Kivlen and Kivlen (No. 2)
[2009] FamCAFC 184
•12 October 2009
FAMILY COURT OF AUSTRALIA
| KIVLEN & KIVLEN (NO. 2) | [2009] FamCAFC 184 |
| FAMILY LAW – APPEAL – appeal against a final property order – Husband’s debts paid by Wife at the beginning of the marriage – the Husband’s state of health and capacity for paid employment – exclusion of superannuation interests within Federal Magistrates discretion – no error in relation to a just and equitable outcome – significant weight on the contribution by the Wife – the Federal Magistrate did not act upon a wrong principle, allow extraneous or irrelevant matters to guide or affect him, or was mistaken as to the facts or failed to take into account some material consideration – appeal dismissed |
| Family Law Act 1975 (Cth) Federal Magistrates Act 1999 (Cth) Federal Magistrates Court Rules 2001 (Cth) |
| House v The King (1936) 55 CLR 499 Lovell v Lovell (1950) 81 CLR 513 Gronow and Gronow (1979) 144 CLR 513 Norbis and Norbis (1986) 161 CLR 513 CDJ v VAJ (1998) 197 CLR 172 AMS v AIF (1999) 199 CLR 160 De Winter and De Winter (1979) FLC 90-605 |
| APPELLANT: | MR KIVLEN |
| RESPONDENT: | MS KIVLEN |
| FILE NUMBER: | DGC | 439 | of | 2008 |
| APPEAL NUMBER: | SA | 36 | of | 2009 |
| DATE DELIVERED: | 12 October 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | O'Ryan J |
| HEARING DATE: | 25 August 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 16 December 2008 |
| LOWER COURT MNC: | [2008] FMCfam 1282 |
REPRESENTATION
| THE APPELLANT: | Mr Kivlen in person |
| COUNSEL FOR THE RESPONDENT: | Ms Jenkins |
| SOLICITOR FOR THE RESPONDENT: | Ken Smith & Associates |
Orders
The appeal be dismissed.
The Application in an Appeal filed 7 August 2009 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Kivlen & Kivlen is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| THE APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 36 of 2009
File Number: DGC 439 of 2008
| MR KIVLEN |
Appellant
And
| MS KIVLEN |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This is an appeal pursuant to s 94AAA(1) of the Family Law Act 1975 (Cth) (“the Act”) by Mr Kivlen (“the Husband”) against a final property order made by Federal Magistrate Burchardt on 5 February 2009. The Respondent to the appeal is Ms Kivlen (“the Wife”). The Wife was the Applicant in the proceedings before the Federal Magistrate.
On 2 July 2009 the Chief Justice made an order pursuant to s 94AAA(3) of the Act that it was appropriate for the jurisdiction of the Family Court in relation to the appeal to be exercised by a single judge.
BACKGROUND AND REASONS FOR JUDGMENT
The Wife was born in October 1973. The Husband was born in July 1979.
The Husband contended that the parties commenced to live together in about August 2003.
At the commencement of cohabitation the Wife was a Credit Controller and earning approximately $40,000.00 per annum. The Husband was in his final year as an apprentice carpenter. In an affidavit filed on 18 August 2008 the Wife deposed that the Husband was earning approximately $15,000.00 per annum.
In his reasons the Federal Magistrate said:
8.When one comes to contributions, the matter becomes more complicated. It is asserted by the wife and not really denied by the husband that at the time of the commencement of the relationship he had debts of about $14,500.00 which the wife paid out. I accept further that she paid out $6,000.00 towards a car loan for his benefit at that time in 2002.
9.I also accept, because it is not really denied, that the wife contributed some thousands of dollars to the purchase of tools for the husband, who was an apprentice carpenter at the time the parties first commenced to live together. He completed his qualifications thereafter.
The Husband complained that the Federal Magistrate was in error in relation to the amount he said the Wife paid for the benefit of the Husband at the commencement of cohabitation. The Husband contended that it was not $20,500.00 but about $10,000.00. In an affidavit filed on 18 August 2008 the Wife deposed that the Husband had debts of approximately $11,500.00 which she paid.
In August 2003 the Wife’s mother died. The Wife later received an inheritance from her mother’s estate which included a half share of a property in Victoria (“the Victorian property”) valued at $132,000.00, together with $45,000.00 in cash. The Wife later acquired the “interest of her sibling” in the property and to pay the cost obtained a mortgage loan that was secured on the title of the property.
The parties were married in November 2003.
There are two children of the marriage. The first child was born in December 2003.
In July 2004 the parties moved to Queensland and first lived in rented accommodation.
In about December 2004 the parties purchased a property in Queensland (“the Queensland property”) for $155,000.00 and borrowed all of the funds to pay the costs of purchase.
The second child was born in April 2005.
The parties separated on 18 September 2005. The Wife and the children commenced to live in Victoria. The period of cohabitation was approximately two years.
In his reasons the Federal Magistrate said:
11.Upon separation, the wife took some $18,000.00‑odd worth of matrimonial funds with her in order to enable herself to re‑establish in Melbourne because she relocated from Queensland. She did so, she told me in Court, because she regarded those funds as being essentially generated by her inheritance. Indeed she plainly regarded most of the assets of the parties as having been originated from that wellspring.
…
16.I note that the amount extracted by the wife at the end of the relationship was not substantially different from the discrete amounts that she put in at the beginning … .
In relation to what happened after separation the Federal Magistrate said:
12.There was a certain amount of time taken up before me as to amounts contributed by each of the parties to the mortgage of the property essentially held by the other (the husband has essentially held the Queensland property and the wife has essentially held the [Victorian] property).
