Fielding & Nichol
[2014] FCWA 77
•28 NOVEMBER 2014
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY COURT ACT 1997
LOCATION: PERTH
CITATION: FIELDING and NICHOL [2014] FCWA 77
CORAM: THACKRAY CJ
HEARD: 20 OCTOBER 2014
DELIVERED : 28 NOVEMBER 2014
FILE NO/S: PTW 3945 of 2013
BETWEEN: MR DAVID FIELDING
Applicant
AND
MS SHIRLEY NICHOL
Respondent
Catchwords:
PROPERTY SETTLEMENT - De facto relationship - Where the parties intentionally kept their property entirely separate and largely kept the balance of their finances separate during their 12 year relationship - Discussion of the proper application of s 205ZG(3) of the Family Court Act 1997 (WA) (equivalent to s 79(2) of the Family Law Act 1975 (Cth)) in light of Chapman & Chapman (2014) FLC 93-592 - It is open to a trial judge to consider s 205ZG(4) of the Family Court Act 1997 (equivalent to s 79(4) of the Family Law Act 1975) in determining whether the "just and equitable" test has been met - In the present matter it is not just and equitable to alter the existing property interests - Application dismissed - Discussion of the proper outcome if the Court has erred in the exercise of its discretion by dismissing the application - On consideration of the matters in s 205ZG(4), the applicant would have to make a payment to the respondent
Legislation:
Family Court Act 1997 (WA), s 205ZD(3), s 205ZG(1), (3) and (4)
Family Law Act 1975 (Cth), s 60CC, s 75(2), s 79(1), (2) and (4), s 117(1), (2) and (2A)
Family Law Rules 2004 (Cth), r 13.04
Category: Reportable
Representation:
Counsel:
Applicant: Self represented litigant
Respondent: Mr Berry
Solicitors:
Applicant: Self Represented Litigant
Respondent: JK Legal
Case(s) referred to in judgment(s):
Australasian Memory Pty Limited v Brien (2000) 200 CLR 270
Bevan & Bevan (2013) FLC 93-545
Bevan & Bevan (2014) FLC 93-572
Chapman & Chapman (2014) FLC 93-592
Dekker & Dekker [2014] FCWA 61
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268
Mann & Carnell (1999) 201 CLR 1
Owners of ‘Shin Kobe Maru’ v Empire Shipping Co Inc (1994) 181 CLR 404
Perre v Apand (1999) 198 CLR 180
Scott & Danton [2014] FamCAFC 203
SCVG & KLD (2014) FLC 93-582
Stanford v Stanford (2012) 247 CLR 108
Watson & Ling (2013) FLC 93-527
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL
JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN
CHANGED
Introduction
1[David Fielding] and [Shirley Nichol] cannot agree on the division of their assets following the end of their 12 year de facto marriage.
2Although they were never married, for ease of reference, I will refer to the parties as “the husband” and “the wife” respectively.
3The husband seeks an equal division of the assets, which primarily comprise the real estate each party owned before the commencement of their relationship. The wife contends it would not be just and equitable to make any orders altering property interests. She proposes that the husband’s application be dismissed, which would have the effect of each party keeping the real estate they owned at the start of the relationship.
Brief background
4The husband is 74 years of age and the wife is 66 years of age. Both are retired, but each receives occasional income from the sale of their artwork.
5The parties commenced living together in December 1998 on the wife’s property at [Nannup], after meeting while studying Art at a local college. They resided in the wife’s home throughout their relationship. The wife asked the husband to leave in July 2011, but he did not move out until May 2012, during which time life went on much the same as it had previously, save that the wife suggested to the husband he might start paying rent.
6The husband’s son from a previous relationship was about 15 years of age when the parties commenced cohabitation. He lived in the Nannup home for about four or five years. The wife’s mother was also living in the home, but she died in May 1999.
The parties and their evidence
7The wife presented as a mature, sensible person who was very ready to make concessions and appeared to have a fairly good recollection of the relevant history. The husband also presented as a mature, sensible person, but was much less inclined to make concessions. His evidence appeared at times to be driven by a sense of entitlement arising out of having devoted 12 years of his life to the relationship and having undertaken some work around the wife’s property. I was less inclined to accept his evidence over that of the wife in relation to those relatively few matters where there was any important difference.
8The husband asserted that the wife failed to comply with her duty of disclosure and, in particular, claimed she had not complied with r 13.04 of the Family Law Rules 2004 (Cth) as a beneficiary of what he mistakenly believed to be a trust. I was not persuaded the wife failed to comply with her duty of disclosure and, indeed, it appeared to be the husband who failed to comply, given there was no satisfactory evidence he ever provided a list of the documents in his possession. Certainly, the copy of his Undertaking as to Disclosure did not attach the required list of documents.
Property settlement approach
9These proceedings are brought under the Family Court Act 1997 (WA). Subsections 205ZG(1), (3) and (4) of that Act are reproduced below. For the purposes of the discussion that follows, it should be understood that these provisions mirror ss 79(1), (2) and (4) of the Family Law Act 1975 (Cth), while s 205ZD(3), which is incorporated by reference, mirrors s 75(2).
