IP & RP

[2005] FamCA 1045

[2005] FamCA 1045

JFIPRP

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT PARRAMATTA

Appeal No. EA 130 of 2004
File No. PAM 3174 of 2002

IN THE MATTER OF:

IP

Appellant/Wife

- and -

RP

Respondent/Husband

REASONS FOR JUDGMENT

BEFORE:  JUSTICE I R COLEMAN
HEARD:  14^th day of October 2005
JUDGMENT:  2^nd day of November 2005

APPEARANCES:              Mr Dura of Counsel, (instructed by Browns The Family Lawyers, Suite 3, Level 5, 33 Moore Street, Liverpool  NSW  2170) appeared on behalf of the appellant wife.

Mr Kenny of Counsel, (instructed by Marsdens Solicitors, Cnr Queen and Dumaresq Streets, Campbelltown  NSW  2560) appeared on behalf of the respondent husband.

Name of Appeal  IP & RP

Appeal Number  EA 130 of 2004

Date of Appeal Hearing                   14^th day of October 2005

Date of Judgment  2^nd day of November 2005

Bench  Coleman J

Catchwords:  Appeal against orders of Federal Magistrate for settlement of property.

Appellant contended that his Honour erred in not including the respondent’s post-separation inheritance in the net asset pool and/or failed to give adequate reasons for such exclusion– the Federal Magistrate was entitled to quarantine the inheritance – such decision was not “arbitrary” and the reasoning was clearly discernable - Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 24 followed.

Appellant challenged the Federal Magistrate’s exercise of discretion in relation to the appellant’s contribution finding, namely the apparently excessive weight given to the respondent’s contribution of $60,000 and the allegedly inadequate weight given to the appellant’s contribution as homemaker and parent – both contribution findings within the ambit of a reasonable exercise of discretion.

Appellant contended that the 10 per cent s 75(2) adjustment in the appellant’s favour was plainly unjust or inequitable – no reference by his Honour to the disparate financial resources of the parties – s 75(2) adjustment outside the ambit of a reasonable exercise of discretion.

Appeal allowed – Order for rehearing.

Costs certificates ordered.

1. By Amended Notice of Appeal filed 23 June 2005 the wife appealed against orders made by a Federal Magistrate on 21 June 2004 in proceedings between herself and the husband.  The orders of the learned Federal Magistrate provided for the husband to pay the wife the sum of $111,000.00, whereupon the wife was to vacate the former matrimonial home of the parties which property was to be retained by the husband.  The wife was otherwise to retain various items of personalty.  The effect of the learned Federal Magistrate’s orders was that the wife would receive property having a net value of $130,241.00.  The effect of his Honour’s orders was that the husband would receive $106,561.00 from the assets of the parties exclusive of an inheritance received by him subsequent to the separation of the parties in the sum of $340,000.00, of which approximately $326,000.00 was found to remain at the date of trial.  In lieu of the sum of $130,241.00 determined by the learned Federal Magistrate, the wife sought to receive either the sum of $189,441.60 or $191,389.90.

2. The husband resisted the wife’s appeal and sought to maintain the judgment of the Federal Magistrate.

3. During the course of the hearing of the appeal learned counsel for the husband fairly raised a matter which is not referred to in the judgment of the learned Federal Magistrate or a matter with which this Court is ultimately concerned.  In his submissions at trial, counsel for the husband, who also appeared on the husband’s behalf before this Court, invited the learned Federal Magistrate to order that the wife have an additional $10,000.00 in the event, as in fact was to happen as a consequence of the learned Federal Magistrate’s orders, that the husband was successful in retaining the matrimonial home.  It is common ground that the learned Federal Magistrate failed to make an order for that additional provision.  Consistent with the husband’s case at trial, his counsel confirmed on the hearing of the appeal that, if the appeal were unsuccessful, provision for an additional $10,000.00 being paid to the wife should be acknowledged.  Although no specific submissions were made in that regard, it is inconceivable that, if her appeal were unsuccessful, the wife would not wish to obtain the additional $10,000.00. In the circumstances the effect of the learned Federal Magistrate’s orders can be seen to have intended to provide the wife with assets having a net worth of $140,241.00 and the husband with assets worth $422,561.00, albeit his orders do not reflect that intention. As this Court can, and will if the wife’s appeal fails, amend the orders in the way indicated, the division of assets intended to be achieved becomes the “starting point” in this appeal.

