DAWSON & DAWSON
[2012] FamCAFC 22
•21 February 2012
FAMILY COURT OF AUSTRALIA
| DAWSON & DAWSON | [2012] FamCAFC 22 |
| FAMILY LAW – APPEAL – PROPERTY – where the Federal Magistrate provided that the property of the parties be divided 60 per cent/40 per cent in favour of the wife – where the wife seeks an order on appeal that the property of the parties be divided 85 per cent/15 per cent in her favour – where the grounds of appeal involve “weight” challenges – where the wife asserts that the Federal Magistrate gave too much “weight” to the contributions of the husband and too little “weight” to the contributions made by her – where the husband has had the sole care of the child since 2009 – where the wife complains that the Federal Magistrate failed to give adequate weight to the s 75(2) factors said to favour the wife namely, her “capacity to re-house herself, “the fact that she will never work” and her “very poor health” – where the Federal Magistrate exercised an undoubtedly broad discretion – where it has not been demonstrated that the Federal Magistrate erred in the exercise of his discretion – where there is no merit in any of the grounds of appeal – appeal dismissed. FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – where the Federal Magistrate dismissed the wife’s application for periodic and lump sum spousal maintenance – where the wife says that the Federal Magistrate erred in finding that she could not afford to purchase a unit and afford a small mortgage and further that the wife would and could live with her mother – where the wife asserts that the Federal Magistrate erred in failing to order lump sum maintenance by way of adding an extra 10 per cent to the wife’s overall entitlement to the net assets of the parties, and the husband pay that sum out of the amount he is due to receive pursuant to the orders for property settlement – where the complaint is that the Federal Magistrate dismissed the wife’s application for lump sum maintenance because the Federal Magistrate found the husband had no capacity to pay weekly spousal maintenance – where the wife’s case on lump sum spousal maintenance was not presented on any specific basis and where there was no evidence before the Federal Magistrate or submissions made justifying the wife receiving 10 per cent of the net asset pool by way of lump sum spousal maintenance – where the requirements of s 72 must still be satisfied – where the Federal Magistrate in considering whether the husband was reasonably able to maintain the wife took into account the evidence as to the payments that the husband would have to make out of the amount he was due to receive by way of property settlement – where it is significant to note that no splitting order was made and the husband was left with his superannuation because of the wife’s need for ready funds to meet her needs – where the husband cannot access that superannuation for quite sometime – where there is no merit in any of the grounds of appeal – appeal dismissed. FAMILY LAW – APPEAL – COSTS – where counsel for the husband sought an order for costs in the event that the appeals were unsuccessful – where counsel for the wife opposed any order for costs primarily on the wife’s financial circumstances per se, and as compared with the husband’s financial circumstances – where it is readily apparent that the wife’s financial circumstances militate against an order for costs being made – where it was not unreasonable for the wife to have instituted the appeals against his Honour’s orders given the lack of clarity and confusion in how his Honour dealt the issues in this case and his understanding of the same – no order for costs. CDJ v VAJ (1998) 197 CLR 172 |
| Family Law Act 1975 (Cth) - s 72(1), s 75(2)(j), s 75(2)(d) and (3), s 79(2), s 94AAA(3), s 117(2) and (2A)(a) and (g) Family Law Rules 2004 (Cth) |
| APPELLANT: | Ms Dawson |
| RESPONDENT: | Mr Dawson |
| FILE NUMBER: | MLC | 9982 | of | 2009 |
| APPEAL NUMBER: | SA | 87 & 90 | of | 2010 |
| DATE DELIVERED: | 21 February 2012 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 29 April 2011 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 18 August & 13 October 2010 |
| LOWER COURT MNC: | [2010] FMCAfam 874 [2010] FMCAfam1106 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Williams |
| SOLICITOR FOR THE APPLICANT: | Hughes Legal Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Spicer |
| SOLICITOR FOR THE RESPONDENT: | Pearsons Barristers & Solicitors Pty Ltd |
Orders
The appeals against the orders made by Federal Magistrate Turner on
18 August 2010 and 13 October 2010 be dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dawson & Dawson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 87 & 90 of 2010
File Number: MLC 9982 of 2009
| Ms Dawson |
Appellant
And
| Mr Dawson |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by Ms Dawson (“the wife”) against orders made by Federal Magistrate Turner on 18 August 2010 and 13 October 2010 with respect to property settlement and spousal maintenance. The appeal is opposed by Mr Dawson (“the husband”).
In summary, the orders of 18 August 2010 provided that the property of the parties be divided 60 per cent/40 per cent in favour of the wife. The orders of 13 October 2010 dismissed the wife’s application for periodic and lump sum spousal maintenance.
This appeal is being determined by me as a single judge, following a direction by the Chief Justice pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
The wife seeks that order 7 made on 18 August 2010 be varied to divide the property of the parties 85 per cent/15 per cent in her favour and that orders 1 and 2 made on 13 October 2010 be set aside.
I note that leave to appeal is sought by the wife, but that is unnecessary given these are final orders.
Background
The parties married on in 1993 and separated in 2009.
The parties have one child, X, who was born in 1995 and was aged 15 years at the time of the trial.
At the time of the trial the husband was aged 42 years, in good health, and earning between $63,000 and $70,000 per annum. The wife was aged 42 years. She had suffered from a number of mental and physical conditions during the marriage and had been morbidly obese since X was aged three. She had not been able to engage in paid employment during the marriage, and now receives a disability pension of $700 per fortnight.
