Maine & Maine

[2016] FamCAFC 270

FAMILY COURT OF AUSTRALIA

MAINE & MAINE [2016] FamCAFC 270

FAMILY LAW – APPEAL – PROPERTY – appeal against orders for property settlement made 11 years after the parties finally separated – where the trial judge considered issues arising from an agreement between the parties – where the trial judge was required to consider whether it was just and equitable to make an order pursuant to s 79(2) – where the trial judge was then required to consider what order should be made pursuant to s 79(4), including the respective contributions of the parties before, during and after the marriage – where the trial judge’s reasons strongly suggest a conflation of s 79(2) and s 79(4) – where the trial judge failed to consider the parties’ contributions during the 11-year post separation period – where the trial judge erred in his Honour’s assessment of the direct and indirect financial contributions of the parties – where the trial judge was required to make findings in respect of evidence that addressed specifically the impact that the violence in the relationship had upon the wife’s contributions, as outlined in Kennon v Kennon (1997) FLC 92-757 – appealable error established – appeal allowed – matter remitted for rehearing – costs certificates granted.

Family Law Act 1975 (Cth) ss 79, 79(2), 79(4), 117(1), 117(2A)

Duties Act (Queensland) 2001 (Qld) Schedule 3
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9

A v J (1995) FLC 92-619
Bevan v Bevan (2014) 51 Fam LR 363
Kennon v Kennon (1997) FLC 92-757
Kowalski and Kowalski (1993) FLC 92-342
Ruane v Bachman-Ruane (2012) 48 Fam LR 131
Senior v Anderson (2011) FLC 93-470
Stanford v Stanford (2012) 247 CLR 108
Whisprun Pty Ltd (Formerly Northwest Exports Pty Ltd) v Dixon (2003) 200 ALR 447
Woodland & Todd (2005) FLC 93-217

APPELLANT: Ms Maine

RESPONDENT: Mr Maine

FILE NUMBER: BRC 6163 of 2014

APPEAL NUMBER: NA 51 of 2015

DATE DELIVERED: 22 December 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Ryan, Murphy and Kent JJ

HEARING DATE: 6 June 2016

LOWER COURT JURISDICTION: Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE: 26 June 2015

LOWER COURT MNC: [2015] FCCA 1753

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Hackett

SOLICITOR FOR THE APPELLANT: Hirst & Co

COUNSEL FOR THE RESPONDENT: Mr Galloway

SOLICITOR FOR THE RESPONDENT: Mitchells Solicitors

Orders

1. That the appellant wife’s appeal against orders made by Judge Vasta on 26 June 2015 be allowed.

2. That Order 1 of the orders made by Judge Vasta be set aside.

3. That the respondent husband’s application for settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) be remitted for rehearing by a Judge of the Federal Circuit Court other than Judge Vasta.

4. There be no order as to the costs of the appeal pursuant to s 117 of the Family Law Act 1975 (Cth).

5. The Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect to the costs incurred by the appellant wife in relation to the appeal.

6. The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent husband in respect to the costs incurred by the respondent husband in relation to the appeal.

7. The Court grants to the appellant wife and to the respondent husband a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the rehearing.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Maine & Maine has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 51 of 2015
File Number: BRC 6163 of 2014

Ms Maine

Appellant

And

Mr Maine

Respondent

REASONS FOR JUDGMENT

1. The wife appeals orders for settlement of property pursuant to s 79 of the Family Law Act 1974 (Cth) (“the Act”) made by Judge Vasta. The effect of the orders is to have the wife pay to the husband $123,859.90 in exchange for the parties otherwise retaining their respective interests in property. 

2. Those interests in property include the wife’s sole ownership of real property that was the former matrimonial home. The circumstances in which that property was transferred to the wife from the parties’ joint names was at the heart of the proceedings before his Honour.

3. The primary judge’s orders are based on his Honour’s assessment that the property of the parties or either of them should be divided in the proportion 65 per cent to the wife and 35 per cent to the husband. The wife argued below, and argues on this appeal, that by reference to s 79(2) of the Act, it was not just and equitable to make any orders pursuant to s 79(4) of the Act.

