JPW & SJW

[2004] FamCA 1280

[2004] FamCA 1280

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT CANBERRA  Appeal No. EA 100 of 2003

File No. CAM 3058 of 2002

IN THE MATTER OF:

JPW

Appellant Husband

- and -

SJW

Respondent Wife

JUDGMENT OF THE HONOURABLE JUSTICE FINN

DATE OF HEARING:  17 June 2004

DATE OF JUDGMENT:                17 December 2004

APPEAL SUMMARY

MATTER:JPW and SJW

APPEAL NUMBER:  EA 100 of 2003 (CAM 3058 of 2002)

CORAM:Finn J

DATE OF HEARING:  17 June 2004

DATE OF JUDGMENT:  17 December 2004

CATCHWORDS:               FAMILY LAW – APPEAL from FEDERAL MAGISTRATE – Property settlement – Whether the Federal Magistrate erred in excluding the respondent’s superannuation from the property pool – Whether the Federal Magistrate erred in his treatment of a damages award in the pool of property – Whether the Federal Magistrate was correct in notionally reducing the value of the award on account of how a portion of the award was expended – Whether the Federal Magistrate erred in speculating about the various possible components of the damages award and their values – Whether the Federal Magistrate erred in his assessment of the parties’ contributions.

Caselaw cited:

Hickey v Hickey (2003) FLC 93-143

Cahill and Cahill (unreported, 7 March 2003, No. CAF 432 of 2002)

Kowaliw v Kowaliw (1981) FLC 91-092

Aleksovski (1996) FLC 92-705

Kennon v Kennon (1997) FLC 92-757

Norbis v Norbis (1986) FLC 91-712

Appeal allowed.

Discretion re-exercised.

Costs certificates granted.

Introduction

1. This is an appeal by the husband against an order for property settlement made by Brewster FM on 22 October 2003. The appeal is to be determined by me as a single Judge of the Family Court pursuant to arrangements made under s 94AAA(3) of the Family Law Act 1975 (“the Act”).

2. The essential effect of the order appealed was that the property of the husband and the wife, which was found have a value of $469,429, was to be divided as to 67.5% to the husband and 32.5% to the wife. This division was arrived at on the basis of an assessment of the parties’ contributions in the proportion of 57.5% to 42.5% in favour of the husband, with a further adjustment of 10% in his favour on account of the matters contained in s 75(2) of the Family Law Act 1975 (“the Act”).

3. The precise terms of the order made by the Federal Magistrate are as follows:

   1.That by 25 November 2003 the husband pay to the wife the sum of $93,000.

   2.That upon payment of this sum the wife transfer to the husband her interest in the (“the home”).

   3.That if the husband does not pay this amount to the wife the parties take all steps necessary to sell the home and divide the net proceeds of that sale between them in the proportions 72% to the husband and the balance to the wife.

   4.That the parties take all steps to sell the motorcycle sidecar in the possession of the husband and to divide the proceeds of that sale between them in the proportions 67.5% to the husband and 32.5% to the wife.

   5.That subject to Order 4 as against the other party is entitled to retain chattels presently in his or her possession and all choses in action in his or her name.

4. In broad terms the husband’s grounds of appeal challenge:

   ·his Honour’s failure to include the wife’s superannuation interest (valued at $7,600) in his calculation of the net property of the parties;

   ·his Honour’s treatment of a damages award received by the husband in his assessment of the parties’ contributions, and the weight which his Honour attached to the husband’s contributions generally; and

   ·the overall adequacy of the award from the husband’s perspective.

5. It was agreed by both parties that in the event that I found substance in any of the grounds of appeal, I should re-exercise the discretion myself on the basis of the findings of fact made by the Federal Magistrate.  No further evidence was ultimately sought to be adduced. 

6. Before considering the grounds of appeal I will set out the brief factual background as found by the Federal Magistrate and which was not the subject of any challenge before me.

Factual background

1. The husband was aged 46 and the wife aged 44 at the time of the trial before the Federal Magistrate (11-12 September 2003).

2. The parties had married in November 1979 and had six children, three of whom were under 18 (being K aged 16, A aged 15 and D aged 13) at the time of the trial.

3. In early 1980 the parties bought a block of land in a country town in southern New South Wales and built a house on this property which became the matrimonial home.

4. In 1991 the husband lost his right arm in an industrial accident.  He sued his employer.  In 1994, his claim was settled and he received damages of $350,000.

5. The parties separated on 28 May 2002 when the wife left the former matrimonial home.  The three children remained living with the husband in the former matrimonial home, although the eldest child moved to live with the wife in the first half of 2003. 

