Donney v Worth

[1991] HCATrans 377

....

• 'I

• ~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S62 of 1991

B e t w e e n -

STUART ROYAL DONNEY by his next

friend DORIS MAY DONNEY

Applicant

and

WILMA BELLE WORTH

Respondent

Application for special leave

to appeal

MASON CJ
DEANE J

GAUDRON J

Donney 1 13/12/91

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 DECEMBER 1991, AT 2.04 PM

Copyright in the High Court of Australia

MR D.M.J. BENNETT, QC:  May it please the Court, I appear

with my learned friend, MR J.R. HAMILTON, for the

applicant. (instructed by John A. Ticehurst & Co)

MR M.R. ERRINGTON:  May it please the Court, I appear for

the respondent. (instructed by Baker Love &

Geddes)

MR BENNETT:  If the Court pleases, I hand up an outline of

submissions.

MASON CJ: Thank you.

MR BENNETT:  Your Honours, this case actually had a very

short ratio. If Your Honours go to page 73,

Your Honours will see, at the bottom of the page, in the judgment of the court, under the heading

"Grounds of Appeal", Their Honours say:

Although there were ten grounds of

appeal ..... the gravamen of the appellant's

case was that the result which the trial judge

reached was either manifestly unjust or

plainly wrong in accordance with the principle

espoused by the High Court in House v

The King.

So, that was the only issue on which the case was

decided.

The decision was at the top of page 80 where

they say:

Having regard to the respective contributions, both direct and indirect made by the parties,

it is in our opinion manifestly unjust to the

appellant for her to lose her

half-interest .... for a mere $10,000.

In our opinion the trial judge has erred in

the exercise of his discretion and therefore

the appeal must be allowed -

and they then go on to substitute their own

judgment.

There is not a whiff in the judgment of one

suggestion that any specific finding is wrong; that

the trial judge ignored any relevant factor; took

into account a factor he should not consider; or in

any way erred except that the result is one which

fell within those words of House v R.

Now, if one looks at the facts of the case

which are summarized very briefly in the outline,

Your Honours will see this, that the income

Denney 2 13/12/91

contributions were approximately equal. That is at

page 79. Capital contributions to the relevant

property were $18,000 by Mrs Worth and $48,500 by

Mr Donney. That is 27 per cent: 73 per cent.

That is page 79. The relevant property was worth

about $124,000, perhaps $130,000 at the time of

separation. Page 74. It was assumed that he

should have the property. The question was what

adjustment should be made so as to accommodate the

property going in that direction.

In relation to indirect contributions, I have

said in paragraph 5 that there were some by

Mrs Worth in providing most of the domestic chores and committing her property and so on and she had

the benefit of the property since separation. It

would be more complete to say that at pages 49 to

52 her indirect contributions are listed - her

direct and indirect - and at pages 53 to 57 his

direct and indirect contributions are listed.	He
made indirect contributions too.	He assisted in a

number of ways in relation to her business and

there was evidence itemizing it all.

Again, I stress, nothing is said anywhere to

suggest that that itemization is in any way

inaccurate; that too much weight or too little

weight was given to anything or anything of the

sort. We can ignore the mortgage because

calculations were done on the basis of the equity.

So, the trial judge said, "On balance, having looked at this overall percentage, 27:73; having

looked at the indirect contributions they both

made, I think a fair apportionment is 20:80". The

Full Court says, "No, that is, in accordance with

House v R, manifestly unjust or plainly wrong.

We'll make it 40:60."

DEANE J:  Mr Bennett, did you go through the exercise of

trying to work out what the percentages would be if

you took income into account also?

MR BENNETT:	No, Your Honour, because I simply accepted the Full Court's statement that the income was about
equal and therefore could be - - -

DEANE J: Assume that the income was equal and there was a

surplus of income, just to pluck a figure out of

the air, of $10,000 on each side. That would make

it Mrs Worth, 28; Mr Denney, 58, which would bring

her up to something considerably over 27 per cent.

MR BENNETT: Yes, it might, Your Honour, but one does not

normally add income to capital in that way. One

normally treats them as separate considerations.

Denney 3 13/12/91

DEANE J: Except when you are dividing property, you can add

surplus income to capital that way.