4. The parties had commenced cohabitation at the end of 1980 and married in 1983. They separated in 2004 but divorced in September 2014. Their two children were each adults at separation. Subsequent to 2004 there was minimal contact between the husband and the wife.  After separation, the parties did not effect a settlement of property by court order or binding financial agreement. 

5. However in 2008, some four years after separation, the parties reached an informal oral agreement by reference to which the former matrimonial home was transferred from the joint ownership of the parties to the wife’s ownership alone in early 2009.  There was no issue that such an agreement existed; the primary issue agitated before his Honour in respect of the agreement was whether the wife agreed to pay the husband $80,000 in exchange for the transfer as the husband alleged or, as the wife alleged, the transfer was by way of gift.

6. An oral agreement between the parties was not, of course, effective to convey an interest in land. However, it is uncontroversial that a formal transfer (including the solemn declarations contained within it) was executed by each of the parties and the parties’ joint interest conveyed accordingly to the wife in early 2009.  As will be seen, that transfer had significant oddities.

7. The husband’s s 79 application was filed six years after the parties’ agreement. The filing of that application occurred some ten years after the parties separated. His Honour’s orders were made on 26 June 2015, some eleven years after the parties separated.

8. Our orders and reasons were delayed in the hope that settlement negotiations commenced at the parties’ request during the hearing of the appeal would continue subsequent to it.  Unfortunately, it would appear that no resolution has occurred.

9. These reasons inform our conclusion that the appeal must be allowed.

The Issues Joined Before The Primary Judge

1. The circumstances surrounding the preparation and lodgement of the formal transfer effecting the disposition of the home, and the contents of the transfer itself, are unusual and gave rise to allegations and counter-allegations by each of the parties before his Honour.  Ultimately, over half of his Honour’s reasons for judgment deal with the issue of the agreement, its terms, and the formal transfer.  Yet, we are, with respect, unable to see how his Honour’s approach or reasons were consistent with well-settled principles which governed the application for property settlement before him.

2. Despite the apparent pre-occupation by the parties and, subsequently, his Honour, with the agreement (and the admittedly significant oddities in the formal transfer document) the substantive issues arising from the agreement and transfer were, in so far as they were relevant to the s 79 proceedings, uncontroversial and are reflected in his Honour’s findings accordingly:

   ·The parties reached an informal oral agreement in late 2008 (some four years after separation) that the former matrimonial home would be transferred from joint names into the sole name of the wife;

   ·    Subsequently, in early 2009, the wife caused a formal transfer to be drawn effecting that transfer;

   ·   “Someone other than the husband or wife [had] written in the details of the lot description and the details of the transferor and the transferee” (reasons at [9]);

   ·   In the section of the transfer reserved for specification of the ‘consideration’, “the document remained blank” (reasons at [9]);

   ·   The husband subsequently signed the memorandum of transfer.  He did so with, again, the section of the transfer reserved for the consideration left blank;

   ·   In addition, the husband signed the solemn declaration on the transfer with the space provided for consideration left blank;

   ·   Subsequently, the wife added the words “agreement in divorce settlement” in the space provided for consideration in the document;

   ·   Those words were crossed out and the words “by way of gift” were inserted and initials were appended;

   ·   No money was paid to the husband by the wife in respect of the transfer (or, indeed, otherwise); and

   ·   Nothing said or written by the husband could be construed as a demand for payment of the $80,000 he alleged was to be paid to him under the parties’ oral agreement (or any money) until, at the earliest, 2013.

3. The husband gave conflicting evidence as to the addition of the words “by way of gift” and initials to the transfer document.  He swore initially that the words were not in the wife’s handwriting and that the initials were not hers.  Subsequently he swore that both were those of the wife. The wife denied writing either.

4. Against that background, the first half of his Honour’s reasons conclude with this finding:

   39. I find that there was an agreement between the husband and the wife that the husband would transfer his proprietary right in the [former matrimonial home] to the wife upon the wife then refinancing the mortgage on that property and paying the husband the sum of $80,000.00.

