GF & KF

[2006] FamCA 628

[2006] FamCA 628

FAMILY LAW ACT 1975

IN THE FULL COURT       
OF THE FAMILY COURT OF AUSTRALIA                 Appeal No EA126 of 2005
AT SYDNEY  File No SYF5329 of 2003

BETWEEN:

GF
Appellant Husband
- and -

KF
Respondent Wife

REASONS FOR JUDGMENT

CORAM:  KAY, COLEMAN & WARNICK JJ
DATE OF HEARING:                 26 June 2006
DATE OF JUDGMENT:             19 July 2006

APPEARANCES:  Mr Maurice of Counsel, instructed by, Griffiths, Delaney & Co., 655 Princess Highway, Blakehurst NSW 2221, appeared on behalf of the Appellant Husband.

Mr Jackson of Counsel, instructed by Macedone, Christie Willis, 40 Railway Crescent, Jannali, NSW 2226, appeared on behalf of the Respondent Wife.

GF AND KF
EA126 of 2005
CORAM:  Kay, Coleman & Warnick JJ
DATE OF HEARING:         26 June 2006
DATE OF JUDGMENT:     19 July 2006

Catchwords:           CHILDREN – Residence – Equal shared care arrangement sought by father rejected in favour of substantial shared care arrangement – Mothers’ capacity to see to children’s needs assessed as “slightly better” – Reasons of the trial Judge apparent even if “only marginal” – No demonstrable error on part of trial Judge.

PROPERTY SETTLEMENT – Contributions – Husband’s contribution to matrimonial property assessed at 75% instead of 80% as he contended for – Wife received a further 12.5% for the factors contained in s75(2) of the Family Law Act – All relevant considerations properly identified – Adjustment generous to the wife but not outside the range of the trial Judge’s discretion.

EVIDENCE – Sale of former matrimonial home after trial for lesser amount than that contemplated by the parties at time of trial – Further evidence as to proceeds of sale put before the court by consent – Justice dictates that the court take this into account on appeal.

1. This is the husband’s appeal against property and parenting orders that were made by Moore J on 1 December 2005.  Her Honour had ordered that the children S aged 7 and N aged 5 should spend the equivalent of five nights per fortnight with their father.  He sought an order for seven nights per fortnight.  Her Honour further ordered that a pool of assets worth approximately $2 million should be divided as to three-eighths to the wife and five-eighths to the husband.  The appellant sought an order that he should be entitled to receive three-quarters of the pool.

Background

1. The husband is aged 49 and the wife 37.  Her Honour found that their relationship commenced in early 1995.  They married in February 1997 and, whilst the marriage broke down in September 2003, they remained together in the matrimonial home until late 2004.  S was born in August 1998 and N was born in June 2000.

Parenting issues

1. At the time the elder child was born the husband’s employment, leave entitlements and rostered work hours were such that he had time available to assist in the care of the children.  On the other hand, after S’s birth the wife was either not in paid work or was working casual or part-time.  Although it was a matter of contest, the trial judge found that the wife was primarily responsible for the children’s care and supervision throughout the time the parties lived together.

1. In September 2004, after the parties physically separated, interim orders were made that provided for substantial shared care of the children requiring 14 changeovers in 28 days.  The orders provided for a four week cycle that saw the children with their father during school term:

(a)      In week 1 Tuesday evening until Wednesday evening and Friday morning until late afternoon;

(b)      In week 2 Tuesday evening until Wednesday evening and Friday morning until late Sunday afternoon;

(c)       In week 3 Tuesday evening until Wednesday evening and Friday morning until late Saturday afternoon;

(d)      In week 4 Tuesday evening until Wednesday evening and Friday morning until late Sunday afternoon;

School holidays were divided evenly between the parents.

1. When the matter came on for hearing before Moore J the parties had agreed upon significant holiday sharing for the children, but remained in dispute about the time that the children were to spend with each parent during school terms.  Her Honour defined the dispute as follows:

“4.…  Essentially, the areas of disagreement relate to (i) the time the children will spend with each parent during school terms, though it is agreed that will include part of each week; (ii) the duration of block periods during the Christmas school holidays; and (iii) the duration of absence on holidays overseas (the outcome here, it is agreed, will follow the outcome of (ii)), though they agree in principle each parent will be able to take the children out of Australia for holidays. 

