DECKE & DECKE
[2012] FamCAFC 163
•9 October 2012
FAMILY COURT OF AUSTRALIA
| DECKE & DECKE | [2012] FamCAFC 163 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – where the Magistrate erred in utilising the figure of $31,000 for the value of the husband’s superannuation entitlement at the commencement of the relationship instead of the correct figure of $13,000, however, the wife failed to establish this was a fundamental and significant mathematical error which affected the ultimate result – where the Magistrate erred in requiring the wife to be solely responsible for the increase of a debt which ballooned from $937 to $4,342 post separation – where it was apparent from the Magistrate’s reasons that his Honour failed to take into account evidence in the form of a schedule of expenditure when notionally adding back to the asset pool $55,000 of a $110,000 draw down on the mortgage over the former matrimonial home – where the evidence demonstrated that the more accurate amount to notionally add back to the asset pool was $45,000 – where the Magistrate erred by including in the asset pool an amount for the wife’s furniture but not an amount for the husband’s furniture, or at the very least his Honour failed to provide any reasons as to why the husband’s furniture was not included – appeal allowed – given the nature of the errors made by the Magistrate the Full Court is able to re-exercise the discretion without the need for further evidence – the asset pool should be adjusted to take into account the amounts the Magistrate should have included and the same percentage division as found by the Magistrate can then be applied to the adjusted asset pool. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| Agius & Agius (2010) FLC 93-442 Gronow v Gronow (1979) 144 CLR 513 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kowaliw and Kowaliw (1981) FLC 91-092 Norbis v Norbis (1986) 161 CLR 513 Smits v Roach (2006) 227 CLR 423 Wells and Wells (1977) FLC 90-285 Zappacosta and Zappacosta (1976) FLC 90-089 |
| APPELLANT: | Ms Decke |
| RESPONDENT: | Mr Decke |
| FILE NUMBER: | PTW | 4433 | of | 2008 |
| APPEAL NUMBER: | WA | 11 | of | 2011 |
| DATE DELIVERED: | 9 October 2012 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Bryant CJ, May & Strickland JJ |
| HEARING DATE: | 16 November 2011 |
| LOWER COURT JURISDICTION: | Magistrates Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 23 March 2011 |
| LOWER COURT MNC: | [2011] FCWAM 19 |
REPRESENTATION
| FOR THE APPELLANT: | Self-represented |
| COUNSEL FOR THE RESPONDENT: | Mr Mather |
| SOLICITOR FOR THE RESPONDENT: | Joyce Teh & Associates |
Orders
The appeal be allowed.
Order 2 of the orders made by the Magistrate be set aside.
Within 28 days of the date of these orders the wife pay to the husband the sum of $33,332.
Each party bear their own costs.
The Court grants to the wife a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the wife in respect of the costs incurred by the wife in relation to the appeal.
The Court grants to the husband a costs certificate pursuant to the provisions of section 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the husband in respect of the costs incurred by the husband in relation to the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Decke & Decke has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 11 of 2011
File Number: PTW 4433 of 2008
| Ms Decke |
Appellant
And
| Mr Decke |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 19 April 2011 Ms Decke (“the wife”) appeals against property settlement orders made by Magistrate Moroni on
23 March 2011. The respondent is Mr Decke (“the husband”).
In summary, the orders appealed against required the wife to pay the husband the amount of $41,041 and indemnify him in relation to the mortgage registered on the title to the property at D (“the D property”). The orders also required the wife to transfer to the husband the registration of the motor vehicle in his possession, and provided otherwise for all property in each party’s possession to vest absolutely in that party.
The wife seeks on appeal that the orders made by Magistrate Moroni on
23 March 2011 be set aside and that the parties’ applications for property settlement be remitted to the Magistrates Court of Western Australia for rehearing by a magistrate other than Magistrate Moroni.
In her Notice of Appeal the wife sought leave to appeal, but as that is unnecessary, we do not propose to address that application.
The wife appeared before the Magistrate and before us without legal representation.
Background
At the time of trial the husband was aged 51 years and employed as a retail manager, and the wife was aged 47 years and employed as a sales consultant.
The parties met in early 2001, commenced cohabitation in about mid-2001 and were married in October 2001. The parties separated in October 2007 and the marriage was dissolved by divorce order in July 2010.
There are no children of the marriage. However, at the time the parties commenced cohabitation the wife had primary care of her four children from a previous marriage (then aged 5, 7, 11 and 14 years), and the husband’s two children (then aged 12 and 15 years) lived primarily with their mother but spent time with the husband.
At the commencement of the relationship the wife was registered as the sole proprietor of the D property, which she acquired pursuant to consent orders made in proceedings with her former husband. The property was subject to a registered mortgage to Perpetual Trustees Victoria Ltd.
The matter came before Magistrate Moroni for hearing on 1 October and
20-22 December 2010. The Magistrate made orders and delivered his reasons for judgment on 23 March 2011.
The reasons for judgment of the Magistrate
The Magistrate commenced his reasons for judgment by setting out the orders sought by each party. To summarise, the husband sought that the D property be sold and the sale proceeds distributed to effect an equal division of the parties’ net assets. The husband also sought that the wife make available specified household chattels and that she transfer to him her interest in his bank accounts, the motor vehicle registered in his name, the chattels in his possession and his superannuation entitlements. The husband proposed to transfer to the wife his interest in her bank accounts, the motor vehicle registered in her name and the balance of furniture and chattels.
The wife sought orders that the husband pay her “a financial consideration” of $10,500 (being $250 per week for 42 weeks) for the husband’s accommodation, food, and his use of the facilities and utilities at the wife’s home for the period of cohabitation prior to their marriage, namely January to October 2001. The wife also sought “financial considerations” of $3,581.01 for her payments towards the motor vehicle registered in the husband’s name (which the husband was using post-separation) and $2,423.47 for the husband’s 50 per cent share of the parties’ debt to Solar Repairs Pty Ltd. For the period from separation to final orders, the wife sought that the husband pay her 50 per cent of the mortgage repayments made and 50 per cent of the fees incurred in relation to the mortgage and the ANZ account from which the mortgage repayments were debited. Further, she sought the husband pay her 50 per cent of the “value of the unpreserved amount of voluntary payments paid … into his [W] Superannuation Fund – AMP and any other interest that he may hold in any other Super”. The wife also sought that the husband pay a share of the parties’ debts at the date of separation comprising predominately utilities and credit card bills. As to property adjustment, the wife sought that she retain the D property subject to the mortgage and that the husband transfer to her his interest in her bank accounts, her superannuation, the motor vehicles registered in each party’s name, and most of the furniture and chattels in the D property. The wife proposed that she transfer to the husband her interest in his bank accounts, the furniture and chattels in his possession and his superannuation entitlements (save the amounts transferable to her). Lastly, the wife sought that the husband pay her spousal maintenance in a lump sum of $22,950 (being $150 per week for 153 weeks) and then periodic payments of $300 per fortnight.