6. At the time of the trial the wife was living with a Mr C.  The husband had not repartnered.

7. I turn then to consider the matters which form the substance of the husband’s appeal.

The exclusion of the wife’s superannuation from the pool of property

1. Before considering the husband’s challenge to the Federal Magistrate’s decision to exclude the wife’s superannuation entitlement from the pool of property available for division between the parties, it will be useful to set out His Honour’s precise findings concerning the pool, including those concerning the wife’s superannuation entitlement.  Those findings were as follows:

   10.      I find that the pool is as follows:

   (a)The matrimonial home  $350,000

   (b)Landcruiser (husband)  $22,500

   (c)Toyota (husband)  $6,000

   (d)Harley Davidson motorcycle (wife)                   $20,000

   (e)Husberg motorcycle (wife)  $6,500

   (f)KTM motorcycle (husband)  $5,200

   (g)Husband’s contents  $5,000

   (h)Wife’s contents  $500

   (i)Proceeds of sale of a motorcycle (husband)       $12,000

   (j)Cash at separation (husband)  $15,000

   (k)Funds in bank accounts at separation (wife)      $31,028

   (l)Wife’s jewellery  $1,500

   Total  $475,228

   11.The wife has a Hyundai motor vehicle but the debt on this exceeds its value.

   12.The wife has superannuation entitlements of $7,600.  I do not propose to include this in the pool as the reality is that it is a financial resource and not a fund that can be accessed.

   13.There is a motorcycle sidecar in the possession of the husband.  The parties cannot agree on its value.  I propose to order its sale and a division of the proceeds.  It appears that its value is modest.

   14.At separation the husband had a credit card debt of $3,500 and the wife a credit card debt of $1,400 and a debt to AGC of $899.

   15.These debts total $5,799.  The pool is therefore $469,429. (Emphasis added)

2. The husband’s first ground of appeal is that His Honour “erred in law in failing to include in the net property of the parties the wife’s superannuation interest”.

3. In support of this ground Counsel for the husband relied on the following paragraph from the decision of the Full Court in Hickey v Hickey (2003) FLC 93-143.

   75.Although, for obvious reasons, the definition of property in s. 4 was not amended to include a superannuation interest or deem such an interest to be property, the effect of s. 90MC is that in proceedings in relation to property under s. 79 a superannuation interest is to be treated as property irrespective of whether or not a splitting or flagging order is sought or proposed to be made. As was submitted on behalf of the husband, the expression “treated as property” should be understood as meaning ``treated as if it were property even though it is not'' and that it should be so treated for the purposes of s. 79. It was further submitted that the intention of the Parliament is clear from Note 1 to s. 90MS. Because a superannuation interest is to be treated as property in s. 79 proceedings it follows that it will be included in the list of property and valued at what is step one of the preferred four step approach to the determination of an application pursuant to s. 79. At step three the superannuation interest may be taken into account, as are other items of property and financial resources, pursuant to the provisions of s. 75(2) if the interest is relevant. The superannuation legislation introduced reforms which are directed to how a court will deal with a superannuation interest at steps one and four of the preferred four step approach in the determination of an application under s. 79. The legislation did not amend s. 79 or s. 75.

4. The terms of the statutory provisions to which the Full Court referred, being s 90MC of the Act and of s 90MS (including the notes to that section) are as follows:

   [s 90MC:]

   A superannuation interest is to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause in section 4.

   [s 90MS:] 

   (1)In proceedings under section 79 with respect to the property of spouses, the court may, in accordance with this Division, also make orders in relation to superannuation interests of the spouses.

   Note 1: Although the orders are made in accordance with this Division, they will be made under section 79. Therefore they will be generally subject to all the same provisions as other section 79 orders.

   Note 2: Sections 71A and 90MO limit the scope of section 79.

   (2)A court cannot make an order under section 79 in relation to a superannuation interest except in accordance with this Part.

5. It was submitted on behalf of the husband that having regard to the above quoted passage from Hickey, Brewster FM should have included the wife’s superannuation entitlement in the pool of property.  I mention here that there was apparently no formal valuation of the wife’s superannuation interest at $7,600, and that this was apparently an agreed figure.

6. However, it was submitted by Counsel for the respondent wife that having considered the existence of the wife’s superannuation in the context of his calculations of the parties’ property, there was no obligation on the Federal Magistrate to include that amount in the pool of property available for distribution between the parties, and that to do so, it was further submitted, would be artificial and unjust.  In support of that further submission reliance was placed by Counsel for the wife on the decision of Coleman J (sitting at first instance) in Cahill and Cahill (unreported 7 March 2003 No. CAF 431 of 2002).

