Hoffman & Hoffman
[2014] FamCAFC 92
•27 May 2014
FAMILY COURT OF AUSTRALIA
| HOFFMAN & HOFFMAN | [2014] FamCAFC 92 |
| FAMILY LAW – APPEAL – PROPERTY – where the husband appeals orders distributing the property of the marriage in the proportion of 50:50 per cent – where the husband contends the Federal Magistrate erred in law by failing to have regard to the husband’s “special contributions” to the marriage – where, alternatively, the husband contends the Federal Magistrate failed to place sufficient weight on his “special contributions” – consideration of the notion of “special contributions” – whether the Federal Magistrate erred in the manner alleged – where no “binding rule” of “special contributions” – where no “legitimate guideline” of “special contributions” – where no error demonstrated – husband ordered to pay the wife’s costs of the appeal. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2 Bolger & Headon [2014] FamCAFC 27 CDJ v VAJ (1998) 197 CLR 172 Chorn & Hopkins (2004) FLC 93-204 D & D [2005] FamCA 1462 Dickons & Dickons [2012] FAmCAFC 154 DJM & JLM (1998) 23 Fam LR 396 Figgins & Figgins (2002) FLC 93-122 House v The King (1936) 55 CLR 499 In the Marriage of Ferraro (1993) FLC 92-335 Jackson & Balen [2009] FamCAFC 131 JEL & DDF (2001) FLC 93-075 Lovine & Connor and Anor (2012) FLC 93-515 Mallet v Mallet (1984) 156 CLR 605 Whiteley and Whiteley (1992) FLC 92-304 |
| APPELLANT: | Mr Hoffman |
| RESPONDENT: | Ms Hoffman |
| FILE NUMBER: | CAC | 868 | of | 2011 |
| APPEAL NUMBER: | EA | 15 | of | 2013 |
| EA | 89 | of | 2013 |
| DATE DELIVERED: | 27 May 2014 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Faulks DCJ, Murphy J, Watts J |
| HEARING DATE: | 12 November 2013 |
| LOWER COURT JURISDICTION: | Federal Circuit Court |
| LOWER COURT JUDGMENT DATE: | 11 January & 17 June 2013 |
| LOWER COURT MNC: | [2012] FMCAfam 1061 [2013] FCCA 446 |
REPRESENTATION
| THE APPELLANT: | Self represented |
| COUNSEL FOR THE RESPONDENT: | Ms Tonkin |
| SOLICITOR FOR THE RESPONDENT: | Phelps Reid Lawyers |
Orders
The appeal in EA 15 of 2013 be dismissed.
The appellant husband pay the respondent wife’s costs, confined to the appeal in EA 15 of 2013, in an amount agreed to in writing between the parties or, failing agreement, as assessed.
The costs of the appeal in EA 89 of 2013 be reserved.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hoffman & Hoffman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA15 of 2013 & EA89 of 2013
File Number: CAC868 of 2011
| Mr Hoffman |
Appellant
And
| Ms Hoffman |
Respondent
REASONS FOR JUDGMENT
On 11 January 2013, Brewster FM (as his Honour then was) made orders for settlement of property, consequent upon reasons for judgment given on 17 December 2012, in respect of the parties’ 36-year cohabitation. His Honour divided equally between the parties property and superannuation interests with a combined net value of almost $10 million.
The effect of his Honour’s orders was that each party would retain real property and chattels and the husband would pay the wife a cash sum of about $3 million. The latter involved the husband electing one of two alternative sums: one involving a payment of slightly more with a consequent split of the wife’s superannuation; the other a smaller sum with no superannuation split.
The husband appeals those orders.
What Issues Arise On The Appeal?
The Grounds of Appeal
The husband prepared his own material and represented himself both at trial and on this appeal. His grounds are as follows (errors and italics in original):
1. His Honour mistook the facts;
2.His Honour disregarded documented evidence and reported case authorities;
3. This lead to the wrong application of the Law.
4.His Honour stated in 36: “Plainly the list of authorities provided by the husband indicates that my views are not shared by a number of judges of the Family Court and any appeal from my judgment may well be successful. “
5.His Honour stated in 37. “Put shortly I do not accept the principle (if it be a principle) of special contributions.”
The Grounds as Argued
The arguments advanced by the husband on the appeal mirror in large measure those advanced by him before the Federal Magistrate. In particular, his written outline of argument refers to his “[s]pecial [s]kills and [e]ntrepreneurial flair” applicable to both substantial investments in real property and the share market.
As can be seen, grounds 2 to 5 (prepared by a self-represented party) assert a misapplication of legal principle said to stem from a misapplication of authority in respect of “special contributions”. The husband contends that his Honour’s finding that contributions were equal was not open because his contributions should have been regarded as “special” thereby resulting in a disparity (on the husband’s assertion it would be a 40 per cent disparity) when compared to those of the wife.
The husband’s arguments in respect of “special contributions” derive from his assertions before the Federal Magistrate and before this Court that his “[s]pecial [s]kills and [e]ntrepreneurial [f]lair” in property “acquisition, development and value adding” were instrumental in the parties having the real property which they did at the time of trial. The husband provides examples of each asserted skill. So, too, the husband says that he exercised “[s]pecial [s]kills and [e]ntrepreneurial flair and ingenuity in selecting, maintain[ing] and trading shares…” Examples are also given in support of that claim, including the assertion that:
…I listed all the research I carr[ied] out for my share investment … and trading shares to the value of $30,238,224.05 in the period from 11 May 2010 to 15th August 2012 (a period of 15 months) that equates to an average of over Two Million dollars a month, every month…
The “documented evidence” mentioned in the grounds refers to the evidence said to be supportive of those assertions and examples. The “reported case authorities” refers to decisions both at first instance and in this Court in which “special contributions” or “special skill or ingenuity” or similar such phrases find expression. In that respect, the husband sought to distinguish cases in which the other party played a role as a director of a company or as a member of a superannuation fund or as a contributor to a business; his argument is that the wife here could claim no such contributions and his contributions were, as a result, all the greater when compared to hers.
