Fitzpatrick v Lynch

[2001] HCATrans 220

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B80 of 2000

B e t w e e n -

DIOSMA DAWN FITZPATRICK

Applicant

and

JOHN ERNEST LYNCH

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 27 JUNE, 2001, AT 9.51 AM

Copyright in the High Court of Australia

MR P.C. YOUNG, QC:   If the Court pleases, I appear with my learned friend, MR A.I. STRUM, for the applicant.  (instructed by Habermann & Associates)

MR P.L.G. BRERETON, SC:   If the Court pleases, I appear with my learned friend, MR T.P. SULLIVAN, for the respondent.  (instructed by Barkus Edwards Doolan)

MR YOUNG:   If your Honours please, the special leave application really is broken into two main sections, discretion and contribution, and I would like to deal firstly with discretion, of which it can conveniently be divided into two subdivisions, the first being whether the Full Court was entitled to interfere with the discretion of the learned trial judge and ‑ ‑ ‑

McHUGH J:   But, Mr Young, that is not a special leave point.

MR YOUNG:   It was only in the manner of the issue of the findings as set out in the appeal book of the Full Court where they did not find error and not having found error, where they looked to the legitimate exercise of discretion but without ‑ ‑ ‑

KIRBY J:   They did not find error.

McHUGH J:   They, in effect, said it was plainly unreasonable.  They held that the proper range is 25 to 30 per cent and, on one view, it is 40 per cent below the bottom of the range and, on the other view, 16 per cent on the top of the range – that is the 5 per cent that constitutes – 40 per cent from the bottom of the range, 16 per cent from the top of the range.  It is just a matter of opinion in which different minds would have different views about the matter.

MR YOUNG:   The trial judge, of course, found 35 per cent.

McHUGH J:   Yes.

MR YOUNG:   What the Full Court did was to substitute, because they found that the trial judge’s determination was “above a legitimate exercise of the discretion”, a view which had a range of 25 to 30 per cent.  The top of their range, 30 per cent, of course is within 5 per cent of the ‑ ‑ ‑

McHUGH J:   It is not really, in one sense, because it is 5 per cent of 30 per cent and that is roughly 16 per cent.

MR YOUNG:   Yes.

McHUGH J:   And 35 from the 25 is 10 per cent which is 10 per cent over 25 per cent is 40 per cent, so it is rather misleading to say it is only 5 per cent.  Given the range and given the figures in the range, it is quite significant.  At least, that is the way they saw it.

MR YOUNG:   It is significant in dollar terms, certainly by community standards.  Of that I join no issue.  The issue, though, was that having found no error ‑ ‑ ‑

KIRBY J:   You keep saying that but on page 188 of the transcript, paragraph 139, they record:

It is argued that her Honour was in error –

Then on 196 paragraph 165 they say:

there is nothing in her Honour’s reasons which point to a particular error.

So they were obviously on to the error point.  I mean, we are very vigilant of this.  You may not have seen it but in the criminal field there have been a number of cases recently where this Court has interfered because of the fact that the intermediate court has not addressed itself to and plainly displayed attention to error.  So the Full Court appears to have been looking at the issue of error and to have kept that in mind steadily.  I mean, I looked at it very carefully for that purpose, because if that had been missing, you would have been on the first leg of the ladder.

MR YOUNG:   Yes.  What the Full Court has said is, as they approached it, that her Honour approached the matter diligently.  What they had earlier said, if I may, at page 141 of the application book, and this was the initial point at the bottom of the page, that they commenced in paragraphs 33 and 34 firstly finding that:

Her Honour then, with precision, identified the various issues –

and in paragraph 34:

Her Honour then proceeded to determine each of the issues that she had identified.

So the starting point for the Full Court was the acknowledgment that the trial judge had identified and had proceeded to deal with in an orderly fashion, in effect, in the line of Clauson and considering the issues determining the asset pool but, having found that for the trial judge and having found that she dealt with it diligently – and I do not want to be at odds with your Honour Justice Kirby on the issue of error – in the context of this case and in the conclusions where the Full Court really exercised its discretion was that they determined as a preference – and it is very much the heart of our case that it is as a preference of the Full Court that they determined that her Honour’s conclusion of 35 per cent in a marriage relationship of 20 years, four children, was above a legitimate exercise of the discretion.

