Matos & Matos
[2024] FedCFamC1A 230
•11 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Matos & Matos [2024] FedCFamC1A 230
Appeal from: Matos & Matos [2024] FCWAM 135 Appeal number(s): NAA 230 of 2024 File number(s): 8515 of 2023 Judgment of: RIETHMULLER J Date of judgment: 11 December 2024 Catchwords: FAMILY LAW – APPEAL – Procedural fairness – Where magistrate highlighted deficiencies in evidence and allowed appellant time to file further evidence – Whether appellant entitled to expect orders she sought if she filed further evidence – Whether appellant entitled to be told of magistrate’s mental processes prior to judgment – No error on part of magistrate.
FAMILY LAW – APPEAL – PROPERTY – Valuation evidence – Bare assertions of value – Adoption of figure less than bare assertion with evidentiary basis – No error on behalf of magistrate – Where valuation cannot be obtained property should be sold.
FAMILY LAW – APPEAL – PROPERTY – Appeal from property settlement of 54/46 in favour of the appellant – Where contributions assessment in favour of appellant – Where appellant demonstrated greater future needs – Reasons alleged to be inadequate simply because ultimate exercise of discretion disputed – Reasons found to be adequate – Error in exercise of discretion – Grounds of appeal established – Appeal allowed – Orders set aside.
Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(4)
Federal Proceedings (Costs) Act 1981 (Cth) ss 8, 9
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Bergman & Bergman (2009) FLC 93-395; [2009] FamCAFC 27
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Chief Commissioner of Police v IHF [2021] VSCA 147
Gronow & Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [936] HCA 40
Raymond & Raymond (2024) FLC 94-180; [2024] FedCFamC1A 45
Re Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6
Sharman v Evans (1977) 138 CLR 563; [1977] HCA 8
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63
F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295
Division: Division 1 First Instance Number of paragraphs: 42 Date of hearing: 29 November 2024 Place: Sydney Counsel for the Appellant: Mr Hannan Solicitor for the Appellant: Rattigan Kearney Bochat The Respondent: Litigant in person ORDERS
NAA 230 of 2024
8515 of 2023FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MATOS
Appellant
AND: MR MATOS
Respondent
ORDER MADE BY:
RIETHMULLER J
DATE OF ORDER:
11 DECEMBER 2024
THE COURT ORDERS THAT:
1.Appeal NAA 230 of 2024 be allowed.
2.The orders of 21 August 2024 be set aside.
3.The matter be remitted for rehearing.
4.The appellant be granted a costs certificate pursuant to 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 in respect of the costs incurred by the appellant in relation to the appeal.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Matos & Matos has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RIETHMULLER J:
The appellant appeals from property settlement orders made by a magistrate made after an undefended hearing on 21 August 2024. The appellant sought orders for a property settlement where she would receive 73 percent of the parties’ assets and superannuation (although this was not sought in her Application, but only set out in her Summary of Argument). The magistrate ordered that the appellate receive property and superannuation valued at $311,173.86, which was approximately 54.5 per cent of the parties' assets and superannuation.
The respondent did not participate in the hearing, nor did he participate prior to the hearing of the appeal where he appeared and sought orders that the magistrate’s judgment be set aside and the matter remitted for rehearing.
BACKGROUND
The appellant and respondent commenced a relationship in 1997, married in 1998, and separated in 2018. The parties remained living in the same home, while separated, until May 2023. It was not suggested that there were any significant assets brought to the relationship by either party nor were any significant lump sums received by either party during the relationship ([25]).
The appellant is 48 years of age and works in administration and as a cleaner. The respondent is 52 years of age and is a qualified tradesperson ([8]). The parties have three children: two of the children are over 18 and the youngest child is aged 16. The youngest child, who remained in the care of the appellant, has been diagnosed with Global Developmental Delay and Autism Spectrum Disorder and that “it is likely that [the child] will require on-going support from the [appellant] given that the latter condition has been assessed as being ‘lifelong and pervasive’” ([29(c)]). The appellant has been without child support payments to assist with the expenses of the child. Whilst she receives National Disability Insurance Scheme support, that support is to assist in meeting expenses associated with the child’s special needs and not the day-to-day care of the child. The appellant also receives modest social security support by way of a Carers Allowance, Rent Assistance, and Family Tax Benefit.
