Craven & Crawford-Craven
[2008] FamCAFC 93
•4 July 2008
FAMILY COURT OF AUSTRALIA
| CRAVEN & CRAWFORD-CRAVEN | [2008] FamCAFC 93 |
| FAMILY LAW - APPEAL – From decision of Federal Magistrate – CHILDREN – At trial the father sought an equal shared care arrangement for the child – At trial the mother sought for substantial and significant time to be spent by the father with the child – Federal Magistrate made orders that the child primarily live with the mother, for equal shared parental responsibility and for time to be spent with the child by the father – Orders made fourteen months after trial – Father appealed – Whether there was no evidence for the finding by the Federal Magistrate that the father was a homosexual – Whether the Federal Magistrate gave inadequate reasons for the division between the parents of the care of the child – Whether, if adequate reasons were given, no aspect of s 60CC was identified so as to justify the result – Whether the Federal Magistrate erred in that he did not have regard to the lapse of time between the hearing and judgment delivery – No merits in ground of appeal FAMILY LAW - APPEAL – From decision of Federal Magistrate – PROPERTY – Settlement in relation to marriage – Father appealed property settlement orders – Whether the Federal Magistrate’s approach to property settlement failed to have proper regard to the initial contribution of superannuation by the father – Whether the Federal Magistrate’s approach to property settlement failed to have proper regard to other contributions – Whether the Federal Magistrate erred in failing to make a splitting order – No merits in grounds of appeal FAMILY LAW - APPEAL – Cross Appeal – PROPERTY – Settlement in relation to marriage – Whether the Federal Magistrate failed to make proper findings pursuant to s 75(2) – Whether the Federal Magistrate erred in finding that the mother made no contribution to two properties purchased after separation by the father and/or his new partner – Whether the Federal Magistrate erred in his methodology in relation to the differential to be applied – Cross Appeal dismissed |
| Family Law Act 1975 (Cth), s 60CC, s 60CC(1), s 60CC(3)(d), s 65DAA(3), s 75(2), s 79(2) |
| Coghlan and Coghlan (2005) FLC 93-220 Doherty and Doherty (2006) FLC 93-256 Hickey and Hickey (2003) FLC 93-143 Mallet v Mallet (1984) 156 CLR 605 Norbis v Norbis (1986) 161 CLR 513 |
| APPELLANT/CROSS-RESPONDENT: | MR CRAVEN |
| RESPONDENT/CROSS-APPELLANT: | MS CRAWFORD-CRAVEN |
| APPEAL NUMBER: | NA | 15 | of | 2008 |
| FILE NUMBER: | BRM | 64 | of | 2005 |
| DATE DELIVERED: | 4 July 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Warnick J |
| HEARING DATE: | 19 June 2008 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 29 January 2008 |
| LOWER COURT MNC: | [2008] FMCAfam49 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Page SC |
| SOLICITOR FOR THE APPELLANT: | Neumann Turnour Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Hogan |
| SOLICITOR FOR THE RESPONDENT: | Hopgood Ganim Lawyers |
Orders
That the appeal be dismissed.
That the cross-appeal be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Craven & Crawford-Craven is approved pursuant to s 121(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 15 of 2008
File Number: BRM 64 of 2005
| MR CRAVEN |
Appellant/Cross-Respondent
And
| MS CRAWFORD-CRAVEN |
Respondent/Cross-Appellant
REASONS FOR JUDGMENT
When the marriage of Ms Crawford-Craven and Mr Craven broke down in September 2003, though they co-operated in significant ways in difficult circumstances, they were ultimately unable to agree on parenting arrangements for their son G, born in 2001, nor about property settlement.
These matters were litigated in November 2006 before Federal Magistrate Wilson. At the trial, in broad terms, the father sought an equal sharing of the care arrangements for G and the mother sought that the father’s involvement, apart from holidays, be on alternate weekends during the school term and on alternate Thursday evenings.
Wilson FM ordered that, in a fortnightly cycle, in the first week, the child be with the father from after school on Thursday until the commencement of school on Monday and on each Tuesday and Thursday afternoon in the second week, from after school until 6.00pm. Holidays were to be equally shared and there were arrangements for special occasions.
The orders were made on 29 January 2008, some 14 months after the trial.
These reasons are in respect of the father’s appeal against both the orders made in relation to parenting arrangements and by way of property settlement and, in respect of the mother’s cross-appeal, against the property settlement orders.
Four grounds of appeal contained challenges to the parenting orders. The first asserted that there was no evidence for a finding by the Federal Magistrate that the father was a homosexual. The second and third grounds asserted that Wilson FM gave inadequate reasons for the division between the parents of the care of the child or, if adequate reasons were given for that result, no aspect of s 60CC of the Family Law Act 1975 (Cth) (“the Act”), justifying that result, was identified. Lastly, ground 4 asserted that the Federal Magistrate erred in that he did not have regard to the lapse of time between the hearing and delivery of the judgment. In oral submissions Mr Page SC, who appeared for the father, amplified that ground, the argument being that Wilson FM ought either to have explained in his judgment that he was conscious of the delay and explained how he assessed its impact on certain aspects of the evidence or to have asked the parties if they wished to put further evidence, before him in relation to those aspects.
The details of the appeal against the property orders and of the mother’s cross-appeal against the property orders will be set out later.
I will return to the arguments in the appeal against the parenting orders after a short background, including an outline of the approach taken by Wilson FM.
