Maguire v Kearns - [2010] WASCA 13

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: MAGUIRE -v- KEARNS [2010] WASCA 13

CORAM: WHEELER JA
PULLIN JA
NEWNES JA

HEARD: 4 NOVEMBER 2009

DELIVERED : 27 JANUARY 2010

FILE NO/S: CACV 118 of 2008

BETWEEN: NEVILLE JOHN MAGUIRE
Appellant
AND
JOY ELLEN KEARNS
Respondent

ON APPEAL FROM:
Jurisdiction              :  FAMILY COURT OF WESTERN AUSTRALIA
Coram  :PENNY J
Citation  :KEARNS AND MAGUIRE [2008] FCWA 129

Catchwords:

Family law - Order made altering property interests - Whether trial judge mistook the facts - Whether order for payment of money should be set aside - Turns on own facts

Legislation:

Family Court Act 1997 (WA), s 205ZG

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant: In person
Respondent: No appearance

Solicitors:

Appellant: In person
Respondent: In person

Case(s) referred to in judgment(s):

Crawford v Crawford (1979) 5 Fam Law Rep 106
FO v HAF [2006] QCA 555; (2006) 2 Qd R 138
Hickey's case (2003) 30 Fam LR 355
House v The King (1936) 55 CLR 499
In the Marriage of Davut and Raif (1994) 18 Fam LR 237
In the Marriage of Weir (1992) 110 FLR 403; (1992) 16 Fam LR 154
In the Marriage of Zyk (1995) 19 Fam LR 797
Kearns and Maguire [2008] FCWA 129
Norbis v Norbis (1986) 161 CLR 513
The Marriage of Quinn (1979) (1979) 37 FLR 168

WHEELER JA: I agree with Pullin JA.
PULLIN JA: This is an appeal against an order for an alteration of property interests made pursuant to s 205ZG of the Family Court Act 1997. The reasons of the trial judge were published as Kearns and Maguire [2008] FCWA 129.
The parties lived in a de facto relationship for less than four years before it ended in December 2006. The parties met in New South Wales in January 2003. They had both been married previously and had adult children. The respondent was aged 57 and the appellant 59. The appellant had the greater assets at the beginning and end of the relationship, the major asset being a property at Lake Clifton in Western Australia.
The respondent made a very poor impression on the trial judge. Her Honour found that the respondent lied on oath in a statutory declaration; exaggerated her own contributions and minimised the appellant's contributions was not frank about the existence of bank accounts and the amounts in them. The respondent signed a financial statement dated 30 March 2007 which allegedly set out her financial position at the time. She was asked in that statement to state what funds she had in banks, building societies, credit unions or other financial institutions and the respondent stated 'Nil'. Her Honour found that this was 'not true'. Her Honour said:
At the time she was doing cleaning work and also obtaining some income from her business Clip Clop Carriages. [The respondent] had bank accounts, but did not disclose their existence or whether there were any sums in them.
At trial the respondent was cross‑examined about a bank account at the ANZ Bank which was opened three or four months before the trial. The existence of that account was not disclosed by the respondent. As a result of the foregoing, her Honour said:
I do not intend to accept [the respondent's evidence] as being accurate without some corroborating evidence. [7]
On the other hand, the trial judge found the appellant to be an accurate recorder of the history of the parties and of the relationship.
Her Honour said:
The approach to be taken in relation to an application for property settlement pursuant to s 205ZG of the Family Court Act 1997 is a four step

process. Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143. Those steps are:
•identify and value the assets and liabilities of the parties;
•consider the contributions made by the parties within paragraph (a) to (c) of s 79(4) (s 205ZG(4) of the Family Court Act 1997);
•consider the s 75(2) factors (s 205ZD(3) factors), together with any matters relevant pursuant to s 79(4)(d)-(g); and
•consider whether the order proposed is just and equitable [18].

