Jabour & Jabour
[2019] FamCAFC 78
•10 May 2019
FAMILY COURT OF AUSTRALIA
| JABOUR & JABOUR | [2019] FamCAFC 78 |
| FAMILY LAW – APPEAL – PROPERTY – Contribution-based entitlements – Initial contributions – Where equal contributions made over a long period of time – Where property to be divided was rezoned and increased in value – Approach to the apportionment of the increase in value of the assets initially contributed discussed – Where the initial purchase of the property was a springboard for what occurred subsequently – Where increase in value of property through rezoning did not favour one party over the other – Weight to be attached to initial contribution to be assessed against rubric of all contributions made by the parties – Post-separation contributions – The weight afforded to a number of post-separation contributions – Procedural fairness – Appeal allowed – Orders set aside – Re-exercise – Where the primary judge assessed the husband’s contributions at 66 per cent – On re-exercise husband’s contributions assessed at 53 per cent. FAMILY LAW – COSTS – Husband to pay wife’s costs. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 79(4) |
Baker v Towle (2008) 39 Fam LR 323; [2008] NSWCA 73 |
| APPELLANT: | Ms Jabour |
| RESPONDENT: | Mr Jabour |
| FILE NUMBER: | MLC | 3535 | of | 2014 |
| APPEAL NUMBER: | SOA | 44 | of | 2018 |
| DATE DELIVERED: | 10 May 2019 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Alstergren CJ, Ryan & Aldridge JJ |
| HEARING DATE: | 11 December 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 May 2018 |
| LOWER COURT MNC: | [2018] FCCA 928 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Vohra SC with Mr Matta |
| SOLICITOR FOR THE APPELLANT: | Hargreaves Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kirkham QC with Dr Ingleby |
| SOLICITOR FOR THE RESPONDENT: | Collins Law |
Orders
The appeal is allowed.
Orders 6 and 7 made on 25 May 2018 are varied by replacing “66%” and “34%” with “53 per cent” and “47 per cent” respectively.
Set aside Order 5(c) and direct the parties to forward to the Court within seven (7) days an agreed replacement order giving effect to the 53/47 per cent division of non-superannuation assets.
It is further ordered, by consent, that from the sum to be received by the wife under Order 5(c), as varied, she is to pay to the husband $100,000.
The husband is to pay the wife’s costs of and incidental to the appeal in the amount of $35,536.91.
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 Jabour & Jabour 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 44 of 2018
File Number: MLC 3535 of 2014
| Ms Jabour |
Appellant
And
| Mr Jabour |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal from property orders made by a judge of the Federal Circuit Court of Australia on 25 May 2018 in proceedings between Ms Jabour (“the wife”) and Mr Jabour (“the husband”).
In short, the orders provided for the net non-superannuation property of the parties ($9,033,912.58) to be divided so that the wife received 34 per cent of the property and the husband 66 per cent, taking into account a further $1 million that the parties had already received by way of interim property settlements. Both parties sought an equalisation of their superannuation entitlements (totalling $371,686) and a splitting order was made to achieve that end.
Central to the proceedings before the primary judge and to this appeal was the approach to be taken to the significant asset available for division, which was a block of land at Suburb A (“Property A”). Property A, which senior counsel for the wife described as “those pieces of dirt on the side of the highway in [Suburb A]” (Transcript of Appeal Proceedings 11 December 2018, p.3 lines 26-27), and which had been fortuitously rezoned in 2010, was valued at $10,350,000 at the date of the final hearing before the primary judge.
The parties met in 1988 and married in 1991. They had three children who were adults at the time of the hearing. The parties separated on 3 December 2013, reconciled in February 2015 and finally separated on 25 May 2015.
The husband owned Property A before he met the wife.
When he was 12 years old the husband acquired a half interest in three blocks of land (one 44 acre lot and two 30 acre lots, which collectively were used for a farm) when his father transferred that interest to him. The husband and his father entered into a mortgage which secured an obligation to pay $26,000 by 1 July 1985. The husband’s evidence was that he repaid the loan.
In 1998 the husband reached an agreement with the co-owner of the land to, in effect, divide the two 30 acre blocks between them. The co-owner’s block was then sold and the proceeds retained by him. In September 2001, the block allocated to the husband was sold for $215,000. The net proceeds were used for family purposes ($105,000) and to acquire the co-owner’s interest in the remaining block ($105,000).
The effect of these arrangements was that in late 2001 the husband became the sole owner of the remaining 44 acres of land.
In 2010, Property A was rezoned from non-urban land into an urban growth zone. This permitted the land to be used for residential purposes and led to its significant increase in value.
The primary judge determined what final property settlement orders should be made on the basis that, other than for Property A, the parties’ contributions throughout the marriage were equal. Relevantly, her Honour found at [125] that “the husband, in bringing [Property A] into the relationship, has made a significant contribution which needs to be appropriately recognised in the division of property between the parties”. Post separation contributions favoured the husband; “in particular, the repayment of a loan to his mother in the order of $130,000” (at [136]). Her Honour thereby assessed the husband’s contributions at 66 per cent and the wife’s at 34 per cent in accordance with s 79(4) of the Family Law Act 1975 (Cth) (“the Act”) and, there being no adjustment sought pursuant to s 75(2) of the Act, made orders dividing the net non-superannuation property in those proportions.
The Appeal
The three sub-grounds of Ground 1 of the Amended Notice of Appeal filed on 12 November 2018 challenge, in different ways, the primary judge’s approach to Property A. Ground 2 challenges the weight afforded to a number of post-separation contributions.
Did the primary judge fail to give adequate reasons for determining “the contribution-based entitlements as to 66% to the Husband and 34% to the Wife”? (Ground 1a.)
The wife submitted that the primary judge’s reasons do not adequately explain why the primary judge determined that a property division of 66 per cent to the husband and 34 per cent to the wife was just and equitable.
In expanding upon that general submission, it was put that “none of the authorities relied upon by the parties, nor considered by her Honour, warranted such a significant adjustment in the Husband’s favour” (Appellant’s Summary of Argument, paragraph 4). That is a different point and we shall deal with it under the consideration of Grounds 1b and 1c.
