Keble and Keble
[2010] FamCAFC 163
•30 August 2010
FAMILY COURT OF AUSTRALIA
| KEBLE & KEBLE | [2010] FamCAFC 163 |
| FAMILY LAW - APPEAL – Whether the Federal Magistrate provided no or insufficient reasons –– Whether the Federal Magistrate’s decision was within the reasonable ambit of discretion. |
| Family Law Act 1975 (Cth) – s 75(2), s 79 (4)(a), s 79 (4)(b), s 79 (4)(c), s 79 (4)(d), s 79 (4)(e), s 79 (4)(f), s 79 (4)(g), 90MT(1)(b) |
| APPELLANT: | Mr Keble |
| RESPONDENT: | Ms Keble |
| FILE NUMBER: | CAC | 379 | of | 2008 |
| APPEAL NUMBER: | EA | 54 | of | 2009 |
| DATE DELIVERED: | 30 August 2010 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Bryant CJ, Finn & Boland JJ |
| HEARING DATE: | 9 December 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 25 March 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 252 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Rees SC |
| SOLICITOR FOR THE APPELLANT: | Phelps Reid Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Gillies |
| SOLICITOR FOR THE RESPONDENT: | Tiyce & Partners Lawyers |
Orders
That the appeal against the orders of Federal Magistrate Donald made on 25 March 2009 ("the Orders") be allowed.
That Orders 1, 2, 3 and 4 of the Orders be set aside and in their place the following orders be made:
(1)That within 42 days of the date of the orders of the Full Court the Wife pay to the Husband the sum of $51,091.
(2)That upon the making of the payment referred to in Order 1 the Husband transfer to the Wife the whole of his right, title and interest in the Second Inner Sydney City Property.
(3)That forthwith upon the making of orders by the Full Court the Wife transfer to the Husband all of her right, title and interest in the First Inner Sydney City Property and the Regional New South Wales Property.
(4)That simultaneously with the transfers referred to in Orders 2 and 3 the Wife forthwith do all things necessary to discharge the mortgage in favour of the Commonwealth Bank of Australia secured over the Second Inner Sydney City Property being dealing number 1234567, and the Husband is to do all things necessary to have discharged the mortgage in favour of the Commonwealth Bank of Australia secured over the First Inner Sydney City Property being dealing number 7654321 and the mortgage in favour of the Commonwealth Bank of Australia secured over the Regional New South Wales Property being dealing number ABC123.
That there be no order for costs in relation to the appeal.
The Court grants to the appellant Husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant Husband in respect of the costs incurred by him in relation to the appeal.
The Court grants to the respondent Wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under the Act to the respondent Wife in respect of the costs incurred by her in relation to the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Keble & Keble is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
FILE NUMBER: CAC 379 of 2008
APPEAL NUMBER: EA 54 of 2009
| Mr KEBLE |
Appellant
And
| MS KEBLE |
Respondent
REASONS FOR JUDGMENT
In proceedings for property settlement between a husband and wife in an eight year relationship with no children, Federal Magistrate Donald divided the net asset pool of $797,493 between Mr Keble (“the Husband”) and Ms Keble (“the Wife”) as to 60 per cent to the Wife and 40 per cent to the Husband.
The Husband has appealed the decision, seeking the orders he sought at trial which resulted in an equal distribution of the assets of the parties. His two grounds of appeal asserted that the Federal Magistrate erred in finding the respective contributions of the parties to be 60 per cent to the Wife and 40 per cent to the Husband and gave no, or insufficient reasons for his decision.
There was no challenge on appeal nor argument at trial about the value of the various assets and liabilities and the amount of the net asset pool found by the Federal Magistrate to constitute the net assets of the parties, including assets, liabilities and superannuation.