As to the identification and valuation of the assets and liabilities of the parties as at trial, the trial judge at [19] said:
The parties have been able to agree the assets and liabilities which should be taken into account when determining this matter.
Assets
Neville’s Lake Clifton property  $650,000.00
Joy’s motor vehicle  7,000.00
Joy’s chattels  1,000.00
Neville’s chattels  5,300.00
Joy’s horse carriage and flat top trailer  7,300.00
Joy’s savings  1,114.00
Neville’s savings, Westpac  4,162.00
Neville’s savings, Bendigo Bank  35.17
Neville’s IAG shares  1,296.00
Neville’s motor vehicle  6,000.00
Neville’s prospecting tools  4,000.00
Neville’s caravan  4,000.00
Joy’s blue wedding carriage  10,000.00
Neville’s BT Financial Group investment                 41,375.00
Add-back Neville’s legal fees    20,000.00
$762,582.17
As to the initial financial contributions made by the parties, the trial judge made the following observations. At [2] her Honour said that the respondent 'had very modest assets, consisting of around $23,000 in cash, a truck and a horse'. At [20] and [21] the trial judge said:
At the time the parties met in New South Wales, Joy says she had $35,000 cash. Her costs of moving to Western Australia were $10,000 and, therefore, at the most she had $25,000 when she commenced the relationship. In addition, Joy owned a truck, a horse, a trailer and horse carriage. Joy estimates that these assets were worth approximately $15,000. At the time the parties met Joy was working as a cleaner.
At the commencement of the relationship Neville owned the following assets:
The property at Lake Clifton, valued at               $270,000.00
Investment account with Challenge Bank                 20,000.00
1988 LandCruiser (subsequently sold for $4,500)       4,500.00
Caravan (subsequently sold for $7,000)                   7,000.00
Boat (purchased for around $7,000)  7,000.00
The sum of $90,000 in an allocated pension
held by BT Financial Group  90,000.00
Prospecting equipment worth about   4,000.00
The sum of $6,500 being sale proceeds of
the on-site caravan in NSW  6,500.00
A Massey Ferguson tractor and implements
Household possessions and white goods [20], [21].
As to the financial contributions during the relationship, her Honour found that after the parties arrived in Western Australia they went on a prospecting trip and that the appellant provided the cash for the purchase of food; that they found some gold nuggets which were sold for around $3,000; that some of this money ($1,000) was spent on stud fees for the respondent's horse and that the other proceeds were used to purchase assets, such as motor bikes, and to pay for prospecting expenses. Her Honour found that the respondent paid for all the food of the household when they were living at home; that the appellant paid for utility expenses along with telephone expenses, insurance expenses, rates, taxes, Foxtel, car maintenance, electricity and the cost of replacements at the home. The source of the appellant's income was from a pension and monthly payments received from his annuity. The trial judge found that the respondent's expenses for food were significantly less than the amounts paid by the appellant.
The trial judge also found that the respondent started to run a business called 'Clip Clop Carriages' with the assistance of the appellant. This involved taking a horse and carriage to various events and race meetings. A fee was charged by the respondent of around $275 on those occasions. The trial judge found that the appellant spent a significant amount of time assisting the respondent in this business. He built an individual stable for each of the respondent's horses at the Lake Clifton property and obtained quantities of food for them. He used to help with grooming, washing, loading and transporting of the horses. The trial judge found that the respondent deliberately left out the significant contribution made by the appellant to this business.
As to non‑financial contributions to the conservation and maintenance of the parties' assets, her Honour rejected the respondent's claim that she did a significant amount of manual labour on the Lake Clifton property. She found that the respondent had exaggerated her contributions. The trial judge accepted that the respondent undertook household activities and cooked all the meals, entertained friends of the parties and was a good hostess and cook.
Her Honour then reached a conclusion about contributions in the following terms:
From the time the parties commenced living together in early 2003, until the date of trial, the value of the Lake Clifton property increased significantly It now makes up 85% of the asset pool of the parties. While both Joy and Neville maintained the property appropriately, this increase in value has not been the result of anything done by the parties, but as a result of the increase in the value of real estate over that period.
While Joy was living on the property during the time of this increase in value, she also obtained significant benefits from living there. She did not pay rent, nor did she pay any expenses associated with the upkeep or running of the property. She made no contribution towards the utility expenses. Her financial contribution only related to food.
Her non-financial contribution took the form of assisting Neville when he was working around the property. On the other hand, Joy obtained a significant benefit from having her horses agisted on the property.
In my view, Joy’s contributions to the accumulation of the parties’ assets have been minor, and should be assessed as no more than 7.5%. An apportionment of the parties’ assets so that Joy received 7.5% would result in Joy receiving assets totalling $57,194 [33] ‑ [36].
The trial judge then dealt with s 205ZD(3) matters. In particular, she noted that this was a relatively short relationship which did not affect the respondent's earning capacity, that the appellant's assets were accumulated and mostly purchased before he met the respondent. Their ages were similar. The appellant suffers from a degenerative eye condition which impairs his vision and both suffer from Ross River virus. The appellant receives a disability pension, a small dividend and an allocated pension from BT. His income was around $500 per week.
The trial judge found that the respondent's income was 'probably' $320 to $350 per week. The trial judge then reached her conclusions in [39] to [43] in the following terms:
The effect of the assessment I have made whereby Joy contributed 7.5% of the assets would result in Joy retaining:
Motor vehicle  $7,000.00
Chattels  1,000.00
Horse carriage and flat top trailer  7,300.00
Savings  1,114.00
Blue wedding carriage     10,000.00
$26,414.00
Cash payment by Neville  30,780.00