7. The decision in Cahill has not to date been the subject of consideration by the Full Court.  In these circumstances, I consider that the more appropriate course for me as a single Judge (albeit exercising appellate jurisdiction) is to regard myself as bound by what the Full Court appears to have been saying in Hickey, that being that a superannuation interest should be “included in the list of property and valued at what is step one of the preferred four-step approach to the determination of an application pursuant to s 79”.

8. Accordingly, I must conclude that ground one has substance, and that I should adjust the pool of property to include the value of the wife’s superannuation entitlements.

9. However I agree with the submission of Counsel for the respondent wife that, if the value of the wife’s superannuation is included in the pool of property available for distribution between the parties, then when considering either the s 75(2) matters or the overall justice and equity of the award, regard should be had to the fact that the wife does not have immediate access to that asset.

The treatment of the husband’s damages award

1. The husband’s second ground of appeal challenges the Federal Magistrate’s treatment of the husband’s contribution of his damages award and is in the following terms:

   2.His Honour erred in law in failing to correctly evaluate the Husband’s contribution of his damages award of $350,000.00 in that he treated the amount as being $312,000.00 despite finding that the difference was not wasted and by engaging in speculation as to possible components of the award and their values.

2. The paragraphs in his Honour’s judgment which are relevant to this issue are as follows:

   18. As I have indicated, in 1994 the husband received an amount of $350,000 by way of damages for the loss of his arm.  In his affidavit he details the way the money was used and I accept his evidence in that respect.  Essentially this is to the effect that an amount of $151,900 was spent on improvements to the house.  A second storey was added, a new kitchen and central heating were installed and a shed constructed.  An amount of $13,000 was applied to discharge the mortgage on the property.  Other monies were applied to purchase chattels.  Some of these appear to be quite extravagant, for example, $55,000 was spent to acquire two motorcycles.  However these purchases would have been for the benefit of the wife and the children.  The husband could not ride a motorcycle after his accident but the wife and the children were very involved in motorcycle riding. Other monies were spent in living expenses.

   19. Some of the husband's damages monies were lost.  This is because he took it upon himself to lend a Mr [S] the sum of $40,000.  This was apparently to enable Mr [S] to buy a business.  It seems that the purchase did not proceed but Mr [S] nevertheless retained these monies and spent them.  Only $2,000 has been recovered and it appears that the balance is lost.  I am satisfied that lending money in these circumstances was extremely foolish.  I would not categorise it as wanton or reckless dissipation of funds such as to attract the principle in Kowaliw (1981) FLC 91-092. However, in the circumstances, I consider it unjust to disregard the fact that part of the husband's damages monies did not go to the improvement of property or to the welfare of the family. It would be unjust to, in effect, give the husband the benefit of this component of the award and to increase his contribution base entitlement accordingly. Accordingly, I propose to treat the award as notionally having been $312,000.

3. Although Counsel for the husband in both his oral and written submissions raised some queries concerning his Honour’s calculations concerning the amount of the damages award spent on household improvements, the only complaint pursued in relation to his Honour’s conclusions just quoted, was that having found that although the loan to Mr S was “extremely foolish”, the principle in Kowaliw v Kowaliw (1981) FLC 91-092 was not attracted to that loan, it was then an error to reduce notionally the husband’s damages award from $350,000 to $312,000 for purposes of assessing the husband’s contributions.

4. Ultimately I do not have to determine whether it was open to his Honour in the exercise of his discretion to reduce notionally the husband’s damages award notwithstanding that he found that the principle in Kowaliw did not apply.  This is because Counsel for the husband was able to persuade me by reference to the transcript of the hearing before the Federal Magistrate that it had not been part of the wife’s case at the hearing that the husband’s damages award should be notionally reduced by the amount of the loan (or the part of it remaining un-repaid), and that the husband had never been afforded the opportunity to respond to such a case. 

5. Counsel for the wife was unable to take me to any part of the transcript or other material before his Honour which could satisfy me that the husband had been accorded procedural fairness in relation to the approach adopted by his Honour, whereby the amount of the husband’s damages award was notionally reduced by the amount of the outstanding loan to Mr S for the purposes of the assessment of the husband’s contributions.

6. Accordingly, to the extent that the husband’s second ground of appeal asserts error on the part of the Federal Magistrate in his reduction of the amount of the husband’s damages award to $312,000 for the purpose of an assessment of the husband’s contributions, that ground also has substance at least for the reason that the husband was not given an opportunity to be heard on the approach which his Honour proposed to adopt.  I will return to this matter in due course.