At the time of the trial the property pool comprised the former matrimonial home in Victoria, a Holden Commodore in the husband’s possession, household chattels and the husband’s superannuation.
The parties separated in 2009, although there was a dispute as to precisely when, the wife saying 5 February 2009 and the husband saying August 2009. However, nothing turned on this dispute.
The husband commenced proceedings seeking parenting and property settlement orders in the Federal Magistrates Court in November 2009.
On 16 March 2010 the wife filed an amended response in which she sought parenting orders, property settlement orders, and orders for weekly spousal maintenance or lump sum spousal maintenance in a sum to be determined by the Court.
On 2 June 2010 the husband filed an amended application still seeking both parenting and property orders.
Final parenting orders that X live with the husband were made by consent on 22 June 2010.
The remainder of the issues in dispute were heard by Federal Magistrate Turner on 22 June 2010 and 23 June 2010. His Honour then delivered his reasons for judgment and made orders in relation to property settlement on 18 August 2010. The wife’s application for spousal maintenance was adjourned to
30 September 2010.
On 30 September 2010 the Federal Magistrate completed hearing the wife’s application for spousal maintenance. His Honour delivered his reasons for judgment and made orders as to this issue on 13 October 2010.
On 9 November 2010 the wife filed a Notice of Appeal incorrectly seeking leave to appeal out of time against the orders made on 18 August 2010 and for some reason seeking leave to appeal against the orders made on 13 October 2010. However, the wife then filed an Amended Notice of Appeal on
18 November 2010 seeking again for some inexplicable reason only leave to appeal against the orders made on 13 October 2010.
Appropriately, on 26 November 2010 the wife filed an Application in an Appeal seeking leave to appeal out of time against the orders made on
18 August 2010. She also sought an extension of time to file documents in relation to the orders made on 18 August 2010.
On 7 February 2011 I heard the wife’s application and ordered that the time for the wife to file and serve a Notice of Appeal against the orders made on
18 August 2010 be extended to the close of business on 21 February 2011.
On 21 February 2011 the wife filed an Amended Notice of Appeal in relation to both appeals.
Reasons for judgment delivered by the Federal Magistrate on 18 August 2010
The Federal Magistrate commenced his reasons for judgment by setting out the background as set out above, including a detailed summary of the net property of the parties totalling in value $421,219.
His Honour then addressed the issue of add-backs. The wife claimed that $23,015 should be added back being money improperly used by the husband. His Honour found that $17,500 was drawn down by the husband without approval of the wife, but the husband used some of this money to pay for items purchased by the wife on lay-by without the husband’s knowledge. With the balance, his Honour in effect found that that was spent on family expenses.
His Honour found that the wife had not identified any items of wastage by the husband and concluded that there was “no reason to add back the funds as sought”.
Turning to contributions, his Honour noted that the parties had made similar initial financial contributions (the wife contributing slightly more) and that the disparity of those contributions had diminished over the 16 years of the marriage, with the husband contributing all his income during the relationship (more recently $70,000 per annum) and the wife contributing her disability pension (ranging between $50 and $100 per week). His Honour found that the parties had equally shared the household chores and the care of the child.
The Federal Magistrate assessed the overall contributions of the parties to be
60 per cent/40 per cent in favour of the husband, primarily as a result of his “far greater financial contributions during the marriage”.
His Honour then addressed the relevant s 75(2) factors and concluded as follows:
29.The fact that the husband is solely responsible for [X] is a very significant s.75(2) factor in favour of the husband. The Court gives this weight and adds 10% in favour of the husband resulting in 70/30%. However it is counteracted by the wife’s condition and her inability to earn income for which the Court allows an adjustment of 30%, this results in a 40/60% division in favour of the wife.
His Honour considered that that division was just and equitable pursuant to
s 79(2) of the Act. It gave the wife “interest earning potential” and it recognised that the husband takes out of the marriage “a substantial reliable income earning capacity which is the most valuable asset” a party can have.
Curiously, after making these findings his Honour went to great lengths to set out the submissions of each counsel in support of what each party sought.
His Honour then concluded that because of the wife’s immediate need for funds the Court would not be making a splitting order in relation to the husband’s superannuation, and the 60 per cent/40 per cent division would be applied to both the superannuation and the non-superannuation assets, but with the husband retaining all of his superannuation as part of his entitlement.
The Federal Magistrate noted that, by agreement, the sum of $4,700 contributed to the mortgage by the parties’ son, X, would be deposited by the parties into an interest bearing account in X’s name upon the settlement of the sale of the property.
The Federal Magistrate then went on to outline both parties’ submissions in relation to spousal maintenance and quoted extensively from the Full Court decision of Clauson and Clauson (1995) FLC 92-959.
After considering the opinions of three doctors as to the wife’s health, the Federal Magistrate concluded that if the wife’s current difficulties continued it was unlikely the wife would be able to engage in paid employment in the future.
It was conceded by the husband that the wife could not maintain herself adequately, and thus the question became “whether the husband can reasonably maintain her”. His Honour then summarised the respective financial circumstances of the parties.
The Federal Magistrate then concluded that the Court had insufficient information to determine the application for spousal maintenance and adjourned the application for further hearing on 30 September 2010.