McHUGH J:   That is right, but if you look at paragraph 117 on 179 of the book they state the principle upon which they ultimately acted:

In the absence of an error . . . the challenge must be that the orders fell outside a reasonable exercise of discretion, that is, that the orders were “unreasonable or plainly unjust” –

and that is the view they took of it.  Now, other members of the Family Court might take a different view of it.  I might take a different view myself, but what is special about the case?  I mean, if we granted special leave every time there was an arguably wrong exercise of discretion, we would need 10 divisions of this Court.

MR YOUNG:   In this particular case there are various factors which indicate, in my respectful submission, that the exercise of discretion – what they did not find, with respect, was that it was unreasonable or plainly unjust.  What they determined was that it was above a legitimate exercise of the discretion.

KIRBY J:   It got to that point through a gateway which they articulated in which they referred to the correct principle.  We have to apply the same principle ourselves.  If they have acted within their jurisdiction and according to right principles, we must not interfere unless we can show error and if we cannot show error because they have demonstrated they have applied the correct principle, we would be doing exactly what you are complaining about in the Full Court.

MR YOUNG:   Yes.  It is a question to an extent of whether or not error or finding that it is clearly erroneous or, in that passage of Justice Brennan in Norbis where he refers to the generous ambit, that is not simply the generous ambit.  It is in the context that it was plainly wrong.

KIRBY J:   Essentially what you are saying is they have expressed the principle but when they came to act they have tinkered and tinkering is not manifest error.

MR YOUNG:   Correct.

KIRBY J:   But it is tinkering in a very unusual context where there are very large amounts of money involved, so it is a small adjustment but one important in the context of this case.

McHUGH J:   It sounds in millions of dollars, does it not, the difference?

MR YOUNG:   Yes.  $2.2 million in reality was the difference ‑ ‑ ‑

McHUGH J:   Yes.

MR YOUNG:   ‑ ‑ ‑ by the variation from 30 to 27½.  I think it was 2.2 million for every 2½ per cent from recollection.

McHUGH J:   Yes.

MR YOUNG:   Of course, I acknowledge that in terms of dollar figures it is a relatively substantial sum.  Ultimately, at the end of the case, what it means is that effectively 45 per cent is not in the pool for distribution and is left with the husband and the balance, the 55, is divided 27½ each.

Now that might be approaching it the wrong way.  I understand at the end of the day there might be a criticism for standing back and saying, “But the husband gets 72½ per cent of an asset pool built up over 20‑plus years of marriage and relationship with four children”.  That might be the outcome, that might be the product of standing back and balancing.  To that extent, the issue of whether or not that is plainly unjust or plainly inappropriate, in a context where I, without in any way being discourteous, would want to maintain that they still have not – whilst in paragraph 117 they referred to:

In the absence of an error in approach or principle –

and I acknowledge that they said that – I do not want to say in passing because clearly it is in the judgment – but what they moved on to do was to express a preference and in the context of this case, particularly with the issue that – and if it be an issue – that I have identified in the summary of argument, the paper that had previously been published by one of the trial judges and the adoption of that paper in the judgment and the reference to transcript that I have provided where the presiding judge, Justice Kay, explained very early in the case to senior counsel for the husband, Mr Kirk, his approach and the…..principle – just in the context of those issues and bearing in mind what Justice Kirby has expressed in CDJ v VAJ in respect of the unique position of Family Court ‑ ‑ ‑

KIRBY J:   It is not entirely unique but the decisions that have been made are discretionary and this is a specialist court.

MR YOUNG:   Yes.

KIRBY J:   They know a whole lot more about these matters than we tend to.  All we have to do is keep our eye on the principle and if they express the principle and it sounds in significant sums, then it is not a tinkering case.  When I first read it I thought this is tinkering and that would have been a good argument for you.

MR YOUNG:   Yes.

KIRBY J:   But when you actually get down to the money sum consequence it is quite significant.

