Danvers and Danvers
[2017] FamCAFC 265
•14 December 2017
FAMILY COURT OF AUSTRALIA
| DANVERS & DANVERS | [2017] FamCAFC 265 |
| FAMILY LAW – APPEAL – PROPERTY – where the appellant contended the trial judge erred in his treatment of the husband’s initial capital contribution and relevant s 75(2) factors – where the challenges on appeal largely devolve to challenges as to weight – where no error demonstrated – where appeal dismissed. |
| Family Law Act 1975 (Cth) |
| Chorn and Hopkins (2004) FLC 93-204 Gronow v Gronow (1979) 144 CLR 513 House v The King (1936) 55 CLR 499 Weir and Weir (1993) FLC 92-328 |
| APPELLANT: | Mr Danvers |
| RESPONDENT: | Ms Danvers |
| FILE NUMBER: | BRC | 2053 | of | 2015 |
| APPEAL NUMBER: | NA | 29 | of | 2017 |
| DATE DELIVERED: | 14 December 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 23 November 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 15 June 2017 |
| LOWER COURT MNC: | [2017] FCCA 240; [2017] FCCA 1278 |
REPRESENTATION
| THE APPELLANT: | In person |
| THE RESPONDENT: | In person with the assistance of an interpreter |
Orders
The appeal against the orders made by Judge Baumann on 15 June 2017 be dismissed.
The appellant husband pay the respondent wife’s costs of and incidental to the appeal, such costs to be agreed, or failing agreement, to be assessed with such costs to be paid within sixty (60) days of agreement or assessment.
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 Danvers & Danvers 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 APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 29 of 2017
File Number: BRC 2053 of 2015
| Mr Danvers |
Appellant
And
| Ms Danvers |
Respondent
REASONS FOR JUDGMENT
On 27 February 2017 Judge Baumann delivered reasons for judgment in property settlement proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) between Mr Danvers (“the husband”) and Ms Danvers (“the wife”). His Honour directed that the wife’s solicitors prepare a minute of order consistent with the reasons then delivered and otherwise adjourned the proceedings.
The parties were unable to agree upon the terms of orders to give effect to the delivered reasons. Following a further hearing on 20 March 2017 Judge Baumann made final orders on 15 June 2017 and delivered further short reasons for those orders confined to addressing the areas of dispute between the parties as to the terms of orders to give effect to the reasons delivered on 27 February 2017.
In summary, the effect of the final orders is that the husband retains or receives property interests equating to 55 per cent of the combined property interests of the parties as determined by his Honour, and the wife retains or receives the 45 per cent balance.
The orders provide for the husband to retain, inter alia, a real property known as the Suburb S unit which he had acquired in his sole name post-separation; and his superannuation. He also remains liable for the mortgage secured by the Suburb S unit together with an ANZ Credit facility. The orders further provide for the former matrimonial home located at Suburb R to be sold with the proceeds of sale to be distributed such that the wife receives 45 per cent of the combined property interests of the parties, taking into account those other items of property each party, respectively, retains or receives pursuant to the final orders.
The husband appeals from the final orders made. The wife opposes the appeal. Whilst each party was legally represented at the trial, each was self-represented on appeal. For the appeal hearing the wife also required some assistance from an accredited interpreter in her first language.
The jurisdiction in relation to this appeal is exercised by a single judge pursuant to s 94AAA(3) of the Act. The appeal was heard on 23 November 2017.
Preliminary issues
In advance of the hearing of the appeal on 23 November 2017 the Registry was advised by the husband of his potential inability to proceed with the hearing of his appeal on that date, due to claims the husband made as to the state of his mental health.
At the outset of the hearing on 23 November 2017 the Court sought clarification from the husband as to whether he sought to make an oral application for an adjournment of the appeal or whether he wished to proceed. Whilst there was some degree of equivocation initially on the part of the husband, in the end result he confirmed that he wished to proceed with the hearing of his appeal and did not formally seek an adjournment of the hearing.
As earlier noted, the wife was self-represented in the appeal proceedings and required some assistance from an interpreter. In advance of the appeal hearing it was not entirely clear from the documents the wife had filed as to whether the wife sought to resist the appeal or whether the wife actually sought to advance a cross-appeal. The wife’s summary of argument sought the making of further orders beyond simply an order dismissing the appeal and the wife’s summary of argument contained assertions about error on the part of the trial judge separate and distinct from the errors asserted in the husband’s challenges.
Again, at the outset of the hearing of the appeal it was clarified with the wife, with the assistance of her interpreter, that the wife actually sought only to resist the appeal and have this Court affirm the orders made by the trial judge.
