GS & TS

[2005] FamCA 40

[2005] FamCA 40

FAMILY LAW ACT 1975

IN THE FULL COURT

OF THE FAMILY COURT OF AUSTRALIA

AT BRISBANE  Appeal No. NA 28 of 2004

File No. (P)BRF 52 of 2003

IN THE MATTER OF:

GS

Appellant Husband

- and -

TS

Respondent Wife

REASONS FOR JUDGMENT

CORAM:  Bryant CJ, Finn and Holden JJ        

DATE OF HEARING:         8 October 2004

DATE OF JUDGMENT:     4 February 2005

APPEAL SUMMARY

MATTER:GS and TS

APPEAL NUMBER:  NA 28 of 2004 ((P)BRF 52 of 2003)

CORAM:Bryant CJ, Finn and Holden JJ

DATE OF HEARING:  8 October 2004

DATE OF ORDER:  4 February 2005

DATE OF JUDGMENT:  4 February 2005

CATCHWORDS:                FAMILY LAW – APPEALS – Property settlement – Whether the trial Judge failed to have proper regard to contributions by the appellant to properties, which the respondent inherited post-separation, and to the welfare of the family – Whether the trial Judge erred in failing to weigh the wife’s contributions to the acquisition of the properties against all other contributions of the parties.  

Caselaw cited:

Aleksovski v Aleksovski (1996) FLC 92-705

Appeal dismissed.

No order as to costs.

1. This is an appeal by the husband against an order made by Bell J on 29 April 2004 in property settlement proceedings between the husband and the wife.  Under the order, the wife was required to pay the husband the sum of $20,550. 

2. In his reasons for judgment in relation to the order, his Honour had found that the parties’ property had a net value of $841,479; that on the basis of the parties’ contributions the property should be divided 90%-10% in the wife’s favour; that there should be an adjustment of 2.5% in favour of the husband on account of the matters contained in s 75(2) of the Family Law Act 1975 (“the Act”); and that accordingly the husband should retain or receive property to the value of $105,184 with the wife retaining the balance (being $736,295 on his Honour’s figures). Given that the husband had property to the value of $84,634 in his possession, the wife was accordingly ordered by his Honour to pay the husband the sum of $20,550.

3. The sole ground of appeal ultimately pursued by the husband is directed to his Honour’s assessment of the husband’s contributions and is in the following terms:

   That in assessing the Husband’s entitlement to the property at 12.5% the Trial Judge erred in that he failed to have any proper regard to the evidence of the Husband’s contributions to the properties at [A] and [E] in the course of the marriage and to the welfare of the family.

4. In the event that his appeal succeeds, the husband would seek on a re-exercise of the discretion by us, an assessment of his contributions at 30%.

Background

1. For present purposes the factual background to this appeal can be briefly stated.

2. The husband was born in 1959 and the wife in 1961.  They commenced to cohabit when they married in 1987.  Their four children were born in 1988, 1990, 1992 and 1994.  The parties separated in 1996.

3. Throughout the marriage, the parties lived in a home owned by the wife’s parents in the Brisbane suburb of A.  Both parties were in employment throughout the marriage (save for periods when the wife was on maternity leave).  However, at separation (in 1996) their assets were minimal.

4. After the parties’ separation, all four children remained living with the wife in the A home.  However, at the end of 2001, the eldest child moved to live with the husband.

5. In 1999, on her father’s death, the wife inherited the A home together with a property at E.  The latter property was subsequently sold for $296,000.  From the proceeds of sale, the wife received a sum of $204,401.  Out of this sum, a fund of $150,000 was set aside for the education of the three younger children.  Before the trial Judge, it was agreed that this fund would not be taken into account in the property settlement proceedings between the husband and the wife.

6. After the parties’ separation the husband had bought and sold a number of properties.  At trial, he owned a property in the Brisbane suburb of H.

7. On 16 July 2002, the husband filed an application for property settlement.  His application was heard by Bell J on 28 April 2004.  On 29 April 2004 his Honour delivered judgment and made the order which is the subject of this appeal.

The property of the parties

1. Before considering his Honour’s findings in relation to, and assessment of, the contributions of the parties and the husband’s complaints in relation to those matters, it will be useful to set out a schedule of the parties’ property as at the time of the hearing before his Honour.

