Falcken & Weule - [2019] FamCAFC 140

FAMILY COURT OF AUSTRALIA

FALCKEN & WEULE

[2019] FamCAFC 140

FAMILY LAW – APPEAL – PROPERTY – Appeal against orders for the division of property – Whether the primary judge erred in the determination of the parties’ various contributions and thus the overall assessment – Whether a disability insurance payment to the respondent should have been treated as a joint contribution since the premiums of the policy were paid from joint funds – Where a joint decision to use joint funds to obtain an insurance policy is a relevant consideration – Challenge to the weight that was given to the appellant’s contributions – Contributions are not assessed in isolation but as part of the myriad of contributions – Whether the primary judge erred in identifying the parties’ assets and liabilities to determine the property available for division – Where the appellant submits that items of property were or should have been “added-back” to the list of property to be divided – Where there was no error in the primary judge’s approach – Appeal dismissed – No order as to costs.

Family Law Act 1975 (Cth) s 75(2)

Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633
De Winter and De Winter (1979) FLC 90-605
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Housing Commission (NSW) v Tatmar Pastoral Holding Co Pty Ltd [1983] 3 NSWLR 378
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Miller & Miller [2009] FamCAFC 121
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Raine & Creed [2015] FamCAFC 133
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Townsend and Townsend (1995) FLC 92-569; [1994] FamCA 144
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Williams & Williams [2007] FamCA 313
Yates & Yates [2012] FamCAFC 138
Yeates and Yeates [2013] FCWA 117

APPELLANT:

Mr Falcken

RESPONDENT:

Ms Weule

FILE NUMBER:

PTW

7430

2015

APPEAL NUMBER:

WEA

2018

DATE DELIVERED:

16 August 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Perth

JUDGMENT OF:

Strickland, Aldridge & O'Brien JJ

HEARING DATE:

10 May 2019

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

30 July 2018

LOWER COURT MNC:

[2018] FCWA 138

REPRESENTATION

THE APPELLANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Evans

SOLICITOR FOR THE RESPONDENT:

Graeme A Ryan & Associates

Orders

The appeal be dismissed.
There be no order as to costs.

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 Falcken & Weule 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).

IN THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WEA 28 of 2018
File Number: PTW 7430 of 2015

Mr Falcken

Appellant

And

Ms Weule

Respondent

REASONS FOR JUDGMENT

Introduction

This is an appeal by Mr Falcken (“the husband”) against orders for the division of property made on 30 July 2018 in proceedings against Ms Weule (“the wife”).
A judge of the Family Court of Western Australia found that the parties’ assets had a net value of $1,849,408. The parties’ contributions to their property and the welfare of the family were found to favour the wife as to 53 per cent and 47 per cent to the husband. No adjustment to that position was considered necessary after consideration of the matters raised by s 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
The husband’s appeal concentrated on two main areas. The first was the determination of the parties’ various contributions and thus the overall assessment in the light of a debilitating stroke which the wife suffered in 2006. The second was a challenge to three items that either were or should have been “added-back” to the list of property to be divided.
The parties commenced cohabitation in 1994 and were married in 1997. Twin children, X and Y, were born in 2003 (“the children”). The husband worked in the engineering industry and the wife in legal services.
On 20 February 2006, the wife suffered a severe stroke which left her with a serious permanent disability. She has not been able to work since.
The wife received $235,152.92 on 26 March 2007 as lump sum compensation for total and permanent disability pursuant to an income protection policy. She has also received and continues to receive a pension from the insurer.
On 4 September 2015, the wife obtained an interim violence restraining order against the husband. The husband moved out of the family home immediately and the parties have not lived together since. The interim order was discharged on 29 April 2016 and the underlying application was dismissed.
Meanwhile, on 2 February 2016, interim orders were made by consent for the children to live with both parties on a week about basis. The primary judge recorded that since then the children have spent progressively less time with the wife so that by the time of the hearing, they were living primarily with the husband.

The Appeal

Did the primary judge err in concluding that the property interests be divided 53 per cent to 47 per cent in favour of the wife? (Ground 1)

This ground was divided into two sub-grounds. The first concerned the disability insurance payment to the wife which the husband contended should have been treated as a joint contribution. The second challenged the weight that was given to five aspects of the husband’s contributions that were made after the wife suffered her stroke in February 2006.