13.I accept that the wife made a contribution of some $2,700.00 to the Queensland property shortly after or about the time of separation. I also accept that the husband has continued to pay about $1,000.00 a month towards the Queensland property. I further accept the husband's assertion that he wished to sell that property or rent it out and that the wife refused.
In an affidavit filed on 30 October 2008 the Husband deposed that at the time of separation he had a debt for $2,850.00 on his credit card and a tax debt for $901.00.
The Wife's evidence was that to her knowledge at the time of separation there was only one credit card in the Husband's name and that the amount owing on that card at about that time was approximately $2,500.00. Furthermore, she testified that the Husband transferred funds totalling $2,000.00 from her Commonwealth Visa account into his National Savings Account just prior to separation for the purpose of paying out his credit card. The Wife submitted that accordingly, any debt on that credit card has been accumulated since separation and should not be included in the net assets.
In his affidavit of 27 October 2008 the Husband contended that after separation he paid the mortgage debt on the Queensland property. He contended that there were periods when he was not living in the property. He also contended that he borrowed an estimated $18,000.00 from his mother and obtained amounts of $4,485.25 and $1,130.00 after tax from his superannuation interest. As seen, the Federal Magistrate at [13] accepted that the Husband continued to pay the amounts due under the mortgage secured on the Queensland property.
In his affidavit filed on 30 October 2008 the Husband contended that in January 2007 he suffered a grand mal epileptic seizure. The Husband contended that in late 2007 he was diagnosed with depression.
The Husband gave evidence that during 2007 he worked “on and off for about six months”. In cross-examination the Husband admitted that in September 2007 he told the Child Support Agency that he “was at a good job earning good money” (transcript, 14 November 2008 at p 31).
Until September 2007 the Husband was assessed by the Child Support Agency to pay the amount of $12.27 per fortnight. At that time the Wife requested a change of assessment from the Child Support Agency and the Husband was reassessed to pay $270.00 per fortnight. However, on one view of the evidence, the Husband may have ceased paid employment in about February 2008 when he commenced to receive the Newstart allowance.
On 11 February 2008 proceedings were commenced when an application was filed by the Wife. The Wife filed affidavits on 11 February 2008, 18 August 2008, 25 August 2008 and 3 November 2008. The Wife filed a Financial Statement on 9 April 2008.
On 29 February 2008 a Response was filed by the Husband.
During cross-examination the Husband testified that he receives the Newstart allowance and not a disability benefit. He testified that he commenced to receive the benefit in about February 2008 (transcript, 14 November 2008 at p 30).
There was in evidence before the Federal Magistrate, which were marked as Exhibit R1, copies of bank statements relating to an account in the name of the Husband with the National Australia Bank. The last statement ended with a transaction on 21 April 2008. On 4 and 11 April 2008 the Husband deposited wages from employment of a total of $3,328.00.
As at 6 August 2008 the Husband owed child support of $6,948.52.
The hearing of the applications for final orders commenced before the Federal Magistrate on 14 November 2008. At the conclusion of the hearing the Federal Magistrate reserved judgment. Then on 16 December 2008 the Federal Magistrate delivered Reasons but did not pronounce judgment.
In his reasons the Federal Magistrates at [1] to [4] gave an introduction to the proceedings. The Federal Magistrate then summarised the “The Pool” of property:
5.The asset pool consists of the Queensland property at […], which has an agreed value of $300,000.00, and the Victorian property inherited by the wife at […] valued at $306,000.00. At the moment there is a mortgage on the Queensland home of approximately $152,000.00 and a mortgage on the [the Victorian] home of approximately $89,000.00.
6.It should be noted that the mortgage on the [the Victorian] property has remained much the same since the property was first purchased when the wife put into that property not only her share of it but the bulk of the cash funds that she obtained. The property has either been rented or has been paid for by the wife substantially thereafter.
7.The parties have a small amount of superannuation, being approximately $17,000.00 to the wife and about $6,000.00 to the husband. As I find, these funds were generated either before or after the relationship and should in my view be excised. The parties’ cars in my view have such minimal value as to be inappropriate for any emphasis in the pool; the parties should simply keep the vehicles they have.
In summary, the Federal Magistrate found that the assets of the parties consisted of the following:
$
·The Queensland property 300,000.00
·The Victorian property 306,000.00
·Superannuation of Wife 17,000.00
·Superannuation of Husband 6,000.00
Total629,000.000
Less
·Mortgage, the Queensland property 152,000.00
·Mortgage, the Victorian property 89,000.00
Total (241,000.00)
Balance388,000.00
I observe that the net equity in the property at the Victorian property was $217,000.00 and the net equity in the property at the Queensland property was $148,000.00. This means that the net equity in both properties was a total of $365,000.00.
As to the superannuation interests, as seen, the Federal Magistrate said at [7] that as the interests “were generated either before or after the relationship [the interests should] be excised”. This means that he found that the net assets had a value of $365,000.00. The Husband does not complain about how the Federal Magistrate dealt with the superannuation interests.
The Husband does complain about the failure of the Federal Magistrate to include certain unsecured liabilities of the Husband.
The Federal Magistrate dealt with what each party had at the commencement of the relationship. He then proceeded at [8] – [17] to deal with “Contributions”. I have already set out what the Federal Magistrate said at [8] and [9] of his reasons. He continued:
10.The exact pattern of earnings by the parties during the relationship is a little difficult to follow but it appears clear that at the commencement of the relationship the wife was earning substantially more than the husband. Naturally enough, following the birth of their first child and the completion of the husband's apprenticeship, that position was reversed.