In dealing with this aspect of the ground, it is now necessary to refer to the primary judge’s reasons in some detail.
After summarising the relevant facts largely as we have done, her Honour referred to the terms of sale of the land in October 2017. Relevantly, the purchase price was to be paid in instalments over five years.
At [34] the primary judge recorded that the wife sought an equal division of the property and that the husband proposed a 70/30 per cent split in his favour in light of:
a)the fact that he brought [Property A] ‘(subject to minor readjustments with the original co-owner)’;
b)the distributions to date; and
c)the delayed superannuation split ‘working significantly in the wife’s favour’.
(Footnotes omitted)
Her Honour noted at [49] that the key issues in the proceedings were:
a)the assets and liabilities of the parties and the impact of the interim orders; and
b)the contributions of each party both at the commencement of the relationship and post-separation, having regard to the following:
i)the fact that the parties concede, quite rightly that their contributions during the relationship were equal; and
ii)the weight that ought to be given to these contributions, given the length of the marriage and other relevant factors.
The primary judge accepted the parties’ concession that their contributions during the relationship ought to be regarded as equal and set out her reasons as to why this was so (at [73]–[82]). In addition to raising their family, each of the parties worked hard in their respective occupations. They also participated in a number of businesses and investments that did not produce significant returns.
Her Honour found at [85] that the husband’s contributions after separation exceeded those of the wife.
Her Honour then turned to Property A and discussed a number of authorities to which she had been referred by each of the parties (at [89]–[117]). It is not clear what principle her Honour derived from them.
The primary judge said, under the heading “Conclusions”:
120.At over $10.35 million, the value of [Property A] represents almost 90% of the non-superannuation asset pool including both current assets and prior distributions made pursuant to interim orders.
121.Notwithstanding the post-separation contributions which the husband refers to in his evidence and to which regard must be had, the key basis upon which the husband asserted that he should receive 70% of the proceeds of [Property A], is that he brought [Property A] into the relationship and but for this fact, the parties would now not have over $10 million to distribute between them. He says that in those circumstances, a 30% distribution to the wife is just and equitable.
122.In this regard, the husband argued that although there had been a “rearrangement” of the ownership of the original [Property A], in essence, he brought the whole of the 44 acre lot which has now been sold.
123.It is conceded that the husband was, at all times, the registered owner of [Property A]. This, of course, is not determinative of the issues now before this court.
124.In addition to the fact that this was a long marriage which produced three now adult children and the myriad of contributions made by the parties over that period, the wife also argued that the [Property A] ought to be treated no differently to other assets of the parties. In support of this, the wife submitted:
a)all other assets have been divided equally, and this is evidence not only of a ‘tacit but an express concession by the husband that this was a marriage where the contributions otherwise were equal’; and
b)regard must be had to the impact of the rezoning on the value of [Property A] as opposed to anything which either party personally did.
125.It is the case and I find that the husband, in bringing [Property A] into the relationship, has made a significant contribution which needs to be appropriately recognised in the division of property between the parties.
(Footnotes omitted)
It is apparent from the concluding paragraph that her Honour essentially accepted the husband’s submissions.
The primary judge then turned to the re-organisation of the ownership of Property A in 1998 and 2001 (at [127]–[134]). Her Honour did not accept the husband’s submission that this was a further contribution by him, saying:
134.I am persuaded that by supporting the husband in his decision to use the proceeds of the sale of the 30 acre lot to purchase the other half share in the 44 acre lot, the wife made some, albeit a non-financial, contribution to the ultimate position that the parties found themselves in, namely to own outright a 44 acre lot of land which has subsequently increased in value. This contribution, however, must be weighed against the fact that without the husband’s initial interest in the original [Property A], the parties would not have had the opportunity to use some of the proceeds of the sale of the 30 acre lot to purchase the remaining half share in the 44 acre lot at all.
This led to the following conclusion:
135.Having regard to the findings and analysis above, I conclude that it is just and equitable to make orders which distribute the parties’ non-superannuation assets in the proportions of 34% to the wife and 66% to the husband and an order equalising the parties’ superannuation entitlements.
136.This recognises the significant contribution made by the husband at the commencement of the relationship in bringing both the property which became the matrimonial home and his half share interest in the original [Property A]. It also recognises the post-separation contributions which the husband has made and which have been outlined above; in particular, the repayment of a loan to his mother in the order of $130,000.
137.Given the nature of the sale with final settlement not occurring until 2022 and the fact that the husband will ultimately receive a higher proportion of the sale proceeds, the orders provide for an equal distribution between the parties in each of the first four tranches with an adjustment to the husband in the final tranche that sees him receive 66% overall of the non-superannuation assets.
The path of reasoning is tolerably clear. The primary judge considered that the introduction of Property A was a significant contribution by the husband, taking into account its value at the time of the hearing. While the leap from words to figures can be difficult to articulate (Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]), the outcome is explained by the finding that, but for the introduction of Property A, there would have been no assets of significant value to divide.
The obligations upon a trial judge to provide adequate reasons are well known. In Bennett and Bennett (1991) FLC 92-191 at 78,266 the Full Court adopted the principles relating to adequacy of reasons articulated in Sun Alliance Insurance Ltd v Massoud [1989] VR 8:
In Sun Alliance Insurance Ltd v Massoud (1989) VR 8, the Full Court of the Supreme Court of Victoria, consisting of Fullagar, Gray and Tadgell JJ, followed the principles established by the New South Wales Court of Appeal. Gray J, who delivered the principal judgment, said, at 18:
“The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if: –
(a) the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.”
We think that the test propounded by Gray J is a particularly useful one, and one which also applies to discretionary judgments.
(Emphasis removed)
An essential part of any reasons for judgment is an explanation as to why one party’s case was preferred. In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110, McColl JA said with the concurrence of the other members of the bench:
58.The extent and content of reasons will depend upon the particular case under consideration and the matters in issue. While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties.
59.The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted … it is necessary that the primary judge “‘enter into’ the issues canvassed and explain why one case is preferred over another”.
(References omitted)
We consider that her Honour’s reasons sufficiently meet these requirements. The basis of the significant adjustment in favour of the husband, and the extent to which she accepted the parties’ respective cases, is clear.
