Molloy and Molloy

[2017] FamCAFC 254

FAMILY COURT OF AUSTRALIA

MOLLOY & MOLLOY [2017] FamCAFC 254

FAMILY LAW – APPEAL – PROPERTY – Where the parties had been separated for almost 10 years as at the time of the hearing – Whether the primary judge erred in her assessment of the parties’ respective post-separation contributions – Whether the primary judge erred by not treating the husband’s payments of the principal of the mortgage and interest as being equal to the value he derived from living in and running his business from jointly owned property – Where the primary judge determined that the husband’s payment of interest was matched by his use of the property, but that the payments of the principal was a financial contribution not matched by the wife – Where these findings were open to the primary judge – Whether the primary judge erred in finding that the husband’s renovations had increased the value of the property – Where there was no evidence to support this finding – Where the error is not material – Whether the primary judge erred by making a five per cent adjustment under s 75(2) of the Family Law Act 1975 (Cth) in favour of the husband to take account of the husband’s lack of superannuation and likely shorter working life – Where the husband did not make proper disclosure about his financial position and resources – Whether the primary judge based her s 75(2) adjustment on speculation, unsupported by the evidence, as to when the husband would retire and as to the quantum of superannuation the wife would accumulate by the time she retires – Appeal allowed and orders set aside – Matter remitted for rehearing – Cost certificates granted for the appeal and rehearing.

Family Law Act 1975 (Cth) s 75(2)
Federal Proceedings (Costs) Act 1981 (Cth)

Black v Kellner (1992) 15 Fam LR 343
Bugmy v The Queen (2013) 249 CLR 571
De Winter v De Winter (1979) 23 ALR 211
Farmer & Bramley (2000) FLC 93-060
Fox v Percy (2003) 214 CLR 118
House v The King (1936) 55 CLR 499
Metwally v University of Wollongong (1985) 60 ALR 68
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Warren v Coombes (1979) 142 CLR 531
Weir v Weir (1992) 16 Fam LR 154
Zalewski & Zalewski (2005) FLC 93-241

APPELLANT: Ms Molloy

RESPONDENT: Mr Molloy

FILE NUMBER: SYC 3838 of 2014

APPEAL NUMBER: EA 180 of 2016

DATE DELIVERED: 24 November 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Strickland, Aldridge & Gill JJ

HEARING DATE: 8 September 2017

LOWER COURT JURISDICTION: Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE: 22 September 2016

LOWER COURT MNC: [2016] FCCA 2400

REPRESENTATION

COUNSEL FOR THE APPELLANT: Ms Druitt

SOLICITOR FOR THE APPELLANT: Marsdens Law Group

COUNSEL FOR THE RESPONDENT: Ms Christie

SOLICITOR FOR THE RESPONDENT: GA Lawyers

Orders

1. The Application in an Appeal filed on 12 May 2017 be dismissed.

2. The appeal be allowed and the orders made on 22 September 2016 be set aside.

3. The matter is remitted for rehearing by the Federal Circuit Court of Australia to be heard by a judge other than Judge Henderson.

4. There be no order as to costs.

5. The Court grants to the appellant wife 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 wife in respect of the costs incurred by her in relation to the appeal.

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

7. The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by them in relation to the new trial ordered.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number:  EA 180 of 2016
File Number:  SYC 3838 of 2014

Ms Molloy

Appellant

And

Mr Molloy

Respondent

REASONS FOR JUDGMENT

Strickland & Aldridge JJ

Introduction

1. On 22 September 2016 Judge Henderson determined property settlement proceedings between Ms Molloy (“the wife”) and Mr Molloy (“the husband”).  Her Honour divided the non-superannuation property of the parties, which had a net value of $929,960, so that the husband received 60 per cent of that property and the wife 40 per cent.  That was achieved by orders that the husband pay to the wife the sum of $372,320 and the wife transfer to the husband her interest in the former matrimonial home at B Street, Suburb T (“the B Street property”).  In addition the wife was to retain her superannuation entitlements which were valued at $64,000.

2. The wife appeals from these orders asserting that her Honour erred in both the assessment of the post-separation contributions made by the parties and in the adjustment made in favour of the husband under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”).