(1)In proceedings with respect to the property of de facto partners, or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property …
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in proceedings with respect to any property of de facto partners, or either of them, the court must take into account —
(a)the financial contribution made directly or indirectly by or on behalf of a de facto partner to the de facto relationship or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the de facto partners, or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a de facto partner or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the de facto partners or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them; and
(c)the contribution made by a de facto partner to the welfare of the family constituted by the de facto partners and any children of the de facto partners, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either de facto partner; and
(e)the matters referred to in section 205ZD(3) [the equivalent provision to s 75(2) in the Family Law Act 1975] so far as they are relevant; and
(f)any other order made under this Act affecting a de facto partner or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act that a de facto partner has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
10Prior to Stanford v Stanford (2012) 247 CLR 108, property settlements under s 79 of the Family Law Act 1975 were commonly dealt with by what was called “the four-step process”. These steps, which were also followed in proceedings under the Family Court Act 1997, required a trial judge to:
•identify and value the assets and liabilities of the parties;
•assess each party’s contributions to the assets;
•assess a range of factors set out in s 79(4)(d) to (g) of the Act; and then
•consider whether the proposed orders are just and equitable.
11The four-step process still has utility, provided the court exercises the discretion conferred by the legislation in accordance with legal principles and does not assume that the parties’ interests in the assets are or should be different from those determined by common law and equity. That this is so was made clear in Stanford v Stanford where the High Court stressed, at [40], that the question of whether it is just and equitable to make a property settlement order should not be answered by starting with an assumption
that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (footnote omitted, emphasis added)
12In a passage on which counsel for the wife places much weight, the High Court in Stanford v Stanford went on to say at [42] (emphasis added):
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
13The final sentence of the preceding paragraph was considered in Dekker & Dekker [2014] FCWA 61 where Walters J, albeit in obiter, discussed the principles that would be applicable in cases such as the present where the question of whether it is just and equitable to make any order is contentious. It is not necessary to recite his Honour’s views, as the law has been stated by the Full Court in Chapman & Chapman (2014) FLC 93-592. I mention Dekker & Dekker only because of the observation that Bryant CJ and I had, “intentionally, it would seem”, omitted the final sentence of [42] in our citation from Stanford v Stanford in Bevan & Bevan (2013) FLC 93-545. This comment is factually correct but the sentence was omitted because it had no bearing on the point being addressed.
Existing interests in property
14In considering whether it is just and equitable to make any order altering existing property interests it is necessary first to determine what those interests are: Stanford v Stanford at [37]. It was not asserted in the present matter that either party had an equitable interest in property owned by the other. The titles therefore reflect the existing ownership.
15Ignoring assets of very low value, I find the existing interests in property to be as set out below. For convenience, I will also set out here what each item of property is worth, and identify all of the liabilities, save for the debts the wife has incurred to pay her legal fees.
| Asset | Husband | Wife |
| [Biddelia] land | 260,000 | |
| Motor home | 33,000 | |
| [Ute] | 12,500 | |
| Camper trailer | 2,500 | |
| Bankwest Reward Pension Accnt | 10,527 | |
| Bankwest Smart E Saver | 33,249 | |
| [Nannup] house and land | 525,000 | |
| [Car] | 13,500 | |
| Bankwest Reward Pension Accnt | 513 | |
| TOTAL | 351,776 | 539,013 |
| Liabilities | ||
| [AB] Planning | 4,000 | |
| Mortgage on [Nannup] | 72,114 | |
| Bankwest Zero Platinum | 1,645 | |
| TOTAL | 4,000 | 73,759 |
| TOTAL NET ASSETS | 347,776 | 465,254 |
16The only valuation dispute concerned the Nannup property, which I will discuss later.
Is it just and equitable to make any order?
17In arguing it would not be just and equitable to make any order altering property interests, counsel for the wife drew on the part of paragraph 42 of Stanford v Stanford highlighted above. Counsel argued that no “express or implicit assumptions” of the parties about their property were brought to an end by the termination of their relationship. On the contrary, their relationship had been conducted on the basis that neither would ever have any interest in the property of the other.
18To appreciate this argument, it is necessary to understand that at the commencement of the relationship, the husband owned an unencumbered block of land at [Biddelia] and the wife owned her unencumbered home and surrounding land at Nannup. At the husband’s insistence, the parties held their property separately throughout their relationship and maintained their finances almost entirely separately. The wife was content with this arrangement.
19Accordingly, when the husband received a compensation payment of approximately $28,500, he deposited it into his own account. Also, when he sold a piece of art for $1,600 (which was much more than he normally received for his work), he kept that money for himself. The husband also insisted (and the wife accepted) that the motor home the parties acquired to travel around Australia would be his property, even though much of the cost was met from the parties’ joint income.
20While each party retained the money they received from their pensions or from employment, it was agreed they would pool the income they received from the sale of art, plants and seeds in a joint account, which was used to cover the costs of their holidays, art supplies and – when there were sufficient funds – rates on both their properties. Otherwise their funds were kept separate, on the basis that household bills and the cost of groceries were met equally, save for the telephone bill which was usually paid “as per the itemised usage”. It was also understood that each was largely responsible for any expenditure on their own real estate. Similarly, it was understood the husband was to be responsible for expenses associated with the motor home.
21When the husband finally left Nannup to move to Perth, he took his personal assets, leaving behind only a few pieces of art and sculpture, primarily those that could not be easily moved. They split the funds in their joint account and divided up their art supplies, “right down to counting out coloured beads” in equal shares.
22Although they were together for 12 years, the husband never executed a will in favour of the wife, while she altered hers, at the husband’s request, only to ensure he inherited her car, in case she died while they were travelling. (The car was to be towed behind the motor home, and the husband felt he needed to own both in the event of the wife’s death.)
