MR HUGHESAppellant/Husband- and -MS HUGHES
[2004] FamCA 638
•20 July 2004
FAMILY LAW ACT 1975
IN THE FULL COURT OF
THE FAMILY COURT OF AUSTRALIA
AT SYDNEY
Appeal No. EA68 of 2003
File No. SYF3343 of 2002
IN THE MATTER OF:
MR HUGHES
Appellant/Husband
- and -
MS HUGHES
Respondent/Wife
REASONS FOR JUDGMENT
BEFORE:Kay, Warnick and O’Ryan JJ
HEARD:3 February 2004
JUDGMENT: 20 July 2004
APPEARANCES: Mr Mater of Counsel and Mr Jackson of Counsel (instructed by Macedone Christie Willis, solicitors) appeared on behalf of the Appellant Husband.
Mr Livingstone of Counsel (instructed by Willis and Bowring, solicitors) appeared on behalf of the Respondent Wife.
HUGHES and HUGHES of 2004
CORAM: Kay, Warnick & O’Ryan JJ
DATE OF HEARING: 3 February 2004
DATE OF JUDGMENT:
Catchwords: APPEAL – Property – Whether division of modest asset pool 60:40 in favour of wife manifestly unjust – Trial Judge exceeded ‘generous ambit’ of his discretion – Discretion re-exercised dividing property 55:45 in favour of wife
The parties commenced cohabitation in 1993, married in 1995 and separated in 2002. There are two children of the marriage, X, born 2000 and Y born 2001.
On 21 July 2003, Rose J made orders dividing the parties’ net asset pool, valued at $621, 587.18, in proportions 60:40 in favour of the wife.
His Honour found that the husband’s significant financial contributions, and limited contribution to welfare of the family, well exceeded the combined contributions of the wife. His Honour found that the wife’s primary contribution had been to the welfare of the family, this contribution increasing post-separation as a consequence of having the parties’ two children in her care.
Having assessed the parties’ contributions entitlement as to 65% to the husband and 35% to the wife, the trial Judge proceeded to make a further 25% adjustment on s 75(2) factors in the wife’s favour. His Honour made this adjustment after taking into account the husband’s greater income and earning capacity, which he described as vastly exceeding that of the wife, and the fact that the wife had the responsibility of caring for the parties’ two children.
The husband appealed on the basis that,
The trial Judge had given too little weight to the husband’s contributions
The trial Judge had given too much weight to the s 75(2) factors favouring the wife
The trial Judge’s determination was manifestly unjust
Held, allowing the appeal, per Kay & O’Ryan JJ:
The trial Judge gave appropriate weight to the husband’s contributions and took all of the relevant s 75(2) matters into account.
These matters could not however justify a result whereby the wife would receive 1.5 times as much of a modest pool of assets as did the husband.
In re-exercising discretion, and given the unchallenged findings of the trial Judge as to s 75(2) matters, an adjustment in the wife’s favour of 20% on account of those matters would be appropriate.
Dissenting, Warnick J:
In circumstances where two children of the marriage aged 3 and a half years and 2 years were in the primary care of the wife, with palpably disadvantageous effect on her earning capacity and there was significant disparity in the earnings capacities and income of the parties, it cannot be said that $60,000 more than what is considered by an appellate court as a just result, indicates that the trial Judge’s order was plainly wrong.
APPEAL ALLOWED
NOT REPORTABLE
Kay and O’Ryan JJ:
Introduction
Mr Hughes appeals against orders for property settlement made by Rose J. on 21 July 2003. His Honour also made an order that an application by Ms Hughes for spousal maintenance be dismissed, however she does not seek to appeal against that order.
His Honour made the following orders:
“1. That the husband pay to the wife the sum of $334,244.00 on or before 21 October 2003.
2. That the husband may elect to discharge the current B Finance loan in respect of Motor Vehicle 1 used by the wife prior to 21 October 2003 in part satisfaction of Order 1 herein and should he do so the husband shall promptly furnish the wife with copies of all relevant credit union statements and receipts evidencing such loan discharge.
