Kitman and Kitman
[2008] FamCAFC 166
•5 November 2008
FAMILY COURT OF AUSTRALIA
| KITMAN & KITMAN | [2008] FamCAFC 166 |
| FAMILY LAW – APPEAL – SPOUSAL MAINENANCE – Wife did not seek periodic spousal maintenance – Husband did not have an opportunity to present evidence or cross-examine. FAMILY LAW - APPEAL – Allowed - Orders for spousal maintenance dismissed. FAMILY LAW - CROSS APPEAL – PROPERTY - Major assets superannuation and former matrimonial home – Wife unemployed but full time carer of the children – Husband Sergeant in the army - Whether the Federal Magistrate erred in not giving sufficient weight to wife’s financial circumstances – s75(2) factors. FAMILY LAW - CROSS APPEAL – Allowed – Wife allowed greater proportion of assets and respondent’s superannuation fund. |
| Family Law Act 1975 (Cth) – ss72, 75(2), 90ME, 90MT(1)(b), 93A(2) |
| AMS v AIF (1999) 199 CLR 160 |
| APPELLANT: | MR KITMAN |
| RESPONDENT: | MRS KITMAN |
| FILE NUMBER: | TVM | 2919 | of | 2006 |
| APPEAL NUMBER: | NA | 35 | of | 2008 |
| DATE DELIVERED: | 5 November 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May J |
| HEARING DATE: | 29 July 2008 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 19 March 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 236 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Appellant appeared in person |
| COUNSEL FOR THE RESPONDENT:& CROSS APPELLANT | Mr A Collins |
| SOLICITOR FOR THE RESPONDENT:& CROSS APPELLANT | Wilson, Ryan & Grose |
Orders
The appeal be allowed.
The orders contained in paragraphs 8 and 9 of the orders made on 19 March 2008 be discharged.
The cross appeal be allowed.
The orders contained in paragraph 6 be varied so that the following orders be substituted:
6. That by way of property settlement the wife receive:
(a)70 percent (70%) of the assets of the parties excluding the husband’s interest in MSBS Superannuation; and
(b) 35 percent (35%) of the husband’s MSBS Superannuation.
(c) To achieve this division:
(i)The husband pay the further sum of $16,834.54 necessary to satisfy paragraph 6 (a) within 28 days of today.
(vii)In accordance with section 90MT(1)(b) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of [MR KITMAN] from his interest in the Military Superannuation Benefit Scheme (MSBS), [MRS KITMAN] is entitled to be paid (by the trustees of the MSBS) thirty five percent (35%) of the splittable payment and there shall be a corresponding reduction in the amount [MR KITMAN] would be entitled to receive but for these orders.
IT IS NOTED that publication of this judgment under the pseudonym Kitman & Kitman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 35 of 2008
File Number: TVM 2919 of 2006
| MR KITMAN |
Appellant
And
| MRS KITMAN |
Respondent
REASONS FOR JUDGMENT
Introduction
I mention at this introductory stage that this appeal is to be determined by me as a single Judge of the Family Court pursuant to arrangements made under section 94AAA(3) of the Family Law Act 1975 (“the Act”).
In a Notice of Appeal filed on 10 April 2008, the appellant husband appeals against spousal maintenance orders made by Coates FM on 19 March 2008.
The orders from which the husband appeals are as follows:
8.The husband pay to the wife by way of spousal maintenance the sum of $200.00 per week backdated to 23 October 2007. The amount owing between the date of trial and the day of judgment to be paid from the husband’s share of the marital property division set out in Order 6(a) above.
9.Spousal maintenance shall cease when the wife begins full time work or takes up a relationship, either by marriage or by de facto arrangement or when the husband retires from the Australian Defence Force.
The primary reason the husband seeks that the appeal be allowed and the orders discharged is that the wife did not ask for the orders at the trial.
In a Notice of Cross Appeal filed on 17 April 2008, the respondent wife appeals in particular against Order 6 made by the trial judge, which details the division of the property between the parties. In essence, the orders provided that the wife receive sixty percent (60%) of the proceeds of the sale of the former matrimonial home and twenty percent (20%) of the husband’s superannuation. The wife’s case is that this division is entirely outside the range of a proper exercise of discretion on the facts as found by the Federal Magistrate and failed to properly take into account a number of important considerations.
I will briefly outline the background relevant to both the appeal and cross appeal and then deal first with the husband’s appeal and then the wife’s cross appeal.
The wife filed an application seeking to adduce further evidence on the appeal. This application was resisted by the husband. I will deal with this issue at a later point in this judgment.
Background
The husband was born January 1959 and the wife was born August 1966.
They commenced a relationship sometime in 1989. They married on May 1991 in Townsville. There are two children of the marriage, a girl born June 1990, now 18 years and a boy born December 1991.
The parties separated on or about July 2005.
The husband is a sergeant in the Australian Army. The wife has not worked since 2004.