The disability insurance payment (Ground 1(a))

The husband submitted that the primary judge erred by treating the receipt of the disability insurance payment as a significant contribution by the wife, instead of it being a joint contribution by both of them, because the premiums of the policy had been paid from joint funds. He also complained that the primary judge erred when he described the payment as having been received “quite late in the marriage” and over-emphasised the weight to be given to it.
It is useful to commence by setting out in full the primary judge’s conclusion on the issue of contributions so that the relevant findings appear in the correct context.
His Honour said:
210.It is common ground that the parties commenced their relationship not owning property of any particularly significant value.
211.It is found that each party worked hard during the marriage and fulfilled the role expected of him/her by the other. Each party contributed income from employment and business activity. Each party made non-financial contributions to the acquisition, conservation and improvement of various items of property. Each party has made important s 79(4)(c) contributions, particularly as caregiver to the children.
212.In this case, as in so many of its type, each party has focused on individual elements of the relevant history. For example, the [husband] invited the court to place heavy weight upon his post‑separation s 79(4)(c) contributions as primary caregiver to the children. For her part, the [wife] argued for significant weight to be attached to the receipt by her in 2007 of her insurance claim of $235,152, which has been used for the common good.
213.Each party has set out in some detail, in the various affidavits, the contributions made by him/her respectively to the time of trial. None of that evidence was materially challenged, except perhaps in respect of how the children were cared for immediately following the occurrence of the [wife’s] stroke.
214.Having had an opportunity to reflect on the above evidence and on the closing submissions, it is concluded that, but for the contribution of the insurance claim of $235,152, it would have been likely that a finding would have been made that the respective contributions of the parties, overall, be found to carry equal value. It is true that the [husband’s] post-separation s 79(4)(c) contributions have been greater than those of the [wife]. However, the [husband] has not held paid employment for some time and the [wife’s] income has been exhausted in supporting the family as a whole and the broad financial structure. That is, the [wife’s] post-separation s 79(4) contributions are also significant.
215.The total net value of the asset pool, inclusive of superannuation property, has been found to be $1,849,408. Thus, the [wife’s] insurance claim, received quite late in the marriage, represents, on its own, about 13% of the value of the pool.
216.It also needs to be remembered that the [wife’s] quality of life has been permanently and significantly reduced. She has suffered and continues to suffer in many ways as a consequence of her stroke. Ordinary notions of justice and equity require that her contribution of the insurance claim be recognised appropriately in the overall evaluation of contributions.
217.At this point in a judgment, as has often been said, there will necessarily be a leap from words to figures or, as sometimes said, from the qualitative to the quantitative.
218.This was a very long and eventful marriage. Each party has made very substantial contributions of varying types, which continue to be made to this day.
The husband correctly points out that the primary judge did not expressly refer to any contribution made by him to the premiums for the income protection policy pursuant to which the wife received her payment. He submitted that this was an error and that his Honour should have found that the receipt and use of the capital disability insurance payment was an equal contribution by both of them and not one that favoured the wife.
The evidence relied on by the husband demonstrates that at some stage during the marriage the parties agreed that they should each obtain income protection insurance (Transcript 17 May 2018, p.24 lines 37–48; Affidavit of the wife sworn on 10 March 2017, p.23). Thereafter, the wife paid the premiums, seemingly from her income. Nonetheless, it was a joint decision to use family funds to obtain income protection.
We accept that this can be a relevant consideration but we do not accept the husband’s contention that it follows from the facts relied on by him that there has been an equal contribution to the receipt and use of the benefits of the policy.
In Yates & Yates [2012] FamCAFC 138 the Full Court (Finn, Strickland & Johnston JJ) discussed the issue of contributions in similar circumstances and said:
100.In any event, it is… a matter of determining whose contribution it is, and there may be many permutations of that. In other words, it may be a sole contribution by the party whose insurance policy it is, it may be an equal contribution by both parties, or it may be that it is a joint contribution but with one party making a greater contribution than the other…
In Raine & Creed [2015] FamCAFC 133 (“Raine”) the Full Court considered the wife’s indirect contributions to the entitlement of the husband to receive disability insurance payments and found that the contribution was significant because the disability insurance payments were the husband’s only income. The Court (Finn, Thackray & Strickland JJ) said:
145.Turning to the relevant s 75(2) factors, given our findings in relation to the grounds of appeal, a specific issue to be addressed is the effect (if any) of the wife making an indirect contribution to the entitlement of the husband to receive the disability insurance payments (s 75(2)(j)). It was a joint decision by the parties to take out such insurance and for the premiums to be met from joint funds.
As these authorities make clear, the issue is one of weight. In Raine the Full Court found that the wife’s indirect contributions, overall but including the contribution to the disability insurance payments, should be recognised by an adjustment of five per cent in her favour.
However, the agreement to obtain such insurance and the source of payments of the premiums are not the only considerations.