Finally, having regard to the wife’s circumstances and the husband’s consent, his Honour decided on the test of comparative hardship that the wife would have exclusive occupation of the property pending its sale.
Orders made on 18 August 2010
The Federal Magistrate made the following orders:
1.That the property [in Victoria] (“the property”) be sold wholly out of Court as soon as practicable upon such terms as may be agreed on in default upon terms as determined by the President of the Real Estate Institute of Victoria (“REIV”) or his nominee whose costs shall be deemed to be a selling expense of the property with liberty to apply for orders in relation to this order.
2.The wife is entitled to the exclusive possession of the property until the parties are required to give vacant possession to the purchaser.
3.Upon completion of the sale, the proceeds are to be applied:
a.To the payment of costs of sale (agents fees, advertising, conveyencing and any costs pursuant to order 1);
b.To discharge the mortgage thereon;
c.To the payment of any outstanding rates and/or charges thereon;
d.To the deposit of $4,700.00 in an interest bearing account for the child [X] born in 1995;
e.That balance be included in the pool of property and be divided between the parties as determined herein.
4.Pending settlement of the sale of the property, the husband is to make the mortgage repayments, and pay all rates, charges and taxes on the property.
5.Each party is to indemnify the other in respect to any liabilities present, or future, standing in their respective names.
6.Each party is restrained from further encumbering the property.
7.The pool of property is to be divided 60% to the wife and 40% to the husband.
8.Other than as provided in the Orders dated 22 July 2010 each party is to retain all other assets in their respective possession with the husband to retain all superannuation in his name.
9.Pursuant to Rule 21.15 of the Federal Magistrates Court Rules 2001, the Court certifies that it was reasonable for the parties to employ advocates.
10.The application for spousal maintenance is adjourned to 10am on
30 September 2010.
Reasons for judgment delivered by the Federal Magistrate on 13 October 2010
The Federal Magistrate commenced his reasons for judgment by outlining the orders sought by the wife, namely periodic spousal maintenance of $400 per week to commence one week after the settlement of the sale of the former matrimonial home. His Honour also noted that whilst the wife’s claim for lump sum spousal maintenance had not been pressed, it would be dealt with by the Court.
The Federal Magistrate went on to consider the submissions of both parties. In summary, his Honour accepted that the wife’s disability pension was income tested and therefore, under s 75(3), the Court should assess her needs as if she had no income from the pension.
Noting that both parties expressed a desire to purchase property, the Federal Magistrate set out the initial and ongoing costs that would be involved with such purchases. However, given the significant difference in the cost of renting and purchasing, his Honour determined that the reasonable standard of living for the parties would be to rent a property.
Next, the Federal Magistrate determined that it was appropriate to have regard to the distribution between the parties of the net pool of assets, noting that it was significant that the wife “received a cash payment of her share of the [husband’s] superannuation”.
The Federal Magistrate went on to consider whether the wife was unable to support herself adequately. The wife’s weekly income if she invested her capital would be $264, whilst her ongoing weekly expenses were found to be $722 per week. His Honour therefore concluded that, even drawing on the cash received in lieu of a superannuation splitting order, the wife would be unable to support herself adequately in the long term.
His Honour then went on to consider whether the husband was reasonably able to maintain the wife. The husband’s total weekly income would be $1,226 if he invested his capital as well (less tax on the income from interest earned) and his total weekly expenses (including those for the son) were found to be $1,161, leaving a surplus of less than $65 per week.
As required by s 72(1), his Honour then turned to consider each of the s 75(2) factors. Notably the Federal Magistrate took into account that the wife could live with her mother, although removing rent from the wife’s expenses still resulted in her exceeding her income by $158 per week.
The Federal Magistrate subsequently concluded that the wife was unable to support herself adequately and that the husband was not reasonably able to maintain the wife. His Honour therefore dismissed the applications for both periodic spousal maintenance and lump sum spousal maintenance.
Orders made on 13 October 2010
The Federal Magistrate made the following orders on 13 October 2010:
1. The application for period spousal maintenance is dismissed.
2. The application for lump sum spousal maintenance is dismissed.
Grounds of appeal and orders sought
The wife’s Notice of Appeal filed on 21 February 2010 contains the following grounds of appeal in relation to the orders made on 18 August 2010:
1.His Honour erred in finding that the contributions made by the Husband were greater than those of the wife whilst finding:
(i)The Wife receiving inheritances from her father’s estate which were applied to the purchase of the parties’ matrimonial home (paragraph 19).
(ii)The Wife did the caring and chores whilst the Husband worked long hours at his employment (paragraph 20 and 21).
(iii)His Honour then inconsistently concluded that the Husband was an equal carer of X (paragraph 22).
2.His Honour erred in assessing the Section 75(2) factors in favour of the Husband as a result of the child [X], born [in] 1995, aged 15 years and 4 months at the time of judgment and has not given appropriate adjustment for the comparatively short period the Husband shall be financially responsible for him and further has not acknowledged that the Wife’s pension does make a payment of child support.
3.Pursuant to Section 75(2)(j), His Honour has erred in giving any weight to his finding which is factually incorrect and inconsistent with his earlier findings of the Wife caring for [X] and doing the chores whilst the Husband worked long hours.
4.His Honour erred in finding the Wife will not financially contribute to [X] at all.
5.His Honour erred in finding the Wife’s pension was not income tested (Section 75(3)).
