Elder v Elder
[2009] FamCAFC 224
•18 December 2009
FAMILY COURT OF AUSTRALIA
| ELDER & ELDER | [2009] FamCAFC 224 |
| FAMILY LAW - APPEAL – PROPERTY – where the trial Judge concluded that the parties’ property should be divided as to 70 per cent to the wife and 30 per cent to the husband – whether the trial Judge failed to explain the effect of his orders and give adequate reasons for his orders – where the Court found that there were significant difficulties in the trial Judge’s calculations and schedules of assets and liabilities – appeal allowed – matter remitted for rehearing. FAMILY LAW - APPEAL – CHILD SUPPORT – where the trial Judge ordered that the husband’s payments for child support until 30 June 2009 be paid in a lump sum – where the wife had sought a payment of lump sum child support until 30 June 2010 – whether the trial Judge failed to give adequate reasons for making this order – leave to appeal granted and appealed allowed – matter remitted for rehearing. FAMILY LAW - APPEAL – SPOUSAL MAINTENANCE – where the trial Judge dismissed the wife’s application for lump sum spousal maintenance – whether the trial Judge erred in finding that the wife was unable to adequately support herself – where the trial Judge may have relied on the wife’s receipt of a pension in finding that she was able to adequately support herself – consideration of s 75(3) of the Family Law Act 1975 (Cth) – appeal allowed – matter remitted for rehearing. FAMILY LAW - APPEAL – COSTS – costs certificates granted to the parties. |
| Child Support (Assessment) Act 1989 (Cth) Family Law Act 1975 (Cth) ss 72(1), 75(2), 75(3), 79 Federal Proceedings (Costs) Act 1981 (Cth) |
| Bennett & Bennett (1991) FLC 92-191 |
| APPELLANT: | Ms Elder |
| RESPONDENT: | Mr Elder |
| FILE NUMBER: | NCF | 693 | of | 2006 |
| APPEAL NUMBER: | EA | 123 | of | 2008 |
| DATE DELIVERED: | 18 December 2009 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Finn and O'Ryan JJ |
| HEARING DATE: | 1 December 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 23 September 2008 |
| LOWER COURT MNC: | [2008] FamCA 850 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Snelling and Mr Kelly |
| SOLICITOR FOR THE APPELLANT: | Emery Partners |
| COUNSEL FOR THE RESPONDENT: | Self represented |
Orders
That there be leave to appeal the orders made by the Honourable Justice Mullane on 23 September 2008 in relation to child support.
That the appeal against the orders made by the Honourable Justice Mullane on 23 September 2008 which related to property settlement and child support and which dismissed an application for spousal maintenance, be allowed.
That the orders referred to in Order 2 of these orders be set aside.
That the applications of the wife in relation to property settlement, spousal maintenance and child support be remitted to a Judge of the Family Court for rehearing.
That the wife’s application to adduce further evidence on the appeal be dismissed.
That there be no order for costs in relation to the appeal.
That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (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 appellant wife in respect of the costs incurred by the appellant wife in relation to the appeal.
That the Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (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 respondent husband in respect of the costs incurred by the respondent husband in relation to the appeal.
That the Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
IT IS NOTED that publication of this judgment under the pseudonym Elder & Elder is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 123 of 2008
File Number: NCF 693 of 2006
| Ms Elder |
Appellant
And
| Mr Elder |
Respondent
REASONS FOR JUDGMENT
introduction
This is an appeal by the wife, Ms Elder, against orders in relation to property settlement and also against an order dismissing her application for lump sum spousal maintenance. The orders were made by Mullane J on 23 September 2008 in proceedings between the wife and the husband, Mr Elder.
Also before us is an application by the wife for leave to appeal, and if leave be granted, an appeal against orders relating to child support also made by Mullane J on 23 September 2008.
The terms of the property settlement and child support orders will be more usefully set out after we have provided a summary of his Honour’s reasons for judgment. Similarly, any necessary factual background to this matter will be most conveniently explained in that context or in the context of our consideration of the grounds of appeal.
an outline of the trial judge’s reasons
It is necessary at the outset to explain briefly the structure and content of his Honour’s reasons for judgment. His Honour commenced his reasons with a comparison of the credit of the parties; he found the wife to be “an impressive witness” while he found the husband to be “a person of extremely poor credit” and “an extremely unreliable witness”. He then provided a relatively detailed history of the parties’ relationship, which had lasted only some six years (2000-2006), but had produced three children (the wife already had a child from a previous relationship).