3. On 12 May 2017 the wife filed an Application in an Appeal seeking leave to issue a subpoena.  At the hearing of the appeal the wife indicated that she was no longer pursuing that application, and thus it will be dismissed.

Background

1. The parties met in 1982 and married in 1983.  They had three children who were born in 1984, 1986 and 1989.

2. The parties separated in May 2007 when the wife left the B Street property.  The husband and the children remained in that home.  The youngest child was 17 and a half years old at the time.

3. After she left the home, the wife continued to support the children, including by cooking meals for them, taking them home, assisting them with their university studies and relationship issues and collecting them after they attended parties.

4. For 12 months after separation the mortgage repayments for the B Street property were made entirely by the wife.  Notwithstanding the wife’s efforts, the mortgage fell into arrears and the mortgagee took action to recover the property in the Supreme Court of New South Wales.  The wife stepped in to have the matter resolved, although that resolution was achieved by the husband paying the shortfall from his income.  Since 2008 he has made all of the mortgage repayments, which resulted in a reduction in the principal of the mortgage of approximately $217,000 and comprised payments of approximately $235,000 in interest.

5. The husband has had the benefit of living in and running his business from that property since separation, whereas the wife has had to pay for rental accommodation from her income.

6. At some time after the separation the husband completed the renovations to the property that had been commenced before separation, financed by a supplementary loan of $120,000.  The rejection of that evidence is not challenged in this appeal.  The primary judge nevertheless accepted that “those renovations … increased, at some level, the value of the property” (at [42]).  We shall return to that finding shortly.

7. At the time of the hearing the wife was 51 years of age, working in the public service and earning $69,000 per annum.  The husband was 56 and operating his own business.  The primary judge did not accept the husband’s evidence that his income was $52,000 per year and found that he had not made proper disclosure.  Her Honour considered that he had a “far superior income earning capacity” to that of the wife (at [54]).

8. The task of the primary judge in assessing the parties’ contributions was made more difficult by the almost 10 years that had elapsed between the parties’ separation in May 2007 and the hearing.

9. The parties had agreed that their contributions up to the time of separation should be regarded as equal.  The main issue, then, was how the parties’ respective post-separation contributions were to be assessed.

10. The primary judge found that since separation the husband’s contributions, and in particular his financial contribution by reducing the principal of the mortgage over the former matrimonial home by in excess of $200,000, justified a result that the overall contributions of the parties to their property and to the welfare of the family should be assessed as being 60 per cent to the husband and 40 per cent to the wife.

11. When her Honour turned to the matters raised under s 75(2) of the Act, she found that there ought be a five per cent adjustment in favour of the wife due to the husband’s superior earning capacity. However, her Honour also found that there should be a five per cent adjustment in favour of the husband as he would not have the benefit of any superannuation at retirement whereas the wife would have superannuation. Thus her Honour arrived at the division of the property referred to earlier.

The Appeal

1. Although there are seven grounds of appeal, counsel for the wife helpfully dealt with those grounds in two groups and we shall follow the same course.

Grounds 1, 2 and 3
The primary judge erred in her findings as to the husband’s post-separation contributions

1. The wife’s submissions focussed on two areas.  The first issue was whether the total value of the husband’s payments to the mortgage exceeded the value of the benefit he received from living in the property and running his business from its backyard.  She submitted that the primary judge erred by not treating the husband’s payments of both the principal of the mortgage and interest as being matched by his use of the property, especially in circumstances where the wife  had been required to apply part of her income to renting accommodation.

2. The second issue was whether or not the husband had made a financial contribution by renovating the property.  The wife submitted that the evidence did not support a finding that the renovations had increased the value of the property and that, therefore, this was wrongly taken into account by the primary judge.

The husband’s mortgage repayments

1. In assessing the parties’ post-separation contributions the primary judge took into account the following:

   25.The wife left the former matrimonial home when, effectively, her children were adults.  She and the husband have each contributed to continuing to providing a home for the children by allowing the children, at various times, being all or some of them or, as is now the case, [C], her husband and two children, to live in the former matrimonial home, and that post-separation contribution is equal for each of them.

   26.The husband has made a superior financial contribution to the wife in that he continued to pay down the mortgage, not merely the interest component of the mortgage, and he has significantly reduced what was the debt level when the wife left the home.

