Field & Basson
[2013] FamCAFC 32
•19 March 2013
FAMILY COURT OF AUSTRALIA
| FIELD & BASSON | [2013] FamCAFC 32 |
| FAMILY LAW – APPEAL – NOTICE OF APPEAL – PROPERTY – where the husband appeals orders for property settlement made by Federal Magistrate Roberts – where the wife opposes the appeal – where the husband seeks that all orders be set aside, that all assets be sold, that all liabilities be discharged and the net proceeds of sale be divided 65 per cent to the wife and 35 per cent to the husband – where many of the complaints of the husband can be described as weight challenges – where the difficulties confronting an appellant in succeeding in such a challenge are well known – where there is no merit in any of the grounds of appeal – appeal dismissed. FAMILY LAW – APPEAL – APPLICATION TO ADDUCE FURTHER EVIDENCE – where the husband seeks to adduce further evidence in relation to the issue of the stock of the business of the parties – where the application is opposed by the wife – where the Federal Magistrate ordered that the husband have the stock – where the husband seeks to adduce further evidence in the form of emails and certain Facebook pages which he alleges show that the wife continued to sell stock before and during the trial and after the orders were made by the Federal Magistrate – where the husband seeks to put this further evidence not to establish that the Federal Magistrate made an error but rather not to admit it would “affront common sense, or a sense of justice” – where these are not matters for an appeal – application dismissed. FAMILY LAW – APPEAL – NOTICE OF APPEAL – COSTS – where the wife did not seek costs against the husband in the event that the appeal was dismissed – no order as to costs. |
| Family Law Act 1975 (Cth) s 75(2), s 93A(2) |
| Antmann and Antmann (1980) FLC 90-908 CDJ v VAJ (1998) 197 CLR 172 Gronow v Gronow (1979) 144 CLR 513 Kowaliw and Kowliw (1981) FLC 91-092 Norbis v Norbis (1986) 161 CLR 513 Ousley and Ousley (1976) FLC 90-122 Petruski & Balewa [2013] FamCAFC 15 Pierce v Pierce (1999) FLC 92-844 Steinbrenner & Steinbrenner [2008] FamCAFC 193 |
| APPELLANT: | Mr Field |
| RESPONDENT: | Ms Basson |
| FILE NUMBER: | LNC | 126 | of | 2011 |
| APPEAL NUMBER: | SOA | 27 | of | 2012 |
| DATE DELIVERED: | 19 March 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide by video link |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 27 September 2102 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 15 March 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 188 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Bishop (Solicitor) |
| SOLICITOR FOR THE APPELLANT: | Bishops Barristers & Solicitors |
| THE RESPONDENT: | In Person |
Orders
The appeal be dismissed.
The application in an appeal filed on 20 August 2012 be dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Field & Basson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SOA 27 of 2012
File Number: LNC 126 of 2011
| Mr Field |
Appellant
And
| Ms Basson |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed 12 April 2012 Mr Field (“the husband”) appeals against orders for property settlement made by Federal Magistrate Roberts on 15 March 2012. The respondent in the appeal is Ms Basson (“the wife”) and she opposes the appeal.
In summary, the orders made by his Honour provided for the wife to transfer and deliver up to the husband the stock of a business known as “C Business” and a Jeep motor vehicle (subject to a loan), for the wife to retain her interest in three properties, for the husband to transfer to the wife his interest in
the partnership in the parties’ names and its assets including the jointly owned property on which the business operated, and provided for the wife to take over all debts of the business and the partnership, and all mortgage and taxation liabilities and indemnify the husband in relation thereto.
On appeal the husband seeks in effect that these orders be set aside, that all the assets be sold, all the liabilities be discharged, and the net proceeds of sale be divided 65 per cent to the wife and 35 per cent to the husband.
The husband was represented by his solicitor at the hearing of the appeal, but the wife, as was the case below, appeared unrepresented.
On 20 August 2012 the husband filed an application in an appeal seeking to adduce further evidence on the hearing of the appeal. I will address this application later in these reasons.
Background
At the time of the trial the wife was aged 47 years and the husband was aged 48 years.
The parties commenced cohabitation in September 1991, they married in March 1994, and they separated in mid-2009, but lived under the same roof until early 2010.
There is one child of the marriage who was aged 13 years at the time of the hearing, and she lives with the wife.
It was common ground that the wife brought significant assets into the marriage. They comprise five properties, furniture, a motor vehicle and cash totalling in value $373,471, net of mortgage liabilities.
At the time of the marriage the wife was working for various employers and she received income from her investment properties.
