
As a result of this cross-examination there was conflicting evidence. However, given the extremely modest sum in issue this could not be characterised, in relative terms, as a significant or material issue.
Further, as identified in the reasons, the judge clearly states “I was then met with the submission that a little more weight ought be accorded to his efforts, or at least his initial contributions should be treated as equal.” As the judge identified and as we have sought to emphasise there were many other contributions made by the wife of far greater relative significance.
It can thus be seen that any error in the finding as to such a modest amount cannot be characterised as material. This aspect of the ground of appeal is thus without merit.
(b) That the Wife paid all household expenses from mid-2004
The next asserted error of fact is the judge’s conclusion that “the wife paid all household expenses from mid 2004”. The primary judge made the following findings:
36.All loans were paid by mid-2004, with the wife paying for household expenses from then. There is no evidence to properly contradict her claim.
As already explained, in December 2004 the husband took a voluntary redundancy. The wife’s income was obviously substantially greater than the husband’s. Of this the judge said:
38.Her claim is that while the husband began using the benefits of the redundancy and superannuation, mainly for his own purposes, then being unable to account for all its use, she continued to earn an income to support the children and the family.
39.This is the key aspect of the contributions analysis in this matter.
In the husband’s written submissions on appeal, it was argued that the judge had no regard to his evidence which includes the following:
(a)The [husband] continued to contribute his share to the household expenses and paid for much of the food and the like;
(b)The [husband] contributed towards the rental costs for the children to the extent of $80 a week;
(c)The [husband] has continued to contribute to the joint expenses and to the costs of the children;
(d)The [husband] paid for his share of expenses for all holidays including a holiday to Turkey and Egypt.
The husband alleged that no challenge was made to these assertions in evidence.
In the written submissions, apart from the references already made to the wife’s contributions, counsel correctly raised the issue of disclosure on the part of the husband. Relevantly, the judge found in addition to [99]:
54.From a realistic perspective, the wife’s claim is that until 2004 the joint monies were mostly used in community with each other, but from this point she states that there has been no clear identification of the use of all monies.
…
90.The husband said his affidavit reveals all of his financial dealings – however, in light of the matters I have referred to so far, I find that he has not revealed all of his financial dealings and it is impossible to know what the true state of affairs is.
…
100.On other contributory issues, the wife paid for family private health care from 1987, without assistance from the husband. She needed to utilise the health insurance for the children’s health care from time to time.
(original emphasis)
In the absence of evidence by the husband, the unchallenged evidence of the wife and in light of his various failures to properly disclose, the findings made by the judge were correct on the evidence. Moreover, and of fundamental importance, is that the husband’s failure to disclose was in relation to his use of capital to which both parties had contributed.
This aspect of the ground of appeal is without merit.
The remaining grounds (excluding (f)) deal with the judge’s findings in relation to disclosure.
As counsel for the wife explained in oral submissions it is important to appreciate some of the circumstances leading up to the hearing on 27 February 2013 in relation to disclosure. The trial was initially listed for hearing on 19 November 2012. The wife served the husband with a Notice to Produce just prior to the date for the hearing, on 16 November 2012. The wife filed her second affidavit on 6 November 2012, raising disclosure issues. The trial was adjourned. After the adjournment the husband filed an affidavit on 26 November 2012 and on the eve of the trial a further affidavit seeking to provide some explanation. It is in that context that we consider the following grounds.
(c) That funds unaccounted for by the Husband from the proceeds of sale of Property K amounted to $50,000 when the evidence was that such sum was $5,000
The error is said to be the judge’s finding in relation to the sum of the unaccounted sale proceeds from Property K. On appeal, the husband asserted that the evidence established that it was the sum of $5,000, to which the trial judge wrongly attributed a value of $50,000.
The primary judge considered the distribution of the proceeds of sale of Property K. The source of the husband’s complaint is where the judge said:
96.Even if I accepted some of his claims and explanations, for example that that an amount of just over $67,000 was withdrawn from his [Superannuation Account A] and $28,000 was used for taxation liability and $15,000 for the wife’s car, it is not an answer to all of the wife’s claims and the claims cannot be simply addressed as a denial. Nor can the submission that: “There may be some minor argument about whether the further $50,000 the husband says he paid the wife came from these monies, but in any event it is again clear that any unexplained discrepancy is only minor”, explain his position. If the husband attended to taxation liability, that is a contribution and also a legal obligation, one which must be disclosed as with all other amounts which have not been explained. The sum of $50,000 is not minor.
(original emphasis, emphasis added)
There is no doubt that the judge misquoted the written submissions of the husband and should have stated $5,000 instead of $50,000.
However, the wife is correct in pointing out that this was not ultimately a finding of the judge that was directed to the assessment of contributions. Rather, it was part of a number of considerations in the overall finding that the husband had failed to adequately disclose his finances [91]-[99].
