Mena and Mena & Anor
[2016] FamCAFC 85
•20 May 2016
FAMILY COURT OF AUSTRALIA
| MENA & MENA AND ANOR | [2016] FamCAFC 85 |
| FAMILY LAW – APPEAL – PROPERTY – Where the trial judge found that the parties’ assets should be divided as to 55 per cent to the husband and 45 per cent to the wife – Where the wife complained on appeal that the trial judge’s decision to make a 5 per cent adjustment pursuant to s 75(2) of the Family Law Act 1975 (Cth) in favour of the husband for “some kind of accounting between” the husband and his mother in relation to loans which the trial judge had found to be legally unenforceable was erroneous – Where the Full Court held that in circumstances where the trial judge had rejected any legally enforceable liability between the husband and his mother in relation to the alleged loans, it was not open to the trial judge to make an adjustment that reflected there would be a liability because it was inconsistent with earlier findings – Where the Full Court also said if the 5 per cent adjustment was made because of a moral rather than a legal obligation owed by the husband to his mother, any such moral obligation should not have resulted in a 5 per cent adjustment between the husband and the wife in circumstances where the trial judge had already adjusted between the parties on the basis of the funds advanced to the husband by his mother as an initial contribution – Where the Full Court re-exercised the discretion – Where the Full Court would have made the same orders made by the trial judge – Appeal dismissed – No order as to costs. FAMILY LAW – APPEAL – APPLICATION TO RE-OPEN – Where after the Full Court had reserved its decision the respondent filed an application to re-open the appeal and adduce further evidence – Where the respondent asserted the further evidence was relevant to the appeal and any re-exercise of the discretion – Where the Full Court held the evidence was not relevant to the determination of the appeal but was relevant to the re-exercise of the discretion – Application to re-open allowed – Application to adduce further evidence allowed for the purpose of the re-exercise of the discretion. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) Family Law Rules 2004 (Cth) |
| Allesch v Maunz (2000) 203 CLR 172 Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 In the Marriage of Biltoft (1995) FLC 92-614 C Pty Limited & PGW as Liquidator of S Pty Ltd (in Liq) [2011] FamCAFC 230 CDJ v VAJ (1998) 197 CLR 172 Gronow v Gronow (1979) 144 CLR 513 Norbis v Norbis (1986) 161 CLR 513 Pierce v Pierce (1999) FLC 92-844 Stanford v Stanford (2012) 247 CLR 108 Watkins v Watkins (2004) 31 Fam LR 590 |
| APPELLANT: | Ms Mena |
| FIRST RESPONDENT: | Mr Mena |
| SECOND RESPONDENT: | Mrs Mena Snr |
| FILE NUMBER: | NCC | 2997 | of | 2010 |
| APPEAL NUMBER: | EA | 6 | of | 2013 |
| DATE DELIVERED:: | 20 May 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Strickland and Watts JJ |
| HEARING DATE: | 16 June 2014 |
FINAL SUBMISSION RECEIVED: 3 March 2016
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 12 December 2012 |
| LOWER COURT MNC: | [2012] FamCA 1046 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Kearney SC with Mr Duane |
| SOLICITOR FOR THE APPELLANT: | Boyd Olsen Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Tregilgas |
| SOLICITOR FOR THE RESPONDENT: | MRM Lawyers |
| SECOND RESPONDENT: | No appearance |
Orders
The wife have leave to amend the grounds of appeal to include Ground 1.5.
The first application to adduce further evidence filed by the husband on
29 May 2014 be dismissed.
The application filed by the husband on 4 November 2015 to re-open the appeal hearing and adduce further evidence be allowed and the husband and the wife be permitted to rely upon the further evidence in their affidavits filed respectively on 4 November 2015 and 17 February 2016, and the written submissions filed 5 February 2016, 22 February 2016 and 3 March 2016.
The appeal be dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mena & Mena and Anor 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 SYDNEY |
Appeal Number: EA 6 of 2013
File Number: NCC 2997 of 2010
| Ms Mena |
Appellant
And
| Mr Mena |
First Respondent
And
| Mrs Mena Snr |
Second Respondent
REASONS FOR JUDGMENT
Introduction
Ms Mena (“the wife”) appeals Order 3 of orders made by Cleary J on
12 December 2012 altering interests in property between the wife and the first respondent, Mr Mena (“the husband”). The property settlement orders effected a division of the parties’ property as to 55 per cent to the husband and 45 per cent to the wife.
In order to achieve that percentage division the orders provided for the husband to transfer his interest in the former matrimonial home to the wife, to discharge various joint liabilities, and indemnify the wife against liabilities, including an alleged debt to his mother. The wife was required to transfer her interest in various investment properties to the husband, and pay $97,960 to him. Each party was then to retain various assets in their possession. It is the order that the wife pay $97,960 to the husband which is now appealed.
At trial a major issue concerned two loans, plus interest, alleged to be owed to the husband’s mother, Mrs Mena Snr. The two loans were respectively $73,000 and $77,000, and the interest was $505,149, totalling $655,149.
The husband contended that this liability should be treated as a joint liability of the parties, deducted from the assets otherwise being divided and be paid to his mother. The wife opposed this approach.
The trial judge did not find the loans, nor the accumulated interest, “should be included as a matrimonial liability” but found that the advancement of $73,000 “gives rise to a significant initial contribution on behalf of the husband.” It is the weight her Honour gave to this contribution which gives rise, in part, to the appeal.
Background facts
The parties met in 1995, married and began living together in 1998. They separated after 12 years of marriage.
The parties have two children who, at the time of trial, were aged seven and nine years, and who lived with the mother and spent time with the father by arrangement.
The husband was aged 39 years at the time of trial and was a self-employed tradesman. The wife was aged 36 years at trial and was working as an administrative clerical assistant in a business owned and managed by her father. She was living with the children in the former matrimonial home.
Her Honour found, and it is not challenged on appeal, that each of the parties “worked hard during the marriage”, the husband first as an employee and then a self-employed tradesman. The “wife worked both part-time and full-time in the five years before the birth of their first child” and thereafter did book-keeping work for the businesses that the husband worked in or owned.