   27.In relation to his payment of the interest, that included payment of his share and the wife’s share of interest.  However this is the contribution to the assets of each of them that he should have made given his exclusive occupational and use of the joint matrimonial home.

   28.It could be regarded as his occupation fee, for want of a better use of word, in living in the former matrimonial home to the exclusion of the wife.

   29.The wife was required to fund her own accommodation by means of her own income.  The wife sought no spousal maintenance from the husband, although the husband’s income-earning capacity, as I will demonstrate later, is clearly superior to that of the wife.  The wife permitted the use of her equity in that property by the husband and her children which continues today.

   30.Additionally, the husband continued to run his business from the home and store his plant and equipment at the home and yet he retained all the income he earnt.  This is also a contribution by the wife.

   31.Thus, I do not see that the husband’s payment of the wife’s share of interest on any loan is superior to that of the wife in relation to the wife’s contribution in permitting the husband sole occupation of the home to her exclusion.

2. The primary judge noted at [43] that the wife has effectively “lived like a gypsy” in rented accommodation whereas the husband had had the benefit of the sole occupation of the home and been able to run his business from there.

3. Her Honour also found that the wife continued to make contributions to the welfare of the family, post-separation, as she had done prior to separation.

4. Her Honour concluded:

   48.The question for me is the husband’s paying down of the principal of the mortgage and renovations of such weight that he should be accorded a post-separation contribution? I find it is. I find that this superior contribution together with the increase in value of the property due to his renovations is 10 per cent. This would result in a 60/40 split in the husband’s favour.

5. Effectively, her Honour determined that the contribution made by the husband in paying the interest was matched by his use of the property, so that the parties’ contributions in the payment of the interest and the use of the jointly owned property could be seen as equal.  Thus the husband’s reduction in the principal of the mortgage was a financial contribution by him that was not matched by the wife.

6. The issue then is whether her Honour was entitled – or, as the wife submitted, was obliged – to find that the value of the use of the property was such that the reduction in the principal of the mortgage should also be set off against that use.  In making that submission the wife emphasised that the husband used the property for his business, which earned him an income far in excess of the $69,000 per annum she earned (at [54]).

7. There was no evidence of what was an appropriate amount of rent for the property since the parties separated.  There was thus no evidence of the quantum of the financial benefit to the husband in living in the property rent free.

8. The wife’s evidence was that since separation she had paid the following rent:

   ·   $305 per week for 15 months;

   ·   $380 per week for 6 months;

   ·   $430 per week for 24 months;

   ·   $420 per week for 24 months;

   ·   $150 per week for 13 months.

9. That accounts for a period of approximately seven years and, if the wife has paid rent for all of the 10 years since separation, that would appear to be an incomplete list.  There is also no suggestion in the evidence that the premises rented by the wife were not comparable with the B Street property.

10. Assuming that the payment of interest of $235,000 was made over nine years, the husband paid approximately $502 per week in interest.

11. The task before her Honour was not purely an arithmetical one (Farmer & Bramley (2000) FLC 93-060 at [49] per Finn J; Zalewski & Zalewski (2005) FLC 93-241 at [165]; Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]). That being said, her Honour would have been assisted by some evidence as to the value of the benefit the husband received from the use of the property. In the absence of any such evidence the primary judge had to do the best that she could on the available evidence.

12. We consider that the finding made by her Honour was open to her on the evidence.  The payments made by the husband under the mortgage had the effect of increasing the parties’ equity in the B Street property by over $200,000.

The renovations undertaken by the husband

1. We turn then to the issue of the increase in value of the property due to the husband’s renovations.  As we have already recorded, the primary judge found that the renovations increased, to some degree, the value of the property.

2. The husband attempted to adduce evidence from a valuer to the effect that the renovations had increased the value of the property by $200,000.  That evidence was rejected by the primary judge and the husband does not now seek to agitate against that rejection.  As a consequence of that ruling, there was no evidence before the Court as to what effect, if any, the renovations had on the value of the property.

3. Accordingly, the primary judge’s finding that the “renovations have increased, at some level, the value of the property”, was pure speculation and was not supported by any evidence.  It cannot be assumed that renovations will always increase the value of a property.  It is easy enough to envisage that inappropriate renovations could reduce the value of a property.