His Honour then set out a schedule of the parties’ assets (which included a number of items of real estate) and their liabilities as at separation. Those assets and liabilities had a net value of approximately $717,000. His Honour next provided a relatively detailed account of the parties’ financial affairs from their separation in March 2006 until the hearing before him in August 2008, before setting out a schedule of the parties’ property and liabilities at the time of the hearing, which showed the net value of their property to be $617,505.
His Honour then undertook an identification and evaluation of the parties’ contributions pursuant to s 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”). He concluded that the overall ratio of their contributions was 60:40 in favour of the wife. As we will later discuss more fully, he then applied that 60:40 ratio to “a notional pool” or “adjusted pool” which amounted to $674,862, before determining a distribution of their present property and liabilities, apparently on the basis of their contributions.
Next his Honour considered what, if any, adjustment was required on account of the matters in s 75(2) of the Act. In the course of his consideration of the s 75(2) matters, he referred to the requirement in s 79(2) that the court must not make an order for property settlement under s 79 unless satisfied that in all the circumstances it is just and equitable to make the order.
Having concluded that the s 75(2) matters which favoured the wife were of greater weight than those favouring the husband, his Honour then expressed his overall conclusion in relation to the property settlement proceedings in the following way:
161.…Overall the just and equitable result is for the present property and liabilities to be divided in the ratio of 70:30 ($432,253:$185,252) in favour of the wife.
His Honour then considered the wife’s application for “an order for payment of the child support currently assessed and payable by monthly instalments for the period from [the date of the hearing] to 30 June 2010 to be paid by a lump sum”. Having applied the relevant provisions of the Child Support (Assessment) Act 1989 (Cth) to this case, his Honour concluded that he would make an order for the payment of child support by lump sum from the date of his judgment to 30 June 2009.
Finally, his Honour considered the wife’s application for “lump sum spouse maintenance of $30,000 to cover a period of 4 years”. He concluded that the application should be refused because the wife had not established (as she was required to do under s 72(1) of the Act) that she was unable to adequately support herself.
The following orders with respect to property settlement and to lump sum child support, which have relevance to this appeal, were then made by his Honour, together with an order dismissing any outstanding applications, which must be taken to have included the wife’s application for spousal maintenance:
1)On or before 31 October 2008 the husband must pay to the Child Support Registrar a lump sum of $11,366 for child support for the children of the parties [J] born … August 2002, [E] born … October 2003 and [S] born … June 2005.
2)The lump sum is to be credited towards any administrative assessment for the period 1 October 2008 to 30 June 2009 and for that purpose to have an annual rate of $15,155 and the annual rate of child support under any administrative assessment for that period is to be reduced by $15,155.
3)On or before 31 October 2008 the wife must pay to the husband by way of alteration of property interests a sum of $24,490 and may at her option instead pay the sum by 31 October 2008 as follows:
3.1) pay $11,366 on the husband’s behalf to the Child Support Registrar in satisfaction of his liability under Order 1;
3.2) pay on the husband’s behalf to the Child Support Registrar any arrears of child support, interest and charges owing by the husband and in respect of the children or $13,324 9 (whichever is the less); and
3.3) pay the balance to the husband.
…
5)On or before 31 October 2008 the parties must do all acts and execute all documents prepared by the wife to release the husband from any liability in respect of:
5.1) her loan of $140,000 from the National Australia Bank;
5.2) any guarantee he has given relating to the debt; and
5.3) the mortgage over [the V property] securing the loan.
6)On or before 31 October 2008 in consideration for the wife’s compliance with Orders 3 and 5 and contemporaneous with such compliance, the husband must do all acts and execute all documents submitted by the wife to transfer to the wife all his interest in:
6.1) the debt of $400 owing to the parties by [Mr and Mrs W];
6.2) the parties’ 214 shares in company [T]; and
6.3) the property known as [the V property], being the land in Certificate of title folio identifier …
…
(9)Otherwise any outstanding applications are dismissed.
the challenge to the property settlement order
The three grounds of appeal which are expressly directed to the property settlement orders assert that his Honour erred in “exercising his discretion with regard to matters under [s 75(2)]” and in failing to give adequate reasons “on his assessment of the [s 75(2)] factors”, and that his “assessment” of s 75(2) factors was “manifestly unjust”. In addition to the three grounds expressly directed to the property settlement orders, there is a more general ground which asserts a failure on the part of his Honour “to give adequate reasons for his judgment”.
