Harrington & Harrington

[2007] FamCA 451

FAMILY COURT OF AUSTRALIA

HARRINGTON & HARRINGTON [2007] FamCA 451

FAMILY LAW - APPEAL – FROM DECISION OF FAMILY COURT JUDGE - PROPERTY SETTLEMENT – CONTRIBUTIONS – INHERITANCE FROM CHILD – Duration of cohabitation of parties over 30 years – four children of the marriage – more than eight years later, and even at trial, parties remained living together, notwithstanding divorce in 2003 – death by suicide of parties’ eldest child – deceased left a note leaving everything he owned to mother – estate of deceased valued $503,000 – O’Ryan J made property settlement orders dividing pool 47% to wife, 53% to husband – wife received other inheritances, $22,000 and $280,000 – On appeal, wife argued that trial Judge erred by including in asset pool wife’s paid legal costs – argued by Counsel for wife that guidelines for exercise of court’s discretion were set out – Counsel for wife argued that trial Judge gave no reasons for failure to follow guidelines –wife argued that Trial Judge erred in assuming, in absence of evidence, that husband made direct and indirect contributions to deceased child’s support and to his ability and opportunity to accumulate assets– wife argued that the assessment of the wife’s contributions at 60% was inadequate – wife argued that the adjustment by s75(2) factors of 7 per cent in husband’s favour manifestly excessive – wife sought variation of orders by seeking approximately an additional 9.5 per cent of the net assets

Family Law Act 1975 (Cth), as amended, s 75(2)

AMS v AIF; AIF v AMS (1999) FLC 92-852 at 86,042-3
Australia Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627
Chorn v Hopkins (2004) 32 FamLR 518, FLC 93-204
Docters van Leeuwen and Docters van Leeuwen (1990) FLC 92,148 at 78,025
Gronow and Gronow (1979) 144 CLR 513 at 520
In the Marriage of Parshen (1996) 21 FamLR 199
Joshua v Joshua (1997) FLC 92-767
NHC v RCH (2004) 32 Fam LR 518
Norbis v Norbis (1986) 161 CLR 513
Norbis v Norbis (1986) FLC 91-712 at 75,176

APPELLANT: MRS HARRINGTON

RESPONDENT: MR HARRINGTON

FILE NUMBER: SYF 3078 of 2003

APPEAL NUMBER: EA 49 of 2006

DATE DELIVERED: 21 MAY 2007

PLACE DELIVERED: BRISBANE

JUDGMENT OF: WARNICK, BOLAND AND STEVENSON JJ

HEARING DATE: 3 MAY 2007

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 20 APRIL 2006

LOWER COURT MNC: [2006] FamCA 274

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Millar

SOLICITOR FOR THE APPELLANT: Rowley & Ross Lawyers

COUNSEL FOR THE RESPONDENT: Mr Sansom

SOLICITOR FOR THE RESPONDENT: Norwest Family Law

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Harrington & Harrington.

Orders

1. That the appeal be dismissed.

2. That the wife pay the husband’s costs of and incidental to the appeal as agreed and in default of agreement, as assessed.

FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 49 of 2006
File Number: SYF 3078 of 2003

MRS HARRINGTON

Appellant

And

MR HARRINGTON

Respondent

REASONS FOR JUDGMENT

1. On 20 April 2006, O’Ryan J made orders by way of property settlement in what he described as “…a sad and unfortunate case and frankly should have been resolved given the duration of the marriage and other matters.”  The duration of the parties’ cohabitation was some 30 years, ending with their separation in June 1997.  Even at trial, more than eight years later, they continued to live in the same residence, notwithstanding their divorce in mid-2003.  Pivotal among the “other matters” to which O’Ryan J referred was the death by his own hand in September 1995, of the parties’ eldest child, B, then 27 years of age.  The day before B died he had left a note which read:

   I leave everything I own to my mother.

2. The orders of O’Ryan J effectively divided a pool of $2,801,233, 47 per cent to the husband, 53 per cent to the wife.

3. B’s estate was valued at $503,000.  The wife received other inheritances, one from an aunt, of $22,000, and on the death of her mother, a property at Granville Point (worth $280,000 at trial).