4. The husband submitted that, regardless of whether his renovations had increased the value of the property or not, his exertions could still be considered to be a contribution.  The difficulty with that submission is that it was not how the husband ran the hearing.  The submission is therefore not one that can be made on appeal: Metwally v University of Wollongong (1985) 60 ALR 68.

5. It follows, therefore, that there was no basis for her Honour to take into account any increase in the value of the property due to the renovations when determining the husband’s financial contributions.  In doing so, her Honour fell into error.

6. However, that is not the end of the matter.  If the error is not material then it does not justify allowing the appeal:  De Winter v De Winter (1979) 23 ALR 211 at 217.

7. The reduction in the principal was of the order of $217,000.  The primary judge found that the net non-superannuation assets were $929,960.  Therefore 10 per cent of those assets is $92,996, which leads to a differential between the parties on a 60/40 division of $185,992.

8. This is substantially less than the reduction in the principal of the mortgage.  It is clear therefore that the primary judge did not apply a strict arithmetical, or dollar for dollar, process in determining the greater post-separation financial contribution by the husband.  This is because the reduction in the principal of the mortgage has not been fully taken up in the assessment of the parties’ contributions.  It follows that no allowance, or very little allowance, has been made for any increase in the value of the property and any error made by taking some unspecified increase in value due to renovations is immaterial.

9. Accordingly, these grounds of appeal have not been established.

Grounds 4, 5, 6 and 7
Did the primary judge err in her findings as to the parties’ future needs?

1. These grounds challenge the adjustments made by her Honour under s 75(2) of the Act.

2. The primary judge found that the husband had a far superior income to that of the wife and that this warranted a five per cent adjustment in the wife’s favour.  However, her Honour also considered that the husband’s lack of superannuation and likely shorter future working life compared with the wife’s circumstances justified an adjustment in his favour, also of five per cent (at [58]).  The net effect was that the 60/40 split derived from the considerations of the parties’ contributions remained.

3. Whilst the wife submitted that having regard to the primary judge’s strong findings about the husband’s income, the five per cent adjustment in her favour was inadequate, she nonetheless accepted that it was within the range of a reasonable exercise of discretion.  However, she submitted that, in the circumstances, the further adjustment in favour of the husband was wholly unreasonable.  She also submitted that the evidence did not support the findings made by the primary judge.

1. Her Honour referred to the husband’s asserted income of $52,893, which she found to be inconsistent with the mortgage payments of $30,000 to $35,000 made by him each year (at [51]).  The primary judge also found that for a number of years the husband had included in his tax returns deductions for interest, lease payments and depreciation for loans and assets that either did not exist or had not been disclosed (at [52]–[53]).

2. The primary judge concluded:

   54.The husband could not explain any of these discrepancies.  I find his income is clearly more than $52,000 and the business provides for his fuel, telephone and perhaps some component of the interest on the home loans given he runs his business from the premises.  Thus I find he has a far superior income earning capacity to that of the wife, who as a PAYE taxpayer earns $69,000 per annum.

   55.I find that the husband’s superior financial position would lead me to the view that the wife is entitled to a 5% per cent adjustment in her favour due to his superior income-earning capacity.  However, that is not the end of this issue.

   56.The wife is a PAYE taxpayer, has some $64,000 in superannuation and has between 10 and 13 years to work.  I do not propose to split this superannuation and no order is sought for this.

   57.The husband is aged 56, doing manual work, and he may well be retiring at aged 60.  He has no superannuation whatsoever.  He has no capacity to create any superannuation given the modest amount people of his age are able to put towards superannuation due to the change of the law.  He no doubt paid the mortgage down as part of his retirement plan.  The wife’s superannuation will continue to increase and grow as she continues to work and earn income.

   58.In those circumstances, I will allow him a 5% adjustment as he will not have any superannuation at retirement.  The wife may be seized of superannuation, approaching, perhaps $200,000 in 10 to 13 years’ time.

3. We accept the wife’s submission that there was no evidence before the Court as to the likely amount of the wife’s superannuation in 10 to 13 years or as to the likely retirement age of the husband.