This aspect of Ground 1 does not succeed.
It remains to consider, however, whether her Honour’s reasoning process was infected by error because she misdirected herself as to the principles relevant to the assessment of contributions.
Did the primary judge misdirect herself as to the jurisprudence on contributions? (Ground 1b.)
The wife submitted that the primary judge erred:
in seeking a nexus between contributions and a particular item of property when assessing contributions holistically over a long marriage and when considering the assets of the parties on a global basis … quarantining from the assessment of contributions, all of the other contributions made by the parties to the assets of the marriage.
(Appellant’s Summary of Argument, paragraph 25) (Emphasis in original)
As we shall now explain, this submission should be accepted.
It is first necessary, briefly, to survey her Honour’s reasoning on this aspect of the matter.
The primary judge commenced her discussion of how to deal with Property A at [89] by noting the submission advanced on behalf of the husband, which was:
that in assessing [the husband’s] contribution, where an asset which was brought into the relationship is intact at the time of separation, it is important to have regard to the value of that asset at the time of trial to assess contribution, not the value of the asset at the commencement of cohabitation.
That submission was based on a passage in Williams & Williams [2007] FamCA 313 (“Williams”) in which the Full Court said:
26.We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
Counsel for the husband explained the relevance of Williams to the primary judge in the following terms:
And I am not on a flight of fancy of my own just picking one unreported decision. A more recent Full Court approved of Williams. And you’ve also got – very disrespectfully left Brereton J’s title off here – got Brereton J in the New South Wales Court of Appeal making exactly the same point: the problem of seriously undervaluing initial contributions, treating:
…any increment in capital value of an asset held at the outset of the relationship as if it were parts of the fruits of the relationship, when it is not: it is the result of the asset having been held by one of the parties at the start of the relationship. … It is likely to produce erratic results –
that is what my learned friend Mr Matta quite explicitly asks you to do, is to adopt an approach which Brereton J says:
…is likely to produce erratic results because under it, the significance of any particular asset in the ultimate evaluation will depend on its value when it was introduced. If one party has a house worth 250,000 at the outset, and it appreciates to be worth 750, the contribution is of a house which at separation is worth 750, not of money worth 250.
Says Brereton J, correctly so. Now, my learned friend will not be able to point to any authorities where these statements of principle are disagreed with.
(Transcript 5 February 2018, p.73 lines 25 – 46)
The reference to Brereton J is a reference to his Honour’s judgment sitting as a member of the New South Wales Court of Appeal in Kardos v Sarbutt (2006) 34 Fam LR 550 (“Kardos”), which was quoted in Williams at [23] and [24].
In relying on Brereton J’s decision in Kardos, counsel for the husband placed great emphasis on the proposition that in assessing an initial contribution, regard should be had to the value of that contribution as at the time of the hearing, rather than just to its initial value. While it is true that in Williams the Full Court accepted “there is force” in that proposition, it did not do so unreservedly.
The Court in Williams also referred to Bilous v Mudaliar (2006) 65 NSWLR 615 (“Bilous”), in which the New South Wales Court of Appeal expressed doubt about what was said by Brereton J.
In Bilous, Ipp JA, with the agreement of Giles and McColl JJA, said:
62.By “the approach adopted in Howlett v Neilson” Brereton J appears to have meant the apportionment of the increase in value of the assets initially contributed. His Honour appears to have stated a rule to the effect that, for the purposes of determining what order should be made under s 20(1) of the Property (Relationships) Act, any increase in value in assets initially contributed should be regarded, in all circumstances, as entirely a contribution by the party who contributed those assets. If that is what his Honour intended, I do not agree.
63.Determinations as to what orders should be made under s 20 are to be made solely on the grounds of the justice and equity of the case. The justice and equity of the case may derive from the fact that the party who owns the family home or other property was able to retain that property, while the market value increased, because “of joint efforts of wage earning, homemaking and parenting, and mutual support”. In some instances the non-financial contributions of one party may result in property of the kind in question not having to be sold. In other instances, the non-financial contributions of one partner may allow the other to advance his or her career and earn a high income that enables the property in question to be maintained and retained. Thus, an increment in capital value may well result, indirectly, from “joint efforts of wage earning, homemaking and parenting, and mutual support”.
(Emphasis altered)
In Baker v Towle (2008) 39 Fam LR 323 (“Baker”), Basten JA, who was a member of the bench in Kardos, referred to that part of Kardos identified by counsel for the husband, quoted Ipp JA in Bilous at [63] and said:
60.The primacy of s 20 of the Act in identifying the proper approach to applications made under it is undoubtedly correct. To the extent that Kardos purported to state principles which are not consistent with or fetter the broad discretion conferred by that section, it should not be followed. However, a number of recent cases have tended to talk in terms of assets owned by one party before the relationship began as “initial contributions” or as contributions “to the relationship”. The inference is that assets owned by the parties to a domestic relationship are in someway pooled even though they are not jointly owned. This approach is not reflected in the language of s 20. Rather, s 20 assumes that the parties have “interests with respect to” property, a concept which will include both individual and jointly held property. It is those interests, as at the date of the application, which are sought to be “adjusted”. The use of the term “contributions” in this context is inapt because it reflects the language of paragraphs (a) and (b), defining the “contributions” to which the Court must have reference in considering an appropriate adjustment.
61.As Ipp JA noted in Bilous contributions by one party, whether financial or not, may result in pre-relationship property in the name of the other being conserved or improved, not necessarily by protecting the property from dispossession. It is also true that non-financial contributions of one party may result in the other being able to increase substantially his or her financial resources. However, a non-financial contribution must be recognised in a possible adjustment in property interests even though it has no such beneficial economic effect for the other party. In such a case the Court is required to translate, in a manner which is “just and equitable”, the contribution of one party to the welfare of the other party or of the family, into an interest with respect to the property of the parties.
62.I remain of the view that in Kardos (in which I participated), being a case in which each party brought significant assets to the relationship, in which the relationship lasted for a little under three years and involved no children and each party had a remunerative occupation, it was appropriate that the assets be distributed proportionately to the value of the assets owned by each at the commencement of the relationship. However, I accept that, as this Court stated in Bilous, there are comments in the judgment in Kardos which are not consistent with earlier authority of this Court and which do not conform to the statutory scheme of the Act. I agree that they should not be followed.