…
14.Neither party sought that I approach the assets of the parties on an asset‑by‑asset basis. On balance, I think that is the correct approach in the particular circumstances of the case. It is clear, on any view, that the wife's inheritance was a major contribution to the position the parties now find themselves in after what was on any view a relatively short relationship.
15.While it is clear that the husband's contributions as father and predominant income‑earner were significant, likewise the mother's contributions as a mother and income‑earner were too. I accept the submission advanced by counsel for the mother that the day‑to‑day contributions of the parties should be assessed as equal. I also accept that there should be a substantial adjustment in the wife's favour for the $170,000.00‑plus contribution that she made.
16.I note that the amount extracted by the wife at the end of the relationship was not substantially different from the discrete amounts that she put in at the beginning. In all the circumstances, I think that it is appropriate that there be a 20 per cent adjustment in the wife's favour because of the overwhelming nature of the contribution that she made.
Thus the Federal Magistrate concluded at [16] that the contribution based entitlement of each party, expressed as a percentage of the net assets, should be assessed as to 70 per cent to the Wife and 30 per cent to the Husband. This means that the Wife’s contribution based entitlement had a net value of $255,500.00 and the Husband’s entitlement had a net value of $109,500.00. The difference in the respective entitlements was $146,000.00.
In his reasons the Federal Magistrate then proceeded at [18] – [34] to deal with the “Section 75(2) Factors”.
The first matter the Federal Magistrate dealt with was the Wife’s responsibility for the care and support of the two children. The Federal Magistrate said at [18]:
18.When one turns to the s.75(2) factors, the wife laid particular emphasis upon the fact that she is the primary carer for these two small children. Indeed that is clearly the case because the father is only able to visit occasionally from Queensland. The wife will plainly have to look after these children for many years to come and it is clear on the materials that her chances of getting any substantial child support are low.
I observe that in relation to child support the Federal Magistrate said:
17.One final matter I should address under this heading is the $8,000.00 child support allegedly owed by the father. As is so often the way, although the materials filed suggest that such a sum is indeed owing, the uncertainty as to the father’s work prospects is such that it cannot be overlooked. Further, according to paragraph 14 of the wife’s affidavit filed on 3 November 2008, the father has an extant application “to reduce his child support to nil”. In these circumstances, I am not able to bring the alleged $8,000.00 into account.
The Federal Magistrate then dealt with the income, earning capacity and state of health of the Husband. Referring to the Husband, the Federal Magistrate at [2] said “I should make it clear that his health is by no means good”. Then at [19], referring to Exhibit R1, the Federal Magistrate said that the Husband “has been able to work from time to time and has obtained not insubstantial sums in doing so, including in the years 2007 and 2008”. The Federal Magistrate said:
20.The husband has also, however, been on Newstart benefits for a substantial amount of time during that period. That this is so has arisen from the fact that in early 2007 the husband had a grand mal seizure. It is his case that he suffers from epilepsy. It is his case also that he is depressed. He has annexed to his affidavit filed on 30 October 2008 a number of medical reports.
21.Counsel for the wife objected to these on the basis that they are hearsay. I pointed out that pursuant to s.69 of the Evidence Act 1995 they are probably admissible in any event.
22.Counsel went on, as an alternative submission, to observe that even if the documents were admissible, her client suffered the disadvantage of being unable through cross‑examination to test the expertise and flaws of the medical opinions expressed in the exhibits. Counsel is correct to make this criticism but in my view it is one of the practical problems that arise when you have a self‑represented person in the position of the husband.
The Husband attached to his affidavit filed on 30 October 2008 a report from a Dr R of a Queensland Medical Centre. The Federal Magistrate observed at [23] that Dr R appeared “to be part of a large general practice although if, as is very probable, the practitioners are listed in order of seniority, he is the most senior. I notice that, amongst other things, he is a member of the College of General Practitioners”.
The Federal Magistrate said:
24.[Dr R] in his letter dated 10 September 2008 certifies that [Mr Kivlen] has been a patient of the practice for over 10 years. He notes that [Mr Kivlen] suffers from depression and epilepsy and details the medications given to control these. He goes on to say that [Mr Kivlen] is likely to require the Epilim long‑term or for life and Aropax for a lengthy period of time until his depression gets better. He expects this to take several years.
25.[Dr R] concludes that on his impressions of the last few visits, it is unlikely [Mr Kivlen] will return to full‑time employment in the near future and that he expects he will be able to return to work in the medium to long-term. I must approach that expression of opinion with a measure of caution, given that exhibit R1 shows that [Mr Kivlen] was able as recently as April 2008, according to his bank records, to earn around about $3,300.00 from working as a carpenter.
The Federal Magistrate then at [26] dealt with the “next medical document” being a report dated 30 September 2008 from Dr B. Dr B said that he examined the Husband on 30 September 2008 and that he first saw him on 28 January 2007, the day after a grand mal seizure. The Federal Magistrate said at [26] that Dr B “asserts that the anticonvulsant that [the Husband] takes will be required lifelong”. The Federal Magistrate said:
27.[Dr B] also diagnosed a major depressive illness on 6 May 2007 and offers the view that [Mr Kivlen] is incapable of working at the present time because of the depression. Once again, I must approach this evidence with some caution in light of the fact that exhibit R1 does indeed show patterns of some work during this period.
The Federal Magistrate then at [28] dealt with the third piece of expert evidence being a letter dated 17 March 2008 from Mr S, Clinical Psychologist. The Federal Magistrate said that Mr S had treated the Husband for his depression on reference from Dr R. The Federal Magistrate said that “[Mr S’s] letter is of assistance to me in that it clearly goes to fortify the evidence about the severe mental reaction [the Husband] has had to misfortunes in his life but he is of less assistance insofar as it purports to offer advice to the Court as to [the Husband]’s capacity to work”.