Background
The parties commenced cohabitation in about March 1995 and married in March 1997. Both parents worked full-time until shortly before the birth of G (as seen, 2001), when the mother took nearly one year’s maternity leave. She recommenced work on a part-time basis in February 2002. In August 2002, the father was suspended from his employment in the education industry. At around this period the father had some sexual contact with men whom he had met through internet correspondence. The father told the mother of his involvement with these men not long after the events occurred.
Following his suspension, the father started up an online business, working from the family home. Initially, he looked after G two days per week while the mother was at work. However, the father’s suspension from work and his exploration of his sexuality were difficult times for him, and of course, for the mother. The father began to suffer from severe panic attacks and moderate to high level depression. The mother said that his involvement in G’s care diminished.
The father was diagnosed HIV positive in February 2003. He told the mother. Testing showed her to be free of the condition.
When the parties separated in September 2003 G continued to live with the mother. He went to child care three days per week. There was no fixed arrangement for the time the father spent with G, but he visited frequently at the former matrimonial home and, in fact, continued to run his business from there until late 2004. At about that time, the father commenced cohabitation in a “same sex relationship” with Mr J. The mother also commenced a relationship in late 2004, with Mr B.
In November 2004, the father began having overnight time with the child. That increased to two nights per week in April or May 2005.
In July 2005, the mother gave birth to E, the child of herself and Mr B, whereupon the mother stopped working and took maternity leave. From this time, the father cared for G from after day care on Monday to before day care on Tuesday and from 9.00am on Friday until Saturday, 4.00pm.
In February 2006, G commenced attending preschool two and a half days per week. At the time of final hearing, the arrangement was that the father collected G from day care on Mondays and delivered him back to day care on Tuesday morning. On Fridays the father collected the child from preschool and he remained with the father until Saturday afternoon. That arrangement, the Federal Magistrate found, had been “working well”.
As to the practicalities of a shared-care arrangement, the parties live very close to each other. The school that G attends is within walking distance from the father’s home.
As to relevant relationships and parental capacity, the Federal Magistrate found:
15.It is common ground that [G] has a loving relationship with each of his mother and father. He also enjoys a good relationship with [Mr B], the mother’s husband. He has a strong and affectionate relationship with his sister [E]. [G] also enjoys a close relationship with his father’s partner, [Mr J]. [G] also enjoys a good relationship with his maternal grandparents whom he sees frequently.
19.… He is fortunate that he has two parents who love him and wish to care for him. He is also fortunate that each of his parents has a partner who is prepared to care for and support him.
…
24.… I am satisfied that both parents have the capacity to provide for [G]’s needs, including his emotional and intellectual needs.
Wilson FM was satisfied that equal shared parental responsibility was appropriate and he recognised that, consequently, he was obliged to consider making an order that G spend equal or substantial and significant time with his father. His consideration of these factors will emerge from discussion of the grounds of appeal.
The finding as to the homosexuality of the father
Ground 1
1That in considering the lifestyle of the Appellant as a homosexual as the Federal Magistrate did in paragraph 16 of his reasons and describing the father as homosexual in the key words to the reasons for judgment, the Federal Magistrate erred in that he made that determination when there was no evidence that justified such determination.
In paragraph 16 of his reasons the Federal Magistrate said:
16.The homosexuality of the father does not, of itself, disqualify him from fully enjoying and fulfilling his role as a parent.
In respect of this ground, in the written submissions upon which he relied, Mr Page said:
2The finding, whilst not having of itself any consequence, is a finding that was not open to the Trial Judge on the evidence that was before the Court, that is, that the father had a homosexual preference, if that finding reflects upon the determinations which the Trial Judge made in paragraph 30. This was the first occasion on which the Trial Judge referred to the time spent by [G] with his father as being “significant time”. The Trial Judge then carried that forward in his application of s 61DA(1) in paragraph 31 and following. (emphasis added)
Paragraphs 30 and 31 are:
30.I accept that the father and his partner are able to provide for [G]’s needs and to parent him effectively. However, as [G] grows older, issues may arise that the father has to deal with in explaining to his son his personal circumstances. That does not mean that [G] should not continue to spend significant time with his father.
31.I do, however, think that the separation of [G] from the mother and his sister for extended periods would not be in his best interests. It would prove to be disjointed for [G]. He would be part of the larger family unit for some of the time and would then be effectively an only child in the father’s household whilst he spent time with him. This may prove difficult for [G] to adjust to. This difficulty is highlighted by the fact that it will be only him who is moving between two households whilst his sister stays with the mother. In my view this concern leads me to conclude that the child should spend more time with the mother than with the father, and it would not be in the child’s best interests to spend equal time in both households.
Within the quoted paragraph of the written submissions is the answer to the assertion of error in the ground, because Mr Page did not contend that the finding could be seen to have affected any relevant determination that the Federal Magistrate made. Indeed, it is clear from the discussion that followed the sentence containing the reference to the homosexuality of the father, that the learned Magistrate saw no relevance in it in the case before him.
Moreover, in paragraph 30, Wilson FM did not draw any conclusion against the father because he may have to, in the future, explain his personal circumstances to his son. Indeed, in the last sentence of the paragraph, he especially rejected any such consequence.
In the following paragraph 31, the learned Magistrate set out the basis for rejecting an equal sharing of time between parents. The father’s sexual orientation was not a factor.
In any event, while the husband deposed that psychologists and counsellors had identified him “firmly as bisexual” and therefore a more complete description of the circumstances presented at trial might have been that he was a bisexual, living in a homosexual relationship, it is at least arguable that a reference to the homosexuality of the father is not incorrect, that being one part of his orientation, currently forming a basis for his cohabitation with Mr J.