7. The husband’s second ground of appeal further asserts that the Federal Magistrate erred in engaging in speculation as to the possible components of the damages award and as to the values of such components.  The paragraphs of his Honour’s judgment which are relevant to this complaint are as follows:

   20.The husband's damages claim was settled and there is no break-up of the monies he received.  I can infer, however, that they would have comprised the following:

   Past loss of income.

   Future loss of income.

   Pain and suffering and loss of amenities of life.

   A Griffiths v Kerkemeyer component.

   21.It is obvious that the settlement was in the nature of a compromise.  If liability had been admitted or was obvious I cannot imagine that the husband would have been advised to settle for $350,000. In such circumstances he would have been awarded much more had the matter gone to trial.  I infer that either liability was not clear cut or that there was a significant likelihood that any award would be reduced by reason of contributory negligence.  This means that when I come to estimate in some way the quantum of each of these components I must discount that quantum.

   22.The component of the damages that would have related to loss of income from 1991 to 1994 or loss of income for the period from then until separation does not of itself, in my opinion, have any special significance.  As I have indicated, I do not regard contributions made by a party by way of bringing in income as more significant than a contribution as a homemaker or parent.  The fact that a party may receive monies representing wages in a lump sum does not put this in a different category to persons who earn wages by way of weekly or fortnightly payments. However, there can be a significance of a different type attached to the receipt of this money.  It is sometimes the case that a person is injured but nevertheless able to perform household duties and fulfil the role of a parent.  Given that that party is at home and has more time to devote to these tasks the Court might be prepared to infer that the injured party's domestic contributions exceeded the domestic contributions of the other party who might be in employment.  The injured party is therefore effectively making a double contribution, on the one hand as a provider of money and on the other as the principal homemaker or parent.

   23.The husband would have me make an adjustment on this basis.  He claims that he quickly learned to compensate for the loss of his arm and was able to perform significant homemaking duties, notwithstanding his injury.  I reject the husband's contention that he was able to perform significant household tasks from a period shortly after his accident.  Documents prepared for his damages claim in 1993 tell a different story to the one related by the husband to me at the hearing.  For example, in a report dated 6 September 1993, a consultant psychiatrist, Dr [V], reports that:

   “Simple tasks like using a knife and fork, tying his shoelaces, doing up buttons and zips are either beyond him or are very difficult.  Even showering, washing his hair and dressing is much more difficult with only his left upper (sic) limb intact.  It is difficult even to sign a form at the bank.  Consequently, a lot of things have been taken over by his wife.”

   24.In addition a Statement of Particulars filed in May of 1993 indicates that at that date he was unable to do any housework except vacuuming.

   25.I accept however that at some stage after his damages monies were received, the husband was able to perform significant household duties.  The evidence does not enable me to put a date on this.  I am satisfied from the material provided that in 1993, some two years after the accident, his ability to perform household tasks was severely compromised but at some time after this date he became able to make a significant contribution to the domestic tasks of the household.  I infer that by reason of the severe limitations he was said to suffer in 1993 it would have been some considerable time after this.  From this point onwards his award of damages for loss of earnings does assume the significance that I have indicated.  However I believe that the husband’s disability was likely to have reduced his capacity to perform domestic tasks and this tempers the significance of his “double contribution.”

   26.A component of the award would have represented pain and suffering and loss of amenities of life.  I imagine that this was a substantial part of the award.  This does have special significance in that it is a contribution over and above normal contributions which a party makes during a marriage.  That part of the award which relates to loss of earnings after the parties separated also has a special significance as a contribution by the husband.

   27.As I have indicated, part of the verdict would have represented a Griffiths v Kerkemeyer component.  From the Statement of Particulars it appears that a claim was made for over $23,000 on this basis up to the date of that document.  Moreover the Statement claimed that the wife's Griffiths v Kerkemeyer type contributions were continuing.  Judging by the limitations it described the husband as labouring under this was to be expected.  This component of the damages is of course a contribution by the wife. 

   28.The difficulty is that, as I have mentioned, there is no break up of the damages.  Much of my task consists of guesswork.

1. It will be seen from a number of passages in the above paragraphs that his Honour clearly recognised that he had no “break-up” of the damages award into its possible components and that what he said about those components was no more than inference or guesswork.  For my part I have some difficulty in understanding why his Honour considered it necessary to resort to such inferences or engage in such “guesswork”, and I accept the submission which was put on behalf of the husband that such inferences, guesswork or speculation would amount to “an irrelevant consideration” (as that expression is used in the authorities which govern appellate interference with a discretionary judgment).