The Federal Magistrate concluded:
29.Taking this medical evidence in the round, it seems to me clear that those who have expressed medical opinions are qualified to do so. It is consonant with ordinary human experience that medical practitioners would not be likely to offer opinions that they are not in fact qualified to give. The evidence is also entirely consistent with the demeanour of the husband in Court. He showed every aspect of a person who was extremely unhappy.
30.My findings about the husband's future employment prospects come to this. It is likely that he will ultimately get better and be able to work. He said himself that his epilepsy was the lesser of the immediate problems he has faced. I accept, however, that his employment will be qualified by his epilepsy because of prejudice against epilepsy that is likely to occur in future employers.
31.It may be that the husband is able, as he has obviously been able in the past, to get employment by suppressing his epilepsy from the knowledge of any future employer. However, that may not be altogether easy because there is no evidence as to quite how widespread, so to speak, work will be available for him, both in geographical and other terms. Furthermore, it is not by any means certain just how bad his epilepsy is.
32.I accept counsel for the applicant's criticism that the husband has not put evidence before the Court to enable the Court to make any kind of informed findings as to his prognosis. Nonetheless, there must be a question mark over his earning capacity in the future and it is a matter to which I give at least some weight.
The Federal Magistrate then at [33] dealt with the Wife’s earning capacity and said that it “will be plainly limited by her home care responsibilities and I accept the evidence that her eBay trading will provide minimal income for her”.
The Husband complains about the findings of the Federal Magistrate in relation to the income of the Wife from her eBay trading. The Wife had given evidence in her affidavit filed on 18 August 2008 that she earns income from buying and selling goods on eBay and earns “approximately $50.00 - $100.00 per week”. In an affidavit filed by the Husband on 30 October 2008 he replied to what the Wife had said and contended that the Wife earns closer to “$250/300 a week”. The Husband attached to his affidavit certain eBay “information”. During the hearing on 14 November 2008 the Wife gave evidence in chief ((transcript, 14 November 2008 at pp 11 – 12) about her eBay trading. The Wife was also cross-examined by the Husband however I was unable to locate any or perhaps very little cross-examination of the Wife in relation to such trading.
The Federal Magistrate concluded his consideration of the s 75(2) factors at [34] and said that: “In all the circumstances, it is my view that there should be a further adjustment in the wife's favour, under s.75(2) but not of the magnitude that she claims. In my view, the wife should receive an adjustment of seven and a half per cent under this heading”.
The Federal Magistrate then at [35] dealt with what is sometimes referred to as the fourth step. The Federal Magistrate determined that the Wife was to receive 77 per cent of the net assets of $365,000.00 being $281,050.00 and the Husband was to receive 23 per cent being $83,950.00. These findings had the consequence that the Wife would receive:
$
·The Victorian property 306,000.00
·Payment by Husband 64,000.00
Total370,000.00
Less
·Mortgage, The Victorian property (89,000.00)
Balance281,000.00
The Husband would receive:
$
·The Queensland property 300,000.00
Less
·Mortgage, The Queensland property 152,000.00
·Payment to Wife 64,000.00
Total (216,000.00)
Balance84,000.00
The consequence was that the Wife received $197,000.00 more than the Husband. This is a significant disparity.
On 5 February 2009 the Federal Magistrate made the following order:
1.That the Respondent Husband pay to the Applicant Wife the sum of $64,000.00 ("the payment") on or before the 16th February 2009 ("the date").
2.That contemporaneously with the payment:
(a) The Applicant Wife do all acts and sign all such documents as may be required to transfer to the Respondent Husband at the expense of the Respondent Husband all of her interest in the property known as [The Queensland Property] in the State of Queensland being the whole of the land more particularly described in Title Reference [title reference] and having an agreed value of $300,000.00.
(b) That the Respondent Husband refinance the Mortgage No. [mortgage number] secured on the said property by the Commonwealth Bank in the approximate sum of $152,000.00 into his name only and indemnify the Applicant Wife against any liability to the mortgage and all rates taxes and outgoings of or with respect to
3.In the event that the whole of the payment has not been made by the Respondent Husband by the payment date the parties shall do all acts and things and sign all deeds, documents and writings necessary to cause the home, to be sold by private treaty at a price agreed to by the parties in writing or failing agreement at a price nominated by an independent Estate Agent nominated by the President for the time being of the Real Estate Institute of Queensland. The proceeds of the sale shall be distributed as follows:
(a) to pay all legal costs and expenses in relation to the sale;
(b) to discharge the mortgage to the Commonwealth Bank;
(c) to pay all outstanding taxes and council and water rates and charges;
(d) so much of the payment as is outstanding together with interest thereon at the rate of 11% adjusted monthly from the date to the wife;
(e) to pay the Husband the balance.
4.That the Applicant Wife retain her property known as [the Victorian Property] in the State of Victoria and being the whole of the land more particularly described in Certificate of Title Volume [number] Folio [number] and having an agreed value of $306,000.00, and the Applicant Wife indemnify the Respondent Husband against any liability pursuant to the mortgage registered on the property by the Commonwealth Bank in the sum of approximately $89,000.
5.That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:-
(a) Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these Orders.
(b) Insurance policies to become the sole property of the beneficiary named therein.
(c) Each party forgo any claims they may have to any superannuation benefits belonging to or earned by the other.
(d) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
(e) Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
6,That the Application of the Applicant Wife filed on the 11 February 2008 and the Response of the Husband filed on 29 February 2008 be otherwise dismissed.