Financial dealings with the husband’s mother
In relation to the husband’s financial dealings with his mother, the trial judge’s reasons can be summarised as follows:
a)The husband’s mother:
6.…asserts two loans to her son made in 1997 to a total of $150,000 plus interest. She seeks to enforce repayment of those loans through these proceedings.
b)The husband’s mother had purchased a property at C Street in 1991 and had borrowed $50,000 from the National Australia Bank (“NAB”) to complete the purchase.
c)In early July 1997 the husband’s mother transferred C Street to the husband. The consideration was stated to be $134,000 and the husband’s mother asserted she lent the husband $73,000 to complete the purchase with the balance borrowed by the husband from the bank (“the first loan”). The husband’s mother alleged that she told the husband that “she and his father had ‘worked to reduce the mortgage to $73,000’ and would therefore lend him that amount”. However, the trial judge found that that evidence was inconsistent with the original mortgage being $50,000.
d)After the transfer of C Street to the husband a mortgage document was prepared and stamped with the principal sum nominated as $73,000 “with interest at the rate of 10 per cent per annum calculated on daily rests”.
e)The mortgage was not registered and it was uncontested at trial that no repayment had been made of principal or interest.
f)In September 1997 the husband borrowed $58,000 from Advance Bank. Neither the husband nor his mother asserted that those funds were paid to her.
g)The husband’s mother “also paid stamp duty and legal fees of $6,081.15 in relation to the transfer”.
h)The husband asserted that he completed $17,000 worth of renovations to C Street and spent a further $75,500 on renovations shortly after the parties married. The trial judge found that there was no explanation “for where the additional funds came from for the expenditure, other than [the husband’s assertion that] ‘this was all paid for [by] myself and my family’”. Her Honour also noted that the husband deposed “that he only had $57,350 in savings at the time.”
i)In November 1997:
13.…a caveat was prepared, stamped and lodged on behalf of [the husband’s mother] with the Registrar General noting her interest in [C Street] as mortgagee. The husband and his mother had several conversations relating to the transfer of [C Street]. Neither of them asserts that the wife was present at any time when the matter was being discussed.
(footnote omitted)
j)
The wife denied “all knowledge of a loan for [C Street]. Her evidence is that between first meeting and marriage her husband told her that the
[C Street]property was his”. The trial judge then noted that by 1997
[C Street]was the husband’s.
k)In November 1997 the husband and his mother entered into a Deed of Loan for $77,000 which was said to be for the purposes of assisting the husband in buying an interest in a business (“the second loan”).
l)From 1999 the parties began buying investment properties, buying four in total.
m)In 2002 “the husband sold [C Street] back to his mother for $320,000 and borrowed additional funds to buy the property in [Suburb W], which became the family home.” Her Honour also noted “the unregistered mortgage over [C Street] lost its significance.”
n)The husband and his mother, in their affidavits “refer to conversations from time to time about the husband having to repay the loan when asked to do so” but there is no suggestion that the wife was present during the conversations and “[t]he first request for repayment came in a letter from solicitors on 19 February 2010, 15 days after the parties had separated”.
o)The husband’s mother “frankly stated that when she became aware of problems in her son’s marriage she instructed her solicitor to issue the demand.”
p)Her Honour noted that there had been “no payment made by [the husband] in response to that request up to and including the dates of trial”.
q)The husband’s mother sought by way of an application in a case that the court make orders that the parties pay $73,000 and $77,000 plus interest of 10 per cent “calculated on daily rests over 15 years from the matrimonial asset pool.”
The trial judge’s findings about the first loan
The trial judge found that:
20.…where an unsecured liability is vague or uncertain, unlikely to be enforced or unreasonably incurred, the Court may determine not to take it into account (In the Marriage of Biltoft (1995) FLC 92-614 at 82,127) …
21.It would be unjust to impose on the wife the repayment of a loan to which she was not a party and of which she was unaware. She had no opportunity to consider repaying the loan that her husband had arranged with his parents.
22.Further the rate of interest became punitive as it increasingly exceeded the commercial rates over the years from 1997. The wife had no chance to consider refinancing at a lower rate.
Her Honour concluded that the husband’s mother:
23.…had the intention to benefit and assist her son and also, whilst ever his marriage was successful, his wife and children. It was not her intention to impose a financial penalty on him by allowing the loan to run for 13 years then calling for the total amount where interest greatly exceeds principal.
Her Honour also found that the money was described as a loan by the husband’s mother but that her intention was to “protect her son’s position as much as her own” and found that “if the marriage had continued the loan would not have been called on and would never have been repaid”.
Her Honour then said:
25.I am supported in this view by the fact that [the husband’s mother] did not commence proceedings in the State Courts to recover the money from her son … The personal obligation between the [husband] and his parents is a matter for them. On balance I consider it unlikely that [the husband’s mother] will require repayment to her of various monies said to have been lent, but she may do so. That possibility requires a modest adjustment pursuant to s 75 of the Family Law Act 1975 (Cth) …
Her Honour concluded that “neither the loan nor the accumulated interest on the loan should be included as a matrimonial liability.”
The trial judge’s findings about the second loan
As set out above, in relation to the second loan the trial judge recorded:
27.On 10 November 1997, the [husband] and his mother entered into a Deed of Loan in the sum of $77,000 which was stamped in that year. This is said to be a second loan and was expressly stated to be “separate and distinct from monies owed by the borrower to the lender under a mortgage in respect of [C Street]”.
28.The loan was to assist the [husband] to purchase his share of [a business] from his partner …
The husband’s mother said that a conversation occurred between she and the husband in which she said that she would do another loan agreement with the same terms and conditions as were in place for the house at C Street and that
“I will also ask for [the loan] to be paid back in full including interest in the future, as well as the loan for [C Street]” and that the husband agreed that he would pay back both loans when asked for.
Her Honour noted that:
29.…no repayments have ever been made in respect of this loan and again, there was no action by [the husband’s mother] to enforce repayment until 19 February 2010. On that date, solicitors who acted both for the husband and [his mother] wrote requesting immediate repayment of the two amounts, together with interest at 10 per cent per annum.
Her Honour found that the husband and his mother conceded that the wife was not a party to the loan discussions.
Her Honour did not accept that the $77,000 was lent “in order to enable the [husband] to acquire an interest in [a] business in 1997”. She found that “reference by [the husband’s mother] to being willing to lend ‘up to $150,000’ suggests that there was a generalised figure chosen for this loan to balance the advance for the purchase of the home at [C Street].”
Her Honour accepted that the husband’s mother “from time to time advanced sums of money to her son to assist him with the purchase of tools.” Her Honour found that the second loan, of $77,000, should be treated in the same way as the first, that is, as an exception to the general principle that courts will usually distribute between the parties the net value of their assets after deduction of all debts.
The trial judge’s division of the parties’ property
Her Honour indicated that she intended to:
1.Identify the assets and liabilities and accordingly find a net asset pool;
2.Identify the contributions made by each of the parties, directly and indirectly, financially and to the welfare of the family;
3.Consider the factors set out in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) in making an adjustment; and
4.Consider whether the outcome is just and equitable in the circumstances of the case.
Her Honour set out a balance sheet reflecting the various assets and liabilities of the parties. Her Honour then dealt with a number of issues that related to the asset pool and arrived at a revised balance sheet which did not include the loans from the husband’s mother to the husband. As there was no challenge to these figures it is sufficient to set out her Honour’s conclusions:
Assets
1,888,370
Addbacks
71,001
Superannuation
44,331
Less Liabilities
448,680
Total
$1,555,022
Her Honour then considered the contributions made by the parties. She noted in particular that when the parties were married in 1998, the husband owned the house at C Street with a value of $134,000 subject to a mortgage of $58,000 (to the bank). Her Honour also set out that the husband had money in the bank of $57,350, a three year old Toyota motor vehicle, a full set of tools and a jet ski.