The Magistrate proceeded to identify the parties’ asset pool. His findings in relation to the parties’ property can be summarised as follows:
· The D property: The property was valued at $520,000 in its condition at the time of trial, and the valuer gave evidence of $20,000 to $30,000 worth of work that could be done to repair, maintain and improve the property. The Magistrate rejected the husband’s assertion that the property should be included in the asset pool at the value of $550,000 because the wife had “deliberately damaged the property or wilfully failed to maintain it, thereby intentionally reducing its value”. The Magistrate was not satisfied the wife had the financial resources available to her post-separation to maintain the property to the standard referred to by the valuer. The mortgage balance at the time of trial was $323,782.
· Motor vehicles: The husband’s vehicle had an agreed value of $10,000 and the wife’s was $2,000.
· Furniture & jewellery: The wife contended the value of the furniture she retained was $7,000 and the value of her jewellery was only $500, whilst the husband asserted “a very significant portion of the [wife’s] expenditure during the marriage was directed towards the acquisition of expensive jewellery”. On the evidence, the Magistrate could make no definitive finding of fact that the wife had retained any particular items of jewellery other than those which she had already disclosed, and thus the wife’s jewellery was included in the asset pool at the value of $500.
· Superannuation: The husband’s superannuation had an agreed value of $102,700 at the time of trial and it emerged during cross-examination that he had another entitlement from previous employment, which was valued at $3,683 as at 30 June 2010. The wife’s superannuation had an agreed value of $9,100 at the time of trial, however, it was the husband’s evidence that the balance had been $28,840 and that post-separation on 6 January 2009 the wife drew down $25,757. Although the husband did not argue that the draw down should be added back to the pool as a premature distribution, the Magistrate determined to take into account the fact the wife had already accessed her superannuation. As neither party sought a superannuation splitting order, the Magistrate determined the parties’ superannuation entitlements would be “left to stand as they presently stand”.
The Magistrate’s findings in relation to the parties’ liabilities are summarised below. Whilst all these liabilities were in the sole name of the wife, it was her contention that they were all for the benefit of the household and so responsibility should be borne equally by both parties.
· The Telstra account of $1,761 was included in the pool “at its full extent”.
· The Aussie MasterCard debt, which related solely to the installation of a spa at the D property, was $8,748 at the date of separation and the wife had reduced it to $4,373 by the time of trial. The Magistrate determined the debt should be included as at the date of separation.
· The Solar Repairs Pty Ltd debt for a hot water system at the D property was $4,344 at the date of separation. The creditor successfully sued the wife and she discharged the judgment against her by a total payment of $4,846. The Magistrate determined to include the liability as at the date of separation.
· The Baycorp Collections debt related to an exercise bike used by the husband. It was $937 at the date of separation and had ballooned to $4,342 by the time of trial. The Magistrate found the wife had allowed the penalties to run when she ought to have prioritised the debt, and he included it at $937.
· The credit card debts at the time of separation consisted of Citigroup in the amount of $21,501, NAB Visa in the amount of $6,144, AMEX in the amount of $9,679 and ANZ MasterCard in the amount of $12,742, most of which had increased by the time of trial. They were all in the name of the wife. The Magistrate rejected the wife’s argument that the debts “needed to be created to meet those ordinary and reasonable living expenses which the parties could not meet from their combined earnings”, and that the husband should be jointly responsible for repaying those debts.
Lastly, the husband argued that the $110,000 extension of the mortgage on the D property, which is part of the current mortgage balance, should be added back to the asset pool. In essence, the parties refinanced the mortgage in July 2005 to cover anticipated costs of extensions to the house, however, the planned extensions never eventuated and the wife drew down the additional $110,000 between August 2005 and May 2007, paying the majority to her credit cards. The Magistrate determined to add back 50 per cent of the draw down as a premature distribution to the wife, given that some of the money was used for the husband’s motor vehicle, a small tax debt and the acquisition of a stove.
The Magistrate ultimately determined that the total value of the parties’ property pool was net $370,411 calculated as follows:
17. ITEM
18. $
19. [D] Property
20. (less mortgage balance)
21. Net Value
22. 520,000
23. (323,782)
24. 196,218
25. [Husband’s] motor vehicle
26. 10,000
27. [Wife’s] motor vehicle
28. 2,000
29. [Wife’s] furniture
30. 7,000
31. [Wife’s] jewellery
32. 500
33. [Husband’s] superannuation ([W])
34. 102,700
35. [Husband’s] superannuation (REST)
36. 3,683
37. [Wife’s] superannuation
38. 9,100
39. Add back 50% of mortgage drawdown spent by [wife]
40. 55,000
41. (less Telstra debt as at date of separation)
42. (1,761)
43. (less Aussie Mastercard debt as at date of separation)
44. (8,748)
45. (less Solar Repairs Pty Ltd [debt] as at date of separation)
46. (4,344)
47. (less Baycroft [sic] Collections debt as at date of separation)
48. (937)
49. TOTAL
50. 370,411
Turning to contributions, the Magistrate recorded that at the commencement of the relationship the husband was working as a store manager for W with a gross annual income of $49,000 and accumulated superannuation benefits of $31,000. The husband also had an interest in a property at S which was sold in September 2011 with net proceeds of $4,100. The wife was a store manager for a homewares retailer. She was the sole registered proprietor of the D property, which at the time it was transferred to her was valued at $200,000 and subject to a mortgage of a little less than $170,000. There was no evidence as to the value of the property or the mortgage balance at the time the parties commenced cohabitation, except that approximately one year before the net equity in the property was about $30,000. It was common ground the property value had increased considerably since the parties commenced cohabitation. The value at the time of trial was $520,000, which the Magistrate found would equate to a 160 per cent increase over 11 years.
During the relationship both parties contributed their incomes towards the household, although the husband claimed he had no control over the spending habits of the wife and that she was “somewhat secretive regarding the management of her personal finances”. Due to the lack of evidence the Magistrate was unable to make any findings of fact as to how the wife dealt with her income, but the Magistrate gained the impression the parties, and in particular the wife, “lived beyond their means” and that there was not “a great deal to show now for the significant expenditure of the parties during the marriage”.