5. Immediately thereafter, under the heading “The Consequences of that Finding”, his Honour says:

   40. The agreement that I have found existed was meant to be a final agreement between the parties as to the disposition of property obtained by them during the marriage. If the wife had honoured the agreement and paid the $80,000.00, the husband would not have brought these proceedings, or if he had brought these proceedings, I would have dismissed this application (see Bevan v Bevan (2014) 51 Fam LR 363).

   41. Using the power I have pursuant to s.18 of the Federal Circuit Court of Australia Act 1999 (Cth), I could order the enforcement of the agreement. Both Counsel have urged me not to undertake such a disposition of the matter.

   42.As a result of the wife repudiating the agreement, which occurred, consistent with my findings, before she registered the transfer of the property, it is my view that the proper course is to decide whether there should be a property adjustment pursuant to s.79 of the Family Law Act 1975 (Cth).

6. Counsel for the husband, Mr Galloway, effectively conceded, as was with respect appropriate, that there was no evidentiary foundation for the finding that the agreement was “meant to be a final agreement between the parties as to the disposition of property obtained by them during the marriage”. Equally, there is no evidentiary foundation for the finding that if the wife had “honoured the agreement and paid the $80,000.00, the husband would not have brought these proceedings”; so much is, with respect, pure speculation on his Honour’s part. Even more so, of course, is his Honour’s statement as to what determination he would have arrived at if the speculated event had occurred.

7. Whether or not his Honour could have ordered “the enforcement of the agreement” as postulated (about which we express no opinion), any such order and indeed any money paid pursuant to it would have been but preliminary to, and a circumstance within a number of other relevant circumstances, a proper determination of the broader questions inherent in the husband’s s 79 application.

8. Moreover, and important to arguments raised by the appellant wife on this appeal, it emerges from what his Honour said in the passages just quoted that his Honour apprehends that the “final agreement” would have resulted necessarily in dismissal of an application by reference to Bevan & Bevan.[1] With respect to his Honour, we consider that to be erroneous.  Nothing within the decision in Bevan or, more importantly, the decision of the High Court in Stanford v Stanford,[2] upon which it is based, suggests any such thing. That error of law is underscored by the apparently alternative finding at [42] of the reasons that embarking upon a consideration of whether orders should be made pursuant to s 79 of the Act is “as a result” of a finding that the wife had repudiated the agreement.

   [1] (2014) FLC 93-572.

   [2] (2012) 247 CLR 108.

9. The relevance and significance of informal agreements entered into between parties to a marriage in subsequent proceedings pursuant to s 79 of the Act is well settled. In Woodland and Todd,[3] the Full Court said:

   38. Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing.

   39. In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However, and perhaps more significantly, it would generally be necessary for the court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.

   [3] (2005) FLC 93-217, per Finn, May and O’Reilly JJ at 79,604-79-605.

10. It has later been said, for example, that “an agreement’s failure to be ‘binding’ in the s 90G sense renders its use in Part VIII proceedings to be very limited; specifically it does not operate as a bar to orders made under that Part”.[4] Importantly, those decisions can be seen to be entirely consistent with what the High Court later said in Stanford (above), which, in our view, bears repeating here:

    41.…if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Part VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. … These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.

    42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).

    (Emphasis added)

    [4]Senior & Anderson (2011) FLC 93-470, per Strickland J at [96], 85,719. See also, for example, Ruane v Bachman-Ruane (2012) 48 Fam LR 131, per Murphy J at [70], 147.

11. As has been said, despite the parties’ separation some years previously, the marriage had not formally been brought to an end until the divorce order made 9 September 2014. Nor, despite their informal oral agreement, had the parties formalised, or sought to formalise, a settlement of property between them until the husband brought his s 79 application some ten years or so after the parties separated (and about six years after the parties’ informal oral agreement).