23At the time the parties commenced their relationship, the husband owned a home at [Boyanup] jointly with his former wife. I do not accept that he only agreed to the sale of that property (in which he and his son were living) because of his burgeoning relationship with the wife and the opportunity to live in her home. I consider it more probable, as the wife recalled, that the Boyanup house had to be sold in order to satisfy the entitlement of the husband’s former wife. The money from the husband’s share of the Boyanup home was used to discharge the mortgage on the block at Biddelia, but there was no suitable residence on that property for the husband and his son. I accept, as the husband asserted, that there was a rental home nearby, which he could have occupied instead of moving in with the wife, but clearly the latter arrangement was more financially beneficial for him.
24The husband, with assistance from the wife, undertook work around the Nannup property. Some of this could be classified as maintenance, such as keeping up the firebreaks, but other work was done which the parties considered made the property more attractive. This included bringing native vegetation under control, making pathways through the bush, building garden beds and steps and installing various pieces of art and sculpture around the grounds. The husband placed heavy emphasis on the fact that these improvements were highlighted in the advertising material when the property was on the market between 2007 and 2010. The fact is, however, that the property did not attract any offers, notwithstanding it was for sale for years. There was also no evidence (save for a concession made by the wife in cross-examination that was the subject of an objection by her own counsel) that any of the work made a real difference to the value of the property. It should also be observed that the husband did not assert that he anticipated his work would lead to him acquiring any legal or beneficial interest in the property – the high point of his case was that the parties hoped to use some of the proceeds of sale to fund their proposed trip.
25The husband now considers it is just and equitable for there to be an adjustment of property interests because he devoted 12 years of his life to the relationship and because he had anticipated the parties would live out the rest of their lives together. He also emphasises that his expectations were dashed only because the wife ended the relationship without giving him any reason for doing so.
26In authorising a judge to make such orders altering property interests as he or she “considers appropriate”, Parliament has conferred a discretion of considerable breadth, tempered by the requirement that the judge shall not make an order unless satisfied “in all the circumstances, it is just and equitable to make the order”. As the High Court said in Stanford v Stanford at [36] (footnote omitted):
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
27The expression “just and equitable” and the word “appropriate” are particularly elusive “qualitative” concepts. As McHugh J said in Perre v Apand (1999) 198 CLR 180 at 211-212, and in his dissent in Mann & Carnell (1999) 201 CLR 1 at [130] (footnotes omitted):
While the training and background of judges may lead them to agree as to what is fair or just in many cases, there are just as many cases where using such concepts as the criteria for duty would mean that “each judge would have a distinct tribunal in his own breast, the decisions of which would be as irregular and uncertain and various as the minds and tempers of mankind”. Lord Devlin was surely right when he said:
“For a judge to decide fairly and convincingly every case that comes before him in the light only of his own sense of justice, he would have to be a superman. I doubt if there have ever been more than a handful of men on the Bench who could do it, though doubtless there are slightly more who think that they could.”
28The question arises whether Parliament intended that each individual judge exercising jurisdiction under the Act was to be granted an entirely unguided discretion to determine whether it is “appropriate” and “just and equitable” to make any order for property settlement. It might be thought this was unlikely, given the way Parliament has been at pains to prescribe the matters to be taken into account in the other highly discretionary areas arising under the legislation, namely parenting orders and costs (see s 60CC and s 117(2A) of the Family Law Act1975 and their equivalents in the state legislation).
29In considering what might be taken into account in deciding whether it is “just and equitable” to make any order adjusting property interests, Bryant CJ and I said in our judgment in Bevan & Bevan (2013) FLC 93-545:
84. Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
85. This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.
30These paragraphs, but especially the opening sentence of [85], have been the subject of discussion. Most recently, the Full Court (Strickland, Ainslie-Wallace & Watts JJ) in Scott & Danton [2014] FamCAFC 203 cited Chapman & Chapman with obvious approval, where the plurality (Strickland and Murphy JJ) said they would “respectfully disagree” if [85] in Bevan & Bevan was read as meaning that “a consideration of the s 79(4) matters is mandatory in answering the s 79(2) question”.
31I have set out below the relevant part of the judgment of Strickland and Murphy JJ in Chapman & Chapman (although in doing so I have corrected a minor error in the citation from Bevan & Bevan):
18. As to inference, the plurality in Bevan said (at [89]) “[u]ltimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues” (emphasis added). Similarly, the plurality firmly rejected (at [86]) the notion that s 79(2) forms a “threshold issue” – which their Honours described as a “misleading” description – or that error is demonstrated by a failure to deal with s 79’s separate requirements in a particular order.
19. Section 79 demands a consideration, separately, of all of its requirements without conflation. Provided a trial judge has done so, and the reasons demonstrate that this has been done, no error is demonstrated by a failure to follow a particular order in doing so. Further, the breadth and depth of the consideration of the s 79(2) issue, and the extent of an adequate exposition of it in the reasons, will vary from case to case. In that respect, the plurality in Bevan said, at [82], that the separate s 79(2) issue will, “…in many cases … [be] … effectively answered in the affirmative by the way the parties present their cases.”
20. Each of those conclusions conforms entirely with what was said about those issues by the High Court in Stanford v Stanford (2012) 247 CLR 108.