The Magistrate determined that the husband’s assumption of joint liability for the mortgage on the D property (when the title remained registered solely in the wife’s name) was an indirect financial contribution pursuant to s 79(4)(a). The Magistrate also noted that post-separation the wife had “faced certain difficulties keeping the mortgage instalments up to date”, although she had “the advantage of sole occupation” of the property whilst the husband had to meet the costs of finding other accommodation. As to s 79(4)(b) the Magistrate ultimately accepted the husband’s affidavit evidence about the renovations and repairs he carried out on the D property, although he acknowledged some of the evidence “may have been slightly overstated”. In relation to s 79(4)(c), the Magistrate found both parties worked in paid employment during the relationship and that each party assisted with the care of the other’s children, although the husband’s children only stayed at the D property for short periods of time. The Magistrate concluded “[n]either party here devoted himself/herself slavishly to providing for the needs of the other party, and that is rightly so, given both were working. This is a case where the s 79(4)(a) and (b) contributions will carry more weight”.
The Magistrate found the two main ways the parties created wealth was the increase in equity in the D property from $30,000 one year prior to the commencement of the relationship to $196,000 at the time of trial, and the increase in the husband’s superannuation from $31,000 at the commencement of the relationship to $106,000 at the time of trial. The Magistrate stated “the fact that one party enters a marriage with a particular asset does not mean that such party can necessarily expect to leave the marriage with the asset intact”, and further that “it would be wrong in principle to simply credit the initially contributing spouse with the value of the initial contribution and then to simply divide equally the value of any windfall gain in the value of the asset”.
The Magistrate proposed to take a global approach in his assessment of the parties’ respective contributions. The Magistrate found significant weight must be attached to the wife’s initial contribution of the D property, because he questioned whether without it the parties would “ever have been able to be disciplined enough to save enough for a deposit on a home, stamp duty, up front borrowing costs and all of the other related expenses whilst paying rent”. The Magistrate also attached significant weight to the husband’s solid superannuation base, and the fact the wife had already drawn down almost the entirety of her own superannuation. Lastly, the Magistrate attached weight to the contributions made by both parties by way of their paid employment during the relationship and their contributions to an investment property at N, which the parties owned between 2001 and 2004 and sold for a net profit of about $34,000. Based on contributions alone, the Magistrate determined to divide the property 42.5 per cent/ 57.5 per cent in favour of the wife, which would require the wife to pay the husband $41,041.
In turning to consider the s 75(2) factors, the Magistrate proposed to deal simultaneously with the issue of spousal maintenance. Whilst the wife only raised the issue of spousal maintenance in her Papers for the Magistrate filed on 28 September 2010, the Magistrate determined to treat it as an amendment to her response to avoid the need for her to bring a stand alone spousal maintenance application.
The Magistrate found both parties were still “relatively young people” with good health and a history of gainful employment. Whilst the wife had recently been out of work, the Magistrate found she had successfully balanced work and family commitments and would be “capable of and likely to regain appropriate employment”, especially as she wished to retain the D property. The Magistrate did not accept the wife’s evidence that she was unable to support herself by reason of any of the matters set out in s 72(1) and thus, her application for spousal maintenance was unsuccessful.
As to the remaining s 75(2) factors, the Magistrate could find no factors to mandate any variation of the proposed division based on their contributions given it was “a relatively short childless marriage which has had no detrimental effect upon the earning capacity of either party”.
Finally, the Magistrate acknowledged this was a case where there was “simply insufficient value available to satisfy the aspirations of both parties”, but he was ultimately satisfied the proposed orders were just and equitable in the circumstances.
Orders made 23 March 2011
Magistrate Moroni made the following orders:
1.The [wife], [MS DECKE], have leave to amend the said response so as to seek an order for spousal maintenance and the said response stand so amended.
2.By no later than 27 April 2011, the [wife] pay to the [husband], [MR DECKE], the sum of $41,041.
3.The [wife] indemnify and keep the [husband] indemnified in respect of all liability arising under the mortgage to Perpetual Trustees Victoria Ltd registered against the title to the property situated at
[D].4.As soon as practicable, the [wife] transfer to the [husband] the licensing registration of the [motor vehicle] in the [husband’s] possession.
5.Otherwise:
(a)all the right, title and interest (if any) of the [husband] in all property presently in the possession of the [wife] and in any superannuation entitlement of the [wife], vest absolutely in the [wife].
(b)all the right, title and interest (if any) of the [wife] in all property presently in the possession of the [husband] and in any superannuation entitlement of the [husband], vest absolutely in the [husband].
6.The hearing fee paid by the [husband] for the fifth day of the trial be refunded to him.
7. By no later than 27 April 2011, the [wife] pay to the [husband] one half of the setting down and hearing fees paid by the [husband] for the four hearing days.
8.Both parties have liberty to file written submissions as to costs within 28 days of the date hereof.
9. The said proceedings otherwise be and are hereby dismissed.
The wife appeals against all orders.
Grounds of appeal
Despite having included lengthy grounds of appeal in her Notice of Appeal, at the hearing of the appeal the wife relied on even more lengthy grounds of appeal as set out in her summary of argument filed on 2 November 2011, namely:
1.The Court has failed to:-
i. Accurately identify and value the net propertys of the parties, including any superannuation entitlements and liabilities of the parties; at the commencement of the relationship.
ii.Accurately assess the parties’ contributions to the assets in terms of paragraphs (a), (b) and (cc) of s 79(4) of the Act
iii.Give Sufficient weight to the Respondents’ Pre-marriage financial contributions.
iv.Give sufficient weight to the Respondents’ duration of marriage financial contributions.
v.Give sufficient weight to the Respondents’ post separation financial contributions.
vi.Accurately consider the relevant s 75(2) matters and
vii.Accurately identify liabilities and debts of the marriage.
2.The Court has failed to be just and equitable to the Respondent by not carefully considering the Facts that:
i.The Respondent made a very substantial initial contribution at the commencement of the relationship which has been deliberately understated by the Court.
ii.The Applicant had virtually no assets and made only a very modest initial contribution;
iii. The Respondent earned a greater income than the Applicant.
iv.The weight to be attached to the disparate contributions made by each party prior to the marriage, during the marriage and also post separation.
v.A further dispiriting factor is that the real estate has appreciated in value since separation in 2007, however the Court saw fit that the Applicant should benefit from that increase, whilst having not contributing to that value increase.
vi.Court Orders that the Applicant should be absolved from the penaltys by which the unpaid debts have been increased to, to-date shows the Courts’ bias to the Applicant.