$57,194.00
Neville’s major asset is the Lake Clifton property. This was purchased by him before the relationship to provide a home for himself in his retirement which suited his lifestyle and interests. I have already stated that Joy’s contributions to it were minor. Neville will have to realise assets to pay to Joy the sum owing to her taking into account her contributions.
In my opinion, the s 205ZD(3) provisions slightly favour Joy, particularly the fact that her financial position is not as strong as Neville’s. I do, however, have to take into account that this was a short relationship. Joy’s earning capacity and the assets retained by her are very similar to when she entered into the relationship. The parties lived frugally during the course of the relationship. Neville’s position is better than Joy’s because of the fact that the Lake Clifton property increased significantly in value over the course of the relationship. Other than this property, his assets are relatively modest.
Taking into account these factors, in my opinion, Joy should retain assets totalling $70,000 to take into account not only her contributions, but s 205ZD(3) factors as well. I do not intend, in these circumstances, to apportion the assets on a percentage basis, but rather make a lump sum provision for Joy.
The result of such an order will be that Joy retains the assets in her possession and Neville will pay to Joy the sum of $43,586. This will result in Joy having a lump sum to help re-establish herself. Neville should be able to raise these funds without having to sell his property. Such a result, in my view, is just and equitable in these circumstances.
As a result, the trial judge made an order on 7 November 2008, that within 60 days the appellant pay to the respondent the sum of $43,586. There were other orders which I do not need to mention at this stage, save that the issue of costs was adjourned to chambers and after a hearing, the trial judge made an order that the respondent pay to the appellant $30,000 by way of costs, such sum to be subtracted from the amount payable to the respondent by the appellant pursuant to her judgment of 7 November 2008.
The appellant has appealed against the 7 November 2008 judgment on the following grounds:
GROUND 1
Her Honour, Justice Penny, made a number of errors of fact when assessing that an amount of $43,568 be ordered to be paid by the appellant to the respondent. Findings made by Her Honour and used when determining the size of the lump sum payment are inconsistent with Her Honour's adverse assessment of the respondent's honesty and compliance and are not supported by the evidence at trial.
GROUND 2
Her Honour erred in law in not specifying what portion of the lump sum amount awarded to the respondent is attributable to the provision for her future maintenance as required by s 205ZF of the Family Law Act.
GROUND 3
Her Honour erred in law in making orders that are not just and equitable in all the circumstances. When the serious misconduct of the respondent, as found by Her Honour, is combined with the errors of fact made by Her Honour when considering what order to make the final result cannot be considered as just and equitable in all the circumstances.
When the grounds are read with the written submissions, it becomes clear that the 'number of errors of fact' referred to in ground 1, relate to three findings of fact. They are as follows:
(a)the finding (or apparent finding) that the appellant's initial financial contribution to the relationship was a cash amount of $23,000 to $25,000;
(b)the finding that the respondent's income from all sources was probably around $320 to $350 per week'; and
(c)the finding that the respondent paid $180 per week in rent and struggled to meet her necessary living expenses.
As mentioned, the application made by the respondent was made pursuant to s 205ZG of the Family Court Act which is the analogue of s 79 of the Family Law Act. Hickey's case (2003) 30 Fam LR 355, which the trial judge cited and which has been followed in many cases since, contains the following observations about s 79 of the Commonwealth Act:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), ('the other factors') including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: …
Section 79, unlike s 78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s 79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: [39], [40].
It is clear enough that in determining what is just and equitable, the statute has not said that the only relevant considerations are those set out in s 205ZG(4). What the section provides is that the court must not make an order under the section unless it is satisfied 'in all the circumstances' it is just and equitable to make the order. Of course the matters set out in s 205ZG(4) must be taken into account and they should be seen in the reasons for judgment to have been taken into account: In the Marriage of Davut and Raif (1994) 18 Fam LR 237. To that extent, the four‑step approach explained by the Full Court in Hickey's case, provides a 'useful discipline to ensure clarity of thought and transparency of judicial reasons': FO v HAF [2006] QCA 555; (2006) 2 Qd R 138 [51].
The decision made under s 2052G is a discretionary decision. The principles governing an appeal against a discretionary decision are well settled. See Norbis v Norbis (1986) 161 CLR 513 and House v The King (1936) 55 CLR 499, 504 - 505.
In this case, the appellant in ground 1 alleges that there were errors of fact made and if the trial judge did 'mistake the facts' (House at 504), then it is one of the types of error which may result in an appeal court setting aside the discretionary decision and then exercising its own discretion in substitution.
Another authority of importance in the circumstances of this case, is In the Marriage of Weir (1992) 110 FLR 403; (1992) 16 Fam LR 154, where the Full Court of the Family Court of Australia was dealing with a case in which it had been found that the husband had not made full disclosure of his assets. In the conduct of his business he was in the habit of pocketing cash payments without accounting for them. He gave instructions for false entries to be made in the books to mask the transactions. The Full Court in joint reasons said at 158:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-757, and Muzzacappa and Muzzacappa (1987) 11 FamLR 957. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of Monte and Monte (1986) FLC 91-751, the Full Court said that to found jurisdiction under s79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identity and value.
We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and insofar as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed [32] ‑ [36].