5.As for (i), broadly expressed, their mother proposes a two weekly cycle where the children would be with their father in week 1 from Thursday afternoon to Friday afternoon and in week 2 from Thursday afternoon until Sunday afternoon.  For the remainder of 2005 their father proposes another 28 day cycle but with less changeovers: they would be with him in week 1 from Wednesday afternoon to Friday afternoon, in week 2 from Wednesday afternoon until Monday morning, in week 3 from Wednesday afternoon until Saturday afternoon, and in week 4 from Wednesday afternoon until Sunday morning.  As is apparent, the time of moving to their father’s care each week would be consistently Wednesday afternoon but the time of return to their mother would vary each weekend in the cycle.  From the beginning of 2006 onwards he proposes a week about arrangement to operate from each Monday morning unless that is a public holiday or pupil free day.  As for (ii) and (iii), their mother takes the view that 3 consecutive weeks, proposed by their father, is too long for the children to be away from each parent and she would reduce their absence to 1 week until they are older.” 

1. In her judgment Moore J identified the case put by each parent noting inter alia the mother’s complaint that the parties had an inability to effectively communicate, and the father’s emphasis on his involvement with the children’s day to day routine.  Her Honour referred to a welfare report prepared in December 2004 in which the assessment of the counsellor was that both parents “presented as involved and caring parents who were considerate of the children’s needs”.  The counsellor further observed:

“[S] and [N] have significant and close attachments to their mother and father.  They identified both parents as emotional and physical supports.  The children were comfortable and confident ... in both observations enjoying the company of their parents.  [N] showed signs of separation anxiety when separating from the father.  The children enjoyed having their mother and father involved in all aspects of their lives.  [S] in particular commented that she wanted her time with her mother and father to stay the same.”

1. The reporter further indicated of the parties:

“They do appear to feel uncomfortable together and at times experience frustration and tension with each other…Mr [F] and Ms [F] believe their communication will improve with time, which Counsellor agrees is likely considering that Mr [F] and Ms [F]  appeared to have been effective communicators prior to their marital difficulties.

Mr [F], Ms [F], [S] and [N] thought the current interim orders were going well.  Where the children are not exposed to excessive levels of parental conflict, extreme tension and the parents can communicate about issues regarding the children, shared residency is beneficial for the children’s long term development including the development of the relationship with both parents.  [S] and [N] would benefit from a shared care arrangement.

[N] is at an age where she would likely miss her mother and father if she were not to see them for say a week about.  [S] is more likely at age 6 years to effectively cope with a week away from either parent.  It would be in the best interests of the children for them to remain together and [S] and [N] would benefit from seeing both parents within the same week.”

1. The counsellor then recommended that the children be cared for in a shared care arrangement and that any such arrangement include the children seeing both parents within each week.

1. As will be seen, ultimately the trial judge gave effect to this recommendation in the sense that she made orders that see the children, on a fortnightly cycle, spending three nights with their mother, one night with their father, six nights with their mother, and four nights with their father.  Whilst this was not an equal shared arrangement it meets the criteria as recommended by the court counsellor.

1. In the course of determining what order her Honour thought would best advance the welfare of the children she noted

·    there would be no practical difficulties related to the children moving from the care of one parent to the other;

·    each parent loved the children and wished to do the best they could in providing them with a happy and healthy upbringing;

·    both parents were able to provide adequately for the children and for their needs;

·    there were some indicators that “their mother is likely to be a little better equipped [to provide adequately for the children] than their father”;

·    some past episodes depicted the father as having a dismissive bordering on disrespectful attitude towards the mother which indicates that “her capacity to see the children’s needs should be assessed as slightly better”;

·    on the issue as to the capacity of the parties to be able to communicate about daily parenting requirements “there remains an obvious tension between them and undoubtedly there is scope for further improvement on that front yet”;

·    the father’s work would not be an impediment to the introduction of a week about arrangement.