1.GROUND 1.
The Court constantly showed bias in favour to the Applicant throughout the proceedings etc, regardless of all the evidence the Respondent produced to the contrary – various paras and volumes.
2.GROUND 2.
The Court did not give sufficient “weight” to the [Mr S] – Valuer testimony and therefore showed bias in favour of the Applicant, Vol 5 page 67 – 69.
3.GROUND 3.
The Applicant exaggerated in his trial Affidavit his initial superannuation value as at commencement of co-habitation to be $31,000 instead of its actual value of $13,000, his Honour erred in accepting the Applicants’ exaggerated value despite, evidence to the contrary. Vol 5 page 12 para 3.
3a.His Honour then further erred in using this fabricated value for the Applicants’ superannuation in his mathematical calculations of the couples initial contributions at the commencement of the relationship – Reasons for Decisions Vol 1 page 31 para 66 and 70.
4.GROUND 4.
His Honour showed significant bias to the Applicant in its almost threat to Respondents suggesting adding back the Respondents superannuation draw down, which was soley used for payment of the couples mortgage back to the pool as pre-distribution, as this gives the effect of allowing the Applicant to “Double Dip” into the pool. This would give an unjust advantage for the Applicant Vol 1 page 32 para 72
5.GROUND 5.
His Honour erred in levelling all financial/penalty interest responsibility to the wife, regardless of whether the debt was created by and for the sole use of the Applicant This is another example of the Courts bias in favour of the Applicant Vol 1 page 23 paras 29 – 35.
6.GROUND 6.
His Honour erred in adding back an amount of $55,000 to the pool of assets to be divided between the parties. Vol 1 page 24 paras 36 – 44.
7.GROUND 7.
His Honour misapplied the principles in Kowaliw in regards to the $110,000 drawdown in His Honour failing to adequately take into account the Respondents accounting for items of the draw down which is item 11. Of the Courts’ Exhibits File, and now item 11 in Volume 9 commencing at page 181 of the Appeal books. The 50% addback to the pool is highly an unjust miscarriage of justice to the Respondent as it would have the effect of awarding a pre-distribution of 37.87% or $41657.00 soley to the Applicant and is another example of the Courts bias in favour of the Applicant.
8.GROUND 8.
His Honour has erred in failing to take into consideration the post separation contributions of the Respondent and further the use of the Valuation of the [D] property as at late 2010, even though the Applicant has failed to contribute since the separation in October 2007. By doing so the Court is unjustly enriching the Applicant Vol 2 para 87b.
9.GROUND 9.
That his Honour failed to take into account assets held by the Applicant totalling $3500 as detailed in the Financial Statement filed with the Court of 14 December 2010 or even the $1500 totalling $5,000 as represented in the Applicants’ initial Financial statement filed in 2009 in this matter. By doing so the Court is unjustly enriching the Applicant Vol 5, page 50 para 12, page 15 last para, and page 52 first para.
10.GROUND 10.
His Honour erred and is unjustly enriching the Applicant in his inclusion of the value of the debts as at the time of Separation, yet the Applicant is benefitting from the present value of the [D] Home Vol 1 page 27.
11.GROUND 11.
His Honours discretionary decision miscarried To the value of the [D] property, in the effect of his Honours’ orders was against the facts as per detailed in the consent orders affirmed December 1999 used by the Applicants’ counsel to establish the Respondents’ total property value at the time of co-habitation Vol 1 page 28 para 50. Copy of said consent Orders attached.
12.GROUND 12
His Honour further erred in not accepting or even considering the Respondents affidavited valuations of property, and instead in its discretion, partially using the abovementioned consent Orders as a base for the valuation purposes even though these Orders were from years before the parties relationship had even commenced yet using a value of the Applicants superannuation assets of several years into the marriage Vol 2 para 60a.
13.GROUND 13
His Honour erred in unjustly enriching the Applicant by not using values of the total property held by each party as they would have been at the commencement of co-habitation. Vol 1 page 28 para 50, vol 2 paras 60a and 60b.
14.GROUND 14
His honour wrongly applied the principles that it relies on in that if money was or part of the money was used to meet reasonable living expenses then that money or part of that money, is not added back or regarded as a pre-emptive distribution as enunciated in [M & M] and [NHC & RCH]. Vol 9 item 11 page 181.
15.GROUND 15
His Honour has erred in not giving the appropriate weight to each parties’ respective incomes. Vol 2 aras 87 – 87b.
16.GROUND 16
His Honour erred in not giving sufficient weight and not acknowledging the Applicants’ negative contributions as attested by the Independent Witness’s testimony as to the sub-standard quality workmanship performed by the Applicant, that about $2,000 was needed to repair much of the said work done by the Applicant due to its sub-standard, Vol 5 page 67 – 69.
17.GROUND 17
His Honour showed continual bias in favour of The Applicant as to the level of his non-financial contributions, The Courts suggestion that “part of his evidence may have been overstated” is further evidenced this. Vol s – various.
18.GROUND 18
The Courts suggestion that the Applicants Trial evidence in paragraphs 27 to 51 is largely reliable, it is not viable to accept the Courts finding that the Applicant in addition to those alleged renovations around the home, he also performed equal home duties and worked full time at the same time. These types of comments further evidence the Courts bias in favour of the Applicant. Vol 5 page 91 – 103 inclusive.
19.GROUNDS 19
His Honours rendition of the facts is riddled with inaccuracies as have been detailed previously which serves the purpose of showing bias in favour of the Applicants exampled in above quoted Vol 5 in regards to the applicants contributions.
20.GROUNDS 20
His Honour did not give sufficient weight to or to include it its calculations the fact the Applicant paid additional superannuation payments into his superannuation fund, this was evidenced in the Respondents’ Trial Affidavit para 66. (approximately $18,000 during the relationship). This was earnings that was not applied to the family and this fact should have been included in the Courts Considerations, failing to do so shows bias in favour of the Applicant.
21.GROUNDS 21
His Honour has erred in not ensuring that it is just and equitable to make such orders and in almost all circumstances the Court sought the most positive outcomes for the applicant in order to manufacture this result for the Applicant Vol 1 page 27.
22.GROUNDS 22
His Honour controlled the result of the Trial by informing the Respondent on day 3 of the Trial, which she could and could not ask about during the cross-examination.
23.GROUNDS 23
His Honour failed to remain impartial in these proceedings, by informing the Respondent she could not ask about the debts of the marriage, yet then favoured the Applicant in its apportioning of these.