THE REASONS FOR JUDGMENT OF THE LEARNED FEDERAL MAGISTRATE

1. His Honour identified the competing applications and set out a number of matters of background, none of which is controversial.  The parties married on 25 February 1984.  At the date of judgment the husband was aged 56 and the wife was aged 53.  The parties had in fact cohabited from 1973 and separated in late 2001.  Their cohabitation was accordingly of approximately 28 years’ duration.  There were three children of the marriage, all of whom were adults at the date of judgment.  One child of the marriage, J, was “severely autistic”.  J was 28 years old at the date of judgment.

2. The major asset acquired during the parties’ cohabitation was the matrimonial home.  The property was purchased in 1983 at a cost of approximately $60,000.00, the totality of which was found to have been paid from funds the husband had at the date cohabitation commenced.  The husband was found to have made the greater financial contribution during cohabitation, he having had employment substantially throughout that period.  The wife was found to have made the greater contribution as homemaker and parent. 

3. The learned Federal Magistrate concluded that the husband’s contribution of the $60,000.00 with which the matrimonial home was purchased and, albeit to a far lesser extent, the sum of $7,000.00 received by him as compensation for an injury in about 1990, entitled his contributions to be regarded as somewhat greater than those of the wife, concluding the husband’s contribution entitlement to be 55 per cent and that of the wife 45 per cent, which translated as a disparity in contribution entitlements of approximately $23,600.00.  In reaching that conclusion, the learned Federal Magistrate had regard to physical work done at the matrimonial home by the husband, financial contributions made by the wife whilst she was in employment and the contributions of the wife to the care of their disabled son.

4. The learned Federal Magistrate concluded that a 10 per cent adjustment in the wife’s favour was appropriate by virtue of s 75(2).  In the course of reaching that conclusion, his Honour referred to the capacity of each party to earn income, inferentially, and understandably, finding that the wife was in a somewhat better position than the husband in that regard, he being “less employable than the wife”. 

5. His Honour also had regard to the wife’s “ongoing responsibility” for caring for J, having been “appointed J’s guardian”, finding that J was “unable to live independently in the community or earn an income”.  Inferentially, his Honour had regard to that factor in the wife’s favour. 

6. The learned Federal Magistrate referred to the sum of $326,000.00 which the husband retained from the inheritance he received as a result of the death of his father, $40,000.00 of which was received in November 2002, $300,000.00 of which was received in February 2003.  It is clear that the s 75(2) adjustment made in the wife’s favour was significantly influenced by the husband having those funds, although the evidence did not suggest “that the wife contributed in any way to this inheritance by the husband”, a finding not challenged in this appeal.

THE GROUNDS OF APPEAL

10.  In his comprehensive Outline of Argument, counsel for the wife agitated four complaints, two of which can be considered together.

11.  The first two of “four headings”, under which it was suggested that the grounds should be “summarised”, asserted:

1. The treatment of the Husband’s Post-Separation inheritance, being:

a. The failure to include it as part of the parties’ asset pool and/or;

b. The failure to give reasons explaining why the inheritance was excluded from the asset pool.

2. As a result of the failure to include the inheritance as part of the asset pool, the learned Federal Magistrate erred in calculating the asset pool as $236,802.  (Appellant’s Outline of Argument)

12.  Grounds 1, 2 and 3 of the Amended Notice of Appeal provide the foundation for those submissions.  It is clear that the learned Federal Magistrate “quarantined” from the net asset pool the husband’s inherited funds.  His reasons for doing so were brief.  A number of submissions were made by counsel for the wife in support of these complaints.  It is unnecessary to deal with such submissions in any detail. 

