DALY & TERRAZAS - [2019] FamCAFC 142

FAMILY COURT OF AUSTRALIA

DALY & TERRAZAS

[2019] FamCAFC 142

FAMILY LAW – APPEAL – PROPERTY – Where the appellant husband challenges the primary judge’s assessment of the parties’ relative contributions and contends that the primary judge failed to give adequate reasons for her decision – Where the husband contends that the assessment of 20 per cent reflecting the wife’s contributions is erroneous – Where her Honour’s conclusion was open on the evidence – Whether the primary judge’s conclusion was unsupported by reasons – Where her Honour took into account all the evidence and facts – Where the appeal is dismissed – No costs ordered.

Family Law Act 1975 (Cth) s 75(2)

Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76
House v The King (1936) 55 CLR 499; [1936] HCA 40
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Steinbrenner & Steinbrenner [2008] FamCAFC 193

APPELLANT:

Mr Daly

RESPONDENT:

Ms Terrazas

FILE NUMBER:

WOC

1064

2016

APPEAL NUMBER:

2019

DATE DELIVERED:

13 August 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Ainslie-Wallace, Aldridge & Austin JJ

HEARING DATE:

13 August 2019

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

4 December 2018

LOWER COURT MNC:

[2018] FamCA 1012

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Cook

SOLICITOR FOR THE APPELLANT:

Bowral Legal

THE RESPONDENT:

In person

Orders

The appeal against the orders of a Judge of the Family Court made on 4 December 2018 is dismissed.
There be no order as to costs.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Daly & Terrazas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)..

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 7 of 2019
File Number: WOC 1064 of 2016

Mr Daly

Appellant

and

Ms Terrazas

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Ainslie-Wallace J

On 4 December 2018 a judge of the Family Court of Australia made property settlement and parenting orders as between Mr Daly (“the husband”) and Ms Terrazas (“the wife”). The husband appeals her Honour’s property orders.
To give some context to the issues agitated on appeal, it is helpful to set out some apparently uncontroversial matters taken from her Honour’s reasons.
The parties began to live together in May 2005, married in 2014 and separated late in that same year. There are two children of the relationship, X who was born in 2005 and Y who was born in 2008 (“the children”).
At the time of the hearing before her Honour, the children were living with the husband and spending weekends and holidays with their mother, the wife. Her Honour’s parenting orders provided for the husband to have sole parental responsibility for the children albeit with a responsibility to advise the wife of any major long term decision prior to its being given effect, the children to live with the husband and spend time with the wife on weekends and weekdays during the school term and during school holidays. Other orders were made that provide for the children to spend time with the wife on special occasions.
These orders are not the subject of an appeal.
Her Honour also ordered the husband, within one year of the date of the orders, to pay the sum of $2,565,113 to the wife and, that interest accrue on that sum until it is paid.
At the commencement of the marriage, both parties had property and other assets. It was uncontroversial that the wife’s net assets at that time was in the order of $500,000. The husband asserted that his initial financial contribution to the marriage was in the order of $4,974,512. While the wife disputed that value of the husband’s initial contribution, her Honour accepted the husband’s valuation.
The wife has qualifications as a professional and worked in paid positions and also earned income from share trading throughout the relationship. The husband too earned income from personal exertion and from business investments.
Having noted that there was no serious challenge to the parties’ financial statements, her Honour constructed a list of the parties’ assets noting that during the relationship each conducted his or her financial affairs independently of the other, although her Honour found that each party invested “both formally and informally” in properties owned by the other (at [10]).
In short, her Honour found that the net value of the parties’ assets was $12,524,921 excluding their individual superannuation funds of which the husband’s entitlement were $342,351 and those of the wife were $83,618. At the time of the hearing, the husband was 47 and the wife 44 years old. Noting that neither party sought a superannuation splitting order, her Honour considered the discrepancy in the parties’ superannuation entitlements as a section 75(2) factor, under the Family Law Act 1975 (Cth) (“the Act”).
It is in her Honour’s assessment of the parties’ relative contributions and her reasons that the challenge on appeal lies.
Her Honour found that from the time when the parties started to live together, each contributed their money and efforts into the “enterprise of their family” (at [59]). After the parties’ separation in June 2014, the children were living in a shared care arrangement, although after that, the children had lived primarily with the wife and from June 2017, primarily with the husband (at [62]).
Following separation the parties continued to invest and reap profits on their investments. Her Honour at [67] concluded that up until the trial, and excepting the parties’ initial contributions, their contributions should be assessed as equal.
Conscious of the disparity in their initial contributions, her Honour assessed the wife’s contributions as to 20 per cent and those of the husband as to 80 per cent.
Her Honour in assessing the factors to which s 75(2) refers, took into account that the husband will have assets capable of earning vastly more income than the wife and that he has greater superannuation entitlements than the wife. She also took into account that the husband will have the greater proportion of the care of the children and their financial support, albeit the wife will provide financial support to them. Her Honour made a further adjustment of 10 per cent, concluding that the wife was entitled to 30 per cent of the net assets of the parties, being $3,757,476. On that basis, and taking into account the assets then in the wife’s possession, her Honour ordered the husband to pay to the wife a further sum of $2,565,113 and, at the husband’s request deferred that payment for a period of one year to enable him to make that payment subject to the payment of interest on so much of that amount as remains outstanding from time to time.