As Thackray CJ said in Yeates and Yeates [2013] FCWA 117 at [208] and [209] the payment of insurance premiums cannot be compared with contributing to a superannuation fund and that “[t]he sad reality is that the money became available only because the husband was diagnosed with a terminal illness and then died”.
Finally, we are content to adopt the following statement made by Strickland J in Miller & Miller [2009] FamCAFC 121:
101.…This payment was not a windfall. It was a payment received by the husband because he suffered a heart attack. It matters not that it was a minor attack from which he recovered. Despite the husband’s good fortune in this regard, his health into the future is “significantly compromised” as a result according to the evidence of his cardiologist. Thus, although the fact that it was a joint decision to take out the insurance and the fact that the premiums were maintained out of the parties’ joint funds can be treated as contributions by each of the parties, there still needed to be a life-threatening event before a payment could be made. It is simply not open to the wife to argue that the parties have contributed equally to this payout. It is the husband’s money to which the wife has made an indirect contribution of a relatively minor nature…
(Original emphasis)
The upshot of these authorities is that a joint decision to take out insurance is a contribution by both parties. It is worth recording that in none of these cases was that contribution regarded as being anywhere close to equal.
The primary judge recognised the disability insurance payment was received by the wife for being totally and permanently disabled. It was compensation for her not being in a position to receive income for what would otherwise have been the rest of her working life.
It was, however, not used by the wife to support her over those years, but was entirely spent on supporting the family prior to separation.
Consistent with the above authorities, the primary judge found that this was a significant contribution by the wife.
Although his Honour did not expressly refer to the joint decision to take out insurance, that does not mean that it was not taken into account. It is not necessary for a primary judge to record every matter taken into account (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 per Gleeson CJ, McHugh & Gummow JJ at [62]; Housing Commission (NSW) v Tatmar Pastoral Holding Co Pty Ltd [1983] 3 NSWLR 378 per Mahoney JA at 385–386).
After the discussion on contributions, which we have already set out above, the reasons continued:
217.At this point in a judgment, as has often been said, there will necessarily be a leap from words to figures or, as sometimes said, from the qualitative to the quantitative.
218.This was a very long and eventful marriage. Each party has made very substantial contributions of varying types, which continue to be made to this day.
219.It is determined that, on the score of contributions alone, the net property interests of the parties, including superannuation property, should be divided in proportions of 53% : 47% favouring the [wife]. In reaching that decision, consideration has been given to the actual dollar effect of this assessment.
As the husband pointed out, the capital sum that was received represented approximately 13 per cent of the value available for distribution. He submitted that the primary judge’s finding was, in fact, a finding by his Honour that the disability insurance payment received by the wife represented a 13 per cent contribution by her.
We would highlight that the adjustment in respect of it was only three per cent. Obviously, other factors were taken into account, such as the husband’s care of the family after 2006 and, we infer, the joint decision to take out insurance. Given the significance of the other contributions, we do not find it surprising that this was not specifically noted.
The primary judge found that but for the contribution of the disability insurance payment, the parties’ contributions, overall, would have been equal. Therefore, if the husband’s contention as to the approach of the primary judge was correct, a 13 per cent adjustment ought to have been made to reflect the specific contribution of the disability insurance payment. That was not what occurred. Instead of the contributions being found to be equal, they were found to favour the wife by only three per cent, leading to the property division of 53 per cent to the wife and 47 per cent to the husband.
Thus, whilst the payment itself represented 13 per cent of the property pool, it was taken into account not at that percentage, but at a much lower one. This, of course, reflects the fact that contributions are not assessed in isolation, but as part of the myriad of contributions made by the parties throughout the relationship (Williams & Williams [2007] FamCA 313 at [26]).
Further, having regard to the nature of the contributions made by both parties, we do not regard the lack of a reference to the joint payment of premiums as being material.
Ultimately, however, the husband’s challenge is to the weight that the primary judge gave to the significant contributions he made by caring for the family after the wife’s stroke on the one hand, and the wife’s contribution of the disability insurance payment on the other hand. The husband submitted that these contributions should have been seen as equal and not as favouring the wife.
The weighing of such matters is very much a matter for the primary judge and appeals from that exercise face a high bar (Gronow v Gronow (1979) 144 CLR 513 (“Gronow”); Norbis v Norbis (1986) 161 CLR 513).
In Gronow at 519–520, Stephen J said:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight. In the present case it should not have done so at all.
We are not satisfied that such an error has been demonstrated and this aspect of the ground does not succeed.
Finally, the husband submitted that the primary judge erred when he described the disability insurance payment as being received “quite late in the marriage”. The parties commenced cohabitation in 1994, married in 1997 and separated in 2015. The relationship lasted for 21 years and the marriage for 18 years. The disability insurance payment was received in 2007, some eight years before the parties separated.
The use of the rather vague word “late” is not inapt because the payment was not received early in the marriage or half way through it.
However, that is an issue of arid semantics. As his Honour expressly recorded that the payment was received in 2007, there is no reason to think that the primary judge had anything other than that date in mind when describing the receipt of the payment.