THE COURT NOTES:-
A.That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
The Husband complains about paragraph 3(d) of the order.
On 5 February 2009 the Federal Magistrate also heard and determined an application by the Wife for costs. The Wife sought costs of the hearing on 5 February 2009 which arose because the parties were unable to agree to the form of the orders that should be made to reflect the Reasons of the Federal Magistrate. The Federal Magistrate said at [2] that the reason he required the parties to produce the minute was that the circumstances of the case were such that he felt it appropriate to give the parties every opportunity “to explore mechanisms which might be bought to bear to enable both parties to retain the property that they were primarily concerned with”. The Federal Magistrate noted that the parties were unable to agree and continued at [3] and said that the Wife was wholly successful because the orders she sought reflected, what in the absence of agreement, was a relatively straightforward outcome. However, the Husband had dissatisfaction with the Reasons and had articulated a number of critical matters in an email which he sent to the Federal Magistrate on 17 December 2008. Although the Federal Magistrate observed at [5] that the Husband was wholly unsuccessful, in “this aspect of the proceedings” both parties were “in many ways somewhat impecunious”.
On 24 April 2009 the Husband filed an Application in an Appeal seeking an extension of time to file a Notice of Appeal. On 14 and 18 May 2009 that application was listed for hearing before me and on 19 May 2009 I pronounced judgment and granted an extension of time to the Husband to file his Notice of Appeal out of time.
On 22 May 2009 the Husband filed his Notice of Appeal. The orders sought by the Husband - if he is successful are stated in his Notice of Appeal as follows:
1.That 15% loading be added to my percentage of the pool to provide for me in the future while my illnesse’s [sic] prevent me from working. Making a 62/38 in the wife’s favour.
2.That $28,000 of debts to banks be paid before division of equity.
3.That $18,000 of debts borrowed from the husband’s mother be Paid [sic] before division of equity.
4.That The [sic] superannuation i [sic] received during the relationship and the superannuation i [sic] used to make Mortgage payments be refunded to me before division of equity.
4.That Remaining Equity be divided 62/38 in the wife’s favour With Both [sic] parties given the optunity [sic] to retain there respective house.
5.That the date for the settlement be extended 2 months after any appeal hearing.
The Wife seeks that the appeal by the Husband be dismissed and that “the Applicant Husband pay the whole costs of these proceedings”.
Since no payment was made in relation to the mortgage on the Queensland property in over 9 months, on 1 July 2009 an application was filed by the Wife in which she sought that the Registrar sign any necessary paperwork in order to sell the Queensland property. The order was granted on 7 August 2009.
On 23 July 2009 I made the following orders:
1.The appeal be listed for hearing at 10:00 am on Tuesday 25 August 2009.
2.On or before 4:00 pm on Friday 7 August 2009 the Appellant file and serve an amended Notice of Appeal.
3.On or before 4:00 pm on Friday 7 August 2009 the Appellant file and serve a list of the documents that were before the Federal Magistrate upon which the Appellant seeks to rely.
4.On or before 4.00 pm on Friday 7 August 2009 the Appellant obtain those parts of the transcript of evidence of the hearing before the Federal Magistrate which may be relevant to the appeal and provide copies of such transcript to the Court and to the Respondent.
5.On or before 4:00 pm on Friday 7 August 2009 the Appellant file and serve a written summary of argument and list of authorities (if any).
6.On or before 4:00 pm on Friday 7 August 2009 the Appellant file and serve any application to lead further evidence and any material in support thereof.
7.On or before 4:00 pm on Friday 14 August 2009 the Respondent file and serve a list of any further documents that were before the Federal Magistrate, not included in the Appellant’s list, upon which she seeks to rely, together with a written summary of argument and a list of authorities (if any).
8.On or before 4:00 pm on Friday 14 August 2009 the Respondent file and serve any application to lead further evidence and any material in support.
9.The costs of today’s proceedings be reserved.
The Husband did not comply with these orders. The Husband did not file and serve a list of the documents that were before the Federal Magistrate upon which he sought to rely. Further, the Husband did not comply with Order 4 in that he did not provide any transcript of the hearing before the Federal Magistrate. However during the hearing I was referred to parts of affidavits of the Husband of 19 August 2008 and 30 October 2008. I also arranged for a copy of the transcript of the hearing before the Federal Magistrate to be made available to the parties.
On 7 August 2009, the Husband made an application for a stay of the orders made on 5 February 2009 and this application was dismissed.
On 7 August 2009 the Husband filed a written summary of argument and a list of documents that were before the Federal Magistrate upon which he sought to rely.
On 7 August 2009 an Application in an Appeal was filed by the Husband in which he sought to “lead further evidence”. The application was supported by an affidavit filed by the Husband on 7 August 2009 which comprised two paragraphs excluding annexures. I am not going to repeat what the Husband said. However, in summary, the Husband contends that he found eBay accounts of the Wife and also saw a file on the Wife’s computer that showed that she “had made $350 profit” for one week.
On 19 August 2009 a Response to an Application in an Appeal was filed by the Wife. The Wife sought that the application of the Husband be dismissed. On 19 August 2009 the Wife filed an affidavit in support of the Response.
On 21 August 2009 a written summary of argument was filed by the Wife.