The parties’ home was purchased in 2003 and sold in April 2007. The major assets of the parties are the proceeds of the home and the husband’s superannuation.
The current relationship between the parties can best be described as acrimonious. It is unnecessary to reproduce at length the details of their former relationship, given that both the appeal and cross appeal relate to property matters. For present purposes it is relevant to note that the trial judge thought that both parties had engaged in domestic violence, specifically in the form of harassment (Reasons para 139-141).
There was much concern at trial as to the effect of the dispute between the parties on the emotional and physical well being of the children. Although it was determined that the husband was not the cause of the children’s depression, Coates FM concluded that “the marital dispute has affected the children” (Reasons, para 57).
As the Federal Magistrate explained:
58.Because of their conditions, the children are schooled at home through the Charters Towers School of Distance Education and cared for by the mother.
Not surprisingly, particularly because of their ages and views expressed, no order was made that the children spend time with the father other than “by agreement”.
The Appeal
The husband argues that the trial judge erred both in fact and in law in making orders with respect to spousal maintenance. Generally, the husband’s submissions can be grouped into four broad grounds of appeal. These are summarised below.
First, the husband asserts that an order requiring the husband to pay spousal maintenance to the wife from the date of the hearing, pursuant to section 72 of the Act, is an error of law.
Secondly, the husband claims that his Honour erred in his consideration of a lump sum payment of spousal maintenance.
Part of this argument is that the trial judge misunderstood the application of the wife. The husband refers to the wife’s Further Further Amended Application (filed 12 June 2007), which seeks in paragraph 8 a lump sum payment for spousal maintenance pursuant to the orders of Monteith J on 27 September 2006. Those orders were successfully appealed by the husband in this court, in a decision of 15 August 2007. The husband argues that “[i]n essence…the wife is seeking that the trial Magistrate re-instate the orders of 27 September 2006, despite them having been successfully appealed. The trial Magistrate could not do that.”
The third ground of appeal relates to his Honour’s consideration of the parties’ evidence with respect to spousal maintenance. In his Reasons for Judgment, Coates FM found that the husband “did not direct relevant questions [to the wife] in relation to the tests laid down in s 72 of the Act including the mother’s ability and capacity to work.” In his Grounds of Appeal, the husband complains that the wife was not questioned on these matters because she had not applied for periodic spousal maintenance.
The husband further argues that no order for lump sum or periodic spousal maintenance was made by the wife. This, he argues, indicates that she has no need for it. While the second proposition is not correct the first appears to be the case.
The final ground of appeal asserts that the trial judge made an error in fact in his consideration of the husband’s wages and financial positions. In his Reasons for Judgment, the Federal Magistrate was satisfied that the husband’s pay had increased by $170.00 per week and that “he [the husband] can reasonably maintain the wife” (para 201). However, the husband asserts that $150.90 of this increase was in fact rent allowance. Therefore the sum did not amount to a significant increase in wages. The husband outlined this in his final submission to the trial judge, filed 25 October 2007 where he also annexed his pay slip dated 18 October 2007.
Conclusion
It is not necessary to deal with these matters in any detail. Counsel for the wife made appropriate submissions conceding much of the argument.
The appeal should be allowed for a number of reasons. First, the wife did not ask for an order for periodic spouse maintenance. Secondly, that being so the husband did not have an opportunity to present evidence or cross examine on such an issue. Thirdly, the wife’s need for maintenance is a matter better considered in final property orders. In this matter, I am asked by the wife to consider those orders and for reasons I will give shortly it is apparent that the wife’s financial needs were not properly considered when reference is made to the findings of the trial judge and the orders ultimately made. The orders for spousal maintenance should be dismissed.
Cross Appeal
Grounds of Cross Appeal
The wife alleges that the Federal Magistrate erred in the orders made dividing the property of the parties.
The grounds of appeal for the wife’s cross appeal are as follows:
1.That the Federal Magistrate place no or not sufficient weight on the financial circumstances of the wife, either generally or compared with the financial circumstances of the husband.
2.The Federal Magistrate gave no or not sufficient reasons for reducing the wife’s entitlement to the husband’s superannuation to 20%, in circumstances where he found that the contributions of the parties during the marriage were equal.
3.The Federal Magistrate made findings of the husband’s contributions to superannuation in particular with respect to superannuation prior to the marriage and/or post separation, which findings were not open on the evidence.
4.The Federal Magistrate made findings essentially with respect to
the value of the husband’s superannuation as referred to in paragraph 3, which were not open on the evidence.
5.The Federal Magistrate’s findings with respect to the comparative section 75(2) factors for the parties which were not open on the evidence of were contrary to the evidence.
6.The Federal Magistrate gave insufficient weight to the needs of the children and/or to the need for the wife to continue her care for the children and/or made findings contrary to the evidence with respect to that issue.
