Elmanu & Elmanu
[2022] FedCFamC1A 186
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Elmanu & Elmanu [2022] FedCFamC1A 186
Appeal from: Elmanu & Elmanu [2022] FedCFamC2F 630 Appeal number(s): NAA 144 of 2022 File number(s): MLC 13816 of 2018 Judgment of: TREE J Date of judgment: 16 November 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the husband appeals from final property settlement orders – Whether the primary judge erred in considering the Kennon argument independent of the other contributions of the parties – Where the primary judge did not holistically assess contributions – Error established – Notice of Contention – Where the wife concedes the error but contends there is no miscarriage of justice – Where the primary judge’s findings were open on the evidence – Where the error had no influence upon the result – Appeal dismissed – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 75
Federal Circuit and Family Court of Australia Act2021 (Cth) s 36
Cases cited: Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27
Singerson & Joans [2014] FamCA 238
Number of paragraphs: 30 Date of last submission/s: 10 November 2022 Date of hearing: 3 November 2022 Place: Cairns (via video link) Counsel for the Appellant: Dr Smith Solicitor for the Appellant: Adrian Abrahams Family Lawyers Solicitor for the First Respondent: Swiftly Legal The Second Respondent: Did not participate ORDERS
NAA 144 of 2022
MLC 13816 of 2018FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR ELMANU
Appellant
AND: MS ELMANU
First Respondent
MS ALAGNA
Second Respondent
order made by:
TREE J
DATE OF ORDER:
16 November 2022
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant pay the respondent's costs in the sum of $12,059.68 within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Elmanu & Elmanu has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
introduction
By Amended Notice of Appeal filed 26 September 2022, Mr Elmanu (“the husband”) challenges orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) which effected a division of the parties’ property such that he received 39 per cent and Ms Elmanu (“the wife”) 61 per cent of the pool.
The wife accepts that there is merit in one aspect of one ground of appeal, but nonetheless by her Notice of Contention filed 26 July 2022, says that the error did not result in any miscarriage of justice, and hence the appeal should be dismissed.
For the reasons which follow, the appeal will be dismissed.
background
After a 32 year marriage to which three now adult children were born, the parties separated in 2017.
Six years into their marriage, the parties established a business, which the husband still operates. The wife also worked in that business, as well as providing the bulk of the homemaker and parenting contributions (at [13]).
As found by the primary judge, the net pool of assets of the parties had a value of $3,890,169, together with a small amount of superannuation.
The primary judge determined the parties' respective contribution based entitlements at 55/45 in the wife's favour, and assessed the factors listed in s 75(2) of the Family Law Act 1975 (Cth) as favouring the wife, with an adjustment of 6 per cent reflective of that.
THE APPEAL GENERALLY
At the outset, it is useful to restate the well-known principles applicable to appeals from such discretionary judgments such as the one under appeal here. In House v The King (1936) 55 CLR 499 at 504-505, it was said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
Ground 1
This ground provides:
1. When assessing the contributions of the parties and the Kennon Argument:
1.1The learned trial judge erred in considering the Kennon argument independent of the other contributions of the parties;
1.2the learned trial judge gave inadequate reasons as to why it was just and equitable to make an adjustment of 5% in favour of the wife.
The wife concedes Ground 1.1 has merit, however that does not absolve me from needing to be satisfied of that error for myself.
The wife contended that the husband's family violence made her contributions more onerous, and thereby called in aid of her case the principles espoused in the decision of Kennon v Kennon (1997) FLC 92-757 (“Kennon”).
Many authorities have now stated that individual aspects of contributions should not be separately assessed, as the task is a holistic one (see Jabour & Jabour (2019) FLC 93-898; Singerson & Joans [2014] FamCA 238; Dickons v Dickons (2012) 50 Fam LR 244).
However the primary judge did not holistically assess contributions, but rather determined that Kennon considerations justified “an uplift of her contributions to reflect this” assessed at 5 per cent (at [56] and [60]). But for that uplift, contributions were assessed as “roughly equal” (at [57]). This is exactly the same error as the Full Court identified in Benson & Drury (2020) FLC 93-998 (“Benson & Drury”).
There is therefore merit in Ground 1.1.
Because the primary judge should not have considered the more onerous nature of the wife’s contributions in isolation, the adequacy of her reasons for a 5 per cent adjustment becomes, as the husband conceded in oral argument, a sterile debate, and Ground 1.2 need not be further considered.
However the Notice of Contention – restricted as it is to the primary judge’s assessment of the parties’ contributions based entitlements – does now fall for consideration. As to that, the parties were agreed that the question which requires to be answered is “what the outcome would have been, had the Kennon argument been properly considered as part of the holistic assessment of all contributions” (Benson & Drury at [73]).