The husband brought into the marriage one property, furniture and motor vehicles with a total net value of $45,000. In addition, he had a superannuation interest which was worth in excess of $2,000. He was employed full-time at the time of the marriage.
In 1988 the parties commenced a business known as “C Business”. As the business grew the husband resigned from his employment and received his superannuation which had a gross value of almost $107,000. There was no evidence as to the amount of taxation the husband was required to pay in relation to this.
Apart from working in the business the husband undertook maintenance and renovation work on the wife’s properties.
The wife worked full-time in the business from its inception, with the business being run both as a company and a partnership.
The parties took out loans to purchase the business premises and those loans were secured by mortgages over two of the wife’s properties.
The business was not a success and the parties were not able to meet all of their financial obligations.
In early 2011 the husband obtained outside employment and ceased his direct involvement in the business which was left to the wife to operate.
The wife closed the business abruptly just before Christmas 2011.
The reasons for judgment of the Federal Magistrate
The Federal Magistrate commenced his reasons for judgment by noting that the orders the husband was seeking had changed from those set out in his Initiating Application filed on his behalf by his former solicitors in March 2011. At the time of trial he appeared to be seeking “an allocation to him of a reasonable percentage of the net value of the asset pool”, but with no specificity as to how that would be achieved. The Response filed by the wife by her former solicitors, also differed from the orders sought by her at trial in that she sought that she retain all assets and the husband be responsible for all debts.
At the time of trial the parties were unrepresented and the Federal Magistrate made specific mention of the difficulties that caused the court in having to “assume the burden of endeavouring to ascertain the rights of the parties …”, quoting from the High Court decision of Neil v Nott and Another (1994) 121 ALR 148.
The Federal Magistrate then set out the evidence relied upon by the parties, and the background of the parties. His Honour noted that although the parties entered into a pre-nuptial agreement that was not binding on the court because it pre-dated the introduction of the legislation providing for that. However, his Honour was still able to use that document insofar as it provided information about the intentions of the parties, and set out the assets each brought into the marriage.
His Honour then identified the assets that each party brought into the marriage, and to repeat, the wife had assets to the total value of $373,471 net of mortgage liabilities, and the husband had assets to the total value of $47,000, although it was likely that he had a greater superannuation entitlement than was included in that figure.
His Honour then detailed the employment of the parties leading into the commencement of the business and the subsequent history of that undertaking.
After setting out the relevant law his Honour addressed the net asset pool of the parties finding they had assets to the value of $1,620,000 and liabilities to the value of $985,027. However, his Honour observed that the figure for stock that he accepted, being the wife’s figure, may not be entirely accurate because some of the stock was considered dead stock and there would also be costs incurred in disposing of it.
His Honour noted that at the time of trial almost all of the borrowings of the parties were in arrears, and creditors were pursuing legal action. Thus, despite the net value of the pool of assets being $634,973, his Honour considered that it was more likely to be only of the order of $600,000.
The Federal Magistrate then turned to consider the issue of contributions.
His Honour further detailed the employment of each party and the roles that they undertook in the business.
The Federal Magistrate found that although their income fluctuated from time to time the parties contributed their respective incomes for their mutual benefit.
The husband contended that he made many non-financial contributions throughout the relationship, which the Federal Magistrate found that wife sought to “belittle”. The Federal Magistrate found that the husband did contribute by way of the maintenance and renovation of the various properties of the parties, and that the wife also made “significant non-financial contributions”.
His Honour was somewhat “bewildered” by why the wife closed the business of the parties just before Christmas 2011 given that that was the busiest time of the year for that business, and if it had been kept open she could have reduced the stock level and paid off some of the debt.
The Federal Magistrate found that the wife appeared not to want to take any personal responsibility for the financial situation the parties found themselves in. However, his Honour determined that “neither party [was] completely blameless”.
His Honour found that both parties had been “willing to let their debts mount up”, and they were not prepared to accept “the reality that they cannot afford to keep their child enrolled at an expensive private school”.
Overall the Federal Magistrate found that the contributions of the parties should be assessed as equal (apart from the greater initial contributions by the wife). His Honour gave a weighting of 25 per cent to the wife’s initial contributions, noting that three of the properties the wife brought into the relationship formed part of the asset pool at trial.
As to the s 75(2) factors his Honour made a 12.5 per cent adjustment in favour of the wife in light of her having greater responsibility for the care of the child, and the husband having the greater income.
Thus, his Honour concluded that the wife should receive 87.5 per cent of the net assets of the parties, and the husband 12.5 per cent.