The alleged inadequacy of reasons
Grounds 2 and 3
2That having considered each of the primary and additional considerations contained in S60CC of the Family Law Act, the Federal Magistrate erred in that he gave no or no adequate reasons for his conclusion that the child spend more time with his mother.
3That if the Federal Magistrate did provide adequate reasons for the determination made that [G] should spend more time with his mother than with his father, then the Federal Magistrate erred in that he identified no aspect of S60CC that justified his determination.
Mr Page submitted that there was no evidence before the Federal Magistrate that would allow him to find as he did, in the opening two sentences of paragraph 31 (set out a moment ago), that separation of G from the mother and his sister for extended periods would not be in his best interests and it would prove to be disjointed for G.
Further, Mr Page argued, not only was there no evidence about any prospective detrimental effect of the separation of G from his mother and sister as envisaged in the father’s proposal, but there was no suggestion of that raised at trial. I do not accept that submission. In paragraph 25 of his reasons Wilson FM said:
25.… The mother says that spending significant time with the father will mean that [G] is excluded from being part of her family unit with his sister. The mother believes it would be unfair to [G] because in the father’s household there is no contact with other children. …
There was no attack on what the Federal Magistrate said in that passage.
The issue having been raised before, and left to the Federal Magistrate to resolve, the father is in a poor position to now complain that the learned Magistrate reached some conclusions about it. He had no Family Report to assist him, but in any event an assessment of the likely consequences of, and risks associated, with any proposed course, is well within the judicial function.
Indeed, one of the aspects that a court “must consider”, pursuant to s 60CC(1) of the Act is s 60CC(3)(d):
(d)the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:
(i)either of his or her parents; or
(ii)any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living; …
That is precisely the issue that the learned Magistrate addressed and thought critical to his decision in paragraph 31, set out earlier, but repeated in part here:
31.I do, however, think that the separation of [G] from the mother and his sister for extended periods would not be in his best interests. It would prove to be disjointed for [G]. …
In addition, Wilson FM found two other factors relevant to his conclusion:
33.The only matter that is relevant to s.60CC(3)(i) is the father’s failure to pay any child support, a matter referred to in s.60CC(4)(c). The father has, however, paid child care fees and has purchased clothes and other gifts for the child. He has certainly taken the opportunity to spend time with the child and participate in making decisions concerning the child. This consideration, whilst slightly favouring the mother’s proposal is of little weight in deciding which of the competing proposals is in the child’s best interests.
34.In my view, therefore, the additional considerations in s.60CC(3) of the Act lead to the conclusion that it is in [G]’s best interests to spend regular time with his father but to spend more time with his mother. This will enable [G]’s relationship with his father to be maintained and hopefully strengthened, whilst at the same time ensuring that [G] does not suffer from a feeling of separation from his mothers’ family unit.
There is no merit in these arguments in support of grounds 2 and 3.
Three further arguments were raised by Mr Page. They do not fit readily within either of grounds 2 or 3 but arguably come within a challenge to the adequacy of reasons, so are dealt with here.
Firstly, Mr Page suggested that the orders as to the time the child spends with the father did not provide for “substantial and significant time”.
As to this, Wilson FM said:
39.Having concluded that it is reasonably practicable for [G] to spend equal time with both parents, it follows that it must be reasonably practicable for [G] to spend substantial and significant time with his father. I consider that it is in [G]’s best interest to spend substantial and significant time with his father. They have a close and loving relationship. [G] already spends regular and consistent time with his father.
He then addressed the terms of s 65DAA(3), “defining” the term “substantial and significant” time, and continued:
41.I therefore need to fashion orders that allow [G] to spend time with his father both on weekends and on weekdays and during school holidays. Those orders must also allow the father to be involved in [G]’s daily routine. I will make separate orders for special days which will accommodate the requirement of s.65DAA(3)(b)(ii) and (c).
…
43.I propose to make orders that [G] spend a block of time with his father each fortnight, and spend time after school with his father in the alternate week. In that way the father will spend weekend time with his son as well as weekdays. He will be involved in [G]’s daily routine on the days that he goes to school whilst in the father’s care and for one weekend per fortnight. I will also make provision for [G] to spend time with his father during school holidays.
I reject the argument that the orders made, which also provided for time to be spent between the father and child on special occasions, did not provide for substantial and significant time to be spent by the child with the father.
Secondly, Mr Page suggested that the Federal Magistrate had paid insufficient attention to the object of ensuring that the father had a meaningful involvement in the child’s life, an argument which I reject having regard to those parts of Wilson FM’s judgment already discussed.
And, thirdly, Mr Page suggested that, having said that to accustom the child to spending consecutive nights away from the mother, a graduated regime of increasing contact could be implemented, Wilson FM failed to utilise such an approach, so as to provide for an equal sharing of care, or something close to it.
The passage founding Mr Page’s contention is:
25.The mother contends that it is not in [G]’s best interests to spend either equal time or substantial and significant time with his father because he is not accustomed to spending consecutive nights away from her. That problem can be addressed by implementing a graduated regime of increasing time with the father, if necessary. …
I also reject this submission. The statement that a graduated regime could overcome a particular problem in no way nominates equal parental time as the preferred arrangement for the child. For clear reasons, not including that the child was unaccustomed to spending consecutive nights away from his mother, Wilson FM rejected the notion of equal time.