2. However I also have some difficulty in understanding what impact, if any, such speculation ultimately had on his Honour’s assessment of the parties’ contributions.  I say this because his Honour appears to have regarded all of the damages award (save for a “Griffiths & Kirkemeyer” component) as being a contribution by the husband, which, in my view, is the correct approach having regard to the statement by Baker and Rowlands JJ in Aleksovski (1996) FLC 92 705 at 83,437 that “a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury”. Nevertheless I cannot discount the possibility that his Honour’s speculation regarding the various possible components of the damages award (at least in relation to the Griffiths & Kirkemeyer component) may have influenced his ultimate assessment.

The assessment of the husband’s contributions at 57.5%

1. The husband’s third ground of appeal challenges the weight given by the Federal Magistrate to the husband’s contributions which led to an assessment of those contributions at 57.5%, and is in the following terms:

   3.His Honour erred in law in failing to give sufficient weight to the contributions of the Husband, including the financial contribution of $350,000 as shown by the contribution assessment for the Husband of 57.5%.

2. Again, this is not a complaint on which I have to express a concluded view.  This is because I have already decided that his Honour was in error in notionally reducing the amount of the husband’s damages award from $350,000 to $312,000, which is not an insignificant amount in the context of this case.  I have also decided that his Honour may have misled himself in some way by engaging in speculation about the components of the damages award.  Furthermore, I have decided that the asset pool should be increased by the value of the wife’s superannuation.  It will therefore be necessary for me to reach my own conclusion on what is an appropriate assessment of the parties’ contributions against a somewhat different background to that against which his Honour reached his assessment of contributions.    

3. Nevertheless because I will in due course have to undertake my own evaluation of the parties’ contributions, it will be useful at this point to consider his Honour’s analysis of the parties’ contributions which extended from paragraph 16 to paragraph 44 of his judgment.  I have already set out a number of those paragraphs and will now either set out or summarize those remaining paragraphs, which are relevant in considering the weight which should be accorded to the parties’ contributions. 

4. Before doing so, however, I mention – and this is important for my re-exercise of the discretion – that I did not understand Counsel for the husband to challenge any of his Honour’s findings in relation to the parties’ contributions apart, of course, from the matters concerning the husband’s damages award which I discussed in the context of ground two.  Rather it was the weight which his Honour gave to the husband’s contributions as reflected in his 57.5% assessment which was the subject of the challenge contained in ground three.

5. His Honour began his consideration of the parties’ contributions with the following general observations:

   16.At times each of the parties worked in paid employment and at other times each was not in paid employment and contributed solely as a homemaker and parent.  Subject to what will appear later in this judgment I do not regard one type of contribution as having more significance than the other.

6. The first specific contribution of either party which his Honour identified was the wife’s inheritance of $4,000 which enabled the parties to acquire the property which became the matrimonial home in the early 1980’s.  His Honour’s findings about this contribution by the wife were as follows:

   17.The block of land … cost $7,000.  The wife applied an inheritance of $4,000 towards this.  Given that the land was acquired in the order of twenty years ago the significance of this initial contribution has been very much eroded by the passage of time.  Nevertheless, it is a matter which weighs in the balance as it enabled the parties to acquire the … property.  It is appropriate when considering an initial injection of monies into a marriage to have regard to the use to which they were put: Pierce (1999) FLC 92-844.

7. Then in paragraphs 18 and 19 of his judgment, which I have earlier set out, his Honour identified the husband’s contribution of his damages award, which for the reasons earlier discussed, his Honour reduced, erroneously, in my view, from $350,000 to $312,000.

8. His Honour then embarked on his somewhat speculative analysis of the husband’s damages award.  Again I have already set out the relevant paragraphs from his Honour’s judgment (being paragraphs 20 to 28), and I have concluded that I cannot discount the possibility that his Honour’s speculative analysis may have influenced his ultimate assessment of the parties’ contributions.

9. Next his Honour considered the home-maker and parent contributions of each of the parties saying as follows:

   29.The wife worked in paid employment during the marriage and also contributed as a homemaker and parent.  The husband and one of the parties' children gave evidence that her homemaking contribution was very limited.  I do not accept this evidence.  I find no basis for treating the wife's homemaking and parenting contributions as being less than that of the husband.  As I have indicated, the only basis on which I place greater weight on those contributions made by the husband was that he had more time on his hands to apply himself to these duties and therefore, after he overcame his handicap and was able to contribute significantly to household tasks his contributions in this respect exceeded those of the wife.