GROUNDS OF APPEAL
Appellate principles
This is an appeal from a discretionary judgment and in determining such an appeal there is a strong presumption in favour of the correctness of the decision. The limits on interference by an appellant court with such a judgment are well established in the authorities. In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-505:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. 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 such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
See also Lovell v Lovell (1950) 81 CLR 513 at 519 per Latham CJ; Gronow and Gronow (1979) 144 CLR 513 at 519-520 per Stephen J; Norbis and Norbis (1986) 161 CLR 513 at 540; CDJ v VAJ (1998) 197 CLR 172 per Kirby J at 230 – 231 and AMS v AIF (1999) 199 CLR 160 per Kirby J.
Failure to give weight to a relevant consideration is a ground for interfering with a discretionary order. However in considering the question of weight, the appeal court should not regard itself as being in the same position as the court below, and in the absence of exclusion of a relevant consideration or the admission of an irrelevant consideration the decision will not be set aside unless the failure really amounts to a failure to exercise the discretion: Lovell v Lovell (supra) at 519, 533; Gronow v Gronow (supra). An appeal court will be especially reluctant to intervene if the question of proper weight depends upon an assessment of the credibility of witnesses who are seen and heard by the trial Judge.
If the exercise of the discretion of the trial judge is based upon conclusions of fact which can be shown to be erroneous, then, providing the factual error is something that may have influenced the outcome of the proceedings, prima facie the exercise of the trial judge's discretion has miscarried. It is also to be noted that, once a mistake of fact is shown, then the Full Court exercises its own discretion even though the actual result reached by the trial judge may have seemed within the ambit of possible results on a proper exercise of discretion. As was said by Gibbs J in De Winter and De Winter (1979) FLC 90-605 at 78,091:
It is apparent from this statement [an extract from House v The King (1936) 55 CLR 499 at pp 504-505] and is clear law, that a discretionary judgment which is based on a mistake of fact will not be upheld merely because the result reached in itself does not appear unreasonable or unjust. In Storie v Storie (1945) 80 CLR 597 both Latham CJ, at p 600, and Rich J, at p 604, cited from the judgment of Viscount Simon LC in Blunt v Blunt (1943) AC 517, at p 526:
If it can be shown that the court acted under a misapprehension of fact in that it either gave weight to irrelevant or unproved matters or omitted to take into account matters that are relevant, there would, in my opinion, be ground for an appeal. In such a case the exercise of discretion might be impeached, because the court's discretion will have been exercised on wrong or inadequate materials...
There are many other authorities, from Young v Thomas (1892) 2 Ch 134, at p 137, to Australian Coal and Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621, at p 627, that recognize that a mistake of fact is a ground for overruling a decision involving discretionary judgment. It may in some cases appear that the mistake of fact has not affected the final result, or that its effect has been negligible, or that in any case the conclusion reached was correct, notwithstanding the error. But it is not right to say, as the majority of the Full Court appear to have said in the present case, that a discretionary judgment which has proceeded upon a mistake of fact should be upheld simply because the order was well within the range of the discretion of the primary judge.
Further evidence
Section 93A(2) of the Act provides: :
Subject to section 96, in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and, in its discretion, to receive further evidence upon questions of fact, which evidence may be given:
(a) by affidavit; or
(b) by oral examination before the Family Court or a Judge; or
(c) as provided for in Division 2 of Part XI.
Section 94AAA(6) of the Act applies in a similar way to an appeal heard by the Family Court (whether by the Full Court or a single judge) from the decision of the Federal Magistrates Court.
In CDJ v VAJ (supra) McHugh, Gummow and Callinan JJ, who were in the majority, explained the essential difference between admission of fresh evidence in an appeal at common law and appeals under the Family Law Act. Their Honours said:
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. In an application at common law to admit further evidence, the court applies principles, bordering on fixed rules. In an application under s 93A(2) and similar provisions, the Full Court or Court of Appeal weighs factors, although it may of course develop guidelines for weighing those factors and exercising the discretion. (footnotes omitted)
Their Honours went on at [107] – [116] to explain how the discretion may be exercised, identifying various factors which may be taken into account. These include the need for finality of litigation, whether the evidence was available at the trial, whether the failure to call the evidence at trial was as a result of a wilful omission or innocent mistake, whether the further evidence is disputed, whether the evidence relates to matters occurring after the trial and the nature of the case. However, their Honours placed the following limitation on the reception of further evidence which was said to be useful to determination of the appeal:
113. In any event, we cannot accept that the discretion to receive further evidence is so wide that the Full Court can admit further evidence merely because it is useful. Such a criterion is inconsistent both with the nature of the appellate jurisdiction exercised by that Court and with the perceived purposes of s 93A(2).''
Finally their Honours at [115] pointed out that the power to admit or reject further evidence must be exercised judicially.
In summary, the purpose of the power to admit further evidence is to give power to do so where the evidence, if accepted, would demonstrate that the order under appeal is erroneous. In exercising the discretion there are various matters that would be relevant to consider.
Grounds of appeal
The Husband’s Grounds of Appeal as stated in his Notice of Appeal are as follows:
1.Future Needs. F M Burchardt has not taken into consideration my future needs in relationship to my health. Being able to find a job is a lot different to being capable of working, and my doctors letters both state i am incapable of paid employment at the moment.
2.The Pool. F M Burchardt has not taken into consideration debts from time of separation, or any debts incurred since in the maintenance of the properties Equity has been derived from. The wife in this matter forbid the house being rented out for over 3 years causing a massive negative contribution and forcing me to pay for the mortgage even when I didn’t have means and was not living in the house. As i had to use credit and borrow money to make these payments, like the mortgages they should be added to the pool. [The wife] did not deny these debts in court.
3.Factual Issues. F M Burchardt has made decision while some of his beliefs are wrong. And was provided misinformation in regards to income from the wife in this matter, that can now be easily proven. There is also a $10,000 discrepency in one calculation.
