Halsbury and Halsbury
[2009] FamCAFC 55
•3 April 2009
FAMILY COURT OF AUSTRALIA
| HALSBURY & HALSBURY | [2009] FamCAFC 55 |
| FAMILY LAW - APPEAL – FROM A DECISION OF A FAMILY COURT JUDGE – PROPERTY – Trial Judge made orders dividing net assets approximately 82.5 percent to the husband and 17.5 percent to the wife – Parties cohabited for about nine years – Trial Judge assessed the contributions, other than capital contributions, of each party to be roughly equal – Husband had a medical condition affecting his eyesight – Trial Judge found that the wife had a significantly greater earning capacity than the husband – Wife appealed asserting mistake of fact in relation to the parties’ circumstances, inclusion of legal fees in the asset pool in light of a court order requiring the husband to pay an amount of these fees to the wife and that the order was plainly unjust – Trial Judge made an error in the treatment of legal fees – Trial Judge did not assess all of the evidence bearing upon the issue of earning capacity because he mistakenly thought the wife had made a concession about her comparative capacity to earn – Overall result was plainly unjust – Appeal allowed – Parties filed further evidence in event that discretion was re-exercised – Further affidavits presented evidence (likely contentious) of changes in circumstances of both parties – Application for alteration of property interests to be reheard |
| Family Law Act 1975 (Cth) s 75(2); s 79 Federal Proceedings (Costs) Act 1981 (Cth) |
| APPELLANT: | MS HALSBURY |
| RESPONDENT: | MR HALSBURY |
| FILE NUMBER: | LEC | 33 | of | 2007 |
| APPEAL NUMBER: | NA | 50 | of | 2007 |
| DATE DELIVERED: | 3 April 2009 |
| PLACE DELIVERED: | Brisbane |
| JUDGMENT OF: | Warnick, Boland and Murphy JJ |
| HEARING DATE: | 17 February 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 29 June 2007 |
| LOWER COURT MNC: | [2007] FamCA 1101 |
REPRESENTATION
| APPELLANT: | Ms Halsbury in person |
| SOLICITOR FOR THE RESPONDENT: | Mr Tester |
Orders
That the appeal be allowed.
That orders 1 to 6 of the Orders of Barry J made 29 June 2007 be set aside.
That the applications/responses of the husband and wife seeking orders by way of alteration of property interests be remitted for rehearing by a judge of the Family Court of Australia other than Bell and Barry JJ.
That either party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal or in respect to costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth) by filing such submissions at the Brisbane Registry of the Family Court and serving them on the other party within 21 days of the date hereof.
That the other party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Brisbane Registry of the Family Court and serving them on the other party.
That either party be at liberty to reply to an answer by way of written submissions by filing such reply at the Brisbane Registry of the Family Court and serving it on the other party within a further 7 days.
That each party endorse on the cover sheet the date on which a copy of that submission was served on the other party.
IT IS NOTED that publication of this judgment under the pseudonym Halsbury and Hlasbury is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| IN THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 50 of 2007
File Number: LEC33 of 2006
| MS HALSBURY |
Appellant
And
| MR HALSBURY |
Respondent
REASONS FOR JUDGMENT
On 29 June 2007, in property settlement proceedings between Mr and Ms Halsbury, Barry J made orders effectively dividing net assets of $397,000.00, approximately, 82.5 per cent to the husband, the balance to the wife. Against those orders the wife appeals.
The parties had cohabited for about nine years between the end of 1995 and late 2004. They had a daughter, J born in 1996 and at trial there was a shared care arrangement with regard to her.
In his reasons for judgment following his review of the various contributions of the parties, the trial judge concluded:
108.Overall excluding the capital contributions I would assess the contributions of the parties in a financial and non-financial sense as equal.
109.So far as the capital contributions are concerned, the Husband introduced capital to the matrimonial home of a total of $169,000 …
…
The Wife’s contribution appears to be $34,800 …
…
110.The Husband’s capital contribution outweighs the Wife’s by a measure of approximately 83%/17%. Allowing for the contributions around the house being equal, making allowance for the fact that the Wife has had to pay rental for the period since separation until she was able to take occupation of her new home and allowing for the restrictions in the Wife’s superannuation entitlement, I would assess on the basis of section 79 factors the assets should be divided 75% to the Husband and 25% to the Wife.