7.The Federal Magistrate’s finding with respect to the wife’s alleged domestic violence against the husband, was not supported by evidence and/or was wrong in law.
8.The Federal Magistrate gave insufficient weight to the evidence of the husband’s domestic violence towards the wife and to the impact of that on her role as homemaker and carer of the children.
9.The Federal Magistrate’s orders with respect to the apportionment of property including superannuation to the wife were insufficient, were not supported by the evidence and/or were contrary to:
9.1the Federal Magistrate’s findings with respect to the evidence as a whole;
9.2the findings with respect to the conduct of the husband;
9.3the findings and/or the evidence with respect to the wife’s needs, including her ongoing need to support and care for the children.
10.The Federal Magistrate erred both in fact and in law in that he failed to place any or sufficient weight on the evidence of the comparative contributions of the wife and the husband to the care of the children following separation; and/or that he made findings in respect of contributions, including post separation contributions, which were not open on the evidence or contrary to the evidence.
The orders sought by the wife pursuant to the cross appeal (as amended) are:
1.That paragraph 6 of the order of the Federal Magistrate dated 19 March 2008 be discharged.
2.That the property of the parties other than superannuation be divided as to 70% to the wife and 30% to the husband.
3.That pursuant to section 90MT(1)(b) of the Family Law Act, there be a superannuation split in favour of the wife being one half of the husband’s Comsuper / MSBS entitlement.
4.That the husband’s appeal filed 10 April 2008 be dismissed.
5.That with respect to the payment to the wife of spouse maintenance (the issue referred to in the husband’s appeal) and in the alternative to paragraph 4 above, this court exercise its discretion and make orders in favour of the cross appellant wife, with respect to the quantum of and the period of payment of, weekly spouse maintenance.
6.For such further or other order as to this court may seem fit.
7.That the husband pay the wife’s costs of and incidental to the appeal proceedings.
Reasons for Judgment of the Trial Judge – Cross Appeal
The relevant orders made by Coates FM on 19 March 2008 were as follows:
6. That by way of property settlement the wife receive:
(a) Sixty percent (60%) of the proceeds of sale of the former matrimonial home; and
(b) Twenty percent (20%) of the husband’s MSBS Superannuation.
(c) To achieve this division:
i.The husband and the wife do all such acts as is necessary to authorise the release of the proceeds of sale of the former matrimonial home, presently held in the trust account of McDonald Leong Lawyers, in the proportion of sixty percent (60%) to the wife and forty percent (40%) to the husband.
ii.The husband or the wife as the case may be transfer his or her title and interest in any jointly owned policy or policies of life insurance so that the sole ownership of such policy or policies shall vest in the spouse shown as the life insured under such policy.
iii. The husband be declared the owner of:
a. All real estate held in his name;
b.The owner and beneficiary of all policies of superannuation (including death benefits attached thereto), subject to the exception of Order 6(b) above;
c.Life insurance (including any shares issued or to be issued pursuant to any policy) held in his name;
d.Redundancy payments, long service leave and all other benefits to which he is or has been entitled by virtue of any employment;
e.All monies and accounts retained by him at the date of separation;
f.All motor vehicles including the Kia vehicle, chattels, household furniture and contents and items of personal property presently in the possession of the husband.
iv. The wife be declared the owner of:
a.The owner and beneficiary of all policies of superannuation (including death benefits attached thereto) and life insurance (including any shares issued or to be issued pursuant to any policy) held in her name;
b. The superannuation subject of Order 6(b) above;
c.Redundancy payments, long service leave and all other benefits to which she is or has been entitled by virtue or any employment;
d.All monies and accounts retained by the wife at the date of separation;
e.All motor vehicles including the Mitsubishi […] vehicle, chattels, household furniture and contents and items of personal property presently in the possession of the wife.
v.Each party be solely liable for and indemnify the other against any liability encumbering and item of property to which that party is entitled pursuant to these Orders.
vi.That Order 6(c)(vii) and 6(c)viii have effect from the operative time in 6(c)(ix).
vii.In accordance with section 90MT(1)(b) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of [MR KITMAN] from his interest in the Military Superannuation Benefit Scheme (MSBS), [MRS KITMAN] is entitled to be paid (by the trustees of the MSBS) twenty percent (20%) of the splittable payment and there shall be a corresponding reduction in the amount [MR KITMAN] would be entitled to receive but for these orders.
viii.That the trustee of MSBS Superannuation Fund in accordance with the obligations set out under the
Family Law Act1975 and the Family Law (Superannuation) Regulations 2001, do all such acts and things and sign all documents as may be necessary to calculate the entitlement of, and make payment to the wife [Mrs Kitman] in accordance with 6(c)(vii) above.ix.The operative time for order 6(c)(vii) and 6(c)(viii) is four (4) business days after service of the final orders on the trustee.
x.That the husband shall so all things necessary, including but not limited to, exercising his request pursuant to Rule 7A.06(2) of the Superannuation Industry (Supervision) Regulations1994 for the transfer of the transferable benefit from the MSBS Superannuation fund to a fund of the wife’s choosing.
xi.The husband be restrained and an injunction issue restraining the husband from withdrawing any benefits from his MSBS superannuation fund prior to the operative time defined in paragraph 6(c)(vii) above.
xii.Upon receipt of the payment split notice pursuant to Rule 7A.03 of the Superannuation Industry (Supervision) Regulations 1994 the wife exercise her election pursuant to Rule 7A.06 of the Superannuation Industry (Supervision) Regulations 1994 to have the transferable benefit transferred to her own elected superannuation account.