The submission of counsel for the husband was wrong and misleading.
We consider that the decisions in Baker and Bilous indicate that the Court in Williams somewhat overstated the importance of the increase in value of a piece of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship” (Williams at [26]).
Returning then to her Honour’s reasons, we find a reference to Zappacosta v Zappacosta (1976) FLC 90-089 (“Zappacosta”) where McCall J found that the rapidly accelerated value of a property due to rezoning was a mere windfall to which neither party had a greater or lesser claim.
As the primary judge noted, Zappacosta was referred to with approval by the Full Court in Wells & Wells (1977) FLC 90-285.
The next authority her Honour considered was Zyk & Zyk (1995) FLC 92-644 (“Zyk”), a case concerning a lottery win. At [101], her Honour quoted the following passages from Zyk at 82,515, adding the emphasis as it appears below:
In the ordinary run of marriages, a ticket is purchased by one or other of the parties from money which he or she happens to have at that particular time. That fact should not determine the issue. Where both parties are in receipt of income and where their marriage is predicated upon the basis of each contributing their income towards the joint partnership constituted by their marriage, the purchase of the ticket would be regarded as a purchase from joint funds in the same way as any other purchase within that context and would be treated accordingly.
… In the sort of case to which we have referred above, the conclusion would be that the ticket was purchased by joint funds and the contribution of the prize would be seen as a contribution by the parties equally…
For our part, we would have emphasised the words “the contribution of the prize would be seen as a contribution by [both]” and not those emphasised by the primary judge.
At [102] her Honour then recorded the Full Court’s conclusion in Zyk at 82,516:
From the time of the marriage the parties jointly shared their respective incomes. The husband continued to purchase his share of the syndicate ticket each week, but from then on the purchases should be treated as coming from joint income … consequently … [the lotto ticket] should have been treated as a joint contribution of the parties.
As the following passages from the primary judge’s reasons make clear, her Honour appears to have focused on the bolded passage from Zyk above and not on the other statements made by the Full Court in that judgment:
103.Counsel for the husband conceded that in determining this matter, appropriate recognition ought to be given to the contribution that the wife made to the relationship. The husband’s case was that 30% of [Property A] properly recognised the wife’s contribution.
104.In his closing submissions, counsel for the husband submitted that it was clear on the basis of the evidence that [Property A] was effectively self-funding throughout the life of the marriage and that the parties did not contribute to its upkeep from their resources; it was essentially ‘tucked away in the top drawer of cupboard and untouched by the marriage.
105.Counsel for the husband sought to distinguish Pierce v Pierce [1998] FamCA 74 by arguing that this was not a case where the property brought in at the commencement of the relationship, became, for example the family home. Rather, he submitted that [Property A] remained entirely separate throughout the marriage.
106.The wife argued that to accept the husband’s approach would “ignore the miscellany or the myriad of contributions made by (her)” and would not give proper regard to “the fact that in 1999 or 2000 the other half of that parcel was purchased by the parties.
As we have said, the husband’s submissions were accepted, as is evident from the property division that was made.
At [105] the primary judge referred to Pierce v Pierce (1999) FLC 92-844 (“Pierce”). That case represents the culmination of a line of authorities bearing on the issue of how to weigh an initial contribution against other contributions made by the parties over the course of their relationship.
The suggestion that an initial contribution could be “eroded” or “offset” over time by subsequent contributions made by the other party was first made in Lee Steere and Lee Steere (1985) FLC 91-626 in which the Full Court said at 80,078:
The longer the duration of the marriage, depending on the quality and extent of her contribution, the more the proportionality of the original contribution is reduced … the proposition that the strength of a contribution made at the inception of a marriage is eroded, not by the passage of time but by the off-setting contribution of the other spouse, still holds true.
In Money and Money (1994) FLC 92-485 at 81,054 (“Money”) Fogarty J further observed that:
the term “off-setting contribution” does not necessarily mean “greater contribution”. It simply reflects the circumstance that the respective contributions of the parties over a long period of marriage may “offset'” the significance which might otherwise be attached to a greater initial contribution by one party … the original contribution should not be carried forward as a mathematical proportion; ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be later factors of significance, and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
Finally, in Pierce, after quoting Fogarty J’s remarks in Money, the Full Court said:
28. In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
Again, consistent with the authorities set out above and those which we discuss below, the import of Pierce is that the weight to be attached to an initial contribution must be assessed against the rubric of all of the contributions, both financial and non-financial, made by the parties over the course of their relationship.
The final authority the primary judge referred to was Wallis & Manning (2017) FLC 93-759 which was a case involving a long marriage. The family farm had been given to the parties by the husband’s father early in the marriage.
Her Honour said:
113.In considering the question of contributions, the Full Court said:
The length of a marriage is important, then, in assessing the respective contributions of the parties, particularly when it is said that significant capital contributions made early in the marriage are a dominant feature of that assessment.
…
The gifts made by the husband’s father were made early in a long marriage. The use to which those gifts were put rendered them of fundamental importance to the parties throughout the marriage. They provided the foundation for a farming business, operated as a partnership between the husband and the wife, from which the marriage derived income during its duration. They provided land upon which the parties home was situated and, thus, a place to live
114.Particularly relevant for the purposes of this case, the Full Court went on to say:
There can be little doubt on the evidence that each party contributed to the maximum of their respective capacities and abilities within these various roles. There was a genuine mutuality to their relationship and it, and the financial decisions and arrangements within it, were subject to the ‘unstated assumptions’ that devolve from that mutuality
115.In Wallis, the court concluded that the evidence supported a finding that the husband’s contribution should be assessed as greater than that of the wife’s and, after reviewing a range of comparable decisions, concluded that the parties’ contributions were properly assessed ‘in the proportion of 57.5% to the husband and 42.5% to the wife.’
(Footnotes omitted)
This led her Honour to the conclusion we set out earlier.