13.  It was undoubtedly open to the learned Federal Magistrate to have “quarantined” the husband’s inheritance although, as his Honour clearly recognised, that did not mean that such inheritance ceased to have relevance.  His Honour said in relation to the “quarantining”:

18. I agree with the submission by Mr Kenny of counsel that the husband’s post-separation inheritance should be quarantined, although it still must be considered.  He submitted that the husband’s post-separation assets should be shown as financial resources, which appears to me to be an appropriate course.

14.  As recorded above, there was no dispute that the wife had not “contributed in any way to this inheritance by the husband”.  Although in substance his Honour’s treatment of the inheritance was perhaps more in the nature of an “asset by asset” approach as discussed by the High Court in Norbis v Norbis (1986) 161 CLR 513 than any strict “quarantining”, the approach adopted by him did not in this Court’s view constitute error on his part.

15.  With respect to the submissions of counsel for the wife, the learned Federal Magistrate’s reasoning process in relation to the “quarantining” of the husband’s inheritance is apparent.  Having found that the wife had made no contribution to the acquisition of the inheritance, which finding has not been challenged, his Honour elected to deal with the husband’s inheritance in the context of s 75(2).  In the circumstances of this particular case, had the sum been included, but the contribution entitlements assessed on an “asset by asset” basis, the same outcome with respect to contribution entitlements would have resulted.  Whatever conclusion the learned Federal Magistrate reached with respect to contributions to other assets, the evidence suggests that only one finding was reasonably open to him with respect to the husband’s inheritance, that being that it was a contribution solely by or on behalf of the husband and the acquisition of which the wife made no direct or indirect contribution. 

16.  With respect to counsel for the wife, in the circumstances of this case one wonders what more the learned Federal Magistrate could usefully have articulated by way of reasons for approaching the husband’s inheritance in the way in which he did.  In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 24 at 279, McHugh JA said:

… without the articulation of reasons, a judicial decision cannot be distinguished from an arbitrary decision. In my opinion the giving of reasons is correctly perceived as “a necessary incident of the judicial process” because it enables the basis of the decision to be seen and understood both for the instant case and for the future direction of the law.

17.  This Court has little difficulty accepting that the learned Federal Magistrate’s decision to “quarantine” the husband’s inheritance was not “arbitrary”, his reasons for doing so being sufficient to enable this Court to understand why he approached the inheritance in the way he did. 

18.  In fairness, counsel for the wife referred to submissions made by him to the learned Federal Magistrate in relation to the treatment of the husband’s inheritance.  In the course of submissions counsel for the wife said:

In essence, both options, I submit to your Honour, are open as to how your Honour deals with the property of the parties.  I agree with my friend’s submission that it is much of a muchness, if the inheritance goes in then the husband ought to receive a proper adjustment in relation to his contributions.  If it doesn’t go in it gets treated as a financial resource, then the wife ought to receive a substantial 75(2) adjustment given the size of the inheritance that the husband has received. (Transcript of 18 September 2003, page 10, lines 5-13)

19.  The submission to his Honour sensibly recognised that it was open to him to “quarantine” the husband’s inheritance, the real issue being, as counsel’s subsequent submissions make clear, the regard had to the inheritance under s 75(2) in the event of his Honour electing to have regard to such inheritance within the context of s 75(2).  It is apparent that counsel made submissions to the learned Federal Magistrate with respect to s 75(2) on the basis that, in the husband’s hands, the inheritance was a substantial financial resource unmatched by any financial resources in the hands of the wife, and that a substantial adjustment should be made by reason of it. 

20.  Nothing advanced on behalf of the wife in relation to the first two “headings” or grounds 1, 2 and 3 of the grounds of appeal has merit.