4. In this, the wife’s appeal, there are four grounds which we summarise:

   •That his Honour erred by including in the asset pool the wife’s paid legal costs;

   •That his Honour erred in assuming in the absence of evidence that the husband made direct and indirect contributions to the child B’s support and to his ability and opportunity to accumulate assets;

   •That the assessment of the wife’s contributions at 60 per cent was manifestly inadequate;

   •That the adjustment by reason of s 75(2) factors of 7 per cent in the husband’s favour was manifestly excessive.

5. The wife sought that Order 1 of O’Ryan J’s orders be varied by deleting as the sum payable by her to the husband, $338,161, and substituting $72,044.  Thus effectively she sought about another 9.5 per cent of the net assets.

That his Honour erred by including in the asset pool the wife’s paid legal costs

1. The trial Judge included in the pool of assets the wife’s paid legal fees of $42,527 and the paid legal fees of the husband at $33,868.  He also included a liability of the husband relating to legal fees.

2. Mr Millar for the wife argues that because she paid her legal fees from income after separation and from deposits held by her as a result of her inheritance and earnings on those deposits, the fees should not have been included.  He relies on a statement by the Full Court in Chorn and Hopkins (2004) FLC 93-204 in which case, he submits, guidelines for the exercise of the Court’s discretion with regard to the treatment of paid costs were set out. The particularly relevant passage is paragraph 58, which reads:

   58.If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance) they would generally not be added back as a notional asset;…

3. O’Ryan J quoted that passage among others from the case and said:

   59.In K v K (unreported decision delivered 30 August 2005) referring to NHC v RCH I said:

   “133.In my view, it is plainly wrong as submitted by counsel for the husband that “If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset”’.

   Nothing put to me on behalf of the Wife has caused me to change my view as to the correctness of what was said in NHC v RCH.  

   60.I am going to include in the list of assets the costs paid as a notional asset.  I do not consider that I need to enter into any consideration of the binding nature of “guidelines”: See P. Doolan, 'Property by any other name - the treatment of paid and unpaid legal fees in family law', (2005) 19(3) Australian Journal of Family Law 213.

1. Mr Millar wrote in his summary of argument:

   His Honour gave no reasons for refusing the [sic] follow the guideline referred to at AB 16 from Chorn v Hopkins.  There was nothing in the circumstances of the case that warranted departure from that guideline.  It is submitted that his Honour erred in law in not following Chorn v Hopkins and excluding the wife’s paid costs from the property for division between the parties.

2. In oral submissions, Mr Millar argued that O’Ryan J did not include the wife’s paid costs because he considered departure from the guideline appropriate, for reasons that he identified, but because he rejected the guideline altogether.  On the face of what the trial Judge said in paragraphs 59 and 60 and indeed on reading O’Ryan J’s decision in K v K, to put the paragraph that he quoted from that case in context, we must accept Mr Millar’s argument.

3. The real question then is whether O’Ryan J’s rejection of the guideline, of itself, constituted an error of law.

4. In Norbis v Norbis (1986) FLC 91-712 Brennan J said (at 75,176):

   There may well be situations in which an appellate court will be justified in setting aside a discretionary order if the primary judge, without sufficient grounds, has failed to apply a guideline in a particular case. Where there is nothing to mark the instant case as different from the generality of cases, the failure will suggest that the discretion has not been soundly exercised. The distinction between such a guideline and a binding rule of law, though essential, may be thin in practice. But the distinction must be maintained and a failure to apply the guideline cannot be treated as an error of law: a failure to apply the guideline is no more than a factor which warrants a close scrutiny of the particular exercise of the discretion.

5. Going a step further, Mason and Deane JJ said (at 75,166):

   …The proposition referred to at the beginning of this paragraph should not be seen as inhibiting an appellate court from giving guidance, which falls short of constituting a binding rule, as to the manner in which the discretion should be exercised (but cf. The Queen v. Biacanin (1976) 15 S.A.S.R. 20 at p.25). And despite the generality of some of the statements to which we have referred, there may well be situations in which an appellate court will be justified in giving such guidance the force of a binding rule by treating a failure to observe it as constituting grounds for a finding that the discretion has miscarried.