12. Once the proper role of that agreement consistent with established principle is appreciated, the court’s task was, first, to consider whether it was just and equitable to make any order adjusting the then existing legal and equitable interests of the parties in property (s 79(2)) and, if it was, to consider what order should be made by reference to s 79(4). In respect of the latter task, his Honour was obliged to consider, among the sub-section’s other requirements, the respective contributions of the parties over “the entire relationship between the parties whether arising out of contributions before, during or after the formal tie of marriage”.[5]

    [5]          Kowalski and Kowalski (1993) FLC 92-342, at 79,630.

Was s 79(2) Addressed By The Primary Judge?

1. Under the heading “Applicable Principles” his Honour acknowledges at [51] that “I must be satisfied that any orders that I make are just and equitable pursuant to s.79(2) of the Act” and then quotes [35] to [38] of the High Court’s decision in Stanford. 

2. Yet, thereafter, his Honour moves to “identifying the pool” and assessing contributions. No finding is made by his Honour as to whether it is just and equitable to alter the existing interests in property of the parties. We are unable to see anything in his Honour’s reasons by which it is concluded that s 79(2)’s requirements were satisfied and how and why they were satisfied. Certainly there is no express finding by his Honour to any such effect.

1. In light of the particular (somewhat unusual) circumstances of this case earlier referred to, this issue carried with it the need for careful analysis and a consequent finding. Not only did the wife assert, centrally, in her case that s 79(2) was engaged such as to render it unjust and inequitable to make any s 79 order, the circumstances of the case did not admit of the “ready satisfaction” of the s 79(2) requirement to which the High Court refers in Stanford, particularly at [42] earlier quoted.

2. Further, his Honour’s reasons move immediately from a statement of the s 79(2) question to a consideration of the “pool” of property and then, immediately thereafter, a consideration of the relevant s 79(4) matters. In the absence of a consideration of the separate s 79(2) question and a finding in respect of same, his Honour’s reasons suggest strongly a conflation of the s 79(2) and s 79(4) questions; something which the High Court were at pains to say should be avoided.

3. In our view, there is merit in grounds 7 and 8 which assert error in each of the respects just discussed.  

The Primary Judge’s Assessment of Contributions

1. Grounds 6 and 10 to 13 of the wife’s Notice of Appeal challenge the trial judge’s findings in respect of contributions.

Adequacy of Reasons

1. At the time of the proceedings before his Honour “the property of the parties or either of them” within the meaning of s 79 of the Act consisted of the former matrimonial home valued at $750,000 owned by the wife; an investment unit, also owned by the wife, valued at $330,000; the wife’s cash reserves of about $9,000; and the wife’s car valued at $5,000. For his part, the husband had property comprising cash of $8,000 and a motor vehicle valued at $16,500. The parties each had superannuation interests – in the wife’s case the amount was $86,505 and in the husband’s case $82,505. The wife was aged 62 at trial; the husband, 55.

2. His Honour found that the $1,100,500 in assets and superannuation held by the wife was subject to liabilities comprising $607,924 owing to St George Bank and money owed to each of the parties’ two adult children totalling $20,000. Thus, the whole of the $627,924 in liabilities were those of the wife; the husband had no liabilities. The net pool of assets and superannuation interests calculated by his Honour was $659,614.

3. His Honour assessed contributions in the proportions 65 per cent to the wife and 35 per cent to the husband. His Honour made no adjustment to that assessment pursuant to s 79(4)(e) of the Act.

4. The consequence of his Honour’s orders was that the husband would retain his motor vehicle, his bank accounts and superannuation and receive a payment from the wife of $123,859.90. The consequence of his Honour’s orders is that the wife would need to fund the latter sum through borrowings with the consequence that her total liabilities would be $751,783.

5. When the parties separated, their property consisted essentially of the equity in the former matrimonial home which was subject to a mortgage. An agreed valuation before his Honour estimated its 2004 value at $490,000. The wife deposes to $267,000 owing on the mortgage at that time. Payments in respect of the mortgage then owing were met solely by the wife following separation in 2004. 

