MUIR & ROYSTON - [2010] FamCA 374

FAMILY COURT OF AUSTRALIA

MUIR & ROYSTON

[2010] FamCA 374

FAMILY LAW - PROPERTY – Contribution – Global approach or asset by asset – Modified asset by asset approach – Grouping of net assets into three categories having regard to the discrete sources of assets – Section 75(2) factors – Just and equitable considerations – Net assets overall 55% to husband and 45% to wife

Family Law Act 1975 (Cth) ss 79, 75(2)

Billington & Billington (No 3) [2007] FamCA 1465
Campbell v Kusky (1998) FLC 92-795
Coghlan & Coghlan (2005) FLC 93-220
Dawes & Dawes (1990) FLC 92-108
Farmer and Bramley (2000) FLC 93-060
Ferraro and Ferraro (1993) FLC 92-335
Figgins and Figgins (2002) FLC 93-122
Gorton v Federal Commissioner of Taxation (1965) 113 CLR 604
Gosper and Gosper (1987) FLC 91-818
Kessey and Kessey (1994) FLC 92-495
Lee Steere and Lee Steere (1985) FLC 91-626
L and L (unreported) Appeal No EA47 of 2004
Mallet v Mallet (1984) FLC 91-507
Norbis & Norbis (1986) FLC 91-712
Omacini & Omacini (2005) FLC 93-218
Pellegrino and Pellegrino (1997) FLC 92-789
Phillips and Phillips (2002) FLC 93-104
Pierce and Pierce (1999) FLC 92-844
Rosati & Rosati (1998) FLC 92-804

APPLICANT:

Mr Muir

RESPONDENT:

Ms Royston

FILE NUMBER:

SYC

2780

2009

DATE DELIVERED:

19 March 2010

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Sydney and Brisbane

JUDGMENT OF:

O'Reilly J

HEARING DATE:

6-9 September and 14 October 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Kearney

SOLICITOR FOR THE APPLICANT:

Newnhams Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Foster

SOLICITOR FOR THE RESPONDENT:

Watts McCray Lawyers

Order

Pursuant to s79 of the Family Law Act 1975 (Cth) the property and assets of the parties or either of them be divided in accordance with the following order so as to provide 55% to the husband and 45% to the wife:

The husband have:
(a)the property, assets and liabilities described in the reasons for judgment as category 1, valued at $2,484,579;
(b)NAB account, valued at $139;
(c)AMP whole of life policy, valued at $150,199;
(d)2001 Toyota Avalon motor vehicle, valued at $17,800;
(e)interest in DDT, valued at $1,000;
(f)loan account Muir Family Trust, valued at $38,919;
(g)computer IT equipment, valued at $500;
(h)rental bond, valued at $4,200;
(i)add back: paid fees and disbursements, valued at $109,324;
(j)his member’s account Muir Superannuation Fund, valued at $821,359.
Total value:              $3,628,019
and be solely responsible for the following other liabilities:
(k)NAB overdraft, valued at $10,044;
(l)CBA Mastercard, valued at $11,699;
(m)NAB Mastercard, valued at $166;
(n)tax 30 June 2009 year – marital, valued at $29,735;
(o)tax accrued to 31 July 2009 and unpaid – marital, valued at $4,000.
Total other liabilities:      $55,644
Total net value:       $3,572,375.
The wife have:
(a)the property, assets and liabilities described in the reasons for judgment as category 2, valued at $43,748;
(b)The property at M, free of encumbrances, valued at $2,200,000
(c)Citroen motor vehicle, valued at $27,500;
(d)CBA bank accounts … 3079 and … 6702, valued at $70,107

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.

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Details

AGLC: MUIR & ROYSTON [2010] FamCA 374
Case: [2010] FamCA 374
Decision Date: 19 March 2010

CaseChat Overview and Summary

This decision concerns the application of principles regarding financial contributions to a marriage, specifically where gifts originate from the family of one spouse. The court was tasked with determining how such contributions should be characterised for the purposes of property settlement.

The central legal issue was to ascertain the circumstances under which a financial contribution made by the parents of one spouse should be treated as a contribution solely by that spouse, or as an equal contribution by both spouses. This involved interpreting and applying a specific passage from the judgment in *Gosper*, often referred to as "the qualifying paragraph," which allows for a departure from the general rule that such gifts are attributed to the spouse from whose family they originate.

The court considered the established legal principle that advances from a party's family are generally treated as contributions made by or on behalf of that party. However, it acknowledged a qualification to this rule, as articulated in *Gosper*, where evidence demonstrates that the donor intended to benefit both spouses. In such situations, the court may determine that the contribution should be treated equally between the parties. The court noted the common scenario where parents provide financial assistance to their married children, often with the implicit or explicit intention of benefiting both members of the couple, and that the nature of such gifts, like the provision of a home, can inherently benefit both spouses. The court also observed that parents may not always specifically consider the intention to benefit one spouse over the other, being content to benefit both.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

In Pellegrino and Pellegrino (1997) FLC 92-789, Chisholm J at 84,727 referred to the difficulty in applying “the qualifying paragraph” in Gosper (the paragraph commencing “In other cases …” set out above):My task is to apply the law as formulated in the decisions to which I have referred. The critical question, I think, is whether this case falls within the following paragraph of Fogarty J’s judgment, already quoted:-“In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.”For convenience, in the following discussion I will refer to this paragraph as “the qualifying paragraph”. The issue is, when does this qualifying paragraph apply? In what sort of circumstances does the evidence not justify the conclusion that the contribution was made on behalf of the spouse? This is an important issue, because parents often provide financial assistance to their married children. Often, perhaps usually, they do this in a way that benefits their child and their son or daughter in law. Often there is no specific evidence of their intention at the time. I think I can take judicial notice of the fact that frequently parents make such provision in a way that does not involve them formulating or specifically considering whether they intend to benefit their own child or both parties. They are happy to benefit both parties. The gift, as vividly illustrated by the provision of a home in this case, might inherently benefit both. Also, they will realise that their own child’s happiness is bound up with that of their son or daughter in law, so that benefiting one will benefit the other indirectly. They may also have in mind other benefits associated with an extended family, being involved with grandchildren, and enriching the complex web of obligations and attachments that characterise extended families.;and then at 84,728 said:I return to the question whether this case falls within that I have called the “qualifying paragraph” of the judgment by Fogarty J in Gosper, quoted earlier. My reading of the authorities is that in such cases it is normally appropriate to treat the provision as a contribution made by or on behalf of the spouse whose parents made it. I am not sure precisely what cases fall within the qualifying paragraph. An example might be, perhaps, where the parents’ gift is in recognition for some service made to them jointly by the parties. …(bold emphasis added) In L and L (unreported) Appeal No EA47 of 2004, 5 November 2004, the Full Court said at par 31:The correct approach to gifts coming from the family of one of the parties appears to be settled in law. In Gosper and Gosper (1987) FLC 91-818 Fogarty J concluded that such an advance ought generally be treated as being a contribution made by or on behalf of the party from whose family it came. His Honour added a rider that if there was evidence that the donor intended to benefit both spouses, such a conclusion may not be justified. In such circumstances the court may determine that it should be treated as an equal contribution by both parties to the marriage. See also Balnaves v Balnaves (1988) FLC 91-952; 12 Fam LR 488, and Kessey and Kessey (1994) FLC 92-495; 18 Fam LR 149. In Pellegrino v Pellegrino (1997) FLC 92-789; 22 Fam LR 474, Chisholm J when considering Gosper spoke of the qualification to the general proposition expounded by Fogarty J as “the qualifying paragraph. …(original italics, bold emphasis added)

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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