The assets and liabilities are set out hereunder:
Assets
Value
First Inner Sydney City Property (Joint)
$525,000
Second Inner Sydney City Property (Joint)
$850,000
The Regional New South Wales Property (Joint)
$225,000
Household possessions, in the Wife’s possession (Joint)
$12,000
Motor Vehicle, in the Wife’s possession (Joint)
$50,000
Jewellery (Wife)
$7,000
Savings (Wife)
$2,000
Superannuation (Wife)
$97,504
Superannuation (Husband)
$23,557
Savings (Husband)
$500
TOTAL
$1,792,561
Liabilities
Outstanding
Mortgage over the First Inner Sydney City Property (Joint)
$264,000 [sic] ($264,202)
Mortgage over the Second Inner Sydney City Property (Joint)
$562,666
Mortgage over the Regional New South Wales Property (Joint)
$158,200
Loan from Husband’s Parents to upgrade the Regional New South Wales Property (Husband)
$10,000
TOTAL
$995,068
NET PROPERTY
$797,493
The division of 60 per cent to the Wife and 40 per cent to the Husband was put into effect by the making of the following orders:
(1)That within 42 days the Husband transfer to the Wife the whole of his right, title and interest in the property situated and known as [the Second Inner Sydney City Property].
(2)That within 42 days the Husband pay to the Wife the sum of $28,860.
(3)That upon the said payment of $28,860 to the Wife pursuant to Order (2) herein, the Wife transfer to the Husband all of her right, title and interest in the properties situated and known as [the First Inner Sydney City Property] and [the Regional New South Wales Property].
(4)That simultaneously with the said transfers referred to in Orders (1) and (3) herein, the Wife is to do all things necessary to have discharged the mortgage to the Commonwealth Bank of Australia secured on the [Second Inner Sydney City Property] being dealing number [1234567], and the Husband is to do all things necessary to have discharged the mortgages to the Commonwealth Bank of Australia registered on the [First Inner Sydney City Property] being dealing number [7654321] and the mortgage on the [Regional New South Wales Property] to the Commonwealth Bank of Australia being dealing number [ABC123].
(5)Thereafter the Husband is to indemnify the Wife in relation to all outgoings in respect of the said [Regional New South Wales Property] and [the First Inner Sydney City Property] including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to the repairs and improvements and any other sums due or accruing in respect of the said property and the Wife is to indemnify the Husband in relation to all outgoings in respect of the [Second Inner Sydney City Property] including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to the repairs and improvements and any other sums due or accruing in respect of the said property.
(6)That within 14 days the Husband transfer to the Wife the whole of his right, title and interest in the Mercedes Benz motor vehicle, registration number [WXYZ6789] and thereafter the Wife indemnify the Husband against all liability in relation to the same.
(7)That within 14 days the parties divide equally between them the contents of the property at [the Second Inner Sydney City Property] save that all of the Husband’s personal belongings be returned to him prior to any division.
(8)That other than as outlined in the preceding orders herein, the Husband and the Wife are declared to have the sole right, title and interest in:
(a)Any chattels, goods, furnishings, motor vehicles and other property which are at the date hereof in their possession respectively; and
(b)Any monies, shares, debentures or superannuation entitlements which stand in their sole name respectively at the date hereof.
…
The trial judgment
The Federal Magistrate found that the parties commenced cohabitation in 1999, were married in October 2001 and separated in 2007. The Husband is employed in the public service and earns approximately $64,000 per annum. The Wife is employed in the private sector and earns approximately twice as much as the Husband.
The parties purchased three properties during the course of their relationship. The first was a property at the First Inner Sydney City Property, purchased for $425,000 using borrowed funds and $100,000 provided by the Wife from the sale of the South Australian Property which she had owned prior to the marriage.
The second property purchased by the parties was the Second Inner Sydney City Property. This property was purchased for $755,000 with the full amount of that purchase price being borrowed by the parties and secured by a mortgage over property. The borrowings for both of these properties were also secured over a property owned by the Husband, which had been purchased by him prior to the relationship.
The third of the properties was the Regional New South Wales Property and was purchased for $175,000. The whole of the purchase price was borrowed for this property and the borrowed funds secured by a mortgage over all of the properties.
Following their separation in 2007 the Wife continued to occupy the Second Inner Sydney City Property and paid the mortgage in relation to it. The Husband resided in the Regional New South Wales Property and paid the mortgage payments over that property. There was some dispute about the mortgage payments in relation to the First Inner Sydney City Property which was rented. We will return to that issue later in the judgment.