There is some confusion in relation to this. Paragraph 96 is a reference to Property K, an issue not pressed by the wife in submissions. The unexplained figure as submitted by the wife is $55,438 being in total an amount conceded by the husband in his affidavit and when cross-examined he could not explain. Regardless, it was agreed by the husband that he did not know what the $5,000 was spent on (nor, did he know or could account for the majority of the proceeds) and this was confirmed during his cross-examination.
Despite the misstatement of the amount it can be seen that overall the judge was correctly concerned with non-disclosure rather than some attempt to mathematically calculate how the money was spent. In addition, the combined amount of moneys for which the husband could not account for was significantly greater than $50,000.
Thus the husband does not establish any material error in this respect.
(d) That the Husband failed to disclose an investment of $70,000 in Investment Account A which was used for the purchase of shares
The husband contends that the judge’s finding, that he failed to disclose Investment Account A used to purchase shares, was unavailable on the evidence. That no documents existed to support the husband’s claims was conceded by the husband’s counsel in the written submission before the judge.
The husband argued that the trial judge incorrectly found that no share dealings were disclosed by him to support the evidence given in his affidavit that a sum of $70,000 had been placed into Investment Account A to purchase shares. The judge found:
92.On another amount of money, the husband agreed he had $70,000 in his [Investment Account A]. Asked what happened to the money, he said it went to shares, however, no share dealings were disclosed to support that assertion. It was put that he was still receiving dividend payments which he said: “---No. I don’t – no. Have you looked at your bank statements?---Only the ones in that thingo, the one I didn’t know existed.” He was referring to the fund of about $38,000 found by the wife.
In his written submissions the husband argued the judge had no, or no proper regard, to what the husband deposed to in his affidavit:
87.…As referred to elsewhere in my affidavit, amounts totalling a little over $70,000.00 were paid from my [Investment Account B] to [Investment Account A] for acquisition of shares or other investments. The monies for this were derived partly from my redundancy pay and other on ceasing employment […], and partly from the balance proceeds of the sale of [Property K].
88.While I have not retained all of the records from this period, and while I do not recollect every detail of these transactions, the documents listed below, copies of which are included in bundle being document number 12, are Chess holding statements or certificates for acquisitions at about this time:-
(details omitted)
…
89.These investments were made prior to the establishment of the [Superannuation Account C] and were therefore simply investments in my own name.
The husband is correct in saying he provided some evidence of purchase of shares. What he failed to do, and on appeal continued to fail to do, was establish how much money was paid for the purpose of acquisition of shares nor did he explain the sale of the shares. The CHESS holding statements only show the shares held at a particular time.
There is no evidence of purchase or sale of shares amounting to $70,000 and no evidence of what later happened to those shares or the money. There was no error by the primary judge.
(e) That the Husband was responsible in part for losses to the value of his self-managed superannuation
Another error asserted by the husband is the judge’s finding that the husband was responsible for the depreciation in value of the self-managed superannuation fund.
The husband established a sizeable self-managed superannuation fund. However, by 2010, it had significantly declined:
64.Around 2008 when the GFC is identified as beginning, the husband had $633,173 in his self-managed superannuation fund and when funds were transferred to [Investment Account A] on 9 September 2010, he only had $222,544.
…
68.The husband’s self-managed superannuation fund, with $527,041 rolled into it, began investing in various entities on advice, from time to time, from various firms […] and possibly on the husband’s own views.
69.The husband also took what are referred to as pension payments, which seem to be $15,000 in the financial year ending 2007, $26,000 in the next year, $31,000 in the next year and $35,000 in the financial year ending 2009.
In assessing the husband’s management of his self-managed superannuation fund, the judge made the following remarks:
60. The husband suggests that risk attends investment and losses cannot be held to be anything other than a failure of an investment to succeed.
61.This type of submission overlooks the point of the wife’s complaint, which was that in view of continually reducing superannuation, the husband simply refused to work in the area he was trained in – teaching – to either restore or offset reductions.
(original emphasis)
The husband argued on appeal that the treatment by the judge of that loss ‘…as if it occurred of the Appellant’s doing was unjustified” (Husband’s written submissions).
At trial and on appeal, the husband made several arguments around the basis that the money in the fund was invested by a number of different investors engaged by him and overall the investment did not succeed due to poor market conditions. The husband further argued that the judge did not have regard to his evidence, including statements of financial position. Therefore, the husband contends that such a loss cannot fall at his feet.
The critical point here is not that the husband suffered losses in the market. The issue is that the husband refused to offset his losses by the exercise of his earning capacity as a teacher and otherwise failed to demonstrate, via full and proper disclosure, that substantial capital losses were sustained despite his prudent management of investments.
Several parts of the primary judge’s reasoning supports this finding:
74.He also said he assumed that all the assets of the self-managed fund was transferred to [Superannuation Account B], but realised that some assets of the fund had not been transferred, when he read the wife’s affidavit filed in November 2012. He blamed the [a] representative. He blamed his financial adviser at the time for not transferring the money.
75.The husband’s account of money dealings becomes questionable, not because he seems to have lost money, but because the wife discovered the documents showing the self-managed fund was obviously not closed down and disclosure by the husband has been poor – I will address disclosure later.