The Federal Magistrate was of the view that there was no simple solution to the problems the parties found themselves in. His Honour observed that the only real solution was for real estate to be sold. However, his Honour noted that the wife was unwilling to sell any real estate in her name, and she was “unlikely” to be “cooperative”. Thus his Honour came to the view that “the only way to do justice between the parties” was to transfer all the business stock to the husband to allow him to sell it, and hopefully realise funds in the vicinity of $80,000. The Jeep motor vehicle was also to be transferred to him, which the husband was then at liberty to sell. If those items were worth more than the figures attributed to them by the Federal Magistrate, as was suggested by the husband, then the Federal Magistrate considered that the husband might be able to realise the 12.5 per cent that he thought was appropriate.
His Honour then concluded as follows:
63.The settlement that I have proposed above is likely to fall short of providing the husband with 12.5% of the net value of the assets. However, I cannot see any better way of achieving a just and equitable outcome. If something is not done quickly to resolve the parties’ own “debt crisis”, the parties will both be overwhelmed by it.
64.While I have no confidence that the wife will sell real estate in time to prevent her being overwhelmed, all I can do is make that suggestion.
The orders made 15 March 2012
The Federal Magistrate made the following orders:
(1)That [MS BASSON] (“the wife”), either personally or in her capacity as a shareholder and director of [C Business] (Australia) Pty Ltd (“the company”) must forthwith transfer and deliver up to [MR FIELD] (“the husband”) the following:
(a)all existing stock of the business formerly known as “[C Business]” (“the business”) in order that that the husband may dispose of that stock in any manner that he chooses; and
(b)the Jeep Grand Cherokee motor vehicle formerly used in the operation of the business (“the Jeep”) subject to the loan obtained to purchase the Jeep.
(2)That the wife retains her interests in the following properties (“the real estate”) free from any claim by the husband:
(a)[Property B] in Tasmania, more particularly described in Certificate of Title Volume .…2 Folio .;
(b)[Property E] in Tasmania, more particularly described in Certificate of Title Volume ….3 Folio . and Certificate of Title Volume …..7 Folio .;
(c)[Property N] in Tasmania, more particularly described in Certificate of Title Volume ….7 Folio .. .
(3)That the wife must henceforth pay and indemnify the husband in relation to all outgoings with respect to the real estate referred to in Order No. 2 hereof, including but not confined to mortgage payments, rates, land taxes and insurance premiums.
(4)That the wife must forthwith make all reasonable attempts to obtain a discharge of the husband’s obligations with respect to any mortgage secured over any of the real estate referred to in Order No. 2 hereof, including but not limited to Mortgage C…..2 to the Commonwealth Bank of Australia
(5)That subject to Order No. 1 of these orders the husband must relinquish all his right title and interest in [the partnership] and do all such things and sign all such documentation as may be reasonably required to transfer his interest in any asset of the partnership (other than stock and the Jeep) to the wife including but not limited to the property at [Property K] in Tasmania more particularly described in Certificates of Title Volume ….8 Folios .. and .. (“[Property K]”).
(6)That nothing in Order No. 5 hereof prevents the husband from joining with the wife to transfer [Property K] to a bona fide purchaser without first transferring his interest to the wife.
(7)That contemporaneously with a transfer of [Property K] pursuant to either Order No. 5 or Order No. 6 hereof the wife must obtain a discharge of the husband’s liability to the Commonwealth Bank of Australia pursuant to Mortgage C…..1.
(8)That contemporaneously with the transfer of [Property K] as referred to in Order No. 5 hereof (or a sale as referred to in Order No. 6 hereof) the husband must do all things and sign documents as be reasonably necessary to resign as a director of the company and to transfer to the wife or her nominee his entire shareholding in the company.
(9)That save for the loan obtained in relation to the Jeep the wife must pay and indemnify the husband in relation to any debts incurred by the partnership or the company including but not limited to any business loans, lines of credit, accountancy fees, security costs, any monies owed to suppliers and all current and future liabilities to the Australian Taxation Office.
(10)That, provided that the wife complies with Order No. 1 hereof without any delay, the husband must pay and indemnify the wife in relation to the Jeep loan in the approximate sum of $13,800.
AND THE COURT NOTES
(11)That pursuant to section 81 of the Family Law Act 1975 these Orders are intended to finally determine the financial relationships between the parties and avoid further proceedings between them.
The husband appeals against all orders.
The orders sought by the husband in his Notice of Appeal were as follows:
1.That the assets of the parties be sold for the best price reasonably obtainable.