The appeal

Although three grounds of challenge are asserted in the Notice of Appeal filed 31 December 2018, only two are pressed. Those grounds challenge her Honour’s assessment of the wife’s contribution at 20 per cent contending that the decision is incorrect and further that her Honour failed to provide adequate reasons for her decision.
There is no challenge to her Honour’s assessment of the adjustment in the wife’s favour of a further 10 per cent taking into account the factors to which s 75(2) refer.
None of her Honour’s findings about the parties’ initial contributions is challenged, rather, the challenge is to her Honour’s determination of how those contributions should be recognised.
It is important to note that the first challenge, that to her Honour’s assessment of the wife’s contribution is a challenge to the exercise of her Honour’s discretion. The bar to appellate intervention in such a challenge is set high indeed. In CDJ v VAJ (1998) 197 CLR 172, Kirby J said:
186. …Neither this Court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. … To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders. …
(Citations omitted)
In short, the argument as to the first ground, shorn of the lawyerly language of the submission, is: “20 per cent is too much”.
In Babett & Falconer (2015) FLC 98-067, the Full Court said, apropos a similar challenge:
37. While it can be contemplated that assessments of contributions pursuant to s 79 might be judged erroneous by reason of fitting the description “unreasonable” or “plainly unjust”, it is a description that begs a foundation for this Court doing other than substituting its own discretionary conclusion for that of the trial Judge. In this, as in so many like cases, the central contention is that error is established by the result being “so outside” something that is not only unidentified but is not referenced to any foundation save for that assertion.
(Emphasis in original)
The appeal ground invites this Court to do the impermissible, to substitute our determination of what figure is appropriate to reflect the parties’ contributions instead of her Honour’s. Nothing put to us persuades me that we ought to, and further, her Honour’s conclusion was entirely open to her on the evidence. The outcome is not unreasonable or plainly unjust such that a failure properly to exercise the discretion may be inferred (see House v The King (1936) 55 CLR 499 at 505).
In my view his challenge has no foundation and must fail.
The second remaining challenge contends that her Honour’s conclusion as to the wife’s contribution was unsupported by reasons.
It is correct as the ground contends, that judges are required to give reasons for the decisions they make, for without reasons:
… a judicial decision cannot be distinguished from an arbitrary decision. In my opinion the giving of reasons is correctly perceived as “a necessary incident of the judicial process” because it enables the basis of the decision to be seen and understood both for the instant case and for the future direction of the law.
(Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh J, at 279).
The reasons must enable the parties, and an appeal court to discern the reasoning process to the decision made.
What then was the basis of her Honour’s decision to make that adjustment?
As her reasons indicate, her Honour was acutely aware of the vast disparity between the parties’ initial contributions.
Her Honour took into account how the parties conducted their relationship both financially and as to the care of the children, and concluded that each contributed their efforts and their money to the “enterprise of their family” (at [59]).
As part of that assessment, her Honour took into account that during the relationship, the parties invested in each other’s property to the advantage of the family enterprise (at [10]).
Her Honour observed that on separation, the wife had her superannuation entitlements, cash of about $184,454 and shares valued at $108,500. She invested in shares and her portfolio increased as a result. However, as her Honour observed and plainly took into account, the husband having a much larger share of the assets, continued to deal with those assets and their value increased (at [65]).
It was not suggested that there were matters to which her Honour did not refer or findings which were available but which were not made by her Honour.
In Steinbrenner & Steinbrenner [2008] FamCAFC 193, Coleman J said:
234. Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective. In this Court’s view this is not such a case.
Nothing put in the appeal persuades me that the “leap” from words to figures is such as to render the reasoning process defective and for my part I do not see what else her Honour could have said in further illumination of the matter on which she relied to come to her decision.
In my opinion the ground ought fail and the appeal should be dismissed.

Aldridge j

I agree with the orders proposed by the presiding judge and with her Honour’s reasons.

Austin j

I agree with the proposal that the appeal be dismissed and the reasons given for that result by the presiding judge

Ainslie-Wallace J

In that event the orders of the Court will be:
1.The appeal against the orders of a Judge of the Family Court made on 4 December 2018 is dismissed.
2.That there be no order as to costs.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge & Austin JJ) delivered on 13 August 2019.

Associate:

Date: 15 August 2019