21. First, it is “…not possible to chart [the] metes and bounds” of the relevant discretion. Just as importantly, it was recognised specifically that the characteristics of individual marriage unions, in so far as they acquire, hold and deal with property, differ. In “many cases”, the union is underpinned by “…stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of the husband and wife during the continuance of their marriage” (Stanford, at [41]). And, in “many cases”, (but, not all) the “…just and equitable requirement is readily satisfied…” by the fact of separation: “[i]t will be just and equitable to make a property settlement order … because there is not and will not thereafter be the common use of property by the husband and wife” (Stanford at [42]).
22. “Ready satisfaction” of the s 79(2) requirement “in many cases” by reference to separation and its consequences brings with it a necessary further consequence; in those “many cases” the parameters, breadth and depth of the s 79(2) inquiry will be curtailed accordingly. It is those who lived within the “stated and unstated assumptions” who understand them best. As a result, satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.
…
24. In light of the broad sweep of the wife’s arguments on this issue, mention should also be made of what the plurality said in Bevan at [84] and [85]. The opening to the latter paragraph and its reference to a “…requirement to consider the s 79(4) matters…” (emphasis added) in answering the s 79(2) question suggests that those factors must mandatorily be considered. Their Honours support that conclusion in [84] by reference to the words used in s 79(4):
…it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection.
25. If the plurality intended that a consideration of the s 79(4) matters is mandatory in answering the s 79(2) question, we respectfully disagree.
26. The judgment in Stanford points, in our view, to the opposite conclusion. In particular:
•The “…range of potentially competing considerations” and the consequent impossibility of charting the “metes and bounds” of what is just and equitable (at [36]);
•The ready satisfaction of the s 79(2) requirement in “many cases” by the fact of separation (at [42]);
•The statement that “it will be just and equitable” to make an order in “many cases” by reason of the “…choice made by one or both of the parties…” to end the marriage (at [42]);
•Equally, the statement that “it will be just and equitable” to make an order “in many cases” because “…there is not and will not thereafter be the common use of property by the husband and wife” (at [42], emphasis in original);
•The reiteration that: “…nothing in these reasons should be understood as attempting to chart the metes and bounds of what is ‘just and equitable’ (at [46]); and,
•The further reiteration that nothing in their Honours’ reasons is “…intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable” (at [46]).
27. Further, and crucially, in “applying s 79 in this case” the Justices of the High Court did not themselves take into account the matters in s 79(4). Indeed [51] of the judgment suggests they eschewed those s 79(4) matters relating to contribution. If, as the plurality held in Bevan, it is a “…requirement to consider the s 79(4) matters…” (emphasis added) in determining if, pursuant to s 79(2), it is just and equitable to make any order it is, respectfully, inconceivable that their Honours in Stanford would not have done so.
(original emphasis)
32Having cited these paragraphs from the judgment of the plurality in Chapman & Chapman, the Full Court in Scott & Danton concluded its discussion by saying:
23.In Chapman, Bryant CJ (in separate reasons) corrected any impression that there was a requirement to consider section 79(4) matters in determining whether it was just and equitable to make any order (referring to the words used by the plurality at [84] in Bevan as “infelicity of expression”). Bryant CJ said that the plurality’s reasons in Bevan, read as a whole, meant rather that it would be inappropriate to limit the wide discretion conferred by section 79(2) by requiring the court to ignore section 79(4) matters.
24.Importantly, [22] of Chapman echoes what Finn J said in Bevan:
168. As already suggested, where both parties are seeking alterations of interests in one or other’s property, the question as to whether or not it is just and equitable to make any order, will be more easily answered.
33I am bound by the law as it has now been explained by the Full Court. If I correctly apprehend the pronouncements, it is open to a trial judge, in addressing the s 79(2) question, to consider matters that may be seen as arising under s 79(4), but consideration of those matters is by no means conclusive in determining whether the “just and equitable” test has been meet. This is, in essence, what the Chief Justice said in her judgment in Chapman & Chapman, which was cited by the Full Court without demur in Scott & Danton. This also accords with the view Finn J had earlier expressed in Bevan & Bevan where her Honour said:
169. Findings of fact concerning the parties’ financial history (ie their contributions) and their present circumstances and future prospects made in the context of s 79(4) will also assist, but such findings cannot (according to Stanford) be conclusive in determining whether or not it is just and equitable to make an order altering any particular property interest.
34Murphy J expressed a similar view when he said, sitting as a single judge in Watson & Ling (2013) FLC 93-527, that the factors in s 79(4) “can inform” the decision to be reached under s 79(2).
35All of these pronouncements, which authorise judges to consider any matters arising under s 79(4) that they consider relevant in answering the s 79(2) question, are consistent with a long line of authority in the High Court warning against any attempt to fetter the exercise of discretion. For example, Gaudron J said in FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 290, “[w]here a power or discretion is conferred upon a court it is inappropriate that such power or discretion be treated as subject to limitations not contained in the grant of that power or discretion”. To like effect, see Australasian Memory Pty Limited v Brien (2000) 200 CLR 270 at 279 and Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421.
36It follows that the final sentence of [42] in Stanford v Stanford cannot be read as saying that matters arising under s 79(4) can only be considered after a court has concluded it is just and equitable to make a property settlement order. The sentence does not in terms say, nor as a matter of necessary inference mean, that matters arising under s 79(4) must be excluded from the myriad of factors that could potentially be taken into account in addressing the s 79(2) issue. The sentence appears to do no more than state the uncontroversial proposition that once it has been determined it is just and equitable to make an order, the content of that order must be determined by reference to s 79(4).