The husband’s challenges on appeal
With respect to the husband who represented himself in the appeal proceedings, and has no relevant legal training, his grounds of appeal as set out in the notice of appeal filed 13 July 2017 are, largely, not proper grounds of appeal. Some of them are not readily intelligible and many fail to particularise an error of fact or law capable of founding a legitimate ground of appeal. The husband’s stated grounds are:
1.Relating to the decision and orders behind the reiteration and simplifying the minutes of orders from 27 February 2017 being reiterated as minutes on 15 June 2017.
2.The health of the respondent husband was not considered as the respondent was being treated for Post Traumatic Stress Disorder and extreme anxiety as a mental illness and subsequently diagnosed and unable to work in his occupation due to the applicant wifes persecution (including by proxy) of the respondent husband.
3.The applicant wife was actively seeking to destroy the husbands, business, career and occupation to make the respondent husband unfit for work both before and during and after trial with false, malicious and vexatious DV claims perjuring herself and constantly persecuting and harassing the respondent with threats knowing this would make the respondent husband unable to work in his career.
4.The wife the applicant wife’s operating a cash based business ( not a hobby) and income was not given greater consideration nor her ability to work and how she is funding her lifestyle.
5.The applicant and her legal representatives attempting to change the judges orders when directed to write the minutes changed them with their own competing orders to add more financial benefit for the applicant wife and add extra parenting clause and sending 2 different electronic versions to the respondent an hour before court when the respondent was driving from [Suburb S] to Brisbane for court with the purpose to gain financial benefit to herself.
6.The applicant wife has been constantly trying to change the orders for 100% of the assets and $795 per week spousal maintenance outside the orders when the respondent was unemployed as medically unfit from PTSD.
7.The refusal by the applicant to follow parenting orders as a result of no consideration to the applicant wife practicing Hostile Aggressive Parental Alienation tactics.
8.The greater initial contribution of the respondent husband.
9.By not taking into account the financial distress of the trust and business entity and an inability to be liquidated due to the applicant wife retaining use of the only company asset, it has and is causing greater debt and financial distress to the respondent husband verging ever closer to bankruptcy and dilution of the financial [illegible] equitability.
(Errors and omissions in original)
The difficulties with these stated grounds of appeal are compounded by reference to the husband’s summary of argument for the appeal. That document is riddled with references to the wife’s asserted conduct in her role as a mother although it is entirely unclear how this could relate to an asserted error by the trial judge in property settlement proceedings. Additional references are made to the wife’s asserted conduct during the course of the proceedings themselves, including allegedly yelling during court hearings, making applications for spousal maintenance, and submitting orders to the trial judge which did not reflect the reasons for judgment. It is likewise unclear what relevance or consequence these could possibly have to the appeal.
Thus, at an early stage in the appeal hearing I engaged the husband in an exercise of identifying, and reframing from his grounds of appeal and summary of argument, the legitimate challenges on appeal he intended to advance. That exercise resulted in the husband confirming the following as comprising the challenges the husband sought to agitate on appeal:
a)His Honour erred by excluding two liabilities of the husband – being a bank loan of $60,000 and credit card of $20,000 – from the property pool of the parties, or otherwise taking them into account;
b)His Honour erred in his assessment of the parties’ contributions by:
i)Failing to give sufficient weight to the husband’s initial contributions;
ii)Failing to take into account that the husband met various jointly incurred debts or expenses post-separation including a Centrelink debt; and
iii)Failing to take into account that the husband purchased for the wife a sedan motor vehicle post-separation.
c)His Honour erred in the treatment of a 4WD motor vehicle;
d)His Honour erred in his assessment of the parties’ future needs pursuant to s 75(2) by failing to pay sufficient regard to:
i)The husband’s asserted mental ill health;
ii)The poor financial position of the husband’s business and trust entity;
iii)The wife’s operation of a cash business and consequent access to funds;
iv)The wife’s operation of a business and bank account in her mother and children’s names, or access to funds in those accounts;
v)The wife’s lack of full and frank disclosure in respect of her financial position;
e)His Honour failed to take into account the wife’s conduct, otherwise described as: “hostile aggressive parental alienating … as an attempt to prejudice the appellant husband … as a means of financially ruining the appellant by making him unable to work and no longer run a formerly profitable business”;
f)His Honour ought to have made a superannuation splitting order.
Having thus reframed the husband’s challenges, in the course of the hearing of the appeal the husband abandoned many of those complaints. In the end the husband did not seek to press as errors any of the matters identified in each of (a), (c), (d)(i), (ii), and (iv), nor (e) above. It is therefore unnecessary to deal further with those abandoned challenges.
Relevant facts
The parties met and married within three months in mid-1999. They separated in mid-2014. At the commencement of their relationship the husband had recently finalised a property settlement with his former partner.
The husband’s daughter from his previous relationship, who was eight years old at the commencement of the parties’ relationship, lived primarily with the parties until she turned 18 years of age.