Her Honour noted that there was “no record of the husband’s savings between June 1997 and February 1998” and that the “possibility exists that the savings were part of business income and/or advances by the husband’s mother” rather than true savings.
Her Honour then noted that “the husband was working fulltime in his own business and was probably generating a reasonable income”.
Her Honour found that the wife had shares in the Commonwealth Bank worth about $5,000, a Holden motor vehicle worth about $5,500, modest superannuation, a Yamaha organ and household goods.
Her Honour also noted that the wife had “a Higher Education Contribution Scheme (HECS) debt of $3,200 and a debt in respect of her car of about $2,500”.
Her Honour found:
55.… it is clear that the initial position of the husband was a much stronger one financially. I give significant weight to the contribution by the husband or on his behalf, of a house with equity of about $76,000 …
56.To the extent that there was a repayable loan to [the husband’s mother], I consider that the [the husband] was confident that it would not be called on by his parents whilst he needed their ongoing support.
(emphasis added)
Under the heading ‘Contributions during the relationship’ her Honour noted that:
57.During the period from 1998 to 2010 both parties worked exceedingly hard. The wife taking on the greater share of the care of the children and also working both independently and in the business’s run by the husband. The husband worked long hours and initiated the purchase of the three properties in [D Street, Suburb H] which are part of the asset pool.
58.[The husband’s mother] assisted the parties by putting her son in a position of owning his own home and having an interest in a business. She gave cash sums to her son during the course of the marriage. On balance I consider that both parties benefited from that money. The initial contribution by the husband outweighed that of the wife, although contribution during the marriage was equal.
In the period ‘Post separation’ her Honour noted:
59.The parties’ mortgage met many of their joint expenses. The husband paid very little by way of child support so that the financial burden of the children as well as their day to day care fell mostly on the wife.
Her Honour then concluded that:
60.Over the course of the relationship, the husband had a significant initial contribution providing the platform the [sic] for the [parties’] capacity to go on borrowing and adding to assets. By the date of separation, with the parties’ equal contributions over 12 years, I consider that difference created by initial contribution had reduced to 70/30 in favour of the husband, and by the date of hearing to 65/35 in favour of the husband.
Her Honour then considered the factors pursuant to s 75(2) of the Act and concluded at [68] that there should be an adjustment of 15 per cent in favour of the wife “on account of her lower capacity to earn income and her commitment to part time work for many years due to the age of the children.”
Under the heading ‘Other considerations’ her Honour found that:
73.…there may well be some kind of accounting between mother and son for the generous financial assistance which the husband has been given credit for in these proceedings, and there should be a modest adjustment of five per cent in his favour to allow for that contingency.”
(original emphasis).
Her Honour then concluded that the ultimate percentage division should be
55 per cent to the husband and 45 per cent to the wife. Based on a division of assets in specie the trial judge made an order that the wife pay to the husband the sum of $97,960 in order to achieve such a division. As a result she had an obligation to raise funds to pay the husband.
Applications to adduce further evidence
Before dealing with the appeal, it is necessary to deal with two applications brought by the husband. The first was an application to adduce further evidence brought by the husband in the appeal and the second, an application to re-open the appeal following the reservation of judgment so as to adduce further evidence as to changes the husband asserted had occurred whilst judgment was reserved. The husband asserted that the evidence in both applications was relevant to the orders under appeal and a potential re-exercise of the discretion of the court under ss 93A(2) and 94(2) of the Act. We propose to deal with the first application at this stage of the judgment but to consider the husband’s application to re-open after a discussion of the grounds of appeal. For convenience, they will be referred to as “the first application” and the “re-opening application”.
The husband’s first application
By an application in an appeal filed on 29 May 2014, the husband sought to adduce further evidence under s 93A(2) of the Act and r 22.39 of the Family Law Rules 2004 (Cth). The material in the affidavit in support of the application falls into three parts. First, paragraphs [3] to [31] are a combination of details of:
·Implementation of the orders under appeal;
·Current living and accommodation arrangements in relation to the husband and his contact with the children;
·The husband’s intention in relation to the sale of various home units owned by him and the costs that the husband would incur if these assets were sold (costs which were not taken into account by the trial judge); and
·Payments allegedly made by the husband to his mother since the orders were made.
In relation to this aspect of the evidence sought to be introduced, counsel for the husband conceded it could be only relevant to the re-exercise of the discretion in the event that the appeal was successful.
Senior counsel for the wife submitted that there was no information in the material relevant to the re-exercise, other than to show that the wife had paid to the husband the sum of $97,960 pursuant to the orders of her Honour, which was conceded. Senior counsel for the wife submitted the further evidence was not germane to a re-exercise of the discretion as the evidence outlined the husband’s future intention regarding the sale of properties, and was self-serving as to the husband’s repayments to his mother, in circumstances where there was no challenge to her Honour’s finding that the alleged liabilities were not enforceable as such.
The other two aspects of the evidence involved matters the subject of orders which can be characterised as having been incorrectly dealt with by her Honour. Annexed to the husband’s affidavit are consent orders made on 9 May 2011 which were made pending further order. Order 8 provided that, inter alia:
8.…the husband shall pay the costs of the valuation provided for at Orders 5, 6 and 7 herein.
Notation 12 to those orders notes that:
12.…it is agreed between the husband and the wife that any claim by the wife for an “addback” of the withdrawn monies shall be reduced by the amount paid by the husband pursuant to Order 8.
It was contended by the husband that the intention was that he would be reimbursed from joint funds for the valuation amounts, and that that had not occurred. Senior counsel for the wife conceded that if this adjustment was appropriate and had not been made, it was open to the husband to return to the trial judge for an adjustment to be made.
The third part of the evidence sought to be adduced related to a Honda CRV motor vehicle, with a value of $7,500 which was incorrectly described in the table of assets and liabilities in the trial reasons for judgment as being in the possession and control of the husband, and taken into account as his asset, whereas in fact it had, at all times, been in the control of the wife and should therefore have been regarded as her asset.
Senior counsel for the wife agreed with this aspect of the evidence the husband was seeking to adduce and again submitted that it was open to the parties to approach the trial judge to make any necessary adjustment, failing any agreement between the parties themselves.
As a result of these concessions we do not need to deal with the matters raised in the second and third parts of the further evidence identified above.
Senior counsel for the wife contended that almost all of the further evidence was inadmissible and, in any event, unhelpful. He further submitted that in the event the court admitted the further evidence, the evidence was in dispute and the matter would have to be remitted in its entirety for rehearing.
