Holland & Holland - [2017] FamCAFC 166

FAMILY COURT OF AUSTRALIA

HOLLAND & HOLLAND

[2017] FamCAFC 166

FAMILY LAW – APPEAL – PROPERTY – where the husband inherited an unencumbered property three and a half years after separation – where the trial judge “excluded” the property from the pool of assets and referred to it as a financial resource of the husband – where it is wrong as a matter of principle to refer to any existing legal or equitable interest of the parties as being “excluded” from consideration – where the property was not a financial resource, but property to which the parties were presently entitled – where these errors amounted to an error of principle – where the trial judge conflated issues relevant to the contributions assessment with issues relevant to an assessment of s 75(2) factors – where it was not possible to discern the path of reasoning by which the trial judge concluded the property of the parties should be distributed – appeal allowed – no order as to costs – costs certificates issued.

Family Law Act 1975 (Cth) ss 4, 75(2), 79, 117(1)
Federal Proceedings (Costs) Act 1981 (Cth)

Bevan & Bevan (2013) FLC 93-545
Bonnici and Bonnici (1992) FLC 92-272
Coghlan and Coghlan (2005) FLC 93-220
Calvin & McTier [2017] FamCAFC 125
Chapman & Chapman (2014) FLC 93-592
Clauson and Clauson (1995) FLC 92-595
Dickons v Dickons (2012) 50 Fam LR 244
Farmer and Bramley (2000) FLC 93-060
Norbis v Norbis (1986) 161 CLR 513
Norman & Norman [2010] FamCAFC 66
Singerson & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108
Zaruba & Zaruba [2017] FamCAFC 91

APPELLANT:

Ms Holland

RESPONDENT:

Mr Holland

FILE NUMBER:

DGC

3242

2011

APPEAL NUMBER:

SOA

2016

DATE DELIVERED:

9 August 2017

PLACE DELIVERED:

Perth

PLACE HEARD:

Melbourne

JUDGMENT OF:

Ainslie-Wallace, Murphy & Aldridge JJ

HEARING DATE:

21 February 2017;
Further written submissions filed 12 April 2017; 3 May 2017.

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

24 June 2016

LOWER COURT MNC:

[2016] FCCA 1547

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Potter

SOLICITOR FOR THE APPELLANT:

Bramich Legal

COUNSEL FOR THE RESPONDENT:

Ms Teicher

SOLICITOR FOR THE RESPONDENT:

Knox Family Law Specialist Pty Ltd

Orders

The appeal is allowed.
The orders made by Judge Jones on 24 June 2016 be set aside.
The proceedings be remitted for rehearing before a judge of the Federal Circuit Court of Australia other than Judge Jones.
The court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.
The court grants the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
The court grants both the appellant and the respondent a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under this Act to the appellant and the respondent in respect of the costs incurred by the appellant and the respondent in relation to the new trial.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Holland & Holland has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SOA 57 of 2016
File Number: DGC 3242 of 2011

Ms Holland

Appellant

And

Mr Holland

Respondent

REASONS FOR JUDGMENT

On 24 June 2016, Judge Jones made orders for settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) by which the mortgaged former matrimonial home was transferred to the wife in exchange for a payment to the husband of $90,000 and that otherwise, the property each possessed was vested in them. The wife appeals those orders.
As drawn, the grounds of appeal together with the wife’s summary of argument did not clearly articulate the errors asserted to have been made by the trial judge. The issues to be decided by this court were concomitantly opaque.
Leave was given to amend the grounds and, although oral argument proceeded on those amended grounds, an opportunity was afforded to each of the parties to file further written submissions. Further written submissions were filed on 12 April 2017 and 3 May 2017 by the husband and wife respectively.