2.That out of the assets of the parties, the liabilities of the parties be discharged.
3.That the net proceeds of the sale be divided between the parties in the proportions of 65% to the wife and 35% to the husband.
The grounds of appeal
The husband set out his grounds of appeal in his Notice of Appeal filed on
12 April 2012 as follows:
1.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he gave excessive weight to the initial contributions of the wife.
2.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he gave inadequate reasons for deciding to give a weighting to the initial contributions by the wife of 25%.
3.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to give adequate weight to the non-financial contributions of the husband over the 18 years of co-habitation.
4.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he approached the exercise of his discretion on the basis of an equal division of the parties’ property from which he considered what adjustments should be made to that initial presumption.
5.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he gave excessive weight to the S.75(2) factors that favoured the wife.
6.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to give sufficient weight to his finding that the husband did much in relation to maintenance and renovation of the various properties (paras 23 to 41).
7.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to give sufficient weight to the husband’s resignation from outside work and the contribution of his superannuation with a gross value of nearly $107,000.00 (para 22).
8.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he gave insufficient weight to the agreed desire of the parties to school their daughter at a private school and the impact of that cost on the husband.
9.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to frame Orders that would ensure that the husband would receive 12.5% of the assets and made Orders that would, at best, give him slightly more than 10% of the total net value of the asset pool.
10.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to frame Orders that would finally determine the financial relationship between the parties and left the husband liable to third party’s[sic].
11.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he failed to make Orders for the sale of real estate that would finally determine the financial relationship between the parties.
12.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he did not give any weight to the action of the wife in closing the parties’ business shortly before Christmas 2011.
13.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he gave insufficient weight to step 4 of the proper approach and did not cross-check to ensure that overall the results suggested to him by the aggregation of his findings as to contributions and S.75(2) factors was just and equitable in all the circumstances.
14.That the Learned Trial Magistrate erred in law, and his discretion miscarried, in that he arrived at a result which was unjust and inequitable in all the circumstances.
There is clearly some overlapping and doubling up with these grounds of appeal and they were not all addressed by the husband’s solicitor. Indeed, with a number of the grounds all that was put in the written summary of argument was a recitation of the ground itself without any submission. That applies to Grounds 2, 5, 6, 7, 11, 13 and 14. With others there was just one brief paragraph referring to the ground but still not providing any real argument; that applied to Grounds 3, 4, 8, 9, 10 and 12. The only submission of any note was in support of Ground 1.
This was all less than helpful, not only for the wife who was unrepresented, but for the court.
At the hearing of the appeal the husband’s solicitor apologised for the state of the written summary of argument, and did present further argument by way of oral submission. However, in the main his position was that any argument in support of the grounds of appeal was contained in the ground of appeal itself. For my part though that did not and could not provide an answer. For example, Grounds 13 and 14 say nothing more than that the Federal Magistrate erred in either not ensuring or not ultimately making orders that were just and equitable. There is no indication of in what way it is suggested that the orders were unjust or inequitable. There are other clear examples of this difficulty throughout the balance of the grounds of appeal.
That said, I propose to address the grounds of appeal as best I can under the following headings:
The respective contributions of the parties – Grounds 1, 2, 3, 4, 6, 7 and 12.
The section 75(2) factors – Grounds 5 and 8.
Just and equitable – Grounds 13 and 14.
Errors as to the orders made – Grounds 9, 10 and 11.
The respective contributions of the parties – Grounds 1, 2, 3, 4, 6, 7 and 12
It is readily apparent that many of the complaints here can be described as weight challenges; i.e., it is said that his Honour erred in the exercise of his discretion by attributing too much weight to the contributions of the wife and too little weight to the contributions of the husband.
The difficulties confronting an appellant in succeeding in such a challenge are well known. In Norbis v Norbis (1986) 161 CLR 513, Brennan J said at 539 to 540:
The difficulties in the way of developing guidelines beset an appellate review of the exercise of a discretion under s. 79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v. Satterthwaite [[1948] 1 All ER 343, at p. 345], Asquith L.J. stated the rationale of an appellate court’s approach:
“It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.”
The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.
In Gronow v Gronow (1979) 144 CLR 513 Stephen J said at 519-520:
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.
With that background, the first issue to consider is the weight the Federal Magistrate attributed to the initial contributions of the wife.
The Federal Magistrate found that the initial contributions of the wife were “significantly greater than those of the husband”, and considered it appropriate “to give a weighting” to the wife “in the order of 25%”.