As argued, the central challenges mounted by the husband can be seen to be in substance, if not in terms:
(a)His Honour was bound to apply a principle of “special contributions” and his failure to do so amounted to an error of law;
(b)His Honour’s discretion miscarried in that, by failing to recognise and/or apply a principle of “special contributions”, his Honour’s assessment of contributions was plainly unjust and therefore wrong;
(c)His Honour’s discretion in the assessment of contributions failed to take account of a relevant consideration, namely the husband’s “[s]pecial [s]kills and [e]ntrepreneurial flair”.
In deference to the broad thrust of the self-represented husband’s grounds and written and oral arguments, a challenge should also be framed as an assertion consistent with what was said in House v The King (1936) 55 CLR 499 (at 505) by Dixon, Evatt and McTiernan JJ:
…It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred…
The challenge based on asserted error of material facts was, while not abandoned, pursued only faintly. We will deal with those arguments briefly after addressing the appellant’s central challenges.
His Honour’s Assessment of Contributions
At [66(e)] of the reasons, his Honour says that he “…applied a broad brush in this case.” The reasons can be seen to reflect that. No challenge is made to the adequacy of his Honour’s reasons.
In any event, it should be observed that, provided the reasons can be seen to be adequate to explain the ultimate result (which must, in turn, depend upon the circumstances of the case), such an approach is consistent with principle (see, for example, In the Marriage of G (1984) FLC 91-582 and Norbis v Norbis (1985) 161 CLR 513 at 523, per Mason CJ and Deane J).
Two broad-brush central findings commence his Honour’s discussion of contributions:
32.Apart from the “special contributions” issue, which I will turn to shortly, there is nothing unusual about the parties’ contributions during their relationship. They commenced their relationship a long time ago. Each brought a property into the relationship. The wife had a house subject to a loan and the husband a flat. The difference in the values of these properties is no longer relevant. During a long marriage they each earned income. The husband is [a professional] and ran [a practice in that profession]. The wife worked in that practice until 1992 and then worked in the Public Service. As I have indicated the parties raised four children.
33.The claim for an additional share based on the physical work the husband performed on the parties’ various properties can be disposed of in short compass. This work was done when the parties still had young children. It is reasonable to assume that the work the husband did on the parties’ properties took him away from the home. It is reasonable to assume that a greater burden fell on the wife in caring for the parties’ children. I decline to make any contribution based adjustment on this basis.
His Honour continued:
35.Where the court is dealing with a situation where there is a long marriage with children and where the parties have made contributions in different spheres it is usually inappropriate to give greater weight to one party’s contribution than those of the other…There have been exceptions to this approach however. These have been in what are often called “big money” cases. In cases in the past where the parties have acquired a very substantial fortune and this has been due to the particular skills of the husband (in all the cases of which I am aware it has been the husband) then an adjustment has sometimes been made to reflect what is often termed the “special contribution” he has made…
His Honour went on to consider, and reject, the husband’s assertion that he should be given any adjustment based upon his “special contributions”. In the result, his Honour assessed the respective contributions of all types made by each of the parties to be equal.
The Appellant’s Central Contentions
The central challenge to the assessment just referred to revolves around his Honour’s findings that “I do not propose to make any adjustment in favour of the husband by reason of any special contributions made by him” (at [36]) and, more specifically, that “…I do not accept the principle (if it be a principle) of special contributions” (at [37]).
An exegesis on “special contributions” is given in the reasons which underpins those statements and within which his Honour asserts that:
§The decision of the High Court in Mallet v Mallet (1984) 156 CLR 605 “need not and should not be followed” (at [57]);
§Such a course is permissible because the decision is “infected by gender bias” and its constituent judges were “…born between 1917 and 1933”, and “[t]he zeitgeist of the era when they grew up, and the zeitgeist in 1984 when Mallet was decided, was vastly different to the zeitgeist today” (at [46]);
§The decision of this Court in In the Marriage of Ferraro (1993) FLC 92-335 should not be followed;
§He was free to form his own view as the concept of “special contributions”.
Such significant criticism as might, properly, be directed to broad statements such as those being made by a judicial officer in an inferior court is not central to the disposition of this appeal.
Although not expressed in these terms, the thrust of his Honour’s reasons is plainly to the effect that nothing said by the High Court, or this Court, about “special contributions”, or expressions to similar effect, amounts to a legal principle or “binding rule of law” the failure to observe which constitutes an error of law. The husband asserts centrally (albeit not, precisely, in terms) that there is such a binding rule of law and his Honour erred in not having applied it.
“Special Contributions”: A Binding Principle of Law?
To the extent that his Honour’s judgment is to the effect that there is no binding rule of law relating to “special contributions”, his Honour is, in our view, correct.
Gibbs CJ said, in a well-known passage in Mallet at 608-9:
…It is understandable that practitioners, desirous of finding rules, or even formulae, which may assist them in advising their clients as to the possible outcome of litigation, should treat the remarks of the court in such cases as expressing binding principles, and that judges, seeking certainty, or consistency, should sometimes do so. Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.
Since the subsequent decision of the High Court in Norbis there can be no doubt that this Court can develop guidelines so as to aid consistency in the application of the “extraordinarily wide” discretion[1] inherent in s 79(4). Indeed, Mason and Deane JJ in that case go so far as to suggest that this Court, as a “…specialist appellate court … should give guidance as to the manner in which these assessments and judgments are to be made” (at 519-20, emphasis added).