6.His Honour erred in making a 10% adjustment in favour of the Husband in respect of [X] having 2 years and 8 months until 18 years the net result being an adjustment of 20% being $83,303.00 of the property pool which equates to $2,603.00 per month where an adjustment of 5% would have been appropriate.
7.His Honour erred in assessing an adjustment to the Wife of 30% and should have made such assessment of 35% to 40% in view of the Wife’s capacity to re-house herself and the fact that she will never work and has very poor health.
The wife’s Notice of Appeal filed on 21 February 2010 contains the following grounds of appeal in relation to the orders made on 13 October 2010:
1.His Honour erred in not making a further lump sum adjustment in favour of the Wife for spousal maintenance from the lump sum being paid to the Husband pursuant to the judgement of the 18th August, 2010.
2.His Honour erred in finding that the Wife:
(a)Could not afford to purchase a unit and afford a small mortgage (paragraph 8)
(b)Would and could live with her mother.
3.His Honour erred in failing to consider that part of the lump sum received by the Husband gave him the capacity to make payment of lump sum spousal maintenance.
4.His Honour erred that upon finding the Husband had no weekly instalment capacity there was no entitlement of the Wife to a lump sum payment from the Husband’s previously determined lump sum entitlement.
The wife’s Notice of Appeal filed on 21 February 2010 seeks the following orders:
a)Order (7) of the Orders made on 18th August, 2010 be varied to 85% to the Wife and 15% to the Husband.
b)Orders (1) and (2) of the 13th October, 2010 be set aside.
Discussion
Appeal against the orders made on 18 August 2011
Ground 1
This ground, like others pursued by the wife, involves a “weight challenge” in the context of the exercise of the wide discretion reposed in the Federal Magistrate. In other words, it is said that in exercising his discretion the Federal Magistrate gave too much “weight” to the contributions made by the husband and too little “weight” to the contributions made by the wife.
The law relating to appeals against discretionary judgments is not in doubt. It has been expressed in many cases, commencing most notably with the decision of the High Court in House v The King (1936) 55 CLR 499, and probably no more eloquently expressed than by Kirby J in CDJ v VAJ (1998) 197 CLR 172, where at pages 230 and 231, his Honour reiterated what the authorities had consistently held over the decades:
A number of general propositions may be stated:
1.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 approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. 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. It is not necessary for an appellant to demonstrate the kind of unreasonableness that must be shown to authorise judicial intervention in the decision of an administrator otherwise acting within power. The reference to “plainly wrong” is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.
2. Such reasons for appellate restraint are of general application. However, they have particular relevance to appeals within, and from, the Family Court of Australia. This is because of the functions and purposes of that Court and the difficult and evaluative decisions which it often has to make. The peculiar nature of decisions relating to the intensely personal questions of the division of the property of parties to a failed marriage and the welfare of their children makes it essential that those who decide appeals respect the onerous responsibilities of those whose decisions they review. They need to recognise that it is of the very nature of such decisions, including those relating to the residence of children, that any two decision-makers may, with complete integrity and upon the same material, often come to differing conclusions. This is an inescapable feature of the nature of this jurisdiction… (footnotes omitted)
It is also useful to refer to what Brennan J said in the High Court decision of Norbis v Norbis (1986) 161 CLR 513 at 539:
The difficulties in the way of developing guidelines beset an appellate review of the exercise of discretion under s.79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v. Satterthwaite [1948] 1 All ER 343 at p.345, Asquith L.J. stated the rationale of an appellate court’s approach:
“It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.”
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.
The focus then is on whether the decision “exceeds the generous ambit within which reasonable disagreement is possible”, and was “plainly wrong”.
Unfortunately I am not assisted in relation to this ground of appeal or any of the others for that matter by the written summary of argument filed on behalf of the wife. It is brief, it fails to comply with the Family Law Rules 2004 (Cth) in that it does not specifically address the grounds of appeal, but more significantly, it reveals a lack of understanding of the principles that apply to property settlement and spousal maintenance, the rules of evidence, or the appellate principles. Fortunately, at the hearing I had the benefit of
Mr Williams of counsel appearing for the wife, and he was better able to explain and argue the wife’s case.The principal complaint in Ground 1 is that although his Honour made positive findings about the wife’s contributions he still assessed the husband’s contributions as being greater.
Within this ground though there is also the suggestion of an “inconsistency” in his Honour’s reasons. The husband who claimed to be the primary carer of the child, conceded that the wife undertook the caring of the child and the household chores whilst he worked long hours in his employment. However, his Honour then found that the husband “was an equal carer of [X], and shared in the household chores”, and it is said that this finding is inconsistent with the husband’s concession.
I reject this submission. The concession by the husband was not that the wife was the primary carer of the child and that she undertook the majority of the household chores. It was simply that the wife attended to those tasks when he was at work, but even then, because of her mental and physical condition not much was in fact done by her. The husband’s case was that he undertook the majority of these tasks when he was not at work. Thus, it was open to the Federal Magistrate to make the finding that he did about this issue.
It should also be noted that since late 2009 the husband has had the sole care of X and that is a relevant contribution for his Honour to take into account.
The remaining issue with this ground is the wife’s complaint that his Honour in effect did not give adequate weight to the inheritances that she received from her father’s estate and which were applied to the purchase of the parties’ home.