   30.I find that from the time of the husband's accident until some time after 1993 when he regained his ability to perform domestic tasks, the wife provided the great bulk of the household tasks.  I propose to take this account.  I acknowledge that I should not double count as part of the additional work she undertook would have been reflected in the Griffiths v Kerkemeyer component of the husband's award.

10. Over the following 11 paragraphs (paragraphs 31 to 40) his Honour considered and ultimately rejected a claim made by the wife for an adjustment in her favour based on the principles set out in Kennon v Kennon (1997) FLC 92-757. As no issue arises about that matter in this appeal, no further reference need be made to it.

11. His Honour then turned to the post separation contributions of the parties saying as follows:

    41.After separation the younger children resided with the husband in the former matrimonial home.  This continued until 2003 when [K] began to, in the husband's words, “oscillate” between the two households.  Later in the year -  the husband says in July and the wife in May – [K] moved in full time with the wife.  The other two children remained with the husband.

    42.The wife's financial statement filed in October 2002 reveals payment of child support of only $15 a week for the three children although she says that for a time she also bought groceries for the children.  Even accepting this I find that post-separation contributions as a parent favour the husband.

12. Finally his Honour summarized his findings on contributions and expressed his conclusion that there should be a 7.5% adjustment in the husband’s favour in the following terms:

    43.I summarise my findings on contributions as follows.  I am satisfied that during the marriage the husband's contributions should be given more weight than those of the wife.  In the main this is because of the very substantial injection of capital through his damages monies although his “double contribution” is a factor.  However the damages monies have to be seen in context.  The marriage lasted for more than twenty two years and during this time both parties contributed in various ways to the acquisition, improvement and preservation of property and to the welfare of the family.  That part of the award that related to loss of earnings during the marriage has no special significance.  Moreover, there would have been a Grifffiths v Kerkemeyer component to the award.   I take account of the additional contributions made by the wife when the husband was disabled.  I take into account post separation contributions which favour the husband.

    44.In the result I make a contribution based adjustment of seven and a half percent in the husband’s favour.  The pool is in the order of $470,000 so this is the equivalent of about a $70,000 difference between the parties’ entitlements on a contribution based division.

13. It was submitted by Counsel for the husband that the husband’s damages award of $350,000 received in 1994 represents 74.5% of the net value of the property of the parties as found by his Honour at $469,429.00.  When that financial contribution is considered together with the husband’s home-making and parenting contribution, the conclusion must be that an adjustment of only 7.5% in the husband’s favour must mean that insufficient weight had been given to his contributions.  It was submitted on behalf of the husband that his contributions warranted an adjustment in his favour in the order of 17.5%.

14. However on behalf of the wife it was submitted when proper regard is had to the various contributions of the wife, his Honour’s assessment of the parties’ contributions was within a proper range.

15. It is not always easy to determine whether a particular assessment of contributions falls within (or perhaps just outside) the “generous ambit of reasonable disagreement” and is thus within “the area of immunity from appellate interference” (see Brennan J in Norbis v Norbis (1986) FLC 91-712 at 75, 178). For my own part, I would have thought that the husband’s contributions as identified by his Honour would have warranted an adjustment in his favour of no less than 10%. As I have earlier said, however, I do not need to express a concluded view on whether an assessment of the 7.5% can be said to fall outside the “generous ambit within which reasonable disagreement is possible”.

The adequacy of the overall award to the husband

1. The fourth ground of the husband’s appeal is in the following terms:        

   4.The result which divided the net property between them as to 67.5% to the husband and 32.5% to the wife was manifestly inadequate to the husband and outside the ambit of discretion available to the Court on the facts of this case.

2. It will be seen that this last ground does not expressly challenge the further 10% adjustment made by the Federal Magistrate in the husband’s favour on account of matters contained in s 75(2) of the Act, but only challenges the adequacy of the overall award of 67.5% to the husband.

3. However in the husband’s written submissions in support of ground four, it is contended that certain additional s 75(2) matters should have been taken into account by his Honour in addition to those which he did take into account, and that overall a just and equitable division of the property would have been one in which the husband received 75% rather than 67.5% of the parties’ property and that that latter percentage was submitted to be “manifestly inadequate”.

4. Again because I will need to re-exercise the discretion in relation to the parties’ entitlements based on contributions, because of the errors identified in the context of the earlier grounds and because any adjustment to be made on account of the s 75(2) matters will depend on the value of the parties’ entitlements based on their contributions, it is unnecessary that I concern myself with the question of whether his Honour’s 10% adjustment in the husband’s favour on account of the s 75(2) matters was adequate, or indeed whether the overall award was adequate.