6. In Docters van Leeuwen and Docters van Leeuwen (1990) FLC 92-148, after setting out a quote from the judgment of Mason and Deane JJ in Norbis which ended with the passage above quoted, the Full Court of this court said (at 78,025):

   Although this view was not shared by Wilson and Dawson JJ. at pp. 75, 173-75, 174; Fam. L.R. pp. 831-832, it was supported, albeit with some caution, by Brennan J. at FLC pp. 75, 176-75, 177; Fam. L.R. pp. 834-835. 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.…

7. We think the position of Brennan J in Norbis a little distant from “supporting, albeit with some caution,” the statement by Mason and Deane JJ, for at the beginning of his judgment, he said (at 75,175):

   I agree generally with the reasons of Mason and Deane JJ. for allowing this appeal, except for one proposition of some importance.  The proposition with which I am unable to agree is this:  that an appellate court which gives guidance as to the manner in which a statutory discretion should be exercised may prescribe that such guidance should have the force of a binding legal rule.…

8. In a first instance judgment in 1997 (Joshua v Joshua (1997) FLC 92-767), Lindenmayer J considered the decision of the Full Court in Docters van Leeuwen, among other Full Court decisions.

9. His Honour said (at 84,443):

   Reverting, for the moment, to the cases of Waters, Docters van Leeuwen and Bell, previously referred to, I think it relevant to note that insofar as those cases may be said to establish a guideline, the failure to follow which may render a trial Judge's decision liable to be overturned on appeal as an erroneous exercise of discretion, they do so only in circumstances where the appellate Court considers there is no adequate explanation for the departure from that guideline in the particular case.

10. We think the present position in this Court is that if a guideline is departed from without adequate explanation, the appeal court may give “close scrutiny [to] the particular exercise of the discretion”.

11. However, even if this Court may give guidelines with “…the force of a binding rule”, we were not referred to any cases and have not for ourselves located any, which purport to give the guidelines set out in Chorn and Hopkins such binding effect.  Rather, in our view, the guidelines in Chorn and Hopkins fit into that category where in the event of a failure to give reasons for a departure from them, close scrutiny may be given to the circumstances of the case by the appellate court.

12. Accordingly, even though O’Ryan J said that he rejected the guideline because he disagreed with it, it is appropriate that we examine the findings to see if within them are adequate reasons for the inclusion of the wife’s paid costs in the asset pool.

13. In our view, when scrutiny is applied to the judgment in this case, there are ample reasons for the inclusion in the table of assets for division of the wife’s paid legal fees.

14. As earlier noted, the parties still lived in the one home at trial.  His Honour found: (paragraph 48)

    …From the date of separation the Husband ceased giving money to the Wife and paid all household expenses except the costs of the Wife’s food.  On a number of occasions after the parties separated the Husband asked the Wife if she would contribute to the payment of household expenses and she refused.  For example, on one occasion the Husband asked the Wife if she would contribute half of the cost of repairing the hot water system and a refrigerator and the Wife refused.  The Husband has paid municipal and water rates, electricity, telephone and household repairs.

15. Thus the husband was contributing to the wife’s financial position post-separation.

16. At paragraph 81, O’Ryan J said:

    81.As to the legal costs paid by the Wife of $42,527 it was submitted on her behalf that such fees were paid from post separation earnings and the inherited monies and that I should find that the contributions were 100% by the Wife and nil by the Husband.  I do not know what proportion came from the inherited money to which the Husband made an indirect contribution.  Further, at present the Wife receives a gross salary of $792 per week or $41,184 per annum which is less than the amount of costs paid.  The Husband has paid all household expenses.

17. In our view, within these paragraphs are identified sufficient reasons for the inclusion of the fees so that ultimately we see no merit in this ground of appeal.