At the commencement of his Reasons for Judgment, the Federal Magistrate outlined the various applications and orders sought by both parties. For the purposes of this appeal, it is sufficient to note that:
· the wife ultimately sought a seventy percent (70%) division of all property and child support in a lump sum payment; and
· the husband sought orders that the wife receive no spousal maintenance and that the property be divided so that the wife receives thirty-five percent (35%) of the proceeds of the sale of the former matrimonial home, and twenty percent (20%) of the husband’s superannuation.
His Honour correctly set out the principles governing property settlement matters under the Act, identifying the four step process as outlined by the Full Court in Hickey & Hickey & Attorney General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Pool
The property pool was determined by agreement between the parties and by concessions made by the husband during cross-examination. The pool was reflected in a table produced at paragraph 78:
ASSET
VALUE
Proceeds sale of marital home
$155,957.39
Consent withdrawals from Trust account
$3,000.00
Payment by husband to the wife which the wife alleges to be her share of first home owner’s grant
$7,500.00
Cash payment to husband (bank account) – wife alleges to be $3,000.00, husband alleges to be $1,500.00, say,
$1,500.00
Husband’s tools
$1,200.00
Husband’s Kia vehicle
$5,800.00
Wife’s Mitsubishi vehicle
$6000.00
Husband’s motorbike sold for
$600.00
Husband’s superannuation- MSBS (at 30 June 2006 – conceded in Husband’s submissions at p.2)
$340,895.83
Wife’s superannuation - Sunsuper
$1,539.33
TOTAL
$523,992.55
LIABILITIES
Husband’s car loan balance
$2,830.00
NET POOL
$521,162.55
There was no issue in relation to the appeal as to the identity or value of the parties’ assets or liabilities.
Contributions
In relation to contributions, his Honour noted that the parties had always had different earning capacities.
The husband is a sergeant in the Australian Armed Forces and during the trial gave evidence of an expected promotion. It was the husband’s evidence that his net wage was $2,551.45 per fortnight. This figure includes the sum of $142.42 deducted for superannuation.
In contrast, the wife has not worked since 2004. Prior to this she worked for a bakery and as a casual teacher’s aid. The Federal Magistrate noted that the wife cares for the children and received Centrelink payments, a family tax payment (adjusted downwards because one of the children received youth allowance) and spousal maintenance. His Honour concluded that for comparison purposes, the wife’s fortnightly income was $880.00. She also received child support, for both children of about $415.00 per fortnight.
During the marriage the wife cared for the children on her own at various times when the husband was away for up to eight months every 12 months. The Federal Magistrate concluded that the wife made a major contribution throughout the marriage, “both financially in a small way and non-financially in a big way.” She raised the children, maintained the home by doing all the housework and also worked casually and contributed those wages.
In relation to the parties assets the Federal Magistrate decided that, apart from superannuation, it was “built up during the marriage with only the husband’s superannuation being of a size to be considered as an initial contribution.”
The husband asserted that he made a major contribution to the purchase of the marital home in 2003. It was his evidence that he contributed $23,000.00 to the deposit, such funds coming from his military retention benefit (a payment made by the government for remaining in the armed forces).
The trial judge noted that the husband gave no evidence when he would leave the army, and no evidence as to the period of time over which the benefit was accrued. He concluded that as the purchase of the house was in 2003, well after the beginning of the relationship the value of the retention benefit was to be considered with all other contributions, both financial and non-financial.
His Honour referred to Mallett & Mallett [1984] HCA 21. The trial judge considered the contributions “over the length of the marriage, in detail, to assess the relative contributions.”
Ultimately, his Honour found that the wife’s contributions were equal to the husband’s financial contributions:
100.Given the raising of the children, especially when the husband was away for such long periods, her small financial contributions and non-financial contributions to the family I find her contributions equal to his financial contributions.
101.I also consider that part of the wife’s non-financial contributions must be considered as allowing the husband to devote his time to his military career and in doing so, she contributed indirectly to the husband’s ability to attract his pay as well as the retention payment. The retention benefit was part of the husband’s capacity to contribute financially to the marriage. He did not have a choice of not taking it in that he did not consider leaving the army and foregoing the benefit.