21.  It is necessary then to consider the complaint that “the learned Federal Magistrate erred, and failed to give proper reasons, in assessing the wife’s contributions as amounting to 45%” (Appellant’s Outline of Argument, page 1).  That complaint derives, albeit not precisely, from ground 4 of the Notice of Appeal.  On its face, the ground of appeal challenges the exercise of discretion whilst the Outline of Argument appears directed more to the adequacy of reasons.  It is apparent however from the submissions made in support of the ground that the real challenge sought to be agitated relates to the exercise of discretion and to two particular aspects of that exercise of discretion, the first being the weight given to the husband’s contribution of $60,000.00 in 1983, which was asserted to have been excessive, the other being to the weight given to the wife’s contributions as homemaker and parent, which was asserted to have been inadequate. 

22.  It was acknowledged on behalf of the wife that, “during the course of the trial” the wife had “conceded” that “the sum of $60,000 had been an asset of the husband’s as at the time of cohabitation” but that “it must be remembered that that was in 1973, some 28 years prior to the parties separating” (Appellant’s Outline of Argument, paragraph 10).  It was submitted that there was “no evidence before the Court to suggest that at the date of cohabitation the husband possessed the sum of $60,000” (paragraph 11). 

23.  It was fairly conceded on behalf of the wife that the husband had not been cross-examined to suggest that his assertion that he did have $60,000.00 in 1973 was inaccurate or untrue.  The husband’s affidavit evidence (paragraphs 11-15) was, as counsel for the wife submitted, less than clear and possibly inconsistent in relation to over what period the sum of $60,000.00 had in fact been accumulated by the husband. 

24.  As was submitted by counsel for the wife during this appeal, nowhere did the learned Federal Magistrate refer to the fact, as it must have been, that for the first 10 years of the marriage the husband did not utilise, and was not required to draw upon his $60,000.00 pre-cohabitation savings. It was thus submitted that the learned Federal Magistrate gave excessive weight to the husband’s contribution of $60,000.00 to purchase the matrimonial home in 1983. 

25.  No submission at trial to which this Court has been referred raised the specific issue now being raised, although the logic underpinning the submission is difficult to refute.  On the undisputed facts, the wife could be regarded as having made indirect contributions to the conservation of the husband’s $60,000.00 during the first decade of cohabitation. The evidence does not suggest either that the husband derived income by way of interest or otherwise on the sum which was applied for the benefit of the family, or that he was obliged, or chose, to draw down the fund during that period, in the context of a cohabitation which appears to have at all times during that decade been one involving modest financial circumstances. 

26.  The learned Federal Magistrate’s contribution finding reflected the husband’s capital contribution of $60,000.00 in 1983 as a disparity of approximately $24,000.00 in 2004.  His Honour was entitled to and did have regard to the fact that the husband’s $60,000.00 had provided the whole of the purchase price of the matrimonial home.  Even allowing for the indirect contributions of the wife over the decade prior to the purchase of the matrimonial home, the contribution finding of the learned Federal Magistrate can in this Court’s view be comfortably accommodated within the ambit of a reasonable exercise of discretion.  There is however a further aspect of this challenge which requires consideration. 

27.  It was submitted on behalf of the wife that:

The learned Federal Magistrate failed in the exercise of his discretion in attaching significant weight to the contributions of the wife in her capacity of homemaker/parent in circumstances where she was primarily responsible for the care of the three children of the marriage, one of which suffered from severe autism. (paragraph 14) 

28.  It was, as was submitted on behalf of the wife,:

… clear on the evidence before the learned Federal Magistrate that the wife continued her role as primary carer for the child both during the course of the marriage, and following the period that the child resided in assisted care. (paragraph 15)

29.  It was thus submitted on behalf of the wife that her contributions as “primary carer”, particularly for J, should have resulted in her contributions being assessed at 60 per cent of “the asset pool adopted by the learned Federal Magistrate”. 

30.  On behalf of the husband it was submitted, without seeking to demean the contributions of the wife to the care of J, that the submissions on behalf of the wife “ignore many and varied other contributions made by the husband throughout the lengthy marriage including contributions in relation to the care of J” (Respondent’s Outline of Argument, page 8).  Reliance was placed upon the concession of the wife that “she had filed a previous affidavit in dissolution proceedings recognising an interaction between the husband and J” and that the wife had “overstated her role in the care of J over recent years”, a number of examples of which were then provided. 