In support of the ground which asserts a lack of adequate reasons generally, counsel for the appellant wife submitted that his Honour had failed to explain the effect of his orders, in particular how it could be just and equitable to require the wife (whose income is primarily derived from social security) to make a payment of $24,490 to the husband (or to the Child Support Registrar in discharge of the husband’s liabilities to the Registrar).
In order to determine if there was substance in this submission, it was necessary for us to examine closely the assets in the possession of each party and the liabilities for which they would be responsible as such assets and liabilities had been recorded in his Honour’s reasons and then apparently distributed by him. As we indicated during the hearing to counsel for the wife and to the husband (who represented himself before us) our examination of the various schedules of assets and liabilities in his Honour’s reasons and also of his calculations as to how the parties’ entitlements should be satisfied, appeared to reveal some significant difficulties with those schedules and calculations. Further consideration of these matters since the hearing has confirmed our concerns as the following discussion will show.
His Honour made findings at paragraphs [102], [103] and [104] of his reasons that the “property and liabilities of the parties at the time of the hearing comprised the following”:
$
Jointly owned property at [V] 380,000
Wife’s interest in [I] Street 130,000
Husband’s property at [M] 360,000
Husband’s shares in [DD] Pty Ltd 11,500
Wife’s shares in [S] Pty Ltd Nil
Wife’s 2004 … motor vehicle 14,000
Wife’s 329 shares … 1,257
Jointly owned 214 shares in [company T] 910
Wife’s 1,200 shares in [BR Limited] 18
Wife’s 3,150 shares in [company T] 13,388
Wife’s … motor cycle 3,500
Wife’s money upon deposit in banks or building societies 4,392
Husband’s funds in building society 42
Husband’s funds in bank 113
Debts owing to parties by [Mr & Mrs W] 400
Cash in wife’s possession 105
Wife’s NAB Visa card credit 23
Contents of wife’s home 3,000
Contents of husband’s home 500
Wife’s superannuation with AMP … 33,197
Husband’s superannuation entitlements … 19,993
Wife’s savings … 800
Wife’s prepaid cruise, air fares and car hire 9,600
Wife’s entitlement to Child Support Arrears payable by husband 9,586
Total$996,524
Less liabilities
Husband’s mortgage debt secured on property at [M] 216,000
Wife’s mortgage debt secured on [V property] – agreed 140,000
Husband’s NAB Visa card debt 6,000
Wife’s second NAB Visa card debt NIL
Wife’s ANZ Master card debt 1,000
Debt owing to [BO] for legal costs in the proceedings 1,306
Debt owing to [Mr DB] for purchase of motor cycle – approx 4,927
Husband’s liability for Child Support Arrears 9,586
Total ($378,819)
Balance $617,505
There was no challenge to these findings.
At paragraphs [130] – [136] of his reasons his Honour dealt with matters of contribution and at paragraph [137] said that “[t]he overall ratio of their contributions is 60:40 in favour of the wife” (emphasis added).
He then said: “but justice and equity requires that in calculating their entitlement based upon contributions alone, the calculation should be done by applying the ratio to a notional pool calculated as follows” (emphasis added). However, his Honour never explained what he meant by this statement; nor did he give any reasons from which an understanding of it could be gleaned. In any event it is unusual that a finding would be made, as it should, as to the net assets of the parties at the date of the hearing, and then a finding made as to different net assets when considering the matters in s 79(4)(a), (b) and (c) of the Act.