2. His Honour did not include such a schedule in his judgment.  However, he had before him lists of assets and liabilities from both parties (the wife’s being a list referred to as list A and the husband’s as list B). 

3. Having regard to those lists and to his Honour’s reasons for judgment, we are able to construct the following schedule of the assets and liabilities:

Wife’s assets
A home	$560,000
Shares	$1,785
2001 Holden	$19,700
Household effects	$7,000
Superannuation	$106,313
Balance of proceeds of sale of E property (including CBA deposit of $2,646 and ING deposit of $5,000 which his Honour effectively counted twice)	$54,401
Total:	$749,199
Husband’s assets
H property less mortgage ($115,000 - $85,000)	$30,000
EC Pty Ltd	$3,000
Furniture	$2,000
Superannuation	$49,634
Total:	$84,634
Total assets:	$833,833

(Note: the difference between the above total and his Honour’s total of $841,479 is caused by the deduction of the sums of $2,646 and $5,000 as mentioned above).

The trial Judge’s findings in relation to the parties’ contributions

1. In order to understand his Honour’s ultimate assessment of the parties’ contributions, it is necessary to have regard to the following findings in his judgment:

   4.The parties commenced the marriage and cohabitation at a property [A]…owned jointly by the respondent's parents…  They…continued to live there…until separation and the mother with the three girls still [resides] in that property. 

   5.Subsequent to marriage the parties…, with the quite generous assistance of the maternal grandparents…purchased various properties including a two-flat unit at [A].  I think this was in 1988.  Some moneys were forwarded to enable the husband…to commence his business of [EC], which is still in existence and which is still run by the husband.

   6.In 1989 he received a superannuation payment of something like five to six thousand dollars.  It is said by the husband that out of this money he gave to the maternal grandfather…some $2500 to enable [the maternal grandfather] to rewire a property owned by [him] and his wife…at [E].  Whilst the husband is quite certain this took place the wife is unable to either accept or deny the payment of this money.  She is saying she knows nothing about it.  In that case I feel I have to accept that he made some contribution by way of a payment to [the maternal grandfather].  It is not known whether in fact it was used for the rewiring of the property or not.

   7.As I said, the purchase of [A property] was with the assistance of the maternal grandmother.  I think she lent something like $35,000 to the parties and this is rather the crux of the whole matter.  There is [A property] which now is in the wife's name because initially her mother died, her father being the sole beneficiary under the will, then he died in 1999 and the wife was the sole beneficiary under his will.  Consequently, as and by way of succession, she received the whole of the parent's interest in [A] and in [E].

   …

   9.The father has given evidence…of the amounts of contribution which he says he and the wife made to the property at [A].  The various properties, which the parties had owned, one of which were the flats at [A], were eventually all sold.  Some moneys were paid to the wife's mother but it appears to me as though a substantial amount of the money lent to the parties as and by way, I think initially as a loan, subsequently became a gift since it was not repaid and the estate did not at any time seek recovery of the moneys owing to it.  There was a very large contribution on the part of the respondent's parents.

   …

   12.…as I have said…the wife received as and by way of a bequest from her father eventually, the properties at [A] and at [E].  Both of these properties were quite valuable.  I think the one at [A] is $560,000 and the [E]property…was already sold for something in excess of $200,000.

   …

   16.She also concedes that some amount of work was done by herself and her husband, as he then was, on the property of the maternal grandparents.  She does not concede the extent as alleged by the husband but she concedes that some work was done on the property and some moneys were expended by the parties to assist in renovations or maintenance of some parts of the property.

   …

   18.…I emphasise the fact that they had made contributions to this property, albeit it was not in the possession of either of them at the time of the contributions and did not come into the possession of the mother until subsequent to the death of her father which was subsequent of course to separation.