Ground 4
4That the Federal Magistrate erred in making the parenting orders that he did without regard to the lapse of the period of thirteen months between the conclusion of the hearing and the delivery of judgment.
In paragraph 21 of his judgment Federal Magistrate Wilson said:
21.Turning then to the additional considerations referred to in s.60CC(3) of the Act, I note that the father in his affidavit material refers to [G] wishing to spend more time with him. [G] is still very young. Although he is portrayed as an intelligent child, I do not think that his views should be given any significant weight, primarily because of his age. I am satisfied, as I have said, that the child has a good and meaningful relationship with each of his parents, with each of his parents’ partners, with his sister, and with his maternal grandparents. He also has the opportunity to develop relationships with his maternal aunt and cousins, his paternal aunt and cousins and his paternal grandparents whom he sees less frequently than his maternal grandparents.
Mr Page’s argument was that, by the time the Federal Magistrate gave his decision, the child being 13 or 14 months older than he was at trial, Wilson FM might have viewed his wishes differently. Therefore, this was a feature that the learned Magistrate ought either have dealt with in his reasons or about which he ought have called for further evidence. Mr Page also submitted that the Federal Magistrate should have sought information concerning the arrangements that were in place in relation to the child at the time of his judgment and as to whether there had been any change in the attachments of the child.
In my view, the question of further evidence was very much one for the parties. Neither asked the Federal Magistrate to re-open. In reply to that point during oral submissions, Mr Page argued that his client could not have been expected to apply to re-open, not knowing when the decision would be delivered and not knowing what matters the Federal Magistrate would regard as relevant. However, the parties in any parenting case must decide what material they wish to put before the court, not knowing whether regard will be had to it by the court. And, in relation to not knowing when the judgment would be delivered, the mother certainly knew of the passage of time that in fact had elapsed and at any time might have sought to re-open to put further evidence before the Federal Magistrate. At the very least, when the date for delivery of judgment was nominated, she might have made such an application.
Absent any application to re-open, the learned Magistrate was entitled to address the evidence at trial, on the basis that it remained the relevant evidence at the date of his judgment. Therefore, he did not need to explain what he made of the effluxion of time and indeed, could probably not, without speculation, have done so on any other basis than acting on the evidence at trial.
If any more were needed to reject this argument, and I think nothing is, it might nonetheless be found in the absence of any application before me to adduce further evidence of matters that might have been put before the Federal Magistrate before he delivered judgment.
THE PROPERTY ORDERS APPEAL AND CROSS-APPEAL
Wilson FM found the net assets of the parties or either of them, to be divided, to be $574,298.00. He assessed contributions to property as favouring the husband at 60 per cent to the wife’s 40 per cent, primarily because of initial contributions by the husband, which included a superannuation entitlement of $98,820.00. He adjusted, in the wife’s favour, 2.5 per cent on account of s 75(2) factors. Of the $330,221.00 resulting to the father, $219,715.00 was in a superannuation fund.
At trial, the wife sought to receive a transfer of the husband’s half interest in the former matrimonial home in the suburb “H”, in exchange for a payment to him of $89,418.00. She also sought that she be allocated a base amount of $58,960.00 out of the husband’s superannuation interest.
The husband sought a transfer to him of the wife’s interest in the suburb H home in exchange for $99,905.00. In the alternative, he proposed a sale of the suburb H home and division of 60 per cent of the net proceeds to him and that out of his superannuation the wife be allocated a base amount of $53,416.00.
The orders that the Federal Magistrate made provided for the wife to pay $72,008.35 to the husband in exchange for his interest in the suburb H home. He made no order in respect of the husband’s superannuation.
The father’s assertions of error in the Federal Magistrate’s approach to property settlement include:
(i) failure to have proper regard to:
·the initial contribution of superannuation by the father;
·other contributions;
(ii) failure to make a splitting order.
Another ground related to an order for sale of the suburb H property in default of payment of the sum specified, by the mother to the father and in particular, to the structure of that order, in that it provided for the payment to the husband from the net sale proceeds of the specified sum, rather than a percentage division of net proceeds. This ground has been overtaken by events, because the mother has paid the father and nothing more need be said of it.
In the mother’s cross-appeal, she asserted:
· That the learned Magistrate failed to make proper findings in relation to one s 75(2) factor and to properly assess all relevant s 75(2) factors;
· That the Federal Magistrate erred in finding that the mother made no contribution at all to two properties purchased after separation by the father and/or his partner. The argument was that the mother had made an indirect financial contribution by paying her income towards a joint loan secured over the former matrimonial home. As well, the mother was supporting G as the father paid no child support. Thus, she freed the father to devote his income to the acquisition of his interests in real property; and
· That the Federal Magistrate erred in his methodology because he meant to only adjust by a 10 per cent differential for contribution, but used 20 per cent.
I will deal with the cross-appeal grounds that give rise to the last two points first, they being the ones that relate to the alleged “slip” or error in methodology and to the allegedly wrong finding about the mother’s contributions post-separation, as they bear upon the foundations of, or for, the discretionary exercise. I will then deal with the balance of the points in the appeal and cross-appeal, as they relate to the exercise of discretion.