Ground 1(a) does not succeed.

Did the primary judge fail to give appropriate weight to the husband’s financial and non-financial contributions? (Ground 1(b))

The husband submitted that the primary judge erred by basing his decision on contributions solely on the husband’s care of the children after the wife’s stroke and on the wife’s contribution of the disability insurance payment. The submission continued that, in doing so, his Honour failed to take into account or to give appropriate weight to the following:
·the husband cared for the wife after the stroke and received a carer’s allowance. This meant that contrary to the judge’s finding, the wife did not have the same capacity to care for the children as him;
·he was and remains the primary caregiver to the children;
·he undertook most of the household tasks after the wife’s stroke and maintained the real estate properties held by the parties as an investment;
·the wife would receive an indexed disability income until she turns 67 years of age (currently at $75,000). This is pursuant to an income protection insurance policy where the parties jointly paid the premiums; and
·the husband’s career as an engineer has come to an end because of the need for him to care for the wife and the children and, given his age and continuing care of the children, it is unlikely that he will work again.

The care of the wife

The primary judge was well aware of the effect of the wife’s stroke, recording the following:
37.Most unfortunately, on 20 February 2006 the [wife] suffered a severe stroke which has left her with a serious permanent disability and has deprived her of her professional and any other earning capacity. The [wife] was hospitalised until August 2006.
38.The [wife] has lost a significant degree of function in her limbs, is unable to write, has difficulty reading and has somewhat impaired speech. Fortunately, her intellectual acuity remains intact and she is able to drive a modified motor vehicle.
It is obvious that on her return home, the wife would require care from the husband. It is also relevant to recall that the wife has lived independently since early 2015 and that in 2016 consent orders were made for the children to live with her every second week.
The husband clearly took on a significant role in the care of the children after the stroke but the wife also made significant financial contributions, being the disability insurance payment and the continuing disability pension.
We are satisfied that these matters were taken into account as the following passages (which it is convenient to repeat) establish:
211.It is found that each party worked hard during the marriage and fulfilled the role expected of him/her by the other. Each party contributed income from employment and business activity. Each party made non-financial contributions to the acquisition, conservation and improvement of various items of property. Each party has made important s 79(4(c) contributions, particularly as caregiver to the children.
…
213.Each party has set out in some detail, in the various affidavits, the contributions made by him/her respectively to the time of trial. None of that evidence was materially challenged, except perhaps in respect of how the children were cared for immediately following the occurrence of the [wife’s] stroke.
…
218.This was a very long and eventful marriage. Each party has made very substantial contributions of varying types, which continue to be made to this day.
As we have already said, it is not necessary for a trial judge expressly to refer to every fact, consideration or submission. During the course of his oral submissions, the husband accepted that his challenge was essentially one of weight. We shall return to that issue after we have considered the other matters raised by the husband.

The primary carer of the children

The primary judge clearly understood and accepted the husband’s substantial care of the children. The post-separation care was expressly noted at [212].