Although it is premature to indicate whether this material might be relevant to the re-exercise of the discretion, without having first determined whether or not the wife is successful in any grounds of appeal, and accepting that the court must in a re-exercise turn to the evidence of the circumstances as they now exist, as distinct from when the order appealed was made (Allesch v Maunz (2000) 203 CLR 172), we are not satisfied the material in the affidavit of the husband in relation to the first application changes the circumstances in which the discretion should be exercised, should that arise.
Matters that required attention by the trial judge could be dealt with by an application to the trial judge and both counsel conceded before us that that should occur. The material concerning the husband’s future intention (in relation to the disposal of home units), or self-serving material in relation to repayments to his mother in circumstances where the findings of the trial judge were not challenged, would not affect the re-exercise of discretion were there error found. Matters relating to the children have been outlined by the second application. Accordingly, we would not admit the evidence in the husband’s first application for any purpose.
The appeal
On appeal there was no challenge to her Honour’s findings regarding the “loans” not being liabilities of the parties, and the husband’s mother who had intervened at trial did not take part in the appeal.
The wife’s challenges assert errors in her Honour’s assessment of contributions and consideration of relevant factors under s 75(2) of the Act.
The wife asserts that the contribution findings in the husband’s favour overstate the husband’s initial contribution (funded through his mother) when weighed “with the entirety of the contributions of the parties over the relationship and until trial.” And, having given the husband significant credit for initial contributions, to further reduce the wife’s entitlement by five per cent for the contingency of the payment to the husband’s mother is fundamentally inconsistent with the rejection of the “loans” asserted by the husband, and is to give him two allowances for initial contributions or, as senior counsel for the wife described it, results in a “double counting”.
The amended notice of appeal, including the further ground on which the wife was given leave to rely at the hearing before us, contains six grounds. The wife provides the following groupings of those grounds, which we propose to follow:
·The contribution finding (Ground 1)
·The adjustment for the accounting contingency (Grounds 2 and 3)
·The justice and equity of the orders (Grounds 4, 5 and 6)
Ground 1 – the contribution finding
Ground 1
1.That [h]er Honour erred in assessing the contributions of the parties as 35% to the appellant and 65% to the respondent husband in:
1.1giving excessive weight to the respondent husband’s initial contribution, including in the context of the contributions of each party over the entirety of the relationship;
1.2as a matter of law, determining the weight to be given to an initial financial contribution by means of offsetting other contributions and/or the erosion of the initial contribution;
1.3failing to properly identify and give sufficient weight to the appellant’s contributions during the marriage and following separation;
1.4that such finding was one well outside the range reasonably available in these proceedings; and
1.5that [h]er Honour erred in the findings made as to the respondent’s initial contributions at paragraph 50 of the reasons for judgment
Her Honour gave “significant weight to the contribution by the husband or on his behalf, of a house with equity of about $76,000” (at [55]).
As argued, it was the wife’s contention that the significant weight which was given to the husband’s equity in the C Street property did not justify a 30 per cent differential (at separation) between the parties on account of their respective contributions.
The task in overturning a discretionary judgment is not an easy one. As
Stephen J said in Gronow v Gronow (1979) 144 CLR 513 at 519:
… When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge…
As Brennan J said too in Norbis v Norbis (1986) 161 CLR 513 at 540:
The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.
In determining an appeal in respect of a decision involving a discretionary judgment Kitto J said in Australian Coal and Shale Employees’ Federation v Commonwealth (1953) 94 CLR 621 at 627:
… there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts.
Senior counsel for the wife submitted that a consideration of the husband’s initial contributions ought properly to have been confined solely to his interest in the C Street property, and in particular, Ground 1.5 asserts error in findings made as to the husband’s initial contributions. This relates to her Honour’s finding at [50] that when the parties were married in 1998, the husband had various assets which included money in the bank of $57,350.
Senior counsel for the wife submitted in support of this ground that the finding in relation to the asserted savings of $57,350 was not supported by the evidence. As to the first part of that argument, senior counsel submitted that her Honour was not entitled to say that the husband had that money at cohabitation and furthermore, the evidence was inconsistent as to its use.
However her Honour at [51] of her reasons acknowledged that:
51.There was no record of the husband’s savings between June 1997 and February 1998 [the date of commencement of cohabitation]. The possibility exists that the savings were part of business income and/or advances by the husband’s mother. The husband conceded that the relevant account was his business trading account, out of which he paid tax and other business related expenses. It is likely that funds in the bank are reflective of the husband’s position in his business rather than true savings.
That finding was supported by evidence given at trial. Cross-examination of the husband (see transcript, 18 June 2012, p 21 to 25) indicates that the husband’s evidence was that he was unable to say what amount of money he had in the bank at cohabitation but that the sum of $57,350 related to the business and that the account went up and down with deposits and expenses and he paid some money out of the account for tax and other liabilities.
The husband also said that the $57,350 in savings went to renovations to the
C Street property.
With respect to senior counsel’s submission, the evidence was not inconsistent as to its use, although it was not specific. Whilst the husband conceded that he had probably paid a tax liability from the money prior to the marriage, he was not challenged about the use of his savings towards renovations. The wife was cross-examined about this expenditure as well and whilst she did not acknowledge all of the payments by the husband came from his account, a fair summation of her evidence (see transcript, 20 June 2012, p 20) is that there was a concession that the husband provided furnishings for the C Street property prior to moving in and that there were renovations done after they moved in. The evidence would have comfortably enabled her Honour to at least make a finding that the husband had savings at the date of cohabitation and paid for furniture, renovations and alterations both prior to moving in and afterwards, although there was no certainty as to the precise amount.
The second part of senior counsel’s submission in relation to Ground 1.5 cannot be maintained. Whilst it is true that at [50] of the reasons for judgment her Honour took account of money in the bank of $57,350, at [51] she acknowledged some of the issues we have discussed in the passage cited at [47].
Whether or not a closer consideration of the evidence reflects contributions to the property by way of furnishings, renovations and alterations, albeit some being incapable of precise quantification, [55] of the reasons makes it clear that her Honour did not give any weight to this issue. Her Honour there said:
55.On balance, it is clear that the initial position of the husband was a much stronger one financially. I give significant weight to the contribution by the husband or on his behalf, of a house with equity of about $76,000…
In our view that is entirely reflective of the evidence and does not constitute any error in the assessment of contribution by her Honour.
In relation to the $77,000 loan (the second loan) the husband indicated that that sum was made in a number of payments with an initial payment of $25,000 and the rest of the amount of $77,000 “was just made up over time, over the next few months until November of that year”. But at trial, counsel for the husband conceded the evidence in relation to the $77,000 loan was unclear.