The parties had two children of their own during the course of their relationship and their third child was born a couple of months after their final separation. On the first day of the trial on 30 August 2016 the parties were able to largely agree upon parenting orders in the best interests of the children and the trial judge resolved those remaining issues between them such that final parenting orders were made on 30 August 2016.
In relation to the property dispute, the husband contended before the trial judge, via his counsel, that his contributions based entitlement to the parties’ combined property interests ought be assessed at 75 per cent and that there ought to be no further adjustment for the parties’ future needs. For her part the wife contended that the parties’ contributions based entitlements ought to be considered equal and that she ought to receive an adjustment in her favour of between 10 and 15 per cent for her future needs.
After resolving a number of issues between the parties as to the items of property interests which ought to be considered in the assessment of the property adjustment orders to be made, the trial judge assessed the parties’ contributions based entitlements at 65 per cent to the husband and 35 per cent to the wife. The trial judge made an adjustment of 10 per cent in favour of the wife, having regard to relevant s 75(2) factors, producing an overall division of 55 per cent to the husband and 45 per cent to the wife of their combined property interests as determined by the trial judge.
The property of the parties
At [37], the trial judge sets out the following findings in respect of the property interests of the parties, including the husband’s superannuation:
ASSETS
Ownership
Property
Value
Joint
[The Suburb R property]
$570,000
Husband
[the Suburb S unit]
$525,000
Joint
ANZ cheque account
$5,455
Husband
[…] boat
$30,000
Wife
Partial property settlement
$25,000
Husband
Partial property settlement
$25,000
Husband
[…] Superannuation
$95,896
$1,276,351
LIABILITIES
Joint
Home mortgage loan
$70,000
Husband
Suburb S unit mortgage
$351,892
Husband
Personal guarantee for ANZ Credit facility
$79,453
$501,345
NETT ASSETS
$775,006
The $60,000 loan and the N Bank credit card
As earlier noted, the husband abandoned, during the course of argument of his appeal, the challenges directed to these issues and it is thus not strictly necessary to deal with them. However, as this abandonment occurred in the course of the hearing when the husband was directed to relevant matters within the appeal record I will, for completeness, deal briefly with these issues.
The husband’s initial complaint was that the trial judge had failed to take into account his “extra $60,000 bank loan and $20,000 from N Bank credit card”. Whilst it was not wholly clear from the husband’s documents filed in advance of the appeal whether the complaint was that the trial judge failed to bring these liabilities in as property of the parties to be considered, or whether the trial judge failed to take proper account of them in assessing relevant s 75(2) factors, it was the latter aspect that the husband confirmed was his complaint on the hearing of the appeal, prior to abandoning it.
The $60,000 loan to which the husband makes reference was taken out by him by way of second mortgage on his Suburb S unit shortly before the trial and was money he applied to meet his legal fees (transcript 30.08.2016 p 8, l 23 to p 59, l 13). It was first raised in the trial during the course of the husband’s oral evidence in chief.
It would seem that this $60,000 sum is in addition to the agreed sum of the home loan otherwise secured over the Suburb S unit mortgage of $351,892 given that the case outline documents filed by each party on 23 August 2016 include a sum of $351,892 as the amount of the mortgage over the Suburb S property. Obviously, those documents pre-date the subject additional loan.
No submission was made by either party at trial that the additional loan amount of $60,000 should be included as a liability of either of the parties for the purpose of assessment and indeed the following discourse occurred during the course of the oral evidence in chief of the husband:
HIS HONOUR: Well, it’s probably – I’m probably able to infer that without the wife consenting to anything on the home mortgage, which is jointly owned, it could be only be on one property, but in any event, it’s for his legal expenses.
[COUNSEL FOR THE WIFE]: If your Honour - - -
HIS HONOUR: No one is going to sort of suggest seriously they be brought into account as a debt of the parties, are they?
[COUNSEL FOR THE WIFE]: I wouldn’t have – I wouldn’t have thought so.
HIS HONOUR: So I don’t know what possible way it could be applied to it. He says he took out a second mortgage for legal expenses.
[COUNSEL FOR THE HUSBAND]: It reflects the consequence that there’s a correspondent debit into his – or credit into his other account for the same amount. It just balances the two.
(Transcript 30.08.2016 p 58, l 34 to p 59, l 2).
The trial judge did not include any credit balance in a bank account of $60,000 as an asset of the parties, nor did he include any amount standing to the credit of the husband in his solicitor’s trust account. Given that the funding was for the husband’s legal fees for the proceedings that approach was entirely consistent with authority (Chorn and Hopkins (2004) FLC 93-204).