The care of the parties’ property

The husband’s submissions focussed on the maintenance of the investment properties which was a matter not expressly recorded by the primary judge.
The husband relied upon the following paragraphs in the wife’s affidavit sworn on 27 January 2016:
179.All renovations and property maintenance issues were billed and paid for by [B Pty Ltd], as deductions against the rental incomes on the properties and my Income Protection Payments.
180.[The husband] was responsible for organising and managing the tenants in the various rental properties and was paid accordingly.
We were informed that B Pty Ltd was a family company.
This passage does not identify the frequency, nature and duration of the work but accepts that it was performed. It also indicates that the husband was paid for his work.
The husband referred to the following which also appeared in an affidavit sworn by the wife on 10 March 2017. It is to the same effect:
172.… While [the husband] and I cohabitated, [the husband] was responsible for managing tenants in the rental properties and was paid for this.
The husband also took us to the following extract of his cross-examination of the wife. The following appears to be the relevant section:
[THE HUSBAND]: Renovating [C Street]?
[THE WIFE]: Yes.
[THE HUSBAND]: Renovating [E Street] which was ‑ ‑ ‑?
[THE WIFE]: No.
[THE HUSBAND]: ‑ ‑ ‑ putting a new kitchen into ‑ ‑ ‑?
[THE WIFE]: No. It’s – so [E Street], that’s 2008 purchase. 2008.
[THE HUSBAND]: But we had a family moving in the – from the UK with five children. And when they moved out, you were there a couple of times cleaning up the place ‑ ‑ ‑?
[THE WIFE]: Yes.
[THE HUSBAND]: ‑ ‑ ‑ readying it for the next tenant?
[THE WIFE]: Yes.
[THE HUSBAND]: And I spent a fair bit of time doing the place up, getting it ready for the next tenants, which were tradespeople sharing the place?
[THE WIFE]: Yes. But it’s 2008 was the purchase [E Street].
(Transcript 17 May 2018, p.18 lines 10–26)
This indicates that the husband performed some renovations but that both parties cleaned and tidied up.
Given the general nature of the evidence and the many other contributions made by both parties, particularly those to which the parties gave specific emphasis in their submissions to the primary judge, it is not surprising that the primary judge did not expressly refer to this evidence.
We are satisfied that the primary judge did take this contribution into account because he expressly recorded at [213], in the conclusion, that “[e]ach party has set out in some detail, in the various affidavits, the contributions made by him/her respectively to the time of trial”. Obviously, but not surprisingly, given the scant nature of the evidence, his Honour did not regard the matter as worthy of any particular weight or specific comment.
In any event, if his Honour erred by not taking this into account, the error is not material for the same reason (De Winter and De Winter (1979) FLC 90-605 at 78,092).

The wife’s guaranteed disability income payments

This was expressly taken into account by his Honour in his discussion of the s 75(2) matters. He said:
229.It is highly unlikely that the [wife] will ever return to the workforce. She lives on her disability insurance payments of around $74,500 per annum. Of course, these payments are subject to income tax.
…
238.The [wife’s] income is stable and it appears that she is in the habit of lodging her income tax returns in a timely manner. It is likely that proper levels of child support in all of the circumstances will be paid by the [wife] going forward.

The husband’s employment prospects

The husband submitted that his career was over and that this required recognition by the primary judge. This was, in part, he said, because his role as a carer for the wife and the children took him out of the workforce and deprived him of the opportunity to improve his skills.
That, however, was not the finding made by the primary judge. His Honour said:
225.The [husband] enjoys reasonably good health. The [wife’s] health is significantly compromised. The [husband] has the necessary physical and mental capacity for appropriate gainful employment. He said that he would like to return to the workforce as soon as possible. Given the ages of the children, it should be possible for the [husband] to work on a full-time basis.
226.The [husband] has skills and qualifications as an engineer. In the not too distant past he has conducted his own sub-contract business earning as much as $130,000 per annum. The [husband] said, however, that he was fortunate to have the support of a very understanding head contractor, in the sense that his working commitments could be tailored to meet his responsibilities to care for the children.
227.The [husband] impressed as a gentleman of above average intelligence and sophistication.
228.The available evidence is probably insufficient to allow a finding that the [husband] would be able to return to work earning $130,000 per year in the short-term. It is difficult to make a finding as to the [husband’s] earning capacity in precise dollar terms. However, the evidence would indicate that the [husband] is capable of earning a good deal more than the [wife] receives under her disability insurance cover.
…
233.The [husband] was able to generate income of about $130,000 per year over the period from about 2010 to 2012. Hopefully, he will be back to full-time work soon. He should have many more productive working years still ahead of him.
It is to be noted that the primary judge did not find that the husband would return to earning the same level of income he received before the wife suffered her stroke but found instead that he would be likely to receive more than the wife was to receive from disability payments.
The husband’s real complaint, therefore, is that the primary judge did not make the finding for which he contended. That, of itself, does not sound in appealable error. The husband’s submissions did not identify why it is said that these findings should not have been made. We consider that they were open on the evidence.
We turn then to the issue of weight. The husband submitted that these matters justified a finding that contributions favoured him 65 per cent to the wife’s 35 per cent.
This, however, is to focus only on the contributions made by him and not those made by the wife. We have already referred to the authorities that reinforce the need to look at the whole myriad of contributions made by the parties. This is what the primary judge did. Having regard to the difficulties that challenges to findings of weight face, we are quite unable to identify any error on the part of the primary judge.
Ground 1(b) therefore fails.