3. That the husband shall continue to pay all B Finance loan repayments in respect of the loan referred to in Order 2 herein as and when they fall due until such time as he has complied with Orders 1 or 2 whichever shall first occur.
4. That the husband transfer to the wife the whole of his right, title and interest in Motor Vehicle 1 forthwith upon him complying with Orders 1 or 2 whichever event shall first occur and in the interim the husband shall pay the registration fees and insurance premiums which may fall due for payment in respect of that motor vehicle.
5. Declare that each of the parties is the sole owner of all such items of personalty in his or her possession or control respectively subject to orders otherwise made.
6. That the wife’s application for spousal maintenance is dismissed.
7. That all documents produced on subpoena may be returned to the person who produced the same.
8. That the proceedings be removed from the Active Pending Cases List.”
In the Notice of Appeal the husband sought that in the event that his appeal is successful he pay to the wife the sum of $122,895 in lieu of $334,244. However, in the written summary of argument filed on his behalf it was contended that the amount of $198,855 should be substituted for the amount of $122,895. In October 2003 the trial Judge granted a stay of proceedings upon condition that the husband pay $250,000 to the wife. The husband has complied with this condition and thus if the appeal is successful the wife would have to refund an amount of $51,145 to the husband.
Background facts
The husband was born in 1964 and the wife was born in 1968. The parties commenced cohabitation in September or November 1993 and were married in 1995. They separated on 9 January 2002.
There are two children of the marriage, X born in 2000 and Y born in 2001. In September 2002, by consent, final parenting orders were made which provided that the two children reside with the wife and that the husband have contact, including each Wednesday overnight, each Saturday from 11.00 am until Sunday 5.00 pm and for four weeks of the year prior to the children commencing to attend school. The orders provide that after the children commence school the husband will have contact for one half of each school holiday period.
At the commencement of cohabitation the husband was the owner of C Street, Suburb D which he acquired in 1990 for $170,000. To assist with payment of the cost of purchase the husband obtained a Home Fund loan for $98,000. In early 1993 he re-financed with a loan from E Bank for $122,000. The amount required to discharge the Home Fund loan was $106,419.19 and the balance was applied to pay expenses associated with the re-financing and renovations to the property. It was agreed that in late 1993 the property had a value of $200,000. The husband also had a half interest in F Street, Suburb G, Queensland that he owned jointly with his parents. This property was acquired in 1988 for a price of $70,000 and all of this was borrowed. The husband also had a motor vehicle, household effects, B Company shares and minimal savings. So far as the wife is concerned, she had a motor vehicle, furniture, savings of $12,500 and clothing and personal effects. After the parties commenced cohabitation they lived in the home at Suburb D.
At the commencement of the relationship both parties were in paid employment. The husband was employed by B Company and the wife was employed by H Company. During the relationship both parties continued in paid employment. However, there were periods when the wife worked in a second position.
In 1993 the wife gave the husband $12,500 which he used to pay an insurance claim relating to a motor vehicle accident.
In about 1994 or 1995 renovations were carried out to the Suburb D home. In 1997 further renovations were carried out to the home, financed by an advance from the E Bank of $21,000. The husband said the renovations were carried out in 1996 at a cost of $25,000.
In 1998 the husband accepted a redundancy package from B Company and received $87,003.96 gross for long service leave, holiday and redundancy pay together with $106,145.19 net for superannuation.
In 1998 an amount of $98,192.55 was used to discharge the mortgage over the title of the Suburb D home. As well, an amount of $14,760.22 was used to repay a B Company finance loan and $3,000 was used to pay credit card debts. An amount of $17,592.15 was rolled over into a J Company Insurance Policy account.
In 1999 the parties obtained a loan of $6,500 from a credit union which they used to purchase a boat.
In 1999 the mortgage on the title of the Queensland property was discharged.
In 2000 the wife ceased employment with H Company. In 2000 the husband resumed employment with B Company as a professional. In early 2001 the wife resumed employment, however she ceased in mid-2001 prior to the birth of the second child. In late 2001 the wife commenced part-time employment in hospitality.