The court in that case concluded that the trial judge should have made an allowance in the wife's favour, because there was evidence that the husband received substantial benefits. The Full Court said that it thus fell upon it to either order a new trial or to exercise an independent discretion having regard to the evidence. The Full Court then proceeded to make the best assessment it could of the moneys which had been unaccounted for.
These observations are particularly important in this case because the respondent here had deliberately failed to disclose assets. There was at least one bank account with the ANZ Bank which the respondent failed to disclose.
It is also necessary to briefly mention some authority concerning the proper treatment of 'windfall' gains in property value. In this case there was a substantial increase in the Lake Clifton property which the appellant had owned before the relationship began. Before 1995 there had been cases in the Family Court which disregarded any windfall gain which occurred independently of any activity by the parties. That approach was disapproved of in the Full Court of the Family Court of Australia in In the Marriage of Zyk (1995) 19 Fam LR 797 where the court said:
For reasons that we will refer to hereafter, we prefer in these cases the approach which considers this issue in the context of 'contributions' rather than as a 'windfall' to which neither party has contributed. This may appear at first sight to be a matter of semantics but we think the more useful analysis is to consider it as a contribution ie a contribution of property to the relevant pool of property by one or both parties, rather than a 'windfall' or other equivalent term which isolates into an apparently special category outside the traditional approach adopted in s 79 proceedings.
Later their Honours said:
In our view, the critical question in such cases is - by whom is that contribution made?
The case of Zyk was concerned with lottery winnings but the principle stated is applicable to the circumstances of this case.
In my opinion, the increase in value of the Lake Clifton property should be treated as a contribution by the appellant and not by the respondent. The trial judge found that although the respondent claimed that she had done a significant amount of manual labour on the Lake Clifton property, she had exaggerated her contributions. She did assist the appellant with work around the property, but the trial judge found that much of the work related to the respondent's horses for which the appellant took significant amounts of responsibility. Her Honour found at [33] that the respondent had not been responsible for any increase in the value of the real estate over the time that they cohabited.
In [33] and [34] her Honour said:
While both Joy and Neville maintained the property appropriately, this increase in value has not been the result of anything done by the parties, but as a result of the increase in the value of the real estate over that period.
While Joy was living on the property during the time of this increase in value, she also obtained significant benefits from living there. She did not pay rent, nor did she pay any expenses associated with the upkeep or running of the property. She made no contribution towards the utility expenses. Her financial contribution only related to food.
Although the increase was not as a result of anything done by the appellant during the period the parties cohabitated, he had taken the risk when purchasing the property before the parties met and the respondent did not contribute to the increase.