The Factual Context for the Trial Judge’s Orders

The parties cohabited for approximately 17 years before their separation in July 2007 and eventual divorce in January 2012. There are two children of the relationship who were aged 17 and 14 years at the time of the trial.
The trial judge summarised the background facts relevant to her decision (at [3]). The facts as summarised are not controversial on this appeal. It is convenient to respectfully incorporate her Honour’s summary:
…
d)on 18 August 2000, the parties purchased the former matrimonial home at [Property L], Victoria (“former matrimonial home”) for $160,000.00. The paternal grandparents advanced the parties $31,000.00, which was repaid by the parties within three years;
e)at separation, the mortgage on the former matrimonial home was $132,332.09. On 1 November 2015, the mortgage encumbering the former matrimonial home was $138,383.17;
f)the Husband, who is a [tradesman], commenced his own [trade] business in or around 1992, and in 1997, the business was restructured as a partnership, with the Husband and Wife as joint partners. The name of the business was [Holland Trade] Services. A joint bank account was operated for that business. The [husband] undertook the [trade] work associated with the business whilst the Wife engaged in administration/book work for the business. The parties dispute the contribution of the Wife to the business. In September 2007, the Husband re-established his business as a sole trader under the name “[Mr Holland]”;
g)the Wife was the primary carer for [the parties’ children] during the relationship;
h)upon separation in July 2007, the Husband left the former matrimonial home and lived with his brother. The Wife remained in the former matrimonial home with the children until in or around 2009;
i)the Husband paid the mortgage repayments for the former matrimonial home until in or around April 2009 when he says he formed the belief that the Wife had re-partnered and the new partner was spending a significant amount of time in the former matrimonial home. Since that time, the Wife has been responsible for the mortgage repayments for the former matrimonial home;
j)after leaving the former matrimonial home, the Wife embarked on renovations to the house to enable it to be tenanted. The rental income, which commenced in July 2009, was deposited in the parties’ [ABC] Bank Home Equity Line of Credit, from which the Wife paid the mortgage and other expenses;
k)after leaving the former matrimonial home in 2009, the Wife commenced living in [M town], Victoria, with [X] and [Y]. [X] returned to Melbourne to live with the Husband in 2010. The Wife commenced living, in March 2015, in rental accommodation at [S suburb], Victoria. Presently, [X] resides with the Wife three weeks during each month and spends one week with the Husband (subject to one exception when [X] spent three weeks with the Husband), and [Y] spends two weeks with the Wife and two weeks with the Husband each month;
l)the Wife is employed in [M town], Victoria as an [Community Worker] on a casual basis, and has obtained various Certificates to enable her to obtain full-time employment as an [Community Worker];
m)in February 2011, pursuant to the Husband’s brother’s Last Will and Testament, the Husband inherited a property situate at [Property W] Victoria (“the [W] property”). At the time he inherited the property, there was a mortgage of $83,000.00 encumbering it. The Husband’s parents, who received the Husband’s brother’s superannuation benefits under the Will, paid out the mortgage. Consequently, the Husband is sole proprietor of this unencumbered property.
In addition to that summary it should also be observed that, initially, the parties had made private arrangements in respect of child support payments. However, from in or around April 2009 until October 2011, the husband made no child support payments due to his belief that the wife’s then partner was residing in the former matrimonial home. In October 2011, the husband was assessed by the Child Support Agency and from that time the husband paid the assessed child support, school fees and fees associated with extra-curricular activities of the children. During cross-examination the wife acknowledged that the husband had met his child support obligations and had made further payments beyond those required of him to meet additional expenses of the children.[1]
[1]Transcript, 24 November 2015, p 36 ln 13 ff.
In respect of the renovations to the former matrimonial home, it was accepted by the husband during cross-examination that the house needed further renovations if it was to be rented.[2] At [49] to [51], her Honour found that the renovations were paid for by the transfer of a jointly owned motor vehicle to the tradesman and from funds saved from business tax returns. Her Honour noted that, while those taxation refunds were “joint funds” in the sense that they derived from the parties’ business partnership, the husband would also have received and retained similar business tax refunds.[3]
[2]Transcript, 24 November 2015, p 113 ln 16 – 18; [50].
[3][51].
Although there was a “dearth of expert evidence” showing any change in value of the property due to the renovations, the trial judge concluded that the wife “made contributions to the conservation and improvement of the only asset of the relationship” and that, doing the best she could on the evidence before her, “it is reasonable to assume that the value of the property increased over the period from 2009 to 2015, particularly with the renovations”.[4] There is no challenge to that finding.
[4][52].
Prior to the husband’s brother’s death and the subsequent inheritance by the husband of Property W some three and a half years after the parties’ separation, the husband had cared for his brother following his being diagnosed with bowel cancer and until his death in 2010. At the time of trial, Property W had an agreed value of $715,000.

The Issues Raised on the Appeal

The wife’s challenge appears to be formulated around five central contentions.
First, it is argued that Property W was plainly “property of the parties of the marriage or either of them” within the meaning of s 79(1) of the Act and that the trial judge erroneously failed to treat it as such by “excluding” it from the “pool of assets” and treating it instead as a “financial resource”.
Secondly, and allied to that, it is argued that, despite the property being inhabited by the husband and his brother in the circumstances earlier referred to, the trial judge erred by not according to the wife an indirect contribution to it.
Thirdly, the wife contends that the trial judge did not give adequate weight to the post-separation contributions made by her, which she asserts to have been “significant”.
Fourthly, it is argued that her Honour did not give adequate reasons for her findings in relation to s 79(4)(e) – i.e. the “s 75(2) factors” – and failed to give adequate weight to the wife’s future needs. Properly analysed, the thrust of the challenge appears to be that her Honour erroneously conflated her assessment of contributions with her assessment of the relevant s 75(2) factors.
Finally, and again relevant to her Honour’s s 79(4)(e) assessment, it is argued that, despite her Honour saying that she would treat the husband’s inherited Property W as a financial resource, she did not in fact do so. Properly viewed, that contention must be seen to relate to the attribution of weight; her Honour plainly makes reference to the property when considering the “s 75(2) factors”.[5]
[5][70].

“Exclusion” of Property and “After-Acquired Property”

The written submissions on behalf of the wife argue that “[Property W was] clearly property and should have been included” in the “pool of assets” rather than being treated “as merely a financial resource”.[6] That assertion attends the wife’s argument that Property W was “excluded” from her Honour’s consideration of the parties’ assets and liabilities.
[6]Wife’s Summary of Argument filed 15 November 2016, paragraph 2.