His Honour dealt with this in paragraphs 19 and 24 of his reasons for judgment, where his Honour said this:
19.The wife received inheritances from her father’s estate in 1994 of $11,678.20 and $7,866.17 ($19,544.37) which was applied to the purchase of the parties matrimonial home (T p.75, l.40). The husband contributed $5000 towards the deposit. The husband’s parents lent them $13,000.00 (T p.77, l.11 and p.79, l.15) which was put towards the purchase of the parties next home (Affidavit of husband sworn 28 May 2010 paragraph 6).
24.The parties made similar initial financial contributions, and to the extent that the wife contributed slightly more, the disparity between those contributions diminished over the 16 years of the marriage [s.79(4)(a)].
I have not been taken to anything which persuades me that his Honour was plainly wrong in how he treated this issue. In paragraph 24 his Honour was clearly referring to the need to weigh up all of the respective contributions of the parties made throughout this lengthy marriage, including their initial contributions. Indeed, the Full Court decision of Pierce & Pierce (1999) FLC 92-844 amply supports his Honour’s approach.
Grounds 2 and 6
I observe that the complaint made in Ground 2 is also the subject of Ground 6, and thus I will address these grounds together.
The wife argues that given the age of the child, to make an adjustment of 10 per cent in favour of the husband was an error by his Honour. Allied to this is the complaint that his Honour failed to take into account that there is an amount of child support that is paid to the husband from the wife’s disability pension.
X has lived with the husband since late in 2009, and the consent order confirming this arrangement was made on 22 June 2010. Significantly though the relationship between X and his mother has completely broken down and the order does not provide for the child to spend any time with her. Thus the husband has the full-time care of X.
His Honour understandably found the care of X and the responsibility for that care to be an important factor. His Honour said this in paragraph 29:
The fact that the husband is solely responsible for [X] is a very significant s.75(2) factor in favour of the husband …
The submission made by the wife’s counsel was that 10 per cent was too high and a 5 per cent adjustment was more appropriate when comparing the percentage adjustments made in other cases for a party having the ongoing care of a child or children.
As I have earlier observed, the Federal Magistrate was exercising an undoubtedly broad discretion. Others may not have been as generous to the husband as was the Federal Magistrate here, but that is not the test. I have not been taken to anything that persuades me that the Federal Magistrate exercised his discretion by reference to erroneous facts, that he had regard to extraneous or irrelevant facts or circumstances, or that he failed to have regard to relevant facts or circumstances. No error of principle has been demonstrated; and nor has it been shown that, despite the absence of demonstrable error, the adjustment made by the Federal Magistrate was manifestly excessive.
In relation to the submission that his Honour failed to “acknowledge” the child support paid from the wife’s pension, it is correct that his Honour did not address this in his reasons for judgment. Indeed, his Honour said in paragraph 28 of his reasons for judgment that “[t]he mother does not provide child support for [X] and is unlikely to provide it in the future” (also see paragraph 6 of the reasons for judgment). It has not been made apparent to me that there was any evidence presented as to what if any child support was being paid, or that any submission was made about it. Further, there was nothing said about this whatsoever in the wife’ summary of argument. In any event, even if this had been raised during the trial, and his Honour did then err in not acknowledging it, it would undoubtedly be considered to be de minimis, and it certainly would not warrant the setting aside of any orders made by his Honour. As was discussed during the hearing before me the amount of child support that would be paid from a disability pension would be minimal and would have made no difference to his Honour’s finding as to the percentage adjustment that was appropriate.
Ground 3
I cannot fathom why this ground is presented in the context of s 75(2)(j). In any event, it is a repeat of Ground 1 and I have dealt with the issue raised under that heading. In short, there is no error here by the Federal Magistrate.
Ground 4
Again this seems to be a repeat of part of an earlier ground, namely Ground 3. However, apart from it thus having been dealt with, the difficulty that the wife has in succeeding on this ground is that his Honour did not find that the “Wife will not financially contribute to [X] at all”. I have referred above to what his Honour said in paragraph 28 of his reasons for judgment and it is plain that the word his Honour used is “unlikely”. Accordingly, there is no merit in this ground of appeal.
Ground 5
There is no doubt that the wife’s disability pension is income tested, and thus his Honour was incorrect in finding otherwise. However, in not then disregarding the pension, ironically his Honour’s finding turned out to be correct. This is because s 75(3) of the Act which requires a Court to disregard an income tested benefit only applies when the Court is exercising its jurisdiction under s 74, i.e., when determining an application for spousal maintenance. It does not apply when determining an application for property settlement.
Thus, although his Honour erred, in the end result there is no appealable error.
Ground 7
This ground comprises another “weight challenge” to his Honour’s decision, but this time suggesting that his Honour failed to give adequate weight to the
s 75(2) factors that are said to favour the wife, namely the wife’s “capacity to re-house herself”, “the fact that she will never work”, and her “very poor health”. Instead of an adjustment of 30 per cent for these factors the wife’s initial position in her summary of argument was that it should have been 35 per cent to 40 per cent.The first problem for the wife is that I have not been taken to any material that indicates her “capacity to re-house herself” was an issue agitated by her before the Federal Magistrate in the context of the property settlement proceedings. Thus, there is no reference to this in the reasons for judgment of the Federal Magistrate, and as would be expected his Honour simply identified as a factor to be taken into account under s 75(2)(d) that “[t]he wife will need to pay rent or otherwise secure accommodation, as will the husband.” Accordingly, there can be no error here by the Federal Magistrate.