The initial cash contribution of the respondent

As set out above, the trial judge made observations or findings concerning the respondent's initial cash contribution in two places (at [2] and [20]). It seems that her Honour implicitly made a finding that about $25,000 was brought into the relationship by the respondent.
The appellant submitted to this court that there was no credible evidence that the respondent had any funds, whether in a bank account or in cash at the commencement at the relationship in March 2003. The appellant also points to the fact that although the respondent had obtained bank statements back to 2005, she had not obtained statements for any earlier period [23]. The appellant submits that the trial judge should have concluded that the only property or financial contributions made by the respondent were the truck, a horse and some carriage ride equipment with an agreed value of $15,000.
As the appellant points out, it is a 'mathematical fact' that if $25,000 is incorrectly added to the respondent's relatively low value of assets at commencement, 'it has a disproportionately distorting effect if 'extrapolated to the total asset pool at trial'. In most cases the finding the trial judge made would not be a finding against the weight of the evidence because the respondent had filed an affidavit deposing in effect that she had about $25,000 when she came into the relationship and it was not contradicted by any other evidence. What then is the effect of her Honour's statement that she would not accept the respondent's evidence without some corroborating evidence in view of the respondent's unreliability, exaggeration, lack of frankness and willingness to lie on oath?
It is relevant to examine the transcript to see whether her evidence about her cash contribution was at least challenged by the appellant as evidence. That examination reveals that there was no challenge in cross‑examination to the respondent's evidence on this point. Cross‑examination of the respondent by senior counsel for the appellant proceeded as follows:
I think that your position is that when you started living with Neville you had - how much did you have in ready cash? You had 30‑what, 35,000 or something? Is that what you say? Was it 35 or 37? You just have to help me for a bit. How much?‑‑‑Yes, 30, 35.
35. So can I take it that if you had got your statements from the bank as at March 2003, you would be able to show me 35,000 in the bank?‑‑‑I drew out 10,000 in cash to come up here with.
So you drew that out and drew it out where?‑‑‑Down in New South Wales.
In New South Wales, and when do you say the relationship commenced? In New South Wales?‑‑‑Yes.
And you got together - what - you say in January in New South Wales?‑‑‑Yes.
And you bought the truck - what - in January?‑‑‑No, I had the truck before I met Neville.
You had the truck before you met Neville. So at the point that you met Neville, how much did you have in the bank?‑‑‑I couldn't tell you offhand. Maybe it would be about 20,000.
About 20,000?‑‑‑Yes.
So you had about, say, 20,000 plus the truck?‑‑‑Yes, I had the truck and I had a little car as well.
Where are we? You see, you say at 61 of your affidavit page 10 - I will just start at 60:
This property was sold -
your property -
in about 2001 for 75,000. After I had repaid all my debts, I was left with about 55,000.
Yes? 61:
Using those funds, I gave each of my sons 5000. I also purchased a new car for 10,000. I was left with about 35,000 in cash.
Right:
Shortly after that I met Neville. When we decided to move to Western Australia together, I paid for the expenses relating to the move. I estimate that the overall cost of moving was about 10,000.
So at the time that you got together with Neville did you have 35,000? I think you just said you had less than 35,000. You had ‑ ‑ ‑?‑‑‑I had about 20,000 in the bank.
About 20,000, all right. So that 35,000 - to be correct, you had a bit more than 20,000?‑‑‑Yes.
In my opinion, implicit in her Honour's statement, that she would not accept the respondent's evidence as being accurate without some corroborating evidence, is that this was so where the appellant indicated by cross‑examination that respondent's evidence was challenged. During the relationship, the appellant must have had some impression about whether or not the respondent was able to draw upon her bank account for cash when she needed it. If the impression the appellant gained was that she had no cash, he would doubtless have instructed counsel to cross‑examine to draw this out. The cross‑examination of the respondent did not in any respect challenge the respondent's evidence that she had 'a bit more than $20,000' or about $25,000 at the beginning of the relationship. In the circumstance, the trial judge did not err in concluding that the respondent did have about $25,000 at the beginning of the relationship.

The respondent's income

The respondent in her financial statement filed 25 August 2008, said that she had income from two sources, namely a widow's pension of $184 per week (as to which there is no dispute) and against the item 'total salary or wages before tax' the respondent inserted the figure of $130. This evidence was challenged in cross‑examination.
The trial judge at [37] made a finding that:
From all sources [the respondent] probably earns around $320 to $350 per week.
This means that the trial judge did not accept that the respondent earned only $184 from her pension and $130 from salary and wages ($314). The trial judge did not explain how she arrived at the figure of $320 to $350 per week.
The appellant submits that the trial judge erred in making the finding. He submits that the finding is not correct based upon the evidence which emerged in cross‑examination . The appellant claims in his written submissions that the respondent was confronted with subpoenaed documents that she earned a regular undisclosed income of $162 per week and possibly more from a cleaning business (see ts 15 ‑ 17) plus an undisclosed income of $115 per week from her horse drawn carriage business (ts 3). When these figures are added to what the respondent disclosed in her financial statement filed 25 August 2008, namely an income of $130 per week on average from cleaning plus $184 per week from a widow's pension they add up to $591. This figure if correct is significantly greater than the appellant's income which was found to be approximately $500 per week [37]. The appellant submits that in the light of that evidence, the finding that the respondent earned $320 to $350 per week was a finding against the weight of evidence. The question then is whether the appellant's submissions are correct. An examination of the cross‑examination establishes that the respondent's income was significantly more than the judge found but was less than the appellant contended it was.
It is clear enough that the respondent was receiving $184 per week from a widow's pension. Nor is it in controversy that the respondent was earning an income from her work as a cleaner. The question is whether the figure of $130 per week is correct. In cross‑examination the respondent was confronted with the exercise book in which she had recorded income from cleaning. This evidence revealed that over a three week period, the respondent and another person worked three days a week and in a three week period referred to in cross‑examination, earned the following amounts:

Week 1

22/8/8

20/8/8

19/8/8

$ 50/2

$100/2

$ 50/2

$ 75/2

=

=

=

=

$25

$50

$25

$37.50

Week 2

14/8/8

13/8/8

12/8/8

$100/2

$ 75/2

$ 75/2

=

=

=

$50

$37.50

$37.50

Week 3

7/8/8

6/8/8

5/8/8

$100/2

$100/2

$ 50/2

$ 75/2

=

=

=

=

$50

$50

$25

$37.50

$425.00

If $425 by the respondent was earned over a three week period, then if that figure was divided by three, then a weekly figure of $141.67 is arrived at. That figure may be criticised as being a figure derived from a very small sample. However, two comments can be made about that. The first is that in re‑examination there was no attempt made to suggest that the three weeks selected was unrepresentative of the earnings for the rest of the year and the second is that, if there is any imperfection in approach, it is the respondent who must be disadvantaged due to her deliberate failure to make full disclosure.
The appellant next alleges that the respondent failed to disclose to the court her income from her horse‑drawn carriage business. The appellant contended that the respondent earned $115 per week from this business. The $115 per week is a figure which the appellant arrives at by taking the respondent's evidence in cross‑examination that she earned $6,000 per year from the horse‑drawn carriage business and dividing that figure by 52. At ts 3, 4 and 5 the following cross‑examination of the respondent appears:
My question is first of all: did you actually derive an income - in the 12 months before, did you receive any income through that Clip‑Clop horse carriage business?‑‑‑Yes.
Did you actually receive an income? That's what ‑ ‑ ‑?‑‑‑Yes, I did.
Do you know in the previous 12 to 13 months before how much you received, approximately?‑‑‑Approximately, yes.
And what was that?‑‑‑About $6000.
…
How much do you say you earned in the first 12 months?‑‑‑I would have earned about $6000.
…
All right. So up until 30 March 07 you were receiving moneys from Clip‑Clop Carriages and you are banking the cheques into an account, aren't you?‑‑‑Yes.
Later in cross‑examination, the respondent said that the $6,000 would have been earned 'over a couple of years' (ts 10) that she had been running the business. Depending on what evidence should be believed, she earned between $115 and $57 per week from the business.
The respondent's evidence about expenses in relation to this business was brief. She said:
Have you disclosed to us or to your former partner these expenses of running - have you disclosed them anywhere because I have not seen them?‑‑‑Well, they have been there but I mean, $275, that's in a month and I had to shoe the horse. It was $120 to shoe the horse before I even left the paddock. Sometimes $90.
I do not read that evidence as suggesting that the respondent had expenses of $275 per month, but rather there were expenses of $275 in one month she looked at.
All the other expenses of the business, namely the agisting of the horses and the feeding of the horses with hay was provided by the appellant. The horses were agisted on his property and so fed themselves from that source and the appellant found and supplied them with hay free of charge. He also assisted with the transportation of the horses, although the appellant conceded that there would have been some costs associated with transport such as petrol which the respondent paid for.
There are two points of significance about this evidence. The first is that because the horses were being agisted free of charge and very little expense to the respondent while she lived with the appellant, she would have been able to accumulate the income which she did not disclose to the court. The second point of significance, relates more to her future prospects. After the relationship ended, it is possible that she would not have continued to run the business because the horses would have to have been agisted elsewhere at cost to the respondent and hay would have been an expense. The difficulty is that the court was not provided with information to allow it to make an assessment about expenses. The trial judge perhaps ignored this income perhaps assuming that the expenses would equal or exceed the income. However, because of the respondent's attitude, and because of the decision in Weir, it is not, in my opinion, reasonable to make the latter assumption. In the absence of proper disclosure in a way that would have enabled the court to make an assessment, the conclusion should be drawn that the respondent was able to earn some income from the horse‑drawn carriage business.
Thus, as a result of the evidence, the position was reached that the respondent had disclosed income of $314, being $184 by way of widow's pension and $130 by way of income from cleaning, but was shown through cross‑examination and by subpoenaed documents to be earning more per week from cleaning than $130 and was shown to be earning income from her horse‑drawn carriage business which money, whatever it amounted to, had been banked by the respondent in an account which she did not disclose to the court to allow the court to see what expenses were paid out. If the additional amount per week by way of cleaning at $11 is added to her income from the horse‑drawn carriage business of between $57 and $115 per week (but say $60 per week) the respondent was earning about $70 more than she had disclosed in her pre‑trial statement which means her income was over $380 per week rather than the $320 to $350 her Honour found. This might seem a very small difference, but in the context of the income of the two individuals, it is significant. In De Winter v De Winter [1979] FLC 90‑605; (1979) 23 ALR 211 Gibbs J (with whom Barwick CJ agreed) said when referring to the discretion conferred by s 79 of the Family Law Act, that the discretion is 'extraordinarily wide' and that 'few curial orders can have a greater effect on ordinary citizens of modest means and that such a discretion is to be exercised with scrupulous care'. These litigants are of modest means in their ability to earn income.
The trial judge recognised that the respondent earned more than she disclosed but the trial judge arrived at a figure which was less than was demonstrated in cross‑examination. The figures revealed in cross‑examination concerning the respondent's weekly income was:
Widow's pension  $184.00
Earning from cleaning  $141.00
Earning from carriage business (estimated)       $60.00
Total:$385.00
At [37] of the trial judge's reasons, her Honour found that the respondent 'probably earns around $320 to $350 per week' . In my opinion that was a finding against the weight of the evidence.