It is useful to set out the primary judge's reasons dealing with the Kennon issue:
41.The wife’s evidence concerning the allegations of physical and emotional violence carried out by the husband was contained in her affidavit affirmed on 14 April 2020. The wife identified four instances of physical (or threats of physical) violence, being:
(a)on the second or third day of the parties’ marriage, the husband slapped the wife in the face;
(b)in February or March 1987, during an exchange about whether the husband should send a camera to his family in [Country B], the husband hit the wife with a “backhanded blow”;
(c)in 1989, the husband punched and kicked the wife several times during an argument that took place when the parties got home from visiting friends;
(d)in 2015, during a visit to the family holiday home, the husband (in the presence of members of the parties’ extended family), lunged at the wife and broke her phone when he became angry that she (the wife) had turned off the phone briefly to check text messages and in doing so, had interrupted the music that had been playing. It was the wife’s evidence that this incident caused her to apply for an intervention order which was made on 22 March 2018 and which expired one year later.
42.It was also the wife’s evidence that the husband “verbally abused me almost every day when we were running [the business] together. He would call me “bitch”, “cunt”, “idiot”, “stupid”, “dumb”, “useless”. The wife deposed that she loathed going to work because the husband would always find fault with what she was doing and insult her. The impact of this behaviour, according to the wife, was that she had difficulty maintaining concentration and fulfilling her duties was exceedingly difficult as she was “constantly stressed” as a result of the husband’s behaviour. The wife referred to the husband gesticulating as though he was going to hit her and said that this would further cause her to feel an enormous amount of stress and anxiety.
43.The wife deposed that when the stress of working with the husband became particularly severe, she would retreat to her bedroom for a period of two or three days. During this time, the wife would consume very little food and water and would struggle immensely with day-to-day functioning. It was the wife’s evidence that she would feel lethargic and worthless and this would cause her to remain in bed all day and avoid communicating with the husband. The wife estimated that she had isolated herself in this way approximately two dozen times during the relationship.
44.The wife also deposed to having made attempts to obtain employment outside of the Business in an effort to obtain some respite from the husband’s behaviour. The wife cited as one example how she had in 2005 obtained casual work at a local library, which involved teaching computer skills to children with learning disabilities. It was the wife’s evidence that the husband would regularly call her “fucking dumb” for doing this work and would say things like: “You’re wasting time teaching those little fucks when you are working for me”. The wife claimed that the husband’s insults demoralised her to the point that she eventually resigned from the position at the library.
45.Apart from the event that took place in 2015 which, in substance, the husband admitted had occurred, the husband did not respond to any of the allegations raised by the wife in his affidavit sworn on 12 May 2021 and neither did he challenge the evidence during his cross-examination of the wife. When these allegations were put to him by the wife’s counsel, the husband variously provided non-responsive answers or denied that the events in question had occurred and accused the wife of lying. On one occasion, the husband suggested that had the alleged conduct occurred, the parties would not have been married for so long.
46.As the final hearing was conducted in person, I had no difficulty making observations about the demeanour of the husband and the wife in the witness box. Although I make some allowance for the fact the husband did not have legal representation (which might otherwise have produced a more sobering effect on his conduct) the fact remains that in cross-examination he displayed behaviours that might best be characterised as belligerent, impatient and aggressive. The husband frequently talked back to and over counsel and made large and sudden gestures that were physically intimidating. The wife, on the other hand, largely maintained her composure, and gave her responses to questions in a forthright manner. I find that the wife’s account of events was plausible and internally consistent and corroborated, in part, by the husband’s performance in the witness box. I accept that the events recorded at [42] took place substantially as they were described and that they involved acts of either physical or emotional violence comprehended by the definition of “family violence” contained in s 4AB(1) of the Act.
47.However, the finding that these events and associated conduct of the husband took place during the course of the parties’ relationship does not, of itself, establish that the principles identified in Kennon are engaged.
48.In Kennon, the Full Court of the Family Court considered the relevance of domestic violence to s 79 proceedings and noted:
The question raised in this case was whether and if so to what extent domestic violence was relevant in the exercise of the discretion under s 79 of the Family Law Act. If it is relevant, that should be clearly acknowledged. If it is not, then a disservice is done by attempting to apply the section to circumstances which are not within its ambit. Change is then a matter for the legislature.
49.After considering the history of s 79 and the changes introduced in 1975, the Court went on to say:
Section 79 replaced the previous s 86. It made no explicit reference to conduct one way or the other but it did include the rather enigmatic provision in s 75(2)(o)…
…in pre 1975 legislation, conduct as such was relevant to the determination of property proceedings and, to an extent, those orders were seen to represent social and judicial disapproval of that conduct. It seems to us that in the post 1975 cases the change was to exclude what were otherwise relevant factors under s 79 because they had their origin in conduct…The correct position may be that such matters are relevant within s 79 not because they are based in conduct, rather despite that and because they are otherwise part of the legitimate s 79 exercise.