In respect of the N Bank credit card, the trial judge records:
27.More importantly, the husband asserts there are a number of liabilities of the business (or Trust) said to be:
- Australian Taxation Office (“ATO”) - $23,930
- ANZ Credit facility - $79,453
- N Bank Rewards Credit Card - $22,037
- State Government fines - $4,820
28.The husband’s failure to make full disclosure, other than the production of the taxation returns to 30 June 2015 (Exhibit 7) means, in the absence of full financial statements revealing, for example:
a) what income was generated to create the tax liability of $23,930 and when;
b) no Profit and Loss Statement or Depreciation Schedule has been produced for either the Trust of the company [XYZ Pty Ltd] (which it is noted, in its own right had a taxable income of $33,721 for the 2015 year); and
c) the husband’s attempt to explain his calculations, relying upon the letter dated 12 August 2016 from his external accountant […] (Annexure “SPD-16”) is highly qualified and no opportunity to assess the basis for the estimates could occur when “evidence” is submitted in this way.
findings are difficult to make.
(Emphasis added)
At [35] the trial judge records a finding: “I see no basis to include the credit card debt to N Bank of $22,037 in the absence of any explanation as to how it was generated”.
There was very little evidence before the trial judge in respect of this liability.
The husband simply includes a reference to that liability at paragraph 89 of his trial affidavit which is in the following terms:
89. The liabilities of the [Danvers Discretionary Trust], excluding related party loan accounts, are as follows:
Liabilities
Estimated Value
Comments
ANZ Credit Facility Statement Account
$79,454
Balance as at 11 August 2016
N Bank Rewards Credit Card
$22,038
Balance as at 11 August 2016
Queensland Government – fines
$4,820
Balance as at 11 August 2016
Taxation liabilities
$23,930
Plus 2016 tax and outstanding BASExhibited to me and marked with the letter “SPD-16” is a true copy of email dated 12 August 2016 from [the husband’s accountants]
Total Liabilities
$130,242
The husband was cross-examined as to this liability:
[COUNSEL FOR THE WIFE]: Right. Okay. The next one is the N Bank Rewards credit card, account number ending 4020. Is that the subject of any personal guarantee?
[THE HUSBAND]: I guess it’s mine.
[COUNSEL FOR THE WIFE]: Well, you’ve listed it as being owned by Your H2O. Do you know is it a company credit card? Is it your personal credit card?
[THE HUSBAND]: The accountant uses a N Bank credit card as the company’s card, so that’s how he works out all the expenses and all the GST because I give him the – all the N Bank statements and he told me to use the ANZ card just for personal use.
[COUNSEL FOR THE WIFE]: And how much is owing on that card now, do you know? The N Bank one?
[THE HUSBAND]: The N Bank one is about 23.
(Transcript 30.08.2016, p 66, l 38)
The wife contended that the N Bank credit card ought to be left out of consideration of the property of the parties, as it was a debt owed by the business and would therefore be subsumed within liquidation of the company (Transcript 30.08.2016 p 145, l 26-41).
There would appear to be no injustice or inequity about the trial judge’s treatment of the loan of $60,000 given that it was utilised by the husband to pay his legal fees. Likewise, with respect to the credit card in circumstances where that was, on the evidence, a debt of the company/Trust rather than one personal to the husband and where the trial judge also excluded from consideration as part of the property pool a 4WD motor vehicle owned by the husband’s company, being the only remaining asset of that company.
In summary, the husband’s abandonment of these challenges was appropriate given that these matters did not constitute any legitimate basis for demonstrating any error on the part of the trial judge.
Assessment of contributions
As already noted, the trial judge assessed the parties’ contributions based entitlements as being 65 per cent to the husband and 35 per cent to the wife. The trial judge accepted that the husband made greater initial capital contributions than did the wife, which contributions the trial judge considered to be the “springboard” for the purchase of the former matrimonial home.
At [8] and [9] the trial judge records his acceptance of the significance of the husband’s initial capital contributions and at [42] and [50] the trial judge records his findings as follows:
8. The husband was some six years older and was born in 1969. At the time of the marriage, the husband had divorced from his first wife and had their eight year old daughter Sonia living with him in his home at [Suburb C] (“[the Suburb C property]”). That home had been built by the husband and his former wife, but as a result of court order he was entitled to retain the home, which caused him to refinance the mortgage to a level of $104,100 in October 1998. At cohabitation of these parties the wife had no assets of significance. There is no probative evidence before the Court as to the value of the home at the time of cohabitation.
9. I am satisfied that an equity did exist which the husband “brought into” this relationship and which was an unmatched initial contribution. The home was sold in April 2009 for $635,000. Annexures SPD “13” and “14” show how the sale of the [Suburb C property] and purchase of the former matrimonial home occurred on 6 April 2009 simultaneously with the balance of purchase funds of $449,824 needed for the purchase of [the former matrimonial home] (“[the Suburb R property]”) coming from the sale proceeds of the [Suburb C property]. I accept the parties paid from joint funds, the deposit of $5,000.