“After-Acquired Property”

The concepts just referred to have as one of their premises that Property W was an “after-acquired property” of the husband, that is, property acquired after separation. That description, together with the descriptions “financial resource” and “excluded” require specific attention; they involve the risk of error exemplified by an argument advanced in Calvin & McTier[7]and firmly rejected by the Full Court in that case:
We turn then to the third proposition of senior counsel outlined above at [27]. Shorn of those aspects of the argument which are plainly not supported by authority and taking into account the many concessions made in oral submissions, we understand the third proposition ultimately to be as follows: where there is after-acquired property and the owner of that property objects to its inclusion in the property to be considered for division under s 79(1) of the Act, there must be a separate and specific consideration as to whether there is a principled reason for its inclusion and division.
Senior counsel submitted that such principled reasons could include a direct contribution to the after-acquired asset (such as, in the case of an inheritance, caring for the donor) or by making contributions to the family that were out of the ordinary, and that in the absence of such a direct connection between the marriage and the property there would be no basis for including the after-acquired property for division. We repeat, that is contrary to longstanding authority.
[7] [2017] FamCAFC 125, [38] – [39] (“Calvin”).
As the High Court made plain in Stanford v Stanford:[8]
First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
(emphasis in original)
[8](2012) 247 CLR 108, 120 at [37] per French CJ, Hayne, Kiefel and Bell JJ (“Stanford”); See also the recent discussion in Calvin, above.
Equally, prior to the decision in Stanford, the Full Court in Norman & Norman[9], said, by reference to earlier authority:
First, property acquired by one or both parties after cohabitation has ceased is not immune from the reach of s 79. Indeed, the opposite is the case; “the property of the parties or either or them” includes all property of whatever type, whenever acquired (see Hickey & Hickey (2003) FLC 93-143 at [40]). Further, it is not necessary to prove that any particular form of contribution is connected with any particular part of the property …[10]
[9] [2010] FamCAFC 66.
[10]Above, [38]; also referring to Shaw and Shaw (1989) FLC 92-010 and Napthali and Napthali (1989) FLC 92-021.

“Financial Resource”

The expression “financial resource” requires similar caution. It has been used by the court throughout the Act’s history in contradistinction to “property” to highlight a proposition central to the operation of s 79 of the Act. Orders pursuant to s 79 of the Act can alter interests in respect of “property”; “financial resources” cannot be the subject of such orders. However, those same financial resources can be important to the making of s 79 orders by reason of a consideration of them pursuant to s 79(4)(e) of the Act (i.e. the “s 75(2) factors”).[11]
[11]Thus, in some circumstances, an expectation under a will might be taken into account pursuant to s 75(2)(o) as a financial resource – see, for example, White and Tulloch v White (1995) FLC 92-640; De Angelis and De Angelis (2003) FLC 93-133. See more generally for example, Pencious & Pencious and Anor [2014] FamCAFC 171, [51] – [52].
It should be recognised immediately that the expression “financial resource” has sometimes been used to describe a situation where property the subject of an inheritance has been assessed within an “asset by asset” or “separate pool” approach.[12] However, with respect to those who have used that expression in that context, we would seek to reiterate what was said by the Full Court in Bonnici and Bonnici,[13] referred to by her Honour:
The expression “resource” [or, we would respectfully add, “financial resource”] is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement”.[14]
[12] See, for example, Jarrott & Jarrott (No 2) [2012] FamCAFC 72, [9] cited by the trial judge at [33].
[13] (1992) FLC 92-272 (“Bonnici”).
[14] Above, 79,020.
Such an approach is supported by the recent statement by the High Court in Stanford earlier referred to.
Thus, despite an apparent pedigree of sorts, we consider it important to state that there is no doubt that her Honour erred in referring to the husband’s vested interest in Property W as a “financial resource”. It was, with respect, not a financial resource; it was property of the husband. It is property to which the parties are, or a party is, presently entitled – see the definition of “property” in s 4 of the Act and the recent discussion in Calvin.[15]
[15] Above, [20] – [24], [35] and [36].
However, it does not in our view follow that this error warrants intervention by this court. If her Honour can be seen to have erred in the manner of her expression rather than in the error infecting the application of principle or the exercise of her Honour’s discretion such that injustice is caused, intervention by this court is not warranted.

“Exclusion” of Property in s 79 Proceedings

In a similar vein to the expressions just discussed, earlier cases often contain reference to particular property being “excluded” from consideration. In our view it is wrong as a matter of principle to refer to any existing legal or equitable interests in property of the parties or either of them as “excluded” from, or “immune” from, consideration in applications for orders pursuant to s 79. Again, what was said by the High Court in Stanford pertains.[16]
[16]See also, Bonnici, 79,019 – 79,020 and the discussion of same in Calvin, [48], [50] – [51]; Farmer and Bramley (2000) FLC 93-060, 87,948 per Finn J.