1. Following on those findings as we have paraphrased them, her Honour said:

“45.Ultimately a decision has to be made and in a finely balanced case I have come to the view the children’s interests would be best served by adopted [sic] their mother’s proposal about their future care during school terms, subject to one modification I shall come to shortly. Of course both parents have much to offer and naturally their continued close involvement in their children’s lives will be to their children’s benefit. Yet their mother is just that more capable of seeing to their needs, for the reasons discussed, to which there may be added the history of her care since their birth along with the fact that the children are comfortable and accustomed to being in her care. The change I would make to her proposal is to have the children returned to school by their father on Monday morning of the second week rather than return home on Sunday afternoon. This would allow them to remain at his home for an extra night and to start their school week from there after those longer weekends with him. This means they would spend time with their father each week, to include an extended stay every second week of 4 consecutive nights, yet their pattern of their movement between their parents would be much less than under the interim orders. Indeed, where they would spend their nights in each fortnight from the start of week 1 would be: M3 F1 M6 and F4. I am satisfied this would be a proper arrangement for the children.”

Parenting appeal

1. The gravamen of the parenting appeal as argued was that her Honour’s reasons for reaching the conclusion that she did were inadequate.  Furthermore, insofar as any reasons could be ascertained, they were based upon three fallacious findings, namely that

·    the mother’s capacity to see to the children’s needs should be assessed as slightly better than the father’s;

·    the parties did not effectively communicate with regard to the children, and;

·    the mother had been a primary caregiver of the children prior to the separation. 

1. Counsel for the appellant father also stressed his client’s case that the welfare of the children would be best advanced by allowing the father’s involvement in all aspects of their lives.  The father was concerned that the orders of the trial judge effectively confined him to being a weekend parent. 

1. The requirement to give adequate reasons is met if an appellate tribunal and the parties can follow the line of reasoning of the trial judge and ascertain the basis upon which the decision was made. 

1. In Bennett (1991) FLC 92-191; 14 Fam LR 397 the Full Court (Nicholson CJ, Simpson and Finn JJ) reviewed the authorities relating to the adequacy of reasons for judgment and described at FLC 78,251; Fam LR 414 as ‘‘particularly useful” a test propounded by Gray J of the Supreme Court of Victoria, in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18 where that learned judge said:

“The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:-

(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or

(b) justice is not seen to have been done.”

1. The requirement to give adequate reasons is well established.  The requirement at its lowest is to ensure that the parties and an appellate court can properly follow the line of reasoning.  It is also to ensure that necessary findings are made to enable the statutory powers to be properly carried out.

1. It is not always easy for a trial judge to express precisely why one course is chosen over another.  As Murphy J said in Gronow v Gronow (1979) 144 CLR 513 at 532; (1979) 5 Fam LR 719 at 731; (1979) FLC 90-716 at 78,856; :

   “…Reasons for judgment, necessarily in many cases, especially in a finely balanced case are a rationalisation of a largely intuitive judgment based on an assessment of the personalities of the parties and the children.”

2. Whilst there were strong arguments in favour of adopting the husband’s suggestions for a week about an equal sharing arrangement, the reasons why her Honour chose a different arrangement are apparent even though, as her Honour said, they are only marginal.  Her Honour was very cautious in the language she used, emphasizing that the mother was “a little better” equipped to provide adequately for the children than the father and was “slightly better” in her capacity to meet the children’s needs.  Her Honour also remained anxious about the degree of tension in the parties’ communications.  It was those reasons that led her Honour to choose to divide the children’s care during school term nine nights in favour of the mother and five in favour of the father, rather than seven and seven as the father was urging.

1. As already indicated there are many features present in this case that would have made an outcome of seven and seven capable of being readily justified, and perfectly consistent with the dictates of the legislation that the orders made best advance the welfare of the children.  Ultimately, however, it was an exercise of judicial discretion which, absent any appealable error, cannot be interfered with.

1. We have closely examined the evidence relating to the particular areas where it is said that the trial judge fell into error, but we are not persuaded that any error has been demonstrated.