31.  It was submitted that the learned Federal Magistrate was obliged to balance the various and substantial contributions of the parties, which included those referred to earlier as well as the wife’s concession that the husband “was hard-working, in fulltime jobs throughout the marriage working long hours”, that the husband “carried out the various improvements and renovations” to the matrimonial home, and that “the wife had paid no housing expenses from the date of separation to the date of hearing” (Respondent’s Outline of Argument, pages 8 and 9). 

32.  It was thus submitted that if:

… one looks at these contributions by the husband, acknowledging that the wife worked in paid employment from time to time and also assumed the primary role as homemaker and parent it remains eminently within the discretion of the learned Federal Magistrate to make the finding that he has in relation to contributions. 

33.  The law regarding challenges to the “weight” given to the exercise of discretion is not in doubt and does not require re-stating in the context of this appeal.  No finding of fact made by the learned Federal Magistrate in the course of determining the contribution entitlements of the parties has been challenged.  It is not suggested that the learned Federal Magistrate failed to have regard to any relevant fact or circumstance in relation to the contribution entitlements of the parties, nor that he had regard to any extraneous fact or circumstance in exercising his discretion.

34.  In Gronow v Gronow (1979) 144 CLR 513, Stephen J said at 519-20:

The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.

35.  It is clear that different judicial officers would be liable to reach somewhat different conclusions with respect to the contribution entitlements of the parties on the evidence before the learned Federal Magistrate in this case.  The fact that this Court might, were it to be exercising the discretion, reach a somewhat different conclusion does not render the conclusion of the learned Federal Magistrate erroneous.  This Court is not persuaded that the learned Federal Magistrate’s conclusion with respect to contributions fell beyond the ambit of a reasonable exercise of discretion.  As his Honour clearly recognised, the significance of the husband’s $60,000.00 capital contribution, albeit not made until 10 years after the parties had commenced cohabitation, was an enduringly significant factor given that it enabled the parties to obtain a home, and to do so without a mortgage. 

36.  His Honour’s reasons for judgment make clear that he was conscious of the onerous homemaking and parenting duties undertaken by the wife by virtue of J’s state of health (paragraphs 24 and 27 are relevant in that regard, as, albeit to a lesser extent, is paragraph 30).  There were, as counsel for the husband’s submissions identified, a number of contribution factors to be balanced by the learned Federal Magistrate.  In this Court’s view the comparative weight which his Honour can be seen to have given those factors was not beyond the reasonable ambit of his discretion.  The challenge to the learned Federal Magistrate’s contribution finding accordingly fails. 

37.  The fourth matter agitated on behalf of the wife asserted that:

The learned Federal Magistrate erred in assessing the wife’s relevant s 75(2) factors as amounting to 10% thereby creating a result that was plainly unjust or inequitable. (Appellant’s Outline of Argument, paragraph 4) 

38.  The thrust of this submission is that a s 75(2) adjustment of $23,680.20 in the wife’s favour fell outside the scope of a reasonable exercise of the learned Federal Magistrate’s discretion.  There is no suggestion that his Honour failed to have regard to any relevant s 75(2) fact or circumstance, nor is there any suggestion that he had regard to extraneous or irrelevant factors in reaching his determination.  The position is thus that, to succeed, counsel for the wife must demonstrate that:

… some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. 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. (House v The King (1936) 55 CLR 499 at 504-505)

39.  It is apparent that the learned Federal Magistrate regarded two s 75(2) factors as favouring the wife, they being the “ongoing responsibility for looking after” J, the wife having been “appointed J’s guardian”, in circumstances where J “is an adult but is unable to live independently in the community or earn an income”, and the financial resource or property of the husband represented by his inheritance ($326,000.00). 