Judgment of the trial Judge
In his reasons for judgment his Honour set out the relevant marital and financial history. He then referred to the relevant principles to be applied pursuant to s 79 of the Family Law Act 1975 (Cth) in relation to the applications.
His Honour identified the asserted property and liabilities of the parties and dealt with a number of issues relating to disputed items. He then made a finding that the property of the parties had a gross value of $662,829.18. He found that they had liabilities of $41,242, leaving property of a net value of $621,587.18. His Honour found that the property of the parties was as follows:
Assets
·F Street, Suburb G $ 47,500.00
·C Street, Suburb D $490,000.00
·1,400 B Company Shares $ 4,858.00
·Motor Vehicle 2 $ 7,000.00
·Boat $ 3,500.00
·Tools $ 1,500.00
·Effects – husband $ 5,000.00
·Superannuation $ 23,521.00
·Wife’s paid costs $ 14,949.35
·Controlled monies $ 9,792.51
·B Company finance $ 100.00
·Shares – wife $ 16,425.32
·Motor Vehicle 1 $ 19,000.00
·Furniture – wife $ 2,000.00
·Super – wife $ 17,683.00
$662,829.18
Liabilities
·Credit card $ 70.00
·Loan from Ms K $ 2,900.00
·B Company finance $ 24,000.00
·L Finance $ 2,200.00
·Loan from Mr M $ 1,000.00
·Motor Vehicle 1 $ 11,072.00
($ 41,242.00)
Net property $621,587.18
There is no challenge to his Honour’s findings as to the net property of the parties.
His Honour then proceeded to deal with the contributions of the parties, dealing first with the contributions of the wife. He made findings in relation to the assets that the wife had at the commencement of the relationship and accepted that she had savings of $12,500. His Honour found that she made financial contributions by applying her income to pay living expenses, mortgage payments, as well as a substantial part of the expense involved in a fertility program which the parties undertook. He found that she was engaged in part time employment during the period of cohabitation and since for other than a period of twelve months following the birth of each child.
His Honour found that in 1993 the wife provided a large part of her savings for the purpose of satisfying an insurance claim against the husband.
His Honour found that the wife made a contribution in relation to the work involved in renovating the matrimonial home at Suburb D and the Queensland property. He also found that she made a substantial contribution to the welfare of the family in the role of home maker and parent and that she provided most of the substantial care and supervision of the two children, as well as what he called the “full range of domestic work.”
He found that subsequent to the separation the wife’s contribution as home maker and parent was increased in that a necessary consequence of the two children residing with her was a greater application by her towards their care and supervision and that it increased at times in order to meet the husband’s short notice of change of arrangements for contact. His Honour said that it also had the consequence of the wife having to forego certain employment shifts with the result of loss in income that she would have otherwise have gained.
His Honour found that the wife was required to give special attention at times to the child Y due to an injury that the child suffered as well as contracting pneumonia. Finally, his Honour found that after separation the wife provided financial support of the two children.
His Honour then proceeded to deal with the contributions by the husband. He firstly made findings in relation to the assets the husband had at the commencement of cohabitation. In relation to the Suburb D home he said that in the absence of evidence of market value of the home at the commencement of cohabitation or the precise amount outstanding in relation to the mortgage secured on the title, he inferred that the husband’s equity in the home was no less than $48,000. At the trial it was agreed that the equity was about $80,000. In relation to the Queensland property his Honour found that in the absence of evidence of the market value of the husband’s half interest in the property and the amount outstanding pursuant to the finance facility, there was no evidence from which he could infer that the husband had equity in the property, let alone the precise or estimated value thereof.
His Honour found that the husband made financial contributions by the application of income earned by him from full-time employment with B Company through the period of cohabitation and that his income was applied towards meeting living expenses and liabilities. His Honour found that in 1998 the husband accepted a redundancy package and made a financial contribution by the application of the amounts received.
His Honour found that the husband made an indirect financial contribution by the performance of physical work in relation to renovations undertaken to the Suburb D home and that he performed substantial manual work.