His Honour then turned his attention to s 75(2) factors under the following heading:
Adjustment for Section 75(2) Factors (Husband’s Medical Condition)
As to the husband’s medical condition, his Honour set out the relevant passages of some expert evidence:
6.Prognostically, at best, [the husband] will retain what little vision he has. …
7.He will require ongoing medical treatment for the rest of his life and may require further operations either for cataract and/or glaucoma.
…
9.I believe a conservative estimate of his future medical costs would be in the tens of thousands of dollars.
As to past medical costs, his Honour set out contentions of the wife in her Summary of Argument. They included:
… During the course of the marriage he had cataract surgery, the expense for which was in large part covered by Medicare. … If he should require surgery in the future the rarity of his condition will be given consideration and he will get a doctor accordingly. It is reasonable to expect the expense for this to be likely in large part covered by Medicare as it has been in the past.
His Honour concluded:
115.I do not find it reasonable that the Husband should throw himself on the mercy of the public hospital system. If he has the ability and the finances he should be entitled to the best medical service available to save such a precious gift as sight.
…
118.Because of the Husband’s disability I would have thought a significant adjustment on account of section 75(2) factors was called for.
His Honour then addressed the question of earning capacities saying:
119.The Wife is likely to be able to earn significant income as a teacher if she is able to secure full time employment. The Wife presents well, is articulate and personable. I see no reason why in the fullness of time she would not be able to secure employment in the northern rivers district with either a public or a private high school.
120.The Wife has her income supplemented by a boarder who pays $130 a week for thirty weeks of the year.
121.The Wife as noted earlier conceded she would have a significantly greater income for the future. The care of the one dependent child of the parties is shared.
122.The Husband’s income is likely to be modest although he is multi-talented and has what I would detect to be an entrepreneurial streak.
123.On account of section 79(2) factors I am of the view that a further award of 7.5% is justified.
124.Overall the assets of the parties will be divided 82.5% to the Husband and 17.5% to the Wife.
Before us, the wife was unrepresented, as she was before Barry J. Her grounds of appeal asserted mistakes of fact in five respects; that his Honour had failed to put sufficient weight on certain aspects of the parties’ circumstances; placed too much weight on the husband’s future medical expenses and, by way of amended grounds, that his Honour erred in including in the asset pool the parties’ legal fees, when they included an amount payable by the husband to the wife pursuant to a costs order, and finally, that the decision in effect was plainly unjust.
We are satisfied that the appeal should succeed, because of at least one error of fact, because the treatment of legal fees was erroneous and because the result is plainly unjust.
We think there no need to discuss other grounds.
The wife sought to put further evidence before us in support of the appeal. It related to potential medical expenses of the husband and to studies he had commenced post trial. We rejected the application. The material was contentious or begged further enquiry, related to only two aspects of many relevant to alteration of property interests, and did not show that the orders appealed were wrong.
A mistake of fact
The reasons earlier quoted show that in assessing s 75(2) factors, the trial judge said that the wife had “conceded she would have a significantly greater income for the future.” Earlier, in paragraph 89 of his reasons, the trial judge had said:
89.It was put to the Wife in the course of cross examination that her capacity to earn income was significantly higher than that of the Husband. The Wife accepted that this was the case.
We do not think that those concessions were made.
The relevant evidence is as follows:
Yes, okay. Now do you say to this Court that your earning capacity is greater than, equal to or less than [the wife’s]?---My earning capacity?
Yes?---Is greater, yes.
It’s greater?---Yes.
Yes, it’s a lot greater, isn’t it?---I suppose. Depends how you weight these things.
Yes, because not only are you now a qualified high school teacher, but you’re a qualified jeweller, aren’t you?---Well, actually if it came to the point my jewellery qualifications are more in experience. I never did actually get a qualification.
Well, you went to TAFE, didn’t you?---I did go to TAFE.
Yes?---I didn’t finish my TAFE.
Okay, I see. All right, and you’ve done work as a jeweller through the marriage?---Yes, Yes.
And you’ve worked as a teacher solidly since separation until this year, 2007?---It’s not solid. I did part-time work and I did two terms at [L] High for four days a week. And I did two terms at 3 days a week at [L] High. And apart from that at [B] I worked for three days a week for three terms.
Yes, and you are obviously willing to take up a full-time teaching position if one became available somewhere on the north coast?---Absolutely.