[1] De Winter & De Winter (1979) FLC 90-605 at 78,092, per Gibbs CJ.
Mason and Deane JJ also held that “…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” (at 519). Brennan J agreed that “[t]he authority of an appellate court to give guidance is not to be doubted” but disagreed in respect of a matter said by his Honour to be a “proposition of some importance”; his Honour did not accept “…that an appellate court which gives guidance … may prescribe that such guidance should have the force of a binding legal rule” (at 537).
It is clear that even if what might be described as the broader view of Mason and Deane JJ is preferred, the scope for a guideline to become a binding rule of law is very narrow indeed:
…guidance must be given in a way that preserves, so far as it is possible to do so, the capacity of the Family Court to do justice according to the needs of the individual case, whatever its complications may be. Reconciliation of these goals, suggests that in most, if not all, cases the Full Court of the Family Court should give guidance in the form of guidelines rather than binding principles of law…
The reference to “wrong principle” in the passage quoted from House v. The King no doubt refers to a binding rule rather than a guideline in the sense already explained…
(Norbis at 520, per Mason and Deane JJ; bold emphasis added)
Brennan J, in describing a permissible guideline as “…a principle which can be seen to be common to a particular class of case…” concluded that, “[i]t is one thing to say that principles may be expressed to guide the exercise of a discretion; it is another thing to say that the principles may harden into legal rules which would confine the discretion more narrowly than Parliament intended” (at 537).
No authority to which this Court was referred, nor any decision of this Court revealed by our own research, establishes (or suggests) that anything said by this Court about “special contributions”, contributions having “special features”, or any similar expression is in the nature of a binding rule of law.
Indeed, given the nature and breadth of s 79(4); the myriad of contributions particular to individual marriages which the section requires to be considered; and the statements of principle from the High Court just referred to, it is highly unlikely that any such suggestion would or should have been made. This Court has itself counselled care in not elevating particular statements “to a ‘principle’” (see, for example, Browne & Green (1999) FLC 92-873, at [49]-[50]).
If in using the words “the principle (if it be a principle) of special contributions” (at [37]), the Federal Magistrate intended to hold that there is no “binding rule of law” of special contributions, we respectfully agree.
To the extent that the husband’s grounds and arguments suggest that the Federal Magistrate erred in law by failing to recognise and/or apply a binding of rule of law pertaining to “special contributions”, they should in our view be dismissed by reference to the principles just outlined.
It follows that no error is demonstrated in that respect.
“Legitimate Guidelines”
As has just been seen, “[t]he authority of an appellate court to give guidance is not to be doubted”. That is, statements of principle by this Court can, by a process of analysis, repetition and application give rise to “…principles which have yielded just and equitable results in the generality of cases to which those principles have been applied” (Norbis at 537, per Brennan J).
Those guidelines, when established, “guide the exercise of a discretion”; they do not replace it. That is because, even if established as guidelines, they must “[preserve], so far as it is possible to do so, the capacity … to do justice according to the needs of the individual case…” (Norbis at 520, per Mason and Deane JJ).
If there is a guideline relating to “special contributions”, the failure by his Honour to apply such a guideline:
…does not of itself amount to error, for it may appear that the case is one in which it is inappropriate to invoke the guideline or that, notwithstanding the failure to apply it, the decision is the product of sound discretionary judgment.
(Norbis at 520, per Mason and Deane JJ).
However:
[t]he failure to apply a legitimate guideline to a situation to which it is applicable may … throw a question mark over the trial judge’s decision and ease the appellant’s burden of showing it is wrong.
(Norbis at 520, per Mason and Deane JJ. Emphasis added).
The emphasis respectfully added to their Honour’s statement is important. Their Honour’s use of the qualifying adjective suggests immediately that statements made in earlier cases might accurately fit the description “guidelines” yet be different to a “legitimate guideline” to which their Honours refer.
A distinguishing feature between the two, as Brennan J pointed out, is that the latter is “…a principle which can be seen to be common to a particular class of case…” A similar approach is evidenced by Mason and Deane JJ’s reference to “[t]he authoritative guidance available to aid in the resolution of the next case [lying] in [the] accumulated wisdom” gained from “[t]he decision and reasoning of one case contribut[ing] its wisdom to the accumulated wisdom of past cases” (at 533-34).
Their Honour’s eschewing of reliance upon “the abstract formulation of principles or guidelines designed to constrain judicial discretion within a predetermined framework” is equally important. Again, Brennan J makes a similar important point (at 538-39):
The expression of guidelines must be undertaken cautiously, ensuring that a sense of urgency does not diminish the care necessarily to be taken in expressing guidelines in terms which will be seen to be just and equitable in the generality of cases. It is not enough to assert the predilections of particular judges as guidelines. The factors which, together with the factors prescribed by s.79(4), should usually be taken into account must be identified and then, if it be possible, it would be desirable to express the relative importance of those factors in the generality of cases or in cases of a particular class…
The distinctions are important. As Brennan J points out in Norbis, caution must attend any guideline, including a “legitimate guideline”: “[a]ssuming that it is possible to express the wisdom gleaned from experience in the form of a guideline, it cannot be elevated to the status of a legal rule” (at 537). As we have said, the husband’s argument as to error of law earlier discussed falls foul of precisely that.
The second reason for the importance of the distinction derives from what Mason and Deane JJ said in the passage quoted above and from what Gibbs CJ said in the passage earlier quoted from Mallet. The failure by a trial judge to apply a legitimate guideline, if it be such, will “ease the burden” of an appellant seeking to establish that the discretion has miscarried. No such consideration attaches to “abstract formulation of principles” that cannot be said to be “legitimate guidelines”.