The Federal Magistrate, in considering the evidence, had regard to each of the affidavits filed by the parties and all of the other evidence given by each of them and to exhibits tended and submissions made on their behalf. He did not make any general findings of credit, and in fact there was very little dispute about the acquisition of the assets the Federal Magistrate found the parties owned at the time of the hearing.
Turning to the direct financial contributions to the property acquired by the parties, the Federal Magistrate found that the Husband owned a residential property in a suburb of Melbourne (“the Melbourne Property”) which he purchased some years prior to the relationship and for which he received rental income. The Federal Magistrate found that, throughout the relationship until the property was sold in 2004, the rental return was used for household expenses.
When the property was sold in November 2004 the proceeds of sale, being $200,000, was contributed by the Husband partly to pay down one of the joint home loans of $150,000 and the balance was applied to household expenses.
The Wife sold the South Australian Property owned by her prior to the relationship in February 2000. This property was also rented out until it was sold. The Wife received the net amount of $125,000 from that sale and applied $100,000 to the purchase of the First Inner Sydney City Property. At that time the Wife also owned shares in a publicly listed company (which later became valueless (transcript, 20 November 2008)), a Honda Prelude motor vehicle and superannuation benefits valued at approximately $25,000.
In addition, the Federal Magistrate found that the Husband brought a number of personal items into the relationship.
At the time the parties commenced cohabitation both of them were employed by the same employer and had similar incomes. The Wife leased her motor vehicle while the Husband owned his. The Husband’s motor vehicle was eventually sold for $1,000 and the proceeds from that sale were applied to household expenses.
When the Husband’s employer ceased operations in 2001 the Husband later received a redundancy package of $45,588 which he placed with other joint funds which were used for joint purposes.
From the time of his retrenchment in 2002 until 2006, the Husband was only able to obtain short-term contracts from time-to-time. All the income he received was contributed to joint funds for household expenses.
Conversely, the Wife upon leaving her previous employer obtained employment with a new company and was earning a reasonably significant income throughout that period. The Federal Magistrate noted that it was the Husband’s evidence that the Wife retained all monies earned by her which was in excess of $1000 a week for her own purposes. He noted that it was the Husband’s belief that the contribution of the parties, in the financial sense, were about equal if one took into account the various lump sums contributed by him and disregarded the funds kept by the Wife for her own use.
Despite it being agitated before him, the Federal Magistrate made no finding about the Husband’s submission or whether the Wife had indeed contributed all of her earnings to the joint resources of the parties and the extent by which her earnings exceeded the Husband’s during this period.
Under the heading “[i]ndirect contributions during the marriage” the Federal Magistrate noted that in the first six months of cohabitation, the parties lived in rental premises paid for by the employer of the Wife and that from 2002 when the Husband’s employer ceased operations he did not have full-time employment until 2006. The Federal Magistrate accepted his evidence that during this period he was the primary homemaker and did the cooking, cleaning and made domestic arrangements. The Federal Magistrate found that the Husband made a greater contribution in this regard, although finding that the burden would not have been excessive because there were no children. He finally noted that when purchasing the First Inner Sydney City Property the parties did have the benefit of $50,000 loaned to them by the Wife’s parents, which was advanced on an “interest free basis” and was repaid during the period of cohabitation.
The Federal Magistrate then dealt with the events since separation and dealt with a contentious matter agitated before him, namely, payments made by the Wife into the account from which the mortgage over the First Inner Sydney City Property was paid. It appears that the rent from this property was sufficient to cover the mortgage payment but for some reason the rent was paid directly into the mortgage account and not into the joint account from which the bank was taking mortgage payments. As a result, the Wife was making payments towards the First Inner Sydney City Property effectively when she had no need to do so.
Despite this being a matter of contention before the Federal Magistrate, it was finally conceded by the Wife, and appears to have been accepted by the Federal Magistrate, that nothing turned on this fact because the extra payments reduced the amount of the mortgage. It seems to us, however, this would have been a payment which seems to have amounted to approximately $8,000 which the Federal Magistrate may have reasonably taken into account as a contribution by the Wife. The Federal Magistrate may have done so because in paragraph 39 of his reasons he said:
I accept the evidence of the Wife that she has continued to contribute to the loan repayments required in relation to the two [Inner Sydney] properties...