The trial Judge found that the husband also made a contribution of the welfare of the family in the capacity of home maker and parent in the care and supervision of the two children, but to a limited degree compared to the contribution of the wife.
His Honour found that subsequent to separation the husband continued to make a contribution as home maker and parent in accordance with the consent parenting orders, although the husband had not exercised holiday contact and had been unreliable at times in respect of other contacts and at certain times the contact periods were shorter than provided for by the orders. His Honour concluded that the husband had provided child support since separation.
His Honour then proceeded to make an assessment of the parties’ contributions and he assessed the contribution based entitlements of each party as to 65% in favour of the husband and 35% in favour of the wife. His Honour said:-
“61. The husband’s financial contributions combined with his limited contribution as home‑maker and parent in totality well exceed the combined contributions of the wife.
62. I have assessed the parties’ contributions on a global rather than on an asset by asset basis as submitted by counsel for the wife. His submission in that regard rested upon the husband’s interest in the Queensland property. However, I found that there was an absence of evidence of the value of the husband’s equity, if any, at the commencement of cohabitation.
63. Accordingly, I consider it appropriate to apply the global approach in accordance with the High Court’s judgment in Norbis v Norbis [(1986) FLC 91-712].
64. The husband’s financial contributions were greater compared to those of the wife. His initial contributions included the equity in the former matrimonial home. It provided additional income for a limited period and the parties were able to live in the former matrimonial home with their two children throughout the period of cohabitation of about 8 ¼ years. In addition, the husband performed greater manual work in the renovations to the former matrimonial home than did the wife.
65. The husband’s redundancy package totalling about $193,000 subject to tax, received about three or four years prior to separation was significant particularly as it was applied to discharge the mortgage over the former matrimonial home and meet other debts.
66. The husband worked throughout cohabitation and since applying his income to meet living expenses and liabilities.
67. The wife’s financial contributions were significant but much less than that of the husband.
68. The wife’s initial contributions represented principally by her savings of $12,500 were used to discharge a liability of the husband. The wife worked hard in her employment and at times held two part-time positions. Her income was applied to also meeting the parties’ living expenses and certain liabilities.
69. The wife has made the primary contribution in the role of home-maker and parent to a far greater degree compared to that of the husband. This has increased since the parties separated as he has not availed himself at times of the contact provided in the consent orders. That contribution of the wife has lessened the primary financial contributions of the husband to which I have referred, but not sufficient in my assessment to create equality.”
His Honour then proceeded to deal with the relevant ‘other factors’, including the matters in s75(2) of the Family Law Act. He found that each party was in good health in the absence of evidence to the contrary.
His Honour found that the wife’s income amounts to approximately $940 per week gross, principally made up of her gross wage of about $500 per week, child support of $274 per week and social security payments of $110 per week. He found that she has the capacity to earn income in her present part time position in the travel industry in which she is very experienced. However, he found that her opportunity for greater employment is limited by the need to care for the two young children and the inability to take advantage of some shift work due to the husband’s unreliability in exercising contact. His Honour found that, as a result, the wife does not have the capacity for greater hours of employment as in the past when she had a second part time position.
In relation to the husband, his Honour found that his income is approximately $94,000 per annum gross which takes into account income increment due to travel. His Honour was satisfied that the husband’s current capacity to earn income is as a professional employed by B Company and that he has the capacity to continue to earn income in this position and has the potential to earn income by letting out part of the former matrimonial home as he has done in the past.
His Honour found that the wife has the daily care and control of the two children of the marriage subject to contact by the husband.
His Honour found that each party has superannuation entitlements which he described as modest.
His Honour found that the parties enjoyed a good standard of living during the period of cohabitation and that the husband has been able to maintain such standard of living while living in the matrimonial home whereas the wife and the two children have lived in rented accommodation with less facilities.
His Honour found that the husband has paid child support in the sum of $274 per week and would be liable to continue to meet child support assessments.
His Honour dealt with certain hobbies of the husband and found that the expenditure of money on such activities was not wasteful, extravagant or reckless.