What emerges, relevant to the instant discussion is, first, that there is a distinction between a “legitimate guideline” and guidance or “statements of principle” that do not fit that description. Secondly, a “legitimate guideline” requires, axiomatically, a principle which can be identified with clarity and, in addition, the identification of a “particular class of case” to which it applies. As has been seen, a legitimate guideline should either apply to all cases or, at least, all instances within an identifiable category of case.
The words of Gibbs CJ in Mallet quoted earlier continue to resonate: there is little doubt that this Court, and indeed judges at first instance, have, from time to time, sought to identify “unifying principles” or “guidelines” designed to address the mischief, and remedy the problems, to which Gibbs CJ and, later, the Justices in Norbis refer. Contentions have been made periodically that “legitimate guidelines” exist in respect of a number of purported “categories of case”. Examples might be seen to include global/asset-by-asset approach[2]; initial contributions[3]; gifts and inheritances[4]; waste[5]; and conduct making contributions significantly more arduous[6].
[2] The Full Court decision in Norbis & Norbis (1984) FLC 91-543.
[3]Bremner & Bremner (1995) FLC 92-560; Pearce & Pearce (1999) FLC 92-844; Williams & Williams [2007] FamCA 313.
[4] Gosper & Gosper (1987) FLC 91-818; Kessey & Kessey (1994) FLC 92-495.
[5]Baker J’s statement in In the Marriage of Kowaliw (1981) FLC 91-092 approved by the Full Court on regular and frequent occasions including in Browne & Green (1999) FLC 92-873 at [44]-[49]; Chorn & Hopkins (2004) FLC 93-204.
[6] Kennon & Kennon (1997) FLC 92-757.
Consideration of the decisions to which reference has just been made reveals that some statements within those cases may be described as “legitimate guidelines” in the sense just discussed while many others may not.
The essential inquiry, however, is not one of categorisation or labelling; rather the task is to assess, relevantly, whether the authorities reveal a principle enunciated with clarity and clear indicia as to a class or category of case in which the clear principle can be applied universally so as to guide the exercise of the discretion in the sense earlier outlined.
“Special Contributions”: A Legitimate Guideline?
The origin of the suggestion that principles pertaining to “special contributions” might amount to a guideline have an uncertain origin, but is commonly attributed (as did his Honour in this case) to statements in Ferraro & Ferraro (1993) FLC 92-335, in particular, at 79,572:
However, there are cases where the performance of those roles has what may be described as “special” features about it either adding to or detracting from what may be described as the norm … On the other hand, in the breadwinner role, the facts may demonstrate an outstanding application of time and energy to producing income and the application of what some of the cases have referred to as “special skills”…
and later at 79,581 that:
So far as the husband was concerned there is no doubt that … by his special skills and endeavour he greatly increased the assets of the parties to the level at which they were at the time of the trial. In accordance with authority those special skills were entitled to recognition as an extra or “special” contribution…[7]
[7]Rowlands J in Whiteley & Whiteley (1992) FLC 92-304 used the word “special” when referring to the artist’s skill.
Although the words “special contributions” were used in Ferraro, sometimes other expressions have been used to an apparently identical end. They include: adjectives such as “extra”, “exceptional”, “entrepreneurial”, “extraordinary”, “outstanding”, “stellar” and “significant” which are combined with nouns such as “skills”, “ingenuity”, “capacity”, “talent”, “flair”, “endeavour”, “acumen”, “stewardship”, “dedication”, “features” and “factors”.
In JEL & DDF (2001) FLC 93-075, Holden and Guest JJ (with whom Kay J concurred relevantly) discussed a number of earlier decisions of this Court and statements made by the High Court[8] and set out to summarise what their Honours said emerged from those decisions as follows:
[8] Paragraph [123] -[150].
152. It seems to us that the following general principles can be said to arise from the cases referred to in these reasons, namely:
(a) There is no presumption of equality of contribution or “partnership”.
(b) There is a requirement to undertake an evaluation of the respective contributions of the husband and the wife.
(c) Although in many cases the direct financial contribution of one party will equal the indirect contribution of the other as homemaker and parent, that is not necessarily so in every case.
(d) In qualitatively evaluating the roles performed by marriage partners, there may arise special factors attaching to the performance of the particular role of one of them.
(e) The Court will recognise any such special factors as taking the contribution outside the “normal range” in the sense that that phrase was understood by the Full Court in Mclay (supra).
(f) The determination of an issue of whether or not a “special” or “extra” contribution is made by a party to a marriage is not necessarily dependant upon the size of the asset pool or the “financial product”. When considering such an issue, care must be taken to recognise and distinguish a “windfall” gain.
(g) Whilst decisions in previous cases where special factors were found to exist may provide some guidance to judges at first instance, they are not prescriptive, except to the extent that they purport to lay down general principles.
(h) It is ultimately the exercise of the trial Judge’s own discretion on the particular facts of the case that will regulate the outcome.
(i) In the exercise of that discretion, the trial Judge must be satisfied that the actual orders are just and equitable, and not just the underlying percentage division.
Neither the first part of sub-paragraph (a) above nor any of sub-paragraphs (b), (c), (g), (h) and (i) of [152] in JEL pertain to any “legitimate guideline” in respect of special contributions, or, indeed, to “special contributions” at all. Each and all derive either from the plain words of s 79 itself or from authoritative statements of principle by the High Court and pertain generally to the exercise of the s 79 discretion.