There was no reference to the following passage in Wallis which rejected the approach ultimately taken by the primary judge in this matter:
110.The approach adopted by the parties before her Honour is repeated in the supplementary submissions filed on behalf of the respondent husband; it is there asserted that “the contributions of the parties would be equal aside from gifting by the Husband’s father of significant parcels of land which remain in existence at the present point in time”. Counsel for the wife, in his further submissions, makes no such specific assertion but implicitly does so by relying upon the trial judge’s findings and manner of assessment. For the reasons given earlier, we reject that approach; the gifts by the husband’s father should be taken into account as a contribution together with the miscellany of other contributions made by each of the parties over the course of their marriage.
(Footnote omitted)
In Wallis their Honours also said, consistently:
20.Yet, that approach must also ensure that the “myriad of other contributions” and the duration over which, and circumstances in which, the miscellany of other s 79(4) contributions were made is not accorded a subsidiary role. The essential s 79(4) task is for “trial Judges [to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation”.
(Footnotes omitted)
In Dickons v Dickons (2012) 50 Fam LR 244 the Court expressly rejected the notion that there must be a relationship between contributions and what they produced in terms of property saying:
14.As is plain from earlier decisions of this Court, regard must be had to the use made of contributions of various types so as to compare the contributions made by each of the parties during the course of, and over the length of, their relationship (see, for example, In the Marriage of Pierce (1998) FLC 92-844) But that is an entirely different proposition to, as it were, causally linking contributions with their asserted financial “product” or “value”. The former recognises that the nature, form and extent of contributions made by each of the parties might differ; the latter suggests that the absence of a causal link counts as no contribution at all.
To like effect, in Singerson & Joans [2014] FamCAFC 238 the Full Court also said:
66.Section 79(4) of the Act is clear. There is nothing to suggest that any category of contributions needs to be quarantined and applied solely to particular assets. The court is mandated to look at the totality of what the parties have contributed in a financial and non-financial sense, including contributions to the welfare of the family and to the acquisition, conservation and improvement of assets. The court is required to evaluate the significance of all the various contributions to the property, notwithstanding there may be different categories of that property.
Such an approach is consistent with the words of s 79 of the Act, as the Court in Dickons explained:
15.The search for a causal link might be seen to come instinctively to the necessary inquiry and all the more so when regard is had to s 79(4)(a) which refers to financial contributions made “...directly or indirectly...” “...to the acquisition, conservation or improvement of any of the property ...” and goes on to also refer to the financial contribution made “...otherwise in relation to any of that last-mentioned property...” The terms of that sub-paragraph might, naturally enough, be seen to suggest a causal link between those contributions and the “financial product” which those contributions of that type are said to have produced. That same requirement might also be seen to suggest that relevant contributions of that type can be seen to be quantifiable – or, at least, conceptualised – in monetary terms, in contradistinction to contributions made pursuant to s 79(4)(c).
16.While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the sub-paragraph to the “...acquisition, conservation or improvement of any of the property...” or, indeed, to “property” at all. This is not a legislative oversight; the 1983 amendments to the Act which inserted the current s 79(4)(c) were specifically intended, relevantly, to remove any suggestion that there needed to be a causal link between contributions of that type and any particular asset or property. The Explanatory Memorandum to the Family Law Act Amendment Bill 1983 provides, at Clause 36, that a specific purpose of the re-casting of s 79(4) was, relevantly, to:
... revise sub-section 79(4) to remove the possibility of an interpretation of the sub-section requiring that there be a nexus between a spouse’s contribution and a specific item of property in section 79 proceedings ...
Their Honours continued:
17.Within that context, then, it is self-evident that financial contributions (whether direct or indirect) can be made to a relationship that have an effect on the property of the parties without those financial contributions finding their way directly into, or being directly linked to, specific property or, indeed, directly to the totality of the property available for distribution at the time of trial. Financial contributions can be made to the “...acquisition, conservation or improvement...” of property “...directly or indirectly...” (s 79(4)(a). Emphasis added). A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B. Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital. Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property. Indeed, the principles discussed for example in In the Marriage of Kowaliw [1981] FamCA 70; (1981) FLC 91-092 and In the Marriage of Townsend [1994] FamCA 144; (1995) FLC 92-569, can be seen as an exception to that general proposition.
18.Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).
19.That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the Court to take into account contributions made to the welfare of the family (and substantively and “...not in any merely token way...”; see, Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 605 at 636 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property.
20.Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
21.Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79). That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
This approach is entirely consistent with that taken by Ipp JA in Bilous.
In Hurst & Hurst (2018) FLC 93-851 the Full Court affirmed the above passages from Wallis and Dickons. That case involved a largely dormant block of land that increased in value due to market forces. The primary judge found that the wife’s contribution to the property was indirect and limited to the payment of rates and for slashing.
The Court pointed out the dangers inherent to such an approach:
22.The corollary of seeking a nexus within a global assessment is, relevantly, the quarantining of other indirect contributions made by each of the parties across all the property during the entirety of the approximately 39 year period between cohabitation and trial. We respectfully consider that here, by isolating the Suburb C property, her Honour did in fact quarantine those contributions from having any application to it in the finding earlier highlighted. In our respectful view, that is an error.
Further, their Honours held that the finding of the primary judge was not open:
24.The evidence before her Honour was plainly to the effect that both parties made indirect contributions to the conservation of the parties’ interests in property available at trial, including the Suburb C property, by proceeding upon the “stated and unstated assumptions” upon which their very lengthy marriage operated and the roles within that marriage which those assumptions directed and which they each performed.
25.The contributions made to the conservation of the Suburb C property were of precisely the same nature and extent as the contributions that each made in their respective agreed roles and spheres for the 25 years prior to the contribution of the Suburb C property and for the 13 years subsequent to it. The evidence before her Honour was plainly to that effect and no evidence before her Honour suggests otherwise.
The weight of authority is therefore clear.
Her Honour’s conclusions appear contained in the following passages:
115.In Wallis, the court concluded that the evidence supported a finding that the husband’s contribution should be assessed as greater than that of the wife’s and, after reviewing a range of comparable decisions, concluded that the parties’ contributions were properly assessed ‘in the proportion of 57.5% to the husband and 42.5% to the wife.’