The magistrate did not make specific findings as to the appellant’s earning capacity ([29(a)]) but found that she would be able to maintain gainful employment ([30(a)]). The appellant had set out in her financial statement that she earns around $1,152 per week from employment, around $60,000 per annum.
The magistrate found that the respondent, a qualified tradesperson, has an earning capacity of $170,000, based upon his earnings prior to COVID-19. However, the magistrate said that he was unsure whether the respondent was exercising this earning capacity at present ([29(e)]), due to the respondent’s conspiratorial beliefs and the associated financial consequences, and thus that the respondent may have significant future needs ([30(b)]). However, there was no evidence as to the respondent’s income or earnings in recent years, nor any evidence as to any future needs of the respondent.
The magistrate set out his findings as to the assets and superannuation of the parties ([20]), to the following effect:
Jointly owned matrimonial home $490,000.00
The [appellant’s] car $1,000.00
The [respondent’s] car $3,000.00
The contents of the home [in the respondent’s possession] $7,000.00
The mortgage on the home ($223,443.93)
Outstanding Council Rates ($3,513.44)
Outstanding Water Rates ($2,694.91)
Total of non-superannuation assets $271,347.72
[Superannuation fund 1] (W) $15,000.00
[Superannuation fund 2] (H) $64,061.04
[Superannuation fund 3] (H) $241,091.94
Total Superannuation $320,152.98
Total Assets and Superannuation $591,500.70
The magistrate’s conclusions, after considering the contributions factors in s 79(4)(a) to (c) of the Family Law Act 1975 (Cth) were that ([27]):
(a) the [respondent’s] financial contributions were significantly greater than those of the [appellant] during the marriage;
(b) the [appellant’s] financial contributions were significantly greater than those of the [respondent] post May 2023 given the wife has solely met all expenses in respect of [the child] and the [respondent] has failed to meet the mortgage repayments and ancillary expenses for [the former matrimonial home]; and
(c) the [appellant’s] non-financial contributions were significantly greater than that of the [respondent] given the [appellant’s] undisputed evidence about her contributions as homemaker and primary carer of the children during a long marriage and post separation and given she is now the sole carer for [the child].
The appellant had not sought, nor argued for, a percentage assessment at this stage of the analysis, and none was made by the magistrate.
The magistrate turned to the other factors, finding:
[30] Given my findings as referenced in the preceding paragraphs I am satisfied that:
(a) notwithstanding the [appellant’s] lack of any formal qualifications, her consistent employment history, combined with her current employment and earning capacity suggest that the [appellant] will be able to maintain gainful employment and with the benefit of NDIS funding, meet [the child’s] on-going needs; and
(b) the [respondent’s] future needs are difficult to ascertain as there is a lack of evidence with respect to same. However, given the [appellant’s] evidence about his presentation, conspiratorial beliefs and the financial consequences that have been occasioned as a result of same, the [respondent’s] future needs may be significant. Having said that, the [respondent] clearly had an opportunity to put evidence before the Court to assist the Court in determining those needs - but he has failed to do so.
[31] Ultimately, I am satisfied on the balance of the limited evidence before me that the section 75(2) factors of the Act favour an adjustment toward the [appellant] given she is currently solely responsible for meeting [the child’s] needs and given [the child’s] diagnosis such responsibility is likely to continue into [the child’s] adulthood. Moreover, I am not satisfied on the evidence that the [respondent] will contribute in any way to meeting those needs through either financial or non-financial support.
The magistrate made orders for the home to be sold and the parties to share equally in the sale proceeds and otherwise retain the chattels in their possession. The orders also provided for a split of $175,000 from the respondent’s Superannuation fund 3 superannuation in favour of the appellant.
The practical result is that the appellant received slightly less than 50 per cent of the non-superannuation property and nearly 60 per cent of the parties’ superannuation.
GROUNDS OF APPEAL
The appellant filed a Notice of Appeal on 10 September 2024 with six grounds. It is appropriate to deal with Ground 6 first as it addresses issues of procedural fairness.
Ground 6
6. His Honour denied the Applicant procedural fairness in that the Applicant was not provided with an opportunity to remedy or rectify what His Honour considered to be deficiencies in her evidence and in that the Applicant was not provided with notice that His Honour intended to make dramatically different orders to those sought by the Applicant.