It is beyond doubt that his Honour was correct in finding that the wife’s initial contributions were greater, and I do not understand that the husband cavils with that. What the husband’s solicitor suggests in his outline of argument is that the Federal Magistrate did not properly apply “the erosion principle”. In particular, it is said that his Honour did not “apply it sufficiently to recognise the counter veiling contributions of the husband”. However, the husband’s solicitor did not amplify that submission; all he did was cite a number of decided cases, and indeed at the hearing he requested that I ignore almost half of those cases because he no longer sought to rely on them.
The so-called erosion principle was put to rest by the Full Court decision in Pierce v Pierce (1999) FLC 92-844. There the Full Court said this at 85,881:
In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
Importantly, his Honour recognised this and in paragraph 49 of his reasons for judgment he referred to what the Full Court said in Pierce. Further I can find no error in his Honour’s application of the principle emanating from that case. His Honour’s task was to weigh up all the contributions of the parties including their respective initial contributions. I am satisfied that that is what his Honour did in his reasons for judgment commencing from paragraph 36. There he identified all the respective contributions of the parties and concluded in paragraph 47 as follows:
Overall, I find that up until quite recently the parties were each “pulling their weight” in terms of effort and endeavour, and their contributions during their relationship should be given equal weight (apart from the significantly greater initial contributions by the wife detailed above).
His Honour’s reference to “until quite recently” relates to what happened post-separation where each party blames the other for allowing their debts to “spiral out of control”. In this regard, to repeat, his Honour found that “neither party is completely blameless for the situation in which they find themselves [at the time of the trial]”.
In any event, in these circumstances, I am not persuaded that there is any merit in Ground 1.
It is next said that his Honour gave inadequate reasons for deciding to give the wife a weighting of 25 per cent for her initial contributions (Ground 2).
Again there was no articulation of this complaint by the husband’s solicitor, and thus it is difficult to address. To repeat, his Honour in paragraphs 36 and following identified all of the respective contributions of the parties and none of that is challenged. His Honour then set out his conclusion, as I have recorded above, in paragraph 47 of his reasons for judgment, and then crystallised the extent of the greater initial contributions of the wife in paragraph 50 by indicating that a weighting of 25 per cent should be attributed to the wife.
As Coleman J, sitting as a single judge exercising appellate jurisdiction insightfully said in Steinbrenner & Steinbrenner [2008] FamCAFC 193:
234.Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective. In this Court’s view this is not such a case.
235.Essentially, for the reasons which he carefully and accurately detailed by reference to the facts found by him, that, overall, the husband’s contributions vastly outweighed those of the wife, the learned Federal Magistrate grappled with the difficult question of “by how much”.
236.With respect to learned Counsel for the husband, what more his Honour could constructively have added to his Reasons for Judgment is difficult to imagine. Whether or not such conclusion was reasonably open to him, the learned Federal Magistrate adequately “spelt out” why he concluded as he did. The reader is not in any real doubt as to why the wife’s contributions were assessed as they were. The Court is not persuaded that the learned Federal Magistrate’s Reasons for Judgment were inadequate.
In my view these remarks apply equally to this case, and there is no merit in Ground 2.
The next series of grounds (Grounds 3, 6 and 7) raise specific areas of contribution by the husband in respect of which it is said his Honour failed to give adequate weight, namely, the husband’s non-financial contributions (including the maintenance and renovation of the various properties) and the contribution of his superannuation with a gross value of $107,000.
As to the husband’s non-financial contributions, again, his Honour clearly identified the same in his reasons for judgment (e.g., in paragraphs 23, 38, 39, and significantly in paragraph 41). However, that was in the context of
his Honour identifying all of the contributions of the parties and following which his Honour, to repeat, found that, apart from the significantly greater initial contributions by the wife, the contributions of the parties should be given equal weight.
His Honour was exercising an undoubtedly broad discretion, and in exercising that discretion he had regard to facts and events which were largely unchallenged. This again is a “leap from words to figures” and I have not been taken to anything by the husband’s solicitor which demonstrates that
his Honour was “plainly wrong” in the weight he gave to the non-financial contributions of the husband when weighing all of the contributions of the parties.
As to the specific issue of the husband’s superannuation, the position is no different. There was an issue as to the failure by the husband to provide evidence of the amount of income tax that was assessed on this payment, but his Honour clearly recorded that payment in his reasons for judgment and equally clearly took it into account in his assessment of the respective contributions of the parties. I am not persuaded that his Honour failed to attach adequate weight to this contribution, and of course it must be borne in mind that after marriage it was not the husband’s sole contribution and the wife made indirect contributions to that entitlement.