More often than not, the expression is used to indicate that particular property, or a particular category of property, or superannuation interests, are to be treated separately from other property for the purpose of a consideration of s 79(2) or for the purpose of assessing contributions.
As to the former, s 79(2) prescribes not making “an order” under s 79 unless the court is satisfied that “in all the circumstances, it is just and equitable to make the order.” In arriving at a conclusion in that respect, it must be borne in mind that:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …[17]
(Footnotes omitted)
[17] Stanford, 120 at [36] per French CJ, Hayne, Kiefel and Bell JJ.
In answering the fundamental s 79(2) question, a court may (but not must) take into account the matters referred to in s 79(4) – that is, the nature, type and extent of all contributions of all types made by the parties to the interests in property of the parties or either of them.[18] The relevant inquiry may have reference to the nature, form and characteristics of particular interests in property, including the manner of their acquisition, conservation and improvement and the nature, form and characteristics of the contributions of all types (if any) made by the parties during the currency of their relationship.
[18] Bevan & Bevan (2013) FLC 93-545; Chapman & Chapman (2014) FLC 93-592.
In Zaruba & Zaruba[19] the Full Court said:
In the vast majority of cases, it will be appropriate to address the s 79(2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets. That is because [referring to Stanford] the “express and implicit assumptions that underpinned the existing property arrangements” can be seen to apply (to the extent and degree to which they do apply) to all of the property of the parties or either of them, including property in which the legal interests vary.
However, the position is likely to be different in circumstances where, as here, the characteristics of the property and the circumstances of its acquisition, improvement and the like can be seen to differ significantly and where, as here, the parties’ relationship had taken on quite different characteristics during the period to which the s 79 inquiry is directed.
[19] [2017] FamCAFC 91, [38] – [39].
The considerations just discussed recognise that nothing said by the High Court in Stanford calls into question what was earlier said by that court in Norbis v Norbis.[20] There, for example, Wilson and Dawson JJ said:
… Of course, it may be possible and appropriate in many cases to determine the proportions in which the property is to be divided without treating any of the assets separately, but where the interests of the parties differ, a different approach will be open. Section 79, in particular s. 79(4), refers to “any property of the parties to a marriage or either of them” and that expression is sufficient to encompass both the entirety of their property and their individual interests. If the parties’ interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of the property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case. …
[20](1986) 161 CLR 513, 532 – 533 (“Norbis”).
Thus, the nature of a particular interest or interests in property and when and how it was acquired, utilised, improved or preserved may be very relevant to each or all of three central questions: should a s 79 order be made at all;[21] whether contributions should be assessed “globally” or “asset by asset”[22] or by reference to two or more “pools”;[23] and, what is the nature and extent of each party’s contributions. However, there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest.
[21] Section 79(2); Stanford.
[22] Norbis, per Mason & Deane JJ, particularly at 523; per Wilson & Dawson JJ at 532 – 533.
[23] See, for example, Coghlan and Coghlan (2005) FLC 93-220 (“Coghlan”).
Importantly, while it might be convenient to describe property by reference to a characteristic (for example, as an “inheritance” or “post-separation” or “after‑acquired” property), its place within the ambit of s 79 is determined by the fact that it exists as a legal or equitable interest of the parties to the marriage or either of them and that the nature, form and characteristics of it and the contributions of all types made by the party suggest that it should be treated in a particular way.
The consideration of the three central questions earlier referred to call in each case for the exercise of discretion by a trial judge. That discretion is exercised not by reference to whether property might conveniently be described as “an inheritance” or “after-acquired” but, rather, by reference to the nature, form and characteristics of the property in question and the nature, form and extent of the parties’ contributions of all types across the entirety of their relationship.
In respect of the last point, it is important to emphasise that the categorisation of property as “an inheritance” or as “after-acquired” property often leads to an erroneous argument that unless contributions to that property can be established, the property should be “excluded from consideration”. As we have said, that argument is erroneous by reason of ignoring the fundamental premise that s 79 is directed to all of the existing legal and equitable interests in property of the parties or either of them without exclusion of any of those interests.
In so far as those arguments have been made in respect of property that was acquired by way of inheritance, they might appear to gain some support from what was said in Bonnici and can be seen exemplified in an argument advanced in Calvin. However, in rejecting that argument, the Full Court in the latter case said this:[24]
Finally, the husband sought to draw support from the following passages in Bonnici & Bonnici (1992) FLC 92-272 (“Bonnici”) at 79,019 – 79,020:
…
44.The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. …
…
The husband particularly relied upon the first sentence of [44] of Bonnici above. We do not agree that in that sentence their Honours were purporting to lay down a guideline as to the approach the court should take to inheritances received after separation. It is clear from reading the passage as a whole that they were not doing so. Whilst the court did indicate that in the case before them it would have been simpler for the primary judge to have dealt with the inheritance separately from the other property, it expressly said that there was nothing wrong with a global approach (i.e. dividing just one group of assets, including the inheritance), provided there was an explanation as to how the division was arrived at (at [46]). See also Bishop & Bishop (2013) FLC 93-553 at 87,421.
[24] Above, [48], [50].
The position there expressed is consistent with longstanding authority. Referring to some of that authority, Kay J said in Farmer and Bramley:[25]
Guest J, having analysed several relevant cases, reaches a conclusion that there should be no consideration of s 79(4)(a), (b) and (c) issues other than those that post-date the acquisition of the lottery winnings. In my view the passages cited by Guest J from Shaw and Shaw (1989) FLC 92-010, Jones and Jones (1990) FLC 92-143 and Branicki (unreported Full Court 18 May 1990), place beyond doubt the proposition that an assessment of contributions made under s 79(4)(a), (b) and (c) does not have to bear a direct relationship to the assets as they presently exist. The court is asked to determine what is an appropriate and just and equitable order, bearing in mind not only the contributions made directly to the existing assets, but contributions made generally during the course of the relationship between the parties both to the acquisition, conservation and improvement of assets (which may or may not still exist) and to the welfare of the family in the role of homemaker and parent.
This is not to say that the Court should be blind to the circumstances in which any assets were acquired post separation. Clearly contributions made towards the acquisition of such an asset by one party and the lack of contributions made towards its acquisition by the other party may weigh heavily in the exercise of discretion. However it is quite wrong to say that contributions made under s 79(4)(a), (b) or (c) before an existing asset was acquired could have no bearing on the outcome of the proceedings.
[25] Above, 87,949, [65] – [66]. See to similar effect in the same case, Finn J at 87,948, [56] – [57].

Infelicity of Expression or Error of Principle or Discretion?