   …

   20.…So far as the s79 factors are concerned, during cohabitation it could not be said that the husband made any large contribution to any property whatsoever other than the contributions that the wife concedes.  He says that he spent more than what she says. …

   21.I would have thought that it could not in any way be suggested that as at the date of the separation of the parties the contribution of the parties under s79 was other than around about 50/50.  Thereafter, of course, the big difference arises.  At the stage of their separation, I would think that about the only thing they could say that they own was the $9000 odd which was in a trust account and some items which they purchased for the former…matrimonial home…

   22.As I have said, and I will say again, after the separation came the huge increase in the assets of the parties, and when I say parties, this is by far and away the assets which came into existence as a result of the wife's benefiting under the will of her father. …

   …

   28.As I have said, by far and away the greatest contribution to the assets of the parties or either of them was by the wife through her parents.  They were allowed to live rent-free in the [A] premises…since they married until separation.  There is some half hearted attempts on the part of the father to suggest the $50 per week which was paid for some three years was in fact an attempt to repay some of the mortgage.  Even if it was it was a joint payment by the applicant and the respondent.  If it was not, it was something that would offset the boarding expenses that they should have had with the parents.  They did pay some moneys towards rates but not frequently.

   29.There was a huge contribution on the part of the mother through her parents in so far as their ability to live virtually rent free in this property at [A], therefore releasing to them more of their moneys to invest in the various properties which I have here and before referred, I think three in number

   30.Further, subsequently there was moneys advanced by the grandmother to the parties, which have not been repaid.  It varies between $55,000 and $60,000, a considerable contribution that was forthcoming because of the special relationship, as I understand, between the wife and her parents.  It could not be said that that 50/50, taking into consideration the subsequent contributions of the wife, could last.  I would have thought that the husband’s contribution under the s79(4) factors could be no more than 10 percent.  His is by far and away a comparatively minor contribution to the parties’ assets rather than the massive contribution, which have been given to the parties by the maternal grandparents through their love and affection for the wife.

   31.That of course is not the end of the matter.  From separation the husband has paid little or no moneys as and by way of child support from separation for a period I think of about five years, the wife not only had the care and control of the three girls but also [B].  [B] appears to be a difficult boy and I would have thought he would not have been less than difficult while he was living with his mother for five years up until towards the end of 2001.

2. For the sake of completeness, we also set out the following paragraph which explains his Honour’s 2.5% adjustment in favour of the husband:

   32.There is an amount in excess of $13,000 owing by way of unpaid moneys to the Child Support Agency.  I do not have the authority at this stage, or the jurisdiction, to deal with it since I am not seized of any departure application or any form of application to enforce the recovery of that amount of money.  However, the father now has the responsibility of [B].  He has the responsibility initially of paying for [B’s] education… As I have said, he is not an easy boy as it appears and I think that there should be a small increase in the husband's percentage by 2.5 per cent making his percentage of the assets of the parties to be 12.5.  According to my mathematics 12.5 percent of $841,479 comes to $105,184.

The submissions on behalf of the appellant husband

1. In both his oral and written submissions in support of the husband’s sole ground of appeal, Senior Counsel for the husband placed particular emphasis on his Honour’s statements in both paragraphs 21 and 30 of his reasons, to the effect that the contributions of the parties were approximately equal as at separation.  (The relevant passages are emphasised in the above quotations of those paragraphs.) 

2. On the basis of that proposition of equality of contribution as at separation, it was then argued that the wife’s subsequent inheritance of the former matrimonial home and the E property could not justify a reduction in the assessment of the husband’s contributions to only 10%, having regard to the use which had been made of the properties by the parties, to the husband’s work on the properties, and to the husband’s care of the eldest child for about three years prior to the trial.

3. In support of the submissions that the trial Judge had placed undue weight on the fact that the inherited property had been received subsequent to separation, and that under his award the wife had effectively retained all her inherited property, Senior Counsel for the husband placed particular reliance on the following passage from the judgment of Kay J in Aleksovski v Aleksovski (1996) FLC 92-705 at 83-443:

   What his Honour had to assess by way of contribution was 18 years where each party provided their labours towards the acquisition, conservation and improvement of assets, and towards the welfare of the marriage generally. Additionally, late in the marriage, the wife received a large capital sum arising out of a motor car accident. In my view whether the capital sum was acquired early in the marriage, in the midst of the marriage or late in the marriage, the same principles apply to it. The Judge must weigh up various areas of contribution. In a short marriage, significant weight might be given to a large capital contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital. A party may enter a marriage with a gold bar which sits in a bank vault for the entirety of the marriage. For 20 years the parties each strive for their mutual support and at the end of the 20 year marriage, they have the gold bar. In another scenario they enter the marriage with nothing, they strive for 20 years and on the last day the wife inherits a gold bar. In my view it matters little when the gold bar entered the relationship. What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship. Just as early capital contribution is diminished by subsequent events during the marriage, late capital contribution which leads to an accelerated improvement in the value of the assets of the parties may also be given something less than directly proportional weight because of those other elements.  