1. The finding of primary responsibility during the time the parties were living together was clearly open to her Honour on the evidence.  The husband’s evidence was that certainly he was a very involved father from the time of birth of the children.  He said that he was “able to substantially assist in the care of [S]” and after the birth of N was “able to assist more with the care of the children as well as with household duties…”.  The mother painted a more dramatic picture deposing “prior to our separation the [father] was only minimally involved in the day to day care of the children”.  Whilst her Honour did not ultimately determine this conflict in the evidence, she did find that the wife had remained primarily responsible for the children’s care and supervision during the time the parties lived together.  This finding does not, however, appear to be expressed as the basis upon which her Honour concluded that something less than an equal shared care arrangement was appropriate. 

1. The ultimate conclusion seems to rest upon her Honour’s perception that as a parent, the mother was, as mentioned, “a little better”, “slightly better”, or “just that more capable of seeing to [the children’s] needs”.  Those findings, coupled with an underlying tension between the parties, led her Honour to the view that the appropriate orders were as her Honour outlined.  Each of those findings was clearly available to her Honour on the material.  As we have already said, whilst it would not have been surprising to see her Honour reach a result of an equal shared parenting arrangement, it cannot be said that she has fallen into appealable error to the point where an appeal court could properly intervene and make orders other than those made by her Honour.

Property

1. The pool of assets available for division between the parties as found by the trial judge was as follows:

   “Assets:

   Husband to retain

   a.    5 [K Place, H]  1,550,000

   b.    1997 Subaru  8,000

   c.     1997 Toyota  3,000

   d.    853 Qantas shares  2,755

   e.    1,373 IAG shares  7,510

   f.     Boat  7,000

   g.    Westpac account  857

   h.     Legal fees paid   14,339

   i.     [S] Credit Union        4,998

   Sub-total:  1,598,459

   j.     G [F] Superannuation Fund   332,720

   k.     First State Super       86,991

   Total:  2,018,170

   Less liabilities:

   l.     Virgin Mastercard  944

   m.   Husband’s sister  6,000

   n.     Capital Gains Tax                14,549            21,493

   Total net to husband:  1,996,677

   Wife to retain

   o.    704 IAG shares  4,196

   p.    Nissan Pulsar   11,250

   q.    Legal fees   23,842

   Sub-total:   39,288

   r.     ING Superannuation   15,442

   Total:   54,730

   Less liabilities

   s.     L. [D]   36,234

   Total net to wife:   18,496

   Total net (H&W):   2,015,173”

2. At the hearing of the appeal we were told by consent that the property at 5 K Place, in H, had been sold in order to raise sufficient funds to enable the husband to pay out the wife and that it had realised a net sum of $1,438,682 rather than the $1,550,000 that had been the agreed value before her Honour. 

1. An issue then arose as to whether it was appropriate for us to allow the appeal at least to the extent of reducing the sum payable by the husband to the wife, because of the known reduction in the value of the principal asset.  Submissions in support of that proposition were relied upon by the appellant husband.  These submissions were interwoven with another argument advanced at the appeal, that the orders made by the trial judge ought to have contemplated a sale of the property.  Counsel for the husband put that, a sale being likely, there should have been included a “rise and fall” order to reflect the division of the actual proceeds of sale rather than the agreed value.

1. The respondent agreed that a rise and fall clause is appropriate where a sale can reasonably be foreseen, but submitted that this was not the case before Moore J.  Her Honour offered the parties an opportunity to consider draft orders before they were finalised, but was never asked to consider a possible sale of the home.  The respondent submitted that for this reason it would be quite inappropriate to vary the orders.  Counsel for the appellant acknowledged that the option had been provided by the trial judge but whether by oversight or otherwise he had not availed himself of that opportunity.

1. Nothing before us explains why the husband did not seek an order for sale of the home and percentage division of the proceeds at trial, bearing in mind the chance that he had after the reasons were delivered, and after he knew the amount of the payment required to the wife.  He could have sought such an order, either as a primary order or in the alternative, right up until the orders were pronounced.