The appellant complains that the conduct of the magistrate in identifying a number of significant deficiencies in her evidence, and then allowing her time to file another affidavit before reserving judgment, thereby induced her to believe that he would make orders in the form she sought. No such statement was made by the magistrate during the discussions where the magistrate identified the deficiencies in the evidence and explained to the appellant’s solicitor the relevance of matters about which there was insufficient evidence. Nothing in this discussion could be construed as an indication or representation as to the course the court would take: it was no more than a generous interaction by the magistrate to assist the solicitor to provide evidence that was necessary to appropriately put his client’s case.
After deciding to allow the appellant 14 days to file a further affidavit the magistrate said “then what I propose to do is, I will make an order that judgment will be reserved as of the date of filing of the additional affidavit…” (Transcript 5 July 2024, p.9 lines 41-43). The solicitor for the appellant demurred to this proposal, although sought other orders on that day concerning superannuation (which were not ultimately granted).
Counsel argued that these interactions should be reasonably understood as a representation to the effect that if the appellant gave the magistrate the evidence then he would make the orders sought. There was no assurance about how the matter or any aspect of it would be resolved: (Raymond & Raymond (2024) FLC 94-180 at [27]) nor any rejection of a matter agreed upon (Chief Commissioner of Police v IHF [2021] VSCA 147 at [113]), nor could it be said that the appellant acted to her detriment by filing further evidence (Re Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 at [36]-[37]). The appellant’s arguments are without foundation and must be rejected.
In effect, the appellant complains that the magistrate did not discuss his thoughts with the solicitor appearing for the appellant prior to giving judgment. A decision maker is not required “to disclose what he [or she] is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he reaches a final decision” (F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295 at 369) nor provide “a running commentary upon what [the decision maker] thinks about the evidence that is given”: SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at [48]. In this matter the decision maker was not persuaded by the appellant’s arguments as to the extent of the property settlement she ought to receive. The magistrate was not required to forewarn the applicant that he was not persuaded by her arguments prior to giving judgment. This argument is also without merit.
There is no merit in this ground of appeal.
Ground 1
1. His Honour erred in fact and in law in arriving at his conclusions about the value of:
a. the home contents;
b. the parties' respective superannuation entitlements;
c. the value of the former matrimonial home, and;
d. The Applicant Wife's personal liabilities which have been either excluded or reduced to nil.
Particular (a) addresses the findings as to the value of the household contents in the possession of the respondent. The appellant placed no evidence before the magistrate from which findings as to value could be made: she simply made a bare claim that the chattels had a value of $10,000.
The magistrate found that the value of the chattels was $7,000. The magistrate erred as there was no evidentiary basis for the magistrate to determine the value of the chattels at $7,000. Ironically, the appellant’s success on this part of Ground 1 leaves the court without any admissible evidence as to the value of the chattels. At best, given the lack of evidence as to the value of the chattels, the respondent’s retention of the household chattels could be no more than a general consideration pursuant to s 75(2) of the Act.
Particular (b) challenges the magistrate’s finding that the appellant’s superannuation entitlement should be valued at around $15,000. The only evidence the appellant chose to place before the magistrate was a superannuation statement from 30 June 2023 showing a balance of $9,104 (in her accumulation fund). The magistrate identified that this was unsatisfactory, and that the appellant acknowledged in her affidavit that the figure would have been higher by the time of the hearing (see footnote 17 to the judgment).
Whilst there are no reasons given for how the figure adopted by the magistrate (around a year later) was calculated, it seems obvious that his Honour had regard to the appellant’s income of around $60,000 per annum and the superannuation guarantee levy of around 10 per cent, to estimate an increase in her superannuation of around $6,000. Such an estimate does not assume any investment returns (about which his Honour had no evidence). In the circumstances of this case I am not persuaded that more detailed reasons were required on such a minor issue where the reasoning is apparent from the finding.
Particular (c) complains that there was no sufficient basis for the magistrate to adopt the figure of $490,000 for the former matrimonial home, as opposed to $470,000. The appellant provided an emailed appraisal from an agent, suggesting the range of $475,000 to $525,000 and another with the range of $470,000 to $520,000. There was no expert evidence to assist the magistrate. In the absence of evidence of the value of the home, the only option open to the magistrate was to order its sale and division in particular portions: see Bergman & Bergman (2009) FLC 93-395 at [59]. While a valuation is useful to form a view of the property’s worth and the size of the asset pool, it is not necessary when the orders provide for the property to be sold with the proceeds to be divided between the parties as a percentage, as the magistrate ordered in this case. The form of the orders providing for a sale and division of the proceeds by percentage ensured both parties shared in the true value of the home without the need for a valuation. There is no merit in this argument.