The cross-appeal
Ground 1(a)
1.Contribution Assessment
(a)The Federal Magistrate erred in finding that the Mother made no contribution at all to the properties purchased after separation by the Father and his partner at [P Street] and [H Drive] (para 98 of Reasons) when:
i.The Mother had made an indirect financial contribution to those properties by paying her income towards the repayment of the parties’ joint loan from the [X Bank] secured over the property at [H Terrace], making a net contribution of $15,192.45 to that account from September 2003 to March 2005 whilst the Father withdrew a net amount from that account of ($27,602) in the same period (para 92 of Reasons).
ii.The Father was able to devote his income to the acquisition of his further real properties including incidental purchase costs and loan repayments, whilst the Mother’s income was devoted towards the repayment of their joint debt.
iii.The Mother had made an indirect financial contribution to those properties by supporting the parties’ child [G], whereas the Father paid no child support.
In assessing contributions, the learned Magistrate reviewed a number of post-separation financial transactions. He found that after separation the parties “…continued to intermingle their financial affairs. Each continued to use the line of credit facility.” He later said:
92.The mother says, and I accept, that from September 2003 until March 2005 she credited $44,442.73 to the line of credit account. She withdrew $29,250.28, making a net payment by her of $15,192.45. By contrast she says the husband deposited $6,966.80 and withdrew $34,568.90, a negative contribution of $27,602. This justifies a further small adjustment in the mother’s favour.
The particular finding attacked by this part of ground 1 is:
98.The mother made no contribution at all to the properties purchased at [P Street] and [H Drive]. The father did not contribute financially to the acquisition of these properties, other than by jointly agreeing to repay monies borrowed to facilitate the purchases. In my view, the making of appropriate property settlements orders would be more easily achieved if these two properties were put to one side. The father has not used any matrimonial property for the purposes of the acquisition of the properties.
Strictly speaking, the argument contained in this part of ground 1, is correct.
The wife’s post-separation contributions to the line of credit must necessarily have indirectly, possibly directly, affected the husband’s capacity in some degree, though perhaps minor, to make some repayments in respect of his interests in real estate. However, as seen, Wilson FM gave the wife a “small adjustment” in the contributions assessment, to reflect this particular post-separation contribution and this was applied to division of the net asset pool.
While the two real estate interests in question were not included in that pool, on the figures used by Wilson FM, the father’s equity in the two properties held with Mr J was about $9,500.00. Any indirect contribution by the wife to that must be seen as miniscule. As an appeal point it is of no moment.
Grounds 1(b) and 1(c) – cross-appeal
1.…
b)The Federal Magistrate erred in his methodology of calculations in that he found (paragraph 103 of Reasons) that a 10% adjustment should be made between the parties in favour of the Father for contribution factors and then concluded by implication (Paras 111 and 112 of the Reasons) that such adjustment should result in a 60:40 % division of the pool in favour of the Father for contribution factors.
c)The Mother asserts that a 10% adjustment of the pool in favour of the Father for contribution factors should in fact result in a 55:45% adjustment of the pool in favour of the Father as follows:
Total property pool after acquired property in accordance with the findings that were made at trial (para 112 of Reasons) $574,298 Less 10% to be adjusted to Father $57,429.80 Balance $516,868 50% of $516,868.20 to Father $258,434 Plus the 10% adjustment
$57,429 Total to Father
$315,863 (45%) Total to Mother
$258,434 (55%) Thus as a result of the findings the Mother’s share of the pool, for contributions factors alone would be 45%; the Father’s share would be 55%
In other words, the contention is that the Federal Magistrate, in implementing his assessment of contributions, meant to only adjust 5 per cent in the father’s favour, producing a 10 per cent differential between the parties, but when he calculated final adjustments, he used a 20 per cent differential (reduced only by 2.5 per cent for s 75(2) factors).
There is no merit in the ground, however, as the following passages render it clear that Wilson FM intended his assessment of contributions to produce a 20 per cent differential between the parties:
67.Until the birth of [G], I would make an adjustment in favour of the father having regard to his greater initial contributions, and to reflect his greater financial contribution during the first six years of the parties’ relationship. Such an adjustment would be in the order of 10% - 15%. (emphasis added)
103.After taking into account the matters that justify a small adjustment in the mother’s favour, for matters that have arisen since separation, overall I conclude that there should be an adjustment in the father’s favour, for the matters referred to in s.79(4)(a), (b) and (c) of the Act of 10%. (emphasis added)
111.In my view, the s.75(2) factors are evenly balanced. … When all of these matters are taken into account, I would make an adjustment of 2.5% in the mother’s favour. (emphasis added)
112.If the properties acquired post-separation, and their associated debts are ignored, a 57.5/42.5 apportionment in favour of the father would see him entitled to property worth $330,221.35 (being 57.5%% of net property of $574,298). The wife would be entitled to property worth $244,076.65.
Grounds 5 and 6 of the appeal
5That in determining to assess the property issues on a global approach, the Federal Magistrate erred in that he failed to have any or any proper regard to the contributions of the Appellant to his superannuation prior to the commencement of cohabitation between the parties.
6That in determining to take a global approach to the division of property, the Federal Magistrate erred in that he failed to have regard to the fact that to do this would not properly reflect the contributions of the parties to the property of the parties or either of them or to the other assets.
At the outset of his reasons for the property orders, after considering statements by the Full Court of the Family Court in Hickey and Hickey (2003) FLC 93-143, and by the High Court in Mallet v Mallet (1984) 156 CLR 605 and in Norbis v Norbis (1986) 161 CLR 513, the Federal Magistrate stated that he would take the global approach. He gave a reason for this, namely:
48.I conclude that, in the present case, the global approach is the more appropriate. The parties intermingled their finances, even following separation.
