Magick v Magick

[2000] HCATrans 227

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S174 of 1999

B e t w e e n -

WENDY DIANE MAGICK

Applicant

and

RODNEY JAMES MAGICK

Respondent

Application for special leave to appeal

GAUDRON J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 26 MAY 2000, AT 2.00 PM

Copyright in the High Court of Australia

MRS W.D. MAGICK appeared in person.

MR A. LADOPOULOS:   May it please the Court, I appear for the respondent, your Honours.  (instructed by Appleby & Nilson Solicitors)

MRS MAGICK:   May I seek leave of the Court to just hand up the authorities?

GAUDRON J:   Yes.

MRS MAGICK:   And some of the exhibits and as I just explained ‑ ‑ ‑

GAUDRON J:   Is there a copy for Mr Ladopoulos?

MRS MAGICK:   Yes.

MR LADOPOULOS:   Thank you, your Honours.

GAUDRON J:   Did you need one for yourself?

MRS MAGICK:   I can remember.  First of all, my argument rests upon section 7 ‑ ‑ ‑

KIRBY J:   Could you come to the middle because I think we get a bit of amplification if you are there and I do not want to miss what you are saying.

MRS MAGICK:   My argument mainly rests upon the 79th section of the Family Law Act relating to determining the 75(2) factors which Justice O’Ryan accorded me a 20 per cent adjustment out of the family assets.  I just wanted to discuss the discretion that Parliament has conferred on the trial judge and I would just ask if you could look in the application book on page 21 and there are three trading results of the Magick Family Trust and that is apart from the husband’s salary.  That is 95, 96, 97 and that is less the tax allowance so the Magick Family Trust is quite a profitable business.

In 97 it came down to $22,090.  It was valued at that amount and then on the exhibits there the husband, in his affidavit, said that the business was deteriorating and losing.  There is a leaflet of a loan.  He took out a loan to invest further money into the Harper Timber Group on the eve of his affidavit which, I think, comes into the ambit of the discretion of the judge that maybe the business is not losing when the husband is prepared to put another 78,000 into it.  This is my argument that there are these kind of factors that influence the judge’s mind.  But that 78,000 actually reduced the valuation of the Magick Family Trust from $309,000 down to 222 roughly.

There is another factor that – if you could just turn the page, the list of assets there.  There is a motor vehicle for $8,000 for the wife but it does not list a motor vehicle for the husband.  The husband has only listed his group certificate earning on the previous page but he does have a new Fairlane provided to him every three or four years and I am sure that that kind of thing does not escape the judge’s eye that the husband has not noted the value of his car.

There are so many things I think the judge is able to see when he is hearing a case.  The respondent said that he had a bad back but he did actually not have any medical evidence for many years to show that he had sought some relief for his back and his affidavit said that he claimed $40 a week for court fees, that he played two and three times a week and also he claimed in his affidavit that we went skiing every other year so he also gave conflicting evidence in his affidavit about his physical abilities.  The trial judge concluded that he was well, in spite of what the husband is saying, that he felt he did not have much employment prospects.    The trial judge did say he was able to work for the Harper Timber Group.

GAUDRON J:   The real question, Mrs Magick, is whether, assuming the correctness of all you have said, even so the allocation of 70 per cent to 30 per cent does appear to involve some disparity and the question is whether it is justified.

MRS MAGICK:   Well, I think that the judge did agree with my affidavit that the assets were set up fairly soon after the marriage.  I had my own business.  I had 12 employees and we secured the waterfront property at Narrawallee and paid a home off almost within about – we paid most of it.  It was 3,000 balance in 1969 and Justice O’Ryan agreed with that because of the assets that we had.

At that time I was the superior wage earner and over the time, when we have had the children, I now no longer have those earning skills so I think that this is an adjustment in favour of my lack of – my earning capacity.  I think the main issue here is the husband’s earning capacity over the next few years and he still has the inheritance of his parents whereas mine has been used up in the family.  He does have a superannuation to look forward to whereas I do not.  The 70/30 sounds a lot but it means that it is finite for me.  That is the end of it whereas my husband has the ability to earn quite substantial amounts of money each year and also have his vehicle provided and many other things that the business provides for him.