His Honour then found that there should be an adjustment in favour of the wife of 25% to reflect the relevant matters pursuant to s 75(2) because of a number of matters. His Honour said:-
“89. The husband’s income and capacity to earn income, as well as property vastly exceeds that of the wife. His income is $94,000 per annum gross and the husband has the potential to earn income from letting part of the former matrimonial home as he has done in the past. He is employed full‑time and his capacity to earn income is not inhibited by the care of the two children of the marriage.
90. The wife’s income from her part-time employment is $26,000 per annum gross. The child support is $274 per week and all sources of income are utilised in meeting all living expenses and liabilities. Her capacity to earn income is restricted by the need to provide daily care and supervision of the two young children of the marriage and is likely to continue for the foreseeable future.
91. The wife has the responsibility to provide for the care of those children on a daily basis. The husband has the exclusive occupancy of the former matrimonial home. The wife has lived in rented premises with the two children of the marriage. It is reasonable, having regard to the parties' past lifestyle prior to separation, that the wife seek to acquire alternative accommodation for herself and the two children of the marriage.
92. I consider that 60 per cent of the parties' net property is just and equitable, having regard to my findings in respect of contributions and relevant s75(2) matters and the practical effect of orders being made which reflect such alteration of property interests.
93. Each of the parties will retain all items of personalty and notional assets. The husband will have the opportunity to retain his real estate interests although with a significant increased debt in order to meet the lump sum of $334,244, which he will have to pay to the wife. He is earning $94,000 per annum gross without significant liabilities. I will provide him with a period of 3 months within which to raise finance. He will be able to satisfy payment in part by discharge of the outstanding loan in respect of [Motor Vehicle 1] used by the wife and the two children which will be transferred to her.”
His Honour then proceeded to deal with the wife’s application for spousal maintenance.
Grounds of appeal
There are seven grounds of appeal in the amended Notice of Appeal. However, Grounds 2 to 7 were abandoned and only ground 1 in the amended Notice of Appeal was pursued. At the commencement of the hearing leave was granted to add two further grounds of appeal so the grounds now argued are:
“1. That the trial judge erred in the exercise of his discretion by giving too little weight to the preponderance of relevant contribution made the Husband.
2. The trial judge erred in the exercise of his discretion by giving too much weight to s75(2) factors favouring the Wife.
3. His Honour the trial judge’s determination was manifestly unjust.”
Applicable law
This is an appeal against a discretionary judgment. Section 79 grants to the trial Judge a very wide discretion: see, generally, De Winter and De Winter (1979) FLC 90-605 at 78,092 per Gibbs J; Mallet v Mallet (1984) FLC 91-507 at 79,110; (1984) 156 CLR 605 at 608; Norbis v Norbis (1986) FLC 91-712; (1986) 161 CLR 513. That being so, the limited nature of the appeal process must be recognised, as the numerous authorities in relation to the appellate review of discretionary orders demonstrate: see, for example, House v The King (1936) 55 CLR 499 at 505; Lovell v Lovell (1950) 81 CLR 513 at 519; Gronow v Gronow (1979) FLC 90-716; (1979) 144 CLR 513 and Mallet (supra) at 79,111 and 79,119.
Unless there has been:
·an error in approach or principle,
·the failure to take into account relevant circumstances,
·the taking into account of irrelevant circumstances,
·the making of findings of fact unsupported by the evidence,
the challenge must be that the orders fell outside a reasonable exercise of discretion, that is, that the orders were “unreasonable or plainly unjust”.
In its widest formulation the discretion and its immunity from challenge was described by Brennan J. in Norbis v Norbis (supra) at 75,178; CLR 540. His Honour said as follows:
“… Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v Satterthwaite (1948) 1 All E.R. 343 at p. 345 Asquith L.J. stated the rationale of an appellate court’s approach:
‘…It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.’
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.”
It is within this context that we now turn to consider the present appeal.
Ground 1
On behalf of the husband it was submitted that an appropriate range of the husband’s contribution based entitlement expressed as a percentage of the net property of the parties would not start at less than 70% and could reasonably be found to have been at least 80%.