The Federal Magistrate then set out the provisions of s 79(4)(a) to (c) of the Family Law Act1975 (Cth) (“the Act”) and after citing a passage from Pierce v Pierce (1999) FLC 92-844 at 85,873 concerning initial contributions, simply said, at paragraph 62:
[t]aking all these matters into consideration leads me to the view that, as a result of their respective contributions, the assets of the parties should be apportioned 60% to Wife and 40% to the Husband.
The Federal Magistrate then turned to the matters in s 79(4)(d) to (g) of the Act to consider whether any adjustments should be made and after making findings in relation to certain of those matters the Federal Magistrate decided that there were no factors which justified further adjustment in relation to the distribution of the property of the parties.
The appeal
The Husband's grounds of appeal essentially assert that the Federal Magistrate erred in finding that the respective contributions of the parties were 60 per cent on the Wife and 40 per cent on the Husband, and in failing to provide adequate reasons for that finding. Senior counsel submitted in written submissions:
[w]ithout any dissection or consideration [of] the effect of the findings of fact referred to above, His Honour at Paragraph 45 of the Judgement [sic] assesses the respective contributions at 60% to the Wife and 40% to the Husband. His Honour gives no reason why the greater capital contribution of the Husband and his greater home making contribution should not give rise to an equal contribution.
It is further submitted by senior counsel for the Husband, having regard to the s 75(2) factors the Federal Magistrate found that the Wife earned approximately $2,619 per week and the Husband $1,463 per week and that the Federal Magistrate gave no reasons for reaching the conclusion, that no further adjustment should be made in favour of the Husband.
The Wife resisted the appeal and her counsel submitted that there was an assessment of relevant matters sufficient to found the conclusion that the Federal Magistrate reached.
In our view, for the reasons submitted by the Husband, the appeal must succeed.
An analysis of the facts found by the Federal Magistrate (which do not appear to have been subject of any real dispute) indicates the following:
(a)That to the acquisition of the three properties jointly acquired by the parties, the Husband contributed from his pre-relationship assets, $200,000 in November 2004 being proceeds from the Melbourne Property, and a further $45,588 received from his redundancy.
(b)In addition, the Husband provided rent from the Melbourne Property of $720 per month for approximately five years.
(c)The Wife contributed $100,000 from the sale of the South Australian Property to purchase the parties’ first jointly owned property and a further $25,000 of her superannuation.
(d)When the Husband was made redundant in 2002, until 2006, he was the primary homemaker and was found to have made the greater contribution as homemaker whilst he was not in full-time employment.
(e)Finally, the Federal Magistrate found that the Wife had contributed $8,000 after separation to the mortgage on the First Inner Sydney City Property.
At trial, senior counsel for the Husband submitted to the Federal Magistrate that having regard to these matters, and also to the Wife's greater contribution of earnings, such greater contribution of earnings would be offset by the Husband's greater capital contributions and greater homemaker contribution to arrive at an equality of contribution.
Implicitly, as a result of his conclusion as to what percentage each should receive, the Federal Magistrate rejected that proposition and found that the Wife had made a significantly greater contribution than the Husband to the assets of the parties. What is missing is the Federal Magistrate’s explanation and analysis of why, given the uncontroversial facts to which we have referred, he came to that conclusion.
We do not consider that without some explanation as to how the Federal Magistrate arrived at his decision to award the Wife 60 per cent for her contributions, it could be said that the result was within the reasonable ambit of his discretion. As a result, the appeal must succeed.
Re-determination of the matter
Both parties agreed that if the appeal was successful, given the findings of fact which were unchallenged, that the Full Court should re-exercise the discretion of the Federal Magistrate.
Direct financial contributions
The Wife contributed $100,000 from the sale of the South Australian Property and had superannuation of $25,000 at the commencement of cohabitation. In addition the Wife’s parents loaned the parties $50,000 on an interest free basis, which they repaid. After separation the Wife made mortgage payments in respect of the property she occupied and in addition in respect of the First Inner Sydney City Property of approximately $8,000. Otherwise, rent was being received from the First Inner Sydney City Property which exceeded the mortgage repayments, albeit not by a significant amount.