Did the primary judge err in identifying the parties’ assets and liabilities to determine the property available for division? (Ground 2)

The primary judge identified the parties’ assets and liabilities to determine the property available for division. At the request of the parties, his Honour considered the inclusion of items of property which had been disposed of by one of the parties and thus were no longer available for division. In this ground, the husband raises three of these items.

The wife’s loan and superannuation drawdown

The primary judge decided that it was appropriate to add back the wife’s legal costs of $113,939, which had been paid from funds withdrawn from her superannuation and from a line of credit held by both parties. Such an approach accords with established authority (Chorn and Hopkins (2004) FLC 93-204 (“Chorn”)).
The husband submitted that the primary judge should have gone further and added back all of the amounts withdrawn from the two abovementioned accounts by the wife, namely, $152,796. He asserted that this was because the withdrawals constituted a premature distribution of property as described in Townsend and Townsend (1995) FLC 92-569.
That may be a basis for adding back or, perhaps preferably, dealing with a premature distribution of property under s 75(2)(o) of the Act, but it is not obligatory. It is to be recalled that addbacks are the exception, not the rule, and that parties are entitled to provide for their own support pending the resolution of their financial arrangements (Chorn at [24]). If such spending was extravagant or reckless it may more readily be taken into account but the approach to such expenditure remains discretionary (Trevi & Trevi (2018) FLC 93-858 at [27]–[30]).
In early 2016, the wife drew down $80,000 from a line of credit secured over a property owned by her which she paid to her lawyers.
It was not in dispute that in 2016 the wife also drew down her superannuation, which then had a balance of $74,000. She paid $9,000 in tax and received $65,000 (Transcript 17 May 2018, p.9 lines 42–45).
Of this amount, $20,000 was paid to her lawyers on account of their fees for acting for her in the proceedings against the husband. As to the balance, the primary judge said:
158.Staying with the subject of addbacks, it is common ground that, in mid-2016, the [wife] drew down on her superannuation account to the extent of $65,000 net. The [wife] admitted paying $20,000 of this figure to her lawyers. As for the balance, the [wife’s] oral evidence was little vague. She said the balance was spent on “lawyers, [D School] fees, child support and the ATO”.
159.The evidence does not indicate that the [wife] spent any of the money drawn down from her superannuation account in a reckless or irresponsible fashion. Furthermore, the [wife] has established that the only cash now available to her are the amounts which she has disclosed as being held in her various bank accounts, as will be particularised below.
As the above passage makes clear, the primary judge found that the money drawn down by the wife was not spent recklessly or extravagantly. Further, it seems that some of the funds drawn down had not been spent and remained in the wife’s bank accounts.
This led his Honour to conclude:
160.On reflection, it is determined that the fairest way to deal with the issues of the [wife’s] paid legal costs, her drawdown on account [# …87] and her drawdown on her superannuation account is to add back the whole of the [wife’s] paid legal costs of $113,939 and include in the pool the various amounts deposited in the [wife’s] various bank accounts.
The approach to the legal costs taken by his Honour accords with the authorities. The treatment of the bank accounts (in the sum of $25,651 at the time of the hearing) follows logically from the facts identified in the reasons.
It remains then to deal with the difference between these two sums and the original drawdowns. This difference is explained by the wife’s spending which was found by the primary judge to be neither reckless nor irresponsible.
Further, the husband cross-examined the wife as to how she spent the funds that were drawn down (Transcript 17 May 2018, p.10 lines 8–11). At no time did the husband suggest to the wife that she could have or should have paid those expenses from her income as opposed to drawing on the two accounts. The point is, therefore, not now available as the evidence may have taken a different course had the questions been put to the wife (Metwally v University of Wollongong (1985) 60 ALR 68; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418).
We do not detect any error in his Honour’s approach.