Having referred to the passage from Stanford, earlier quoted, her Honour, at [25], refers to the parties’ respective assertions as to those interests. Both the husband and the wife included Property W as an asset.
Her Honour then says, (at [27]), that although it was “not readily apparent from the Husband’s characterisation of the assets in the property pool” an issue before her was whether Property W, “should be treated as part of the legal and equitable interests of the parties at hearing, or as a financial resource of the Husband”.
The first two of the assertions of error made by the wife, which we have earlier summarised, appear to derive primarily from that statement and from her Honour saying, at [35], that she was “excluding the Husband’s inheritance as an asset to be included in the property of the parties” and going on to say in the same paragraph that “in the circumstances, it is just and equitable to consider this inheritance as a financial resource under sub-s.75(2) of the Act”.
Her Honour’s erroneous reference at [35] to “excluding the Husband’s inheritance as an asset to be included in the property of the parties”, and the erroneous reference to it as a “financial resource”, occurred in a context where her Honour said at [34] – [35]:
The Wife submits that she contributed to the care of the testator in the following way. It is undisputed that the Husband’s brother was very fond of the family dog. Following a family meeting, held soon after the Husband’s brother’s terminal illness became apparent, it was agreed that, rather than accompany the Wife and the children, the dog should live with the brother. The Wife maintains that $6,000.00 (from the insurance received from a caravan in their joint names) was used for surgery for the dog to enable him to reside with the brother until his death. The Wife also relies on the fact that the Husband’s brother’s Last Will and Testament dated 22 June 2010, was made only shortly before the brother’s demise on 26 June 2000, there being no Will prior to that date.
The consideration of whether a global approach or asset by asset approach should be adopted to the inheritance received by the Husband after separation is, I acknowledge, being engaged in prior to the assessment of the contributions of the parties under sub-s.79(4) of the Act. This assessment shortly follows. I have had regard to my findings about the parties’ contributions below. Taking into account all of the circumstances, I am satisfied I should adopt an asset by asset approach, excluding the Husband’s inheritance as an asset to be included in the property of the parties. I have decided that, in the circumstances, it is just and equitable to consider this inheritance as a financial resource under sub-s.75(2) of the Act. The circumstances I have had regard to are as follows:
a)I accept that the parties had a long relationship, cohabiting for around 17 years;
b)the Husband received the inheritance some 3 and a half years after separation;
c)I have found below that the contributions by the parties during the relationship were equal and, while the Wife’s contributions post separation have been slightly greater, this is not a factor which would move the Court to adopt a global approach;
d)I am not satisfied that the Wife’s contribution to the care of the testator prior to his death was such, as to amount to an exceptional circumstance. No doubt, it was an act of generosity to allow the Husband’s terminally ill brother to have the comfort of the family dog. However, again, this is not a factor which would move the Court to adopt a global approach. The relevance of the brother’s Will being made only shortly before his death is not apparent to me.
Those findings, by at least some of their expression, might be seen as informing a discretion as to whether the s 79 task should be approached by reference to an “asset by asset” or “global” approach.
If the erroneous use of the expression “financial resource” to describe the husband’s interest in Property W is confined to informing that discretion, intervention by this court is not warranted if it can be seen that the discretion would plainly have been exercised in the same manner whether Property W was (correctly) described as property or (erroneously) described as a financial resource. The same applies, in our view, if expressions used by her Honour indicating that Property W was “excluded” from consideration are similarly confined to that purpose.
As will emerge, we do not consider that either expression was confined to that question. Rather, we are of the view that the use of each and both presages an error of principle by her Honour.

The Trial Judge’s Assessment of Contributions

As has earlier been said, the wife challenges the trial judge’s assessment of contributions in two respects. First, it is said that her Honour erred by assessing the wife’s contributions in respect of Property W as negligible. It is contended that the trial judge erred in not finding that the wife had made an indirect contribution to it (s 79(4)(a)) and that inadequate weight was attributed to her “post-separation contributions” which, it is contended, were significant.
Oddly, it might be thought, given that there is neither a cross-appeal nor a notice of contention, the husband’s further written submissions contend that “the trial judge has failed to pay proper regard to factors which she ought have had regard to in assessing contribution”. In effect, this is a contention that the assessment of “post-separation contributions” should have been more favourable to the husband.
In addition, again oddly, as drafted the husband’s further written submissions appear to assert that her Honour’s reasons were inadequate.[26] Those further written submissions conclude at paragraph eight: “It is unjust and inequitable to order that the [wife] receive the entirety of the equity in the former matrimonial home as the [husband] made a significant financial contribution during the marriage and post separation”.
[26] Husband’s further written submissions filed 12 April 2017, paragraphs 2 – 4.
Taken together, the submissions would appear to suggest that the husband supports the wife’s appeal. His initial written submissions and his oral submissions before us suggest that he does not. We assume that he does not.