The finding of equal contribution to the date of separation was a finding clearly open to the Federal Magistrate and not really challenged in the appeal.
It was the husband’s case that the wife had wasted assets or secretly taken monies. His allegations included:
· That the wife had prevented him from renovating the house, thus reducing its value on sale; and
· That the wife kept a secret bank account and made fraudulent withdrawals from the mortgage redraw facility, including the withdrawal of $1,500.
The Federal Magistrate found that there was no evidence to support the husband’s case of waste and fraud against the wife. Ultimately, he did not accept the allegations of the husband. Rather, he accepted the wife’s claim that any funds withdrawn from the mortgage redraw facility were used jointly by the parties.
The wife’s case for adjustment beyond an equal division (being 70 percent of the property) was premised on her care of the children in light of the husband’s prolonged absences and “the abuse she suffered from the husband” (para 124).
The Federal Magistrate found that the evidence before him confirmed that the husband had:
· Attempted to have the wife involuntarily committed for mental health treatment under the Mental Health Act 2000 (Queensland);
· Complained to police that the wife had forged documents to access the mortgage redraw facility, resulting in a police investigation;
· Posted abuse directed at the wife, her legal representatives, his own former lawyers and a Family Court Judge on a website; and
· Claimed, without evidence, that the wife had alienated the children from him;
· Cut off access to money and credit cards.
The wife also said that she lived at her mother’s house between June and September 2003, because the husband had assaulted and threatened her. The husband did not admit any violent behaviour and claimed that the separation was the result of the wife’s anti-social behaviour.
The Federal Magistrate concluded that:
131.The evidence, and I failed to mention other allegations such as the husband cutting off access to money and credit cards which I accept occurred, and especially his attempt to have the wife committed to a psychiatric hospital, his complaint about fraud and his abuse of the children, in my opinion, equate to a course of conduct which, for the purposes of identifying the behaviour, would be classified as domestic violence under the Domestic and Family Violence Protection Act 1989 of Queensland. Such includes intimidation, harassment and abuse.
132.I have considered the aspect that the psychiatric commitment attempt and the complaint to police about fraud came after the parties separated. That is evidence I find to be an indication that the wife’s claim of angry behaviour towards her was real.
His Honour then considered the husband’s allegations against the wife of “similar behaviour”:
134.The husband said he was the subject of abuse or harassment directed towards him by the mother, ranging from anti-social behaviour, complaints to police of fraud, domestic violence, assault, sexual assault of their daughter, the selling of his goods at a garage sale and complaints to his superiors. He produced crime reports – without objection - obtained from the Queensland Police Service under freedom of information applications.
The Federal Magistrate found that the husband’s allegation that the wife made a false complaint to the police about his supposed sexual assault of their daughter could not be made out. Complaints were made to the police in 2006 for alleged incidents which occurred in 1998. The wife denied making the complaint and there was no evidence to challenge this.
However, with respect to the other allegations, his Honour found that:
138.…[H]er complaints about the husband’s alleged fraud, in signing documents related to insurance and her complaints to the husband’s superiors of the marital situation were calculated to cause the husband damage. The police complaints to cause that damage which occurs if a person is charged with a criminal offence. No charges were laid.
After considering both the husband and the wife’s evidence, the Federal Magistrate held that:
139.I think both parties have engaged in domestic violence.
This finding is somewhat remarkable because there was no evidence that the wife had been physically violent to the husband.
After referring to S & S (2005) FLC 93-246 the Federal Magistrate determined that:
142.Corroborative and actual evidence, apart from assertions that domestic violence was entrenched during the relationship, is missing. The evidence that there was domestic violence, in the form of harassment after the separation, is apparent and has been offered by both parties.
143.While the S & S reference to “contributions to the marriage” would usually mean contributions during the marriage, I do not read the statement as precluding post-separation contributions. In this case, the domestic violence in the form of harassment caused communication to breakdown such that post-separation contributions were more arduous for both parties, even to the extent that with such a small pool they could not see their way clear to reaching an agreement.
144.But for the wife’s abuse of the husband, I would have been prepared to find that she ought to have a weighting in her favour for the property settlement, but both made the other’s contributions more arduous.
Consideration of Factors under section 75(2)
The Federal Magistrate considered in considerable detail the circumstances of the parties in light of the factors listed under section 75(2) of the Act.
His Honour noted that the husband must retire from the army when he reaches the age of 55 years. There was no evidence that the husband had skills, was trained for or planned to take civilian employment upon retirement from the armed forces.
The wife, although not working, gave evidence at trial that she would work in the future. However, she qualified this by stating it was unlikely she would work in the near future because of her duties in caring for the children. The Federal Magistrate noted that but for the care of the children there was no reason why she would have ceased work.
At trial, no evidence was led before the judge as to whether the children would stay or leave home when they reached the age of 18. Although the wife claimed that she would have sole care of the children well beyond their attaining adulthood, the Federal Magistrate found that there was little or no evidence to support this claim.