MR YOUNG:   But ultimately, is it the outcome or the product of the case, the dollar figures, that is the correct way to consider and then apply that reasoning to an issue of lack of error because ‑ ‑ ‑

McHUGH J:   Yes, but, Mr Young, you are treating the matter as if this was an appeal.  There is nothing special about it.  The most you can say is that they got it wrong.  This Court does not sit as an error‑correcting Court.  It only takes on cases when there is something special about them and there is nothing special about this case that I can see at the moment.

KIRBY J:   You tried to leg it up on the issue of the proper recompense for the wife’s contributions in terms of ‑ ‑ ‑

MR YOUNG:   Yes.

KIRBY J:   Now, how is that special in this case?

MR YOUNG:   Yes, well, that is really the second limb of the argument.  The other argument on discretion that I leave was the range question because we had in our summary of argument raised the issue of whether the Full Court should be in a position simply of accepting a range and without any particular reason, as they say, in their judgment selecting a midpoint and that is at page 196.

KIRBY J:   You keep beating this drum but you are not going to make much headway.

MR YOUNG:   I leave the matter totally.

KIRBY J:   Now, let me understand, if you can show that in some way the judge undervalued a wife’s contribution as a homemaker and bearer of children, well, that will be special as far as I am concerned.

MR YOUNG:   I will turn to that, your Honour.  The issues of contribution we have dealt with in grounds 2 and 3 of our special leave application and in paragraphs 40 to 59 of our summary of argument.  May I just make this preliminary observation – and it is in the summary of argument – and that is that section 79(4)(c), which was introduced in 1983 by the legislative changes of that year, has not been considered by the Court.

Mallet’s Case, of course, was dealing with the Act as it was prior to 1983 and it was a very significant change with the introduction of subparagraph (c) and the issue of the welfare of the family and, in that context, the role of homemaker and parent.

Underlining all of our submissions is, I think, what is universally accepted now and that is that the homemaker and parent contribution is not to be taken in a token way, rather in a substantial way, and that really is the basis upon which I move forward.

The findings of the trial judge on the issues of contribution we have outlined in the application book at pages 224, 225.  I was not proposing to spend any time there but in passing could I just observe particular paragraphs that go to the issue of homemaker and parent and they are 9, 10, 12, 14, 20 and 21.

KIRBY J:   I thought this was a rather unusual case in which it was found that the husband did make an equal contribution in the upbringing of the children.

MR YOUNG:   What her Honour the trial judge did was effectively to divide the period of marriage into three time frames.  The first, from the commencement of the relationship in 1971 right through until 1987, and it was at that time she found that the wife made – and I will take your Honour to the passage – the very significant contribution.  Because the wife then fell ill, a depressive illness, from 1987 to 1991, which was the second period, her Honour certainly uplifted the husband’s contributions but, of course, at that stage three of the children were but adult and the youngest child was 16.

The real years of this marriage and the wife’s “significant”, to use her Honour the trial judge’s word, contribution were when the parties were in the outback in South Australia moving around with the husband as a geologist prospecting and it was with the raising of the four children, as we had put and as her Honour the trial judge found, in somewhat difficult circumstances with the conditions, the housing, the move and the like.

But ultimately, what is unique about this case in many ways was that the parties did not come into this wealth in the first 15 years of the marriage.  It was when, and the trial judge made a finding of the husband’s efforts in locating and identifying the Mt Leyshon gold deposit in northern Queensland and ultimately, with the assistance of the various external experts, the floating of that company and the selling of the shares on the day ‑ ‑ ‑

KIRBY J:   I understand all that.

MR YOUNG:   Yes.

KIRBY J:   Is what you are saying that the Full Court at paragraph 163, when it says:

The wife’s contributions were for the most part as homemaker and parent.  As a parent, her Honour found that the husband’s contributions were equal to the wife’s –

that that is a misstatement of the primary judge’s finding?

MR YOUNG:   It is – no, I will not say it is a misstatement.  What the primary judge found was the wife’s significant role to 1987 and then balanced it by the husband’s contribution over the next four years.

KIRBY J:   And then the wife’s diminished later because of her illness.