The Trial Judge’s Approach and Reasons

It has already been seen that her Honour addressed a number of considerations directed to whether the questions arising from s 79 should be applied to “two pools” or to “individual assets”.[27] However, that discussion concludes with her Honour finding (at [35]):
… Taking into account all of the circumstances, I am satisfied I should adopt an asset by asset approach, excluding the Husband’s inheritance as an asset to be included in the property of the parties. I have decided that, in the circumstances, it is just and equitable to consider this inheritance as a financial resource under sub-s.75(2) of the Act.
[27] The language used, respectively in Coghlan and Norbis.
It may have been open to her Honour to find first, that Property W should be assessed separately from the other property (and superannuation interests) and, secondly, to find that, by reference to s 79(4)(a), (b) and (c), the wife should be assessed as having no entitlement to a share of it by reference to those considerations. However, that conclusion is to be reached by findings which (a) included the interest in that property; and (b) by making findings on the evidence which justify that conclusion with respect to contributions of all types made across the entirety of the period until the date of trial. Respectfully, her Honour did neither.
First, when at [36] her Honour makes a finding as to “the assets and liabilities of the parties at hearing”, Property W is specifically “excluded”. Secondly, having (apparently) determined to assess contributions by looking separately at Property W and the balance of the property and superannuation interests, her Honour does not then do so.
Having considered a number of matters relevant to contributions, her Honour finds, at [42] that: “Overall, I find that the contributions of the Wife and the Husband were equal” (emphasis added).
Despite the use of the word “overall” in the finding at [42] quoted above, that finding must be taken to be a finding only in respect of the parties’ approximate 17 year cohabitation. So much is made clear by the discussion which follows at [43] to [59]. Many of those paragraphs deal with, as best as her Honour could on the evidence before her, what is described by her Honour (at [43]) as the parties engaging in:
… a forensic accounting task inconsistent with the settled principles that the assessment of contributions is not to be approached as a mathematical exercise, but from a holistic point of view. Bundles of bank statements from joint accounts of the parties were tendered by both parties, as were “spreadsheets” of expenses, for the purpose of convincing the Court that their contribution in the post separation period was a greater one. I must confess that, at times, I found the cross-examination of these Exhibits confusing and unhelpful, as the parties descended to quibbling over expenditures of around $100.00. …
Having adopted the approach just described, her Honour specifically eschewed making any quantitative finding in respect of the parties’ post-separation contributions, finding at [60]:
Taking into account a range of factors, including the care arrangements for the children, the Husband’s ongoing capacity to generate income and derive benefits from his business (albeit modest income having regard to his income tax returns), the Wife’s limited capacity to earn income while studying for her chosen career, the fact the Wife has been required to live in rental accommodation since 2009 whilst the Husband lived with his brother rent free, the Wife’s action in conserving and improving the former matrimonial home together with the expenses incurred on the parties credit card and the payment of same using the home loan, I am satisfied that in the post separation period the Wife’s contribution was slightly greater than the Husband’s. I am not prepared to allocate a percentage amount to this contribution but I will have regard to it later, in an overall assessment of what is just and equitable.
Nowhere in the discussion that precedes the “overall” finding at [42], nor in the discussion of “post-separation contributions” is an asset by asset approach taken to the assessment of contributions of all types to Property W on the one hand and the balance of the interests in property (and superannuation) on the other.

Her Honour then moved to an assessment of the s 75(2) considerations. There is no challenge to any individual finding of fact made in that respect.
As already observed, her Honour did not, as asserted, fail to have regard to Property W in assessing the s 75(2) considerations. Her Honour found, at [70] to [71]:
The Husband has the benefit of the significant financial resource he received by way of inheritance, [Property W], which he lives in unencumbered. Its’ value is at least twice the value of the equity of the only asset of the relationship, that being the former matrimonial home.
The Husband accepted, during cross-examination, that the Wife was entitled to secure a home for her and the children, and I agree that this is a reasonable expectation of the Wife.
Ultimately her Honour found, at [72]:
Taking all of the circumstances relevant to the parties’ future needs and my findings regarding the Wife’s contributions post-separation into account, I am satisfied that it is just and equitable to make an adjustment of 12% in favour of the Wife.
It needs to be repeated that although her Honour there speaks of “an adjustment” it is plain from what follows that her Honour is “adjusting” the finding of equality of contributions to the point of separation; her Honour concluded that the parties’ property should be divided in the proportion 62 per cent to the wife and 38 per cent to the husband:
74.A 62% adjustment to the Wife of the net asset pool of $373,713.00 is $231,702.00. The Wife’s entitlement to superannuation is $9,353.00. Consequently, she is entitled to by way of distribution, $222,349.00.
75.A 38% adjustment to the Husband of the net asset pool of $373,713.00, is $142,011.00. The Husband’s entitlement to superannuation is $44,360.00. Consequently, he is entitled to by way of distribution, $97,651.00.
76.Stepping back to consider the amounts derived from the percentage adjustments, I am satisfied that it would be just and equitable to increase the Wife’s entitlement by $7,000.00, which approximately represents the residual amount from the caravan insurance payout retained by the Husband, and to round up her entitlement to $230,000.00. This amount is derived by having regard to all the circumstances and adopting a holistic approach. The consequence of this is that the Husband’s entitlement becomes $90,000.00.
77.The Wife seeks an opportunity to have the former matrimonial home transferred into her name. In the circumstances, I am satisfied that it would be appropriate to make an Order such that, upon payment of $90,000.00 to the Husband, the title of the former matrimonial home is transferred into the Wife’s name.