24.GROUNDS 24
His Honour showed bias to the Applicant as the Respondent had prepared further photocopied information relating to the debts, the Court would not allow her to pass it to the Applicant during cross-examination for further evidencing.
25.GROUNDS 25
The Courts aforementioned actions put the Respondent under extreme duress and affected her train of thought and performance.
26.GROUNDS 26
His Honour erred and showed bias to the Applicant by allowing an Affidavit of the Applicants’ witness which clearly had been altered after filing to remain in evidence.
[Errors as in original]
It is apparent that the first paragraph and most of the second paragraph of these “Grounds” comprise a general summary of the complaints that the wife makes, and that there are then 26 grounds of appeal identified. Given that the first and second paragraphs are encompassed in the other 26 grounds, we do not specifically need to refer to them. We also observe that “the applicant” referred to in those grounds is the husband, and “the respondent” is the wife.
Throughout the grounds of appeal the wife complains of “bias” in favour of the husband, and indeed, Grounds 1, 17, 18, 19, 20, 21, 22, 23, 24 and 26 are directed solely to that topic. However, it is readily apparent that most of these grounds do not allege apprehended bias, or actual bias as it is understood as a legal concept. Grounds 1, 17, 18, 19, 20, and 21 fall into that category. What is being suggested is that the Magistrate in accepting the evidence of the husband in various respects and in not accepting the evidence of the wife in these and other respects, and even in making findings in favour of the husband and against the wife, the Magistrate has exhibited “bias”. In relation to those grounds, the wife’s complaints are misconceived and they are really a complaint that the Magistrate ought not to have made findings or that the findings were against the weight of the evidence. To the extent that these matters need to be examined they are included in other grounds which we will address.
There are other grounds of appeal such as Grounds 2, 4, and 5 where the claim of bias stems from an alleged error of the Magistrate in making a particular finding, and we will of course address those grounds of appeal.
In relation to Grounds 22, 23, 24 and 26 these grounds, on their face, suggest that rather than “bias” as alleged there was a lack of procedural fairness in the manner in which the Magistrate conducted the proceedings. As Kirby J said in Smits v Roach (2006) 227 CLR 423 at 466:
125.However, it is now settled law in this Court that where a litigant, aware of circumstances providing a ground for objection on the basis of disqualification, fails to object promptly, that litigant will be taken to have waived the objection and cannot later rely on it. Obviously, this conclusion represents a practical approach, even if at the cost of some doctrinal purity. … [Footnotes omitted]
The wife made no such complaint during the trial and at the appeal she did not refer us to any passages in the transcript to support her contention that there was any procedural unfairness directed to her. These grounds therefore have no merit.
We also observe that Ground 25 is not a ground that we can deal with. Apart from the fact that there is no evidence to support that ground, there is no recognisable appealable error alleged on the part of the Magistrate.
Finally, there is an element of repetition amongst the remaining grounds of appeal, and we will endeavour to group those grounds appropriately when addressing them.
Discussion
Grounds 2 and 16
The complaint here is that the Magistrate failed to act on or give sufficient weight to the evidence of the single expert witness that the cost of rectifying “substandard quality workmanship performed by the [husband]” at the former matrimonial home was approximately $2,000. First, that is simply not the evidence of the single expert witness. He identified areas of work required and indicated a possible cost of repairs but he did not say, because he was not qualified to do so, that this was “substandard quality workmanship performed by the [husband]”. Secondly, in our view, in paragraphs 17 and 18 of his reasons for judgment the Magistrate adequately and appropriately dealt with the issue of how the cost of repairs and maintenance may impact on the value of the property.
We find there is no merit in these grounds of appeal.
Grounds 3 and 3a
By these grounds the wife complains that the Magistrate erred in utilising the figure of $31,000 for the value of the husband’s superannuation entitlement at the commencement of the relationship, instead of the correct figure of $13,000. This is a clear error by the Magistrate, and that is conceded by the husband. Interestingly though it cannot be treated as a typographical error because on
23 March 2011, when the Magistrate was delivering his reasons for judgment the wife pointed out that the correct figure was $13,000 and not $31,000 as appeared in the husband’s trial affidavit, and the Magistrate then said “[t]he court was given a couple of figures. I assume that somewhere the 13 was removed and ought to have been the 31” (Transcript, 23 March 2011, page 7, lines 14-16).
In any event, the issue is whether the recognition of this error would have made any difference to the Magistrate’s decision. The wife makes no submission about that, but the husband’s counsel suggested that it would make no difference.
It is apparent that the Magistrate applied a global approach in assessing the parties’ respective contributions, and with the husband’s superannuation entitlements he was not so concerned about the particular amount involved, but more the fact that the superannuation entitlement that he had at the commencement of the relationship created a solid base for subsequent growth and an increase in value.
Mr Mather, counsel for the husband, submitted that this was not such a “fundamental and significant mathematical error” that it can be said the Magistrate’s discretion has been wrongly exercised. In this regard Mr Mather referred us to the recent Full Court decision of Agius & Agius (2010) FLC
93-442 where their Honours said this:
144.It was submitted that whilst it is not necessary to justify decisions in property cases by reference to precise mathematical calculations, a fundamental and significant mathematical error constitutes appealable error: see Burke and Burke (1981) FLC 91-055 at 76,452 per Full Court (Baker J with whom Asche and Ellis SJJ agreed). It was submitted that in King and Kemp (1996) FLC 92-673 at 83,010 the Full Court (Baker, Lindenmayer and Bulbeck JJ) corrected a $10,000.00 mathematical error even in circumstances where all grounds of appeal relied upon by the appellant had failed. It was submitted that the error in the present case is of a significant proportion and should be corrected.
145.We accept that it is not necessary for a trial judge to justify his or her decision in a property settlement case by reference to precise mathematical calculations. If a trial judge takes a very broad approach to the figures which were before him or her then an appellant must show that there has been a fundamental and significant error before it can be said that the trial judge’s discretion has been wrongly exercised.
In this instance we agree with the submission of Mr Mather. The wife has the task of establishing that there has been a fundamental and significant error and it has affected the ultimate result, or is likely to do so. That is a difficult task in this case because the Magistrate did not base his findings on contribution upon, or in part upon, the amount of the superannuation that the husband had at the commencement of the relationship. As we have said the Magistrate applied a global approach in assessing the parties’ respective contributions and particularly noted that the superannuation entitlement of the husband at the commencement of the relationship “created a solid base for subsequent growth and an increase in value”. This was not the only category of contribution to be taken into account, nor was it the most significant, and it is not a matter in our view that would impugn the ultimate conclusion reached by the Magistrate.