MR BENNETT:	Yes.
DEANE J:	I had an abortive attempt at doing it but it was

probably because I did not go deeply enough into

the facts.

MR BENNETT: Well, Your Honour, that is not the way the

Full Court analysed it and what we submit is really

very simple, that House v R does not permit this

sort of interference with what a trial judge does

and if the Full Family Court is taking the view

that it does, it is appropriate for this Court to

grant special leave to elucidate or, rather,
explain the application of House v R principles to
this type of case which comes before that court so

frequently.

In Mallet v Mallet, of course, the Court

stressed that the discretion is a very broad one

and one does not interfere with it lightly. The

percentage figures in that case, as I recall, were

quite substantial and the amount there was

something like 50 per cent.

GAUDRON J:  Why do you go to percentages in an analysis of

this when the first instance results would result

in the respondent receiving less even than her

capital contribution?

MR BENNETT: Because, Your Honour, there were indirect

contributions both ways and one makes

approximate - - -

GAUDRON J: Yes, but there would have to be really some

explanation for an apportionment that resulted in

less than the capital you put in.

MR BENNETT:  Your Honour, any apportionment except an exact

one is going to give one party less than the

capital he or she put in.

GAUDRON J: Yes, significantly less.

MR BENNETT: Well, 27:20 is probably less of a difference

than 27:40 which the Full Court thought was

appropriate. What they must have done, we would

respectfully submit, is to say, "Well, we've looked

at all the indirect contributions. The trial judge

came to a balance of reducing by 7 per cent. We've come to a balance of increasing by 13 per cent when

we look at the indirect - - -". But they do not

say that. They do not go through the indirect

contributions.

Denney 4 13/12/91

GAUDRON J: But there was no basis on which Mr Donney was

going to end up with less than his original capital

contribution of $48,000.

MR BENNETT: Well, there is, Your Honour, if one gives

greater weight to the large number of small items

one puts on his side as opposed to the large number

of small items one puts on the other side.

GAUDRON J: Yes, but on the actual result that has come

about now and the result at first instance.	He was
always going to get his original capital
contribution back, was he not?

MR BENNETT: Well, one can say the same thing about her

original capital contribution, Your Honour.

GAUDRON J: But she was not going to, was she?

MR BENNETT: Well, on the trial judge's decision, she was

not going to.	On the Full Court's decision, he is
not going to.

GAUDRON J:  He is not going to get the $48,500 original

capital contribution?

MR BENNETT:  He is not going to get the - he having put in

73 per cent, is going to get back 60 per cent.

GAUDRON J: But the capital amount now is not the same as

the original capital contribution?

MR BENNETT:  No, there has been an increment.

GAUDRON J: Yes, and on no view was Mr Denney ever going to

get less than his original capital contribution?

MR BENNETT:  No.

GAUDRON J: But the respondent was?

MR BENNETT:  I am not sure that is correct, Your Honour,

bearing in mind - because the adjustment involves

something more complicated than that. If one goes

to the form of orders which were made at page - the

order is just $10,000.	The calculation is on
page 57.

DEANE J:  On your figures, she was going to get $25,000

under the trial judge's order, that is 20 per cent

of $124,000?

MR BENNETT:  That is not the way the Full Court puts it,

Your Honour. It is at page 79, lines 10 to 15. It

is said:

Denney 13/12/91

The relevant contribution by the appellant, as

we have said, amounted to $18,000 and that of

the respondent $48,500 ..... in percentage

terms -

he -

provided approximately 27 per centum -

and that is correct when one takes those two

figures. Eighteen per cent is about 27 per cent of

18 plus 48 and a half. So, the figure is based on

those capital contributions.

DEANE J: Well, what I said was if you combine paragraphs 3

and 7 of your figures, of your document, she was going to get $25,000 approximately, on the trial

judge's order?

MR BENNETT: Well, yes, he says at the end at page 57,

line 10:

The just and equitable result is an adjustment

of $50,000.

But because there were other items of property

moving in other directions, that is the way it

works out. I have not taken Your Honours through

the individual items but presumably it is accepted

that an adjustment of $50,000 is achieved by

ordering the payment of $10,000, with the property

going in the way it is going and the other assets

going the way they are going.