Errors in the Trial Judge’s Approach

(a) “Exclusion” of the Interest in Property W

If her Honour was to adopt an “asset by asset” or “two pools” approach to the assessment of contributions, her Honour’s task was to assess contributions across the whole of the more than 25 year period under consideration (approximately 17 years of co-habitation and approximately eight and a half years post-separation) in respect of Property W and to assess contributions separately across the same period in respect of the balance of the parties’ interests in property (and superannuation). In our view, her Honour cannot on any view be seen to have done so.
Having determined to consider contributions by reference to the period of cohabitation and, in effect, separately in respect of the post-separation period, her Honour was obliged to make findings relevant to each such period so as to arrive at an overall conclusion as to contributions to Property W and an overall conclusion as to contributions to the balance of the interests in property (and superannuation). In that respect, her Honour refers to the decision of the Full Court in Singerson & Joans[28] which approved of what was said in Dickons v Dickons.[29] At [24] of the latter case, the Full Court said:
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
[28] [2014] FamCAFC 238, [62].
[29] (2012) 50 Fam LR 244, [23] – [26].
Rather than an infelicitous use of the expression “financial resource” or of expressions indicating that Property W was “excluded” so as to inform a decision whether an “asset by asset” or “global” approach should be adopted, in our view, her Honour has excluded Property W altogether from a consideration of the contributions made to the parties’ existing interests in property. As we have earlier sought to demonstrate, doing so is an error of principle.

(b) Conflation of Contributions Assessment and s 79(4)(e) Assessment

We consider that [60] of her Honour’s reasons quoted above evidences a conflation of issues relevant to the assessment of contributions with issues relevant to an assessment of the relevant s 75(2) matters.
For example, the direct financial contribution made by the husband of income earned by him compared with direct financial contributions made by the wife during the post-separation period might be relevant to an assessment of the parties’ respective contributions. Conversely the husband’s “ongoing capacity to generate income and derive benefits from his business” and the wife’s “limited capacity to earn income while studying for her chosen career”[30] might be relevant to the s 75(2) assessment (for example, s 75(2)(b), (d), (g)). Equally the “care arrangements for the children” between separation and trial might impact upon an assessment of post-separation contributions, whereas future or “ongoing” care arrangements may be relevant to the s 75(2) assessment.
[30][60], (emphasis added).
The distinctions become particularly important because of what we apprehend to be the distinct finding made by her Honour as to the equal contributions made by the parties to the date of separation. This finding left for consideration an assessment of the respective contributions made in the approximately eight and a half year post separation period and, consequent upon the overall assessment of contributions, an assessment of the relevant s 75(2) factors.
In this case, the post-separation period is equivalent to about half the time the parties cohabited and represents about a third of the period over which contributions were to be assessed. Contributions in that period, including those emanating from the parties’ and the children’s living circumstances during that period can be seen to be potentially very important. It will be recalled that the husband had resided at Property W for approximately eight years by the time of trial. For about three and a half years, he did so with his brother who became terminally ill. He cared for him until he died. The property was encumbered at the time of the brother’s death, but the husband’s parents discharged that mortgage with a bequest they received under the brother’s will.
We have not been directed to, nor can we see for ourselves, any findings by which it is possible to discern how her Honour’s qualitative description of a “slightly greater” contribution by the wife during the post-separation period can be assessed in terms of its meaning or impact in dollar terms. Quite apart from the obvious difficulty that “slightly greater” might mean different things to different people – including the parties – the property and superannuation to be divided has a modest net value. The consequence of the latter is that what some judges, or the parties, might regard as “slightly greater” in dollar terms may represent a percentage disparity that might not be so described.
In the instant case, that can be seen to be particularly important. Property W had a value of $715,000. The total net assets to which the contributions assessment pertained had a value of about $373,000. (As her Honour observed, Property W had “at least twice the value of the equity of the [former matrimonial home]”).
In the absence of findings as to how a “slightly greater” post-separation contribution is to be assessed in what was, in this case, a lengthy post‑separation period in which the parties made a miscellany of contributions, it is not possible to discern the “overall” assessment of contributions.
Without an overall assessment of contributions it is not possible to discern the prospective entitlements of each of the parties based upon that assessment. Without a finding as to the prospective entitlements of each of the parties based upon an overall assessment of contributions it is not possible to discern the foundation for her Honour’s assessment of s 75(2) including, importantly but not exclusively, s 75(2)(b), or how that assessment was reflected in dollar terms.[31]
[31] See, for example, Clauson and Clauson (1995) FLC 92-595, 81,911 (“Clauson”).
We consider that her Honour erred in her approach to the assessment of contributions.