His Honour found that the standard of living of both parties had suffered because of the separation. His Honour elaborated further, and made a number of observations, including:
· The wife will be receiving spousal maintenance, which should assist her to earn an adequate income, despite her lack of employment skill;
· The husband has stable employment with a reasonably good income and provision for superannuation;
· The husband has few commitments and has the advantage of subsidised rent and accommodation through the army. Consequently, he has a reasonable standard of living;
· The husband is not supporting any other person, but is paying child support;
· If and when the wife gets work, it will be low paid and unskilled.
The husband’s appeal being allowed, a factor taken into account by the Federal Magistrate, periodic maintenance is now removed.
The Federal Magistrate was particularly concerned about the care of the children. He noted that the wife currently cared for the two children and wished to continue such care, pursuant to section 75(2)(l). However, at the time of trial one child was almost 18 and the other will turn 18 in 2009. Coates FM further noted that should the children need further care, this issue should be raised with the relevant government authority.
His Honour found that the wife had contributed equally to the property pool but her capacity to work “will not bring the same wages as the husband earns. She needs to be able to re-establish herself.” The wife also claimed that her health had suffered as a result of the marriage, but his Honour found there was insufficient evidence to indicate the cause of the wife’s depression.
His Honour concluded that:
164.The considerations raised in the evidence relating to the care of the children requires an adjustment, in relation to the proceeds of the home, to the wife of 10 percent. That is she will receive 60 percent of those assets.
And at paragraph 167:
167.In summary, while the acts of domestic violence against each other caused equal distress, the mother had the burden and has had the burden of caring for the two teenage children and that care also justifies the 10 percent weighting in her favour.
The net pool was found by the Federal Magistrate to be valued at $521,162.55 so an allowance of 10 per cent is worth $52,116 if this percentage had been applied to the property overall. As applied to the house only the value is $15,595.
The calculation as provided by the Federal Magistrate was as follows:
165. In the marital asset schedule, there is a group of assets as follows:
WIFE
HUSBAND
Half of first home owners grant
$7,500.00
Cash to husband
$1500.00
Mitsubishi vehicle
$6000.00
Tools
$1200.00
Kia vehicle
$5800.00
Motorbike sold
$600.00
TOTAL
$13500.00
$9100.00
That totals $22,600.00 of the total assets.
The wife holds 59 percent of those marital assets.
I am going to leave those assets where they are, based on the same 60 percent division of the major asset. Further, I accept counsel’s submissions that the money component was used to benefit the family.
166.I am not going to disturb the decision of the parties in their agreement to release $3000.00 to the wife from the monies held in trust from the sale of the house. There was no adequate evidence, in my opinion, to show I should overturn their joint decision.
The property in the wife’s possession was the sum of $3,000 being withdrawals from the trust account, $7,500 for her share of the first home owners’ grant, the car valued at $6,000 and superannuation of $1539.33 in total $18,039.33.
A small error in the calculation by the Federal Magistrate in paragraph 63 is that he did not take into account the liability of the husband in the sum of $2,830 for his car.
Superannuation
A significant aspect of the appeal is how the Federal Magistrate treated the husband’s superannuation.
The key facts are that the relationship was found by the Federal Magistrate to have begun in 1989. The first child was born June 1990. The parties married May 1991. The husband became a member of a superannuation scheme on August 1987. The parties have now been separated for more than three years; they separated July 2005. The husband will be 55 in January 2014, a likely date for retirement.
In relation to the superannuation issue the Federal Magistrate said:
168.The wife has a very small superannuation fund. I think it harsh for the husband to say it is small because she does not work. It is small because she does not work because she has had care of the children, before and after separation. I note he says the wife should keep her superannuation.
…
170.Because of the evidence I am going to treat the acquisition of the superannuation differently, otherwise I cannot make a decision which is just and equitable in the circumstances.
…
174.The superannuation exists because of the husband’s chosen employment. It existed for four years before the marriage although no value had been stated. It exists between the date of separation until he retires.
175.The wife’s contributions to the superannuation I think are in a different position to the major assets of the marriage.
176.She says her contribution to the superannuation was the sole care of the children during the marriage, allowing him to concentrate on his career, resulting in her “nil” capacity to earn income.
177.The superannuation was deducted regardless of any other factors and was a compulsory scheme.
178.Although the husband was, I think, asking me to adopt a formula approach because he had the superannuation fund for about four years before cohabiting with the wife, Young J in Bar & JMR (No 2) [2005] FamCA 386 analysed the decisions of the past regarding the formula approach and rejected it in that particular case.
…
180.I will not adopt a formula approach, but consider the initial contribution of the husband, with this resource, was greater than that of the wife.
181.The husband remained in his military position for the 14 years of the marriage and was the principle wage earner.