50.After considering a range of relevant cases, the Court stated:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or put another way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79 (emphasis added).
51.The Court made it clear that this approach was limited to exceptional cases. Indeed, in considering whether the approach was likely to have the effect of “opening the floodgates”, the Court went on to say:
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass…conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).
52.In the decision of the Full Court (Kay, May and Carter JJ) in S & S [2003] FamCA 905 (“S & S”), their Honours indicated (at [46]) that they “would not want the reference in Kennon to “exceptional”…to be understood to mean rare. We do not agree with this qualitative description”. Their Honours also agreed with the trial judge that the lack of evidence of the impact of family violence on a party’s contributions is not necessarily fatal to an application made on that basis and (at [45]) that there are cases “where it is obvious or a very likely inference from the facts, that certain kinds of violence must have adversely affected a person’s contributions”.
53.The Full Court also said in S & S at [47] as follows:
An insufficiency of evidence in the present case leaves the Court with a limited ability to deal with allegations in the context of section 79 proceedings. As Kennon has established, it is necessary to provide evidence to establish:
•The incidence of domestic violence
•The effect of domestic violence
•Evidence to enable the court to quantify the effect of that violence upon the parties capacity to “contribute” as defined by section 79(4)
54.In this case, although I have found that the events described by the wife (and recorded at [42]) did occur, there is a paucity of evidence directed at the question of how, and to what extent, those events (and the associated behaviours of the husband) impacted upon the wife’s capacity to make assessable contributions. I infer that the events were traumatic and, in the final case, provided the impetus for the wife to take out an intervention order against the husband. However, these events – when viewed in the context of a relationship of over 32 years – occurred infrequently and sporadically and in an environment dissociated from the Business (to which the wife made contributions). I do not consider that these events, even when assessed together, involved a course of conduct or had the requisite oppressive effect on the capacity of the wife to contribute.
55.However, the behaviour of the husband recorded at [43] stands in a different light. The wife has given evidence (which I accept) both as to the impact of this (sustained) behaviour on her generally and in particular as it operated on her capacity to contribute to the Business. The wife has described how she loathed going to work, had difficulty maintaining concentration, and felt stressed and anxious. On a not insignificant number of occasions, the capacity of the wife to contribute was impaired to the extent that she was bed-ridden for a period of two or three days.
56.Although the conduct of the husband towards the wife at the Business did not involve physical violence, it nonetheless was pervasive and systematic and directed at the wife for a prolonged period. I accept that as a result of this conduct, the contributions of the wife to the Business were made more difficult and onerous and the wife should be given an uplift of her contributions to reflect this.
57.I find that in other respects, the parties made roughly equal contributions during the relationship to the best of their ability, both directly and indirectly, financially and non-financially to the acquisition, sale and maintenance of properties and the welfare of their three children. This finding reflects the evidence before the Court which is to the effect that the parties entered into a relationship in which they:
(a) shared their assets;
(b) made decisions together to buy, finance and sell properties; and
(c) established and ran the Business together.
58.I do not accept the husband’s submission that the fact his contribution to the Business involved physical exertion has the result that his contribution should be given greater weight than the wife. In any case, the wife (as was conceded by the husband) made contributions in the dual capacity of homemaker, and bookkeeper, for the Business.
(Footnotes omitted) (Emphasis in original)
The husband’s written submissions appeared to invite me to embark upon the unedifying task of, in effect, comparing and contrasting the history of family violence here with that in Benson & Drury, although he disavowed this in his oral address. Indeed, whilst axiomatically like cases should be decided alike, it is simply not possible to, at least in this case, in any meaningful way place in some kind of hierarchy incidents of family violence in two separate relationships, inevitably attended by quite different relationship dynamics and personal circumstances. Rather, what Kennon requires, is that the more onerous and difficult nature of the contributions in fact made be taken into account. The primary judge was satisfied that indeed the wife’s contributions had those characteristics attending them, as did the Court in Benson & Drury at [76] (even if it did use the descriptor “significantly”). In that sense, the cases are on all fours.
Given the undisturbed findings of the primary judge on this issue, plainly the weighing of the parties’ contributions must include the impacts of the husband’s family violence which were found to have made the wife’s contributions more onerous. That must inevitably be a matter of assessment informed by the evidence.
I am persuaded that the percentage adjustment – and indeed dollar disparity – was well open to the primary judge on the evidence, and hence there was no miscarriage of justice occasioned by the conceded error. I am satisfied that the error had no influence upon the result. The Notice of Contention is thus correct, and therefore the merit of Ground 1.1 does not justify the appeal being allowed (s 36(1)(b) of the Federal Circuit and Family Court of Australia Act2021 (Cth)).