4. The husband submitted that these statements made by the primary judge as to the husband’s likely retirement age and the future quantum of the wife’s superannuation were not factual findings but rather were examples used for discussion purposes.  This flows, it was submitted, from the use of the words “may well be” and “may be”.

5. The point of the husband’s submission was that the primary judge was entitled to take into account the length of the parties’ future working life and the assets that would be available to them upon their retirement, including their superannuation.  The husband was older than the wife and working as a truck driver.  Thus it was submitted that he would have a shorter working life and not be able to accrue significant superannuation or continue for any length of time to make significant reductions to the mortgage and that an adjustment in his favour of five per cent was well founded.

6. It is to be recalled that over a period of approximately nine years the husband was able to reduce the principal of the mortgage by a total of some $217,000, which equates to $24,000 per year.  This sum, absent evidence to the contrary, would be available to the husband, in the future, to pay into a superannuation fund or, instead, to continue to reduce the principal of the mortgage as part of his retirement plan (which was how the primary judge had categorised those payments).

7. The primary judge clearly made the five per cent adjustment by weighing the husband’s likely lack of superannuation against the wife’s superannuation, which the primary judge supposed would be “approaching, perhaps $200,000” by the time the wife retired.  We do not accept that these references were mere examples – they were not stated to be such and the adjustment was quantified by direct reference to them.  Whilst there is some force in the husband’s submissions that in appropriate cases an adjustment may be made on the basis of the future financial resources of the parties, these critical findings as to the wife’s future superannuation and the husband’s retirement age were relied upon by the primary judge even though they were not supported by any evidence.  Thus, the findings about the likely future resources of the parties were no more than unjustifiable speculation.

8. Further, the primary judge was entitled to take a more robust than usual approach in favour of the wife (and not the converse) because of the husband’s lack of proper disclosure:  Weir v Weir (1992) 16 Fam LR 154 at 158; Black v Kellner (1992) 15 Fam LR 343 at 347–348. This had been the subject of specific submissions by the wife to the primary judge.

9. It follows that, when considering the s 75(2) adjustments to be made to the non-superannuation property, her Honour took into account matters that were not the subject of evidence (House v The King (1936) 55 CLR 499) and that her discretion has miscarried.

Conclusion

1. The appeal will be allowed, the orders set aside and the matter remitted for re-hearing.  We note that that was what both parties sought if the appeal was successful.

Costs

1. The appeal has succeeded on a question of law.  Nothing in the way the husband and the wife conducted their cases before her Honour led her into error and thus we will make no order for costs as between the parties.  We will however make an order that each party should receive certificates under the Federal Proceedings (Costs) Act1981 (Cth) for both the appeal and any re-hearing.

Gill J

1. I rely upon the Introduction and Background set out in the judgment of Strickland and Aldridge JJ, and their Honours’ reasons in respect of appeal grounds 1, 2 and 3 with which I agree.

2. In relation to grounds 4, 5, 6 and 7, being whether there was error in the primary judge’s assessment and adjustment in relation to the parties’ s 75(2) factors, I respectfully disagree with Strickland and Aldridge JJ.

Grounds 4, 5, 6 and 7

1. Grounds 4, 5, 6 and 7 are set out as follows:

   4.The trial Judge erred in the assessment of the s 75(2) future needs of each respective party.

   5.The trial judge erred in finding that the Applicant Husband has no capacity to create any superannuation.

   6.The trial judge erred in allowing the Applicant Husband a 5% adjustment for not having superannuation.

   7.The trial Judge erred by failing to give sufficient weight to the Respondent Wife’s future needs.

2. These grounds of appeal, as explained by the Summary of Argument provided by the appellant, are variously directed to factual findings that the husband has no capacity to create any superannuation, factual findings as to the future needs of each of the parties and are then directed to the discretionary determination as to the adjustment to the husband in consequence of this factual finding and to insufficient weight being given to the wife’s future needs.

3. That is, this component of the appeal was directed to her Honour’s treatment of the s 75(2) factors, specifically her findings in relation to the wife’s capacity to acquire superannuation and the husband’s incapacity to acquire superannuation before retiring, and then to the exercise of her Honour’s discretion in consequence of those findings.