That his Honour erred in assuming in the absence of evidence that the husband made direct and indirect contributions to the child B’s support and to his ability and opportunity to accumulate assets

1. Addressing the wife’s inheritance and the estate of the child B, O’Ryan J said:

   46.This case is unusual in that ordinarily the facts involve a situation where one of the parties has received an inheritance from a parent or some other source that had no relationship with the other spouse.  However, in this case the inheritance came from the parties’ son who committed suicide and the day before his death he simply wrote a note in which he said that he left his estate to his mother.  He did not leave a will in which he named an executor and his signature on the document was not witnessed.  Thus, in my view, it is mere speculation as to why he wrote the note which he did the day before he committed suicide.

   47.There is no evidence before me as to the circumstances of the child B such as how he was able to accumulate an estate of a value of $503,000 or why he committed suicide.  However, I will assume, in the absence of evidence, that the Husband made an indirect and direct contribution to the care, support and education of the child B and the ability and opportunity for the child to accumulate assets.  The Wife has had the benefit of the estate since it was received after 12 December 1996 and she has simply invested it.

2. Mr Millar submitted:

   As his Honour says, this conclusion was an assumption made without evidence.  His Honour does not explain the reasons for making the assumption.  His Honour does not explain how the husband contributed to the ability of B to accumulate assets, nor to the opportunity for B to accumulate assets.  There was no evidence before the court of care provided by the husband to B.…

3. Mr Millar further submitted that the husband had implied that it was the wife who cared for the children and who was found by his Honour to have been primarily responsible for non-financial domestic tasks and the care of the children.  Further, there was no evidence to suggest that the amount of board paid by B while living at home was inadequate.  Moreover, superannuation of $311,020.48 and an insurance policy included in the estate probably resulted from benefits payable upon death, following a period of employment of not more than 10 years.  It was not clear how the husband could be said to have contributed to those assets.

4. In our view, despite his Honour making an assumption in the absence of evidence, no appealable error occurred.  This is because his Honour did not rely upon the assumption – a conclusive reason – but possibly also because the better view of what his Honour did was to in fact make a finding by inference, not in the absence of evidence so much as in the absence of evidence to the contrary.  Such a position would be similar to that in In the Marriage of Parshen (1996) 21 FamLR 199.

5. There was in fact evidence which supported such an inference and there were earlier findings about that evidence.  For example:

   32.The child B commenced paid employment in 1985.  He remained living at home until February 1992 when he left. 

   …

   43.In February 1993 the child B resumed living at home.  He ceased living at home in August 1993.  In July 1995 the child B resumed living at home.  The Wife said that the child paid board “all to me”.

   …

   48.From the date of marriage up until 1997 the Husband gave the Wife money every week to pay the living expenses and the amount increased over time.  In 1997 the amount the Husband was giving to the Wife was about $290 per week.  If the Wife needed extra money then she would receive it from the Husband.  From the date of separation the Husband ceased giving money to the Wife and paid all household expenses except the costs of the Wife’s food.  On a number of occasions after the parties separated the Husband asked the Wife if she would contribute to the payment of household expenses and she refused.  For example, on one occasion the Husband asked the Wife if she would contribute half of the cost of repairing the hot water system and a refrigerator and the Wife refused.  The Husband has paid municipal and water rates, electricity, telephone and household repairs.

   49.Before proceeding it is necessary to consider the financial position of the Wife shortly prior to the death of the child B.  The parties had been married for approximately 28 years.  In that period they had always lived in the home the Husband owned at the date of marriage and the Husband had always been in paid employment.  The Wife however, did not engage in paid employment between 1968 and 1982.  From 1982 to 1983 she was in paid employment as a School Secretary and later a School Assistant and some other casual work.  The Wife contended she has been in this position for about 23 years (1983).  The Wife is now employed as a School Assistant and earns $792 gross per week ($41,184 per annum).

   …

   51.I have no doubt that by the time of the death of the child B the Wife had accumulated a considerable amount in savings and investments from her earnings from paid employment because of what the Husband was paying from his earnings.  The parties and the family also had very few accommodation costs given that from 1968 the Husband owned the home unencumbered.