His Honour then set out what was comprised in the “notional pool” being:
$
Present property and liabilities 617,505
Wife’s post separation debts 7,233
Value of [S Pty Ltd] at separation 500
Payments received from [Mr & Mrs W] post separation 3,600
Husband’s post separation debt for child support 9,586
Proceeds of sale of [C] shares 5,400
Husband’s long service leave 5,635
Proceeds of [B Finance] investment 11,143
Husband’s tax refunds from 2005/06 or earlier years 11,015
Family Tax Payment received by wife from 2005/06 16,000
[DD Pty Ltd] dividend from 2005/06 12,000
Total $729,617
Less
Adjustment for husband’s reduction in Visa card debt 400
Wife’s … shares in [company T] 13,388
Wife’s Motor cycle 3,500
Wife’s Motor vehicle 14,000
Wife’s entitlement to child [support] 9,586
Wife’s prepaid cruise etc 9,600
Wife’s Increase in savings ($5,320 compared with $1,194) 4,126
Husband’s increase in savings 155
Total ($54,755)
Balance $674,862
Again there was no challenge to these findings. Nor were any submissions made in relation to them. However, we have some difficulty understanding the reasons for this notional pool which totalled $674,862 and how the items described were included. His Honour had previously found that the actual net assets at the date of the hearing had a net value of $617,505, being a difference between the two pools of $57,357.
His Honour then said at paragraph [138] that “[a]pplying the ratio to the adjusted pool gives figures of” $404,917 to the wife (being, we note, 60 per cent of $674,862) and $269,945 to the husband (being, again we note, 40 per cent of $674,862).
His Honour then said at paragraph [139] that “[t]he applicant wife’s entitlement from the adjusted pool would be as follows” and thereafter he set out what the amount of $404,917 would comprise, namely:
$
[Property at V] 380,000
Half interest in [I Street] 130,000
Shares … 1,257
Joint shares in [company T] 910
[BR] shares 18
Savings at separation 1,194
[S Pty Ltd] 500
Household contents 3,000
Payments from [Mr & Mrs W] 25,600
Balance owing 400
Sale of [C] shares 5,400
Proceeds of [B] Finance investment 11,143
Family Tax Payment received by wife from 2005/06 16,000
Wife’s superannuation 33,197
Total $608,619
Less
Loan for [I] St 140,000
Adjustment payable to husband 63,702
Total ($203,702)
Balance $404,917
His Honour then said at paragraph [140] that “[t]he husband’s entitlement from the adjusted pool would be calculated as follows” and thereafter he set out what the amount of $269,945 would comprise, namely:
$
Adjustment payable by wife 63,702
[M property] 360,000
Shares in [DD] Pty Ltd 11,500
Payment from [Mr & Mrs W] 8,000
Long Service Leave received 5,635
Tax refunds received 11,015
Dividend received for [DD] Pty Ltd 12,000
Household contents 500
Superannuation 19,993
Total $492,345
Less
Visa card debt at separation 6,400
Joint NAB [Mortgage] debt on [M] 216,000
Total ($222,400)
Balance $269,945
In summary, in relation to the “Adjusted pool” which included various notional assets, the trial Judge set out what he considered would be the entitlements of each party given his findings as to their respective contribution based entitlements. The outcome was that in order to achieve what he determined were the respective entitlements, the wife had to pay $63,702 to the husband (as shown in the schedules in paragraphs 139 and 140).
His Honour then said at [141] that “[t]he result would be a distribution of present property and liabilities of the parties as follows” (emphasis added). Thereafter he set out what each party would receive of the property and liabilities of the parties at the time of the hearing (being a net $617,505 as found at paragraphs [102]-[104] of his reasons) given his findings as to respective contribution based entitlements.