6. Very shortly after the transfer of the home to the wife in early 2009, the existing mortgage was refinanced by the wife so as to permit her to acquire the investment property. That property was sourced and acquired by the wife alone and borrowings in respect of it were arranged solely by her. She met all payments in respect of the refinanced liability. The investment property was purchased for $280,000 and was, apparently, fully geared. There is no evidence of either the value of the former matrimonial home or its mortgage when the investment unit was acquired. By the time of trial, the real property assets had a combined value of nearly $1.1 million and the mortgage liability was about $607,000.

7. The wife had continued to occupy the former matrimonial home during the whole of that time and had “significantly improved” it.

8. As was conceded ultimately by counsel for the husband in the appeal, the overwhelming bulk of the contributions of all types made to “the property of the parties or either of them” within the meaning of s 79 of the Act during the 11 year period between the parties’ separation and trial were made by the wife.

9. In 2014 the husband received by way of a disability payment about $57,000. Of that sum $8,000 and a motor car valued at $16,500 comprised part of the property of the parties or either of them (together with superannuation interests) at the time of the hearing before his Honour. The balance was expended by the husband. That sum was paid as, we gather, an insurance payout as part of the husband’s superannuation which such superannuation was contributed to and preserved during the 25 years that the parties cohabitated.  His Honour took account of the superannuation that the parties each otherwise retained.

10. During the 11 years between separation and trial, the husband (who suffered, and suffers, from psychological ill health) acquired no real property or other assets save for the cash and car just mentioned which formed part of the property “pool” before his Honour.

11. The parties’ respective contributions during the 11-year period between separation and trial were an extremely relevant consideration. That 11-year period represents about a third of the entire 35 years to which the trial judge’s assessment of contributions should have been directed. The omission by his Honour of any assessment of the parties’ respective contributions during that time constitutes a failure to consider a highly relevant consideration. A consequent inadequacy in his Honour’s reasons is in our view also manifested.

The Parties’ Other Direct and Indirect Contributions

1. Due to the length of time that had elapsed between separation and the hearing, financial records evidencing direct financial contributions said to have been made by each of the parties from income were incomplete; financial records existed only between 2000 and 2004. Those records were in evidence. Of those financial records, his Honour said:

   44.The assessment of contributions is not an easy one. There are no financial records before the year 2000. The financial records that do exist between 2000 and 2004 do provide a snapshot of the financial arrangements for those years. However, it is not correct to then extrapolate from those 4 years to make a conclusion about the previous 20 years.

2. We consider there is considerable merit in the submissions made on behalf of the appellant wife that, despite making the statement just quoted his Honour, at reasons [59] to [64], did precisely that which, at [44] he eschews.  We also agree with the (in effect alternative) submission on behalf of the wife that the evidence before his Honour taken as a whole did indeed show that the records provided a “snapshot” of the contributions made by each of the parties more generally. Further to what has earlier been said about the absence of a consideration of the 11-year post-separation period, it will be observed that his Honour there references only the 20 years from cohabitation to separation in 2004.

3. His Honour said at [64], “[i]f the true situation had been as the wife is now making out, then there would be no cause for complaint as she would now be financially better off without having the drain of her husband”. That finding appears to accompany an earlier finding:

   61.The husband has identified contributions made by him throughout the relationship both financial and non-financial. The submission for the wife seems to be that even though the husband was earning money, his money was spent on his “vices” and he was also using her money to do the same. I do not find that such has been shown.

4. The finding at [64] just quoted would appear to be somewhat at odds with the finding made by his Honour at [46] that “[w]hat does become apparent in reading Exhibits 10 and 11 is that the husband did fritter away money”. 

5. The submission made on behalf of the wife before his Honour was that while the wife had contributed the whole of her income to “family expenses including mortgage repayments, bills and other outgoings” the “[h]usband’s direct financial contributions were sporadic and he retained the majority of his income for personal use … expend[ing] a significant proportion of his income on alcohol and gambling”.[6] That submission was sustained by reference to evidence (summarised in a schedule) elicited in cross-examination of the husband that he had “withdrawn from the joint account from which the mortgage was paid more than he deposited to it and that in fact the Wife made all mortgage repayments”.[7]

   [6]          Wife’s Outline of Submissions at trial, 16 June 2015, paragraph 36.