182.The wife’s contributions were made as homemaker and a small financial contribution. As found, she often had the children for great periods of time when the husband was away and has them now with their described medical conditions.
183.The husband has a greater earning capacity, at least while in the military.
184.For this and the care of the children she has been given a weighting greater than that of the husband in the distribution of the money from the sale of the marital home.
185.The husband has a superannuation fund because of his ability to work in his chosen field.
186.His needs factor under s75(2) will materialise at the age of 55, in six or seven years time, when he retires. He will need money to live.
187.I think the appropriate division is an 80 percent division to the husband, but not necessarily for the reasons he puts forward. I take into account his contribution for nearly four years before the marriage, that it was a compulsory scheme, his contributions to the scheme after separation in 2005, the fact the mother is younger and has opportunity to build her own superannuation and most importantly, he ceases work when he reaches the age of 55 years.
In relation to this issue, the facts as found by his Honour may not be incorrect, the result of 20 percent to the wife however in my view, in these circumstances must be entirely outside the range of a proper exercise of discretion.
Applicable Law
It is appropriate at this stage to identify the principles governing an appeal such as this from a discretionary judgment. The law in this respect is not in doubt.
In Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627, Kitto J described the appropriate level of restraint that an appellate court should exercise in respect of discretionary matters as follows:
there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.
It was clearly enunciated in House v The King (1936) 55 CLR 499, at 504-505 that:
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.
In Gronow v Gronow (1979) 144 CLR 513 Stephen J said at 519:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion.
Thus, as a matter of firmly established appellate process it is necessary first to establish whether there is any recognised ground for reviewing the Federal Magistrates discretionary decision consistent with these principles. It is also appropriate to refer to what Kirby J said in AMS v AIF (1999) 199 CLR 160 at 211:
[A]n appellate court, invited to review the exercise of discretion at first instance will avoid an overly critical, or pernickety, analysis of the primary judge’s reasons, given the large element of judgment, discretion and intuition which is involved. Only if a material error of the kind warranting disturbance of a discretionary decision is established is the appellate court authorised to set aside the primary decision, to substitute its own exercise of discretion or to require that it be re-exercised on a retrial.
In Fox v Percy (2003) 214 CLR 118 Gleeson CJ, Gummow & Kirby JJ as part of a discussion in relation to the powers and functions of courts of appeal said:
22.The nature of the "rehearing" provided in these and like provisions has been described in many cases. To some extent, its character is indicated by the provisions of the sub-sections quoted. The "rehearing" does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. No such fresh evidence was admitted in the present appeal.
23.The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance". On the other, it must, of necessity, observe the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the "feeling" of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
The approach of the Federal Magistrate in dealing with the two major assets separately is not necessarily an error. However, the conclusions reached in relation to both those properties provided the wife in the circumstances of this case with assets considerably less than reflected her contribution and relevant s 75(2) factors would demand. This is an appellable error such that the wife’s appeal should be allowed.
The more difficult question is whether the matter should be remitted for rehearing or whether I should re-exercise. Although there is some dispute about the relevant facts, in particular the parties’ current circumstances, I am mindful of the cost of litigation to these parties. It is appropriate that I re-exercise the discretion.
Application to adduce further evidence
Before embarking on the re-exercise of the discretion it is necessary to consider this application. Section 93A(2) confers on the court an express power to receive further evidence upon questions of fact. In CDJ & VAJ(No 1) (1998) 197 CLR 172 the High Court said of the admission of the further evidence under the heading of s 93A(2) at par 104:
In the exercise of the discretion conferred by a power such as s 93A(2) the critical factor is the subject matter of the proceedings with which the appeal is concerned. This is because the purpose of the power to admit further evidence is to ensure that the proceedings do not miscarry. Tests such as those stated in Wollongong Corporation based on the need for finality in litigation are therefore not necessarily applicable to cases in which the interests of third parties, such as children, are at stake, although factors such as finality, discoverability of the evidence and its likely effect on the orders made are usually relevant to the exercise of the discretion.
And in par 109:
One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellant procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
And in par 111, and we quote in part from that paragraph:
The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
The affidavit of the wife filed 12 June 2008 explains that she wishes to adduce further evidence in relation to her financial circumstances to assist her cross appeal and also to oppose the husband’s appeal. To the extent to which the evidence may be relied upon in relation to the husband’s appeal which has been allowed, it is rejected. An affidavit was also filed by Mr F who explains the rent payable in Townsville for a modest family home would rent for not less than $300.00 per week. I would have thought that such evidence must be relatively uncontroversial and I take it into account especially as the wife is currently living in cramped circumstances with her parents.
In the wife’s affidavit she asserts that she is unable to work by reason of the medical and personal circumstances of her children. Her income consists of carers payments for the children and other pension benefits. The assessed child support is $209.00 per week so that in total her income she says is $547.00 per week.