Particular (d) complains that the magistrate failed to take into account a debt of the appellant of $10,089 (as at 18 July 2024, see the appellant’s affidavit filed 18 July 2024 at paragraph 27 to 29). The appellant’s outline at the hearing only referred to a debt of $3,947 (Annexure “MSM-5”, appellant’s affidavit filed 12 April 2024). The magistrate considered the debt in footnote 13 to the judgment saying:
I am far from satisfied as to the circumstances in which the wife has accrued the personal loan or payday debt as deposed by her at paragraph 83 of her affidavit filed 12 April 2024 and at paragraphs 26-29 of her affidavit filed 18 July 2024 (and Annexure [MSM]-7 therein) and as a consequence I have not included that debt as a matrimonial liability.
The evidence before the magistrate was minimal. The affidavit merely alleged that the appellant has incurred debts. The annexures consist of two screen shots of what appears to be a mobile phone screen: the first gives the total then owning and the second divides the figure into three general categories: “medical”, “car” and “lifestyle/bills/expenses”. There is no evidence of the reason for the borrowings or the purpose for which the money was used by the appellant. In the absence of at least minimal evidence (which the appellant could have easily given in her affidavit) there was no evidentiary foundation for the magistrate to take the appellant’s post separation debts into account. There was no error on the part of the magistrate in not taking into account as part of the assets and liabilities of the parties these unexplained debts incurred after separation.
I therefore find that the appellant has not established this ground of appeal.
Grounds 2 and 3
2. His Honour's reasons are inadequate to explain His Honour's determination of the parties' relative contributions. In particular, His Honour's reasons are inadequate as to how he treated and weighed the Applicant Wife's evidence and submissions that her contributions were significantly greater than the Respondent Husband's after separation, and it cannot be seen on what His Honour's determination was based, and in fact what that determination was.
3. His Honour's reasons are inadequate to explain how His Honour determined the appropriate adjustment which should be made in relation to Section 75(2) matters, or how His Honour arrived at any such determination and the effect of the adjustment in real terms.
The appellant sought to press these grounds, even if successful on other grounds in the appeal. The test for assessing the adequacy of reasons was stated in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18, and accepted in Bennett and Bennett (1991) FLC 92-191 at 78,266:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if: —
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
Aside from the issues discussed with respect to Ground 5, I am not persuaded the magistrate’s reasons were inadequate. The magistrate reviewed the evidence, identified and made findings about the various issues argued and gave clear summaries of his findings as to contributions and s 75(2) factors (as quoted above). It is not open to the court to conclude that reasons are inadequate simply because the outcome of the exercise of the discretion is different from the views of the appellate court. Such an approach would undermine the appellate restraint required by the principles concerning appeals against the exercise of discretion (see Gronow & Gronow (1979) 144 CLR 513, at 519-520 and House v The King (1936) 55 CLR 499 at 504-505).
There is no merit in these grounds (beyond what is identified in Ground 5).
Ground 4
4. His Honour's apparent determination that the asset pool be divided 54.4/45.6 in favour of the Applicant Wife is manifestly inadequate having regard to His Honour's findings about the parties' earnings and earning capacity, the Applicant Wife's evidence as to her financial circumstances, the effect of negative contributions of the Respondent Husband post separation and the Applicant Wife's sole financial and non-financial provision for the child upon her vacating the former matrimonial home and going forward.
In cases where the appellant is unable to point to a specific error in the exercise of a discretion, the judgment may nonetheless be set aside if the outcome “is unreasonable or plainly unjust” because “the appellate court may infer that in some way there has been a failure to properly exercise the discretion...” (House v The King at 505) or, as it was put by Kirby J in CDJ v VAJ (1998) 197 CLR 172 at 230-231, that the primary judge was “plainly wrong”. However, as was said by Stephen J in Gronow at 519-520, “an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight”. The function of the appeal court is “not to offer a second opinion” as “[i]t cannot be too strongly said that a mere difference of opinion ... does not indicate error on the part of the trial judge.” (Sharman v Evans (1977) 138 CLR 563, 565).