Accordingly, these grounds of appeal cannot succeed.
By Ground 4 the husband challenges his Honour’s approach to the assessment of contributions suggesting that his Honour commenced with a presumption of equality and made adjustments from there.
This is a challenge which is plainly misguided. It is readily apparent from
his Honour’s reasons that his Honour commenced with identifying and weighing the respective contributions of the parties and only then, as I have recorded several times already, in paragraph 47 of his reasons for judgment concluded that “their contributions during their relationship should be given equal weight (apart from the significantly greater initial contributions by the wife detailed above)”. His Honour then proceeded (in paragraph 50) to crystallise the weighting to be given to the wife at 25 per cent.
I can find no error in this approach by his Honour, and this ground also fails.
Finally, on the topic of contributions, there is the complaint that his Honour did not give “any weight” to the action of the wife in closing the business shortly before Christmas 2011. It is said that this was a “negative contribution” of the wife, and thus I assume that it is in the area of the contributions of the parties that this complaint arises.
At to this, I observe that in the Full Court decision of Antmann and Antmann (1980) FLC 90-908 it was said (at 75,744) that “… there is no room for such a consideration in para. (a) or (b) of sec. 79(4)”. That is not to say though that conduct which amounts either to a deliberate diminution of the value of assets or to economic recklessness can never be taken into account, and the husband’s solicitor cites the single judge decision of Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 in support of this complaint. However, this single action by the wife comes nowhere near the sort of conduct which Baker J in that case found should be the sole responsibility of the party whose conduct it is.
His Honour in an oft-quoted passage (at 76,644) said this:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under section 75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.
This does not fit with the evidence here. His Honour in paragraph 44 of his reasons for judgment was certainly “bewildered” by the wife’s actions and suggested that if she had kept the business open “she may have been able to reduce the level of unsold stock and pay off some of the debt”. However, I have not been taken to any evidence that either details the specific financial effect that this action had, or that establishes that the wife acted recklessly, negligently or wantonly, and without that it was not open to his Honour to take it into account beyond observing that it was a “bewildering” act, and that appears to be the extent of what his Honour did. Accordingly, there is no merit in this ground of appeal.
Before leaving the issue of the assessment of the respective contributions of the parties, I observe that in the husband’s solicitor’s written submissions in support of his claim that the result in terms of the percentage entitlement allocated to the wife was manifestly excessive, he referred to a list of cases where a small percentage was allowed to one party. As the Full Court recently said in Petruski & Balewa [2013] FamCAFC 15 at 74:
… Counsel for the wife, in his written submissions, cited a number of first instance decisions where the court had, in relatively short marriages, assessed the percentage entitlements of the parties at levels similar to that contended for by the wife to indicate that the result reached by his Honour departed so much from the results in these cases that his Honour was plainly wrong. We consider such an exercise to be unhelpful. The task to be undertaken by a trial judge in applying ss 79(2), 79(4) and 75(2) of the Act requires the trial judge to consider the particular circumstances of the case before him or her in determining whether any and if so what order should be made. What another judge may do in another case on the basis of the facts in that case can rarely if ever determine what is done in the case at hand.
In any event, this was a confusing exercise by the husband’s solicitor given that he utilised the ultimate percentage entitlement of the parties after the adjustment of the s 75(2) factors rather than just the percentage entitlement arising from the assessment of their contributions.
The section 75(2) factors – Grounds 5 and 8
As can be seen the Federal Magistrate increased the percentage entitlement of the wife by 12.5 per cent as a result of a consideration of the relevant s 75(2) factors. His Honour found that that increase was justified “mainly because the husband has the greater income and the wife has the greater burden of caring for their child”.
It seems that the specific complaint of the husband is that his Honour did not adequately take account of the circumstance that the husband was paying the child’s school fees. In his written summary of argument in support of Ground 8, the husband’s solicitor suggests that the fact that the husband was paying the school fees for the child, and the impact that has on his “financial capacity ought to have been weighed in the scale against the wife’s S.75(2) factors to the point where it could not be said that they favoured the wife at all, but rather were of equal impact to the parties”.
This, of course, is yet another weight challenge by the husband.
There is no dispute that the husband has a salary of $66,800 per annum, and the wife is only in receipt of Centrelink benefits. There is also no dispute that the parties’ teenage daughter lives with the wife, and thus apart from the amount of child support paid by the husband, and the amount that he pays for her school fees, the wife has the responsibility for supporting the child both financially and emotionally.
These two factors identified as relevant by the Federal Magistrate are significant, and plainly call for an adjustment in favour of the wife. Whether though his Honour has attributed too much to these factors and insufficient weight to the obligations taken on by the husband is the issue.