The school fees

Immediately after the wife drew down on the line of credit as we have just described, the husband withdrew $20,000 which he ultimately used to pay the children’s school fees.
The husband submitted that the primary judge erred by adding back the school fees because both parties had signed the enrolment form and therefore were both liable for the fees.
That, however, was not the end of the matter. After the breakdown of the marriage, the wife formed the view that the parties could no longer afford to pay private school fees and opposed any further fees being incurred.
This led to the following findings:
148.The evidence immediately above was not challenged by the [wife]. However, it is the [wife’s] case that:-
(a)she should not be responsible for any of the children’s private school fees for 2016 and 2017; and
(b)the $20,000 drawn down by the [husband] to pay [X’s] 2016 school fees should be added back to the pool on the [husband’s] side of the ledger.
…
166.After the breakdown of the marriage in August or September 2015 the financial circumstances of the parties changed significantly. They now needed to run two households and in January 2016 they lost the income stream from renting out the [C Street] property.
167.Whilst most parents want the best for their children and whilst many parents, including the [husband], are convinced that private school education is better than public school education, there are always financial realities that need to be addressed. The [wife’s] case, which is compelling, is that parents who have an income of about $75,000 per annum on one side and another only Centrelink income on the other side simply cannot afford to send their children to expensive private schools. That said, it must be noted that the [husband] was obviously very sincere about his expressed beliefs that the children should not move schools, especially [X].
…
178.If the $20,000 [the husband] has drawn down on loan account [# …87] is not added back to the pool on his side of the ledger, then the effect is to require the [wife] to contribute to payment of the [F School] fees in circumstances where, from the outset, she was firmly opposed. On reflection it is determined that it would not be just and equitable for the $20,000 figure not to be added back.
179.On the balance of probabilities, it is found that the [husband] did say at the case assessment conference that he would be responsible for payment of the fees. Moreover, [Ms G] refers to a December 2015 conversation between the [husband] and the School Registrar of [F School] in which there was an understanding that [X’s] fees would be paid by the [husband]. The [husband] did not subpoena [Ms G] to give evidence. If he thought the content of [Ms G’s] letter was misleading then it would be expected that he would have compelled [Ms G] to give evidence in the trial.
180.Without expressing a concluded view on this subject, it does appear that, by her own letter, [Ms G] has acknowledged that the [wife’s] contractual liability to [F School] came to an end following receipt of the [wife’s] email of 31 August 2015. That is, there appears to be some doubt as to whether [F School] would actually be legally entitled to sue and recover outstanding fees as against the [wife].
…
184.Therefore, the unpaid school fees will not be included in the relevant pool of assets and liabilities as matters of joint responsibility. There will be indemnities granted to the [wife] to cover the whole of the [F School] fees and also the [D School] fees up to and including second term in 2018.
The husband did not seek to challenge these findings and continued to focus on the enrolment form and the fact that he considered it was necessary to keep both children at private schools. He accepted that he did not attempt to call the evidence referred to in [174] and [175].
The primary judge’s findings are consistent with the evidence and no error has been identified.

The H Bank web-saver account

The husband submitted that the primary judge erred by not adding back the sum of $39,558.27. This was a balance held by the wife in a H Bank web‑saver account as disclosed in her Financial Statement. The fate of the funds was not discussed by the primary judge.
The wife accepted in cross-examination that this was the balance held in the account at the time of separation (Transcript 17 May 2018, p.3 line 25). The account had a balance of $7,821 at the time of the hearing which was recorded in the list of assets and liabilities.

The husband says that he questioned the wife about the funds in this account and what happened to them. The wife’s Summary of Argument filed 1 April 2019 asserts that he did not.
The husband has only obtained excerpts of the transcript. None of them includes cross-examination of the wife on this issue.
In the absence of the relevant transcript it is impossible to deal with this aspect of the ground as we simply do not know what, if any, evidence was given on the subject.
Ground 2 therefore fails.

Conclusion

The appeal will be dismissed.

Costs

The wife sought costs in the sum of $5,000 in the event that the appeal was dismissed.
Taking into account the fact that the husband is presently living mostly on Centrelink benefits and child support payments, and has the substantial care of the children, there will be no order as to costs.

I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & O’Brien JJ) delivered on 16 August 2019.

Associate:

Date: 16 August 2019