40.  His Honour clearly regarded the husband as being in a somewhat inferior position to the wife in terms of health and earning capacity.  He found that the husband’s “prognosis for his work in the future is not good” and that the husband’s capacity to “work as a security guard would be unlikely to extend past the age of 60 years”, the husband being 56 years of age at trial and then unemployed.  For her part, the wife, who was then aged 53, was in employment which she conceded in cross-examination to be relatively secure, earning $825.00 per week.  His Honour referred to the wife having “suffered from depression in the recent past” although, as cross-examination of the wife to which this Court was referred makes clear, that depression appeared to have been episodic and not suggested to be ongoing.

41.  The learned Federal Magistrate did not indicate, nor was he required to, the comparative significance of the three s 75(2) factors which he thus identified and regarded as significant.  It would be not unreasonable to infer, as counsel for both parties appeared to tacitly acknowledge, that the future responsibility for J which favoured the wife could be thought to have been offset by the disparity of earning ability as between the parties or vice versa, thus implying that the bulk, if not the totality, of the s 75(2) adjustment in the wife’s favour was referrable to the husband’s inherited funds.

42.  The wife was clearly entitled to an adjustment pursuant to s 75(2) by virtue of the husband having, albeit not resulting from any contribution made by the wife, a fund which, as counsel for the wife submitted, was significantly greater than the totality of the assets produced over 28 years of marriage, during which both parties made very substantial contributions. In fact, the husband’s inherited funds ($326,000.00) exceeded by almost 38 per cent the net value of the assets produced during the parties’ cohabitation ($236,802.00). 

43.  Realistically, the ambit of the learned Federal Magistrate’s discretion was, in the circumstances, broad.  That, as the High Court has made clear, is frequently a feature of a discretionary judgment.  It was, inferentially, conceded by counsel for the husband that the s 75(2) adjustment made by the learned Federal Magistrate may represent “the bottom of the range”, and that, were it up to this Court, a somewhat more substantial allowance may have been made but that, consistent with authority, that was not the relevant test for present purposes. 

44.  The learned Federal Magistrate, having determined that a 10 per cent adjustment (representing an additional $23,600.00 to the wife and $23,600.00 less to the husband, a disparity in the wife’s favour by virtue of s 75(2) of approximately $47,200.00) was appropriate, considered whether the proposed orders were “just and equitable” by reference to s 79(2).  In the course of such consideration, the learned Federal Magistrate referred to a number of matters, none of which is relevant for present purposes, but did not expressly refer to the respective positions of the parties as a consequence of the orders he proposed making. 

45.  Under the heading “conclusions” the learned Federal Magistrate recorded that the orders he proposed would result in the wife receiving $130,241.00 “of the net property” and the husband receiving $106,561.00 “of the net property”.  Nowhere did his Honour expressly refer to the fact that, on his findings, the husband would retain an additional $326,000.00 which was also “net property”.  The effect of so doing was that the husband would have some $432,000.00 net (or $422,000.00 if the $10,000.00 adjustment referred to at the outset of these reasons were taken into account) whilst the wife would have $130,241.00 (or $140,241.00 having regard to the $10,000.00 adjustment). Ideally, having considered the impact of his proposed orders in terms of quantum, his Honour would have addressed the issue of “justice and equity”.  It is regrettable that he did not do so, but there is no foundation for concluding that his Honour was unaware of the impact of the retention by the husband of an additional $326,000.00 or the actual division of the overall assets or “net property” of the parties.

46.  Counsel for the wife submitted that the effect of the learned Federal Magistrate’s orders was to produce an unjust and inequitable outcome in which the wife received 25 per cent on the intended figures and the husband receive 75 per cent of the total asset pool on the intended figures.

47.  The decisions of the High Court of long standing leave no room for doubt that this Court cannot interfere with the decision of the learned Federal Magistrate in this case unless it is satisfied that error in the appellate sense has been demonstrated.  It is, as the High Court has made abundantly clear, insufficient that, if it were for this Court to determine, a different outcome of the proceedings would result.  In the circumstances of this case, intervention is only justified if the Court concludes that the s 75(2) adjustment was “plainly unreasonable”. 