I observe though that this was an issue raised and dealt with by the Federal Magistrate in the context of the spousal maintenance proceedings, and it may be that the wife is confusing the two in her grounds of appeal.
Turning to the other two factors mentioned, it is beyond doubt that the Federal Magistrate was aware of the same, and his Honour referred to them in his reasons for judgment as relevant factors under s 75(2) of the Act. Indeed, they were the very two factors that his Honour took into account to justify the adjustment of 30 per cent in favour of the wife. I refer again to what
his Honour said in paragraph 29 of his reasons for judgment quoted above.In any event, as identified earlier in these reasons, to succeed with this ground it was necessary for the wife to establish that this decision “exceeds the generous ambit within which reasonable disagreement is possible and is, in fact, plainly wrong”. In this regard the wife’s counsel wisely did not maintain the wife’s initial position, and he conceded before me that a 30 per cent adjustment to the wife for these factors was “within the range”. Thus this ground of appeal was in effect not pursued, and I would add, fortunately so.
That addresses the specific grounds of appeal, but there is one further ground of appeal which the wife pursued and which was inserted as item “C” in the attachment to the Amended Notice of Appeal. It reads as follows:
The Orders of His Honour in the circumstances of His Honour’s findings that the Wife will never work and the contributions made by her are not just and equitable when the size of the asset pool for distribution is taken into account.
Mr Williams explained in his oral submissions before me that this was a complaint to the effect that it was not apparent where his Honour had addressed s 79(2) of the Act, namely the requirement that the Court cannot make an order for property settlement unless it is satisfied that in all the circumstances it is just and equitable to do so.
However, Mr Williams has overlooked paragraph 30 of his Honour’s reasons for judgment where his Honour said this:
30.The Court considers that division to be just and equitable s.79(2) especially because of the interest earning potential it gives the wife, and also because the husband takes out of the mortgage a substantial reliable income earning capacity which is the most valuable asset which a party can take out of a marriage Clauson 81.911 post.
Thus, once again this just becomes another “weight challenge”, and as with the other challenges of that nature I have not been taken to anything which persuades me that his Honour was “plainly wrong”. Accordingly, this ground has no merit either.
Conclusion
Having found no merit in any of the grounds of appeal the appeal against the orders for property settlement must be dismissed.
Appeal against the orders made on 13 October 2010
Of the four grounds of appeal set out in the Amended Notice of Appeal it is apparent, as confirmed by the wife’s counsel at the hearing before me, that Grounds 1, 3 and 4 relate to the same issue and can conveniently be dealt with together. That issue in general terms is the failure by the Federal Magistrate to order lump sum maintenance by way of adding an extra 10 per cent to the wife’s overall entitlement to the net assets of the parties on the basis that the husband is able to pay that out of the amount that he is due to receive pursuant to his Honour’s orders for property settlement.
Can I first though deal with Ground 2.
With Ground 2(a) the plain fact of the matter is that his Honour did not find in paragraph 8 of his reasons for judgment that the wife “[c]ould not afford to purchase a unit and afford a small mortgage”. His Honour said this in paragraph 8 of his reasons for judgment delivered on 13 October 2010:
As both parties would like to purchase a property, but one concedes they are prepared to rent, and there is a significant difference in the cost of renting and purchasing, the Court decides that a standard of living that in all the circumstances of this case is reasonable, is for each party not to purchase a property. The husband wants to purchase a property at a cost of $410,000.00. That would require repayments of $580.00 per week, plus stamp duty of $17,300.00 plus mortgage insurance.
It is true that in sub-paragraph 30(g) of his reasons for judgment his Honour said that “[n]either party will be able to purchase accommodation”, but it is clear on the evidence before his Honour that such a finding was open. In any event, there was no specific reference to this ground in the written summary of argument and nothing further was put in oral submissions. There is a suggestion in paragraph 6 of the written summary of argument that if the wife did receive 85 per cent of the net asset pool then that would enable her to “apply the same to a modest unit with a very small mortgage”, but I have not been taken to any evidence that was before his Honour to establish this, and of course his Honour did not provide for the wife to receive 85 per cent of the net asset pool; he only provided for her to receive 60 per cent of the pool, and I have determined that his Honour did not err in that finding.
Further, I am at a loss to understand what flows from any possible error by
his Honour in this regard.
For all these reasons I find there is no merit in this ground of appeal.
As to Ground 2(b), I was referred to the evidence of the wife when being cross-examined on this topic. Although the wife did not agree with the proposition that she could live with her mother, it was of course open to his Honour to find otherwise. The evidence is accurately summarised by his Honour in sub-paragraph 30(g) of his reasons for judgment, and I am not persuaded that
his Honour erred in how he treated that evidence.
However, even if his Honour did err it is not apparent to me how that would have altered his Honour’s decision. The issue for consideration by his Honour was whether the wife was able to support herself adequately. His Honour found that she could not, and as his Honour said in sub-paragraph 30(g) and paragraph 31 of his reasons for judgment, even removing the $300 that the wife would be paying for rent if she was not living with her mother, still left her with an excess of expenses over income of $158. Thus, a finding that the wife could live with the mother would not and did not change his Honour’s finding that the wife was unable to support herself adequately. Thus there is no merit in this ground of appeal.