1. He argues now that it must have been obvious that he would need to sell the property rather than borrow to meet the payment.  We would not necessarily have drawn that inference having regard to the value of the property and the amount of the payment required, although we imagine that the payments on a borrowing of some $737,000 would be substantial and the husband would have difficulty with making such repayments.  An inference at least equally open at that time, however, was that the husband always intended to sell the property, especially if he was to pay more than $475,000, but was content with the fixed sum because he thought he would achieve more than the agreed value.  If they were the circumstances, we wonder whether it would be an injustice to the husband, rather than a failed gamble, if his expectations were not met.

1. While it would be inappropriate for the husband to succeed on a ground of appeal merely because of a sale after trial at a lesser figure than the agreed value before trial, there is in fact in this case some other further evidence already before us.

1. The husband’s appeal was filed promptly after the orders, namely 18 October 2005 and he there raised the argument that an order for immediate sale should have been made.  On 4 November 2005 he applied for an application for a stay.  He sought a stay of order 7 pending determination of the appeal:

   “…on condition that upon completion of the sale of the property … the husband pay to the wife the sum of $475,000 with such sum to be taken into account by the Full Court of the hearing of the appeal.…”

2. The sale of the property has occurred while “proceedings” over property settlement have been afoot in the sense that the appeal had yet to be determined.  The husband’s appeal does not rest on the fact of the sale price being less than the $1,550,000, for he was seeking an order for sale prior to the sale price being known.  There remains however, no explanation of the failure to earlier seek an order for sale once Moore J’s reasons for the property settlement orders were handed down.  Perhaps a further inference is that the failure to seek an order for sale earlier was an oversight.

1. Thus, the possible inferences arising from the failure to seek an order for sale prior to the orders being made, are rebutted, at least from the time the appeal was filed.  

1. The powers of the Full Court upon an appeal are contained in s 94(2) of the Family Law Act 1975 (Cth). That section provides that:

   “…the Full Court may affirm, reverse or vary the decree…and may make such decree as, in the opinion of the court, ought to have been made in the first instance…”

2. The Court is further empowered by the provisions of s 93A(2) to receive further evidence on questions of fact in an appeal.

1. In McGregor v McGregor (1996) FLC 92-710 at 83,532 the Full Court (Nicholson CJ, Barblett DCJ and Finn J) when discussing the issue of the exercise of the discretion to admit further evidence upon the hearing of an appeal said:

   “…in exercising that discretion, a court will pay regard to the need to finalise proceedings.  In family law property disputes and in particular, in those disputes involving ongoing businesses and substantial sums of money,…the situation of the parties is obviously likely to be subject to some change between the trial, date of judgment at first instance and the hearing of any subsequent appeal.

   Sometimes that situation is not the subject of any dispute, as was the case here in relation to [some real estate that sold after judgment] and there is accordingly no difficulty about the admission of such evidence.

   On other occasions, the evidence is incontrovertible and in both of these latter situations the evidence is normally admitted.”

2. In CDJ v VAJ (1998) 197 CLR 172; 157 ALR 686; 23 Fam LR 755,the High Court discussed the operation of s 93A(2) in the context of an appeal against parenting orders. In particular, in their joint judgment (McHugh, Gummow and Callinan JJ) said:

“[107]  The discretion conferred by s 93A(2) to receive further evidence on appeal is not expressed to be limited in any way. In particular, the subsection contains no requirement, comparable with that often found in statutes conferring power on an appellate court to receive further evidence, that ‘special grounds’ or ‘special leave’ be shown before the evidence can be adduced. Nor, in contrast to the common law position, must the motion to receive the evidence be designed to set aside the verdict at first instance. Nothing in s 93A(2), for example, prevents the respondent to the appeal from bringing a motion to adduce further evidence to support the orders made.

…

[109]   One 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]…the Full Court of a family court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of the hearing of the appeal…the power to admit the further evidence exists to serve the demands of justice.

