DOBBS & DOBBS
[2018] FamCAFC 174
•10 September 2018
FAMILY COURT OF AUSTRALIA
| DOBBS & DOBBS | [2018] FamCAFC 174 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Where the s 75(2) adjustment of five per cent in the wife’s favour was allegedly “not open” due to factual error – Where the husband claimed that the trial judge made a mistake of fact by assuming the wife would bear the burden of the child’s private school fees – Where it was probable the wife would have greater financial responsibility for the child in the future – Where the trial judge effectively identified the factors which justified the adjustment under s 75(2) in the wife’s favour – Where the findings of the trial judge were open on the evidence – Where there was no error on part of the trial judge demonstrated – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the respondent seeks costs of appeal – Where the appeal has been wholly unsuccessful – Appellant to pay respondent’s costs of a specific sum calculated on a party/party basis. |
| Family Law Act 1975 (Cth) ss 75(2), 117(2A) |
| House v The King (1936) 55 CLR 499; [1936] HCA 40 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 |
| APPELLANT: | Mr Dobbs |
| RESPONDENT: | Ms Dobbs |
| FILE NUMBER: | MLC | 8793 | of | 2015 |
| APPEAL NUMBER: | SOA | 18 | of | 2018 |
| DATE DELIVERED: | 10 September 2018 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Alstergren DCJ, Watts & Austin JJ |
| HEARING DATE: | 28 August 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 15 February 2018 |
| LOWER COURT MNC: | [2018] FamCA 66 |
REPRESENTATION
| THE APPELLANT: | In person |
| SOLICITOR FOR THE APPELLANT: | Techcomm Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Devries |
| SOLICITOR FOR THE RESPONDENT: | Costanzo Lawyers |
Orders
The appeal is dismissed.
The appellant shall pay the respondent’s costs of appeal, assessed in the sum of $15,000.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dobbs & Dobbs has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 18 of 2018
File Number: MLC 8793 of 2015
| Mr Dobbs |
Appellant
And
| Ms Dobbs |
Respondent
REASONS FOR JUDGMENT
On 15 February 2018, Cronin J made orders between the appellant husband and respondent wife adjusting their property interests under Part VIII of the Family Law Act 1975 (Cth) (“the Act”). The husband appealed those orders.
At trial, the parties agreed to treat their superannuation interests separately from and differently to their assets and liabilities. The trial judge split their superannuation, as part of the overall property adjustment, to reflect the wife’s entitlement to “about 30 per cent” of the parties’ combined superannuation interests. Although the husband’s appeal was notionally against all aspects of the property adjustment order made by the trial judge, none of the grounds of appeal attacked the part of the order affecting the parties’ superannuation interests.
As for the parties’ remaining assets, the trial judge concluded they should be divided in the proportions of “55 per cent to the wife and 45 per cent to the husband”, which reflected findings of their equal contributions and the wife’s entitlement to an adjustment on account of factors considered under s 75(2) of the Act.
The husband’s appeal was directed exclusively to the five per cent adjustment in the wife’s favour since, at trial, he argued for an “equal division of the asset pool as agreed”. The appeal was amended and distilled to three discrete points:
(a)It was not open to find the wife was entitled to any adjustment, given an underlying factual error made by the trial judge (Ground 1);
(b)The trial judge erroneously assessed the evidence in reaching the finding about the quantum of the adjustment in the wife’s favour, which ground was only pressed if Ground 1 failed (Ground 2); and
(c)Inadequate reasons were given by the trial judge for the finding about the need for any adjustment and its quantum (Ground 3).
For the following reasons, the appeal should be dismissed with costs.
Ground 1
The husband alleged that the trial judge fell into factual error by assuming the wife would bear the burden of the parties’ only child’s private school fees, which error contaminated the subsequent finding that an adjustment in the wife’s favour under s 75(2) of the Act was justified. In other words, it was contended a mistake of fact materially affected the outcome.
The trial judge inferentially found it was likely the wife would, in future, bear greater responsibility for the child’s private school fees, so the first question to arise under this ground is whether that finding was open. If so, it is unnecessary to go further and this ground of appeal will fail.
It was uncontroversial that the parties had, in the past, shared the cost of the school fees relatively equivalently, but their respective responsibility for the payment of the school fees into the future was uncertain. The issue of the husband’s future commitment to the child’s private school fees was squarely raised during final submissions at trial, at which point the following exchange occurred between the trial judge and the husband’s counsel (Transcript, 9 February 2018, p 91 ln 10 to p 93 ln 4):
HIS HONOUR: But one of the things I’m obliged to take into account is the future for this child’s support, and it seems pretty clear that [the wife] is going to be the one wearing the school fees.
[COUNSEL FOR THE HUSBAND]: To date that certainly hasn’t been what has happened. The parties seem to have contributed equally to that.