4. Relying on the above passage, Counsel argued that there was a serious flaw in his Honour’s reasoning and that his methodology was wrong in that he did not weigh the contributions by the wife to the acquisition of the two properties post-separation with all other contributions of the husband and the wife. 

Discussion and conclusion

1. For our part, we have some difficulty in understanding exactly what contributions his Honour had in mind when he referred in paragraphs 21 and 30 of his judgment to the parties’ contributions as being approximately equal as at separation. In our view, such an assessment could not have taken into account the virtually rent-free accommodation provided throughout the marriage by the wife’s parents (discussed by his Honour in paragraphs 28 and 29) and the advance of $55,000 to $60,000 made by the wife’s mother (discussed by his Honour in paragraph 30).  Accordingly, we agree with the written submissions of Counsel for the wife that his Honour must have been referring only to “personal contributions” of the parties during the marriage; that is, to the parties’ contributions as wage-earners and to their contributions to the welfare of the family.  Moreover, we understood Senior Counsel for the husband to concede that his Honour could not, on the evidence before him, have arrived at a finding of equality on the basis of the parties’ contributions as at the date of separation.

2. Starting from the basis of equal “personal contributions” during cohabitation, it would then be necessary in assessing the parties’ contributions to have regard to the rent-free accommodation and to the advance of some $55,000 to $60,000 provided by the wife’s parents, together with the wife’s contribution through her inheritance three years after separation of the A property (valued at $560,000) and the E property (which for present purposes can be valued at $54,000). 

3. Furthermore, as his Honour found in paragraph 31 of his reasons, from separation (August 1996) until the trial (April 2004) the husband had “paid little or no” child support for the three younger children who had been in the wife’s care for all of that time, and for the eldest child who had been in the wife’s care until late 2001.  Compared with that contribution on the part of the wife, the husband’s care of the child, B, since the end of 2001 could only have very limited significance. 

4. To the extent that the husband relies on his indirect financial and non-financial contributions to the properties which the wife ultimately inherited from her parents, his Honour referred to those contributions in paragraphs 9, 16, and 28 of his judgment.  We are not persuaded that his Honour’s conclusions in relation to those contributions were not open to him, or that the weight which he gave to those contributions was inappropriate.

5. As was emphasised by Counsel for the wife in her submissions, the husband seeks to overturn a discretionary judgment.  To do this he must establish that the trial Judge made an error of principle or a mistake of fact, or that he failed to take into account or placed inappropriate weight on some relevant matter, or that the decision is plainly wrong.  In the present case, none of these matters which would justify our interference with the trial Judge’s decision have been established. 

6. Indeed, we are of the view when regard is had to the value of the properties inherited by the wife three years after separation, to the virtually rent-free accommodation provided to the parties and their children by the wife’s parents throughout the marriage, to the advance of $55,000-60,000 to the parties from the wife’s mother, and to the wife’s care of the children after separation with “little or no” child support being paid by the husband, his Honour’s conclusion that the parties’ contributions should be assessed in the proportions of 90%-10% in favour of the wife was within the range of discretion available to him.  It is not to the point that any one of us might have made an assessment more generous to the husband.

1. It will be implicit in what we have said that we do not see Kay J’s statements in Aleksovski as assisting the husband in this appeal.

2. Accordingly, the appeal must be dismissed.

Costs of the appeal

1. At the conclusion of the hearing of the appeal, we received oral submissions in relation to the costs of the appeal.

2. In the event that the appeal failed, Counsel for the wife sought an order for costs in favour of her client.  In response Senior Counsel for the husband submitted that there should be no order for costs given the disparity in the parties’ resources. 

3. We are of the view that the circumstances do not warrant the making of an order for costs.

Orders

1. That the appeal be dismissed.

2. That there be no order as to costs.

I certify that the preceding 31 paragraphs
are a true copy of the reasons for judgment
of this Honourable Full Court

Associate