…
42. The husband’s initial contributions were superior to those of the wife, and in my view, were the springboard to allow the couple to acquire the home at [Suburb R] without a mortgage…
…
50.[Counsel], for the husband, contends that a contribution based entitlement of 75% to the husband and 25% to the wife is proper. In my view, considering the initial contribution was over 15 years ago, and consistent with authorities like Pierce & Pierce (1998) FLC 92-844, the Court is required to consider the numerous and additional contributions made by both parties, as set out above during the relationship.
The husband contends that his Honour erred in the weight attributed to his initial contributions. The husband asserts that he brought in real property with 80 to 90 per cent equity and that the trial judge did not give enough weight to this contribution. In this regard, with all due respect to the husband, he entirely misstates the evidence which was before the trial judge. The only evidence before the trial judge in respect of the value of the Suburb C property owned by the husband at the outset was struck out for inadmissibility, prior to the opening of the evidence (Transcript 30.08.2016 p 25, l 35-45). The husband points to affidavits of his former wife and adult daughter as establishing the value of the property but it would seem that these were not relied upon by counsel who appeared for the husband at trial (Transcript 30.08.2016 p 21, l 36 – 38; p 23 l 4-9; p 23, l 21 where the trial judge confirms that the only witnesses are the parties; p 25 l 29-31 where counsel for the wife confirms he does not need to press the objections arising from those witnesses’ evidence).
This left no evidence before the trial judge as to the value of the Suburb C property at the commencement of the relationship other than that it was subject to a mortgage of $104,000.
There is no merit in this challenge. The trial judge was plainly aware of the initial capital contributions made by the husband and it was well within the trial judge’s discretion to make the findings his Honour made as to the weight to be given to that aspect as recorded in the quoted paragraphs. It would not have been legitimate for the trial judge to attempt to place a dollar value on the worth of the contribution of the Suburb C property at the outset given there was in fact no admissible evidence as to that value.
Given that the trial judge assessed contributions at 65 per cent/35 per cent in the husband’s favour, reflecting a disparity between the parties of 30 per cent, worth $232,000 in dollar value terms relative to total property interests worth a combined approximately $775,000, it can be seen that the trial judge placed very significant weight upon the husband’s initial capital contribution.
The parties’ non-disclosure - the husband’s complaints directed to the post-separation period
Relevant to the balance of the complaints the husband maintained on appeal is the fact that this was a case where the trial judge made significant adverse findings against each party as to their respective failures to make full and frank disclosure.
The wife’s failures in this respect are relevant to the husband’s challenges directed to the s 75(2) assessment and will be referred to in that context.
In relation to the husband, the trial judge records a finding at [14] that the husband made only “limited financial disclosure” in relation to the business operations of the entity known as “XYZ Pty Ltd”. The significance of that, in particular as regards the post-separation period to which the husband directs his complaints, is that at [15] the trial judge records that the husband “caused income from his subcontract work to be somehow managed through the [Danvers Family Trust], of which [XYZ Pty Ltd] was Trustee”. There also the trial judge records findings about the use by the husband of this structure concerning diverting his income and also the borrowing of funds but that the “level of disclosure about these matters was limited”.
At [27] the trial judge records the husband’s case as to asserted liabilities of the business (or Trust) being incorporated into the assessment but thereafter the trial judge records the following significant findings:
28.The husband’s failure to make full disclosure, other than the production of the taxation returns to 30 June 2015 (Exhibit 7) means, in the absence of full financial statements revealing, for example:
a)what income was generated to create the tax liability of $23,930 and when;
b)no Profit and Loss Statement or Depreciation Schedule has been produced for either the Trust of the company [XYZ Pty Ltd] (which it is noted, in its own right had a taxable income of $33,721 for the 2015 year); and
c)the husband’s attempt to explain his calculations, relying upon the letter dated 12 August 2016 from his external accountant […] (Annexure “SPD-16”) is highly qualified and no opportunity to assess the basis for the estimates could occur when “evidence” is submitted in this way.
findings are difficult to make.
29.By reference, for example to the Trust, it seems the estimated liability was $6,391.67 but that a “reasonable estimate” of $25,000 is suggested because of the three outstanding BAS from October 2015 to June 2016. However, the liability is of course based on the income generated, and no reliable information has been offered by [the husband] in that respect.
30.Again, based on the husband’s evidence of the business ceasing to trade, the level of ATO debt for the company [XYZ Pty Ltd], must relate to income distributed to the company through the Trust.
31.I am conscious of the date of separation, and in the absence of any better evidence (which I find that the husband was able to produce from his accountants but did not produce), I find that any income tax liability that currently exists (whether personally; in the Trust through undistributed income and in the corporate entity [XYZ Pty Ltd]), arises from post separation income the husband has been entitled to receive and that the level of ATO liability represents decisions he made as to how the income ought be distributed.