As has been said earlier, if a “legitimate guideline” is to be established by reference to the “accumulation of wisdom” from earlier decided cases, it must be possible to state with clarity the principle underpinning the guideline. More specifically, if descriptors such as “special contributions” (or whatever adjective or noun are used to similar effect) are capable of expressing a principle applicable across all cases, or a particular category of case, the factual findings necessary to satisfy the epithet “special” or “extra” must be readily identifiable. They are not. Reference to the authorities, including JEL, does not establish the components of “special” or “extra”. Further, when attempts were made to arrive at one such criterion (the “size of the asset pool”) they were quickly and properly rejected, in JEL itself[9]. The plurality discussed the apparently conflicting decisions of McLay and Stay and accepted what was said in McLay saying the determination of a special contribution “is not necessarily dependent upon the size of the asset pool or the ‘financial product’ achieved by the parties”[10].
[9]JEL & DDF at [152(f)].
[10]JEL & DDF at [129] – [135].
The assertion in [152(a)] that there is no presumption of “partnership” arises from the discussion by the plurality (at [138]-[146]) of the following statement by Fogarty J in In the Marriage of Waters and Jurek (1995) FLC 92-635 at 82,379:
In most marriages, there is a division of roles, duties and responsibilities between the parties. As part of their union, the parties choose to live in a way which will advance their interests – as individuals and as a partnership. The parties make different contributions to the marriage, which the law recognizes cannot simply be assessed in monetary terms or to the extent that they have financial consequences. Homemaker contributions are to be given as much weight as those of the primary breadwinner
The plurality in JEL agreed (at [145]) with an extra-judicial statement by Guest J that:
…To obscure the real issue of contribution by using the “package deal” epithet, that is, homemaker and parent equals financial contribution, is an unfair generalisation. Some may argue that it is invalid.
To the extent that, in the last sentence of the passage from Fogarty J’s judgment, his Honour is suggesting a guideline or principle that “homemaker” contributions must be “given as much weight as those of the primary breadwinner” the statement is, in our view, erroneous as a fetter on the wide discretion embraced by s 79. However, we do not consider that his Honour was doing so. Nor, with respect, do we consider that the plurality in Figgins & Figgins (2002) FLC 93-122 was seeking to establish a guideline when, in asserting that the Full Court in JEL had “missed” an important point about how the roles of persons in a genuine partnership should be evaluated, they said.
134.We reject the concept that there is something special about the role of the male breadwinner that means that he should achieve such a preferred position in relation to his female partner. To do so is to pay mere lip service to gender equality. Marriage is and should be regarded as a genuine partnership to which each brings different gifts. The fact that one is productive of money in large quantities is no reason to disadvantage the other. We think that cases such as JEL and DDF (supra) and the minority view of Guest J in Farmer and Bramley have missed this point and have led to an imbalance of gender considerations in arriving at results that unduly favour the male partner.
In each case, we consider that the point being made is that there is no principle or guideline (or, indeed, anything else emerging from s 79), that renders the direct contribution of income or capital more important – or “special” – when compared against indirect contributions and, in particular, contributions to the home or the welfare of the family. The plurality in Figgins underscored that very point:
56.The special contribution referred to in McLay (supra) and other cases clearly refers to some special factor of skill or capacity that produces the result that there is a loading in favour of the party providing it. In JEL and DDF (2001) FLC 93-075 the majority of the Full Court said:[11]
“However, there are cases where the performance of those roles has what may be described as `special' features about it either adding to or detracting from what may be described as the norm. For example, in relation to the homemaker role the evidence may demonstrate the carrying out of responsibilities well beyond the norm as, for example, where the homemaker has the responsibility for the home and children entirely or almost entirely without assistance from the other party for long periods or cases such as the care of a handicapped or special needs child. On the other hand, in the breadwinner role the facts may demonstrate an outstanding application of time and energy to producing income and the application of what some of the cases have referred to as ‘special skills’.”
57. We are troubled that in the absence of specific legislative direction, courts consider they should make subjective assessments of whether the quality of a party’s contributions was “outstanding”. It is almost impossible to determine questions such as: Was he a good businessman/artist/surgeon or just lucky? Was she a good cook/housekeeper/entertainer or just an attractive personality? We think it invidious for a judge to in effect give “marks” to a wife or husband during a marriage. We think that this doctrine of “special contribution” should, in an appropriate case, be reconsidered. We think that the decision of the House of Lords in Whitev White [2001] 1 All ER 1 gives force to these concerns.
[11]The Full Court in Figgins incorrectly attributed the passage which followed to the majority in JEL & DDF. The majority in JEL & DDF were actually quoting what the Full Court said in Ferraro.
Furthermore, their Honours can in our view be seen to be underscoring what Gibbs CJ in Mallet called “the second principle” “which is “implicit in many of the sections contained in Part VIII of the Family Law Act” namely that “the parties to a marriage are equal in status”. Brennan J made a similar point in Norbis (at 539) “…the purpose of making an order is to ensure that familial obligations are discharged rather than to ensure that they are painlessly shed.” Consistent with those statements, Ellis J said in Figgins, and we respectfully agree:
203. In my view, the Act is expressed in gender neutral language. In a consideration of the just and equitable requirement referred to in s 79(2), the Court must take into account and assess the matters set out in s 79(4) in a manner which does not on the one hand discriminate against or on the other hand advantage a spouse on the basis of gender or on the basis of the role undertaken by a spouse within the marriage[12].
[12]See also, what was said in that respect by Thorpe LR in Lambert v Lambert [2003] 4 All ER 342 at [50].
That consideration can be seen to be particularly important because in all of the reported Full Court decisions in which the epithet “special contributions” has been referred to or argued as relevant, an identifying characteristic is a male who asserts he has primarily or overwhelmingly been responsible for the acquisition of assets of significant value. Allied with that is an attribution of “special” characteristics to contributions made by him under s 79(4)(a) and (b) (and, it is assumed, “normal” or “non-special” contributions made by his spouse under s 79(4)(c)). The characteristics or components of the asserted “special contributions” – which, in any event, remain unarticulated and elusive – would appear to devolve entirely from that difference.