…

[114]   No doubt the Full Court will readily admit further evidence which is not in dispute and which the court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings reheard. Further evidence of this kind is particularly likely to be admitted where the evidence relates to events occurring after trial. In the case of undisputed evidence which the Full Court can evaluate as part of the evidence in the appeal, the discretion to admit the evidence may even be properly exercised without the Full Court considering what effect it would have had on the trial judge’s decision. In that context, the likely effect of the further evidence on the Full Court’s view of the evidence before the trial judge is the important consideration. Where there is no need for a new trial or extensive taking of evidence, other discretionary factors such as the availability of the evidence at the trial and the need for finality of litigation are likely to be more relevant in the exercise of the discretion than the effect that the evidence would have had at the trial.”

1. The issue of providing for a percentage share of the proceeds of sale rather than a fixed amount was revisited by the Full Court last year in Noetel and Quealey (2005) FLC 93-230. In the course of their joint judgment Bryant CJ and Boland J said:

“143. The practice of drafting orders based on a percentage entitlement rather than a fixed sum to achieve fairness between parties in the event of a sale is subject of many authorities. Those authorities were subject of comprehensive review in Sinclair and Sinclair [2000] FamCA 262. We take this opportunity to repeat that summary and emphasise the importance of the well established principle:

‘108. A long line of authority in this Court (Waters and Waters (1981) FLC ¶91-019 at 76,208; Williams and Williams (1988) FLC ¶ 91-959 at 76,940; Docters van Leeuwen and Docters van Leeuwen (1990) FLC ¶ 92-148 at 78,024; Little and Little (1990) FLC ¶92-147 at 78,020; Smith and Smith (1991) FLC ¶92-261 at 78,759; and Bell and Bell (1993) FLC ¶92-347 at 79,683) establishes as a clear guideline for the exercise of discretion under s 79 of the Act, that, absent some special consideration (such as a desire by one spouse to retain a particular piece of property, in specie), and particularly where the value of an asset is contentious, or even where it is not but the market for the property is volatile, or there is likely to be a significant time lapse between judgment and sale, and where the value of the asset is to be divided between the parties, the Court should order its sale and the apportionment of the proceeds between the parties rather than order one party to pay to the other a fixed sum representing a notional proportion of its assessed value.

109. Moreover, in Docters van Leeuwin (sic) (supra) at 78,025, the Full Court (Fogarty, Nygh & Rowlands JJ), after citing a passage from the judgment of Mason and Deane JJ in Norbis v Norbis (1986) FLC ¶91-712 at 75,165-6, said this:

“In our view the time has come to regard a departure from a long-standing guideline, such as the one given in Waters, without adequate explanation as a ground for finding that the exercise of discretion has miscarried.”

110. In Bell and Bell (supra) at 79,763, the Full Court (Ellis, Baker & Purvis JJ), after referring to the earlier decisions in Docters van Leeuwin (sic), Little, and Waters (all supra) said this:

“We see no reason to depart from the line of authority referred to above. There is always uncertainty in relation to the amount which will ultimately be obtained in respect of the sale of matrimonial property and, in particular, matrimonial real estate.

...

Although the order which the trial judge made was essentially discretionary in nature, in our opinion the authorities above referred to clearly establish that where a sale of property is necessary to satisfy a lump sum order for settlement of property and the calculation of any lump sum payable arises from a finding as to the value of the property to be sold, then the amount to be paid to one or other of the parties following any such sale should be expressed in percentage terms, rather than by way of lump sum payment, unless good and sufficient reasons are given for doing so”.’”

1. Here is a situation in which the trial judge has determined that a pool of assets should be divided between the parties in certain proportions, and in order to give effect to that provision has ordered the payment of a fixed sum by one party to the other party.  In the circumstances, where the pool of assets has, by agreement, so changed as to render the payment of the fixed sum inconsistent with the proportion in which the pool of assets should be divided as between the parties, the justice of the situation dictates that we make any necessary amendments to the orders to give effect to the division of the now known pool. 

1. In our view the dictates of justice require us to act upon the further evidence that was admitted before us by the consent of both of the parties.  To ignore the agreed evidence would be to allow one of the parties to receive more than their fair share of the asset pool at the expense of the other.  While to allow the husband to challenge on appeal the absence of an order or sale is to permit him to raise a point not argued by him below, the wife can hardly be prejudiced where she was herself seeking an order for sale.