32.Accordingly, as he has had the benefit of the income he should pay his incidence of taxation – not the wife.
Further, at [35] the trial judge records this as to the husband’s claim that the credit card debt to N Bank ought be incorporated as a liability of both parties:
35. … I see no basis to include the credit card debt to N Bank of $22,037 in the absence of any explanation as to how it was generated. The husband’s bland assertion that it relates to “business” expenses, when really since separation the business was merely him operating as either a sole trader or sub-contractor, cannot be accepted by the Court. Furthermore, if they truly were “business” expenses, then the husband will be able to offset those expenses against his business income (whatever that was), and thereby legitimately reduce the taxable income distributed through the Trust. I see no basis as to why the wife should be responsible to share in “fines” incurred by the husband.
It is readily apparent that the available evidence, and in particular the husband’s non-disclosure of relevant evidence, precluded the trial judge from making any comprehensive analysis of the income available to the husband in the post-separation period or the use made of that income, or relevant transactions within the business/XYZ Pty Ltd/Trust.
It follows that the husband’s contentions concerning the trial judge’s asserted failure to take into account that the husband met some jointly incurred debts or joint expenses in the post-separation period cannot be accepted. As is clear from the findings referred to, the trial judge was not satisfied, by reason of the husband’s own non-disclosure, that the husband had made full and frank disclosure of the income available to him post-separation and indeed the trial judge made positive findings open on the evidence and within his Honour’s discretion rejecting certain claims of the husband.
It may be added that in the proceedings the husband initially claimed as a liability to be accounted for an asserted debt owing to his adult daughter of a previous relationship of $100,000, and claimed that he had sold a boat. The first of these claims was ultimately not pressed by the husband (at [4]) and the latter claim was rejected by the trial judge (at [34]).
It is well settled that within the discretionary exercise to be performed pursuant to s 79 it is open to a trial judge to make broad and robust conclusions where a party or parties fail in their obligation to make full and frank disclosure of all relevant aspects of their financial affairs (see, for example, Weir and Weir (1993) FLC 92-338).
In any event, issues of non-disclosure aside, in this case, the wife continued in her primary caring and homemaking role for the three children of the marriage in the post-separation period. As earlier noted, the youngest of those children was born after the parties’ final separation. After a 15 year period of cohabitation and marriage which produced three children, the wife as primary homemaker and parent plainly made an indirect contribution to the husband’s earning capacity as it existed at the point of separation and the husband had the benefit of income produced by the exercise of that capacity in the post‑separation period.
On the property interests as found by the trial judge totalling, in net terms, $775,006 a disparity of 30 per cent between the parties of a 65 per cent/ 35 per cent contribution based assessment represents a differential between the parties of $232,000 in dollar value terms.
There is no merit in the husband’s challenges concerning asserted failures of the trial judge to take account of relevant matters in the post-separation period. When the trial judge’s reasons are read as a whole it is clear that the trial judge weighed each parties’ relevant s 79(4)(a)-(d) contributions including in the post-separation period, in arriving at the conclusion that such contributions were properly reflected in a 65 percent/35 per cent apportionment in the husband’s favour.
The husband’s challenges can properly be seen as being directed to the weight given to various considerations, however this is quintessentially part of the discretionary exercise performed in arriving at a just and equitable outcome. As Stephen J observed in Gronow v Gronow (1979) 144 CLR 513 at 519-520:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never that an appellate court left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight…
Whilst the husband also complains that the trial judge did not take into account that the husband purchased for the wife a sedan motor vehicle in the post-separation period, there could be no relevant effect upon the assessment of contributions from that fact. The evidence is that in June 2016 the husband purchased the sedan vehicle in an attempt to exchange it for the 4WD vehicle, owned by the husband’s company which was being used by the wife for herself and the children. When the wife refused the proposed exchange the husband sold the sedan vehicle in about July 2016. At no point did the wife receive the sedan vehicle, nor its sale proceeds, which were actually received or retained by the husband. There is thus no substance in this complaint.
The s 75(2) assessment
As already noted, most of the husband’s initial complaints directed to the trial judge’s s 75(2) assessment were abandoned by the husband in the course of oral argument of the appeal. Most of his remaining complaints are challenges directed to weight given by the trial judge to various considerations and the earlier observations made by reference to what Stephen J said in Gronowv Gronow (supra) apply.
The husband maintained his complaints that the trial judge failed to pay sufficient regard to the wife’s operation of a cash business and consequent access to funds; and the wife’s operation of a business and bank account in her mother and children’s names, or access to funds in those accounts (summary of argument, at paragraph 5).