His Honour said that the husband would receive:
$
Adjustment from wife 63,702
Husband’s property at [M] 360,000
Husband’s shares in [DD] Pty Ltd 11,500
Husband’s funds in building society 42
Husband’s funds in bank 113
Contents of husband’s home 500
Husband’s superannuation - Australia Super 19,993
Total $455,850
Liabilities:
Husband’s mortgage debt on [M] 216,000
Husband’s NAB Visa card debt 6,000
Husband’s liability for Child Support 9,856
Total ($231,856)
Net Property & Liabilities $224,264
His Honour said that the wife would receive:
$
[Property at V] 380,000
Wife’s interest in [I] Street 130,000
Wife’s shares in [S Pty Ltd] Nil
Wife’s [motor vehicle] 14,000
Wife’s 329 shares … 1,257
Jointly owned 214 shares in [company T] 910
Wife’s 1,200 shares in [BR] Limited 18
Wife’s 3,150 shares in [company T] 13,388
Wife’s 2006 … motor cycle 3,500
Wife’s money upon deposit in banks or building societies 4,392
Debts owing to parties by Mr & Mrs [W] 400
Cash in wife’s possession 105
Wife’s NAB Visa card credit 23
Contents of wife’s home 3,000
Wife’s superannuation… 33,197
Wife’s savings … 800
Wife’s prepaid cruise, air fares and car hire 9,600
Wife’s entitlement-Child Support 9,586
Total $604,176
Liabilities:
Adjustment payable by wife to husband 63,702
Wife’s debt for [I Street property] 140,000
Wife’s second NAB Visa card debt NIL
Wife’s ANZ Master card debt 1,000
Debt owing to [BO] 1,306
Debt owing to [Mr DB] 4,927
Total ($210,935)
Net Property & Liabilities $393,241
His Honour thus set out what each party would receive of the actual net assets being $617,505. However, as his Honour pointed out at paragraph [143] of his reasons, this division had the result that the wife would receive 63.70 per cent ($393,241 as a percentage of $617,505) and the husband would receive 36.30 per cent ($224,264 as a percentage of $617,505) of “their present property and liabilities”. We note that this division also included provision for a payment of $63,702 from the wife to the husband which was the amount which she would have been required to pay to achieve the 60:40 division of the adjusted or notional pool.
Then at paragraphs [142] – [160] of his reasons, his Honour dealt with the relevant matters in s 75(2) of the Act and at paragraph [161] concluded that “[t]he matters favouring the wife are of greater weight than those favouring the husband. Overall the just and equitable result is for the present property and liabilities to be divided in the ratio of 70:30 ($432,253:$185,252) in favour of the wife”.
The actual amounts in that last quoted passage from his Honour’s reasons total $617,505 (which was the net value of the actual or present assets).
Earlier in paragraph [143] of his reasons, his Honour had said that based on contributions the wife would receive 63.70 per cent of the current net assets of $617,505 (being $393,241) and we have set out above what at paragraph [141] of his reasons his Honour said this would comprise. This division required the payment by the wife of $63,702 to the husband (which, as we pointed out above, is the amount which would have to be paid by the wife to achieve a 60:40 division of the notional or adjusted pool of $674,862).
However, the order requires the payment by the wife to the husband of $24,490. His Honour did not explain how he arrived at this figure. It is a figure which appears for the first time in his order.
On one view his Honour found that, having regard to the “other factors”, the wife was entitled to a further 6.30 per cent of the net present assets (70 per cent less 63.7 per cent) being $38,902.82 (6.30 per cent of $617,505). This would require the payment by the wife of $24,799.18 (being $63,701 less $38,902.82).
If he had intended that the wife was to receive 70 per cent of the adjusted or notional net assets of $674,862, then she would be entitled to $472,403.40, of which, according to his Honour at paragraph [139] of his reasons, the wife had $404,917 which included the payment of $63,702 to the Husband. Given that the wife would be entitled to a further $67,486.40 ($472,403.40 less $404,917) it would mean that the Husband would have to pay $3,784.40 to the wife ($67,486.40 less $63,702).
We point out in addition that at paragraphs [130]-[136] his Honour finds contributions to be in the ration of 60:40 (and then applies that ratio to the adjusted pool). When considering other matters under s 75(2) he arrives at a conclusion that the ultimate result should be a division in the ratio of 70:30. While it seems his Honour was applying this ratio to the actual pool of assets, it is not unreasonable to think that his Honour may have been intending to adjust the contribution based entitlement by 10 per cent rather than 6.3 per cent as the effect of the orders seems to provide. Certainly counsel for the appellant proceeded on this basis and argued that an adjustment of 10 per cent for matters pursuant to s 75(2) was manifestly unjust. Without explanation for the different pools and clarity about the actual percentage adjustment he intended, there is uncertainty as to whether the result arrived at did reflect what his Honour intended.
We acknowledge that the figures discussed above are extremely confusing and are based on considerable speculation on our part. However, they demonstrate that it would be entirely unsafe to allow his Honour’s orders in relation to the parties’ property to stand as they may well work injustice to one or both parties.