HIS HONOUR: Well, that’s not possible to happen from here on in, is it?
[COUNSEL FOR THE HUSBAND]: Well, it’s my client’s position that he’s hopeful that that’s what will happen moving forward, is that they will both still be in a position to be able to contribute to [the child] attending [the private school].
HIS HONOUR: Mathematically, how is it possible…?
…
HIS HONOUR: The people in this community who can least afford to have their children in private schools very, very sadly are the people who have got them there.
[COUNSEL FOR THE HUSBAND]: I am not going to take that argument up with your Honour.
…
HIS HONOUR: But your client, I take it, wants this child to stay at [private school].
[COUNSEL FOR THE HUSBAND]: I think that both parties would say that [the private school] has been a very positive experience for [the child]…and to force her to leave [the private school] would be to her detriment.
…
[COUNSEL FOR THE HUSBAND]: I think the fees are roughly [$]30,000 per annum.
…
[COUNSEL FOR THE HUSBAND]: And I accept that for someone to be able to afford those fees, they’re going to have to be earning at least $70,000 [per annum].
HIS HONOUR: [$70,000 per annum] after tax.
While the husband hoped he could continue to contribute equivalently to the child’s school fees, he could not unequivocally give that commitment, either in evidence or submissions, because he also hoped to obtain sole proprietorship of the former family home under the property adjustment, which would likely have entailed his payment of a large capital sum to the wife and raising the necessary funds to do so would have caused him undue financial difficulty. That is because the parties’ net assets (excluding superannuation) were collectively worth $1,785,000, of which the husband sought half. The net value of the former family home was $1,020,000. If he was to have that real property as part of an equal division of assets he would have had to pay the wife $127,500 and indemnify her against the existing mortgage of $780,000, so his total debt would have been $907,500. His modest income could not have supported a debt of that magnitude. Even if he did not receive the former family home as part of the property settlement, his alternate plan was to use his proportional share of the parties’ net capital to buy another residence. In either case, much of his capital would be tied up in the residential property he would own and inhabit. It was not put to the trial judge that he would quarantine some capital to help meet the child’s future school fees.
The husband contended at trial that his gross annual income was only about $50,000, though the trial judge found it was more likely about $65,000. No challenge was made to the validity of that finding. Nor was there any contest that, at the time of trial, the husband was paying child support of only $36 per week and he deposed how his expenses (which excluded any school expenses for the child) well exceeded his income. He declared his weekly expenses to be $1,424 (which extrapolates to $74,048 per annum), so his expenses still exceeded the higher income he was found to earn.
It was in the context of such relative impecuniosity that the husband submitted to the trial judge he was hopeful he could continue to contribute equally to the child’s private school fees, once the parties’ property interests were adjusted. But it was not remiss of the trial judge to conclude his mere hope was unpersuasive, given his admissions about the quantum of the child’s private school fees, how he perceived his income fell below the threshold necessary to meet such extravagant fees, and how his expenses exceeded his income before he made any contribution at all to the school fees. The husband’s capital position after the implementation of the property settlement will only compound his probable lack of liquidity.
Significantly, the conclusion reached by the trial judge about how the expense of maintaining the parties’ child would fall primarily to the wife was not confined to the cost of the child’s private school fees. It extended to the child’s financial support more generally. The findings were that the husband’s child support contributions had been and would likely remain “limited” and the wife would “carry the larger burden of child expenses” (at [65]), particularly since both parties expected the child would remain “privately educated” (at [68]). Those findings were well open to the trial judge on the evidence and submissions.
Since the findings were open, there was no factual mistake and Ground 1 must fail. The findings did influence the trial judge’s assessment of the quantum of the s 75(2) adjustment, which was the next challenge under Ground 2.
Ground 2
The husband contended the trial judge erred in determining a five per cent adjustment in the wife’s favour under s 75(2) of the Act.
In respect of the application of s 75(2), the trial judge reasoned:
6. …I find his real income is somewhere around $65,000.
7.The wife…can earn more than $100,000…
8.…the wife will have a greater weekday role in the care of their daughter…
49.The wife had possession of the home and the husband asserted that the wife should have been paying for it. On the other hand, the income of the wife and the husband’s modest child support meant that there was not enough to make ends meet…Whilst all of this was going on, the parties had their daughter in a private school…there is no suggestion that either party wants to change the schooling.
53.…I shall take into account that the wife has had a benefit from the parties’ joint resources and will make an adjustment reducing what I might otherwise have given her in contemplating s 75(2)(o) of the Act.