48.  The learned Federal Magistrate was obliged to consider, not only disparity of financial contributions, but, by virtue of s 75(2)(b), the disparate financial resources of the parties in this case.  Whilst it appears improbable that his Honour could have overlooked the fact that the husband had another $326,000.00 apart from the $106,000.00 which he was to receive from the “net property”, nowhere does his Honour refer to that fact, or to its impact which, as has been explained earlier, was very substantial.

49.  Reluctantly, this Court has come to the view that the s 75(2) adjustment determined by the learned Federal Magistrate was, in the circumstances, outside the ambit of a reasonable exercise of discretion.  The ages of the parties, the duration of their cohabitation, and the contributions made by each of them during that cohabitation, combined with the capacity of each of them to earn and of the wife’s legal obligation with respect to the child J, rendered an adjustment in the wife’s favour out of the net property produced by the marriage of 10 per cent manifestly unjust and unreasonable. For the wife to leave the marriage with 25 per cent of the total assets resulting from it fell outside the undeniably broad ambit of a reasonable exercise of discretion.  In those circumstances and with great reluctance, the Court is minded to allow the wife’s appeal. 

CONSEQUENCES OF ALLOWING THE APPEAL

50.  The evidence in relation to the parties is now two years old.  Counsel for each party informed the Court of the desire to adduce further evidence pursuant to the decision of the High Court in Allesch v Maunz (2000) 203 CLR 172. Such requests are not only irresistible but are understandable in the circumstances of this case. It is regrettable however that a re-exercise of discretion and the cost of adducing further evidence needs to be incurred having regard to the ambit of the dispute as that emerges from the submissions of counsel for the wife in the appeal. Objectively, the wife seeks to have the s 75(2) adjustment determined by the learned Federal Magistrate increased by a sum of $30,000.00 - $40,000.00. It is not difficult to see the costs for both parties in having that issue determined accounting for a substantial proportion of the amount potentially in dispute.

51.  Absent evidence of very significant changed financial circumstances, which is the only further evidence which the parties will be permitted to place before the Court in the light of the decision in Ruscoe v Walker [2001] FamCA 268, it is difficult to see how this Court would re-exercise the discretion of the learned Federal Magistrate in a way that did not result in the wife’s s 75(2) adjustment being increased by a more than token or nominal amount, given that the appeal is being allowed on the basis that the s 75(2) adjustment made in her favour fell outside the ambit of a reasonable exercise of discretion in that regard. The Court can only urge the parties, both of whom were apparently in Court during the hearing of the appeal, to give careful consideration to the commercial implications of the appeal being allowed. So doing may well obviate the need for this Court to re-exercise the learned Federal Magistrate’s discretion and, more importantly, avoid the need for the parties to incur further costs in so doing. If there is not to be a resolution of the dispute, a rehearing in the Federal Magistrates Service is inevitable.

COSTS

52.  Both parties seek costs certificates in the event of the appeal being allowed.  The circumstances in which the appeal has been allowed, involving as they do a matter of law, costs certificates should issue to each party in respect of the appeal.  Whilst the Court would hope that good sense would prevail and that the parties would resolve the matter in the light of the Court’s reasons for judgment, orders will be made to facilitate the re-exercise of discretion by this Court, although of necessity that will not be able to occur until probably February or March 2006.

ORDERS

53.  The Court accordingly orders:

1. That the appeal be allowed.

2. That the matter be remitted to the Federal Magistrates Service for a rehearing by a Federal Magistrate other than Federal Magistrate Scarlett, such rehearing to be limited to a determination of the s 75(2) adjustment, if any, appropriate to be made to the contribution entitlements of the parties.

3. That the Court grants to the Appellant Wife a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 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 Wife in respect of the costs incurred by the Appellant Wife in relation to the appeal.

4. That the Court grants to the Respondent Husband a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 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 Husband in respect of the costs incurred by the Respondent Husband in relation to the appeal.

5. That the Court grants to each party a costs certificate pursuant to the provisions of s.8 of the Federal Proceedings (Costs) Act 1981 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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.

6. That the operation of Order 2 of these orders be stayed for 21 days of this date.

I certify that the preceding
53 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Court.
 
Associate
Date: 02/11/05