In so far as the latter issue is concerned, the trial judge did not accept that the sum of $77,000 was lent in order to enable the husband to acquire an interest in the business in 1997 (at [33]). Her Honour accepted that the husband’s mother:
34.…from time to time advanced sums of money to her son to assist him with the purchase of tools. On one occasion a “brick of cash” of $ 20,000 or $25,000 was handed over by [the husband’s mother] to her son. It is hard to reconcile this injection of cash into the business given that the husband subsequently received no payment for his share of the business when he left.
It is clear from her Honour’s reasons that she did not place weight on an initial contribution by the husband of $57,350, nor did she accept and take into account the second asserted loan of $77,000 from the husband’s mother. It is apparent that her Honour was considering the husband’s equity in the C Street property of $76,000 as the basis for what, at [55], she described as giving rise to “significant weight to the contribution by the husband”.
The wife does not take issue with her Honour’s finding that the equity in the
C Street property had a value of $76,000 at cohabitation but, as identified above, challenges the weight given to that contribution considering the entirety of the parties’ contributions throughout the relationship and up to trial. Senior counsel for the wife argued that what her Honour had done was “to isolate the respondent’s initial financial contributions from all the other contributions of the parties (which are said to have been equal) and to afford such contribution disproportionate weight”.
Senior counsel for the wife also contended that when measured against the identified assets of $1,555,022, on the trial judge’s orders, the husband received $466,504 more than the wife on account of his initial contributions. He further contended that the net equity in the C Street property at the date of cohabitation of $76,000 represented some 4.8 per cent of the identified net assets as at the date of the hearing, and that the disparity between the asserted values of all of the parties’ contributions at cohabitation was approximately $126,000. Senior counsel submitted that this demonstrated that the contribution finding was entirely outside any range of discretion properly available.
As set out above, her Honour explained at [58] that the husband’s mother had:
58.…assisted the parties by putting her son in a position of owning his own home and having an interest in a business. She gave cash sums to her son during the course of the marriage. On balance I consider that both parties benefited from that money. The initial contribution by the husband outweighed that of the wife, although contribution during the marriage was equal.
…
60.Over the course of the relationship, the husband had a significant initial contribution providing the platform the [sic] for the parties’ capacity to go on borrowing and adding to assets. By the date of separation, with the parties’ equal contributions over 12 years, I consider that the difference created by the initial contribution had reduced to 70/30 in favour of the husband, and by the date of hearing to 65/35 in favour of the husband.
Her Honour was aware of the manner in which the C Street property came into the marriage and its subsequent use. She gave significant weight to the husband’s initial contribution which, measured at the time, was undoubtedly a significant one. She appropriately considered subsequent contributions of the parties, which she found to be equal, and the effect this had on the initial contribution (see Pierce v Pierce (1999) FLC 92-844).
We do not think it is particularly helpful to consider the amount of the original contribution as a percentage of the ultimate asset pool as that would not be comparing like with like. On any view the initial contribution of the husband was a significant one and it is to be remembered that the parties resold the property to the husband’s mother for the sum of $320,000, certainly after the marriage, but providing them with a significant capital increase on account of the fact that the husband had been able to acquire the property initially.
It was also the case that her Honour made findings that there were other sums of money advanced to the business from the husband’s mother (although not to the extent the husband asserted) and that there was evidence of some renovations done to the property from funds of the husband, either before or shortly after the commencement of cohabitation. Her Honour was aware of the evidentiary inconsistencies as to the use of the funds and the fact that the husband had not proved contributions to the extent asserted. Her Honour was cautious in her findings and relied in the main for the disparity in favour of the husband on the equity in the C Street property.
Although it might be said that the weighting was a significant one, we are not persuaded that it falls outside the wide discretion of a trial judge.
Grounds 2 and 3 – the accounting contingency adjustment
The accounting adjustment (so called) was articulated as a complaint that making an adjustment to the husband of five per cent in consideration of
s 75(2) matters on the basis of the contingency that “there may well be some kind of accounting between mother and son for the general financial assistance which the husband has been given credit for in these proceedings” was both unavailable to her Honour on the evidence and inconsistent with other findings. It was also argued that her Honour failed to consider the impact of the adjustment on the adjustments otherwise made in favour of the wife.
We are satisfied that there is merit in these grounds, at least in so far as the contention of inconsistency is raised.
At [55] of her reasons for judgment her Honour gives “significant weight to the contribution by the husband or on his behalf, of a house with equity of about $76,000”. At [58] her Honour adds to this saying the husband’s mother:
58.…assisted the parties by putting her son in a position of owning his own home and having an interest in a business. She gave cash sums to her son during the course of the marriage. On balance I consider that both parties benefited from that money…
In our view those two paragraphs need to be read together to understand what was taken into account by her Honour as contributions on behalf of the husband. What was taken into account was more than simply the initial interest in C Street.
It is also the case, as was submitted to us by the wife, that her Honour rejected the assertion that the monies advanced by the husband’s mother in the first and second loans were liabilities of the parties, or either of them, that had to be met. In [20] to [26] and [37] of her reasons for judgment, her Honour makes it clear why this is so. Her explanation includes the fact that the loan agreement provided for a rate of interest that became “punitive as it increasingly exceeded the commercial rates over the years from 1997”. Her Honour found at [26] that “neither the [first] loan nor the accumulated interest on the loan should be included as matrimonial liability” (and as to the second loan see [37]) but, as previously explained, she took the monies advanced into account as a significant initial contribution on behalf of the husband.
In addition, it is important to record that her Honour’s findings are bolstered by the fact that in November 1997 a caveat was prepared, stamped and lodged on behalf of the husband’s mother with the Registrar General noting her interest in the C Street property as mortgagee. However, when the husband sold C Street back to his mother in 2002 for $320,000 her Honour found at [16] that the “unregistered mortgage over [C Street] lost its significance.” Even more so, the caveat lodged by the husband’s mother would have been withdrawn at settlement and clearly at that time the husband and his mother had the opportunity to adjust any liabilities between them, but did not do so. Once the property was sold and the caveat withdrawn, the mortgage document became irrelevant and any legal capacity to enforce the loan and any security was lost. The opportunity to adjust liabilities not having been taken, her Honour was correct, in our view, in finding that the loan was not intended to be by the husband or his mother a legally enforceable liability.
As far as the second loan was concerned, her Honour rejected the factual underpinning of the loan and did not accept that any advances, beyond about $20,000 to $25,000, had been made. There is no challenge to those findings.
It can thus be said that her Honour rejected, as a legal obligation, any commitment from the husband to his mother in relation to either loan. Instead, her Honour took into account the monies advanced by the husband’s mother to the husband by way of the first loan as a significant contribution on his behalf, and the monies found to be advanced from time to time to assist the husband as a contribution, but less significantly.