…
…So and you’d like to think that with more teaching work that will be more?---Well, if I was able to go elsewhere and earn five days a week for teaching work, then yes, it would be more.
And you’d like it to be more, of course?---Yes.
Yes, and it was in 2005, 2006?---No.
Wasn’t it?---Well, what I earned over that tax year was $39,500. Yes, so I guess it was a little bit more.
Which is more than it was, yes?---Yes, it was.
And if you get a full-time job, what is your starting salary there?---If I was to get full time work, I don’t know. I don’t – I think the department’s got a calculator somewhere. I think that - - -
About 52 or thereabouts, does that sound right?---It could possibly be.
So putting all that aside just for one minute, can I ask you this, bearing in mind in April 2007 your annual income was around about 30,000 per annum - - - ?---No. Well, not it wasn’t because I wasn’t getting – yes, I was getting the 300 a week. Yes, that’s the –that’s the average, yes.
Okay?---Yes, that’s right.
And can I suggest to you that as a result of your estimate to the Child Support Agency for the period 1 January 2007 to 31 March 2008, you estimated that your income would be $11,830 per annum?---Yes. The Child Support Agency asked me for an estimate solely from earnings as a teacher, not from my Centrelink payments.
Okay, so that’s not your income full stop?---That’s not my whole income. It’s the estimate of what I expect to earn from the teaching work only.
And as a result of that the child support assessment is currently nil?---That’s correct.
Yes, okay. So you agreed with me earlier on that your income, or, I’m sorry, your earning capacity is less than the husband’s? Less, than your husband’s?
HIS HONOUR: She said it’s greater.
MR TESTER: That’s my fault. That your income capacity is greater than your husband’s? If I suggested to you that it was significantly greater, as a qualified teacher and a jeweller, than the husband’s who is a blind musician, you’d have to agree with that, wouldn’t you, that it’s significantly greater?---I’m sure it’s significance would be weighted according to the difference.
But I’m asking you for your answer to that question. You agree with me, don’t you, that it’s a significant difference? That you’re significantly better off or in a better position in terms of your future earning capacity?---I’m not sure about that.
In our view, that evidence does not support the inference which the trial judge drew.
We do not say that on the evidence overall, a finding that the wife did have a significantly greater earning capacity than the husband was not open, but his Honour did not assess, and cannot be seen to have assessed, all of the evidence bearing upon such an issue, because he wrongly considered that the wife had made concessions.
We are also disquieted by the conclusion of his Honour that he saw:
119. …no reason why in the fullness of time she [the wife] would not be able to secure employment in the northern rivers district with either a public or a private high school.
Availability of employment would normally be a topic for evidence.
Legal fees
When discussing the asset pool, his Honour said of legal fees:
54.For her legal fees incurred other than fees covered by the Certificate issued by the Full Court, the Wife obtained an advance on her mortgage of $16,000. The Husband cogently argues that his legal fees amounting to $11,639 should similarly be bought into account. Annexures S and T to the Husband’s affidavit filed 23 April 2007 is said to evidence the Husband’s liability for legal fees. I had some difficulty totalling the balance at the amount contended for but accept the Husband’s evidence that this amount should similarly be brought into account.
55.I indicated it was a case of either both being included or both being excluded. The approach that appeared to be adopted is that they would both be included. For this reason I propose to allow the Husband’s liability of $11,982.
However, the wife now contends (and argues that she so contended at trial) that of the husband’s legal fees, $4,336.00 was an amount payable to the wife pursuant to court order. That amount had been paid by her and was included in her legal fees. Although we think the issue was perhaps put before the trial judge obliquely at best, the proposition now put by the wife is not contradicted by Mr Tester, who appeared for the husband at trial and before us.
In our view, including, by writing back into the asset pool, costs which are payable by one party to the other pursuant to an order, is to cause a distortion and to have the beneficiary of the costs order to, in effect, bear some of the costs for which the other party is liable.
In the circumstances we consider that the amount of the mortgage ought be reduced by $16,000.00 and the husband’s legal fees removed from the liabilities in the pool of assets for division.
The result was plainly unjust
We think we need to add little to what we have already set out of the facts of the case, to explain our conclusion in relation to this argument.
The wife had a daughter born in 1991 from a previous marriage. That child always lived with the parties and there was no financial support or any other form of support forthcoming from her biological father. The husband had three children from a previous marriage, but those children mainly resided with their mother.