4.Super Annuation [sic] was not included F M Burchardt gave reasons for this, but this seams unsatisfactory as I released Super Annuation [sic] early to catch up on Mortgage payments. [The Wife] did not deny this in court.
5.Just and Equitable. $263,000 is a rough estimate of [the Wife’s] Equity after debts and mortgages. $35,000 is my own equity after debts and mortgages.
6.The date given for any settlement was the 15th of February [sic], 10 days after the orders were made and a month before the orders were actually received. In court it was it mentioned by Fm Burchardt [sic] that 10 days was not enuff [sic] time and that that date should be altered, however it was not.
Ground 1
In support of the first ground of appeal the Husband submitted that the Federal Magistrate found that if the Husband hid the fact of his epilepsy he would be able to find employment. The Husband submitted that both of his Doctors rated him unfit for paid employment due to his poor mental health and extreme lethargy caused by his medications for epilepsy and depression.
During cross-examination of the Husband it was put to him:
Q: I put to you that you’re quite capable of getting employment whether you have epilepsy or you don’t have epilepsy? A: Yes I am.
Q: You’re quite capable of getting employment as a carpenter, even with epilepsy? A: Not if I tell them.
In his report of 10 September 2008 Dr R said that he expected that the Husband would be able to return to work in the “medium to long term”. Dr B did say in his report of 30 September 2008 that the Husband “is currently not capable of any paid employment” (emphasis added).
The Federal Magistrate dealt with, at some length, the Husband’s state of health and capacity for paid employment. The Federal Magistrate accepted the expert evidence and also ultimately accepted at [32] that there was a “question mark over [the Husband’s] earning capacity”. I am of the view that the Federal Magistrate adequately dealt with the issue and that the findings he made were available to him on the evidence. I reject the first ground of appeal.
Ground 2
In relation to the second ground of appeal the Husband submitted that the Federal Magistrate did not include a debt of $4,000.00 that was left in his name in September 2005 and has never been paid off. The Husband also submitted that he borrowed a considerable amount of money from his mother to pay for mortgage arrears and to keep the loan and credit card debts from ruining his credit rating.
In his affidavit of 19 August 2008 the Husband contended that he had a credit card debt of $2,850.00 and a tax debt of around $1,000.00. Elsewhere in the same affidavit the Husband referred to debts of “around” $3,800.00. The Husband also gave evidence that he borrowed an estimated $15,000.00 from his mother and released money from his superannuation interest in order to service the mortgage “in times of [his] illness”.
There was a controversy between the parties as to what should happen to the Queensland property. The Wife was in occupation with the children of the property in Victoria and she paid the amounts due under the mortgage secured on the title of that property. The Husband was in occupation of the Queensland property and the arrangement was that he would meet the outgoings for that property. There were however periods when the Husband was not in paid employment and/or was absent from the Queensland property. There were also periods when the Husband wanted to rent the property and the Wife wanted it to be sold.
The Federal Magistrate did not refer to the unsecured liabilities the Husband contended he had at separation or at the date of the hearing and nor did he deal with the funds the Husband contended he borrowed and also obtained from his superannuation interest. However in my view it does not really matter for a number of reasons. First, the Federal Magistrate found that the Husband paid the amount of interest that had to be paid pursuant to the mortgage secured on the Queensland property and thus this was a contribution by the Husband which was taken into account. Second, if the Federal Magistrate had included in the net assets the amounts the Husband contended he had in unsecured liabilities at the date of separation and at the date of the hearing then this would impact on the contribution by the Husband and be taken into account as a further contribution by the Wife. By taking the unsecured liabilities into account the Wife would be contributing to them. As to the amount of $3,850.00 that the Husband contends he owed at the date of separation, a further matter that I take into account is that the amount is immaterial. In the circumstances I reject ground two.
Ground 3
In relation to the third ground of appeal the Husband submitted that the Federal Magistrate was in error in relation to two matters of fact. First, the Federal Magistrate was in error in relation to his finding as to the income of the Wife given a document on her computer in regards to her eBay sales. Second, the Federal Magistrate was in error in finding that at the commencement of the relationship the Wife paid $20,500.00 for debts of the Husband.
As to the first matter, as I have already observed, the Federal Magistrate at [33] accepted the evidence of the Wife that her eBay trading “will provide minimal income for her”. I have also dealt with the evidence of the Wife and what happened during the hearing. The Husband did not challenge what the Wife said and thus it was not an issue. Further, the Wife made clear in her evidence in chief what she does and said that a “typical price” for the products sold via he eBay account is $120.00 and that she “probably [sells] about one per day” (transcript, 14 November 2008 at 11-12). However there are costs including costs of purchase. What the Wife said was not challenged and in my view the Federal Magistrate was entitled to come to the conclusion which he did.
In relation to the application of the Husband to adduce further evidence I reject the application. In my view the further evidence that the Husband seeks to adduce does not advance the matter any further and would have no effect on the order made.
As to the contention that the Federal Magistrate was in error in finding that at the commencement of the relationship the Wife paid $20,500.00 for debts of the Husband, what the Federal Magistrate said at [8] was that at the time of the commencement of the relationship the Husband had debts of about $14,500.00 which the Wife paid out. The Federal Magistrate also said that he accepted “further” that the Wife paid out $6,000.00 towards a car loan for the benefit of the Husband. The amount of $20,500.00 is the addition of the amounts of $14,500.00 and $6,000.00. The Wife had also given evidence that she paid $4,425.00 for a credit card debt and $6,000.00 for a motor vehicle debt being approximately $14,500.00. However the Federal Magistrate did not say that the Wife paid $20,500.00 for the benefit of the Husband. What the Federal Magistrate said was equivocal. I reject ground three.