However, at [25] her Honour said:
25.…[on] balance I consider it unlikely that [the husband’s mother] will require repayment to her of various monies said to have been lent, but she may do so. That possibility requires a modest adjustment pursuant to s 75…
Then, after confirming at [73] of her reasons that she had excluded loans from the asset pool and found that it is likely that the husband “will not be required to repay the loans in full or at all”, her Honour went on to say that there:
73.…may well be some kind of accounting between mother and son for the generous financial assistance which the husband has been given credit for in these proceedings, and there should be a modest adjustment of five per cent in his favour to allow for that contingency.
(original emphasis)
Thus, having rejected, on the evidence before her, any legally enforceable liability between the husband and his mother that would properly found a liability to take the alleged loans into account as a liability of the parties or either of them, it was not open her Honour to then make an adjustment that reflected there would be a liability. It was simply inconsistent with earlier findings.
If what her Honour was referring to at [25] and [73] was a moral obligation on the part of the husband, then his case was not presented in that way. But even if her Honour had in mind some moral obligation, that was a matter between the husband and his mother and should not result in any further adjustment between the husband and the wife, her Honour having already adjusted between them by the generous assessment of the husband’s initial contribution. In other words, an adjustment had been made as between the husband and the wife and any potential adjustment between the husband and his mother, arising from a moral obligation, should not have played any further part in the calculation of the division of the assets of the parties once the adjustment for the husband’s initial contribution had been made. This is the “double counting” submission (described at [51] above) made by the wife and we accept that submission. The wife has, in effect, paid twice, and been unfairly disadvantaged. We accordingly find merit in Grounds 2 and 3.
Grounds 4, 5 and 6 – the justice and equity of the orders
Under these grounds the wife did not take issue with it being just and equitable to make an order altering the interests of the parties in the property but asserted that her Honour failed to have appropriate regard to the effect of findings made under s 79(4) of the Act and the effect of the orders ultimately made. To the extent that we have found that her Honour incorrectly made an adjustment under s 75(2) for the potential for the loan to be repaid, we also find merit in these grounds.
The husband’s application to re-open and the husband’s second application to adduce further evidence
On 4 November 2015 the husband filed an application seeking to have the court stay the delivery of reasons and determination of the appeal, that he be granted leave to re-open his case, and that he be allowed to rely upon further evidence. He filed an affidavit on the same day containing the further evidence on which he sought to rely. He also sought that the application be dealt with by way of written submissions, a process which the court adopted. The wife filed a response and a supporting affidavit on 11 December 2015 in which she asserted the evidence sought to be adduced related to events well removed from the original determination and that the application to re-open ought to be adjourned to await the determination of the appeal. Directions were made by the court which allowed the parties to file written submissions, which they did.
The husband filed written submissions on 5 February 2016 and the wife filed a further affidavit on 17 February 2016 and submissions on 22 February 2016. The husband filed submissions in reply on 3 March 2016.
Facts relied upon by the husband
The husband noted that the appeal before the Full Court was heard on 16 June 2014. He then deposed to the fact that in February 2015 while judgment was reserved, the oldest child, aged 12, began residing with him on a fulltime basis. He asserts that the oldest child thereafter did not spend time with his mother until June 2015.
On 18 June 2015, following a defended interim hearing in the Federal Circuit Court, orders were made for the children to reside with each parent on a week about basis. Previously, the children had predominantly lived with the mother and spent time with the father. Ultimately, on 21 October 2015 the parenting matter was settled and orders were made by consent providing for the children to continue to reside with the parents on an equal week about basis. That is the first matter relied upon by the husband.
The second matter relied upon by the husband is that, as found by the trial judge, the husband was paying child support in the sum of $67.48 per week and he continued to pay that amount until 12 October 2015. He asserts that the amount of child support has been reassessed and is now payable by the wife to the husband in the sum of $20.81 per week as a result of the changed parenting arrangements. That sum has been payable from 11 July 2015. The husband says that as a consequence he had overpaid the wife and he calculates that overpayment to be $1,519.66.
The husband observed that the trial judge dealt with the issue of what, if any adjustment should be made pursuant to s 75(2) of the Act and pointed to the fact that the trial judge noted at [59] that after separation “[t]he husband paid very little by way of child support so that the financial burden of the children as well as their day to day care fell mostly on the wife.” He also emphasised that the trial judge considered that the wife’s future care of the children, as well as the payment of child support, were relevant s 75(2) factors amongst others resulting in an adjustment in favour of the wife of 15 per cent.
The husband reiterated the following findings by the trial judge:
63.The wife has an income of $690 per week gross as an administrative assistant in a [business].
64.The husband declared an income of $1,372 as at 5 June 2012. He has a capacity to earn a greater income than the wife based on his past earning capacity. The wife does not wish to work full time whilst the party’s [sic] children are still young in order to meet their needs for care and supervision.
65.The majority of the day to day care of the children falls on the wife.
66.Both parties have a responsibility to support the children however to date the child support paid by the husband has been in the order of $67 per week in total. That fact is reflected in the assessment of post separation contributions.
67.The current rate of child support is a low one in contrast with the husband’s capacity to earn income.
68.This was a marriage of 12 years to the date of separation. The wife gave up full-time employment with the birth of the parties’ first child and she has not further developed her skills or been in a position to obtain employment consistent with her university education. Both parties wish to continue their role as parents and the mother is committed to working around the hours and obligations of the children, still both in primary school.
69.I consider there should be an adjustment of 15 per cent in favour of the wife on account of her lower capacity to earn income and her commitment to part time work for many years due to the age of the children.
(iii) Standard of Living
70.The parties are now divorced and it is reasonable for each of them and their children to have the reasonable standard of living that they achieved during the course of their marriage.
71.The wife will receive the benefit of continuing to live in the family home if she can meet reduced mortgage payments. If not she will no doubt purchase alternate accommodation and will continue in part-time employment.
(original emphasis)
Given the changed parenting arrangements and the consequent alteration of child support payments, the husband contends that his application to re-open should be allowed and the evidence relied upon, admitted. He contends at [13] of his written submissions filed 5 February 2016:
Here the wife appeals against essentially the overall ‘generosity’ of the trial judge’s orders and reasons to the husband. However here the facts are now post trial orders and judgment that the children of the marriage effectively spend equal time with both the husband and the wife. Hence the finding within the trial judge’s reasoning for the s 75(2) adjustment to the wife are no longer valid. Such facts ‘buttress’/‘support’ the findings already made by the trial judge. That is that the trial judge should have been more “generous” to the husband as the husband now has increased care and control of the children of the marriage with the concurrent effects on child support.
The husband further contends at [15]:
Additionally such ‘further evidence’ is relevant if this Honourable Court allows the appeal and thereafter exercises this Honourable Court’s ‘independent discretion’ pursuant to s 94(2).