   [7]          Wife’s Outline of Submissions at trial, 16 June 2015, paragraph 37–38.

6. If, as would appear to be the case, his Honour’s assessment of the direct and indirect financial contributions of the parties was based upon the premise that the evidence taken as a whole did not permit of an extrapolation from the records exhibited in the trial, we consider that his Honour erred.  Further, once the true nature of the wife’s submissions at trial are understood, they support the only conclusion reasonably open on the evidence, namely that the wife’s direct and indirect financial contributions over the whole of the approximately 35-year period between cohabitation and trial overwhelmingly favoured the wife.

7. It is contended centrally on behalf of the husband that because the $80,000 which he contends was payable by the wife to him pursuant to the parties’ agreement and his Honour so found, he has contributed that sum as and from when it was payable, allegedly, in 2009. It is contended that, in effect, the husband has invested that capital into the financial product of the succeeding six years. That argument should be rejected.

8. Irrespective of whether the husband was to receive $80,000 or not, such amount as was “invested” by the husband was, at best, his s 79 entitlement assessed as at that time and referenced to the property of the parties or either of them and its value at that time.  But, quite apart from that consideration, both parties “invested” the worth of their respective contributions across the entirety of the approximately 35-year period. It was that which his Honour had to assess, if it was first determined that it was just and equitable to make an order under s 79.

The “Kennon Argument” and Findings

1. The wife argued at trial that her contributions were made more arduous by reason of family violence perpetrated by the husband. His Honour refers to those allegations at [47] of the reasons and, at [48], to the decision of the Full Court in Kennon v Kennon.[8] Nothing further is said of that issue until, later in the reasons, his Honour said:

   66.The letters [written by the wife to the husband] also make it clear that there was no impact from any violent conduct of the husband. In fact, physical violence was not mentioned at all. The letters speak of the husband as being a selfish philanderer who thought of himself first and of everyone else second, if at all. I do accept that there may well have been incidents of domestic violence. I do accept that the conduct of the husband could well have caused fear to his daughters. I accept that when intoxicated, the husband had a propensity to irrationally verbally, and sometimes physically, abuse the wife.

   67.However, I cannot see evidence that illustrates how such conduct has made the contributions by the wife more arduous than they would ordinarily have been. Notwithstanding these most unfortunate character traits of the husband, it is obvious by reference to the letters that the wife was still prepared for some form of reconciliation. I accept that this was an unhappy marriage and I accept that the wife would often “have her heart broken” by the behaviour of the husband.

   68.But for me to further adjust the contributions because of the nature of this particular relationship would mean that I am indirectly reimporting into matrimonial law the concept of fault. If there were such a concept still in matrimonial law it may be that the wife would have easily proved this aspect. But fault is no longer part of matrimonial law and the evidence of the “domestic violence” does not reach a point that would allow me to make any further adjustments to the contributions.

   (Emphasis in original)

   [8] (1997) FLC 92-757.

2. His Honour appears to accept that family violence, as defined within the Act, occurred. His Honour apparently uses the fact that family violence was not mentioned in the wife’s letters which were in evidence as a basis for a finding that the violence did not impact upon the wife’s contributions. At [67] his Honour makes a specific finding that there was no “evidence that illustrates how such conduct has made the contributions by the wife more arduous”.

3. We consider that this finding by his Honour is erroneous. It ignores, with respect, direct evidence given by the wife in her affidavit not challenged substantively in cross-examination and not the subject of any adverse finding by his Honour. The wife gave direct evidence that family violence had made the household tasks and care of the children “more difficult”.[9] In addition, given the wife’s detailed evidence of the history of the husband’s drunken violence and abuse over a period of about 20 years; the fact that no finding contrary to that evidence was made; and his Honour’s findings quoted at [66] above, we are, with all respect, unable to understand how it was not, in any event, an inescapable inference that the wife’s contributions – in particular her s 79(4)(c) contributions at the very least – were made “more onerous”.

   [9]          Wife’s Affidavit Evidence in Chief, 25 February 2015, paragraph 78.