THE TRIAL JUDGE’S S 79(4)(e) ASSESSMENT

The matters to which we have just referred render unsafe her Honour’s conclusion with respect to s 79(4)(e) – that is, her Honour’s assessment of the so-called “s 75(2) factors”.
That issue aside, as has been seen, the wife challenges the weight given by her Honour to those factors, in particular the weight attached to the husband’s retention of Property W.
As well-trodden authority demands, a challenge to the attribution of weight by a trial judge within a wide discretion is extremely difficult to sustain on appeal. Here, however, that challenge gains considerable force by reason of the considerations just referred to. It is difficult if not impossible to discern what impact Property W had because it is not possible to discern the overall assessment attributed to the totality of the matters relevant pursuant to s 75(2).
Noting the conflation earlier referred to, it seems that, apart from Property W, her Honour took into account:
·The husband’s “ongoing capacity to generate income and derive benefits from his business (albeit modest income having regard to his income tax returns) ([60]);
·“The Husband is 49 years of age and the Wife is 45 years of age. Both are in reasonable health” ([62]);
·“The parties were married for a long time, around 12 years, and I am satisfied that the Wife’s earning capacity was diminished by reason of her adopting the role of the homemaker during most of the period of the marriage” [62];
·“The Wife said that her ambition was to work full time … She anticipated that in a year’s time (by the end of 2016) she would be able to obtain full-time employment, working three weeks in Melbourne and one week in [M town]. In cross-examination, the Husband accepted that the Wife needs time to obtain suitable employment” ([65]);
·“I find that given the time that has elapsed since she worked as a hairdresser and the nature of the bookkeeping she undertook in her Husband’s business, the Wife does not have a capacity to work as a hairdresser or bookkeeper. I am satisfied that she is entitled to pursue her preferred vocation, and that this will require a period of time before she is able to engage in gainful employment and generate a reasonable income” ([66]);
·“The Husband’s evidence is that his business is still generating the same income as the previous business did during the relationship. He agreed that the income from his business is increasing, and likely to increase in the future. I am satisfied that his income will increase and that he will continue to enjoy the benefit of a small business” ([67]);
·“The parties’ children are teenagers, [X] is about to turn 18 and [Y], who lives in a shared care arrangement, is 15 years of age” ([69]);
·“The Husband accepted, during cross-examination, that the Wife was entitled to secure a home for her and the children, and I agree that this is a reasonable expectation of the Wife” ([71]).
Those circumstances taken together speak of a s 75(2) assessment favouring the wife. Notably, the wife’s current and future income was assessed to be less than the husband in circumstances where the parties had cohabited for 17 years and where a contributions assessment spanned over 25 years. So, too, the wife sought to rehouse, preferably by retaining the former matrimonial home, for her and the dependant teenage child (during the time he was with the wife pursuant to a shared care arrangement between the parties).
Property W must be seen to be an additional factor weighing very significantly in favour of the wife’s entitlement. It is unencumbered; provides a home for the husband (and for the child during his periods of care); it is a future capital base nearly two and a half times greater than that provided by the matrimonial home (before any mooted cash adjustment as ordered by her Honour which, it should be noted, increases the husband’s capital base and concomitantly decreases that of the wife).
The assessed disparity between the parties (again noting that an unassessed and unspecified post-separation assessment is included within it) is 24 per cent. But, it is a figure arrived at in respect of property with a value of $373,000. We think what was said by the Full Court in Clauson earlier referred to can have particular importance in cases such as the present where the value of property to which an assessment pertains is modest and bears repeating:
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.[32]
(emphasis added)
[32]Above, 81,911.
Here, the disparity in her Honour’s assessment of 62 per cent to the wife and 38 per cent to the husband is reflected in dollar terms, by about $89,700. Because that figure also takes up the unquantified “slightly greater” post-separation contribution of the wife, it follows that her Honour’s s 75(2) assessment is represented by a dollar value of (an unquantified) lesser sum. Thus, a figure of less than $89,700 represents both the disparity engaged by reason of the other factors favouring the wife and the husband having a property with the value and attributes earlier discussed.[33]
[33]As can be seen from [76] quoted above, her Honour gave the wife an additional $7000 in respect of an insurance payout, but that amount was not included in the property to which s 79(4) was applied and thus does not affect the percentage and dollar figures under discussion.
With respect to her Honour, and approaching a weight challenge as cautiously as authority demands, we are simply unable to see how it can be said that her Honour gave sufficient weight to Property W in the assessment of s 79(4)(e).
Equally, in circumstances where we are unable to ascertain reasonably her Honour’s contributions assessment and her s 79(4)(e) assessment, we are unable to ascertain the quantification of her Honour’s assessment of the latter whether in percentage terms or, more importantly, in dollar terms.

Conclusions

We have concluded that her Honour erred in principle in the approach taken to the assessment of contributions which, in turn, derives in part from an erroneous finding that property owned by the husband was a “financial resource” and not property and that it should be excluded from the property to which an assessment of contributions should pertain.
Further, having determined to assess contributions to the point of separation and by reference to the post-separation period, we consider that her Honour erred by not quantifying the latter and, thus, the assessment of contributions overall. Thereafter, we consider that her Honour erred in conflating the assessment of contributions with the assessment of matters relevant to s 79(4)(e).
As a consequence, her Honour’s reasons do not adequately reveal her (separate) assessment of s 79(4)(e), whether expressed as a percentage or, as is required, by reference to its impact in dollar terms.
We are, as a consequence, unable to discern the path of reasoning by which her Honour concluded that the property of the parties or either of them should be distributed in the proportions or manner which her Honour found.
We are comfortably satisfied that her Honour gave insufficient weight to the ownership and retention of unencumbered real property in which the husband resided which had a value of over double that of the property to which s 79(4) was applied.
The appeal should be allowed.

Remitter or Re-Exercise?

Counsel for the wife indicated that it would be necessary to put further evidence before this court if we were to re-exercise the relevant discretions.
In discussion with counsel for the husband, it appeared both that further evidence might be necessary and that it was likely to be controversial. In addition, we reiterate what was earlier said about the contentions contained in the husband’s further written submissions.
Sadly for the parties, remitter is effectively inevitable unless, particularly given the dollar values of what is at issue, common sense delivers a resolved outcome ahead of any such rehearing.

Costs of the Appeal

In the event that the appeal succeeded, counsel for the wife sought an order that each party bear their own costs and applied for a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). The husband too, sought a certificate in that event.
We consider that the circumstances of this case are such that the position prescribed by s 117(1) of the Act should pertain and will order that each party bear their own costs of and incidental to the appeal. The appeal has succeeded on a question of law.
We consider it appropriate to recommend that each party be granted a costs certificate and will so order.

I certify that the preceding ninety-two (92) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Murphy and Aldridge JJ) delivered on 9 August 2017.

Associate:

Date: 9 August 2017