5. It will however at this stage be convenient to identify the s 75(2) factors which his Honour considered relevant and then to refer to the further factors which it was submitted on behalf of the husband should have also been taken into account.

6. The relevant s 75(2) factors identified by his Honour were as follows:

   ·occupation of the home by the husband since separation (being, as pointed out by Counsel for the husband, a period from May 2002 to October 2003) while the wife has had to pay for accommodation;

   ·the husband’s responsibility to care for the two youngest children of the marriage (then aged 13 and 15 years) and the wife’s responsibility for the oldest child (then aged 16 years);

   ·the disparity of property resulting from the assessment of the contributions to the parties;

   ·the disparity in earning capacity (which his Honour identified as “the most significant issue”) - it being unlikely the husband would ever obtain future employment as against the wife having an earning capacity of just over $30,000.00 per annum; and

   ·the wife’s small superannuation entitlement.

7. I understood it to be conceded on behalf of the husband that, if the wife’s superannuation entitlement was to be regarded as property, it would then not be regarded as a significant s 75(2) factor, with its only relevance being, according to the written submissions on behalf of the husband, that as a result of the wife being in employment “an employer will make superannuation contributions for her in the future, whereas the husband does not and will not have that benefit”.

8. However it was also submitted on behalf of the husband that, in addition to the factors identified by his Honour, regard should also have been had in determining an appropriate adjustment on account of the s 75(2) matters, to the following matters:

   ·the fact that the husband is 46 and the wife is 44;

   ·the fact that the husband has a greater need for re-housing than the wife because he has the care of the youngest child;

   ·the fact that the wife resides with Mr C on a rural property on which he conducts farming activities; and

   ·the fact that the wife pays just $43.67 per month by way of child support to the husband.

9. The wife’s response to the husband’s submissions in relation to the s 75(2) adjustment was that the adjustment by the Federal Magistrate was within “the wide ambit of his discretion” and thus should not be disturbed.

10. Specifically in relation to the additional s 75(2) matters which the husband contends should have been considered, it was submitted on behalf of the wife that there was no evidence to suggest that the minor age difference between the parties had any relevance, and that there was nothing to suggest that the division of assets made by the Federal Magistrate would not allow the husband to re-house himself and the children adequately.

11. As I indicated earlier the need for me to re-exercise the discretion on account of the success of the other grounds of appeal, makes it strictly unnecessary that I express a view on the Federal Magistrate’s s 75(2) adjustment. However, I would say that I consider that there is force in the submission of Counsel for the wife that the adjustment was, in my view within the wide ambit of the discretion. More significantly perhaps, given that I have to re-exercise the discretion, I would also say that I consider that there is substance in Counsel’s submissions concerning the irrelevance of the parties’ ages and concerning the capacity of the husband to re-house himself out of the division made by the Federal Magistrate.

Re-exercise of the discretion

1. In re-exercising the discretion (which as I have earlier indicated, both parties would have me do), I would for the reasons given when discussing ground one, add the value of the wife’s superannuation ($7,600) to the net value of the property ($469,429) as found by his Honour.  There will thus be a pool valued at $477,029, say $477,000.

2. For purposes of my assessment of the parties’ contributions, there was nothing in the evidence to which I was taken which would persuade me that the value of the husband’s award and hence his financial contribution of $350,000 should be reduced on account of the loan from Mr S.

3. I understood Counsel for the wife to submit that, even if I reached the conclusion that the value of the husband’s award should not be notionally reduced because of the loan to Mr S, nevertheless only limited weight should be given to that part of the husband’s award which was lent to Mr S, because those funds were not available for the use of the family.  While this submission has some initial attraction, I ultimately reject it.  I do so because it seems to me that such an approach would require that the Court, having determined that a party had made a particular financial contribution, then determine whether that contribution has been usefully spent by the family (for example, has a particular item of furniture or equipment acquired with the financial contribution in question been of any use to any member of the family?).

4. Thus I propose to regard the husband’s damages award of $350,000 as a financial contribution by him (there being no evidence of the value of any Griffiths v Kirkemeyer component in that award).  When that contribution by the husband together with the other contributions of both parties identified in paragraphs 17 to 30 and 41 and 42 of his Honour’s judgment, being:

   ·the wife’s inheritance of $4,000 which his Honour found enabled the parties to acquire the matrimonial home and her employment throughout the marriage;

   ·the home-maker and parent contributions of both parties as described by his Honour in paragraphs 29 and 30 of his judgment (but disregarding the last sentence of paragraph 30 with its reference to the Griffiths v Kirkemeyer component and therefore giving full recognition or weight to the wife’s performance of the great bulk of domestic tasks in the period 1991-1993); and

   ·the greater post-separation contributions of the husband,

I would assess the parties’ contributions in the proportions of 62.5% to 37.5% in favour of the husband.