Again we find no merit in these grounds of appeal.
Ground 4
We can dispose of this ground of appeal quite simply. The wife complains that if the Magistrate had added back the draw down he would have thereby misapplied the authority of Kowaliw and Kowaliw (1981) FLC 91-092 and allowed the husband to “double dip” in the pool of assets. However, the Magistrate did not in fact add this back, as the wife conceded, and thus there is no error and no merit in this ground of appeal.
Grounds 5 and 10
Here the wife complains about how the Magistrate treated a number of liabilities, namely the debt of $4,344 owing to Solar Repairs Pty Ltd at separation, the debt to Baycorp Collections which stood at $937 at separation, and four credit card debts of varying amounts at separation.
As to the credit cards, they were all in the name of the wife, but the wife’s case before the Magistrate was that those debts were “created for the benefit of the household generally”, and thus the husband should accept equal responsibility for them. The husband though denied that the wife’s “high levels of credit card spending were indeed all, or even substantially, attributable to the welfare of the household”.
The Magistrate correctly took the view that the onus was on the wife to satisfy the Court that these debts were created in the way and for the reasons that she alleged, and he found as follows:
34.… Put simply, the [wife] has not satisfied the Court that this debt needed to be created to meet those ordinary and reasonable living expenses which the parties could not meet from their combined earnings.
35.It has to be remembered that both parties were working full time and earning reasonable, albeit not high, levels of income. The [wife] had sole control of the credit cards in her name and it seems to the Court that the responsibility was hers to ensure that the levels of expenditure on her various credit cards were affordable in the circumstances. It is difficult to see what the [wife] has to show for these very high levels of credit card debt which she has taken out of the marriage. In the circumstances, the [wife] has failed to satisfy the Court that there is a case for requiring the [husband] to shoulder the responsibility for payment of these various credit card debts taken out of the marriage.
Save and except insofar as this complaint by the wife can be related to Grounds 6, 7, and 14, and which complaint we will come to shortly, there is nothing put by the wife in her written argument or in her oral submissions in support of this challenge and we are not persuaded that the Magistrate erred in how he treated these credit card liabilities.
Turning to the debt of $4,344, the particular complaint of the wife is that the amount that she subsequently had to pay out was $4,846 which included the costs of the judgment obtained against her by the creditor, and it is that amount which the Magistrate should have included in the schedule of assets and liabilities. The Magistrate dealt with this in paragraph 31 of his reasons and said this:
… Again, given the nature of the debt as something related to the retention of the [D] property, the Court is minded to include the liability in the asset pool at its separation date level.
We assume that the basis of this approach was the fact that the wife retained the house after separation and she should therefore be responsible for any increase in any debt associated with that property after separation.
Again, there was nothing in the wife’s written argument or in her oral submissions put in support of this complaint, and we are not persuaded the Magistrate fell into error in how he treated this debt.
Finally, there is the debt of $937. That debt subsequently ballooned to $4,342, and the wife’s complaint is that that is the amount the Magistrate should have taken into account. As can be seen from paragraph 14 above, the Magistrate took the view that the wife should have prevented the increase in the debt and thus she should be responsible for that increase.
This debt, although in the name of the wife, was in relation to an exercise bike which was in the possession of and used by the husband after separation. Just the same as the wife was able to, he could have made the payments himself to avoid the increase in the debt, but he did not. It is also important to note that the wife made two applications to the Court to attempt to have the husband contribute to all of the outstanding debts including this one, but the outcome of those applications was for that issue to be left to the trial.
In these circumstances we consider that the Magistrate erred in requiring the wife to be solely responsible for the increase in the debt after separation, and he should have included the debt at $4,342.
Grounds 6, 7 and 14
These grounds complain that the Magistrate erred in notionally adding back the amount of $55,000 to the asset pool.
As referred to already in these reasons, between August 2005 and May 2007 the wife drew down $110,000 under a refinancing arrangement with the mortgagor. The wife claimed that all of this money was then spent for the benefit of the family, apart from three items of expenditure. The husband denied this saying in effect that he did not know what the wife used this money for and put her to proof.
The three items of expenditure which were eventually agreed as coming from this money and being for the benefit of the parties were a payment of $15,000 to purchase the motor vehicle now in the possession of the husband, an amount of approximately $4,200 for the purchase of a stove for the former matrimonial home, and an amount of $3,286 being for the discharge of an income tax debt owing by the husband.
During the hearing before the Magistrate, and in his reasons for judgment, the Magistrate, correctly in our view, was critical of the failure by the wife to address this issue in her trial affidavit. All she did there was to identify the payments of $15,000 and $3,286 and then indicate that she transferred the balance to her credit cards to be ultimately spent on “family expenses”.
During the hearing before the Magistrate this issue was the subject of cross-examination of the wife, and her various credit card statements were tendered as exhibits. The Magistrate then said, again correctly in our view, that it was not “[his] responsibility” to go through all the credit card statements and “reconcile all the items of expenditure” (Transcript, 22 December 2010, page 26, lines 19-20 and 29-32).
The Magistrate then in effect invited the wife to undertake that task over the luncheon adjournment if she needed to. The wife did in fact do that, and after the adjournment the wife tendered, without objection by the husband’s counsel, a handwritten schedule which was received and marked Exhibit 11.
In his reasons for judgment the Magistrate, to repeat, maintained his criticism of the wife over this issue and reiterated that the onus was on the wife and it was not “for the Court … to go searching for a detailed explanation of the [wife’s] expenditure over the relevant period”. The Magistrate said this:
43.The [husband’s] counsel invited the Court to take a robust approach to the subject of the proposed add back related to the [wife’s] use of the $110,000 line of credit, and in the circumstances it would be difficult to do otherwise. As indicated to the parties, and to the [wife] in particular, during the course of the trial, it is not for the Court to sift through the various credit card statements and other related documentation in order to reconcile the [wife’s] actual expenditure pursuant to the line of credit as against the likely cost of meeting those household needs which could not be met reasonably from the combined incomes of the parties. The [wife] has been aware for some time that the [husband] would be inviting the Court at trial to treat her expenditure under the line of credit as a premature distribution, and so it seems to the Court that the onus was upon the [wife] to explain in detail how she has spent this money and what has become of any items which were purchased therefrom. The [wife’s] evidence presented to the Court does not satisfy it that the onus had been discharged.