Ground 4
In relation to the fourth ground of appeal the Husband submitted that the Federal Magistrate was in error in excluding the superannuation interests of the parties given that the Husband had used part of his interest “to catch up on” mortgage payments for the Queensland property.
The Federal Magistrate excluded the superannuation interests because he was of the view, which is not challenged, that the superannuation interests “were generated either before or after the relationship”. The Federal Magistrate took into account as a contribution by the Husband the amount he withdrew from his superannuation interest and used to assist with payment of the mortgage interest.
In my view it was within the discretion of the Federal Magistrate to exclude the superannuation interests. I therefore reject ground four.
Ground 5
In relation to the fifth ground of appeal the Husband submitted that the Federal Magistrate was in error in relation to a just and equitable outcome in that the outcome “is closer to a 90% to 10% split of available equity”.
The Husband submitted that since separation he has contributed double the amount of funds than the Wife has with the mortgage repayments.
The period of the relationship was about two years and there are two children of the marriage who are now five and four years of age. The parties have been separated for about four years. At the commencement of the relationship the Wife had greater assets than the Husband and a greater earning capacity. Using her pre-relationship assets, at the commencement of the relationship the Wife paid debts of the Husband.
Then during the relationship the Wife received a significant inheritance from the estate of her late mother which included a half share of the property in Victoria. The Wife acquired the interest of a sibling in the property in Victoria and to pay the costs she obtained a mortgage loan. This mortgage loan was repaid from the rental income of the property until after separation when the Wife took occupation of the property. In fact the rental income exceeded the outgoings including the mortgage loan repayments.
During the relationship the parties acquired the property in Queensland and at the time of acquisition they had no equity in the property.
At the time of separation the Wife received approximately $18,000.00 which she used to pay re-establishment costs and acquire a motor vehicle. There were some unsecured debts of less than $5,000.00.
Since the separation of the parties the Wife has met all the outgoings for the property in Victoria and had a significantly greater responsibility for the care and support of the two children. Since the separation of the parties the Husband has met the outgoings for the property in Queensland and given the periods when he was not in paid employment he has obtained funds from his mother and drawings from his superannuation interest to enable him to meet such obligations.
In the future, given the very young age of the children, the Wife will have a significantly greater responsibility for the care and support of the children and may receive modest child support from the Husband. The Husband will at some stage have some capacity for paid employment but given his state of health it may not be as significant as he previously enjoyed.
In all the circumstances, it cannot be said that an outcome whereby the Wife achieves 77 per cent or $197,000.00 of net assets of $365,000.00 (excluding some small superannuation interests), is plainly wrong. It is not unreasonable or plainly unjust. For example, putting aside the Wife’s contribution of her pre-relationship assets, her contributions during the relationship and her contributions since the separation of the parties, the Wife contributed from an inheritance one half of a property now worth $306,000.00 (being $153,000.00) and cash of $45,000.00 being a total of $198,000.00 which is approximately 54 per cent of $365,000.00. Put another way the Wife contributed the equity in the Victorian property which is $217,000.00. This clearly demonstrates that it was within the discretion of the Federal Magistrate to place significant weight on the contribution by the Wife of her inheritance and that it cannot be said that the outcome is so far outside the range of discretion that it is unreasonable or plainly unjust.
Ground 6
In relation to the sixth ground of appeal the Husband submitted that the Federal Magistrate was in error in relation to the date given for any settlement being 16 February 2009, being only 10 days after the orders were made and a month before the orders were actually received. The Husband submitted that 10 days was not enough time and that the date should be altered.
It is not disputed by the Wife that by the time judgment was pronounced, there were only 10 days allowed for the payment to the Wife. However no action was taken to enforce the order until 1 July 2009. At the time an application was made requesting the Registrar to sign any necessary paperwork to sell the Queensland property and an order was made on 7 August 2009. However, in my view the grievance of the Husband is more directed to paragraph 3(d) of the order, being that he pay to the Wife interest at the rate of 11 per cent adjusted monthly from 16 February 2009.
In my view, pursuant to s 80 of the Act, and perhaps s 117B(2), the Federal Magistrate had the power to make an order that the Husband pay interest on the amount that the Husband was ordered to pay to the Wife. The Husband does not complain about the fact that an order was made for the payment of interest or the rate of interest.
The Husband knew as and from 16 December 2008 what the respective entitlements were. The Federal Magistrate gave the parties the opportunity to agree on the form of the orders. The matter then came back before the Federal Magistrate on 5 February 2009 and he was told that the parties were unable to agree on the orders. On behalf of the Wife a minute of orders was handed to the Federal Magistrate and some brief submissions were made. There was a brief exchange between the Federal Magistrate and counsel for the Wife during which the Federal Magistrate said that the Husband would need “a bit more than 16 February to get his finances sorted out” and counsel for the Wife said that the dates would need to be changed. In response the Husband did not provide a minute of what he proposed and a consideration of the transcript reveals that he made very few, if any, submissions as to the form of the orders. The Federal Magistrate then said that he would make orders in the form proposed by the Wife. The Husband has not pointed to any appellable error by the Federal Magistrate. I therefore reject the sixth ground of appeal.
CONCLUSION
In all the circumstances of this case I am not persuaded that the Federal Magistrate acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, or was mistaken as to the facts or failed to take into account some material consideration. As I have also found I do not accept that a substantial wrong has occurred. I therefore propose to dismiss the appeal.
I certify that the preceding ninety nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court of Justice O’Ryan
Associate:
Date: 12 October 2009
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