As to the wife’s bank accounts it is clear that the trial judge took into account this aspect and the wife’s evidence under cross-examination. At [24] the trial judge records:
The wife was cross examined about a number of movements between accounts and, in particular, what became of the funds in the [K Bank] account revealed at Item 37 in her first Financial Statement as having a balance of $22,000. I found the wife’s answers to questions about this issue as generally unhelpful. She could not recall where she deposited the funds – although it may have been to an Australian account in her mother’s name. The wife also indicated she, at times, transferred funds to the children. Her cross examination demonstrated a poor grasp of the detail and I find, less than adequate discovery. On balance, and in the absence of any evidence from either of her parents, I have reached the conclusion that any funds in her possession either came from her parents or post separation income she generated through the business [Business W]. In those circumstances, I do not include any bank accounts for the wife in the Pool, and similarly, for want of any corroboration, I do not include an alleged debt to her parents [Mr and Mrs T], quantified at Item 50 at $30,000. In the circumstances, it would be unfair to include the modest bank account of the husband ($757) although the joint (and apparently frozen) account with the ANZ Bank with a balance of $5,455 is included.
Notably, in relation to the wife’s business the trial judge recorded at [26] the husband’s concession at trial that he could attribute no forensic value to the business of dog breeding and grooming operated by the wife and known as “Business W” noting that the business does not seem to have assets “save perhaps for the breeding stock of one male and two females”.
In relation to the respective earning capacity of each party it can be seen that at [52] of the reasons the trial judge gave careful consideration to a comparison between the capacity of each party to earn income in the future. Bearing in mind that the trial judge found that the wife had, and would continue to have, primary care of the children and homemaking responsibilities for them (including the youngest child at two and a half years of age) the trial judge recorded this:
52. In my view, the various factors within s.75(2) to be considered compel an adjustment in favour of the wife, for the following reasons:
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b) The husband has, and during the relationship developed, skills as a communication technician. Although his income now of around $52,000 per annum is less than he previously earned, I find that he has relevant commercial skills and has a confidence, not enjoyed by the wife that she is employable. The wife has no formal skills and by concentrating on her role as a homemaker, did not develop any skills during the relationship. She is certainly presentable and intelligent but with [the parties’ youngest child, Child G] so young, doing further education or training is problematic for a time;
c) The husband would ask me to accept the wife is capable of earning at least $40,000 to $50,000 per annum from the sale of miniature schnauzer puppies. In this regard the wife produced little paperwork. I felt she was, to a degree, evasive in respect of her business. She apparently keeps most of her “business” records in a personal diary, which was not produced. She has shown a past history of sending funds to Japan. All this makes it very difficult to assess either her current income or future earning capacity. Under cross examination, the wife said the last litter she had from one of her female bitches was in late 2015. She gets around four to five puppies a litter – and each puppy sells for around $1,500 to $2,000 each. The husband says the females can have two litters a year, and allowing for expenses to vets etcetera, he regards his estimate of $40,000 nett per annum as reasonable. I have no evidence of the market demand for this breed. I infer that with most animals, there is no guarantee of the number of live puppies; size of litters; etc. I also have little information about the amount the wife earns from dog grooming where she charges between $15 and $60 a session. I accept the husband’s submission that the wife could have made more fulsome disclosure and that I should treat her evidence of income cautiously. The wife in her Financial Statement filed 18 August 2016, does not reveal any income from either the sale of puppies or dog grooming. On balance, I find that the wife does have an income and earning capacity from this pursuit, but that it is likely to be less than that of the husband and I find, less secure;
d) Although parenting arrangements as ordered provide for all children to live with the wife, the husband will have significant and substantial time with [Child J] and increasing time with [Child G] until his time is the same as that for [Child J]. No prescribed time for [Child O] was ordered, but of course the wife still has the day to day responsibility for her needs exclusively. These parenting obligations upon the wife, which she happily accepts, do impede her capacity to both obtain employment and to retrain. [Child G] is some years away from starting school and at his age, the wife’s obligations to care for him will continue for many years after [Child O] and then [Child J] turn 18. Although the husband does pay child support as assessed, and in my view will continue to do so (currently the wife says it is at a rate of $167 per week), the wife will still bear the majority of expenses and the emotional requirements of the children. This is a factor that weighs in an adjustment to the wife…
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Given the evidence referred to and the findings reflected in the reasons for judgment also referred to, there is no substance in the husband’s challenges directed to the trial judge’s assessment of s 75(2) matters. As noted, the trial judge carefully considered the husband’s case as to what the wife might be capable of earning from the business of dog breeding but rejected the husband’s contention as to the likely level of earnings from that source in future. It was open to the trial judge to so do including in circumstances where the husband could point to no forensic value within the business operated by the wife. So too, the findings concerning the wife’s bank accounts which were open to the trial judge do not point to the wife having significant funds available to her own use from business or income earning sources.