If there was a rehearing of the matter no doubt the husband would wish to cross examine the wife on her assertion that she is unable to work because of the care of the children and her expenses. He also takes issue in his own affidavit with almost every fact asserted by the wife.
The circumstances of this case could not possible justify the matter being remitted for rehearing. It is sufficient to conclude only that there is a dramatic difference between the parties’ financial circumstances and that the wife is in considerable need both currently and in the future.
Submissions of the wife
Counsel explained that the order sought by the wife should the appeal be successful is seventy per cent (70%) of the assets apart from the husband’s superannuation and a splitting order providing that the wife receive fifty per cent (50%) of the MSBS fund.
It was submitted that there was an absence of reasons in relation to his Honour’s findings and conclusions about the husband’s superannuation and their respective s 75(2) factors. In particular it was argued that the learned Federal magistrate did not properly take into account the physical and financial burden for the mother of caring for the children in the future. One difficulty with this argument, I would observe is an absence of evidence in that respect.
It was also submitted that his Honour was wrong in his conclusion in paragraph 39 in relation to domestic violence, that it was “trivialisation of the reality of the relationship”. Again, I would observe that one difficulty in the wife’s case in this respect is an absence of evidence about the effect of the violence on her capacity to care for the children and on her future circumstances.
Ultimately, while recognising that a part of the argument in the cross appeal is absence of reasons it was said that as the wife is impecunious she would not wish a retrial. An effort was made to which I have already referred in the section in relation to further evidence to rely on some updating material about the wife’s circumstances. Although I would observe that the evidence in relation to the parties’ financial circumstances since the trial was entirely controversial, that the husband was insistent on wishing to cross examine, and noting the proportionality of the case, the wife having already spent $40,000 in relation to the property trial, ultimately counsel suggested that perhaps there should be a retrial. In my view, this would be a denial of justice to both parties.
Submissions of the husband
The husband submitted that his Honour was correct in treating the assets differently and that he had provided adequate reasons. Further, that the contribution of the parties’ to the superannuation had been different. The husband had been contributing some years prior to co-habitation and will do so for many years until he obtains the benefit. There was no objection from the wife’s counsel to the husband telling me that he joined the defence forces in August 1987. As to retirement, the husband explained that compulsory retirement was at age 55 years and he referred to the evidence in the trial appearing at T/s 116. The husband said in the trial that with his injuries he may not continue until age 55 and that he may retire earlier. At best, he has another six years of employment in the armed forces.
Conclusions
In this case there was some basis for treating the husband’s superannuation separately, in particular the nature of the asset and the different contribution made by the wife to it as opposed to the other assets.
Accepting the finding that the parties’ contribution during the marriage was equal, a consideration of the factors post separation would not deviate from that result. The most significant factors are those in relation to matters to be considered pursuant to s 75(2). They are:
· The parties’ respective current circumstances;
· The parties’ respective financial futures;
· The parties’ financial and non financial support of the children.
The husband’s evidence at trial was that his net income is net $2,551.45 per fortnight which includes the contribution he makes for superannuation. The wife does not work and is entirely dependant on pensions.
Most likely the husband will continue work to age 55 years. The evidence in relation to the wife’s potential for work is that she is unskilled, has not worked for many years and has living with her two children, one an adult, who have serious difficulties.
First dealing with the assets other than superannuation, the wife should receive a substantial proportion of them. To not allow the husband some share of the net proceeds of the house would be an unfairness to him because it would leave him with only a car with a liability and an expectation of superannuation in a number of years time.
On balance, a proper order is that the wife should receive 70 percent (70%) of the parties non superannuation assets. Counsel for the wife told me that this would mean that in addition to the property and monies already distributed to her a further sum would need to be paid by the husband. A calculation of the assets excluding the superannuation of each party reveals that sum to be $178,727.39. Seventy percent (70%) of that is $125,109.17. Of that I was informed by counsel that the wife already has assets of $108,274.63. It can be seen then that the balance payment is $16,834.54. The effect of the order is that the husband pay such sum to the wife within 28 days.
The division of the husband’s superannuation fund is more problematic. First it must be recognised that the husband did contribute to the fund for a few years prior to cohabitation. This was of course many years ago and must have been of a relatively minor amount. Secondly, since separation, the husband has continued to have deducted from his wages an amount to contribute to the fund. I have already referred to his pay slip attached to his submissions before the Federal Magistrate which provided the information about his income and the monies deducted for superannuation.
Thirdly, the husband will at best work for a further six years approximately contributing to the fund.
The most significant fact is that the fund was accumulated during the relationship of some 16 years. Considering the contribution of the husband both before and after the relationship some discount can be made however, again emphasising the very different circumstances of the parties, especially the reality that the wife has very little prospect of accumulating any significant superannuation for herself, the proper order is that the wife receive thirty five percent (35%) of the splittable payment.
I certify that the preceding ninety eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Justice May.
Associate:
Date: 5.11.08
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