So that I feel that also that I still have the care of the children.  In the conclusions it mentioned that the husband was paying for the second child to be at school.  He is now out of school.  He was enrolled in university but he has deferred this year.  He wants to go back next year.  He wants a break.  So he is working part time but the husband no longer supports him.  I still have Amie at home and the husband now pays $1,100 a month maintenance for her.

KIRBY J:   Mrs Magick, you are addressing us as if we have a general power to sort out what is right between your husband and yourself.  But we do not have that power.  Our only power is to intervene if you can demonstrate that the Full Court has erred and we would be very cautious to do that because of the fact that if the Court becomes involved in every case of adjustment of this kind, we would do nothing else but family law adjustments.

MRS MAGICK:   Yes, I understand.

KIRBY J:   But we do not have the time to do that so it has to be something that lifts it up, that shows an error on the part of the Full Court and that is something of general significance, if possible.

MRS MAGICK:   Yes.  What I am saying is that the Full Court said that the husband’s earning capacity was uncertain, whereas the trial judge said it was not.  Also the respondent brought in three children to the appeal which was not brought up at the trial and at the trial and when he brought them in to the appeal there was no affidavit evidence.  There was a rule, an order which I have put there – Order 32 rule 16A that if fresh evidence is brought into an appeal it must be accompanied by affidavits to support that.

Now these three children were brought up as his new family to support and there was no affidavit evidence and, in fact, he did not declare them on his financial statement in the original trial but when he was questioned in the first trial, the ages were clearly – they were out of the Family Court ambit.  One of them is 21, one of them is a manager at Woolworths and the other one was 19 and the other one was 16 and working so that they should not really have been put forth as the new family that he had to support.

GAUDRON J:   But is that the basis on which the Full Court decided the matter?

MRS MAGICK:   Not the basis, but I think it was a persuasive power.

GAUDRON J:   But that is what we have to look at, the basis on which it was decided.

MRS MAGICK:   Yes, it was, I feel, persuasive to shift the weight of the 75(2) factors because I do not think that the Full Court figured greatly on that but I do not think that they, as I have pointed out, that the trial judge was aware of all the ‑ ‑ ‑

GAUDRON J:   What is put against you, and the basis on which the Full Court decided, was that to give you a 20 per cent advantage was just outside the reasonable range?

MRS MAGICK:   On the grounds that they said the husband – they disagreed that the husband did not have the greater earning capacity.  They said his future was uncertain and they did not see that the Harper Timber Group was a profitable business.

GAUDRON J:   If you look at page 44, they take into account the significantly greater income earning capacity, but what is the Full Court’s decision with respect to that?

MRS MAGICK:   I think they just generalise there whereas they have said that the trial judge – they are talking about he is not going to receive his superannuation immediately, but I think that is an advantage.

GAUDRON J:   What they said was 20 per cent was just too much.

MRS MAGICK:   Too high.

GAUDRON J:   Yes.  I presume that in the Family Court this sort of adjustment is not regularly made.

MRS MAGICK:   No, but I was pointing out that there are other factors that affected the valuation and that the trial judge may have looked at, that the Magick Family Trust was actually devalued by him investing in it and it was earning at a low rate.  What I am saying is that his power of discretion was that perhaps the wife is actually receiving much less than 70/30 in actual real terms when you look at that.

GAUDRON J:   But that is not what is said.

MRS MAGICK:   It is not but there is no car there, a valuation for the car for the husband.  Presumably he has a car.  There are some things that are up to the judge’s discretion and I think that the Full Court has interfered with that discretion.

GAUDRON J:   Yes.  What they are saying is, well, there is a discretion and it will not ordinarily be interfered with but the judge has not, himself, adequately explained, on the factual findings which were not challenged by you in the Full Court, why the discretion should be so much in your favour.

MRS MAGICK:   I think that the judge took into consideration I had to stop my university education.  I had great difficulties with my children at the time.  Amie had four schools in one year.  So I think that all these things amounted to his discretion as it was my diminishing power as a financial power and just not able to even earn a reasonable income at this stage of my life and he has made an adjustment of, say, 245,000 which is said here, but when you look at the husband’s income and his interests from the Harper Timber Group it is very quick, and plus the car that is not mentioned, these things come into the discretionary part of the law and it is not as big as what it seems.  It does not seem – the 20 per cent is not as huge as what it appears to be.  There are so many mitigating factors that I believe the judge has taken into account.

