Konitza and Konitza (No. 2) - [2009] FamCAFC 213

FAMILY COURT OF AUSTRALIA

KONITZA & KONITZA (NO. 2)

[2009] FamCAFC 213

FAMILY LAW– PROPERTY SETTLEMENT – FULL COURT RE-EXERCISE TRIAL JUDGE’S DISCRETION – APPLICATION OF LAW – Wife deceased prior to determination of proceedings – Appeal allowed for reasons previously published – Full Court able to re-exercise trial Judge’s discretion – Court of the opinion that contribution based entitlements of parties to the date of trial should be seen as equal and appropriate that if do so husband and wife receive 50/50 division of the net property pool

Family Law Act 1975 (Cth) Section 75(2)

Fisher v Fisher(No. 2) (1986) 161 CLR 438: (1986) FLC 91-767

APPELLANT:

G KONITZA as Legal Personal Representative of Mrs KONITZA (Deceased)

RESPONDENT:

Mr KONITZA

FILE NUMBER:

PTW

3281

2006

APPEAL NUMBER:

2009

DATE DELIVERED:

22 October 2009

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Perth

JUDGMENT OF:

Bryant CJ, Coleman & May JJ

HEARING DATE:

30 June 2009

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

8 May 2009

LOWER COURT MNC:

[2009] FCWA 55

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Dr Ingleby with Mr Davies

SOLICITOR FOR THE APPELLANT:

O'Sullivan Davies

COUNSEL FOR THE RESPONDENT:

Mr Dowding SC with Ms Taylor

SOLICITOR FOR THE RESPONDENT:

Carr & Co

Orders

That the appeal be allowed.
That order 1(a) of the orders of 8 May 2009 be varied in part by the further order that the husband pay the sum of $440 533 to the legal personal representative of the wife.
That the cross-appeal be dismissed.
That costs be reserved.
That the appellant file and serve submissions in support of any application for costs or costs certificates within 21 days.
That the respondent file and serve any submissions with respect to costs or costs certificates within 42 days.
That the appellant file and serve any submissions in response to the submissions filed on behalf of the respondent within 56 days.

IT IS NOTED that publication of this judgment under the pseudonym Konitza & Konitza (No. 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 10 of 2009
File Number: PTW 3281 of 2006

G KONITZA as Legal Personal Representative of Mrs KONITZA (Deceased)