Put simply, his Honour’s orders are not supported by his reasoning. The confusion in his reasoning, which our analysis above has revealed, makes it impossible for us to re-determine the property settlement matter. In order to ensure justice for both parties, there is, unfortunately, no option other than a retrial.
Given this conclusion, it is unnecessary, indeed probably impossible, for us to express any view on whether the adjustment made by his Honour on account of the relevant s 75(2) matters was either within or beyond a proper exercise of the discretion.
the challenge to the lump sum child support orders
In addition to the ground of appeal which asserts an overall failure on the part of his Honour to give adequate reasons in his judgment, the grounds expressly directed to his Honour’s order for lump sum child support assert not only an error of discretion in the application of s 123A of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), but also a failure to give adequate reasons for making an order for lump sum child support only until 1 July 2009.
His Honour recognised in the opening paragraph (paragraph [162] of his reasons) of his discussion of the wife’s application for lump sum child support, that she was seeking an order which would operate from the time of the hearing “to 30 June 2010”.
His Honour then set out the provisions of s 123A and of s 3 of the Assessment Act and proceeded to make the necessary findings which are required to be made under those sections. Having observed that “[t]he husband has demonstrated over the last 2 and a half years strong opposition to payment of child support”, his Honour concluded:
176.If a lump sum order is not made the wife and her four children are likely to suffer hardship because the husband will not pay the child support as it falls due.
177.It would be just and equitable for the children, the wife and the husband to make an order for payment of the child support for the period from today until 30 June 2009 by lump sum.
…
178.It would be otherwise proper to make such an order because of:
· the nature of the duty of a parent to maintain a child, particularly because the parents have the primary duty to maintain their children; and
· payment by a lump sum would not see the wife receive a higher amount in 2008/09 than if the child support were paid by monthly payments as assessed and should not result in the wife receiving any lesser payments of income tested pensions, allowances or benefits in 2008/09 than if the child support were paid monthly as required by the assessment.
Nowhere did his Honour explain why he had not granted the wife’s application for the lump sum order to operate until 30 June 2010. There may well have been good reasons for making a more limited order than that sought by the wife, but such reasons do not emerge from his Honour’s judgment. The wife should therefore be granted leave to appeal his Honour’s order and the appeal allowed.
Before us neither party was able to direct us to any evidence that would explain or justify the cessation of the lump sum order on 30 June 2009 or its extension to 30 June 2010. In these circumstances, we again have no option but to remit the wife’s application for lump sum child support for rehearing. We note, however, that the husband advised us that as at the date of the hearing of the appeal, he was not in arrears with his child support payments. This advice was not challenged on behalf of the wife.
the challenge to the refusal to make an order for spousal maintenance
In his discussion of the wife’s application for lump sum spousal maintenance of $30,000 to cover a period of four years, his Honour first referred to the terms of the application before setting out s 72(1) of the Act, which provides (emphasis added):
A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Having regard to that section, his Honour then concluded that he should refuse the application, saying (emphasis added):
180.The wife has the care and control of the 3 children of the marriage and at this stage wishes to continue her role as a parent, homemaker and student. But the wife has substantial net property, including a negatively geared investment property. She has not established that she is unable to adequately support herself. Her spouse maintenance application should be refused.
In addition to the non-specific assertion of an error in the exercise of the “discretion with regard to matters” under s 72(1) of the Act, the wife’s grounds of appeal directed to his Honour’s refusal to grant her spousal maintenance application contain the more specific assertion that his Honour erred in finding that she was unable to adequately support herself.
Earlier in his reasons in the context of his consideration of the matters contained in s 75(2) for the purpose of his determination of the property settlement proceedings, his Honour had found:
143.…The wife’s present average weekly income (apart from her negatively geared property investment) comprises:
Social welfare payments $670
Child support –[P] $ 9
Child support- parties’ 3 children $290
Dividends $ 17
Total (at least) $956
Later when considering the wife’s application for lump sum child support, his Honour found:
165. The wife is entitled to income tested benefits, allowances and pensions being the Single Parenting Payment, Family Tax Benefit and Pensioner Education Supplement in the amounts set out in her Financial Statement. They total $670 per week. She would be unable to adequately support herself without those.