Error revealed

As a result, ground 1 should be upheld. The trial judge in the words of House v The King mistook the facts. The mistake was about the amount that the respondent's weekly income and about the money the respondent had accumulated and which was banked into a bank account the statements of which were not disclosed.

The respondent's rent and expenses

The trial judge found that the respondent 'does not own property and has to pay rent'.
Although the trial judge did not say what the rent was, the appellant contends in his submissions that this was an implicit acceptance of the respondent's claim in her financial statement that she pays $180 per week in rent and struggles to meet her necessary living expenses.
The appellant challenges the trial judge's finding that the respondent had to pay rent, not by adducing any other evidence or pointing to any other evidence, but merely pointing out again that the respondent did not produce any corroborating evidence. Once again, it is necessary to examine whether the amount of rent that she said that she paid and the living expenses were challenged. It appears that there was no cross‑examination challenging the fact that the respondent had to pay rent. In the absence of any challenge, there was no reason why her Honour should not accept that the respondent had to pay rent and $180 does not appear to be an unreasonable figure. There was no error on the trial judge's part in accepting that the respondent had to pay rent.

Ground 3: justice and equity of the order of the trial judge

As a result of the error as to the facts the trial judge's order should be set aside. As a result, it is necessary for this court to consider whether it should exercise its discretion under s 205ZG.
Section 205ZG of the Family Court Act 1997 empowers the court to alter the interests of parties in their property, but s 205ZG(3) directs the court that it 'must not make an order under this section' unless it is satisfied that in all the circumstances 'it is just and equitable to make the order'. In considering whether to make an order and what order to make under subs (1), the court must take into account each of the considerations set out in s 205ZG(4) insofar as they are relevant.