   …

   93.In this case according to the Wife the child B commenced work in 1985 and after three months he paid board to the Wife of $10 per week and in February 1988 it increased to $20 per week and in May 1991 it increased to $25 per week ($1,300 per annum).  The child then left home in February 1992.  The child remained at home for approximately seven years after he started work.  The child then resumed living at home in February 1993 and remained living at home until August 1993.  In this period he paid $40 per week as board.  The child then left home in August 1993 and resumed living at home in July 1995.  In this brief period he paid board of $50 per week to the Wife.  He died in September 1995.  In summary he commenced work in 1985 and died in 1995.  In this period he lived at home for a considerable period of time. In this period he was able to accumulate an estate of $503,161.60 which included superannuation of $311,020.48.  The estate also included cash, shares and an insurance policy of approximately $192,141.12.  I have no doubt that the Husband made direct and indirect contributions to the care, support and education of this child both before and after the child commenced paid employment and which continued to varying degrees until the death of the child.  Thus the Husband made a contribution to the assets that comprised the estate.

1. But the full answer to the challenge contained in this ground derives from the content of paragraph 94 of O’Ryan J’s reasons: the trial Judge took the contributions by the wife to include the full value of B’s estate:

   94.However, because the matters I have identified were not really argued I am going to proceed on the basis that the major financial contributions by the Wife were the inheritance from her aunt of $22,000, the inheritance of Granville Point of a current value of $280,000 and the estate of the parties’ son B of $503,000.  These amounts total $805,000 which represents approximately 29% of the net assets of $2,801,233.  However, this approach is artificial because it would not take into account a number of relevant matters including direct and indirect contributions made since the assets were acquired.

2. There is therefore no merit in this ground.

That the assessment of the wife’s contributions at sixty per cent was manifestly inadequate

1. Under the heading “Contributions” his Honour said:

   67.The period of cohabitation was approximately 31 years and there were four children of the marriage.

   68.At the commencement of cohabitation in September 1967 the Husband had greater assets than the Wife.  The Wife had savings of about $3,000.  The Husband owned the Beerwah home which he acquired in June 1966 for a price of $11,000.  He had a mortgage debt of about $8,000.  He also had a truck and trailer and a motor vehicle.  In about 1968 the Husband sold his truck and trailer for $8,000 and used the proceeds of sale to discharge the mortgage over the Birrong property.  As I said, within 12 months of the marriage the Husband owned the matrimonial home unencumbered and in my opinion the Wife made no contribution to the acquisition of the equity in this property.  Thereafter the parties always lived in this home and still do.  It now has an agreed value of $432,500.  The result is that the Husband contributed the matrimonial home in which the parties have lived for almost 38 years and in which they raised and cared for four children.

   69.The Husband also contributed $4,500 he inherited in 1985.

   70.The Husband was also always in paid employment.

   71.So far as the Wife is concerned she contributed $3,000 in savings she had at the commencement of the relationship.  She also contributed the inheritance of $22,000 she received from an aunt in 1982, the property at Granville Point she inherited in 1986/1987 which is now valued at $280,000 and the amount of $503,000 she received from the estate of the parties late son B who died in 1995.

   72.The parties also had the benefit of accommodation with the Wife’s mother between the date of marriage and August 1968.

   73.As well, the Wife was in paid employment from the date of marriage in 1967 until early 1968 and then from about 1982/1983 to the date of separation.  At present the Wife receives a gross salary of $792 per week and the Husband receives about $916 per week gross. 

   74.I am satisfied that both parties applied their earnings for the benefit of the family including the accumulation and maintenance of savings and investments. I have no doubt however, that during the relationship the Husband’s earnings were greater than those of the Wife. 

   75.Since separation although the Husband ceased giving money to the Wife he has paid all household bills except the Wife’s food costs.  I have no doubt that during the relationship and since separation the Wife was able to save a large proportion of her income both from paid employment and interest and dividend income because the Husband provided from his income the majority of the funds to pay household, living and property expenses.

   76.The Husband has superannuation interests of an agreed value of $119,363 and the Wife has superannuation interests of an agreed value of $117,881. 

   77.The Husband did significant physical work in relation to the improvements made to and maintenance of the home at Birrong including a second storey extension.

   78.The Husband did considerable physical work in relation to the improvements made to and maintenance of the home at Granville Point. 

   79.The Husband was responsible for the establishment, operation and management of the courier business owned and operated by MSS Courier Pty Ltd.  The shares owned by the Husband and his loan account have an agreed value of $357,523. 