Ground 2
This ground provides:
2.The learned trial judge gave too much weight to the husband’s lack of disclosure such that her Honour, in making an adjustment on account of the matters listed in s 75(2) of the Family Law Act 1975, made orders that were unreasonable or plainly unjust.
It seems incontestable that the husband did not deign to comply with his obligations as to disclosure in a general sense, as at [35] the primary judge said:
35.The husband's response to the proposed valuation was to suggest that the wife could have the Business for $1,000. While I am not minded to accept the husband’s valuation, I do however have some difficulty accepting that a business that comprised the labour of the husband and, no doubt, a collection of tools and equipment, would have a value beyond a nominal amount. For this reason, and notwithstanding I accept that the husband is in default of orders of the Court regarding disclosure made on 17 May 2019, 23 October 2019 and 19 December 2019 (see r 10.26(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021("the Rules")) and has failed in his general duty of disclosure: see r 6.01 of the Rules, I have not included the amount of $40,000 for the Business in the property pool. Instead, as will become apparent later in these reasons, the failure of the husband to make full disclosure is a matter that has operated against him (and in favour modestly of the wife) when I have come to assess issues of contribution and factors that can be identified under s 75(2) of the Act.
(Emphasis added)
Against that background, at [69], in the course of considering any adjustment under s 75(2), her Honour said:
69.In assessing future needs I have also made an allowance in favour of the wife that recognises the substantial failure of the husband to make proper disclosure in this proceeding. By way of example, the wife (and the Court) remained uninformed by the final hearing, as to the true position of the income derived by the husband from the Business, whether, and in what amount the husband had received an inheritance from his mother and how any such funds had been disbursed. I have taken a robust view, for this reason, of the husband's future needs and capacity to service them, as well as his capacity to meet any orders made and retain adequate assets. In all the circumstances, I consider that an adjustment of 6% in favour of the wife is justified for factors identified under s 75(2) of the Act.
(Emphasis added)
Her Honour had earlier said at [67] and [68]:
67.The husband did not make any submissions that engaged directly with the s 75(2) factors but given his self-represented status, I have proceeded on the basis that he contends that his age and limited capacity for work are considerations that should operate in his favour.
68.I find that both the wife and the husband will necessarily be inhibited and limited in their future capacity to engage in gainful employment. In the case of the wife this recognises her lack of experience and skills and significant psychological impairment. In the case of the husband, it is a product of his age and time in the workforce. However, I consider that the impediment is exaggerated in the case of the wife and I take this into account. The husband continues to work in the Business and derive income from it, whereas the wife is currently unemployed and, on the report of her psychologist, will require significant assistance before she is in a position to re-engage with the workforce.
The use of the word “exaggerated” in [68] is ambiguous – it could mean increased deliberately and falsely so, or increased in comparison to the husband. The husband seemed to somewhat prefer the former interpretation (although in fairness he accepted it was ambiguous), but I do not see any warrant for that, especially given the unchallenged finding in other places in the same paragraph relating to the wife’s “lack of experience and skills and significant psychological impairment” and the like.
The husband did not dispute that a lack of disclosure can inform the s 75(2) adjustment, or that matters of weight were quintessentially for the primary judge. Rather his argument was that, since the two matters specified by the primary judge in [69] were his failure to disclose income, or an $80,000 inheritance, they could not justify a 6 per cent adjustment, being in this case a disparity of $466,820 which “differential is unreasonable and plainly unjust” (husband's Summary of Argument filed 26 September 2022, paragraph 36).
However there are several responses in answer to that complaint. The first is that the 6 per cent adjustment was not solely referrable to the husband’s non-disclosure, but also the matters discussed by the primary judge at [68]. The second is that the primary judge did not only rely on the two matters she referred to at [69], as they were only said to be examples of the husband’s non-disclosure. Finally it is not correct to say, as the husband appears to contend, that somehow the metes and bounds of the extent of the non-disclosure need to be determined in order to make the adjustment defensible, as the very nature of non-disclosure makes that impossible. Hence the authorities advocate a robust approach, which in this case was amply justified.
A decision is presumed to be correct unless the appellate court is persuaded it is affected by error. I am not so persuaded in the way Ground 2 contends.
CONCLUSION
Although there was error as contended in Ground 1, the appeal nonetheless fails, and will be dismissed.
COSTS
In the event the appeal failed, the husband conceded he could not resist an order that he pay the wife’s costs claimed in the sum of $12,059.68. Those costs should be paid within 28 days.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 16 November 2022
0
4
0