37It is legitimate, in my view, to ask whether their Honours in the High Court in Stanford v Stanford ever anticipated that all of their statements would be poured over and interpreted, as if they were tea leaves, in order to identify the matters that could properly be taken into account in cases of an entirely different complexion.
38One such statement was the following, which has been the subject of much conjecture:
51. Section 79(4)(a)-(c) required that the contributions which the wife made to the marriage should be taken into account in “considering what order (if any) should be made” under s 79. It may readily be assumed that the length of the parties’ marriage directly affected the extent of the contributions the wife had made. But, as already noted, the inquiries required by s 79(4) are separate from the “just and equitable” question presented by s 79(2). The two inquiries are not to be merged…
39I concede that this paragraph is open to more than one reading. However, one available interpretation is that the High Court simply took as a given that the wife had made “contributions” during the 37 year marriage, since the contrary had never been argued. The point their Honours were making is that the mere fact such contributions had been made (absent any assertion that the wife had acquired an equitable interest in the property) did not automatically lead to an adjustment of the existing title. Other matters also needed to be taken into account in determining the s 79(2) issue. Chief among these, as the High Court found at [47], was “the effect upon the husband of making an order … that would require the husband to sell the matrimonial home, in which he was continuing to live” and the failure by the trial magistrate to consider “whether a maintenance order would sufficiently meet the wife’s needs”. On this reading, the conclusion in Stanford v Stanford that it was not just and equitable to make any order was reached after what the High Court described at [36] as an “examination of a range of potentially competing considerations”, which included what their Honours clearly accepted were the wife’s contributions over 37 years.
40The fact there was only truncated reference in the High Court’s judgment to the contribution factors, and to s 75(2), does not mean they were not taken into account. “Taking into account” does not necessarily mean discussing at length – or indeed discussing at all. This has now been made clear in SCVG & KLD (2014) FLC 93-582, where the Full Court explained that provisions requiring a court to “consider” various matters (being much the same thing as “take into account” or “have regard to”, which are expressions used elsewhere in the legislation) does not mean that those matters must be discussed in the court’s reasons. The obligation to discuss such matters will vary depending on the way the parties present their cases. After all, as the Full Court said in SCVG & KLD at [78]:
…factual and legal concessions, if accepted by the court, may conclusively deal with factors that legislation requires be considered and, as a consequence of which, the judgment needs to address only the contentious factual and legal matters which remain outstanding.
41It is in the light of this background that I would respectfully disagree with the view expressed by Strickland and Murphy JJ at [27] in Chapman & Chapman that the High Court in Stanford v Stanford “eschewed” reference to matters under s 79(4) in deciding that no order should be made adjusting existing property interests. On my reading of [51], their Honours in the High Court expressly acknowledged those matters. I also respectfully disagree with Strickland and Murphy JJ that it is “inconceivable” the High Court would not have gone on to make an order adjusting property interests if they had taken into account the matters in s 79(4). That conjecture seems to me, with respect, to proceed on an assumption that consideration of the s 79(4) matters would be decisive, whereas the High Court can be seen as saying that whilst they are matters that could be taken into account, they are not conclusive.
42The fact the “two inquiries” under s 79(2) and s 79(4) are “separate” and “not to be merged” also does not mean, as a matter of logic, that matters arising under s 79(4) can be ignored when deciding whether it is just and equitable to make any order adjusting existing interests. The provisions of s 79(4) encompass what Finn J in Bevan & Bevan described as “the parties’ financial history (ie their contributions) and their present circumstances and future prospects” – and her Honour went on to hold that findings of fact about those matters will assist in determining whether it is just and equitable to make any order. Similarly, as the Chief Justice pointed out in Chapman & Chapman at [5], “the matters referred to in subparagraphs (a) to (c) of s 79(4) in particular, would be likely to embrace much of the factual substratum on which any exercise of discretion would be based”. See also, to like effect, the view expressed by Murphy J in Watson & Ling to which I have earlier referred.
43While I accept that a finding that it is just and equitable to make an order will always be required, in most cases the court will not need to discuss the s 79(2) issue, because the cases will be conducted on the basis of acceptance by the parties that it is just and equitable to make some form of adjustment. In those cases, matters arising under s 79(4) will require discussion only when determining the way the adjustment is to be effected. However, in cases such as the present where the s 79(2) point is taken, were it not for Chapman & Chapman, I would have maintained the view that s 79(4) mandates taking into account any relevant matters arising under that subsection, provided it is understood that they will not be in any way determinative.
44This approach, in my view, reflects the legislative prescription that “in considering what order (if any) should be made … in property settlement proceedings, the court shall take into account [the matters mentioned in s 79(4)]” (emphasis added). I respectfully agree with Walters J in Dekker & Dekker at [128] that the words “if any” in s 79(4) can encompass those cases where a full consideration of that provision will “lead to the court reaching a conclusion … that the ownership of the parties’ property should lie where it has fallen”. However, I am not convinced those words should be seen as confined to such cases, nor why, as Walters J suggested at [139], it is “almost inevitable” that a judge who gives consideration to issues arising under s 79(4) in answering the s 79(2) question “will get lost in the luxuriant undergrowth which is certain to sprout from that fertile ground”. On the contrary, I anticipate that judges will be able to negotiate the pathway successfully when the principles are being applied to those cases where the issue actually arises. For example, it would be bold to suggest that the Full Court became “lost” in Bevan & Bevan (2014) FLC 93-572 in having some regard to matters arising under s 79(4), before determining it would not be just and equitable to make any order adjusting existing property interests.