The parties have net assets and superannuation of around $590,000. The difference in the property settlement figures struck by the magistrate was 9 per cent (45.5/54.5), around $53,000.
The contributions findings of the magistrate were that the appellant had made the greater contributions for the reasons set out above. Significantly, during the period between May 2023 and trial, the respondent has had the sole use of the home while the appellant was paying rent ($450 per week), the appellant continued to pay the home insurance, the respondent left rates unpaid, the respondent has earned (or at least has an earning capacity) far in excess of the appellant (around $170,000 per annum compared to the appellant’s earnings of around $60,000 per annum – a difference of around $110,000 per annum before tax), and the appellant has had the onerous task of caring for a child of the parties without child support. These findings must result in the appellant’s entitlement being assessed at greater than 50 per cent by more than the nominal amount.
The findings of the magistrate with respect to future factors are also set out above. It is clear that the appellant was to have the long term care of a child with special needs (without any child support to date) and a substantially lower income than the respondent. As the magistrate found, an adjustment in the appellant’s favour is called for on these facts, beyond the assessment following consideration of the contributions issues. Such an adjustment would have to be an amount that was far more than nominal on the facts of this case.
For these reasons, the appellant has established that the magistrate’s conclusions that a property settlement (on the facts before his Honour) of around 54.5 per cent in favour of the appellant was so low as to be legally unreasonable and plainly unjust. This ground of appeal must be allowed.
Ground 5
5. His Honour failed to take into account the relatively modest pool of tangible property and for reasons unexplained, he provided the Applicant Wife something in excess of 60% of the combined superannuation entitlements, but only 50% of the sale proceeds of the former matrimonial home, in circumstances where the evidence demonstrates she has a pressing need for cash.
This ground addresses the method by which the magistrate effected the property settlement. The orders provided for the respondent to retain the household chattels, for each party to retain a car (of which the respondent’s was slightly more valuable) and for each party to receive 50 per cent of the sale proceeds of the home. It is difficult to understand why the appellant would be accorded slightly less than 50 per cent of the non-superannuation assets yet a greater share of the overall superannuation in circumstances where she has the care of a child with special needs, a substantially lower earning capacity than the respondent, and therefore a far greater present need for financial resources than the respondent.
There are no reasons addressing this issue, despite the appellant seeking an order that she receive the entirety of the proceeds of the sale of the home. As the appellant argues, it appears that the magistrate did not have regard to the appellant’s present needs (demonstrated by her lower income and care of the child) when framing the orders as to the division of the assets and superannuation of the parties. This was a significant factor relevant to the form of the orders effecting the property settlement which it appears the magistrate failed to take into account (see House v The King at 505). The appellant has made out this ground of appeal.
CONCLUSION
The respondent asks that the matter be remitted for a further hearing as he challenges a number of the factual matters in the magistrate’s judgment. He also alleges that the child now lives with him and not the appellant, which is a significant factor in the exercise of the discretion to make property settlement orders in this case. The appellant accepted that the appropriate course is to remit the matter for a rehearing.
The appeal will be allowed, the orders of the magistrate set aside, and the matter remitted for a rehearing.
COSTS
The appellant has succeeded on points of law. The appellant seeks a certificate under s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) for the costs of the appeal. The appellant also seeks a certificate pursuant to s 8 of the Federal Proceedings (Costs) Act for the costs of the rehearing.
The rehearing will not be another undefended hearing as the respondent is now participating in the litigation. Even without the appeal the undefended judgment was likely to be set aside under the rules (as a judgment made in the absence of the respondent who now seeks different orders on the basis of substantially different facts). The costs of the undefended hearing are more appropriately dealt with in the litigation between the parties, just as they would have been had the magistrate’s court set aside the orders.
The respondent is unrepresented and incurred no costs in the appeal and did not participate in the undefended hearing before the magistrate. He seeks no orders with respect to costs.
In the circumstances of this case it is appropriate to order that a certificate be issued to the appellant under s 9 pursuant to the Federal Proceedings (Costs) Act with respect to the costs of the appeal. The circumstances do not warrant a certificate under s 8 of the Federal Proceedings (Costs) Act.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller. Associate:
Dated: 11 December 2024
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