MONROE & MONROE - [2009] FamCAFC 173

FAMILY COURT OF AUSTRALIA

MONROE & MONROE

[2009] FamCAFC 173

FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – From a decision of the Federal Magistrates Court – where it was conceded that a mortgage liability was not deducted from the asset pool by the Federal Magistrate – where it was conceded the parties’ superannuation should have been included in the asset pool – appeal allowed

FAMILY LAW - PROPERTY SETTLEMENT – COMPOSITION OF THE POOL – where the husband disputed the composition of the pool – whether a tax liability should have been included in the pool – where no evidence was adduced to substantiate the liability – where it was partly incurred post-separation when the wife was no longer involved in the business – whether capital gains tax potentially payable on a property should have been included in the pool – where there was no evidence that the property would be sold in the near future – found that the Federal Magistrate’s treatment of both matters was appropriate

FAMILY LAW - PROPERTY SETTLEMENT – NON-DISCLOSURE – whether the Federal Magistrate erred in finding that a party had engaged in a pattern of non-disclosure – where incomplete business records were provided to the court appointed valuator such that the true value of the business could not be determined – where the husband failed to provide the business’ bookkeeper for cross-examination – found that in the circumstances the Federal Magistrate was entitled to make such a finding

FAMILY LAW - RE-EXERCISE OF DISCRETION – where there are adequate findings to enable the Full Court to re-exercise the discretion – discretion re-exercised

Family Law Act 1975 (Cth)

Federal Magistrates Court Rules 2001

G and G [2002] FamCA 766
Gronow v Gronow (1979) 144 CLR 499
Hickey and Hickey (2003) FLC 93-143
House v The King (1936) 55 CLR 499
Hunt and Zuryn (2005) FLC 93-2268
Kowaliw and Kowaliw (1981) FLC 91-092
Omancini and Omancini (2005) FLC 93-218
Weir and Weir (1992) FLC 92-287
Whiterod and Taylor (2006) FLC 93-266

APPELLANT:

Mr Monroe

RESPONDENT:

Ms Monroe

FILE NUMBER:

BRC

3418

2007

APPEAL NUMBER:

2008

DATE DELIVERED:

18 September 2009

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Warnick, May, O'Ryan JJ

HEARING DATE:

19 February 2009

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

29 August 2008

LOWER COURT MNC:

[2008] FMCAfam 935

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Leotta

SOLICITOR FOR THE APPELLANT:

Mr Rafty
Schultz Toomey O’Brien Lawyers

COUNSEL FOR THE RESPONDENT:

Mr George with
Mr Gunn

SOLICITOR FOR THE RESPONDENT:

Adrian Hawkes Lawyers

Orders

The appeal is allowed.
The sum to be paid by the husband to the wife (as ordered in paragraph 14 of the orders made 28 August 2008) be varied to $163,289. Such sum be paid to the wife within 28 days from today.
The husband file written submissions in relation to costs of the appeal within 28 days. Upon receipt of those submissions the wife file submissions in reply…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading MONROE & MONROE

Details

AGLC: MONROE & MONROE [2009] FamCAFC 173
Case: [2009] FamCAFC 173
Decision Date: 18 September 2009

CaseChat Overview and Summary

In the appeal MONROE & MONROE, the parties were contesting the outcome of a property settlement decision made by the Federal Magistrates Court. The husband sought to appeal the decision on several grounds, including the composition of the asset pool, the inclusion of certain tax liabilities, and the Federal Magistrate's finding of non-disclosure. The wife, on the other hand, defended the original decision, arguing that the Federal Magistrate had correctly assessed the asset pool and made appropriate findings regarding non-disclosure.

The court was tasked with determining whether the Federal Magistrate had erred in various aspects of the property settlement, including the composition of the asset pool, the inclusion of tax liabilities, and the finding of non-disclosure. Specifically, the court needed to assess whether certain liabilities, such as a mortgage and potential capital gains tax, should have been included in the asset pool. Additionally, the court had to consider whether the Federal Magistrate was correct in finding that the husband had engaged in a pattern of non-disclosure by providing incomplete business records and failing to provide the bookkeeper for cross-examination.

The court found that the Federal Magistrate had appropriately addressed the composition of the asset pool and the non-disclosure issue. Regarding the asset pool, the court noted that the husband's claim for a tax liability was not supported by evidence and that there was no indication the property would be sold in the near future. Concerning non-disclosure, the court concluded that the Federal Magistrate was entitled to find that the husband had engaged in a pattern of non-disclosure given the incomplete records and the failure to provide the bookkeeper for cross-examination. Consequently, the appeal was allowed, and the sum to be paid by the husband to the wife was varied. The court also directed the husband to file written submissions regarding the costs of the appeal.

The court’s decision reaffirmed the importance of accurate disclosure and the need for evidence to support claims related to property settlement in family law matters. By allowing the appeal and varying the property settlement amount, the court demonstrated its willingness to re-evaluate the discretion exercised by the Federal Magistrate, ensuring a fair and just outcome for both parties.

Orders

Orders of the court

The appeal is allowed.

The sum to be paid by the husband to the wife (as ordered in paragraph 14 of the orders made 28 August 2008) be varied to $163,289. Such sum be paid to the wife within 28 days from today.

The husband file written submissions in relation to costs of the appeal within 28 days. Upon receipt of those submissions the wife file submissions in reply within 14 days. Upon receipt of those submissions the husband file any submissions in reply within 14 days.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

After considering the parties contributions and concluding that largely their contributions were equal, with the exception of the wife’s contribution during the later years of the marriage to the children leading to a 5 percent adjustment, the Federal Magistrate then considered other matters:STEP THREE – OTHER CONSIDERATIONS128.Given that I have found the contributions over 22 years to be 55-45 percent in favour of the wife, further alteration of interests will depend on weighing all of the other circumstances set out in s.79 of the Act and, as I am asked, considering whether there was non-disclosure of assets.129. There are relevant s75(2) factors.130.Re s75(2)(a): The husband is aged 45 years. He says he in good health and can continue in his trade … . The wife is aged 47. She has health problems in her former trade …, being allergic to chemicals. She is now [in a different profession]. That is low paying employment.131.Re s75(2)(b) and s79(4)(d): The husband runs the business. He will have resources from the property settlement. He is also the resource as to his earning of money. He gave evidence that he has made a lifestyle decision not to work, he said 60 to 70 hours a week, and he employs [another tradesman]. He did not produce corroborating evidence of working such long hours and that is the type of claim which should be corroborated when considering s75(2) factors. He has the mental capacity to stay in business. His income is I find, after the way in which he disclosed material and the finding on [Mr W’s] evidence, more than $80,000.00 a year. The Federal Magistrate then considered the submissions on behalf of the husband in relation to capital gains tax (ground 8):132.It was always the case that the husband sought orders for the [L] residence. His orders in that regard reflected the wife’s case.133.In submissions, not in evidence, I was asked to make a s75(2) adjustment to him because the house was property for investment purposes and capital gains tax would be payable when it was sold, although the wife’s residence would be free of capital gains tax.134.Mr Leotta for the husband referred me to In the Marriage of Rosati (1998) FLC 92-804 and asked me to make an adjustment under the s.75(2) considerations. But a close reading of Rosati is required before doing that. The Full Court stated:6.36 It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s 79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases: (1) Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset. (2) If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings. (3) If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid-term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s 75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur. (4) There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs. 135.A potential capital gains tax liability was never part of the husband’s case and there was no application to reopen evidence. There was no indication that he intended selling the property and I understood his case to be that he intended to live in the property as he has done since separation. I do not think he has shown any special circumstances in relation to considering the issue.