45In contemplating the issues discussed above, it may be instructive to examine the legislative provisions most closely resembling the scheme constructed by ss 79(1), (2) and (4), namely those dealing with costs.
46Subsection 117(1) of the Family Law Act 1975 lays down the primary rule relating to costs that “[s]ubject to subsection (2) … each party to proceedings … shall bear his or her own costs”.
47Subsection 117(2) provides, however, that if “the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A) … make such order as to costs … as the court considers just” (emphasis added). Subsection s 117(2A) provides that “[i]n considering what order (if any) should be made under subsection (2) the court shall have regard to [a variety of clearly relevant factors]”.
48Subsection 117(2) therefore sets up the first question to be answered in dealing with costs disputes – i.e. are there “circumstances that justify [making an order for costs]”. Unlike s 79(2), the proposition is not cast in the negative, but it still amounts to a prohibition similar to the one in s 79(2) against making any order unless it is “just and equitable”. Then, using precisely the same words as appear in s 79(4), s 117(2A) lists the matters to be taken into account in deciding whether to make an order for costs “if any”. Judges have traditionally not had difficulty in having regard to matters mentioned in s 117(2A) when answering the first question posed by s 117(2), namely whether there are circumstances that “justify” the making of an order for costs.
49I recognise that it might be said that one vital difference between the provisions relating to costs and those relating to property is that, in the former, the legislative scheme contains internal linkages making it clear that s 117(2A) must be considered in answering the s 117(2) question. In fact, this is not strictly the case, since it is only the second of two separate issues posed by s 117(2) that is expressly made subject to s 117(2A). However, let it be supposed there was no internal linkage. In that event, I doubt it could be seriously contended that a court could only consider s 117(2A) after it has decided there are “circumstances that justify [making an order for costs]”. Nor could it be said that a court would be “conflating” the statutory requirements by looking at relevant matters arising under s 117(2A) in answering the two questions posed by s 117(2). In fact, it would seem almost irresistible that the legislative scheme would be interpreted in such a way as to make it obligatory that s 117(2A) be taken into account in deciding what might be seen as the threshold issue of whether there are circumstances that justify the making of any order.
50I accept, however, that my reasoning is inconsistent with the decision reached by the Full Court in Chapman & Chapman and I repeat that I am bound by that decision.
The exercise of the discretion in the present matter
51Whether I am obliged to take into account the matters in s 79(4) (which Chapman says I am not), or whether I am merely at liberty to do so (which Chapman says I am), in the exercise of the discretion conferred on me, I have determined that it would not be just and equitable to make any order altering property interests in the present matter.
52In arriving at my decision, I have taken into account the following matters:
•the husband’s insistence (and the wife’s agreement) throughout the relationship that the parties’ financial affairs should be kept entirely separate, with the intention that each would continue to hold their property separately, in circumstances where each party was mature, intelligent, and not in any way overborne by the other;
•the fact that the assets were indeed kept entirely separate and the great bulk of them now exist in precisely the same form in which they were held at the commencement of the relationship (save for the fact that the wife now has an encumbrance over her property for which she is solely responsible);
•the absence of any evidence to suggest the husband refrained from accumulating other assets (assuming he had the capacity to do so), or otherwise changed his position, as a result of having the benefit of using the wife’s home during their relationship and having assumed they would live out their days together;
•the fact that neither party made any provision for the other to receive an interest in their property in the event of their death (save for the minor issue of the car, which lends support to the conclusion that the parties otherwise intended that the other would never obtain an interest in their assets);
•the extent of the work done by the husband around the wife’s property was not such as to lead to a conclusion that it would be just and equitable to adjust existing property interests, especially given that the husband (and, for part of the time, his son) lived in the property free of rent; and
•the ages and state of health of both parties, and the fact that although the wife has property of somewhat greater value than the husband’s, each party nevertheless has a significant asset which could be realised to meet needs that cannot be met from current income (noting that, at present, both are able to meet their necessary expenditure from their own income).
53Having thus concluded it would not be just and equitable to alter the existing interests in property, I propose to dismiss the husband’s application.
An alternative approach
54Although the decision in Stanford v Stanford has reinforced that the s 79(2) requirement is a stand-alone, anterior issue, it is also true that the High Court has emphasised that the requirement will be readily satisfied in most cases where the relationship is terminated voluntarily. Although Bevan & Bevan serves as a good example of how the s 79(2) requirement can prove to be a barrier to granting any relief even in a long marriage that was terminated voluntarily, I recognise such an outcome is likely to be most uncommon. I also accept that reasonable minds will differ in considering whether it is just and equitable in a particular case to deny a party that to which they might otherwise have been entitled by reference to the matters set out in s 79(4). The present is potentially such a case, given the parties were together for 12 years; their relationship was terminated voluntarily; and they did not enter into a binding financial agreement.
55In case I have erred in the exercise of my discretion in concluding it would not be just and equitable to make any order, I intend now to consider what the outcome would have been in the event that the matter was to be determined by reference to the factors set out in s 79(4) – i.e. if the s 79(2) requirement was seen as having been met.
56Counsel for the wife submitted that if such an approach was adopted, the court would arrive at much the same result, given that he calculated the husband already holds about 42.5 per cent of the assets. In fact, counsel submitted that if this alternative route were to be followed, while each party would keep their own assets, the motor home should be sold and the wife should receive $12,000 from the proceeds.
57At trial, the husband sought an equal division based on what he had earlier calculated was a net total asset figure of $818,633. This would have required the wife to pay him about $61,500. He had previously sought a cash payment of $72,000.