4. The relevant findings and reasoning appear at [54] to [58] of the judgment, and are set out in the judgment of Strickland and Aldridge JJ.

5. The consequence of the trial judge’s findings as to the parties’ income and their capacity to accrue superannuation was that her Honour concluded, in the exercise of her discretion, that there should be a 60/40 split in favour of the husband of the non-superannuation pool, with the wife to retain her superannuation in addition to this.  Taking into account the total pool including superannuation, the split was 56/44 in favour of the husband.

Factual findings

1. In dealing with factual findings on appeal it is necessary to apply what has been set out in Fox v Percy (2003) 214 CLR 118 where it was stated at 126 that:

   Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions…

2. In doing so, Fox v Percy accepted at 127 what had been said in Warren v Coombes (1979) 142 CLR 531 at 552 that:

   in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial Judge but, once having reached its own conclusion, will not shrink from giving effect to it.

3. That is, an appellate court is required to give real consideration to the factual determinations where they are under challenge on appeal.  In this appeal, factual determinations and the inferences flowing from them that relate to the parties’ capacity to acquire superannuation are under challenge.

4. I accept, as has been said in the judgment of Strickland and Aldridge JJ, that there is no evidence as to how much superannuation the wife might accumulate before she retires.

5. It was, however, open to the trial judge to infer that, given the age and occupation of the wife, she would continue to acquire superannuation for some time.  Given her age it was further open to infer that this may be for a period of 10 to 13 years.  The availability of those inferences was properly conceded (transcript 6 September 2016 p.115) in closing submissions before the trial Judge.  These factual findings and inferences are correct.

6. Similarly, the findings as to the age of the husband, 56 years old, and as to the manual nature of his work, were the appropriate findings on the evidence before the trial Judge (at [57]).  Her inference, flowing from those findings, that the husband would not accumulate superannuation was again properly conceded to be an available inference (transcript 6 September 2016 p.115).  It was the proper inference to draw.  Accordingly appeal ground 5 fails.

7. That is, it was open to find, and also the appropriate finding, that the husband had effectively no capacity to accumulate superannuation, while the wife has an ongoing capacity to accumulate superannuation in addition to that which she has already accumulated.  These findings were open and appropriate on the basis that they were couched with an appropriate degree of uncertainty, given they deal with the future conduct in circumstances of each the parties.  The trial judge appropriately acknowledged the uncertainty inherent with a prediction as to the future noting that the husband “may well be retiring at aged 60” (at [57]).  Similarly, she couched with uncertainty the future prospects of the wife noting that her capacity to continue to acquire superannuation and work was for a period of “between 10 and 13 years” (at [56]).  When couched in such a manner they formed an appropriate basis for the exercise of the discretion.

8. The remaining, and critical question in relation to factual findings made by the trial judge has been identified in the judgement of Strickland and Aldridge JJ as flowing from [58] of the trial judgment.  It is worth setting it out in full given its pivotal nature:

   58.In those circumstances, I will allow him a 5% adjustment as he will not have any superannuation at retirement. The wife may be seized of superannuation, approaching, perhaps $200,000 in 10 to 13 years’ time.

9. That critical question is whether, in this paragraph, the trial Judge made a finding as to the quantum of superannuation that would be acquired by the wife in order to support her ultimate exercise of discretion.  If so, then there was no evidence to support the finding of such quantum and the discretion must have miscarried, as a fact foundational and material to the exercise of the discretion was without basis.

10. Paragraph [58] records the conclusion reached as to adjustment following the reasoning and fact finding recorded in the previous paragraphs of the judgment. It records that the trial judge engaging in a weighing process involving the husband’s inability to acquire superannuation as opposed to the wife’s ability to accumulate superannuation.

11. If the weighing was as to the lack of the husband’s ability to obtain superannuation against the prospects of the wife obtaining further superannuation in the sum of $200,000, then the reasoning is flawed as it is reliant on a fact that could not be found, and ground 4 should then succeed.

12. If, however, the trial judge was weighing the husband’s lack of capacity to acquire superannuation and the long-term effects of that inability against the fact of the wife’s capacity to acquire superannuation in a general sense, that is, her long-term ability to acquire superannuation to provide for herself in an even longer term, then no error of fact is identified.