116.Whilst that decision is of assistance to some degree, the facts in Wallis are quite different to the present facts in that the land in that case contributed by the husband’s father, became the family farm in which the wife both worked and to which she contributed in a practical sense in addition to her other contributions during the marriage.
117.By comparison, in this case [Property A] largely sat idle for the duration of the marriage. I find that the costs associated with maintaining [Property A] were not significant. Neither party made a significant contribution to its upkeep or to the eventual increase in its value.
It is apparent from these passages that the approach of the primary judge was to search for a nexus between the contributions by the parties to Property A and its present value. The only contribution of that kind she could identify was on the part of the husband bringing the property to the relationship.
After identifying this contribution her Honour then said:
126.This contribution however, must be weighed against the myriad of contributions made by both parties throughout the course of their relationship which has spanned 27 years and resulted in three adult children. It also has to be weighed against the fact that this was a union in which the parties clearly, by their actions, shared in the vicissitudes of the relationship, much of which is demonstrated by the numerous businesses and business ventures which the parties undertook throughout their relationship.
As can be seen the primary judge weighed the myriad of contributions made by the parties against the contribution made by the husband by bringing in Property A rather than treating Property A as one of the myriad of the contributions made.
Her Honour then turned to what she described as the reorganisation of Property A and the wife’s role in that process and formed the following conclusion:
133.Having regard to the timing of this sale, and the purpose for which the proceeds of sale were applied, there is some merit to the proposition that the decision to purchase the half interest in the 44 acre lot in 2001 was a joint decision between the parties and that the money used was, at that point in time, money otherwise available for the family. The question is whether that constitutes a contribution on the part of the wife.
134.I am persuaded that by supporting the husband in his decision to use the proceeds of the sale of the 30 acre lot to purchase the other half share in the 44 acre lot, the wife made some, albeit a non-financial, contribution to the ultimate position that the parties found themselves in, namely to own outright a 44 acre lot of land which has subsequently increased in value. This contribution, however, must be weighed against the fact that without the husband’s initial interest in the original [Property A], the parties would not have had the opportunity to use some of the proceeds of the sale of the 30 acre lot to purchase the remaining half share in the 44 acre lot at all.
There was, however, more to the retention of this property than the steps that were taken in 2001 to reorganise the title.
We have already set out the details of the reorganisation. From the sale of the block allocated to the husband, $105,000 was directed to family purposes and $105,000 to purchase the co-owner’s share in the final block.
The parties’ decision not to use all the funds for family purposes enabled the husband to gain sole ownership of the block of land the subject of the rezoning.
This has particular resonance in this case because, on the whole, the parties’ investments and businesses did not go well and funds were scarce, to the extent that they had to borrow from the husband’s family. Thus, the decision not to sell the land at an early stage can also be seen as a significant contribution.
The wife’s evidence was that the parties first became aware of the possibility of rezoning two to three years before it occurred (Wife’s affidavit filed 8 August 2017, paragraph 57). In 2012 they decided to delay a sale for five years so as to achieve a likely sale price in excess of $10 million as opposed to $2.5 million.
Until 2013, when $400,000 was borrowed in anticipation of the eventual sale, the parties lived a “modest lifestyle” (Wife’s affidavit filed 8 August 2017, paragraph 61).
The wife’s evidence is consistent with that of the husband.
The approach of the primary judge had the effect of these considerations being overlooked.
Importantly, it also had the effect of minimising the myriad of other contributions that were made in the course of a long marriage during which both parties worked very hard and raised a family. In this case, those contributions were made over a very long period and the parties regarded them as being equal.
Finally, in relation to a sudden increase in the value of an asset unrelated to the efforts of the parties, such as a rezoning by the council or a lottery win, the authorities point to that increase being a contribution by both parties (or neither – it matters not which it is) (Zappacosta at 75,421; Wells at 76,529–76,530; Zyk at 82,515–82,516; and Hurst at [26]).
It is difficult to see adequate recognition of this principle in the reasons. Indeed, the husband appears to have been given credit for the serendipitous revaluation of Property A by her Honour’s recognition of the husband’s contribution by having regard to its value at the time of the hearing, rather than it being merely the springboard for its later value.
Further, we consider that by quarantining Property A from the “myriad of other contributions made by both parties throughout the course of the relationship” (Williams at [26]) her Honour fell into the difficulty set out in Hurst, as described earlier. This is because those contributions were isolated from and weighed against the contribution of that property, rather than it being one of the myriad of contributions taken into account. The evidence established that, throughout the relationship, the parties’ contributions to Property A “were of precisely the same nature and extent that each made in their respective agreed roles and spheres” (Hurst at [25]).
It follows that her Honour misdirected herself as to the principles to be applied. This has led to a material error and the orders must be set aside.
Was the primary judge’s conclusion manifestly unjust and not reasonably open on the evidence? (Ground 1c.)
We have found that the primary judge has acted on a wrong principle and that the exercise of her Honour’s discretion has clearly miscarried. It is therefore not necessary to consider this ground beyond saying that there is considerable force in the appellant’s submission that the outcome is so plainly unreasonable that had an error of application of principle not been identified, one would have had to have been inferred (House v The King (1936) 55 CLR 499 (“House”) at [505]).
Did the primary judge err in law in her findings about and the weight she attributed to the husband’s post-separation contributions? (Ground 2)
Although Ground 2 appears to be a challenge to the weight that was given to a number of matters, the thrust of the submissions was that the relevant findings were not available because they were not supported by any evidence. If that is so, error is established because the primary judge has then mistaken the facts or allowed an extraneous or irrelevant matter to guide her (House at [505]).
There is, however, an antecedent issue that must be addressed. In her oral submissions, senior counsel for the wife submitted that, in making these findings and taking post-separation contributions into account, the primary judge did not afford the wife procedural fairness because the husband did not seek such matters to be taken into account and the primary judge did not raise the issue with the wife.
There is merit in this submission.
The husband did not raise the issue of post-separation contributions in either his case outline or his oral submissions to the primary judge. In response, counsel for the wife said:
… Post-separation, I don’t think my learned friend was – well, I don’t think my learned friend’s case is premised on any loading to the husband on the basis of his post-separation contributions.