1. On the basis of these contributions, the husband would be entitled to property to the value of $298,125 and the wife property to the value of $178,875 ($298,125 + $178,875 = $477,000).  It must be remembered however that $7,600 of the wife’s entitlements is her superannuation entitlement.

2. In my view the only relevant s 75(2) matters to which significant weight should be attached in this case are the fact that the husband has responsibility for the two children of the marriage who are younger than the child for whom the wife is responsible, that the wife has an earning capacity in the region of $30,000 per year while the husband has no earning capacity and the significant capital disparity that will exist between the parties on the basis of their contribution based entitlements.

3. The first two matters favour the husband and they must be balanced against the third matter which favours the wife.  A balancing of these matters leads me to the conclusion that a 10% adjustment (that is, an adjustment in the order of $47,700) should be made in the husband’s favour.  So far as the wife’s superannuation is concerned while it must be recognised that $7,600 of her capital is not currently available to her in cash, it must also be remembered that she will in time have some superannuation entitlements which the husband will not.  Overall, I see the various aspects of the wife’s superannuation position as neutral. 

1. The overall award would therefore be 72.5% to 27.5% in favour of the husband.  In other words, the husband would be entitled to property to the value of $345,825 and the wife property to the value of $131,175.

2. I am satisfied that, given the relatively limited pool of property available for distribution between the parties, this is a just and equitable result in all the circumstances.

3. According to his Honour’s table of assets the parties each had the following assets at trial:

Husband	Wife
Landcruiser	$22,500	Harley Davidson m/cycle	$20,000
Toyota	$6,000	Hustang motorcycle	$6,500
KTM motorcycle	$5,200	Contents	$500
Contents	$5,000	Bank account	$31,028
Motorcycle proceeds	$12,000	Jewellery	$1,500
Cash	$15,000	Superannuation	$7,600
Total	$65,700	Total	$67,128
Less credit card debt	$3,500	Less credit card debt	$1,400
Less AGC debt	$899
$62,200	$64, 829

1. I understood the submissions of Counsel for the husband to proceed on the basis that the husband would be in a position to buy the wife’s share of the home.  Thus for purposes of these calculations the value of the home at $350,000 can be added to the husband’s list of assets giving him a total of $412,200 ($350,000 + $62,200) as the value of assets in his possession or control.

2. If the wife is to receive her entitlement of $131,375 and taking into account that at trial she had property in her possession to the value of $64,829, the husband would be required to pay her the sum of $66,346 ($131,175 – $64,829) to enable him to retain the home.  However, I was told by the husband’s Counsel that since the trial the husband has paid to the wife the sum of $34,472.

3. The effect of my order will therefore be that the husband will have to pay to the wife the sum of $31,874.  I will give the husband until 1 February 2005 to pay the balance owed to the wife.  

4. I note that in the husband’s notice of appeal, he sought the setting aside of Order Three of the Federal Magistrate’s orders.  I assume that this was because he was confident he could purchase the wife’s interest in the home which I certainly understood to be his position before me.

5. I will therefore set aside Order Three, but will give leave for the parties to apply to me in relation to enforcement orders.  That liberty would be of course without prejudice to the operation of the provisions concerning interest on overdue amounts.

Costs of the appeal

1. In the event that the appeal was to succeed, I understood each party to seek a certificate under the Federal Proceedings Costs Act 1981. Given that the appeal has succeeded on what, in my view, can be categorised as questions of law, I propose to grant to both parties such certificates.

Orders

1. That the appeal against the orders made by Federal Magistrate Brewster on 22 October 2003 (“the orders”) be allowed.

2. (a) That Order One of the orders be varied to provide that the husband pay to the wife the sum of $66,346.00 on or before 1 February 2005, with any amount paid pursuant to Order One as originally made to be credited towards the sum ordered to paid under this varied order. 

(b)That Order Three of the orders be set aside.

(c)That Order Four of the orders be varied by deleting “67.5%” and “37.5%” and substituting instead “72.5%” and “27.5%” (respectively). 

1. That there be liberty to apply to the Honourable Justice Finn in relation to the enforcement of these orders.

2. That the Court grants to the appellant 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 in respect of the costs incurred by the appellant in relation to the appeal.

3. That the Court grants to the respondent 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 in respect of the costs incurred by the respondent in relation to the appeal.

I certify that the preceding 73 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Associate