4. It is of course axiomatic that “a judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue”.[10] However, a party is entitled to know how and why direct evidence adduced by them pertaining directly to an important issue under consideration has been rejected. Here, the parties and this Court have been deprived of an explanation as to why direct evidence by the wife as to how her contributions were made more arduous by family violence which his Honour found to have occurred has been rejected as irrelevant to the assessment of contributions by his Honour.

   [10]Whisprun Pty Ltd (Formerly Northwest Exports Pty Ltd) v Dixon (2003) 200 ALR 447, 467 per Gleeson CJ, McHugh and Gummow JJ; see also, for example, A v J (1995) FLC 92-619, 82-232.

5. Contrary to what his Honour said at [68] of the reasons, he was not being asked to “further adjust the contributions because of the nature of this particular relationship”. Rather, it was specifically asserted by the wife that, by reason of conduct which his Honour himself found to be family violence, the wife’s contributions were made more onerous.

6. Nor, with respect to his Honour, was the wife’s case the “reimporting into matrimonial law [of] the concept of fault”. Rather, established principles by reference to the Full Court decision in Kennon, and the cases which have followed it, required of his Honour findings in respect of evidence that addressed specifically, as Kennon suggests is required, the impact that the violence had upon the wife’s contributions including, significantly (but not exclusively), her contributions referenced to s 79(4)(c).

Summary of Conclusions re Contributions

1. Grounds 6 and 10 to 13 inclusive are established.

Issues And Findings Pertaining To The Agreement

1. The first five grounds of appeal all relate to his Honour’s findings in respect of the agreement between the parties. The grounds include an assertion that his Honour admitted evidence which was inadmissible. Our conclusions earlier expressed that the appeal must succeed on other grounds and our view of the relevance of his Honour’s findings with respect to the agreement render it strictly unnecessary to address these grounds. However, in deference to the arguments advanced on behalf of the parties on this appeal and below, and by reason of the issue occupying the bulk of his Honour’s reasons, we propose to refer briefly to those issues notwithstanding our conclusion that they are not central to the issue that his Honour needed to determine.

2. In short, his Honour accepted the evidence of the husband and his witness over that of the wife and the parties’ adult daughter as to the events leading up to the making of the agreement. His Honour used that evidence to draw a number of inferences so as to conclude:

   36. The notation that the wife made on the transfer documents, in the area where details of the consideration must be made, is also interesting. She wrote “agreement in divorce settlement”. Such a notation is consistent with the agreement to pay the husband $80,000.00. It is obvious that the wife has repudiated this agreement. Even though the subsequent handwriting may not be that of the wife, it is obvious that the words “BY WAY OF GIFT” were inserted on her instructions and that the words “agreement in divorce settlement” were struck out on her instructions. It was when this action occurred that the agreement was repudiated.

   (Emphasis in original)

3. We are respectfully unable to agree that the words “agreement in divorce settlement” are “consistent with the agreement to pay the husband $80,000.00”. Those words are certainly consistent with an agreement and with that agreement being “in divorce settlement” (whatever the latter phrase might be intended to mean) but nothing to which we have been taken, or anything we have been able to find for ourselves, provides an evidentiary foundation for the inference drawn by his Honour.  

4. Further, his Honour uses the finding just referred to so as to conclude that the wife was “deceitful and dishonest”. We agree with the submission on behalf of the wife before us that the words used are in fact consistent with what both parties were asserting before his Honour. In our view, there was no proper evidentiary basis for his Honour to make the serious finding which he did.

5. So, too, the finding that “it is obvious that the [relevant] words … were inserted on [the wife’s] instructions and that the [initial] words … were struck out on her instructions”. Again, counsel for the husband was unable to point us to any evidentiary foundation for the drawing of that inference. In our view no such inference was reasonably open to his Honour on the evidence before him. It will be appreciated that it is this finding which constitutes what his Honour finds was the “repudiation” of the agreement by the wife.

6. Most tellingly, however, amidst the conflicted evidence of the parties and witnesses recalling events occurring some seven years prior to the trial, his Honour had available to him cogent evidence from which an inference could be drawn as to the central issue between the parties, namely whether $80,000 was payable in consideration for the transfer of the former matrimonial home.