Returning to Grounds 1, 3 and 4. In the wife’s written summary of argument it is submitted that the correct approach to lump sum maintenance is for it to be considered at the point of the Court addressing the relevant s 75(2) factors for the purposes of determining the property settlement, and in this case adding
10 per cent to the wife’s entitlement to the net assets of the parties to cater for this, thus arriving at an overall percentage division of the net asset pool of
85 per cent/15 per cent in favour of the wife.
I reject this submission as errant nonsense. The approach required by the Act and confirmed by any number of Full Court decisions is for property settlement to be determined first, and only thereafter is any application for spousal maintenance determined, whether periodic or lump sum, or both. There is no basis for the issue of spousal maintenance to be considered at the point of assessing the s 75(2) factors relevant to the issue of property settlement.
I need go no further than refer to the Full Court decision of Clauson and Clauson (1995) FLC 92-595 where their Honours said this (at 81,907):
Where spousal maintenance is sought in addition to a property order it becomes, in effect, the fourth step in the process. It is only to be exercised after the three step process under s. 79 has been completed and it is not to be confused with the s. 75(2) component in that latter exercise. The reason why it must be exercised after the s. 79 exercise is because that latter exercise establishes the background against which s. 74 must operate, that is, the financial circumstances of the parties.
The result of the s. 79 order may be such that the applicant for maintenance can no longer be described as being “unable to support himself or herself adequately” because he or she may have sufficient assets which, with or without income arising from the investment or use of those assets, will provide an adequate level of support. It also defines the other party’s capacity to meet any order.
His Honour also recognised the fallacy in this submission, and in his reasons for judgment delivered on 18 August 2010 he rejected it, “as it blends the considerations of the division of the pool and the provision of maintenance.”
The next issue raised, as explained by Mr Williams in his oral submissions, is that his Honour erred in dismissing the application for lump sum maintenance on the basis of his finding that the husband had no capacity to make periodic payments of spousal maintenance to the wife.
It is also said that his Honour should have found that the husband had the capacity to make a lump sum payment out of the amount that he was due to receive by way of property settlement, and as a result ordered him to pay a lump sum of 10 per cent of the net pool of assets.
It can immediately be seen how this does not sit well with the previous submission made on behalf of the wife that the 10 per cent for lump sum spousal maintenance should have been included in an overall division of the net pool of assets of 85 per cent/15 per cent in favour of the wife; but I will not take that any further.
The application for spousal maintenance that was before his Honour sought “weekly spousal maintenance or lump sum maintenance in a sum determined by the Court.” However, by the time of the hearing on 30 September 2010 the wife was seeking $400 per week for spousal maintenance, and his Honour found that it was unclear if the application for lump sum maintenance was pressed, but his Honour determined to still deal with it.
His Honour addressed the application, correctly according to the Full Court in Clauson (see 81-907 and 81-908), by first considering the issue of weekly spousal maintenance. It was conceded by the husband that the wife was unable to adequately support herself and she had a need for weekly spousal maintenance, but his case was that he had no capacity to pay spousal maintenance.
His Honour ultimately found that the husband did not have the capacity to pay weekly spousal maintenance and his Honour dismissed that application. Importantly, the finding as to the husband’s capacity to pay and the consequent dismissal of the application for periodic spousal maintenance is not challenged by the wife on appeal.
His Honour then said this in his reasons for judgment in relation to the application for lump sum spousal maintenance:
35.The Court quotes from the decision In the marriage of Clauson (1995) FLC 92-595 at [81], 907:
In addition, it is necessary to determine the issue of periodic maintenance first because this type of lump sum maintenance is the capitalization of that conclusion. The Court must satisfy itself of the components necessary to justify a periodic maintenance order, namely in effect, need and capacity, and determine the amount in question and in some cases the duration of that order. If the applicant fails to establish those components that will end any claim for not only periodic maintenance but lump sum maintenance as well.
36.The application for lump sum spousal maintenance is dismissed.
This is of course brief, but it has to be appreciated that in the latter part of
his Honour’s reasons delivered on 18 August 2010 his Honour addressed the issue of spousal maintenance before determining that it needed to be adjourned to obtain further information, and in particular, as to the future accommodation costs of the parties.
It would appear from paragraphs 35 and 36 above that his Honour dismissed the lump sum application for spousal maintenance because in the context of the application for periodic maintenance, although the wife could not support herself, the husband had no capacity to pay weekly spousal maintenance and thus there was no basis for an order for periodic maintenance to be made.
Now, of course, his Honour there quotes from the Full Court decision of Clauson which seems to support this approach. The complaint though is that that is not necessarily good law, and that despite his Honour’s dismissal of the application for periodic spousal maintenance his Honour was still required to address the application for lump sum maintenance.
It is true that some doubt has been cast on the accuracy of what the Full Court said in Clauson in this regard. For example in Vautin v Vautin (1998) FLC 92-827, the Full Court said this:
43. It has been pointed out on a number of occasions in this Court that in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay (as passages in the judgment in Clauson and Clauson (1995) FLC 92-595 at pp. 81,907 and 81,908 may suggest) or to cases where the need for or the capacity to pay periodic maintenance is demonstrated.