This finding in paragraph [165] appears entirely inconsistent with his Honour’s later finding in paragraph [180] that the wife had “not established that she is unable to adequately support herself”; on the basis of that finding he refused the wife’s application for spouse maintenance. It is true, as his Honour also said in paragraph [180], that the wife has a negatively geared investment property. But if his Honour proposed to rely on that matter as the reason for refusing the wife’s spousal maintenance claim, it was necessary for him to have explained much more fully how she might utilise any funds devoted to her negatively geared investment to support herself.
This was particularly necessary given the provisions of s 75(3) of the Act which prevent a court taking into account a social security pension when determining the capacity of an applicant for maintenance (as opposed to property settlement) to support himself or herself, and given also his Honour’s earlier conclusion in paragraph [165]. Section 75(3) provides:
In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Having regard to his Honour’s earlier conclusion in paragraph [165] of his reasons, it would seem that he may well have taken into account the wife’s receipt of the pension when later determining in paragraph [180] that she had not established that she was unable to adequately support herself.
Accordingly, the appeal against the trial Judge’s dismissal of the wife’s application for spousal maintenance must also be allowed, and that application remitted for rehearing in the context of the re-determination of the property settlement proceedings.
conclusion in relation to the appeal
It will be appreciated from what we have said so far in these reasons that we have found substance in the wife’s complaints concerning his Honour’s various decisions essentially because his Honour has failed to give adequate reasons for those decisions. A long line of authority in this and other courts has established that it is imperative that both parties (particularly the losing party) and also the appeal court can understand the reasons for a particular decision reached by a trial Judge (see Bennett & Bennett (1991) FLC 92-191 and the authorities from other jurisdictions there cited).
It is essentially because of inadequacy in his Honour’s reasons in this case that the appeal against all of his orders made on 23 September 2008 must be allowed, those orders set aside and the wife’s applications for orders for property settlement, spousal maintenance and lump sum child support should be remitted for rehearing.
application by the wife to adduce further evidence
There was also before us at the hearing of the appeal an application by the wife to adduce further evidence. The evidence sought to be adduced was extensive, but it essentially related to a change in the amount which the wife receives by way of social security pension because of the amount of child support which she was entitled to receive from the husband. This change in the wife’s pension entitlement occurred after the hearing before Mullane J.
Having heard the submissions of counsel for the wife in support of the application, we reached the view that this further evidence could only be properly received by us as updating evidence in the event that we were to re‑determine one or more of the applications determined by his Honour.
As all of those applications are to be remitted for re-determination at first instance, we will dismiss the application to adduce further evidence. The wife will, of course, be entitled to seek to rely on that evidence at the new trial.
costs of the appeal and of certain other proceedings
Given the reasons for the success of the appeal, no order for costs against either party would be appropriate. In these circumstances, and again given the reasons for the success of the appeal, it is also appropriate to grant both parties costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) in respect both of the appeal and of the rehearing.
As earlier mentioned, the husband appeared at the appeal without legal representation. However, it is clear from copies of correspondence which he provided to us that he has had some legal representation in relation to the appeal. It is thus appropriate that he receive a costs certificate in relation to such representation.
We understood the husband to seek orders for costs against the wife in respect of applications by her for a stay of the orders appealed and for a reinstatement of the appeal.
The wife’s stay application was heard and granted, apparently by consent, by Flohm J on 10 November 2008, with no order apparently being made on that day in relation to the costs of the application. We are not disposed to make any order in relation to the costs of that application on the limited material before us. It may be, however, that the costs of the stay application might be covered by the costs certificate in respect of the successful appeal. But that is a matter for the Attorney-General and his Department and is not a matter on which it would be appropriate for us to express a view.
The wife’s application for a reinstatement of the appeal (which presumably had been deemed abandoned) was heard and granted by Coleman J on 23 January 2009. Somewhat unusually, his Honour reserved the respondent husband’s costs of that application “to the Full Court”.
We can only assume that his Honour’s intention when reserving to the Full Court the costs of the reinstatement application was to reserve such costs as costs in the appeal. On this basis, these costs would also be the subject of the costs certificate granted to the husband. But again this is not a matter on which we should express a view.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 18 December 2009
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