7. The stamped transfer was an exhibit before his Honour. That document reveals that the transfer was stamped on 26 February 2009 and that duty in the amount of $8,312.50 was paid. 

8. In the hearing before us counsel consented to us receiving Schedule 3 to the Duties Act (Queensland) 2001 (Qld) (“the Duties Act”). It reveals that if the consideration payable to the husband was, as he contends, $80,000 the duty payable would have been $1,225. Thus, if the agreed consideration was $80,000 the wife paid, voluntarily, over $7,000 in duty more than she needed to.  If, on the other hand, consistent with her case before his Honour, she paid duty consistent with a gift on the total value of the husband’s half interest in the property, the duty payable is the amount that was in fact paid.[11]

   [11]Exhibit 9 before his Honour was an application for finance by the wife which valued the transferred property at $565,000 for stamp duty purposes. Half of that value is $282,500. The duty payable on that one half value is $8,312.50.  That is the duty that was paid. It equates to the duty payable on a transfer of the property at a value of $282,500.

1. We should point out that, although the stamped transfer was before his Honour neither party sought to inform his Honour of the matters just referred to nor to put the relevant schedule to the Duties Act before his Honour.

2. However, in our view, it was not open to his Honour to draw the inferences which he did and nor was the finding as to the parties agreement containing a term that the wife would pay the husband $80,000 open to his Honour on the evidence before him.

Remitter or Re-exercise?

1. Understandably each of the parties contended before us that this Court should re-exercise the discretion in the event that error was established and the appeal was allowed. Obviously, that is the path that this Court would take if it is possible – and all the more so in the circumstances of this case.

2. As we said during the course of discussions with counsel, it is now 12 years since these parties separated and the financial circumstances of each of them as revealed by the record suggests that neither can afford a further trial. It would be a tragedy if that was the consequence. Allied to that is the fact that the husband apparently has somewhat fragile psychological health.

3. In contending for a re-exercise by this Court, counsel for the wife submitted that because the central contention of the wife both at trial and on this appeal is that once proper regard is had to the evidence, the only reasonable conclusion open to the court is that it not exercise its discretion pursuant to s 79(2) of the Act to alter the existing interests in property or superannuation of the parties at all. In light of that counsel submitted that despite concerns expressed by the Court as to whether this Court could resolve factual questions as to, in particular, the allegations relevant to the Kennon argument, the Court could and should nevertheless re-exercise.

4. Counsel for the husband suggests that a remitter is inevitable by reason, primarily, of the necessity to make findings relevant to the Kennon argument. Added to that, of course, is the profound difficulty that we have concluded that his Honour’s reasons are entirely lacking in respect of the post-separation contributions said to have been made by each of the parties. That issue alone suggests the possible need for further evidence in respect of the position as at the hearing of the appeal which occurred some 12 months after the orders made by his Honour. 

5. If the parties were afforded the opportunity of providing any further evidence to this Court, the course of the litigation thus far (including the apparent inability of the parties to resolve the matter when provided the opportunity during the course of the appeal) suggests that it is almost inevitable that any evidence said to be relevant to the re-exercise would be highly conflictual.  The inability of this bench of three to deal with that conflict in evidence and to make any necessary credit findings is manifest. 

6. Accordingly, we consider that remitter is, tragically, inevitable. 

7. Of course, nothing prevents the parties from bringing what must otherwise necessarily follow from that remitter to a conclusion by agreement.

Costs

1. The wife has been wholly successful on this appeal with the consequence that, in terms of s 117(2A)(e) of the Act the husband has been “wholly unsuccessful”. That said, as this Court has frequently commented, costs do not follow the event any more on an appeal than they do in proceedings below (s 117(1) of the Act).

2. Taking into account all of the circumstances we consider relevant pursuant to s 117(2A), we consider it just that the parties each bear their own costs and that, upon their request made at the hearing, certificates issue to each pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the appeal and the rehearing.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Murphy & Kent JJ) delivered on 22 December 2016.

Associate: 

Date:  22 December 2016