In support of this submission the husband relied upon the contributions made by him of the assets he had at the commencement of cohabitation, his greater earnings from paid employment and his physical participation in the renovations to the Suburb D property and the Suburb G property.
As to the assets he had at the commencement of cohabitation he relied upon his ownership of C Street, Suburb D with an equity of $80,000 and the redundancy package he received in 1998 from B Company.
The value of the Suburb D property at the time of the trial was $490,000 against a total asset pool of $621,587 which included the husband’s interest in F Street, Suburb G. The interest in the Suburb G property was $47,500 at the time of the trial although it was conceded that there was no evidence that the husband had any equity in the property at the commencement of cohabitation and the mortgage instalments were met during cohabitation until it was paid out in May 1999.
As to the redundancy package, the husband joined B Company in 1981 and it was submitted that his entitlement had arisen as a consequence of just over seventeen years employment of which only about four and a half years related to the cohabitation of the parties. A significant portion of that package was used to discharge the mortgage over the Suburb D property.
It was submitted that by contrast the wife’s initial contributions consisted of a motor vehicle, which she sold in 1994 for $8,500 and savings of $12,500.
As well, the husband’s earnings from paid employment were significantly greater than the earnings of the wife. It was submitted that the husband’s gross income was at least on a gross basis more than twice that of the wife. It was also submitted that the husband’s contributions in respect to the property renovations substantially exceeded those of the wife.
However, it was conceded on behalf of the husband that the wife made a greater contribution as homemaker and parent both during cohabitation and since separation although the husband has paid “quite generous” child support.
In our view, it is clear from the passages of the judgment we have set out above that his Honour dealt with all of the matters relied upon and made appropriate findings that were favourable to the husband. His Honour found that the husband’s financial contributions were greater than those of the wife and in this context he identified the initial contributions, the redundancy package and the income from employment. As well, the trial Judge found that the husband performed greater manual work in the renovations.
It was not submitted that the trial Judge made an error in approach or principle, or failed to take into account relevant circumstances or took into account irrelevant circumstances. It was also not contended that the trial Judge made findings of fact unsupported by the evidence. It was simply contended that he gave too little weight to the contributions by the husband.
The observations of the Full Court as to the impact of greater initial financial contributions in Pierce v Pierce (1999) FLC 92-844 appear to be apposite. The Full Court said at 85,881:
“[28] In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weight the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”
His Honour found that the net property of the parties had a value of $621,587.18. The outcome of his Honour’s finding as to the contribution based entitlements of the parties was that the husband had an entitlement of $404,031.66 and the wife $217,555 being a disparity of $186,476. The husband did make a significant financial contribution from the assets he had at the commencement of the relationship. The equity in Suburb D was $80,000 and in 1998 the husband received $87,003.96 gross for long service leave, holiday and redundancy pay together with $106,145.19 net for superannuation. However, his Honour was not conducting an accounting or mathematical exercise whereby, for example, the value of what was contributed was simply taken as a percentage of the current net value of the assets. The reasons for this are evident. The parties cohabited for four and a half years of the husband’s seventeen year employment with B Company. Consideration also has to be given to the other contributions and in this case the B Company home now has a value of $490,000 but it was renovated during the cohabitation and as well both parties made other significant contributions. Importantly, it is not disputed, that the wife made significant contributions including as homemaker and parent both during the relationship and since the separation.
In the result, we are of the view that his Honour did attach appropriate weight to the relevant contributions and no error by his Honour has been demonstrated.
Grounds 2 and 3
In relation to ground 2 on behalf of the husband it was submitted that the adjustment of 25% was well outside the range of a reasonable exercise of discretion and that a realistic range would “end absolutely at 20%”.
It is quite clear that the trial Judge identified all relevant matters in s 75(2) of the Act and it is not contended otherwise. However, submissions were made in relation to his Honour’s treatment of some of the matters.