(Transcript 6 February 2018, p.103 line 47 to p.104 line 4)
Counsel for the husband did not cavil with that statement in his submissions in reply.
Senior counsel for the husband, who appeared before us, accepted that no submissions were made in support of a claim for post-separation contributions.
This did not, off course, preclude the primary judge from undertaking such a consideration but, if that course was to be taken, that possibility must have been squarely raised with the wife and her submissions sought on each aspect of the proposed consideration. Her Honour did not do so. We consider that the primary judge erred by not affording procedural fairness to the wife: Kioa v West (1985) 159 CLR 550; Stead v State Government Insurance Commission (1986) 161 CLR 141. Having regard to the above exchange, the wife would have properly considered that no claim for post-separation contributions was in contemplation.
Although it is not strictly necessary now to do so, we turn to the findings themselves.
The impugned findings appear at [83] of the reasons, where her Honour said:
83.The husband also gave evidence and I accept that he made the following contributions post-separation:
a)the repayment of the parties’ debt to his mother in the sum of $130,000 without any contribution from the wife;
b)child support in respect of Mr B at a higher rate than he believed he ought to have paid although this was not specifically quantified;
c)all outgoings for [Property C] and [Property B] until their sale without any contribution from the wife, again without expressly quantifying this amount;
d)payment of expenses incurred by the family during the period of attempted reconciliation on holidays to [Country F] and the wife’s expenses on a holiday to [Country G];
e)a further payment of $2,000 to the wife at her request during the period of attempted reconciliation; and
f)meeting the children’s living expenses whilst they lived with the husband at [Property B] until its sale.
We will address each of these findings in turn.
The repayment of the parties’ debt to the husband’s mother by the husband (Ground 2a.)
Following his mother’s death on 30 May 2014, the husband received an inheritance of $220,000. His evidence was that his original entitlement under his mother’s will was $330,000 but the estate set off the amount of $130,000 which he owed to his mother.
The primary judge said:
72.The parties agreed that over the course of their relationship, they received various loans from the husband’s family. The wife’s evidence was that those loans were repaid throughout the relationship. The husband disputed this and said that at the time of separation, there was an outstanding loan to his mother in the sum of $130,000 which he repaid out of his inheritance without any contribution from the wife. I accept the husband’s evidence in this regard.
The wife submitted that the husband’s evidence did not establish that there was a loan or that, if there was, it had been repaid.
The husband’s evidence referred to the sale of the former matrimonial home on 14 August 2015 for $750,000 which resulted in net proceeds of $507,232. His affidavit filed on 21 August 2017 stated that:
(v)Although I banked $507,232 following the sale, this amount included a reimbursement of part of the monies I received from my mother’s estate. Whereas, I should have received approximately $330,000 as my 1/3 share of my mother’s estate, I received only $200,000 due to a loan of $130,000 which had been borrowed during the marriage and used for the needs of our family and to prop up our [Business P]. The wife therefore made no contribution to the repayment of these monies as the whole of the repayment came from my entitlement to the estate, saving her contributing approximately $65,000.
He also said:
23.As set out in paragraph 8 (c) (v) herein, I repaid the whole of the $130,000 loaned to the Applicant and me I by my mother during the last 3 years before separation by deduction of this amount from my inheritance from my mother. My mother died [in] 2014. The Applicant made no contribution to the payment of this amount.
(As per original)
However, he also said:
16. (g)As the wife and I were living beyond our means in the later part of the marriage, we were reliant on monies provided by my mother to meet the expenses we incurred over and above my [salary] and from [Business P]. From early December 2010 until 30 November 2013, my mother provided a total of $109,000 as follows …
On the other hand, the wife said:
[The husband’s] family provided us with loans throughout our marriage to assist us from time to time, all of which were repaid with interest.
(Wife’s affidavit filed 8 August 2017, paragraph 122)
No cross-examination was directed to either party on this issue.
The following are the primary judge’s findings as to the creditworthiness of the parties’ evidence:
4.Both parties gave evidence and were subject to cross examination. I found both parties to be witnesses of truth. They gave their evidence in an open and forthright manner.
5.It was put on behalf of the husband that the wife was less than forthright in her affidavit material and her evidence before the court. I do not accept this submission.
Apart from some discussion of this issue when objections were unsuccessfully taken by the wife to the husband’s evidence, no submissions were made by either party as to how it should be resolved.
For ourselves, it is difficult to see on what basis the primary judge resolved this question, but there is no ground of appeal directed to inadequacy of reasons.
There was some evidence, albeit somewhat unsatisfactory, which was before the court (no ground of appeal was directed to its admission). It is well-established that a trial judge can accept some parts of a witness’s evidence and reject others (Dublin, Wicklow & Wexford Railway Co v Slattery (1878) 3 App Cas 1155 at 1201; Christmas v Nicol Bros Pty Ltd (1941) 41 SR (NSW) 317 at 322).
It follows then that the finding was open on the evidence and this aspect of the ground fails.
It is, however, easy to overstate the importance of this issue. The effect is that the husband paid more than his appropriate proportion of a jointly owned debt. At best, therefore, a sum of $65,000 is to be taken into account, that is, 0.72 per cent of the non-superannuation pool.
Did the evidence support a finding that the husband paid child support at a rate higher than he ought to have paid? (Ground 2b.)
The wife submits that this finding, made by her Honour at [83(b)] of the reasons, was not supported by the evidence.
The husband said in his affidavit:
24.I continued to pay child support of $320 per week until [Mr B] finished year 12 in 2014. This amount was higher than I should have paid as the Applicant incorrectly advised the child Support Agency that [Mr B] did not spend any nights at my home where as he actually spent on average 2 nights per week with me. I did not ask the agency to change their assessments as I did not wish to cause any further animosity with the applicant that may have made the lives on my children more difficult.
(As per original)
As the primary judge correctly observed, the amount said to have been paid was not quantified. The evidence was silent as to whether the amount paid in excess of the assessment was trivial or substantial.
There was therefore no evidence capable of supporting a finding that there was a contribution of such significance to justify an alteration in the property interests of the parties.
This aspect of the ground succeeds.
Was there evidence to support the finding that the husband paid all the outgoings for the parties’ two properties after separation? (Ground 2c.)