44. It is clear that in exercising the power under s. 72 the trial Judge is not confined to one only of the categories of order referred to in s 80(1). In an appropriate case the Court may make orders which encompass several of those options…
To appreciate this comment by the Full Court in Vautin it needs to be understood that what the Full Court was saying in Clauson was limited to cases where the lump sum is to be calculated by the capitalisation of a periodic amount. In other words, if there is no amount of periodic maintenance then there is nothing to capitalise. Thus, as was highlighted in Vautin, where the lump sum is to be calculated on another basis then it will not necessarily be defeated by the failure to satisfy the requirements for a periodic payment on the particular facts of the case.
The difficulty of course is that regardless of whether it is to be a periodic amount or a lump sum the requirements of s 72 of the Act still need to be satisfied. In other words, the Court must be satisfied that the applicant is unable to support herself adequately in the context of her needs, and that the other party is reasonably able to support her again in the context of her needs.
To return to the Full Court decision in Vautin for a moment, in that case the wife’s claim for lump sum maintenance was made up of specific amounts for the replacement of whitegoods, the replacement of blinds and furniture, for a new motor vehicle, for repairs, and for “the future vicissitudes of life”. Thus, it was not a case where capitalisation of a periodic amount was being sought.
With this background, it is plain that his Honour was approaching this matter on the basis of the lump sum being calculated by a capitalisation of a periodic amount, and given that there was no periodic amount to be capitalised, the claim failed.
I consider that that approach was open to his Honour and that he has not erred.
His Honour received little assistance from counsel for the wife on this topic on 23 June 2010, and no assistance from counsel for the wife on 30 September 2010. On the former date the proposition put as to how his Honour should approach the application for lump sum spousal maintenance was the proposition that I have described as nonsense earlier in these reasons, namely, as an issue to be addressed as part of the overall entitlement of the wife to the asset pool. Significantly, no basis was put to his Honour as to how the 10 per cent (or the 15 per cent that was put at this time on behalf of the wife), for lump sum spousal maintenance was calculated.
On the latter date, namely 30 September 2010, when the issue of spousal maintenance was finally argued, nothing whatsoever was said by either counsel about lump sum maintenance; the only topic addressed was periodic spousal maintenance. That of course led his Honour to comment in paragraph 1 of his reasons for judgment that “the claim for lump sum maintenance was not pressed”, but of course as referred to already his Honour determined to deal with it anyway.
On this basis, it is plain that the wife’s case on lump sum maintenance was not presented to his Honour on any specific basis. There was no evidence and no submissions that the wife required specific amounts as in Vautin, and there was no evidence or submissions directed to justifying the wife specifically receiving 10 per cent (or 15 per cent as was put at the time) of the net asset pool for her maintenance. Thus, it is not surprising that his Honour approached the matter on the basis that what was being sought was a capitalisation of periodic maintenance, given that his Honour had before him evidence and submissions as to the wife’s need for such maintenance and the husband’s capacity (or rather lack of capacity as it turned out) to meet such a claim. Indeed, when challenged about the basis for calculating 10 per cent of the net asset pool as an appropriate amount for lump sum maintenance, Mr Williams in the hearing before me said that it was on the basis of a capitalisation of a weekly amount!
I also observe that Mr Williams put to me, and this is apparent in the grounds of appeal, that once it was known that the husband was to receive an amount of money by way of property settlement, then without more he should be forthwith required to pay lump sum maintenance of 10 per cent of the net asset pool to the wife from that amount. This, of course, overlooks the requirements of s 72 as referred to above, and it is relevant to note that his Honour in considering whether the husband “was reasonably able to maintain the wife”, took into account the evidence as to the payments that the husband would have to make out of the amount he was due to receive by way of property settlement (see paragraphs 21 and 22 of his Honour’s reasons for judgment).
It is also significant to note that the husband was left with his superannuation, and no splitting order was made because of the need of the wife to have ready funds available to meet her needs. The husband of course is unable to access that superannuation for quite some time to come.
Thus, again there is no error by the Federal Magistrate and this ground of appeal has no merit.
Conclusion
Having found no merit in any of these grounds of appeal this appeal must also be dismissed.
Costs
At the conclusion of the hearing I sought submissions from counsel as to the issue of costs depending on the result of the appeals.
If the appeals were unsuccessful then the counsel for the husband sought an order for costs. However, the counsel for the wife opposed any order for costs primarily on the basis of the wife’s financial circumstances not only per se, but when compared with the husband’s financial circumstances.
I do not consider that there should be an order for costs in favour of the husband. Although the wife has been wholly unsuccessful in both appeals and that is a relevant matter to take into account under s 117(2) and (2A) of the Act, the financial circumstances of the parties are also highly relevant
(s 117(2A)(a)), as well as such other matters as the Court considers relevant
(s 117(2A)(g)). I will not repeat the evidence as to the respective financial circumstances of the parties, but it is readily apparent that the wife’s financial circumstances per se, and as compared with the husband’s financial circumstances, militate against an order for costs being made. The other matter in support of this conclusion is that although the appeals have not succeeded, and I have found that the Federal Magistrate has not erred in any of the ways suggested in the grounds of appeal, having closely read the transcript of the hearing before the Federal Magistrate, as well as his Honour’s reasons for judgment, both parties would be justified in thinking that there was a distinct lack of clarity and indeed confusion in how the Federal Magistrate approached the issues in this case and his understanding of the same. In short, it was not unreasonable for the wife to have instituted the appeals against his Honour’s orders.
I certify that the preceding one hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 21 February 2012.
Associate:
Date: 21 February 2012
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