The Wife earned significantly more than the Husband during the period 2002 to 2006 when the Husband did not have full-time employment.
From the date of separation to January 2008 when she took possession of the vehicle, the Wife made lease payments on the Alfa Romeo motor vehicle when the vehicle was in the possession of the Husband
The Husband provided funds from the rent of his Melbourne Property of $720 per month for five years.
The Husband contributed $200,000 from the sale of the Melbourne Property in 2004 and a further $45,588 redundancy payment.
From early 2003 to 2006 the Husband made the greater homemaker contribution.
In our view, having regard to the various contributions by the parties to the net assets as found by the Federal Magistrate (and not the subject of dispute before us), the division of property having regard to s 79(4)(a) to (c) should be an equal division.
As far as matters under s 75(2) are concerned the Husband contends that there should be an adjustment by virtue of the greater earning capacity of the Wife. The Wife contends that there should be no further adjustment.
At trial, the Wife was earning $2,619 per week and the Husband was earning $1,463 per week. However, the Husband’s position that he should have an adjustment pursuant to s 75(2) was only pressed in the event that the Court found the contributions were unequal and favoured the Wife. As we have not come to that conclusion, the Husband does not press for an adjustment under s 75(2) and, in our view, there is no reason for any further adjustment.
Each party currently has the following assets and liabilities:
Husband
Asset
Gross Value
Liability
Net Value
The First Inner Sydney City Property
$525,000
$264,202
$260,798
The Regional New South Wales Property
$225,000
$158,200
$66,800
50% of the household possessions
$6,000
Nil
$6,000
Superannuation
$23,557
Nil
$23,557
Savings
$500
Nil
$500
Loan from Husband’s Parents
Nil
$10,000
-$10,000
TOTAL
$347,655
Wife
Asset
Gross Value
Liability
Net Value
The Second Inner Sydney City Property
$850,000
$562,666
$287,334
50% of the household possessions
$6,000
Nil
$6,000
Mercedes Motor Vehicle
$50,000
Nil
$50,000
Jewellery
$7,000
Nil
$7,000
Savings
$2,000
Nil
$2,000
Superannuation
$97,504
Nil
$97,504
TOTAL
$449,838
NET TOTAL
$797,493
The figure required to adjust the assets retained by each party to ensure that each of the parties receives 50 per cent of the assets, taking into account that each party shall retain their respective superannuation entitlements, will be $51,091 which is payable by the Wife to the Husband.
Although the Husband sought orders that would split the parties’ superannuation under s 90MT(1)(b) of the Act, at the hearing before us both parties sought that each should retain their respective superannuation entitlements.
We propose to deal with the household contents in the same way that the Federal Magistrate did and note that no submissions were directed to us that we should do otherwise. We have thus taken into account an equal division between the parties of the household contents to be retained by each and the orders will continue to reflect that outcome.
Order 6 of the orders sought by the Husband on appeal required the Mercedes Benz vehicle presently with the Wife to be transferred to him. However, no submissions were directed to us regarding the vehicle or its present value and we think it preferable to leave the vehicle with the Wife as the Federal Magistrate did. Its value at trial was $50,000 and it would be open to the Wife to offer the vehicle to the Husband in part satisfaction of the sum she is required to pay him.
We consider the orders whereby the wife pays the husband the sum of $51,091 and that otherwise each party retains his or her present assets and liabilities, are just and equitable, having regard to the facts of this case considered in light of the matters which are required to be considered under s 79 of the Act.
Costs
Both parties sought that if the appeal was successful then an order should be made under the provisions of the Federal Proceedings (Costs)Act1981 (Cth).
As the appeal has succeeded on what is an error of law, in our view, it is appropriate for both the Husband and the Wife to receive the appropriate certificate under the Federal Proceedings (Costs) Act 1981 (Cth) in relation to the successful appeal.
I certify that the preceding fifty one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court comprising of Bryant CJ, Finn & Boland JJ delivered on 30 August 2010.
Senior Legal Associate:
Date: 30 August 2010
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