In the Mallet v Mallet it does say that the Full Court should presume that the judge has made a correct decision and they should come up with some kind of evidence to influence that decision but all they decided was that the husband’s future was uncertain and the figures and his salary and his history of work employment do not say that.  There is nothing to prove that his future is uncertain and that was the reason that the Full Court took the discretionary - reduced the 79 factor.

I am just arguing that that is not the real case, that the husband’s prospects are good.  He has proven that by investing in  ‑ ‑ ‑

GAUDRON J:   Yes, but we cannot deal with it on the facts, Mrs Magick.  We have to deal with it on the question of whether there is an error of law on the part of the Full Court.

MRS MAGICK:   My part was that it was not proven that his future is uncertain and it was very much made a point of his physical disability in that it figured very much in the Full Court’s decision.  That was not proven in the trial.  That was not accepted and the Full Court did accept a physical disability and there is nothing to prove that he has a physical disability.  There is much to prove that he is quite able bodied.          Now, as I said, in his own affidavit there was much conflicting evidence that he gave himself.

KIRBY J:   Essentially when it comes down to the bottom line, your point is that adjusting the entitlements to the parties inevitably involves a judgment and evaluation, that the trial judge was in the best position to do this, that he did not make any relevant error that authorised the Full Court to disturb his decision and that therefore the Full Court exceeded its function in proceeding to disturb the decision of the primary judge, that they should just have let that decision stand.

MRS MAGICK:   And finally, with the decision that the Full Court made, my legal representatives misinformed the Full Court that I wanted to sell the home and that was – I have so much evidence that I had passed my solicitors all along, letters and so forth.  I actually instructed them prior to the appeal that I was arranging finance - so they misinformed the Full Court that Mr Broun – it is on the transcript of the appeal - Mr Broun said I sought advice from the parties at the recess and he said that both parties want to sell the home and that was not true.  The Full Court were misinformed and I think that when they made that decision they did not realise that that meant that we would lose the home.  They, obviously, were previously informed that it did not matter.  We were selling the home and that that was not true.

As I said my children had quite a degree of instability.  One of them was suspended and the other one was expelled and there was quite a bit of instability.  I would like to keep the family home in the best interests of some stability.

I think Mr Broun argued that the difference in the amount is very little to incurring the interest of the High Court and he said at a stay earlier this year that it was 75,000 but I have actually had to sign consent orders with Mr Broun that it is at least 320 that I have to pay so that is quite a lot more than what he is asserting.  That is also my argument, that had the Full Court been informed correctly ‑ ‑ ‑

GAUDRON J:   It is not really a question of if this had happened or that had happened.

MRS MAGICK:   Yes.

GAUDRON J:   We have to deal with matters on the basis on which they were before the Full Court.

MRS MAGICK:   Okay, well I just rest then.  I just have put forth there are some other – there are some Surf to City results that, actually, I have discovered since the trial, that the husband has run in the Surf to City race every year which really does ‑ ‑ ‑

KIRBY J:   That is not something we can go into.

MRS MAGICK:   No, I understand that, but it does at least substantiate Justice O’Ryan’s – because of the conflicting evidence in the affidavit it does substantiate his assertion that the husband is able to and he has a greater earning capacity.  It does, at least, substantiate that.  Thank you.

GAUDRON J:   Yes, thank you, Mrs Magick.  Yes, Mr Ladopoulos.

KIRBY J:   What was the error that allowed the Full Court to intervene in what was quintessentially a discretionary decision.

MR LADOPOULOS:   Essentially, your Honours, the error that the trial judge made as determined by the Full Court was that at the end of assessing and weighing up the section 75(2) factors and making the adjustment, there was no dispute about which factors were the relevant ones and which ones were considered.  What the Full Court said, in my submission, is that having done all that, what his Honour should have done was stood back, as it were, and looked at the final result and seen and determined whether that was a just and equitable result.