The husband was 46 years old at trial; the wife 43.
Prior to the hearing before Barry J, the parties had had a trial of property settlement issues resulting in orders made by Bell J in March 2006. Pursuant to those orders the husband had paid the wife $121,456.00 and she had used those funds towards a residence. Bell J’s orders were ultimately successfully appealed by the husband and the trial before Barry J was a retrial.
Of the husband’s initial contribution, Barry J said:
70.Having regard to the Husband’s evidence and the other evidence before the Court I accept that the capital contribution by the Husband from [L] Street was in the order of $60,000 and he had a further $7,000 in a bank account which he was able to contribute to the purchase of the [O Street] property.
…
71.The Husband’s father died in about November 2000. The Husband received an inheritance of $77,000 in approximately June 2002. The bulk of these funds was used to reduce the mortgage indebtedness on the [O Street] property.
…
73.In February 2003 the Husband’s mother advanced to the Husband the sum of $25,000 as a gift. The Husband says the purpose of the advance was to cover the Husband for future medical needs. He did not in fact use the funds for this purpose by putting the moneys aside but rather expended it for the benefit of the parties.
…
75.Those [the husband’s] shares were sold in 2001 and produced a return of $2,792 (refer paragraph 19 of Husband’s affidavit filed 23 April 2007).
…
91.I accept that the Husband undertook home duties to enable the Wife to complete her study programme. The parties had two small children in their care. The Wife was working and studying part time and on other occasions studying full time. …
…
97.The Wife contended in her Summary of Argument document that after separation she had to pay rent for six months at $230 per week and for the following two years at $250 per week. … In his report he [a valuer] concludes rental value [of the matrimonial home] as at date of separation 24 September 2004 $250 per week. …
98.I accept that the Husband has had the use of the former matrimonial home and the Wife has had to pay rent moneys. By the same token the Husband has had to pay the mortgage instalments on the matrimonial home. …
The finding in relation to the husband paying mortgage payments on the matrimonial home is an error (conceded before us) in that, at the time of separation, there was no mortgage over the matrimonial home. A mortgage was later given when the husband borrowed to pay the sum in accordance with the orders of Bell J.
In our view, accepting the trial judge’s finding that contributions, other than the capital contributions, were equal, and that the capital contributions, which came at various times during the relationship, mathematically were 83 per cent to 17 per cent in the husband’s favour, we nonetheless consider that his Honour placed insufficient weight on the fact that nearly half the husband’s contributions was at the very outset of the relationship and the cohabitation was for nine years, during which many and various contributions were made by each of the parties, which the trial judge assessed as of equal value.
In those circumstances, while we do not say that an assessment of 75/25 is outside a reasonable ambit, we think it certainly at the upper edge.
It is the overall result that we consider plainly unjust and this probably arises at least in part from a failure by the trial judge to consider the disparity caused by the assessment of contributions.
However, his Honour also supported his decision, particularly in relation to s 75(2) factors, by the observation contained in paragraph 115 of his reasons earlier set out, but repeated here:
115.I do not find it reasonable that the Husband should throw himself on the mercy of the public hospital system. If he has the ability and the finances he should be entitled to the best medical service available to save such a precious gift as sight.
His Honour’s observations seems to us very much a “value judgment”, of a nature which we doubt ought be relied upon in s 79 proceedings.
In any event, even on the facts as his Honour found them, that the wife should emerge from the marriage with 17.5 per cent of relatively modest assets is, in our opinion, outside a reasonable exercise of discretion.
Re-exercise of discretion
Each party indicated a desire to put further evidence before us in the event that we considered re-exercising the trial judge’s discretion. We made directions for the filing of such material as each party wished, and each party has filed an affidavit.
On the husband’s part, he has deposed to the listing of medical treatment for his eyesight, an increase in the wife’s income since trial, on the basis of child-support documentation, changes to the wife’s arrangements for tenants, studies that he has undertaken and may continue with, the availability of work in the music industry and his accommodation costs post-separation.
The wife deposed substantially by way of reply to the husband’s affidavit, in many instances in argumentative fashion.
Regrettably, the application for alteration of property interests will need to be reheard. This conclusion makes it unnecessary to consider a request by the husband to file a further affidavit.
Costs or Costs Certificates
We will make directions in these regards.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 3 April 2009
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