At [52(e)] the trial judge noted that the overall effect of the property orders intended to be made would be unlikely to enable the wife to secure a property to live in unless she received some support from her family. Plainly the wife’s ongoing primary caring and homemaking role with the children was a very significant s 75(2) factor balanced against the relatively modest overall quantum of the combined property interests of the parties. In circumstances where a 35 per cent contributions based entitlement to the wife was made, the factors referred to yielding a 10 per cent adjustment in favour of the wife was well within the discretion of the trial judge.
There is no substance in the husband’s complaints directed to the s 75(2) assessment directed to the wife’s capacity to generate income.
Whilst as already noted the husband abandoned during argument of the appeal his complaint that the trial judge failed to have regard to his mental ill health, and the impact it had upon his income earning capacity, for completeness, this can also be briefly addressed.
There was no evidence before the trial judge of any alleged mental ill health. The husband purported to file an affidavit on 4 May 2017, at a time when the matter remained reserved, however, it does not appear on the face of the record that there was ever an application to reopen the proceedings to have this new evidence considered or that his Honour actually considered it. In the circumstances, it is apparent that there was no evidence before the trial judge of the husband’s asserted mental ill health.
The evidence contained in the husband’s trial affidavit established that he was then employed in the manner and at the income which his Honour recorded in his reasons.
There is no substance in any of the husband’s complaints directed to the assessment made by the trial judge of relevant s 75(2) matters.
Superannuation splitting order
The husband did not direct any substantive submission to this challenge on appeal, he merely contends that the trial judge ought to have made a superannuation splitting order (summary of argument at paragraph 17). On appeal he seeks an order that his superannuation interests “should be split 50/50”.
The relevant superannuation interest is the husband’s Media Superannuation benefit of $95,896. Notably, that value is relative to the overall net asset value of $775,006.
At [38] the trial judge records:
Although the husband seeks a superannuation splitting order, the value of the modest superannuation entitlement of the husband persuades me that a “one pool” approach is to be preferred. Neither Counsel otherwise submitted.
In dealing with the relevant s 75(2) matters the trial judge specifically records a finding at [52(e)] that the wife’s “reduced earning capacity persuades me that she is, as a matter of equity, entitled to maximise her cash component rather than to receive a superannuation splitting order in her favour as the husband proposes in the minute of order”.
Further, it can be seen that at [55] on the scenario that there is to be no splitting order in the wife’s favour the trial judge specifically considers the orders to achieve justice and equity to both parties. Reference has already been made to the trial judge’s observations as to the unlikelihood of the wife being able to purchase a property suitable for herself and the children on the property she is to retain or receive as a result of the orders.
No submission was directed on behalf of the husband at trial as to how it would be unjust or inequitable to the husband for no superannuation splitting order to be made. Nor on appeal did the husband direct submissions to support a conclusion that the trial judge was plainly wrong in not making a splitting order.
As a result of the final orders made, the wife retains or receives the benefit of property with an estimated worth of $348,752 (subject to the sale price actually achieved for the former matrimonial home). The husband retains or receives an equivalent worth of non-superannuation property interests ($330,358) plus the husband retains his Media Superannuation interests of $95,896 and, as found by the trial judge, has the benefit of his superior (to the wife’s) future earning capacity.
There is no substance in the husband’s complaint that the trial judge ought to have made a superannuation splitting order with respect to the husband’s superannuation interest. It can be seen that the trial judge considered the husband’s case in this respect but in the exercise of his discretion, on a proper basis, rejected that case.
Conclusion
The husband does not demonstrate, via any of the complaints he ultimately maintained on appeal, that the orders made by the trial judge in the exercise of the judicial discretion conferred by s 79 of the Act, are the result of any error as would permit appellate interference (House v The King (1936) 55 CLR 499 at 504-505).
There being no merit in any of the challenges the husband pursued, the appeal is to be dismissed.
Whilst the wife was self-represented on the appeal, in the event the appeal was dismissed she sought an order for costs on the basis that she had incurred some legal costs in obtaining legal advice and assistance in respect of the appeal.
The husband opposed the wife’s application, principally on the contention that he is not currently in employment.
The husband has been wholly unsuccessful in the appeal proceedings within the meaning of s 117(2A)(e) of the Act. Notwithstanding his current unemployment his financial circumstances, taking into account the consequences of the s 79 orders, are superior to those of the wife.
I am thus of the opinion that there are circumstances that justify the making of an order for costs in the wife’s favour and I consider that such an order on a party and party basis is just.
For these reasons the appeal will be dismissed and an order made for the husband to pay the wife’s costs of and incidental to the appeal in the sum agreed or, failing agreement, to be assessed with such costs to be paid within 60 days of agreement or assessment.
I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 14 December 2017.
Associate:
Date: 14 December 2017
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