The primary judge found at [83(c)] that a post-separation contribution of the husband was that payment of:
…all outgoings for [Property C] and [Property B] until their sale without any contribution from the wife, again without expressly quantifying this amount…
As to both properties, as the primary judge observed, there was no evidence of the payments made by the husband so that it is impossible to gauge whether the contribution was indeed one of any value whatsoever.
As to Property C specifically, the primary judge did not refer to orders made by Judge Turner on 8 October 2014 for the husband to pay $135,000 to the wife by 30 November 2014, that upon payment she relinquish any interest she held in the property and that pending the payment or sale of the property the husband have sole occupation of it on the basis that he paid all the outgoings.
It is difficult to see how the husband could be given credit for the outgoings when he was entitled to sole occupation of the property.
This aspect of the ground succeeds.
Was there evidence to support the findings that (a) the husband paid the family expenses for a family holiday to Country F and the wife’s expenses on a holiday to Country G; (b) the husband made a payment of $2,000 to the wife during the period of reconciliation; and (c) the husband met the children’s living expenses while they lived with him at the former matrimonial home until its sale? (Grounds 2d., e. and f.)
The primary judge made the findings set out in the heading above at [83(d)]–[83(f)].
The husband’s evidence was that he paid for his own ticket to Country F and “…for most of the expenses incurred by the family, including our children” (Husband’s affidavit filed 21 August 2017, paragraph 27 – 28). He did not say what they were. At the time, the youngest child was 18 or 19 years old.
As to the trip to Country G, the husband merely said he paid “almost all of the expenses for my wife and I” (Husband’s affidavit filed 21 August 2017, paragraph 28).
As to the finding at [83(f)] that the husband met the children’s living expenses while they lived with him at the former matrimonial home, the evidence of those expenses went no further than the bald statement referred to in the heading.
In the absence of any evidence as to what those expenses were, it is difficult to see how it could be found that they were sufficient to justify a contribution of any weight in a case involving property worth $10 million.
Finally, as to the finding at [83(e)], a payment of $2,000, in the circumstances of this case, could not possibly justify an alteration of property interests having regard the complete lack of proportionality between it and the total value of the property.
This aspect of the ground succeeds.
Conclusion
It follows that the appeal succeeds and the orders must be set aside.
What are the appropriate orders to be made?
The parties agreed that in the event the appeal was allowed we should proceed to determine what orders should be made. Neither party wished to rely on any further evidence and we were invited to proceed on the basis of the trial record and her Honour’s undisturbed findings of fact. Otherwise the parties relied upon the submissions that were made to the primary judge. It follows that the husband did not seek any adjustment for post-separation contributions and we will not consider such an adjustment.
We shall turn to Property A shortly.
It is necessary to record here that, at the commencement of the relationship the husband owned a property which he purchased for $135,000 shortly before the parties commenced living together. He owed his father $65,000, resulting in a net contribution of $70,000. This property was used as the matrimonial home for many years until it was transferred to the husband as part of a partial property settlement.
We take into account the following:
·apart from Property A and the former matrimonial home neither party had any assets of significance at the commencement of the relationship;
·the parties’ contributions to their property and to the welfare of the family during the marriage were equal;
·the relationship was a long one, of 27 years, and involved raising three children; and
·the primary judge did not record that any adjustments were sought under s 75(2) of the Act and did not consider that section. No challenge was made to that approach and we shall proceed on the basis that this section requires no consideration by us. In any event, given the amount of property to be retained by each party, it is not at all obvious why any further adjustment would be required (even accepting that the husband has had some difficulties with his health recently).
What then is the effect of Property A?
This property was brought into the relationship by the husband. There is no evidence as to its value at the time. In September 2001, some thirteen years into the relationship, the 30 acre block was sold for $215,000. The other half interest in the 44 acre block was acquired for $105,000, which indicates that it was then worth $210,000.
Whatever was the value of the property at the commencement of the relationship its significance has been largely lost given the myriad of the contributions by each of the parties to their various business ventures, through their employment and care of the family over a long relationship, including the contributions made to the retention of the property which we have discussed above. There is no doubt that they both worked hard and over many years they both contributed to the full extent of their capacity within the roles each took within the marriage. As was said in Wallis at [20] it is important that this miscellany of other s 79(4) factors is not accorded a subsidiary role in the assessment of contributions.
The reason that there is significant property to be divided is that Property A was fortuitously rezoned which caused its value to skyrocket. As we have explained, this increase in value does not favour one party over the other. Thus although the property was introduced by the husband it was merely the springboard for the events which followed and relevantly the revaluation.
Throughout the relationship the parties’ contributions to this property were no different to their other contributions.
Conclusion
The only contributions that point away from a finding of equality of contributions where both parties worked very hard to support and maintain their family over 27 years, are the initial contributions made by the husband of the former matrimonial home and Suburb A properties. Although the former was not the subject of the final division, it nonetheless was a contribution of some utility as it served as the family home for many years.
Giving the appropriate weight to these contributions, we consider that they are properly reflected by finding that the contributions favour the husband by 53 per cent and the wife 47 per cent. As there are no other matters to be taken into account, this will be the division of their non-superannuation property. This leads to a differential of $542,035 which appropriately reflects the various contributions.
The parties did not seek a variation to the superannuation splitting order which had the effect of equalising their interests.
We consider such an order to be just and equitable in all the circumstances.
Form of order
The primary judge’s orders recognised that the payments for the Suburb A land were to be paid in instalments with the final payment being the largest. All but the last payments were to be divided equally as they are received with the adjustment being made after receipt of the last payment. We shall follow the same course but adjust the amounts to accord with our findings.
The wife accepted that there should be a further adjustment to the last payment to take account of a debt of $100,000 payable to the husband.
Costs
The appeal has been wholly successful. Senior counsel for the husband properly conceded that it was appropriate that costs follow the event in this matter. We agree and there will be an order that the husband pay the wife’s costs in the amount of $35,536.91 as set out in her amended schedule of costs filed on 10 December 2018.
I certify that the preceding one hundred and forty five (145) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren CJ, Ryan & Aldridge JJ) delivered on 10 May 2019.
Associate:
Date: 10 May 2019
164
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