Valuation of Nannup
58Before moving to consider the matters set out in s 205ZG(4) and s 205ZD(3), I will deal with the dispute concerning the value of the Nannup property.
59The only admissible evidence was a valuation prepared in March 2013. The wife accepts the figure of $525,000 as determined by the valuer, but the husband contends for a higher figure, notwithstanding it was him who engaged the valuer after refusing to accept appraisals suggesting the property was worth somewhere between $400,000 and $540,000. The valuer was not given any opportunity to defend his valuation and the husband’s attempts to undermine it were entirely unsuccessful.
60Both parties accepted that the valuer incorrectly described the land as “gravelly/loam” when in fact it is largely rock, but there was no evidence to suggest this resulted in the value being set too low – if anything the contrary might be the case. I was also not satisfied that the valuer incorrectly described the improvements on the property, including the accommodation in the house. Nor was I satisfied that the valuer overlooked any issues associated with possible re-zoning.
61The husband valiantly attempted to talk up the value by emphasising that the property had been on the market at a price much higher than $525,000, but steadfastly refused to take into account the fact that it attracted no offers at that price (even if such evidence would have been admissible as to value, which it would not have been).
62The court was left with the husband’s own valuation as the only satisfactory evidence of value, and I therefore find the property is worth $525,000.
63The total net value of the assets is therefore $813,030 – ignoring the wife’s liability for legal costs. The husband presently owns about 43 per cent of those assets.
Contributions
64I propose to discuss contributions by reference to the introduction of assets at the commencement of cohabitation; financial and non-financial contributions made during the period of cohabitation; and contributions made after separation.
Initial contributions
65At the commencement of the relationship, the wife owned Nannup unencumbered, a fairly new vehicle, furniture, pottery equipment and a tractor.
66The husband owned Biddelia, which was unencumbered, or at least became unencumbered at around the time of commencement of cohabitation following the sale of his home at Boyanup. He also had a car and some furniture and personal items.
67There was no precise evidence concerning the value of the assets at the commencement of cohabitation. The husband disagreed with the wife’s estimate that her assets were worth at least three to four times more than his, but the estimate in his own affidavit suggested that her assets were worth nearly three times the value of his (i.e. $307,500 and $115,000 respectively). The husband attempted to resile from his estimate by pointing out he was not qualified to value property and saying he only took a “punt” when giving his estimate. This belated retraction left the wife with no opportunity to present evidence in rebuttal. The parties’ estimates are the only evidence available and I therefore propose to proceed on the basis that the wife’s assets were worth well in excess of double the value of the husband’s assets. I observe, however, that the husband’s land appears to have increased in value at a somewhat greater rate than the wife’s property during the period of the relationship.
Financial contributions during cohabitation
68I find, despite a faint assertion to the contrary, that the husband did not have paid employment during the relationship. His income comprised his pension entitlements and the modest income he and the wife generated from the sale of their artwork, and from the sale of flowers and seeds which they collected from their properties and the surrounding area. The husband also received a $500 per annum fuel rebate.
69The wife was in receipt of a widow’s pension at the commencement of the relationship, but this ceased around 2000 or 2001 as a result of her commencing cohabitation with the husband. She then obtained employment as a bookkeeper at a local caravan park, where she worked from 2001 to 2007. Her only other source of income was from the sale of art, flowers and seeds.
70It is unnecessary to enter into the detail of the dispute about which of the parties was responsible for generating the greater proportion of their income. By any measure the income was very modest. Furthermore, their evidence was vague and I was not persuaded that one was responsible for generating much more income than the other. As earlier noted, each party used their income to contribute equally to household expenses. To the extent there was money left over, each kept their funds in their own account.
71Some of the minor assets were sold or disposed of during the relationship and other minor assets were acquired, but these transactions were not of great significance. Thus, for example, the wife sold her car and bought a new one, incurring a new debt in the process. The only asset acquired during the relationship which warrants any further discussion is the motor home, and the only liability requiring consideration is the mortgage now registered against the title to the Nannup property.
72In 2007, the parties acquired an old bus which they planned to use as a motor home to travel around Australia. It cost $23,780, of which $6,500 came from the joint account, with the remainder coming from the wife’s funds. The bus was nevertheless registered in the husband’s name for reasons earlier discussed. The parties agreed the wife would be reimbursed from the income they earned from their joint endeavours. She was repaid as agreed, although I accept a small portion of the funds may have come from the sale of the husband’s campervan. The wife did some minor work to the bus to make it more comfortable and attractive, but otherwise the husband met the cost of the work done to the bus (save in 2011 when the wife paid for a repair job, for which she received prompt reimbursement). The bus remains in the husband’s name, and the wife’s primary position is that he can keep it.
73The Nannup property became encumbered during the relationship when, in 2009, the wife obtained a reverse mortgage of $50,000 to cover the cost of a new car and an overseas trip she took to attend a family wedding. The mortgage does not require repayments of capital or interest and, as a result, the amount owing has increased to over $72,000. The wife had the sole benefit of the borrowing to the extent that it covered the cost of her overseas trip, but otherwise the funds were expended on the vehicle, which the parties used as their means of transport, and which is included in the table of assets above.
74Overall, I find that each party made financial contributions of roughly equivalent value during the period of cohabitation.