His Honour addressed the fact that the child was attending “an expensive private school”, and that the husband was now paying the fees, in his reasons for judgment. The context of that was his Honour’s concern that the parties had not accepted “the reality that they cannot afford to keep the child enrolled [there]”, and that if she went to a state school there would be funds available to otherwise meet some of the debts of the parties. His Honour also made the point that as a result of the husband paying these fees his child support payments were reduced by $100 per week, and that provided another reason for changing the child’s school.
The husband says to this court that the parties chose to send the child to a private school, and thus it was relevant to take into account his payment of the fees. However, despite this, it was clearly open to the Federal Magistrate to take the approach that he did, and to not weigh into the balance what he considered to be an unreasonable expense.
Thus I am not persuaded that his Honour erred in the exercise of his discretion and is “plainly wrong”. Accordingly, I find no merit in these grounds of appeal.
Just and equitable – Grounds 13 and 14
In his written summary of argument there is no articulation by the husband’s counsel of the very general complaints raised in these grounds of appeal. Nor was there any attempt to amplify these grounds in oral submissions.
Appreciating the husband’s solicitor’s position that the argument is contained within the grounds of appeal, as I have said above, that does not assist in relation to these two grounds of appeal. I am simply unable to address these grounds in the absence of submissions in support of them, and thus I am obliged to find that they have no merit.
Errors as to the orders made – Grounds 9, 10 and 11
Addressing Ground 10 first, neither in his written summary, nor in his written submissions did the husband’s solicitor explain the basis of the complaint being raised. It is apparent from orders (3) and (4) made by his Honour that
his Honour appropriately provided for the wife to pay all debts of the business and the outgoings including mortgage repayments payable in relation to the real estate, and for the wife to indemnify the husband in relation thereto. Thus I cannot see how his Honour has erred in the way suggested in the ground of appeal.
Similarly with Ground 11. It was certainly an option for his Honour to make an order for the sale of the real estate, but his Honour, in the exercise of his discretion, determined to make other orders, and as far as I can see those orders finally determine the financial relationship between the parties. I also observe that to order a sale does not create a sale and thus taking that option may not have had the result the husband suggests.
Turning then to Ground 9. It is true that his Honour found that his Honour should have 12.5 per cent of the net value of the assets of the parties. However, because of the nature of some of those assets, the ever increasing debts of the parties, and the uncertainty surrounding what net proceeds would be achieved upon the sale of the stock, his Honour well recognised that ultimately the husband may not receive precisely 12.5 per cent of an ever-diminishing pool. For example, although on the figures his Honour had available, the net value of the asset pool could be said to be $634,973, as referred to above his Honour proceeded on the basis of a net asset pool of the order of $600,000.
This was clearly a case where because of the attitude of the parties and the uncertainty surrounding what in fact might ultimately be available for the parties, his Honour had to do the best he could. To better appreciate the task left to his Honour by the parties, it is instructive to set out his Honour’s concluding remarks from his reasons for judgment as follows:
Discussion
55.I have stated above that there should be adjustments in favour of the wife totalling 37.5% of the net value of the assets. On that basis, the wife would receive 87.5% and the husband would receive 12.5% of that net value.
56.I have also stated above that the likely net value of the asset pool is in the order of $600,000. If the husband is to receive 12.5% of that, he would retain assets with a net value of $75,000.
57.The husband retains his Suzuki and his superannuation worth a total of $4,500, but he also has a personal credit card liability of approximately $23,000. That means that he is approximately $18,500 “in the red”. Consequently, he would need to receive assets with a net value of $93,500 if he is to retain 12.5% of the net value of the asset pool.
58.Unfortunately, there is no simple solution to the difficulties in which the parties find themselves. Clearly, their creditors will not wait forever, and at least one has already taken legal action to recover what is owed. Although it is quite clear to me that the only real solution is for real estate to be sold within a reasonably short time frame, I gained the clear impression that the wife will not willingly sell any real estate in her sole name and it is unlikely that she will be very cooperative in relation to a sale of the jointly owned business premises. I do not understand her attitude, but it is symptomatic of the “head in the sand” approach that I referred to above.
59.I am therefore of the view that the only way to do any justice between the parties is to immediately transfer all the business stock to the husband to allow him to sell it. I have already concluded that the stock should realise approximately $80,000. If it only realises that sum, it would only give the husband an approximate total of $61,500 after deduction of his credit card liability. That would give him only slightly more than 10% of the total net value of the asset pool.