Apart from that characteristic, having properly rejected the size of the asset pool as an identifying characteristic, it is in our view entirely impossible to articulate any other characteristic that might underpin any guideline relating to “special contributions” or what contributions with “special factors” might be. Any such categorisation, in our view, ignores the gender neutral language of s 79 (and the analogous provisions applying to de facto relationships contained in Part VIIIAB of the Act) and is predisposed to discriminate against a spouse on the basis of roles which have been agreed (expressly or by evolution over time) within a legal institution which is, in the case of marriage, defined to be the “the union of a man and a woman to the exclusion of all others, voluntarily entered into for life”[13], and which, in the case of de facto partners, requires a “couple living together on a genuine domestic basis”.[14]
[13] Marriage Act 1961 (Cth), s 5. Emphasis added.
[14]Section 4AA(1)(c) which normally involves a degree of mutual commitment to a shared life: s 4AA(2)(f).
Specifically, reference to sub-paragraphs (d), (e) and/or (f) of [152] of the plurality’s judgment in JEL does not assist in defining any clear principle said to underpin a legitimate guideline of special contributions; the “principles” there enunciated beg more questions than they answer: what are “special factors”; what makes a factor “special” or “ordinary”; what is it about the “performance of [a] particular role” that renders it “special” as opposed to “non-special” or “ordinary”?
At best, epithets of that description might identify cases that may be used as comparable, to one degree or another, in arriving at a decision as to the exercise of the s 79(4) discretion in a particular case. That process can inform properly the s 79 discretion just as it informs the exercise of broad discretions performed within statutory frameworks in other areas of the law.
It is, in each case, the proper manifestation of a search for consistency and a means of avoiding the mischief spoken of in Norbis but without the “abstract articulation of principle” or “predilections of particular judges” referred to by Brennan J in that case. Just as, very recently, the High Court criticised the submission of a sentencing range as distinct from the submission of a range of comparable cases informing the sentencing discretion[15] so are epithets such as “special contributions” or “special factors” of no value. In the absence of “…the care necessarily to be taken in expressing guidelines in terms which will be seen to be just and equitable in the generality of cases” references to “special contributions” or similar epithets are of no greater value than the “package deal” epithet, which the Full Court in JEL dismissed as an unfair generalisation and possible “invalid”.
[15] See, Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2, particularly at [40]-[41].
While decisions of this Court have from time to time referred to what might be described as attempts to collect and describe “unifying principles”, the use of decisions that have been delivered in other cases so as to better illuminate the exercise of the “extraordinarily wide” discretion within s 79(4) is very uncommon, indeed very rare. The reasons for that are not entirely clear – at least to us. The facts of each case are, of course, unique to it and the discretion wide. But, that does not mean that like cases ought not provide a path to consistency in the exercise of the discretion[16].
[16]In that respect, reference might be made, in the context of settlement of property cases in England, to the opening comments in the opinion of Baroness Hale of Richmond in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24, at [122] which refer to the need to achieve some consistency and predictability in the exercise of discretion and “that so far as possible like cases are treated alike”.
No decision to which we have been referred, nor any decision revealed by our own researches, reveals any principle enunciated with the clarity required to underpin a “legitimate guideline” in respect of “special contributions”. Additionally, no class or category of case can be defined in which any such asserted principle can be said to apply universally. The notion that “big money cases” (whatever that might mean) might form such a category has rightly been rejected. No other category or class of case can be said to have replaced it.
We consider that the true position is, with respect, put correctly and succinctly by O’Ryan J in D & D [2005] FamCA 1462 at [271]: “…the notion of special contribution has all been a terrible mistake … what I have to do is identify and assess the contributions made by each of the parties without any presumption of entitlement” (emphasis in original). The task is to make findings as to the nature, form, characteristics and duration of each and all of the contributions made by each of the parties referenced to s 79(4), without adjectival qualification[17]. Thereafter the court must undertake the exquisitely difficult task of assessing how those respective contributions, often of differing types (a task which his Honour referred to below as a comparison of apples and carrots (at [42])), find expression in qualitative assessments.[18] In the context of a case such as the present one, the duration of the marriage[19] has an important influence upon what evidence is relevant in respect of contributions. There is no need to conduct a minute forensic examination of the details of contributions over many years with each party extolling their own efforts and attempting to diminish the other’s.
[17]This court has referred to the potential for error in attaching other “labels” to contributions in, for example, In the Marriage of Mathews (1980) FLC 90-887 at 75,601; DJM & JLM (1998) 23 Fam LR 396, especially at 425; Lovine & Connor and Anor (2012) FLC 93-515; Bolger & Headon [2014] FamCAFC 27.
[18]Coleman J described that part of the process in Steinbrenner & Steinbrenner [2008] FamCAFC 193 (at [234]) “as a ‘leap’ from words to figures”.
[19]Section 75(2)(k) and in the context of a de facto relationship, s 90SF(3)(k).
In summary, we do not consider that there is any “legitimate guideline” of “special contributions” or any such guideline pertaining to particular contributions containing “special” factors or features that “eases the burden” in establishing a miscarriage of discretion.
Consequently, if error is to be established by the husband, it will be because, relevantly, his Honour’s assessment was “plainly wrong” as falling outside the bounds of discretion within which reasonable disagreement is possible or, consistent with what was also (inferentially) argued by the appellant, his Honour’s failure to take account of his claimed attributes should attract the intervention of this Court by reason of his Honour failing to take account of “special skills” as a relevant consideration.
“Big Money Cases”
Before considering each of those arguments, it is necessary to discuss the trial Judge’s alternative treatment of “special contributions” by reference to “big money cases”.