The Full Court determined that his Honour had failed to do that and, indeed, in their reasons they set out on page 48 of the application book at paragraph 25 that had his Honour, in fact, itemised what the husband would have been left with as a result of the orders that he was going to make, it may have become apparent to his Honour that the overall result was not one that was just and equitable.

What his Honour had done was worked out what the wife was to receive, itemised those assets and what they were worth, but failed to do that for the husband and the Full Court determined that had he done that, he may have been able to realise that overall it was an unjust result and that was, in my submission, the error.

KIRBY J:   I see they refer to the usual authorities about not interfering with discretionary judgments at 47.

MR LADOPOULOS:   Yes, your Honour.

KIRBY J:   Presumably they were relied on by counsel for the respondent for the present applicant.

MR LADOPOULOS:   Yes.  Yes, your Honour, that is the case.  Essentially, the Full Court determined that it was outside the generous ambit of the discretion.

KIRBY J:   Was that by reference to some sort of norm that they thought was to be given general application?  I see they refer to percentages and so on.

GAUDRON J:   It was by reason of their assessment, was it not, that the nature of the main asset left to the husband, that is the share in the business which, in turn, was what was going to be productive of income and the net total available to him, was it not?

MR LADOPOULOS:   Yes, that is the case, your Honour.  I do not know that it would be appropriate to say that there is a percentage, a norm in these

matters.  It is a matter that is discretionary and each case will turn on its own facts.  What I submit the Full Court found was that once one did all the weighing up of the relevant section 75(2) factors, if one then stood back and looked at the overall result, it still has to be one that is just and equitable in the circumstances and in this particular matter on these particular facts, the Full Court’s finding was that what Mr Magick was to end up with was not sufficient to make it a just and equitable result.

Primarily, as your Honour has stated, because the primary asset that he was to be left with was indeed the interest in the business, he had a minority interest in that, and it was an interest that he could not realise.  It, in fact, was also, I might submit, the asset which gave him his higher income earning capacity.  In a sense that is double accounting, perhaps, your Honours, but I do not know that I can put it any higher than that.  If there are no further matters that I can assist your Honours with.

GAUDRON J:   Yes, thank you, Mr Ladopoulos.  Anything in reply, Mrs Magick?

MRS MAGICK:   I just wanted to say one thing, that the judge did recognise that he did have an obligation to set down the list of what the husband should receive so I do not think that he did not give weight to it because when you read his judgment, everything was very carefully weighed up.  So I do think that because it was – all the items had been set out previously and the list of the Magick Family Trust and its earnings plus his high income at the moment, all the increments from the business, I think he felt that they were already listed.  I think the fact that he mentioned this is where I should put it down.  There is no need.  I believe he has given sufficient weight to the husband, that it was just and equitable.

GAUDRON J:   Thank you. 

The Court is of the view that the decision of the Full Court of the Family Court of Australia involves no error of principle such as might attract the grant of special leave.  Accordingly, special leave is refused.

Do you apply for costs?

MR LADOPOULOS:   Yes, I do, your Honours.

GAUDRON J:   Can you resist that, Mrs Magick?

MRS MAGICK:   I do, yes.  I would like to resist costs.

KIRBY J:   It was offered that the matter would be dealt with on the papers and you had quite good, if I can say so, written submissions, and in that event there would have been no substantial order for costs, but you wanted to be heard and, in those circumstances, your former husband was entitled to have a lawyer present to put his case, which he has now succeeded in.  Normally, that would carry the costs.

MRS MAGICK:   I did not understand that.  I was not told that.

KIRBY J:   It is at page 65 of the application book in the end of your former husband’s note.  It says:

In view of the fact that the applicant seeks to supplement her summary with oral argument, the respondent would seek to be heard in relation to that oral supplement, but if the applicant was prepared to proceed on her written summary of argument, the respondent would accept that and not seek to supplement with oral submissions.

Which would have kept the costs down.  You received that document, I assume.

MRS MAGICK:   Yes, I did.

KIRBY J:   I think that costs must follow.

GAUDRON J:   That being so, the application will be refused with costs.

Call the next application.

AT 2.28 PM THE MATTER WAS CONCLUDED