The assessment of an appropriate outcome

1. The trial judge concluded that based on the contribution of the parties the asset pool should be divided 75:25 in favour of the husband. Her Honour further concluded that there ought to be an adjustment of a further 12½ per cent in favour of the wife when taking into consideration the relevant factors set out in s 75(2). Her Honour identified those factors as being the disparity of capital, the disparity of future earnings and the responsibilities for the daily care of the children.

Contributions

1. Her Honour’s findings, which were not the subject of any challenge before us, were as follows:

“50.The parties’ relationship began around 10 ½ years ago, during which their two young children were born, and their contributions now have to be evaluated over the whole of that time.  As is apparent from the account given of their history, their contributions they have each made spanning that period fall within those described in paragraphs 79(4)(a)-(c).  They each worked and contributed their earnings, though for different periods and incomes, and they each attended to the needs of their children, the running of their household, and the conservation and improvement of assets they had and acquired along the way, though in different measures as discussed.  Their lifestyle appears to have been relatively comfortable, as indicated by the homes they occupied, the availability of motor vehicles, holidays they took as a family, and leisure activities enjoyed.  Mr [F] was the greater income earner over these years though, balanced against that, Mrs [F] took the primary responsibility for attending to the needs of the children and their day to day supervision and activities, with all the myriad of tasks and vigilance involved in that.  They had some assistance along the way in one form or another from her mother and from each of his parents.  They occupied the family home together for a time after their relationship broke down though their pre-separation financial arrangements appear to have continued largely during that period.  Over the past year Mr [F] has had exclusive occupancy of the family home while his wife has paid rent elsewhere.  However, the children’s care has been shared and Mr [F] has paid from his resources in that time outgoings related to the home and other property as well as paying child support as outlined by Mrs [F] in her evidence.  Nothing of any real moment comes out of their financial arrangements over the past year of living separately. 

51.Looked at overall, what separates their contributions and takes their circumstances away from what might otherwise be seen as approximating equality, is the greater financial strength of Mr [F] at the commencement of their relationship by reason of the introduction of assets and entitlements he had.  Indeed, that he should receive credit for making greater financial contributions overall is not in dispute.  What is at issue is the weight to be given to those greater contributions or, to put it another way, by what proportion should Mr [F] now be favoured in the distribution of their current assets to take account of that initial strength. 

…

53.In this case Mr [F] introduced, amongst other assets, the home at [DP] Road, [C] which was acquired near enough to the outset of their relationship from the sale of another home and the sale of his interest in the partnership.  That property was improved after they occupied it and by the time it was sold some 8 years later in 2003 its value had risen considerably.  The proceeds were put towards the purchase of the [H] home, now their most substantial asset by far.  He also introduced his superannuation entitlement from his years of work with Qantas since 1979.  By the time their relationship began he had some 16 years entitlements behind him and it was only another 2 years or so afterwards that he exited the fund with a substantial entitlement amounting to $160,000 along with other entitlements related to his service with Qantas over prior years.  The self-managed fund he established acquired a unit with the rollover money and that fund (to which there has been no direct financial contribution from his wife) has shown growth over the past 8 years or so that property has been held.  This is also now reflected in their current assets.  The other work related entitlements he received, built up over earlier years and beyond the beginning of their relationship, he put into the [C] home and that is now able to be traced through to the [H] home.  He also introduced other assets such as the boat and shares that find their way reflected, directly or indirectly, in their current assets.  Not to ignore the assets introduced by Mrs [F], when these contributions are weighed with all others made by both over the years, there should be substantial assessment in Mr [F]’s favour.”

1. His counsel had urged her Honour to apportion according to contributions on the basis of 80 per cent in favour of the husband and 20 per cent in favour of the wife.  Her Honour’s assessment was 75:25.

1. As we have discussed above, this is an appeal against a discretionary judgment.  In its widest formulation the discretion and its immunity from challenge was described by Brennan J in Norbis v Norbis (1986) 161 CLR 513,at 540. His Honour said as follows:

“… 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 E.R. 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.”