As to the disparity in income it was submitted that we ought not simply compare the amount of $94,000 gross per annum the husband received with the amount of $26,000 per annum the wife received from part-time employment. We were provided with a schedule that disclosed that the husband’s available income was $966 per week when allowance was made for the payment of tax, child support and the credit union loan repayments in respect of the wife’s car. The wife’s income was said to be $820 net after allowance for child support and social security. Thus it was contended that the difference in available income whilst real is not remarkable or a factor of great magnitude. The disparity in the net amounts currently enjoyed by each party is not as great as the gross amounts may suggest.
We accept that it is permissible and appropriate to take into account the pension received by the wife when considering the matters in s 75(2) in proceedings under s 79. However, the receipt of child support has to be tempered by the obvious greater expenses that have to be borne by the wife in supporting the children. What also is important is that it was not contended that his Honour was in error in finding that there was a significant disparity in the amount of income that each party received from paid employment and that the wife’s capacity to earn income was restricted by the need to provide daily care and supervision for the children and that this responsibility was likely to continue for the foreseeable future.
Section 75(2)(b) requires the Court to take into account the income of each of the parties and the “…capacity for appropriate gainful employment.” No submissions were made in relation to the capacity of each party for employment. We are therefore of the view that no error has been demonstrated in relation to what his Honour said about these matters.
The next matter relied upon was that the wife had, and presumably will have for the rest of the infancy of the children, the principal responsibility for their care although, of course, the husband has an entitlement to contact. It was conceded that there have been occasions when the husband has not had contact but it was submitted that he will have considerable contact during the years to come thereby relieving the wife of the burden of their care. In our view his Honour took this matter into account when he said:
“78. The wife has the daily care and control of the two children of the marriage, aged 3 and 2 years respectively, subject to contact exercised by the husband in accordance with the consent orders.”
Again, in our view no error has been established.
It was then submitted that the only factors of significance identified by the trial Judge were the higher income of the husband and the wife’s “significantly greater likely care of the children during their infancy.” However, in our view, when the judgment is read as a whole it is quite clear that these were not the only matters which his Honour took into account (paragraphs 72 to 87). In our view, the significant s 75(2) matters that his Honour took into account were
·the greater income of the husband,
·his greater earning capacity,
·his greater property interests as a result of his Honour’s finding as to the contribution based entitlements of the parties,
·the wife’s responsibility for the care of the children on a daily basis and
·that it was reasonable that the wife acquire alternative accommodation for herself and the two children.
It is not contended that there are other relevant matters which his Honour should have taken into account but failed to do so.
As to ground 3, the submissions in relation to grounds 1 and 2 are simply repeated with the exception that it is contended that it is instructive to note that the outcome of what his Honour ordered is that the wife will receive a settlement which has a value of $124,000 greater than that of the husband.
His Honour made an adjustment of 25% to the contribution based entitlement of the wife with the result that she received an entitlement of 60% of the net property of the parties and the husband received 40%. This had the outcome that the wife received $372,952.30 of the net property of the parties and the husband received $248,634.87.
We are extremely conscious of the limits on appellate interference with discretionary judgments, especially in circumstances such as the present where the challenge to the trial Judge’s decision is essentially based on matters of weight. The issue in this case is whether nevertheless we consider that the 25% adjustment on account of the s 75(2) matters (and thus the final award made) fell outside the “generous ambit within which reasonable disagreement is possible”, and thus was “plainly wrong”.
When consideration is given to all the relevant s 75(2) matters outlined above together with the payment by the husband of a reasonable level of child support we do not consider that these matters could justify a result whereby the wife received $124,317.43 more than the husband out of a pool of approximately $621,587.18. Such a result could not, in our view, fall within the ambit of a just and equitable result, and it must therefore call for our intervention. In this case the trial Judge’s outcome might well have been an appropriate one were it not for the husband’s substantial contributions. These ought ultimately to have influenced his Honour to a result closer to an equal division than the result arrived at that saw the wife receive 1.5 times as much of the modest pool of assets as did the husband.