13. The error of fact only arises if the trial judge was making a finding of fact that the wife would, or was likely to accumulate $200,000 of superannuation as the matter against which the husband’s position should be balanced.

14. This turns upon an assessment of what the trial judge said at [58] in the context of her reasoning.  I do not accept that the reference to “approaching, perhaps $200,000” was a factual finding relied upon.  The comment made by the trial judge follows from her determination that an adjustment of 5 per cent would be made to the husband.  The comment is couched in terms that the “wife may be seized of superannuation, approaching, perhaps $200,000 in ten to thirteen years’ time.” The manner of expression of this comment, following the determination of the adjustment, leads me to conclude that this was a mere parenthetical aside made by the trial judge that the orders might result in the wife accumulating what the husband has already accumulated, rather than a component of her reasoning in arriving at the 5 per cent adjustment.

15. In a circumstance where there could be no certainty as to the precise position of the parties in the future, and in which the trial judge accepted this was so, I do not accept that the reference to “perhaps $200,000” was to a fact as found by the trial judge.

16. Accordingly, I differ from the judgment of Strickland and Aldridge JJ as to whether this constituted appealable error and ground 4 accordingly fails.

The exercise of the discretion

1. The appellant’s attack upon the decision by the trial judge did not simply rely upon factual findings made by the trial judge but also, by grounds 6 and 7, sought to impugn the exercise of the discretion by the trial judge in determining to give a 5 per cent adjustment to the husband in respect of a lack of superannuation, and in failing to give sufficient weight to the respondent wife in respect of her needs.

2. The role of an appeal court is not one of substituting one discretionary view for another.  Before an appellate court can intervene it must be established that there was a discretionary error as set out in House v The King (1936) 55 CLR 499. While expressed differently, each of grounds 6 and 7 are directed toward the weight that the trial judge placed upon the disparity that she found in respect of the parties’ future prospects.

3. In Bugmy v The Queen (2013) 249 CLR 571, the plurality of the High Court consisting of French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ, in dealing with an appeal from a discretionary (there sentencing) judgment said at 588:

   Sentencing is a discretionary judgment and there is no single correct sentence for an offender and an offence.  Plainly enough the Court of Criminal Appeal disagreed with the sentence imposed by Judge Lerve and favoured a more severe sentence. The difference between the Court of Criminal Appeal's assessment of the appropriate sentence and Judge Lerve's assessment may be explained by saying that Judge Lerve gave too little weight to some factors and too much weight to other factors. However, within a range of sentences for this offence and this offender, the weight to be given to the evidence and the various, conflicting, purposes of sentencing was a matter for Judge Lerve. The authority of the Court of Criminal Appeal to substitute a sentence for that imposed by Judge Lerve was not enlivened by its view that it would have given greater weight to deterrence and less weight to the appellant's subjective case. The power could only be engaged if the Court was satisfied that Judge Lerve's discretion miscarried because in the result [my emphasis] his Honour imposed a sentence that was below the range of sentences that could be justly imposed for the offence consistently with sentencing standards.

4. In the same case at 597 Gageler J set out that to displace a discretionary determination on appeal it is necessary that the determination under appeal either:

   (1)turned on one or more specific errors of principle or of fact; or

   (2)in the totality of the circumstances was unreasonable or plainly unjust

5. Consistent with the pluralities’ analysis as set out above, Gageler J then dealt with the significance of an appeal ground addressed to weight (at 597–598).  Such an appeal ground:

   was incapable of establishing an error in the first category of appellate intervention. It pointed at most to a circumstance which, taken with other circumstances, might be indicative of error in the second category.

6. That is, where no error of fact or principle is established, an appeal ground directed to the question of weight can only succeed where it, either alone or in combination with other such appeal grounds, is able to establish that the decision is manifestly wrong.

7. In this case where findings as to significant disparity in contribution and as to significant disparity in the parties’ future prospects have been made it cannot be said that a 44/56 per cent adjustment of the total pool in favour of the husband is unreasonable or plainly unjust.  It has not been established that the discretionary determination made by the trial judge is manifestly wrong.  Accordingly I would refuse the appeal on these grounds.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Gill JJ) delivered on 24 November 2017.

Legal associate: 

Date:  24 November 2017