1. Given the breadth of discretion available to the trial judge, whilst the assessment was arguably near that end of the scale generous to the wife, we do not believe that the assessment calls for any appellate interference.  Working with a pool of just over $2 million, an assessment based on contributions which allowed the husband the first $1 million before dividing the balance, at the end of a ten year relationship, does not in our view fall outside the boundaries where there can be said to be room for a valid difference of opinion. 

1. Similarly, the process undertaken by her Honour in making a further adjustment by reason of the factors contained in s 75(2) of the Family Law Act whilst also generous in the wife’s favour, again does not fall outside the bounds of a proper exercise of discretion. 

1. The matters identified by the trial judge as being relevant considerations appear to us to all be validly identified.  They are offset by her Honour’s proper consideration of the fact that the husband will be paying child support and that a considerable proportion of the assets retained by the husband are made up by superannuation entitlements, which he will not be able to have access to for at least another 11 years.

1. The net outcome achieved by her Honour was to leave the husband with 25 per cent more of the assets than the wife.  In a pool of $2 million this represents a half million dollar advantage.  In all of the circumstances we are not persuaded that such an order did not accord with the dictates of the Act.

Interest

1. The trial judge’s orders called for the payment of the sum of $737,000 within 60 days. Section 117B(1) of the Family Law Act provides that subject to any order made by the Court interest is payable at the rate prescribed by the applicable rules of court from the date on which the order takes effect.

1. The appellant submitted that given that the monies required to meet the husband’s obligation and the wife’s entitlement did not become available until the settlement of the sale of the property some seven months after the money was due to be paid to the wife, the due date for payment and the date upon which interest should commence to run should be adjusted to give effect to the reality of the situation.

1. When her Honour originally pronounced judgment she invited the parties to make submissions to her on the form of orders.  No submission was made relating to the time that the payment should fall due beyond that proposed by the trial judge namely 60 days.  Throughout the whole of the time until the wife received her share of the proceeds of sale of the home, the husband has remained in occupation of the home and the wife has been kept out of the use of her funds. 

1. Counsel for the appellant husband has not pointed us to any error by the trial judge in fixing 60 days as the time for payment.  The husband did not seek to address her Honour on the issue of a further delay of payment in the event that a sale of the home became necessary in order to raise funds to pay out the wife.  There being no appealable error, it would be quite inappropriate for the Full Court to intervene on this issue.

Outcome

1. Whilst the home had been included in the pool of assets at $1,550,000 the evidence before us was that it realised, after expenses of sale, $1,438,682.  If we substitute the realised figure into the pool of assets as found by the trial judge the pool reduces by $111,318 down to $1,903,855.  The amount necessary for the wife to continue to receive 37.5 per cent of the asset pool is reduced by $41,744.

1. Her Honour had rounded down the wife’s entitlement of $737,194 to $737,000.  If we adjust the difference off the larger of the two sums, the amount appropriate to be paid to the wife is $695,450.

Costs

1. The husband sought a certificate under the provisions of the Federal Proceedings (Costs) Act 1981 (Cth) if the appeal was allowed. The wife sought an order for costs against the husband if the appeal was allowed only in relation to the further evidence. Alternatively she also sought a costs certificate.

1. Given the manner in which the appeal has succeeded, we doubt that there is power to order a certificate under the Federal Proceedings (Costs) Act which is only available if the appeal succeeds on a question of law.  In any event we do not think it appropriate that such certificates be granted. 

1. The circumstances of the case make it appropriate that the husband make a contribution towards the wife’s costs.  The appeal has been basically unsuccessful save for the rather narrow point which arose as a result of the agreed further evidence.

1. The orders we propose are:

   1.        The appeal be allowed in part.

   2.        Order 7(a) of the orders made by the Honourable Justice Moore on 23 September 2005 be varied by substituting the sum of $695,450 for the sum of $737,000 therein appearing.

   3.        The husband pay $3,000 towards the wife’s costs.

I certify that the 57 preceding
 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.



Associate