Re-exercise of the discretion
We understood it to be common ground that in the event that we upheld the appeal that we should re-exercise the discretion ourselves. This we are prepared to do. In so doing we need only say that in the circumstances of this case, given the unchallenged findings of his Honour as to the s 75(2) matters, we consider that an appropriate adjustment in the wife’s favour on account of those matters would be 20%. Such an adjustment would result in a division of the total net value of the parties’ property in the proportions of 55% - 45% in the wife’s favour. We are conscious that this adjustment expressed in percentage terms is a modest one. The comparatively small percentage adjustment may raise concerns about whether we can properly be persuaded that the “generous ambit” of discretion has been exceeded. However when expressed in terms of outcome the disparity between the parties’ capital positions is narrowed by more than $60,000. We see this as more than merely tinkering with the result.
There was, as we have earlier made clear, no challenge to his Honour’s determination of the value of the parties’ property. Further we do not accept that his Honour was in error in relation to the contribution based entitlements of the parties. Thus there is no need for us to interfere with his Honour’s conclusions about these matters.
On a 55%-45% division of such property, the wife will be entitled to property to the value $341,872.94 and the husband will be entitled to property to the value of $279,714.23 being a disparity of $62,158.71.
The wife will receive the following:-
·Costs paid $ 14,949.00
·Controlled moneys account $ 9,792.00
·B Company finance $ 100.00
·Shares $ 16,425.00
·Motor Vehicle 1 $ 19,000.00
·Furniture $ 2,000.00
·Superannuation $ 17,683.00
·Payment by husband $292,093.94
Total $372,042.94
Less
·Credit card $ 70.00
·Debt to Ms K $ 2,900.00
·B Company finance debt $ 24,000.00
·L Finance debt $ 2,200.00
·Debt to Mr M $ 1,000.00
Total ($ 30,170.00)
Balance $341,872.94
The husband has already paid $250,000 and to achieve such a division will require a payment by the husband to the wife of a further $42,093.94 (being $292,093.94 less $250,000). In the event that the appeal was unsuccessful the wife sought that the stay order be discharged and that the husband pay the balance within 28 days together with interest at the rate prescribed by the rules from 21 October 2003 to the date of the judgment of this court. The appeal has succeeded although the husband is still required to pay a further amount to the wife. We agree with what is proposed on behalf of the wife and will make orders accordingly.
Costs of the appeal
At the conclusion of the hearing of the appeal we received submissions on behalf of both parties in relation to the costs of the appeal. In light of those submissions and given that the appeal has succeeded, we consider it appropriate that the appellant and the respondent receive certificates under s 9 and s 6 of the Federal Proceedings (Costs) Act 1981 (Cth).
Warnick J:
I have had the advantage of reading the reasons of the majority. I disagree with their Honours' ultimate conclusion that the adjustment for section 75(2) matters was plainly wrong. I do so even having regard to "the husband's substantial contributions", the assessment of which by the trial Judge was not considered by the majority to be wrong, at least in the appellate sense.
In a case in which the two children of the marriage were aged 3 and a half years and 2 years at trial, were in the primary care of the wife, with palpably disadvantageous effect on her earning capacity and there was a significant disparity in both the earnings capacities and incomes of the wife and the husband, I do not consider that, in all the circumstances of the case, $60,000.00 more than what is considered by an appellate judge or judges a just and equitable result, indicates that the trial Judge's order was plainly wrong.
I would dismiss the appeal.
Orders
The appeal be allowed.
On the basis that the husband has paid $250,000 to the wife in compliance with order 1 made on 21 July 2003 the husband pay to the wife a further amount of $42,093.94 within 28 days of the date of this order.
In addition to the amount is paragraph 2 hereof the husband pay to the wife interest on the amount of $42,093.94 in accordance with the Family Law Rules as from 21 October 2003.
The Court grants to the Appellant Husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 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 Husband in respect of the costs incurred by the Appellant Husband in relation to the appeal.
The Court grants to the Respondent Wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 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 Wife in respect of the costs incurred by the Respondent Wife in relation to the appeal.
I certify that the 75 preceding
Paragraphs are a true copy of the reasons for judgment delivered by this
Sgnd:
Associate
Key Legal Topics
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Family Law
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Appeal
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Remedies
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