The asset pool initially set out by Wilson FM included three parcels of real estate, two of which were the half interests of the father held with his partner. As seen, later, Wilson FM excluded these latter interests, thus, the property table remaining was one in which the major assets were on the one hand, the former matrimonial home, the equity in which was about $260,000.00, and on the other hand, the father’s superannuation and the mother’s superannuation (of $57,500.00 approximately), which totalled about $275,000.00.
Somewhat surprisingly then, given the presence of such significant superannuation assets comparative to real estate interests, Wilson FM did not mention the decision in Coghlan and Coghlan (2005) FLC 93-220, which relates specifically to the treatment of superannuation.
There, the majority of the Full Court said:
63.However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise). This of course is the approach which the trial Judge adopted in this case.
The majority saw a number of advantages in the preferred approach, later saying:
67.If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.
68.When we refer to “the real nature” of the relevant superannuation interest, we are referring to the fact that notwithstanding that its value according to the Regulations may well be calculated to be a very significant amount, that superannuation interest may be no more than a present or future periodic sum, or perhaps a future lump sum, the value of which at date of receipt is unknown.
This, subject to what I say shortly, was Mr Page’s first point, namely that the Federal Magistrate had failed to place superannuation interests in a separate “pool”.
His second point was that, though Wilson FM said he would take the global approach, he did not, because he excluded the real estate interests as mentioned before. However, having regard to the minimal size of the husband’s interests in those properties, and the fact that they were acquired after separation, this point is of no significance.
As to the failure to place superannuation interests in a separate table, Mr Page stopped short of arguing that, of itself, the failure constituted error. This may well be because the majority in Coghlan also said:
65.In summary, then, the trial Judge has discretion as to how superannuation interests will be treated in a particular case. …
The argument here then comes down to an asserted failure to properly assess contributions and particularly in respect to superannuation, which failure might have been contributed to by the Federal Magistrate’s decision to adopt the “global” approach.
As to initial contributions, the Federal Magistrate said:
57.The mother asserts that when she and the father commenced cohabitation the father had the following assets:
Equity in an apartment at [suburb R]
$12,000.00
A […] motor vehicle
$ 5,000.00
Superannuation entitlements
$98,820.00
58.The father agrees with this. He says he also had furniture and effects worth $20,000. In particular the father had some pieces of antique furniture that he had inherited from his great grandmother and from his grandparents. …
59.By contrast, the mother had few assets. She had some household furniture, but no value is ascribed to it in the evidence. She also had a modest, but unquantified, superannuation account. …
…
61.It can be seen that the father made the overwhelming contributions at the commencement of the relationship. In Pierce& Pierce (1999) FLC 92-844 the Full Court said, at p 85,881:
“It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in the case of the husband, regard must be had to the use made by the parties of that contribution, in the present case that use was a substantial contribution to the purchase price of the matrimonial home . . . “
62.In the present case, the father sold the [suburb R] apartment in February 1997, at which time the parties purchased the former matrimonial home at [the suburb H], [suburb R] for $160,000. The father received $20,000 from the proceeds of sale after discharging the mortgage. This was applied as follows:
a) $8000 for deposit on former matrimonial home;
b) $9000 for purchase costs and renovations;
c) $3000 for the parties’ wedding.
63.The mother’s parents gave the couple $2,000 to assist with completing the purchase. It can be seen that the father’s contribution to the purchase price of the former matrimonial home was less than 10%. A small contribution was also made on behalf of the mother.
…
65.Therefore, until the birth of [G], it can be seen that both parties contributed financially, with the father contributing more than the mother.
66.… The father agrees that throughout the relationship the parties had a ‘traditional’ arrangement in that the mother performed most of the domestic household duties while he did the manual work. …
The learned Magistrate then addressed matters following the husband’s suspension from employment in August 2002. He recorded that in the following period, the father received full pay until December 2002. He subsequently received a payout equivalent to five month’s salary. Wilson FM said:
71.… The effect of these matters is that the father continued to contribute financially to a greater extent than the mother until May 2003. During this same period the mother took the burden of the care of [G]. The father accepts that whilst he was preoccupied with concerns about his employment the mother took up most of the care of [G].
…
81.Approximately three months elapsed between when the father’s termination payments covered his financial contributions to the family (May 2003), and the date of separation. For this short period, a small adjustment should be made to reflect the mother’s disproportionate contributions both financial and non-financial.
Then, in respect of matters post-separation, the learned Magistrate said:
93.Each party has been involved in caring for [G], but I accept that the greater burden has fallen on the mother. [G] has continued to live with the mother in the former matrimonial home. She has paid for his food and other living expenses.
…
97.The father says that following separation he purchased whitegoods to replace those he took with him, such as a washing machine and a refrigerator. He borrowed monies from [X] in his name. The mother has in fact repaid this loan herself. That justifies a further small adjustment in her favour.
…
100.The father has not contributed further to his superannuation since separation. The growth in that asset is reflective of market forces, and not any conduct of either party. The father’s greater initial contribution by way of his superannuation is reflected in the adjustment in his favour to which I have already referred. Otherwise, the full amount of the father’s superannuation should be taken into account.
…
Following these passages, as earlier seen, the Federal Magistrate’s conclusion as to contributions was:
103.After taking into account the matters that justify a small adjustment in the mother’s favour, for matters that have arisen since separation, overall I conclude that there should be an adjustment in the father’s favour, for the matters referred to in s.79(4)(a), (b) and (c) of the Act of 10%.