Having rejected the husband’s claim to having made “special contributions” in the manner just described, his Honour turned to an alternative basis for rejecting that claim:
59.However if it be felt that I need an additional arrow in my quiver to reject the husband’s special contribution claim I believe I can find one. If I were to adopt the jurisprudence of the Full Court (which I regard as flawed but need not explain why) I believe I can legitimately confine Ferraro and its successors to true “big money” cases and find that the pool in this case, which is less than $10 million, does not put it in that category…
His Honour then referred to the decisions of this Court in Ferraro; McLay & McLay (1996) FLC 92-667; Phillips & Phillips [1998] FamCA 1551, and JEL, and performed an exercise whereby the value of the parties’ property in each of those cases was purportedly converted into present-day values.
His Honour then continued:
61.Whilst, to put it mildly, I am not enamoured of the logic of applying different principles depending on the size of the pool Ferraro supports the distinction. See pages 79,579 to 79,580. More to the point is the Full Court decision in Stay & Stay...
62.Whilst I am reluctant to justify my decision in this case on what I regard as flawed jurisprudence I will adopt the “tabula in nefragia” principle if it be necessary.
While the cases just mentioned are referred to by his Honour, no analysis of them is undertaken. Although his Honour refers to JEL and relies upon Stay & Stay (1998) FLC 92-751, his Honour does not at all refer to the fact that, as we have referred to above, in the former case this Court expressly said that any asserted “special contribution” was not dependent upon the size of the asset pool or the “financial product” achieved by the parties. Moreover, that case specifically doubted Stay to the extent that it suggested otherwise.[20] That approach has not been the subject of significant challenge in any later case, including Figgins.
[20] JEL at [132]-[135].
If his Honour considered that, like Mallet and Ferraro, this Court’s judgment in JEL should in that respect be “disregarded”, his Honour did not say so.
In so far as his Honour refers, to “big money cases”, we reiterate what we have said earlier. If, as we consider is the correct position, there is no “binding rule of law” or no guideline properly so called relating to “special contributions”, then the value of the property interests the subject of the s 79(4) discretion is not of itself determinative of any particular exercise of the discretion or any particular result or results emanating from it.
“Special Skills” as a Relevant Consideration
The rejection of the arguments advanced by the husband asserting error in respect of “special contributions” leave open an argument gleaned from his grounds and written outline of argument that, if the nominated “special skills” of the husband do not sound in adjustment because of them requiring the application of a principle of law or guideline, his Honour’s discretion nevertheless miscarried because his Honour failed to take them into account as a relevant consideration.
First, however, it is necessary to consider whether his Honour’s reasons reveal an erroneous starting point or presumption of equality of contributions.
As has been seen, his Honour spoke, at [35] of the reasons, of it being “…usually inappropriate to give greater weight to one party’s contribution…” in the circumstances there mentioned (a “long marriage with children” and “…where the parties have made contributions in different spheres…”). The words there used, particularly when added to what his Honour said in respect of “not following” Mallet and the reasons given for that, give rise to a concern that his Honour has either applied a “starting point” of equality or contributions or presumed that to be the case where the matters just quoted are present. Such an approach is clearly erroneous.
However, in our view, the reasons read as a whole do not reveal an erroneous approach. We are comfortably satisfied that his Honour’s reasons reveal not a starting point or presumption but, rather, are an experienced trial Judge’s:
…practical recognition of the circumstance that in many marriages each party contributes in ways which might be described as the normal way in our society and that in any qualitative evaluation of those matters the likely outcome is one of equality. This is repeatedly recognised in the day to day experience of this Court over many years in dealing with a very large number of s. 79 cases. In many cases any assessment of the facts readily makes it clear that an outcome of equality within pars. (a) to (c) is most likely and that a lengthy trial in which those facts are examined in detail will produce no different result…
(McLay at 82,902)
His Honour’s discussion, in particular, of the husband’s arguments in respect of his asserted special skills and talents in the context of a discussion of the wife’s inheritance (at reasons [67]-[71]) bears that out.
The argument that his Honour has failed to take account of relevant considerations by failing to consider the husband’s “[s]pecial [s]kills and [e]ntrepreneurial [f]lair” can, we think, be readily answered.
If there is no binding principle of law relating to “special contributions” and if there is no legitimate guideline(s) in respect of such contributions, the asserted error cannot be that this Honour failed to take account of the nominated particular factors; any such category or epithet cannot of itself be relevant. The nature, form and characteristics of those contributions made by the husband must be considered as they must in respect of all other contributions made by each of the parties. The error, if there be one, is established by a failure to take account of a particular contribution or contributions made by the husband.
The husband set out before his Honour and set out before us those matters which he contends ought to have been taken into account by his Honour. They were summarised earlier. No ground in this appeal challenges his Honour’s contribution findings (save, in the husband’s case, as it finds reflection in his arguments in respect of the wider arguments as to “special contributions” earlier referred to).
The material relied upon by the parties before his Honour reveals evidence adduced by each of them in respect of contributions made “within their respective spheres” over the course of a 36-year cohabitation. For example, each party contended that they worked in more than one role, including in more than one form of remunerative employment. The husband contended that he worked as an “above average” professional (either full-time or part-time) and also as a tertiary teacher; the wife contended that she worked for the husband’s company and for the public service.
Each party contended for significant contributions to the welfare of the family. The wife, in particular, claimed that she had made significantly greater contributions to the care of the children than the husband (noting that the parties had, upon the birth of their fourth child, four children under the age of seven). The wife claimed that she had introduced real property at the commencement of the relationship which was “the springboard for the creation of future wealth”. The husband claimed that he alone researched, organised, chose and managed all of the investments in the marriage which consisted of both real property investments and significant investment in shares.