44.So, how much of the $110,000 in question should be treated as a premature distribution to the [wife]? Obviously, allowance has to be made for the acquisition of the [husband’s] motor vehicle, for the acquisition of the stove and for payment of the [husband’s] small tax debt. Beyond that, the Court is prepared to accept that there may well have been further expenditure by the [wife] which provided some benefit to the [husband], either directly or indirectly. With no great mathematical precision, the Court has come to the view that it would be reasonable to add back 50% of the drawdown to the asset pool as a premature distribution received by the [wife]. This is probably a decision more favourable to the [wife] than to the [husband].
However, the wife says that the information the Magistrate was seeking was comprised in Exhibit 11, and that schedule having been received into evidence, it was not open to the Magistrate to say what he said, and to notionally add back $55,000. The wife also emphasised that the Magistrate failed to even refer to Exhibit 11 in his reasons for judgment, and he seems to have overlooked that it was tendered.
There can be no doubt that the schedule was received into evidence and there can be no doubt that that was done without objection by the husband’s counsel, and further, that it was done without any cross-examination of the wife in relation to the contents of the document.
Plainly then the Magistrate has erred by not taking this evidence into account, and it seems to us that the wife is correct when she says that the Magistrate appears to have overlooked this schedule when he came to provide his reasons for judgment.
However, the appeal will not succeed unless the wife can demonstrate that the matters in Exhibit 11, to the extent they were unchallenged, make a difference to the result. It is submitted by Mr Mather that the Magistrate could not have done much with the contents of the document because it was ambiguous. However, putting aside the fact that there was no cross-examination on the document by the husband’s counsel, it is not correct to suggest that it is ambiguous.
The schedule clearly identifies expenditure of $46,553.70 (including the payment for the stove) on “renovations”, as well as confirming the amount of $15,000 for the motor vehicle. The summary on the final page of the exhibit also includes the payment of the husband’s income tax debt of $3,286 about which there is no dispute, and $10,895 being expenditure on the wife’s jewellery, and $10,803 being alleged expenditure for “family trips”. With the latter two items, it is plain that the expenditure on the wife’s jewellery could not be considered an expense of the family, and the wife conceded that before us, and there is no source material identified in the schedule for the alleged expenditure on the “family trips”, and thus the wife could not have expected the Magistrate to allow for those items in his calculations of what to notionally add back to the asset pool.
Given this detail it is plain that if the Magistrate had had regard to this schedule, unchallenged as it was, in addition to the agreed amount of $15,000 for the motor vehicle, $3,286 for the income tax debt, and approximately $4,200 for the stove, it accounts for a further $42,353.70 of the amount drawn down by the wife. Thus the Magistrate would not have been left to make an assumption without any “great mathematical precision” that “it would be reasonable to add back 50% of the drawdown to the asset pool as a premature distribution received by the [wife]”. Instead the Magistrate, with some mathematical precision, could have arrived at a figure of say $45,000 being the amount unaccounted for (rather than $55,000, as he did).
In these circumstances we find merit in this complaint.
Ground 8
The wife complains that the Magistrate failed to take into account that she had made all the mortgage repayments since separation and the husband had contributed nothing. She further complains that in these circumstances the Magistrate still utilised the 2010 valuation of the property.
We do not consider that there is any error here by the Magistrate. It was correct to utilise the valuation of the property at the time of the hearing (Zappacosta and Zappacosta (1976) FLC 90-089; Wells and Wells (1977) FLC 90-285; Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143), and as the Magistrate referred to in paragraph 60 of his reasons, the wife had had the advantage of sole occupation of the property following separation and the husband had had to meet the costs of his accommodation. Thus, the wife’s payment of the mortgage is in effect offset by these factors, and there is no merit in this ground of appeal.
Ground 9
The complaint here is that despite including an amount for the wife’s furniture in the asset pool, the Magistrate failed to do the same in relation to the husband’s furniture.
Neither party had obtained valuations of their furniture and in relation to the wife’s furniture the Magistrate said this:
26.The [wife] said, and in the absence of any expert evidence to the contrary the [husband] accepted, that the value of the [wife’s] furniture is presently $7,000.
On this basis the Magistrate appropriately included the estimated value of the wife’s furniture in the asset pool.
As to the husband’s furniture, the husband inserted the figure of $3,500 in his financial statement filed on 14 December 2010, yet the Magistrate failed to refer to this in his reasons for judgment or include that amount in the asset pool.
We observe that the amount of $7,000 for the wife’s furniture was an agreed figure, but the amount of $3,500 for the husband’s furniture was plainly an admission against interest.
In these circumstances we agree that the Magistrate erred in failing to include this asset, or at the very least in failing to give any reasons as to why it was not included, and there is merit in this ground of appeal.
Grounds 11, 12 and 13
These grounds challenge the Magistrate’s finding as to the value of the wife’s initial contributions.
At the commencement of the relationship, which the Magistrate found to be about mid-2001, the wife was the sole registered proprietor of the property at D. Her former husband’s interest in that property had been transferred to the wife as a result of a consent order made on 17 January 2000. That property was subject to a mortgage for which the wife took over responsibility.
The wife, in her trial affidavit, complained that the value of the property in April 2000 was $250,000 “according to the Bank valuation done in 2000”. However, there was no expert evidence presented to the Magistrate by the wife of the value of this property at the time of the commencement of relationship, and there was no agreement about it. In these circumstances his Honour said this:
50.… As noted above, the [wife] was registered as sole proprietor of the [D] property, which had been transferred to her pursuant to consent orders made 17 January 2000. According to paragraph 24 of the application for consent orders filed by the [wife’s] former husband, the value of the [D] property was $200,000. The application was affirmed by the [wife] and her former husband in December 1999. At paragraph 34 of the application, the mortgage over the [D] property is shown to be a little less than $170,000. Otherwise, paragraph 43 of the application would seem to indicate that the [wife] then had no superannuation entitlement.
51.There was no evidence given of the value the [D] property as at the time the parties began to live together nor any evidence of the then current mortgage balance. The best the Court can do with the evidence on point is to note that as at December 1999, that is to say at a point in time some 12 to 13 months before, on the [wife’s] case, the parties began to live together, the value of the [wife’s] net equity in the [D] property was about $30,000.
The wife complains that the Magistrate should not have used the figure of $200,000, and should have used the figure of $250,000, and further that the Magistrate should have also taken account of the other assets the wife said she had as detailed in the application for consent orders of December 1999. That document suggested that the wife had net assets of approximately $44,000 comprising bank accounts, cash, furniture, jewellery, and an interest in a business.