MR YOUNG:   Because of her illness, yes.

KIRBY J:   Yes, so that the view was taken that looked at as a whole they ended up about equal.  Certainly, this was not the case where the husband went off to work and made a mint and the wife was left at home the whole period looking after the children.

MR YOUNG:   Not after the first 15 or 16 years, no.  In that latter four years, correct.

McHUGH J:   Well, her Honour found that apart from work he had no other interest but the family, if I remember rightly.

MR YOUNG:   Her Honour the trial judge certainly found that the husband, when he was not at work, did assist with the – yes, but, of course, she also found that he was away for long periods and at work and prospecting and in the outback and other sort of ‑ ‑ ‑

McHUGH J:   There is no doubt that in the first phase, from 1971 to April 1987, the wife had the major running of the family situation and she made a significant contribution to the marriage in that period but, that said, where does it go from there?

MR YOUNG:   Having identified, as I did, those paragraphs in the statement of factual background – and may I just, as an overview, when the Full Court came to look at the issues of contribution they did so on page 191 and they considered the husband’s contributions over the next three or four pages through to 195 and then effectively considered the wife’s contribution in the three paragraphs, but predominantly in the first paragraph at the top of paragraph 160 on page 195.

What we say is that the Full Court, for all of the findings that her Honour made, took time to outline and to detail those contributions of the husband, but when it came to looking to the wife, 161 and 162 really do not set out the contributions.  They move on to the illness that diminished the wife’s ability post‑1987.

McHUGH J:   But, Mr Young, as I said to you earlier, these are not special leave points.  You want us to examine the evidence and make value judgments.  There is nothing remotely special about those facts.  The very fact that you have to go into this detail tells against there being any case for special leave.  It is a fair rule of thumb that if you cannot state your special leave application point in a few minutes, you have not got one.

MR YOUNG:   The essence of what I started was ‑ ‑ ‑

KIRBY J:   I hope everybody is listening to that.

MR YOUNG:   Yes.  The essence of what I was saying turns on section 79(4)(c) and the failure of this court to have regard to contributions that still may be made in a non‑financial sense under 79(4)(b).  What the Full Court does not do at any point of its judgment is deal with the wife’s significant contributions by way of being, under 79(4)(b), for example, a director, a joint appointor of the family trust.  She wore the legal responsibilities throughout this marriage and the trial judge made certain findings of the wife’s involvement, in the passive sense largely, in that way and that was clearly an issue that should have been taken into account by the Full Court, in our respectful submission, under the 79(4)(b).  It was not just a contribution to the welfare of the marriage.  It was a contribution in the wider sense, in the non‑financial sense.

McHUGH J:   But her Honour the trial judge found that the wife’s participation in the business affairs was minimal, did she not?

MR YOUNG:   There is a passage where her Honour indicated that the wife was not actively involved.  I am not sure from memory if she used the word “minimal”.

McHUGH J:   No.

MR YOUNG:   But there was certainly – and that is why I said in a passive sense, trying to accurately sum up, but she was, at all times, a director and had the legal liability and, of course, would have similarly lost in the event of a claim or demand as would the husband.  It was not simply that she was not fulfilling a role within the marriage.  The joint role that the husband and wife elected for themselves was to go forward in a corporate structure and there is nowhere in the Full Court anywhere a consideration of the ongoing role of a wife in our society who takes on, arm in arm with the husband, the corporate responsibilities, as found in this case and putting it no higher, but the Full Court simply elected not to or did not turn to that issue and left the findings of the trial judge but did not, anywhere in the judgment, deal with the 79(4)(b) point.

McHUGH J:   Well, your time is up, thank you, Mr Young.  The Court need not hear you, Mr Brereton.

In this matter the Full Court addressed itself correctly to the need to establish error before it disturbed the exercise of discretion on the part of the primary judge.  Neither in its approach nor in the resulting order has the applicant shown that the Full Court erred in a way that would call for the intervention of this Court.  No special leave point has been demonstrated.  Accordingly, special leave is refused with costs.

AT 10.13 AM THE MATTER WAS CONCLUDED