The 20 per cent differential created by Wilson FM’s assessment of contributions represented $114,859.00. The initial contributions of the husband, albeit in mid-1990’s value, approximated $130,000.00. Most of this was in respect of superannuation. Although use was made of non-preserved superannuation during cohabitation, the balance formed the plank for the value of the husband’s superannuation interest at trial. Contributions were not made after separation. Against the husband’s initial and other contributions were those of the wife during cohabitation, which were substantial, and then, post-separation, in respect of which a series of “small” adjustments were recognised.
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.
I am not satisfied that in reaching the conclusions that he did about contributions to the asset pool, including superannuation, the learned Magistrate erred.
Via the written summary, Mr Page raised an argument in respect of a finding by Wilson FM in relation to the income of the wife’s present husband, namely that his business produced income for him of $15,874.00 in the financial year ended 30 June 2005. Of this finding, it was argued in the summary:
19.… In this appeal, that finding is seen as relevant to the exercise of discretion in the fourth stage. It was not a finding that was consistent with the evidence. …
Evidence of Mr B about his 2006 position was then quoted. It related to the salary he paid himself in that year. The written summary continued:
20.It was thus open to the Federal Magistrate to find that the wife’s present husband’s income at trial was at least $37,200 a year after tax.
To say a finding was open is not to assert appellable error. In any event, the evidence was really as to drawings, not taxable income. But the telling point is that because it related to the 2006 financial year, it does not show that a finding in respect of the 2005 year was wrong.
The failure of the Federal Magistrate to make an order in respect of the husband’s superannuation
The pertinent ground was:
7That in determining that a just and equitable order did not involve the necessity of a splitting order of the Appellant’s superannuation, the Federal Magistrate erred in that he failed to have any or any proper regard to the needs of the Appellant, the age of the Appellant and the limitations upon the income of the Appellant.
No written submissions were separately addressed to ground 7. However, as part of the submissions under the banner of ground 5, was the following:
18Whether or not a splitting order was sought by either of the parties in this case, it was quite clear to the Trial Magistrate that in determining an order that was just and equitable, such an order might well have to be considered. Indeed, at paragraph 114, the significance of the superannuation is quite clear. By adopting the global approach and whilst the Federal Magistrate might have taken into account the value of the husband’s superannuation entitlement at the commencement of cohabitation, the adopting of a global approach quite clearly veiled the proper exercise of his discretion in terms of the fourth stage. This argument in effect takes up the whole of Grounds 5, 6 and 7.
…
22.Having determined to take a global approach, the Federal Magistrate then determined to leave the husband with his superannuation. The Federal Magistrate was aware of the limitations that that would impose upon the husband by way of access to those funds. No reasons were given for that determination. Given the true financial circumstances of the parties as revealed by the evidence but not in the reasons for judgment, such a division could not have been said to have been just and equitable. There had to be reflected in that consideration the degree of physical and financial dependence of the child on each of the parties in terms of the orders proposed by the Federal Magistrate and there was not such reflection of that fact.
There are some unusual circumstances in respect to this ground:
·As seen earlier, the husband’s primary position at trial did not propose a splitting order; and
·He does not now seek one in the event his appeal succeeds.
While, as was recognised by the majority in Coghlan (supra) a court, in fulfilling its obligation under s 79(2) to make orders only if just and equitable to do so, might need to make an order splitting superannuation, even if not sought, there is no reason why what a party seeks should not be relevant to the orders a court makes, unless justice and equity will not be achieved except by doing otherwise.
Superannuation represented about 66 per cent of the assets that the father was to retain from the asset table (or receive from the wife). As well, he retained his $9,500 of equity in real estate.
Superannuation represented about 23 per cent of the wife’s property after division.
The position in the instant case has some similarity to that confronting the Full Court in Doherty and Doherty (2006) FLC 93-256. The headnote records the essential facts there as follows:
In competing applications for property, the Federal Magistrate had divided the property of the parties as to 55% to the wife and 45% to the husband, and ordered that of the two major assets, the wife receive her entitlement by retaining the family home, and the husband nearly all of his by retaining his superannuation entitlements.
The Full Court said (at 80,340-80,341):
17.… Since the availability of such orders following the introduction of Part VIIIB, consideration of the constitution or “mix” of the assets with which each party will be left as a result of proposed orders would seem a necessary, if not critical, factor in determining the justice and equity of proposed orders in each case in which superannuation interests are involved.
…
22.Counsel for the wife advised us (and counsel for the husband did not say otherwise) that there had been no evidence before the learned Magistrate of any particular purpose or need for which the husband would use such cash as he might receive from a sale of the home and equal division of its proceeds. Nor was there evidence of the husband’s intentions with regard to an age of retirement.
23.There will no doubt be cases in which close consideration and discussion of factors to be taken into account when deciding on division of assets, including superannuation, “in specie” is necessary. Indeed, guidance from the Full Court may be highly desirable. This is not the case for that discussion.
24.The decision about the mix of assets was a discretionary one. In our view, in the absence of evidence in support of the orders that the husband sought and more particularly in the absence of submissions on his behalf to support the form of those orders, we consider that the option which her Honour exercised, having regard to what we earlier said of the principles applicable to this appeal, was well open to her.
In the circumstances in which this case presented to the Federal Magistrate, I am not satisfied that his discretion as to the nature of assets that each party retain or receive, miscarried.