   80.Although there is very little, if any, evidence before me I accept that from the date of marriage until separation the Wife was primarily responsible for non-financial domestic tasks and the care of the children.  The Husband also made a non-financial contribution but it was not as significant as that made by the Wife.  I accept, however, that the Husband made a greater financial contribution to the support of the family.

2. O’Ryan J then moved to “Contributions – Conclusion” and after addressing some particular points, including the prospect that the husband had contributed to B’s estate, said, commencing with paragraph 94 previously quoted:

   94.However, because the matters I have identified were not really argued I am going to proceed on the basis that the major financial contributions by the Wife were the inheritance from her aunt of $22,000, the inheritance of Granville Point of a current value of $280,000 and the estate of the parties’ son B of $503,000.  These amounts total $805,000 which represents approximately 29% of the net assets of $2,801,233.  However, this approach is artificial because it would not take into account a number of relevant matters including direct and indirect contributions made since the assets were acquired. 

   95.The Husband provided the home, in effect “unencumbered”, which the parties always resided in and still do.  Thus during the relationship and since separation the parties had the significant benefit of few accommodation costs.  The Wife inherited the Granville Point property many years ago and it has only ever been used for family holidays.  It has never been rented.  The Wife did not have to realise or rent this property and contribute the proceeds towards meeting other family needs.  The Wife was thus able to retain this investment because of the expenses met by the Husband.  As well, the Wife was not required to realise any portion of the inheritances and contribute such to family expenses and again this was because the Husband was paying the majority of such expenses.  The Wife was fortunate that she was able to retain Granville Point and continue to increase her investment portfolio because of what the Husband paid for and provided.  In my opinion, on any view, the Husband made a significant indirect contribution to these assets of the Wife.

   96.In all the circumstances, I am of the view, that the contribution based entitlements of the parties, expressed as a percentage of the net assets of the parties, should be assessed as to 60% or $1,680,740, to the Wife and 40% or $1,120,493 to the Husband.  This is a disparity of $560,247.

   97.In my opinion, this is generous to the Wife because it gives her the benefit of contribution of the estate of the child B.  Putting aside the contribution of the estate of the child the contribution based entitlements would be at least equal and may even favour the Husband.  The significant matters relied upon by the Wife are the inheritance from the Aunt and Granville Point and so far as the Husband is concerned the contribution of the matrimonial home, his greater earnings during the relationship and his contributions since 1997.

3. The arguments for the wife essentially fell into two propositions.  The first was that the trial Judge, in the way in which he treated the husband’s initial contribution of the matrimonial home, in effect unencumbered, overestimated its significance, given the substantial improvements made to it during the period of cohabitation.

4. The second argument was simply that, taking all of the contributions of each party, the assessment was manifestly inadequate to the wife.

5. As to the first point, as seen from the passages quoted, the trial Judge recorded (at paragraph 77) improvements and maintenance to the home, including a second storey extension, albeit in the context of the husband’s significant physical work in relation to those aspects.  Nonetheless, in terms of recognising the wife’s contributions in those improvements and maintenance, it is appropriate to acknowledge the findings about the wife’s capacity to preserve the inheritances she received and the growth in value of those investments, because the husband met other expenses.

6. Where , as here, a trial Judge has recorded all relevant contributions, we see no reason, apart from consideration of the second argument, to consider that the trial Judge has fallen into error with regard to weight given to one particular aspect of contribution.

7. As to the second point, and as is perhaps obvious, it is not asserted that the trial Judge failed to have regard to some relevant matter or took into account an irrelevant matter.  In those circumstances, the many statements bearing upon the breadth of the trial Judge’s discretion are apposite.  We refer to what was said of that in Norbis v Norbis (1986) 161 CLR 513, by Kitto J in Australia Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627, and by Stephen J in Gronow and Gronow (1979) 144 CLR 513 at 520.

8. We are not satisfied that the trial Judge’s assessment of the contributions apportionment was manifestly inadequate.

That the adjustment by reason of s 75(2) factors of 7 per cent in the husband’s favour was manifestly excessive (and consequently the end result was outside the range)

1. Mr Millar argued, firstly, that the only factor recognised by the trial Judge as favouring the husband was the disparity of assets produced by his findings as to contribution.  That disparity was $560,247.  To adjust by seven per cent or approximately $196,000 because of that disparity was, he argued, excessive.