Appellant

And

Mr KONITZA

Respondent

REASONS FOR JUDGMENT

SUPPLEMENTARY

On 16 September 2009, for reasons which were then articulated, the Full Court concluded that the wife’s appeal against orders for settlement of property made by the trial judge on 8 May 2009 should be allowed. The cross appeal of the husband against such orders was dismissed.
Subsequent to the delivery of the Court’s judgment, both parties, sensibly in our view, requested the Full Court to re-exercise the trial judge’s discretion. In its judgment of 16 September 2009, the Court expressed the view that there was no apparent impediment to so doing. The Court remained of that view, and made orders varying the trial judge’s orders on 22 October 2009. These are the reasons for the orders then made.
The reasons for judgment of 16 September 2009 leave little scope for uncertainty as to how this Court is likely to re-exercise the discretion of the trial judge. These reasons for judgment should be read together with the earlier judgment in the substantive appeal and cross appeal.
In submissions filed on behalf of the wife on 5 October 2009, it was asked that the asset pool determined by this Court in its judgment of 16 September 2009 be amended by reason of interest accrued on the sum of $1 700 000 therein referred to (see paragraph 127) of $228 739, less tax of $90 425. So doing produced an adjusted net asset pool of $3 190 189.
In submissions filed on behalf of the husband on 7 October 2009, it was submitted, on the same basis as that asserted by counsel for the wife, that the net asset pool should be quantified at $3 190 189 for the purpose of this Court’s re-exercise of the trial judge’s discretion. With respect to them, the approach adopted by counsel for the parties is, in our view, appropriate, and fairly reflects both the income generated by the $1 700 000 which has been retained to abide the outcome of the proceedings, and the impact of taxation upon that income.
Having thus quantified the asset pool, it is first necessary to consider the contributions of the parties. The Court’s reasons for judgment of 16 September 2009 analysed the evidence before the trial judge with respect to the parties’ contributions.
In addition to the settled approach to determining property settlement proceedings we are particularly mindful in this case of the decision of Brennan J in Fisher v Fisher(No. 2) (1986) 161 CLR 438; (1986) FLC 91-767 where he stated at 457-458:
Section 79(8) does not confer jurisdiction on the Family Court to entertain proceedings commenced after the death of one of the parties to the marriage. The proceedings to which it relates are proceedings commenced between the parties to a marriage with respect to the property of those parties or either of them arising out of the marital relationship or otherwise falling within par. (ca) of the definition of ‘matrimonial cause’ in s. 4(1) of the Act. The proceedings must have been a matrimonial cause commenced pursuant to s. 79(1). The death of a spouse will not always extinguish or satisfy the moral claims of the surviving spouse and children to which effect would have been given if the proceedings had been complete. Section 79(8) empowers the Family Court to give effect to the moral claims made in respect of the property of the spouses which was made available to answer those claims by the commencement of the proceedings, provided ‘it is still appropriate to make an order with respect to property’: s.79(8)(b)(ii). That qualification on the power, coupled with par. (ca)(i) of the definition of ‘matrimonial cause’, ensure that the jurisdiction is exercised only in cases where the moral obligations arising out of the marriage remains unsatisfied.
Section 79(8) provides machinery for the discharge of those moral obligations in priority to any rights in the property of a party to a marriage which arise by testamentary disposition to that party’s property or by any other devolution of that property on that party’s death. That is a law which governs an incident of marriage in that it provides the machinery for enforcing the moral obligation with respect to property arising from a spouse’s marital relationship. It is a law with respect to marriage. (emphasis added)
As is apparent from the Full Court’s judgment in relation to the appeal, the trial judge in paragraphs 308 and 309 of her reasons erroneously eroded the entitlement of the wife in the post separation period from equality to an entitlement of one third.
In our view, on balance, when regard is had to the matters to which this Court referred in some detail in its judgment of 16 September 2009, nothing which occurred in the post separation period justifies altering the entitlements of the parties as they were correctly found by the trial judge to have been at the time of their final separation. The reasons for this conclusion were articulated in some detail in the course of explaining why the trial judge had, in this Court’s view, erred in reducing the entitlement of the wife in the manner in which she did.
Given the ages of the parties at the time of their final separation, and notwithstanding that the husband undoubtedly made all, or virtually all the direct financial contributions in the post separation period, the wife, by not benefiting in any significant way from her equal entitlement to the parties’ assets up to the date of final separation, made an indirect contribution. When coupled with her earlier contributions, this post-separation contribution can be seen as equal to the direct contributions of the husband especially remembering the extraordinary circumstances of this case and the involuntary position in which the wife was placed.
This is particularly so when regard is had to this Court’s reasons in the appeal (at paragraphs 69 – 98) for rejecting the challenge to the trial judge’s exercise of discretion not to add back the value of the one hundred acre property which the husband transferred to the parties’ grandson R after the parties’ final separation. As the trial judge accepted at paragraph 179 of her reasons:
… the husband was entitled to reasonably conduct his affairs post-separation in a manner consistent with getting on with his life. The husband made varying and quite extensive provision for a number of family members, including [G], and others living in the United States. In relation to [R], while the gifts are substantial, I accept the reasons for the provisions are reasonable and valid in the circumstances, as it is clear that otherwise, the husband would probably have had to give up living on the farm, which had been his home for many years. …
The dispositions by the husband included the transfer of the property to R valued at $460 000 at trial which, together with the other gifts and provisions, inevitably reduced the value of the pool by the date of trial.
The nature of the direct contributions made by the husband, having regard to his age and his own evidence, further militate against elevating his contributions in the post separation period above those of the wife.
We accordingly conclude that the contribution based entitlements of the parties to the date of trial should be seen as equal.
As the Full Court’s judgment acknowledged, having concluded that an assessment of 30 per cent of the property of the parties to the wife was inadequate, the contention of the husband that the Court should, in re-exercising the trial judge’s discretion, award 30 per cent cannot succeed. Sensibly in our view, beyond maintaining the claim for a 70/30 division of the property of the parties in favour of the husband, counsel for the husband made no further submissions in support of such an outcome.
It is necessary to consider section 75(2). In our view, there ought not be any section 75(2) adjustment.
It was, at least inferentially, submitted on behalf of the husband that section 75(2) should reduce the sum otherwise properly payable to the wife by virtue of her contributions. We do not accept that such should be the case.
Neither individually nor collectively would the matters referred to in the submissions of counsel for the husband of 14 October 2009 incline us to increase the husband’s entitlement by virtue of section 75(2) of the Act.
As the submissions on his behalf tacitly acknowledge, the husband has substantial capital, and will have secure accommodation available to him for the rest of his life. To the extent that the husband’s occupancy of the farming property may be terminated, given his age, his own evidence at trial as to his inability to run the farm, and the reality that the termination of his occupancy of the farm stems from the contract pursuant to which the farm was sold, a section 75(2) adjustment in his favour by virtue of possible loss of occupancy of the farm would not in our view justify an adjustment. This is particularly so given the evidence at trial of the basis upon which the parties’ daughter Y received the monies with which she purchased her home and the trial judge’s undisturbed conclusions with respect to that topic.

Conclusion

For the reasons which we have briefly provided and articulated in the Full Court judgment, the Court concludes that the property of the parties should be shared equally between them.
Fifty per cent of the net asset pool is $1 595 095. The amount payable to the wife is $440 533. This figure represents 50 per cent of the net asset pool minus the amount the wife has already received from the husband. It is agreed between the parties that the wife has received $1 154 561, being the $283 092 she received as a partial payment and a further $871 469 pursuant to the orders of Martin J.
Having regard to the payments which the wife has already received, varying Order 1(a) of the orders made by the trial judge in part by requiring the husband to pay a further $440 534 would effect a 50/50 division of the net property pool.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 25 November 2009