76.And this is the point of the wife’s case, not only was the husband failing to explain money, but he was failing to go out and get work to offset his losses.
…
82.While the husband claimed that he should not be held to account for investments which simply failed to materialise into a profit – there is evidence that the husband was less than cautious with his money.
(original emphasis)
In addition to the husband’s questionable money habits, overall there were issues of non-disclosure throughout the trial.
In the appeal, the husband failed to demonstrate that the findings of the primary judge were wrong.
(f) That the payment of child support in relation to the children of the Husband’s former marriage had continued over a period which affected the extent of the Husband’s ability to contribute
Finally, the husband takes issue with the judge’s conclusion that his liability to support children from a previous relationship impacted upon his ability to make financial contributions.
The husband was cross-examined at the trial in relation to child support paid in respect of the children of his previous marriage. The transcript reveals:
[Counsel for the wife]: …When you separated from your previous wife, there was three young children wasn’t there? And you were paying child support?---Yes.
Right, when did the last child turn 18?---Don’t know.
Just roughly?---Don’t know?
Was it [D] – was he the youngest?---No, he’s the oldest.
All right, how old is [D]?---40.
But they were young children when you started the relationship with my client?---Yes.
Do you remember how much child support you were paying back in 1982?---180 bucks – 180 a fortnight – 90 bucks a week.
By reference to evidence, the judge summarised the contributions of the husband at the beginning of the relationship and his ongoing commitments:
30.As to the initial contributions, the husband contributed $18,000 or $19,000 from a property settlement from his first marriage, which had legal fees owing of about $3,000, a van and he said some cash of about $3,000, but I will not rely on his estimates as being precise. He also contributed his working capacity as a teacher and unstated superannuation he said from over 11 years of work. The husband also had child support for three children of his previous marriage, which reduced his contributions to this marriage.
(original emphasis)
…
34....I would accept that the evidence shows, on weighing all facts, that at least until 2004 the contributions were equal, that is because the husband, while contributing a greater amount initially, also had a reduction in his capacity to contribute because of child support from a prior marriage, which would be a significant impost on this pool. It is not an impost which can be reduced to issues, but it affected his income flow into the family.
(emphasis added)
Emphasis is placed on the statement “which would be a significant impost on this pool” because the husband takes issue with this finding. As the wife correctly pointed out in her written submissions, the husband’s son, D, would have been at least eight or nine years old at the commencement of the parties’ relationship in 1982. Arguably, the husband would have paid $180 per fortnight for at least 10 years for his children from his previous relationship, resulting in expense of at least $43,200.
The husband argued there was no evidence before the judge in relation to the child support, nor any information on whether it fluctuated over the years. It is clear that the evidence was before the judge when the husband was cross-examined by counsel for the wife. The onus was on the husband to clarify or detail such liability and limited disclosure was made.
This speaks to the ongoing issue of failed disclosure, as found by the primary judge. In any event, as previously mentioned, ultimately there was no dispute that the parties’ contributions to December 2004 were equal.
This aspect of the ground of appeal has no merit.
CONCLUSION
As none of the sub-paragraphs (a) to (f) of the sole ground of appeal have been established to demonstrate any material error of fact on the part of the trial judge, the ground fails and the appeal is to be dismissed.
Costs
At the conclusion of the hearing of the appeal we asked for submissions in relation to costs.
Counsel for the husband submitted that if the appeal is unsuccessful there should be no order as to costs.
Counsel for the wife argued that if the appeal is unsuccessful, the wife should have her costs paid by the husband.
Section 117(1) of the Act provides that subject to s 117(2) and other provisions, each party shall bear their own costs. Section 117(2) provides that if the court is of the opinion that there are circumstances justifying an order for costs the court may make such an order. Section 117(2A) provides that in making such an order for costs, the court should have regard to various factors.
Counsel for the husband argued there is a vast disparity in the financial circumstances of the parties and the husband is not in receipt of a regular income.
Counsel for the wife argued that the only cash asset left as between the parties is a sum of approximately $269,000 held on trust. The effect of the primary judgment would see a transfer $153,000 to the wife and leave $116,000 to the husband, leaving sufficient funds for the husband to meet a costs order.
It was further submitted that the husband ‘…was the author of his own destiny…’ as to the disparity of income between the parties and there in fact exists a significant disparity of superannuation favouring the husband. The wife does not plan to retire for a few more years and therefore does not have access to the cash that the husband does through his superannuation.
In this case the most relevant considerations referred to in s 117(2A) are as follows:
a)the financial circumstances of each of the parties – the effect of the original judgment (now upheld) will leave the husband with sufficient funds to meet an order for costs;
b)the conduct of the parties – as recorded in this judgment, the husband has failed to properly disclose his finances throughout the course of this matter; and
c)the appeal is wholly unsuccessful – not only has the appeal failed, it was also entirely without merit.
The husband should pay the wife’s costs.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Murphy & Kent JJ) delivered on 12 June 2015.
Associate:
Date: 12 June 2015
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