60.I therefore consider it appropriate for the Jeep to be transferred to the husband, subject to its loan liability. The husband can then sell it and pay off the loan for which he is jointly liable. That may result in him making a small profit.
61.I note that the husband was of the view that both the stock and the Jeep were worth more than the figures that I have attributed to them. If he is right, he might be able to realise the 12.5% that I consider to be appropriate.
62.The wife should then retain all the real estate and be responsible for all liabilities other than the husband’s personal credit card debt and the Jeep loan.
Conclusions
63.The settlement that I have proposed above is likely to fall short of providing the husband with 12.5% of the net value of the assets. However, I cannot see any better way of achieving a just and equitable outcome. If something is not done quickly to resolve the parties’ own “debt crisis”, the parties will both be overwhelmed by it.
64.While I have no confidence that the wife will sell real estate in time to prevent her being overwhelmed, all I can do is make that suggestion.
65.Section 81 of the Act provides that, as far as practicable, I should make orders that will finally determine the financial relationships between the parties and avoid further proceedings between them. It is with that section in mind that I will make orders to provide for what I have set out above.
In those circumstances I am not persuaded that his Honour erred in the exercise of his discretion, and there is no basis that I can see for suggesting, as the husband does, that “there was a fatal disparity between [his Honour’s] finding and his Orders which vitiates the decision”.
Accordingly, there is no merit in this ground of appeal either.
Application to adduce further evidence
On 20 August 2012 the husband filed an application to adduce further evidence. That application was opposed by the wife.
Section 93A(2) of the Family Law Act 1975 (Cth) (“the Act”) provides that in an appeal the Full Court can, in its discretion, receive further evidence upon questions of fact. The law in relation to adducing further evidence on appeal is well settled. In CDJ v VAJ (1998) 197 CLR 172, the High Court discussed the circumstances in which an appellate court may exercise its discretion to admit further evidence. McHugh, Gummow and Callinan JJ said at 201:
109One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
…
111… Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
…
116The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case. Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion. In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance. No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section.
The evidence sought to be adduced related to the issue of the stock of the business of the parties.
There was no formal valuation of the stock put before his Honour by either party, but they each estimated the value; the wife suggesting it was worth $80,000 and the husband suggesting it was worth $118,000. His Honour accepted the wife’s estimate noting in paragraph 32c) of his reasons for judgment that:
…
i)Both parties appeared to concede that some of the stock is “dead stock” which has been difficult to sell; and
ii)There will be some cost in disposing of the stock in any event. It seems likely from the parties’ evidence that the best way to dispose of the stock will be by internet sales and, if the wife is to dispose of it, she may need some technical assistance to get that up and running.
As can be seen from paragraph 59 of the reasons for judgment quoted above, his Honour determined that the husband should have the stock, and his Honour then made the order necessary to achieve that.
The specific further evidence that the husband seeks to adduce comprises emails from the wife sent to the husband after his Honour’s orders were made and which seem to suggest that the wife had been selling the stock before and during the trial, and the stock was not there that his Honour believed was the case. Further, those emails and certain Facebook pages appear to indicate that the wife continued to sell the stock after his Honour’s orders, although as I understand the wife’s submissions that is controversial. I observe that the wife in response clarified that until his Honour actually made his orders there was no indication that his Honour would be transferring the stock to the husband.
Advisedly, it was put that this evidence is not sought to establish that
his Honour had made an error, but rather that to not admit the evidence would “affront common sense, or a sense of justice” quoting from the Full Court in Ousley and Ousley (1976) FLC 90-122 at 75,554, in the context of the husband receiving little else under his Honour’s orders than the stock.
Now whether the further evidence is accurate or not in all respects, given the evidence before his Honour and the limitations that his Honour well recognised in terms of what ultimately the husband might receive by way of the proceeds of sale of this stock, it is readily apparent that the issues sought to be pursued by the husband by adducing this further evidence are not matters for an appeal. The husband should instead consider instituting proceedings under s 79A of the Act and/or proceedings for enforcement. However, in saying that I am making no comment on the success or otherwise of such a course. Indeed, as I have referred to already the wife in her submissions provided possible answers to any such proceedings.
In any event, I propose to dismiss this application
Conclusion
Having found no merit in any ground of appeal, the appeal must be dismissed.
Costs
At the conclusion of the hearing I received submissions as to costs depending on the result.
The wife did not seek costs against the husband if the appeal was dismissed. Thus, there will be no order as to costs.
I certify that the preceding ninety nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
19 March 2013.
Associate:
Date: 19 March 2013
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