2. Secondly, Mr Millar submitted that in O’Ryan J’s consideration of s 75(2) factors he failed to have regard to the effect on the wife’s earnings from investments of his order that she pay the husband $338,161.

3. O’Ryan J’s assessment of s 75(2) factors was as follows:

   Other Factors

   98.The Husband is aged 66 years and is in good health.  The Wife is aged 62 years and is in good health.

   99.The Husband has the capacity to continue in employment as the managing director of MSS Couriers Pty Ltd.

   100.The Wife has the capacity of continued employment as a school assistant.

   101.The Husband receives a salary in excess of $70,000 per annum and the Wife receives a salary of approximately $40,000 per annum.  The Wife however, also derives a significant income from her savings, shares and investments.

   102.As a result of my findings as to the contribution based entitlements of the parties the Wife has greater property interests than the Husband being a disparity of $560,247.

   103.Both parties may have to pay further legal costs.

   104.Neither party has a duty to maintain any other person.

   105.All surviving children are adult and self supporting.

   106.As to the superannuation interests neither party is seeking a splitting order.

   107.The orders I propose to make will have no effect on the earning capacity of either party.

   Conclusion – Other Factors

   108.The significant matters are the greater income of the Husband; the age of the parties and the significantly greater assets of the Wife.  The Husband has greater income from paid employment however he is now aged 66 years and the Wife is 62 years.  The Wife then has assets of $560,247 more than the Husband.

   109.In all the circumstances, I am of the view, that there should be an adjustment of 7% of the net assets of the parties to the contribution based entitlement of the Husband.   

4. As to the second argument of the wife, it is true that the trial Judge did not expressly note that, from her capital, the wife would need to pay the husband a significant sum.  However, immediately following the considerations set out above, his Honour turned to the “Effect of Orders”.  He set out a table of the assets to be retained by the wife.  These included $685,000 approximately in savings and term deposits, $573,000 approximately in public listed shares and nearly $90,000 in bonds.  His Honour expressly recognised the payment due to the husband of $338,161 and noted the balance of assets that the wife would retain.  It is clear that the wife would retain significant income producing savings, shares and bonds

5. After noting what the husband would retain and receive, his Honour said:

   112.This represents a disparity of $168,073.  In my opinion, in all the circumstances of this case, having regard to all relevant statutory considerations, the outcomes identified above are just and equitable.

6. In AMS v AIF; AIF v AMS (1999) FLC 92-852 at 86,042-3, Kirby J said:

   …an appellate court, invited to review the exercise of discretion at first instance will avoid an overly critical, or pernickety analysis of the primary judge’s reasons given the large element of judgment, discretion and intuition which is involved.  Only if a material error of the kind warranting disturbance of a discretionary decision is established is the appellate court authorised to set aside the primary decision, to substitute its own exercise of discretion or to require that it be re-exercised on a re-trial.

7. In our view it would be unduly pernickety to conclude that, when considering s 75(2) factors, his Honour had failed to have regard to the impact of his order on the wife’s position.

8. As to a seven per cent adjustment in the husband’s favour, when the only factor favouring him was the disparity brought about by the contributions assessment (but he had the greater earning capacity, though limited by his age), we repeat what we said about the breadth of the discretion.

9. We find no merit in this ground.

Conclusion overall

1. It follows from our discussion of the individual grounds that the appeal ought be dismissed.

Costs

1. Mr Sansom for the husband sought costs in the event that the appeal was dismissed.  In response, Mr Millar argued that even if the appeal failed, it was understandably pursued in a case in which the wife’s inheritance from the parties’ son was an unusual feature, the effect of which could not readily be discerned from any decided case.  The difficulty with that proposition is that as seen, the trial Judge gave the wife the full value of the estate as a contribution.

2. In view of the outcome of the appeal, we consider that the wife ought pay the husband’s costs of and incidental to it.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate: 

Date:  16 May 2007