Non-financial contributions during cohabitation
75The parties lived in the Nannup home and only occasionally visited the block at Biddelia. Although I accept there was some maintenance and improvement carried out at Biddelia, this was very minor and much less than was done around the wife’s property. In addition to the work done to the garden and bush surrounding the wife’s home, the husband carried out some maintenance and improvement to the house itself. This included installing some skirting boards, bush railings and a fireplace surround, which improved the appearance of the home. However, the only work of any significance was a renovation of the kitchen to make it more spacious and practical, by demolishing some existing walls and fittings, and installing second-hand cupboards. To the extent there was disagreement about the magnitude of the work done, I preferred the evidence of the wife. In addition, the husband did other jobs, including plumbing, mowing, slashing, and smoothing out the driveway.
76The wife helped out with some of the work described above. She also did more of the housework than the husband, in that she did most of the cleaning, as well as washing and ironing for the husband (and his son during the five years he lived in the home). The wife very occasionally made items of clothing for the husband. She also handled the finances and was responsible for the bookkeeping, including maintaining the accounts associated with the sale of art and seeds. Cooking for the evening meal and washing up were generally shared equally, although the wife was probably responsible for a little more of the cooking overall, while the husband provided the wife with tea and toast in bed every day.
77I find that each party was content with their division of labour. For what it might be worth, it also appeared that each gained satisfaction from undertaking the work around the wife’s property, given their interest in matters artistic and botanical. Overall, I am satisfied the non-financial contributions were of equivalent value.
78Before passing from this topic, I repeat there was no reliable evidence to show that any of the work done around the property made a real difference to its value. The improvements were usually effected with second-hand materials and I observe that the valuer described the fit out of the home as being “average to slightly below average”.
Contributions after separation
79Neither party suggested they made any contribution of significance to the main assets since the separation. The wife has stayed on in the Millwood property. The husband has moved to Perth and has been boarding with his son. The husband’s savings have increased as a result of him receiving compensation of about $12,000 relating to damage done to the Biddelia land. The husband also won a literary award for which he received $750. Save for these additions to the husband’s savings, nothing has occurred since the separation which would have any impact on the assessment of contributions.
Overall assessment of contributions
80Taking into account the contribution by the wife of property of much greater value at the commencement of cohabitation, and noting the findings I have made about other contributions, I would have determined that contributions should be assessed at a ratio in the region of 62.5:37.5 in favour of the wife.
S 205ZD(3) factors
81I turn now to consider s 205ZD(3) to determine whether there would have been any adjustment to the outcome suggested by my assessment of contributions.
82The husband is 74 and the wife is 66. Both seem in good health for their age, although the husband has had three hernias and experienced a back spasm. There was no evidence to suggest their health was such as would interfere with any plans they might have to earn income in the future, especially as both describe themselves as retired and neither appears to have plans to derive income from anything other than their artwork. (There was no admissible evidence to support the husband’s assertion that his hernias and back problem had anything to do with work he did around the wife’s property, although I accept there may have been an association.)
83Both parties are in receipt of pensions which are sufficient, along with their occasional sales of art, to meet their modest needs. The wife lives in an unencumbered property (save for the reverse mortgage which requires no payments). The husband has low cost accommodation available with his son, with whom he has been living for over two years. There was no suggestion he will be required to move, or that he would want to.
84The property of the parties has been listed above. Neither party has any other financial resources. Although the wife may be a major beneficiary in the estate of her elderly aunt, the woman in question is still alive, and has been residing in England in a high cost nursing home for some years. The extent of the wife’s entitlement in her aunt’s estate is entirely speculative and, in my view, of no relevance.
85Neither party has responsibility for the maintenance of any other person, and neither has any commitments out of the ordinary. Both are able to maintain a reasonable, albeit very modest, standard of living.
86Neither party has any superannuation, but each has a capital asset which could be sold in the event the need arose, although it is far from clear that either of their properties would sell quickly.
87The relationship had no impact on the earning capacity of either party. I was not persuaded that the husband made any real contribution to the wife’s income earning activity during the relationship, as he attempted to show in cross-examination. The wife did not suggest she made any contribution to the husband’s income earning activity, save for the bookwork she did and the assistance she provided in the seed selling enterprise.
88Although the husband is aggrieved about the wife having terminated the relationship without giving any reason, I was not in any way persuaded I should accept the husband’s submission that this should be taken into account in his favour.
89There was no binding financial agreement.
90Overall, notwithstanding the wife has assets of greater value than the husband, I do not consider there would have been any basis for an adjustment based on the s 205ZD(3) factors.
The result, applying the alternative approach
91If I had not been persuaded it was not just and equitable to make any adjustment of property interests, I would have been inclined to order that the assets be divided in proportions 62.5:37.5 in favour of the wife. This would have involved the husband paying the wife a sum of money. However, having determined that it is not just and equitable to make any order, I do not propose to require him to make any payment.
Orders
92The orders set out below contain a timetable for written submissions as to costs in the event the wife seeks such an order. I will determine any application for costs in chambers, unless either party seeks a hearing to make supplementary oral submissions.
1.The application for property settlement filed on 22 July 2013 is dismissed.
2.If the Respondent seeks an order for costs she shall file and serve written submissions (not exceeding five pages) in support within 21 days.
3.If the Applicant opposes the Respondent’s application for costs, he shall file and serve written submissions (not exceeding five pages) in reply within 21 days of service of the Respondent’s submissions.
4.If the Respondent wishes to reply to the Applicant’s submissions, she shall file and serve written submissions (not exceeding three pages) within 14 days of service of the Applicant’s submissions.
I certify that the preceding [92] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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