65.…The wife will earn more than the husband although that is partly in his hands. The husband’s capacity to contribute to child support is limited even with the increased real income I accept he earns…I am satisfied she will carry the larger burden of child expenses…
68.The factors in s 75(2) of the Act favour the wife only marginally and not to the extent she pleaded in her outline of case where she sought 65 per cent. The various factors all highlight her greater earning capacity but as already mentioned, she will have to bear the greater child rearing expenses at least in the foreseeable future…they wish their child to be privately educated so it cannot be a huge argument in the wife’s favour.
69.There are no arguments about health or other economic circumstances here so the major one is the disparate child responsibilities which are alleviated by the disparity of income which favours the wife…
70.Two other matters should be taken into account under s 75(2)(o) of the Act. First, the wife has already received substantially more than did the husband in the interim property distributions… Secondly,…it is an advantage to [the wife] to have [had] continuity of residence [in the family home]…Both of those matters justify…less of an adjustment in the wife’s favour as she had originally pleaded.
As can be seen, the trial judge comparatively weighed factors perceived to favour each party. The factors favouring the wife were: the greater parenting role she would play (given the child would live with her for 12 nights in each fortnight during school terms), the modest child support paid by the husband in the past, the modest child support he would likely pay in the future, and the parties’ mutual intention to keep the child enrolled at private school despite the financial strain this would cause. Conversely, the factors favouring the husband were: the wife’s post-separation occupation of the family home, her greater income, and the greater interim property distribution she received. The wife received $75,000 more than the husband by way of interim property distribution but, significantly, the trial judge was not told why the parties received disparate amounts or how the sums they each received were spent (at [52]-[53]), so the extra funds may not have been as advantageous to the wife as the husband implied.
The wife sought an adjustment of 15 per cent in her favour, whereas the husband contended no adjustment was warranted either way. The trial judge eventually settled on an adjustment of five per cent in the wife’s favour which, on the net value of the alienable assets, equated to $89,250. At the time of the trial, the parties’ child was only nine years of age, so the wife’s “greater child rearing expenses” (at [68]) would endure for another eight or nine years until she attained her majority. Amortised over that period, the adjustment in the wife’s favour was relatively modest. It could not be convincingly maintained in the circumstances that the result was unreasonable or plainly unjust (see House v The King (1936) 55 CLR 499 at 504 - 505; Norbis v Norbis (1986) 161 CLR 513 at 539 - 540), in which event Ground 2 fails.
Ground 3
The last ground of appeal was that the trial judge erred by not giving adequate reasons for the adjustment in the wife’s favour under s 75(2) of the Act.
In support of the ground, the husband submitted it was “implicit” from the submissions made in support of the first two grounds that it was not possible to discern the path by which the trial judge quantified the adjustment at five per cent. However, if the success of this ground is asserted to be implicitly established by the success of either of the first two grounds, the corollary must be that this ground also fails if the first two grounds both fail. Although the husband was loathe to make that concession orally, it may be fairly imputed from his written summary of argument, which failed to meaningfully elaborate the bare contention comprising this ground of appeal.
Indeed, the oral discourse concerning the first two grounds entailed advertence to the trial judge’s reasons for, first, finding an adjustment in the wife’s favour was warranted, and second, determining its quantum. There is no need to repeat the portions of the reasons extracted in the discussion of Ground 2 above, following which the trial judge concluded:
71.I consider it just and equitable to give the wife a small increase on the otherwise equal division such that it equates to 10 per cent more than the husband; that is, a division of 55 per cent to the wife and 45 per cent to the husband. Critically, it is the underlying value of those percentages which must be just and equitable…
(Original emphasis)
The trial judge’s reasons were concise, clear and logical, so Ground 3 fails.
Conclusion
The appeal is dismissed.
The wife sought her costs of the appeal be paid by the husband in the event of its dismissal. The husband did not submit to any costs order against him, but one should follow. The appeal was wholly unsuccessful (s 117(2A)(e)) and, although the husband might maintain his present impecuniosity, he somehow managed to retain lawyers to file his appeal and prepare his written summary of argument and he is entitled to property worth around $803,250 upon the implementation of the trial judge’s property settlement orders. His financial circumstances, therefore, do or will enable his payment of costs (s 117(2A)(a)).
On the question of the quantum of such costs, the wife sought $21,075.82, though she conceded the computation was not entirely in accordance with scale. She also conceded a portion of the costs related to an adjournment of the appeal, the responsibility for which could not be properly attributed to the husband. The grounds of appeal were refined, the summaries of argument were short, the appeal was concluded quickly, and some of the wife’s costs were duplicated by her retainer of two different counsel. The husband conceded that one-half of the amount sought by the wife (about $10,538) would be reasonable, but we consider the sum of $15,000 is a fair party/party assessment of the wife’s costs.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren DCJ, Watts & Austin JJ) delivered on 10 September 2018.
Associate:
Date: 10 September 2018
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