But, Your Honours, the central point we make

is that the Full Court has not, in this case,

interfered with a single finding by the trial judge

nor has it criticized a single finding. All it has

done is go to the result and say, "Well, on that

result, we think this is unjust" and then put up a

different one.	And it has done so in a situation
where the figures are as close as I have put to	Your Honours and, in our respectful submission,
that is a classic case of a court substituting its own discretion even though it refers to House v R
as the justification for doing it.

We submit that as more and more of these

applications under the De Facto Relationships Act
are heard by the Family Court, it becomes necessary

to indicate in what circumstances the Full Court is entitled to apply that part of House v R to what we

say are mere percentage differentials where the

Full Court says, "We think your percentage

differential is inappropriate, it should be a bit

more or a bit less."

Donney 6 13/12/91

DEANE J: Except against that, Mr Bennett, is the

consideration that the trial judge, in a situation

where the lady had contributed 27 per cent and an

equal amount of income, reduced her to 20 per cent

without really one word of explanation except that

he did not like her.

MR BENNETT: With respect, Your Honour, there is more than

that.

DEANE J: Really, it just comes out after a very detailed

examination of all the assets. Suddenly one gets a

decision. When I said he did not like her, I did

not mean in a personal sense but made a great many

criticisms of her evidence.

MR BENNETT: Yes. But, Your Honour, there are pages going

from 53 to 57 of the application book setting out

his contributions and no doubt the trial judge,

having set those out, had to give some weight to

them.

DEANE J: But when you come to the heart of the decision -

it is at page 57 - in the paragraph beginning,

"Clearly the contributions", well now, there is

really no explanation given about why the lady's

27 per cent, as I say, and equal contributions of

income should suddenly come down to 20 per cent.

MR BENNETT: There is, Your Honour, with respect. There is,

in the contrast of the way His Honour weighs the
factors on 49 to 52 which are her contributions
against the factors on 53 to 57 which are his

contributions. His Honour sets them out in some

detail and the statement at line 4 on page 57:

Clearly the contributions of the respondent

have not been adequately compensated for -

should be summarized as meaning, "In my view,

against the previous three pages, I find it comes	adding up the last four pages and weighing it
down in the scale such that there should be an
adjustment" and he makes an adjustment which is
about 7 per cent as we now know. In my respectful
submission, that reasoning simply is not vitiated.

The Full Court does not attack that reasoning.

The Full Court only looks at the final figure and
says, "That's the problem", because although the

Full Court's judgment goes through the facts at

some length, it at no stage denigrates anything the

trial judge has said except in the one line at
line 5 on page 80:

In our opinion the trial judge has erred in the exercise of his discretion -

Donney 13/12/91

and, Your Honours, that is the issue.	May it
please the Court.

MASON CJ:  The Court need not trouble you, Mr Errington.

The Full Court of the Family Court set aside the order of the primary judge and exercised its

own discretion to make a substitutionary order on

the well-recognized ground that the primary judge's

order was unreasonable or plainly unjust. The

applicant contends that the Full Court was not

justified on the facts in concluding that the

primary judge's order was unreasonable or plainly

unjust.

We are not persuaded that the Full Court's

conclusion on this point was attended with

sufficient doubt to justify the grant of special

leave to appeal.	The application is therefore
refused.

MR ERRINGTON:  Thank you, Your Honour. We would seek costs,

Your Honour.

MASON CJ:  What do you say about this, Mr Bennett? You

might remind us of what our practice is in cases of

this kind?

MR BENNETT: Well, in the Family Court, as I understand it,

the practice is not to make orders for costs,

Your Honour.

MASON CJ: Yes, but I was thinking of this Court,

Mr Bennett, not the Family Court.

MR BENNETT:  No, Your Honour, but the appellate structure is

normally regarded as part of the jurisprudence of

the court from which it comes.

MASON CJ:  You say, Mr Bennett, that we ought to follow the

ordinary course that would be followed in the

Family Court?

MR BENNETT: Yes, Your Honour.

MASON CJ: There will be no order for costs.

MR BENNETT: If the Court pleases.

AT 2.24 PM THE MATTER WAS ADJOURNED SINE DIE

Denney 13/12/91