His Honour’s reasons reveal that he considered and made findings as to all of those contributions and weighed them in arriving at his ultimate assessment. Read as a whole, his Honour’s reasons reflect a proper consideration of all matters relevant to the exercise of his Honour’s wide discretion insofar as it specifically relates to contributions.
The husband’s challenge rests substantially on the existence of “special contributions” as something relevant of itself in the assessment of contributions. For the reasons earlier given, that argument should be rejected. The reasons must reflect an adequate consideration of all matters relevant to the exercise of the wide discretion inherent in s 79 and his Honour’s reasons do so adequately.
No error is demonstrated by reason of his Honour failing to take account of any relevant consideration.
Weight and the Overall Result
The Assertion as to Insufficient Weight
Again, a central plank of the husband’s challenge reframed by reference to either the weight attached to “special contributions” or a broader challenge to the result overall, is that “special contributions” or “special talents” or “special skills” should, of itself result in the attribution of particular weight. The argument, again, rests centrally on the assumption that weight must ipso facto be attached to “special factors” or “special skills” or “talent and entrepreneurial flair” once established (even if it be assumed that somewhat elusive concepts can be determined with any precision or by reference to established criteria). Again, that argument should be rejected.
In respect of a challenge re-framed as one of weight, the concern of this Court is, again, to ascertain whether, in the particular case under consideration, error is established by reference to the weight that was, or was not, attached to specific contributions, not to a particular category or description of contributions. Familiar authorities of long standing outline the difficulties facing an appellant asserting errors as to the weight attached, or not attached, to evidence by the trial court. Those authorities do not need to be repeated here.
Once the central argument as to the place of “special contributions” is rejected, nothing to which the Court was taken, nor any argument advanced by the husband is persuasive of his Honour having failed to give sufficient consideration or weight to any or all of the matters said by the husband to comprise his “special skills” or “special contributions”.
Is the Result “Plainly Wrong”?
Authorities detailing the bounds of appellate interference with discretionary decisions are well known and of long standing. In deference to the husband who represents himself, it is appropriate to mention just one from the judgment of Kirby J in CDJ v VAJ (1998) 197 CLR 172 at [186]:
Neither this Court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. To approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders. It is not necessary for an appellant to demonstrate the kind of unreasonableness that must be shown to authorise judicial intervention in the decision of an administrator otherwise acting within power. The reference to "plainly wrong" is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.
(References omitted).
Here, for the reasons outlined, no error of principle is demonstrated. It is, then, not sufficient that any or all of the members of this Court would have reached a decision different to that of his Honour, including a decision more generous to the husband. The issue is whether the result arrived at by his Honour falls outside the necessarily wide ambit within which reasonable disagreement is possible in the context of the exercise of a wide statutory discretion.
We are not persuaded that the result does so. The challenge on this basis fails.
The Asserted Material Errors of Fact
Although the husband did not emphasise the first ground, he did not abandon it. We consider it appropriate to address briefly our reasons for concluding that there is no merit in any of the assertions made by the husband in this respect.
The husband asserts his Honour made erroneous findings of fact about the date of separation, the size of the pool, the size of the inheritance received by the wife and the husband being away from home when working on the parties’ property.
The date of separation found by his Honour was supported by all of the documentary evidence, including the date of separation the husband asserted in his own divorce application.
His Honour found the pool was less than $10 million and the values of assets and liabilities found by his Honour support that finding.
There is nothing in the evidence which supports a conclusion that his Honour made a factual error in relation to the inheritance the wife received in 2010. The wife had provided the bulk of that inheritance to her children and his Honour found it was unlikely that it would be repaid. There was no challenge to that finding.
His Honour’s statement about the husband being away from the home when doing physical work on the parties’ various properties seems to be only stating the obvious. This happened at a time when the wife remained at home with young children.
The husband has not demonstrated any material factual error that warrants intervention by this Court.
The Result of the Appeal
The appeal in EA 15 of 2013 fails.
The appeal will be dismissed. As a consequence, his Honour’s orders made 11 January 2013 stand in the terms as made.
Events Subsequent to the Hearing of the Appeal
The husband’s appeal against orders made by his Honour on 17 June 2013 (EA 89 of 2013) was heard at the same time as the appeal in EA 15 of 2013, to which these reasons relate.
Subsequent to the hearing of those appeals, and while judgment was reserved, the husband filed a further Notice of Appeal (EA 52 of 2014) in respect of subsequent orders made by his Honour. One issue raised in respect of that appeal, and applications brought within it, is whether his Honour was functus officio when making the orders of 17 June 2013 (and further, subsequent, orders). Thus, as part of the argument in respect of that issue, an issue arises that may have an impact on the appeal in EA 89 of 2013.
As a result of those matters, the Court has set a date for the hearing of the husband’s applications and any issues arising within them that might have an impact on the appeal in EA 89 of 2013 and, consequently, these reasons relate solely to the issues raised in the Notice of Appeal pertaining to EA 15 of 2013.
Costs of the Appeal
As is customary, at the conclusion of the hearing of the appeals, we sought submissions from each party regarding the costs of the appeal.
The wife sought an order that the husband pay her costs of the appeal.
The husband retains almost $5 million worth of property. He has not been successful in the appeal in EA 15 of 2013. He should pay the wife’s costs, confined to the appeal in EA 15 of 2013 in an amount to be agreed or, failing agreement to be assessed.
For the reasons just discussed and, in particular, the ostensible relationship between the appeal in EA 89 of 2013 and the appeal in EA 52 of 2014, the costs of the appeal in EA 89 of 2013 should be reserved.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 27 May 2014.
Associate:
Date: 27 May 2014
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