The wife’s affidavit filed 17 February 2016 contains significant material which can best be described as basing an assertion by the wife that the present situation, whereby the children are now living with the parties on a week about basis and the parties’ oldest child spent some time living only with the husband, was brought about and designed by the husband to benefit him in relation to the appeal and to alienate the children from the mother. We do not intend to engage with these assertions of the wife. They are not conceded and neither party contended that there should be oral evidence which would enable these allegations to be tested. The facts, in our view, which are relevant to the application before us and which are conceded by the wife are that:
·Between 4 March 2015 and 19 June 2015 the parties’ oldest child lived with the husband and did not see or communicate with the wife;
·Following a contested interim hearing on 18 June 2015 orders were made providing for the children to live with the husband and the wife on a week about basis; and
·On 21 October 2015 final parenting orders were made by consent. Those orders were substantially in accordance with the interim orders referred to.
In relation to the issue of child support, in her affidavit in response the wife annexes a number of child support assessments. Germane to the application however, there is a concession by the wife that she has a commitment to pay what she says is $22.50 per month in child support ([31] of her affidavit of
17 February 2016) but she says that this assessment was on the basis that parties’ oldest child was in the fulltime care of the husband.
Relevantly, the annexures from the Child Support Agency indicate the following:
(a)For the period 12 July 2015 to 14 January 2016 the wife was required to pay child support to the father at the rate of $1,086 per annum;
(b)For the period 15 January 2016 to 31 August 2016 the wife was required to pay child support to the father at the rate of $1,200 per annum.
The material indicates that the wife sought to review the assessment on the basis that the assessment was unfair because of the parents’ income, property and financial resources or earning capacity. The material also indicates that the wife was successful in her application, and on 21 January 2016 a new assessment issued and the child support assessment was varied. The impact was that the child support payable by the wife “[was] reduced to nil and [the husband was] required to pay child support” to the wife of:
·$3,480 per annum for the period 1 January 2016 to 14 January 2016; and
·$3,850 per annum from 15 January 2016.
Ultimately the child support review officer found that the husband’s “current financial resources and income is significantly higher and I am satisfied the child support assessment is unfair because he has a greater capacity than the child support assessment currently indicates”. The assertion by the wife that the husband had changed his work arrangements and that he has an increased capacity to earn income was rejected.
Some information as to the parties’ financial positions was provided and is set out in the child support review officer’s decision. Relevantly, the wife provided the information that:
·She receives $40,719 per annum from salary or wages;
·She receives $183.26 per fortnight in Centrelink payments or other government pension, allowance or benefit;
·She receives $80 per annum from interest and dividends;
·Her annual expenses are calculated at $55,210.73.
The husband provided the following information:
·He receives $31,200 per annum from salary or wages;
·He receives $10,400 per annum from Centrelink payments or other government pension, allowance or benefit;
·He receives $52,000 from rental income;
·His expenses are calculated at $93,600 per annum.
Towards the end of his decision, the review officer said:
The “intention of my decision is to effectively result in [the wife] having no outstanding child support on her account and then have [the husband] pay child support to [the wife]
…
Making changes to the child support assessment will reduce the amount of child support payable by [the wife] and result in [the husband] paying child support from 1 January 2016.
In summary, therefore, the wife does not owe any amount to the Child Support Agency for the payment of child support to the husband and the husband has an ongoing obligation to pay child support to her in the sum of $3,850 per annum.
Should the evidence be admitted for the purpose of the appeal itself?
The wife contends in her written submissions that the husband’s submissions conflate the arguments with respect to factors which the court was required to consider pursuant to s 79(4) and s 75(2) of the Act. She contends that the updated evidence of the husband cannot establish error on the part of the trial judge, being events which have occurred since judgment; nor could the updated evidence be admitted to ensure the proceedings do not miscarry. She asserts that the new facts do not establish a change of such magnitude as to be determinative of whether or not the appeal should be allowed.
Further, she asserts, it is a relevant factor that the adjustment in her favour made pursuant to s 75(2) of the Act of 15 per cent was not the subject of the appeal and the care arrangements of the children were but one of the factors that the trial judge referred to when considering factors under s 75(2). Matters such as the comparative earning capacities of the parties and the relative financial position of the parties were also relevant factors. The wife contends that the nature of the fresh evidence, being a change in circumstances since the judgment, can only be relevant to the question of the re-exercise by this court of discretion if the court finds error and decides to re-exercise the discretion of the trial judge.
The Full Court of this court has power to re-open proceedings after hearing and before judgment (Watkins v Watkins (2004) 31 Fam LR 590 at [28]). The Full Court has treated the principles which govern the exercise of the power to
re-open an appeal for the purposes of admitting further evidence as being similar to, or the same as, those which would govern the power to admit further evidence on the hearing of the appeal (Watkins at [31] and C Pty Limited & PGW as Liquidator of S Pty Ltd (in Liq) [2011] FamCAFC 230 at [3]). In any event, as set out in s 93A(2) of the Act:
…in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and, in its discretion, to receive further evidence upon questions of fact, which evidence may be given:
(a)by affidavit; or
(b)by oral examination before the Family Court or a Judge; or
(c)as provided for in Division 2 of Part XI
Section 94(2) provides relevantly:
Upon such an appeal, the Full Court may affirm, reverse or vary the decree or decision the subject of the appeal and make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re-hearing, on such terms and conditions, if any, as it considers appropriate.
In discussing the critical distinction between an appeal by way of rehearing and an appeal in the strict sense, the High Court (Gaudron, McHugh, Gummow and Hayne JJ) in Allesch v Maunz at 181 and 183 said:
23.… on an appeal by way of rehearing an appellate court can substitute its own decision based on the facts and the law as they then stand.
…
31.If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances…
In CDJ v VAJ (1998) 197 CLR 172 the High Court said at 202:
111.…Nevertheless it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
The husband asserts that the evidence should be admitted because it goes both to the orders appealed and, if relevant, to the re-exercise of discretion.
We have found error on the part of the trial judge in relation to her adjustment in favour of the husband on a consideration of s 75(2) factors for the reasons set out at [77] to [89]. On the basis of that error we propose to re-exercise the discretion for reasons that we will explain. Given the need to re-exercise the discretion, it is appropriate in the interests of justice that we allow the husband to re-open the appeal and allow both parties to adduce the further evidence to which we have referred.
We reject the husband’s submissions that the further evidence is relevant to the appeal itself for the following reasons:
·The change in circumstances occurred a significant period of time after her Honour’s judgment and it would have the practical effect of “obliterating the distinction between original and appellate jurisdiction” (Allesch v Maunz) were we to allow the appeal on the basis of this evidence.
·The adjustment of 15 per cent her Honour made in favour of the wife for s 75(2) factors was an holistic assessment, as it should be, and not based solely upon the fact that the children were in the primary care of the wife. Other factors included the husband’s greater earning capacity and the division of the assets between the parties.
·
The adjustment of 15 per cent was not challenged and there was no
cross-appeal in relation to it.