At the date of the trial, the respondent had total net assets of $26,414 and the appellant had assets totalling $736,168. The property of the two parties were kept separate during the relationship. The greatest contributor to the increase of the assets of the parties during the relationship was the increase in the Lake Clifton property, and this increase should be regarded as a contribution by the appellant, because it was his real estate which had increased in value and because the respondent did not contribute to the increase. In all it appears that the respondent's main financial contribution was to share the expense of purchasing food, and even that expense was 'significantly less than the amounts paid by' the appellant [26]. The respondent did contribute $1,000 towards the purchase of a vehicle owned by the appellant. On the other hand, the respondent conducted her horse‑drawn carriage business assisted by the appellant which earned her an income.
The respondent's main contribution was non‑financial. She conducted the household activities, cooked all the meals and helped entertain friends of the parties. Set against that, must be the fact that the respondent was provided with rent‑free accommodation during the period of the relationship and the respondent's contributions to household activities, cooking and entertaining, were matched by the appellant's assistance rendered to the respondent in the running of her horse‑drawn carriage business and the maintenance of the respondent's horses for which the appellant took significant amounts of responsibility.
In my judgment, the non‑financial contributions and financial contributions to the welfare of the family by each of the parties would have been roughly equal.
In my opinion the trial judge's finding that the respondent contributed 7.5% to the parties' assets cannot be sustained. In effect, the trial judge's order permitted the respondent to take all the assets she entered the relationship with and to gain extra property from the appellant, despite the fact that the appellant was the greater financial contributor to the costs of the relationship; despite the fact that while their non‑financial contributions were similar, the appellant was probably the greater contributor; despite the fact that the respondent attempted to mislead the court and never made proper disclosure of her assets or income; and despite the fact that such order would substantially eat into the funds the appellant had set aside in order to pay himself a pension. Her Honour perhaps considered that the amount ordered was justified by reason of s 205ZG matters. However, those matters, in my opinion, either balance out, or slightly favour the appellant. The factors in s 205ZG are as follows (the subparagraph lettering corresponds with the subparagraph lettering in s 205ZG(4)):
(a)Financial contributions:
The only financial contribution made by either party to the acquisition, conservation or improvement of property of the other was the $1,000 contribution by the respondent to allow the appellant to purchase a vehicle.
(b)Non‑financial contributions:
In terms of contribution other than financial contribution, the contributions of the parties were similar but probably exceeded by the appellant. The respondent sought to maximise her contribution but her claims in this regard were rejected by the trial judge. The appellant contributed to the conservation and improvement of the property of the respondent by allowing her horses to be agisted on his property by arranging for feed to be provided to them and by assisting in the running of her business so that she could earn income.
(c)Contribution to welfare:
The contribution of each to the welfare of the family consisted of each meeting expenses of living, the contribution of the appellant exceeding that of the respondent. The respondent undertook household activities and cooked all meals, entertained friends and was a good hostess and cook. In my view, these contributions more or less balance out.
(d)Earning capacity:
The effect of the order which the trial judge proposed and then made had a very substantial impact upon the earning capacity of the appellant. By making an order which allowed the respondent to take away more than she had brought into the relationship the trial judge in effect took away most of the appellant's fund which he had set aside to provide himself with a pension. It is true though, that the appellant had a greater earning capacity because of his capital. They otherwise had a similar earning capacity.
(e)The matters referred to in s 205ZD(3) were of limited relevance. There was not a significant difference between the age and state of health of the appellant and respondent. They both suffer from Ross River fever and in addition the appellant suffers from a degenerative eye condition which impairs his vision. They each came in and went out of the relationship with the same capacity to gain gainful employment which was limited given their ages. None of the other factors in s 205ZD(3) were of particular significance.
(f)This factor was not relevant.
(g)This factor was not relevant.
In Crawford v Crawford (1979) 5 Fam Law Rep 106 at 111, the Full Court of the Family Court pointed out that the longer the duration of a period of cohabitation, the less weight need be given to the initial contribution of capital by either spouse at the beginning of the marriage. They pointed out that the contribution of assets by each party to the marriage is always a factor to be taken into account, but that the significance of the initial contribution gradually diminishes with the passing of years. Earlier, in the reasons in Crawford, the court referred to an argument by counsel in that case that the amount of the husband's original contribution of capital should be extrapolated proportionately to the inflationary growth of the real estate. The court said:
This may be a persuasive argument if the marriage had been of a short duration.
The court went on to say that the marriage had been of comparatively long duration, something in excess of 19 years.
In The Marriage of Quinn (1979) (1979) 37 FLR 168, Evatt CJ noted that in that case the marriage was of short duration (three and a quarter years and the period of cohabitation two years) then said:
The fact that the marriage was of short duration, in the circumstances of this case in my view does give some added weight to the capital contribution which the wife made to the acquisition of this home as against the contributions which the husband made from his income and earnings during the marriage. That is, because the marriage was of such short duration, the asset in question to a large extent could be seen not as an asset accumulated from the efforts of the parties during the marriage but still largely an asset brought into the marriage by the wife.
Likewise, that reasoning leads me to the conclusion that because the relationship here was one of short duration and because the parties kept their assets separate, the capital contribution made by the appellant was not an asset accumulated from the efforts of the respondent. Bearing that factor in mind, and bearing in mind the adverse findings made against the respondent, and the fact that the respondent had not made full disclosure to the court, and that her true circumstances were not entirely known, it is my view that it was not just and inequitable to make any order under s 205ZG(1). As a result, s 205ZG(3) directs the court not to make an order under s 205ZG(1).

Ground 2

By this ground the appellant contends that the trial judge erred by failing to specify the portion of the payment attributable to the provision of maintenance for the respondent. The appellant contends that this was required by s 205ZF of the Family Court Act and that the failure amounted to an error of law. In view of the fact that ground 1 has

succeeded and the order set aside, it is not necessary to consider this ground.

Orders to be made

Ground 1 should be upheld and the appeal allowed. The order made by the trial judge for payment of money by the appellant to the respondent should be set aside. The part of the order that caveat no K32533 be removed from the appellant's (then respondent's) property 'upon payment of the said sum' should be set aside. In my view the caveat should have been ordered to be removed in any event because it claimed a caveatable interest based upon facts contained in a statutory declaration of the respondent declared on 14 December 2006. That statutory declaration claimed a caveatable interest by reason of financial and non‑financial contributions towards the conservation and improvement of the property which the declaration states was a caveat lodged to 'protect my equitable interest therein pending the outcome of future negotiations between Neville and myself or alternatively an order for sale of the property and division of the proceeds by the Family Court of Western Australia'. Insofar as the respondent claimed an interest in the property by reason of her right to apply for an adjustment of property interests, there was no caveatable interest.
The order for costs should stand although it should be amended so that there is no provision for subtraction of the costs from the amount payable by the appellant.
NEWNES JA: I agree with Pullin JA.