The mother’s challenge to the 2½ per cent adjustment for s 75(2) factors
Ground 2 of the cross-appeal was:
2.…
a)The assessment of a 2½% adjustment in favour of the Mother was on the evidence so far below the reasonable range of the Federal Magistrate’s discretion that it should be inferred that he failed to properly exercise his discretion.
b)That Federal Magistrate erred in assessing the s 75(2) factors in finding that the Father and his partner have only two real properties (para 108 of the Reasons) when the evidence disclosed that the Father’s partner has an interest in three real properties and the Father has an interest in two of those real properties and a liability for the loan encumbering his partner’s third real property, and an equitable interest in the third real property.
c)The Federal Magistrate erred in that he failed to give proper weight to the following s 75(2) factors favouring the Mother:
(i)Whilst the father is afflicted with HIV virus, (para 11 of Reasons) that affliction and its treatment and medication do not result in any expense for the Father, and it enables the Father to receive substantial income protection insurance payments until such time as he is fit to work.
(ii)The Father and his partner have three real properties, and there was no satisfactory evidence that they would ever be required to repay the sum received from the Father’s partner’s parents of $99,263, asserted by the Mother to have been gift and asserted by the Father to have been a loan.
(iii)The mother’s partner’s income was $15,874 for the financial year ended 30 June 2005 (Para 102 of Reasons) and the mother’s only income is government family tax benefits and her ability to return to the work force is influenced by the care of her two young children. (paras 88 and 106 of Reasons).
(iv)By comparison the Father’s income was $51,000 per annum at the date of the hearing, and his partner’s income had been $41,870 for the year ended 30 June 2005.
(v)The mother has a greater responsibility for caring for [G], through the parenting orders that were made.
(vi)The Father pays no child support but he has “paid child care fees and purchased the child clothes and the like” (para 108 of Reasons).
As to s 75(2) factors, the Federal Magistrate found:
105.The father receives insurance benefits because he is unable to work. If he receives a cash settlement he will be able to assist his partner in repaying the loans secured against the properties they own. No orders will affect the father’s earning capacity. That is governed by his medical condition.
106.Similarly, the mother’s earning capacity will not be affected by the orders proposed to be made. Her earning capacity remains intact, once she returns to the workforce. Her ability to return to the workforce will be influenced, not by the orders, but by her care of her young children, and any further children that she and her husband have.
107.The mother is 38 years old and in good health. The father is HIV positive. The evidence of Dr [P] gives him a positive prognosis. The father takes medication as well as vitamin and oil supplements. The medication has some side effects but says none are severe enough to prevent him from caring for his son. The father says the separation caused him anxiety and stress and required him to undertake antiretroviral therapy prematurely within one year of diagnosis with HIV. He is currently under the nursing care of the Positive Directions HIV Management Program through [Z] Nursing Service. He is also under the care of a psychologist. He consults Dr [P]. The father says he has been diagnosed with an anxiety disorder with obsessive compulsive symptoms. There is no independent medical evidence to verify this.
108.The father and his partner have two heavily encumbered properties. Each has an income. The father’s income is secure whilst he remains incapacitated for work. I accept that the father’s income is not as disclosed on loan applications that were put into evidence. I accept the father’s explanation for why those documents were completed as they were. The father has considerable superannuation entitlements. The mother has the responsibility of caring for two young children. She is physically and mentally able to work. She and her husband, and their two children live in the former matrimonial home. The mother has a modest superannuation account. They have no other assets. The mother has not received child support from the father, although he has paid child care fees and purchased the child clothes and the like.
109.The mother will have the greater responsibility for caring for [G], through the parenting orders that I propose to make. The mother is also responsible for caring for and supporting her daughter [E].
…
111.In my view, the s.75(2) factors are evenly balanced. On the one hand, the father is afflicted with the HIV virus. However, he receives substantial income protection insurance payments until such time as he is fit to return to work. The mother has the care of two young children, and much less disposable income and a lower standard of living than the father and his partner. When all of these matters are taken into account, I would make an adjustment of 2.5% in the mother’s favour.
Not all of the propositions contained within the above ground were the subject of submissions. In the circumstances, only two arguments need be addressed. The first was that the evidence did not provide a proper basis for the Federal Magistrate to take account of the “father’s affliction with the HIV virus” as “the s 75(2) factor in the father’s favour”. I do not accept that the Federal Magistrate did regard the father’s condition as the sole or even predominant factor in his favour, though it was the factor (qualified in the following sentence, however) that he referred to in paragraph 111, set out above. But there were many other factors relating to the father set out in the preceding paragraphs (also quoted) in Wilson FM’s consideration of s 75(2) factors.
The second argument was simply that, taking account of all relevant circumstances, but in particular a comparison of the disposable incomes of the parties, having regard to the wife’s care of two young children, including a greater responsibility for caring for the child of the parties, a 2.5 per cent adjustment, especially when regard was had to what that meant in dollar terms, was manifestly insufficient.
The differential caused by the adjustment for s 75(2) factors was, of course, 5 per cent, or $28,700.00 approximately. This was not a large sum of money but the “pool” was a comparatively modest one.
Moreover, the learned Magistrate recognised the superannuation interests of the parties in his discussion of s 75(2) factors. Though he referred to those interests in the way of advantages rather than disadvantages, the fact was, as earlier observed, 66 per cent of the assets to be retained by the husband was in the form of superannuation. This could properly be regarded as a s 75(2) factor depressing any adjustment in the wife’s favour which would decrease the cash which, by order, the husband could receive.
In any event, whatever regard the learned Magistrate had to the superannuation entitlements, while I think the adjustment he made towards, or at the lower end, of reasonable parameters, I do not consider it falls outside them.
Conclusion
As I find no merit in any of the grounds of the appeal and of the cross-appeal, they ought both be dismissed.
I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 4 July 2008
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