·The evidence does not meet the test of demonstrating that the orders under appeal are erroneous (CDJ v VAJ at [109])
However, having determined to re-exercise, we do consider that it is in the interests of justice for the further evidence to be admitted for the purpose of it being taken into account in relation to that re-exercise (Allesch v Maunz).
Re-exercise of the discretion
Given the limited nature of the error found, namely the five per cent adjustment in favour of the husband for s 75(2) factors, it is our view that we should re-exercise the discretion rather than put the parties to the time, trouble and expense of a rehearing. We note that in coming to this conclusion, the findings by her Honour about the asserted liabilities were not challenged, nor was the asset pool. The challenge related to the weight given to contributions and the adjustment for s 75(2) factors, and we have found error by the trial judge not in relation to her assessment of contributions, but in relation to her adjustment for the s 75(2) factors. Accordingly, we propose to re-exercise the discretion based upon the assets and liabilities as found by her Honour, the unchallenged findings that her Honour made as to the liabilities of the parties, and her Honour’s findings as to contribution.
Both parties conceded that it was just and equitable under s 79(2) of the Act for the court to make orders altering the interests of the parties in their property (see Stanford v Stanford (2012) 247 CLR 108).
We find the property of the parties to be that which is set at [49] of the trial judge’s reasons, subject only to the question of the Honda motor vehicle and the payment by the husband for property valuations, which the parties have agreed they can adjust. That property is valued at $1,555,013.[1]
[1] In fact the figure appearing at [49] is $1,555,022 but that comes about as an obvious error in transposing the figure for liabilities, namely $448,689 as $448,680. As the demonstrably correct figure is $1,555,013 and the difference is de minimus we propose to use the correct figure of $1,555,013.
We are satisfied for the reasons that her Honour articulated that the contributions of each of the parties in all of their spheres, including the husband’s initial contributions as found by her Honour, should result in a division of 65 per cent in favour of the husband and 35 per cent in favour of the wife.
Section 75(2) considerations
We have already indicated that we would admit the further evidence sought to be filed by the husband and the wife in relation to any re-exercise of discretion.
The evidence before the trial judge on relevant issues should also be considered.
Evidence before the trial judge
We again note that the trial judge allowed a 15 per cent adjustment in favour of the wife on account of matters arising under s 75(2) and concluded at [61] to [71] this was because of “her lower capacity to earn income and her commitment to part-time work for many years due to the age of the children.” The trial judge then reduced that figure by 5 per cent in relation to the accounting between the husband and his mother, which we have found to be an appealable error. Whilst we are obliged to re-exercise discretion independently of her Honour’s findings, and will do so, we observe that on appeal there was no challenge to her Honour’s initial finding of 15 per cent in favour of the wife. The matters which her Honour took into account included:
·That both parties are in good health;
·The wife had an income of $690 per week gross;
·The husband declared an income of $1,372 as at 5 June 2012;
·The husband “has a capacity to earn a greater income than the wife based on his past earning capacity”;
·The wife does not wish to work fulltime whilst the parties’ children are still young in order to meet their needs for care and supervision;
·The majority of the day to day care of the children fell on the wife;
·Child support paid by the husband was in the order of $67 per week and “the current rate of child support is a low one in contrast with the husband’s capacity to earn income”;
·The wife gave up fulltime employment with the birth of the parties’ first child and she has not further developed her skills or been in a position to obtain employment consistent with her university education;
·Both parties wish to continue their role as parents and the wife has committed to working around the hours and the obligations of the children, both still in primary school.
In his trial affidavit filed on 6 June 2012, the husband also deposed to his income position generally and relevantly at [112] says:
After I got re-established in Unit 2 and cared for the needs of our children I was able to slowly get myself back on my feet with my business. It has not been easy and I have continued to work hard. My business is important to earn my money but so are my children and they have been my main focus to attention since separation.
At [113] he says:
Luckily I can book my customers in at times when the children are not staying with me. Even with repeat customers…
The wife’s financial position after considering the further evidence
The children are no longer living predominantly with the wife and spending time with the father. As a result of final parenting orders made by consent on
21 October 2015, the children live with the husband and the wife on an equal week about basis. The wife’s evidence is that she now works 25 hours per week in the weeks the children are in her care, commencing work at 9:30am and concluding at 2:30pm and 33 hours per week in the weeks the children are not in her care. She does not depose to her income but as we have referred to already, in Annexure A to her affidavit filed 17 February 2016, being the notice of decision made by the Child Support Registrar, the wife provided the following information:
·She receives $40,719 per annum from salary or wages;
·She receives $121.22 per fortnight for superannuation;
·She receives $183.26 from Centrelink payments;
·She receives $80 per annum from interest and dividends;
·Her annual expenses are calculated at $55,210.73.
From that same Annexure it can be seen again that the husband indicated to the Child Support Registrar that he received:
·$31,200 per annum from salary or wages;
·$200 per week or $10,400 per annum from Centrelink payments;
·$52,000 per annum from rental income; and
·His expenses were estimated to be $93,600 per annum.
We confirm that the ultimate decision of the Child Support Registrar is that as from 15 January 2016 the husband is to pay to the wife child support in the sum of $3,850 per annum. That sum should therefore be taken into account when considering the wife’s income for the purposes of s 75(2).
Leaving aside Centrelink payments and superannuation, the wife’s income with child support is approximately $44,500 per annum. The husband’s income after deduction of $3,850 for child support is approximately $83,200 per annum.
Given that both parents have a commitment to parent the children on a week about basis there is nothing to suggest that their respective financial positions are likely to improve in the foreseeable future.
However, the husband is in a better financial position than the wife and given his self-employment, has more flexibility than she does as to future income earning capacity.
The husband also has a greater share of the assets before any adjustment for
s 75(2) factors is made, given our assessment that he should receive 65 per cent of the assets when contributions are taken in to account.
Accordingly, we find that an adjustment on account of these factors should be made in favour of the wife of 10 per cent.
The result of that adjustment is that the husband will receive 55 per cent of the assets as found by the trial judge to comprise the net assets for division, and the wife will receive 45 percent.
The result we have reached finds the parties with the same percentages as the trial judge, albeit for different reasons. That being the result, the orders made by her Honour should stand and the appeal should be dismissed.
Costs
In the event that the appeal was successful the wife sought an order for costs, and in the alternative, a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). For the husband’s part he opposed an order for costs, but sought a costs certificate.
The appeal has failed but only after the admission of fresh evidence led to a different conclusion in relation to the weight to be given to the s 75(2) factors. It was partly successful and had it not been for the admission of further evidence would certainly have succeeded.
In those circumstances though, we do not propose to make any order for costs and each party will bear their own costs.
I certify that the preceding one-hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Strickland and Watts JJ) delivered on 20 May 2016.
Associate:
Date: 20 May 2016
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