However, we can find no error in either the Magistrate’s approach to this issue or in his findings.
Given that there was no valuation provided the Magistrate had to look for and rely on the best evidence available, and plainly that was the figure of $200,000.
As to the other assets of the wife there was no evidence before the Magistrate that the wife still had those precise assets (and liabilities) at the time of the commencement of the relationship, or indeed if she did, what their value was at that time.
Thus, we find no merit in these grounds of appeal.
Ground 15
This challenge was directed to the Magistrate’s alleged failure to take into account the claimed greater financial contributions by the wife during the marriage by way of her income when compared with the husband’s income.
In paragraphs 55 and 56 of his reasons for judgment the Magistrate identified and referred to the claims of the parties as to their respective incomes and the use that was made of that income during the relationship. Thus, this challenge is what is often referred to as “a weight challenge”, and complains that the Magistrate erred in the exercise of his discretion.
The law in relation to such challenges is well settled. For example, in Norbis v Norbis (1986) 161 CLR 513, Brennan J said at 539-540:
The difficulties in the way of developing guidelines beset an appellate review of the exercise of a 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 E.R. 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.
Further, in Gronow v Gronow (1979) 144 CLR 513, Stephen J said 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 enough 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. …
Here, we have not been taken to any evidence or any submissions, or any part of the Magistrate’s reasons which demonstrate that the Magistrate has erred in the exercise of his discretion and is “plainly wrong”.
During the hearing before us the wife changed the focus of this ground to the disparity between her income at the time of the hearing and the husband’s income, and she suggested that the Magistrate erred in not taking this disparity into account pursuant to s 75(2)(b) of the Act.
However, again, this can only be a weight challenge because the Magistrate was well aware of the respective incomes of the parties and more significantly their respective earning capacities. Indeed, the Magistrate said this in his reasons:
86.The [husband] has had the more stable employment history and he is likely soon to be able to continue to earn income at the same or similar level to that disclosed in his financial statement filed
5 August 2010.87.The [wife] has had a long history of paid employment in retail sales. The [wife] does have two teenage children, however she has demonstrated a capacity to hold down gainful employment while balancing successfully such commitment against her obligations to care for her children. The [wife] has been out of work briefly in recent times however she gave the Court every impression that she is capable of and likely to regain appropriate employment. Indeed, the [wife] has made it clear that she wishes to retain the [D] property and that being so it is implicit that she expects to be able to work and to generate sufficient income to service a not insignificant mortgage debt and arrears.
We have not been taken to anything by the wife which persuades us that the Magistrate erred in the exercise of his discretion in taking into account the respective incomes and earning capacities of the parties.
In these circumstances there is no merit in this ground of appeal.
Conclusion
We have found merit in the grounds of appeal relating to the following matters:
a.the inclusion in the assets and liabilities schedule of $937 as the amount of the debt to Baycorp Collections instead of the actual amount paid out of $4,342;
b.the notional add back to the asset pool of $55,000 instead of an amount of $45,000 as emerged from a consideration of the schedule comprising Exhibit 11;
c.the failure to include in the asset pool the amount of $3,500 for the husband’s furniture.
At the conclusion of the hearing we sought submissions from the wife and counsel for the husband as to whether if the appeal was successful we should re-exercise the discretion or remit the proceedings for re-hearing by another Magistrate. Both the wife, despite the order that she sought in her Notice of Appeal, and the husband’s counsel submitted that we should re-exercise the discretion, but depending on the grounds of appeal that succeed it was recognised that we may have to receive further evidence as part of the re-exercise, such as an updated valuation of the former matrimonial home, an updated valuation of the superannuation entitlements of the parties, and evidence of the current mortgage balance.
However, given the nature of the errors made by the Magistrate, we consider that we can re-exercise the discretion without the need for any further evidence.
In simple terms it is a matter of adjusting the asset pool to take account of the amounts that the Magistrate should have included, and then applying the same percentage division that the Magistrate did to that adjusted asset pool. We have found no error in the Magistrate’s assessment of the respective contributions of the parties or of the relevant s 75(2) factors.
Thus, the adjusted pool of assets becomes:
ASSETS AND SUPERANNUATION
51. ITEM
52. $
53. D Property
54. (less mortgage balance)
55. Net Value
56. 520,000
57. (323,782)
58. 196,218
59. Husband’s motor vehicle
60. 10,000
61. Husband’s furniture
62. 3,500
63. Wife’s motor vehicle
64. 2,000
65. Wife’s furniture
66. 7,000
67. Wife’s jewellery
68. 500
69. Husband’s superannuation (W)
70. 102,700
71. Husband’s superannuation (REST)
72. 3,683
73. Wife’s superannuation
74. 9,100
75. Add back from mortgage draw down spent by wife
76. 45,000
77. (less Telstra debt as at date of separation)
78. (1,761)
79. (less Aussie Mastercard debt as at date of separation)
80. (8,748)
81. (less Solar Repairs Pty Ltd debt as at date of separation)
82. (4,344)
83. (less Baycorp Collections debt as at date of separation)
84. (4,342)
85. TOTAL
86. 360,506
Applying the percentage division as found by the Magistrate to this amount results in the husband being entitled to net assets to the value of $153,215 (rounded down) and the wife being entitled to net assets to the value of $207,291 (rounded up).
The husband already has his motor vehicle worth $10,000, his two superannuation policies worth $106,383, and his furniture of $3,500, making a total of $119,883 in value. Thus, the wife will need to pay him $33,332 for him to then have his entitlement to the net asset pool. As can be seen that payment will be in lieu of the payment of $41,041 as found by the Magistrate.
We acknowledge that by just increasing the Baycorp Collections debt and leaving it in the schedule of assets and liabilities, and then, as the Magistrate did, applying the percentage division as found by the Magistrate to the net figure, the wife is bearing slightly more of that debt than the husband given the overall outcome, but that fact does not detract from our overall view that the result we have arrived at is just and equitable having regard to all the matters in s 79(4) and s 75(2) of the Act.
Costs
At the conclusion of the hearing we sought submissions from the wife and from the husband’s counsel as to costs. In the event that the appeal was successful the wife sought a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth) and the husband sought the same.
Given the nature of the errors made by the Magistrate we consider that each party should bear their own costs. Thus, on the basis that we are allowing the appeal on questions of law we propose that each party receive a costs certificate.
I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, May & Strickland JJ) delivered on 9 October 2012.
Associate:
Date: 9 October 2012
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