Norman & Norman
[2010] FamCAFC 66
•1 April 2010
FAMILY COURT OF AUSTRALIA
| NORMAN & NORMAN | [2010] FamCAFC 66 |
| FAMILY LAW - APPEAL – FROM A DECISION OF A FAMILY COURT JUDGE – PROPERTY – Wife appealed challenging the discretion exercised by the trial Judge in assessing initial contributions, the adjustment made for matters under s 79(4) and the overall justice of the orders – Elucidation of principles applicable to appeals from discretionary judgments – Appellant contended the initial contributions of the husband ought be ‘offset’ by the wife’s significant contributions throughout the relationship – Not a matter of offsetting or erosion but weight and balance of all contributions – Consideration of the overall justice and equity of the orders and the nature of the ‘fourth step’ – No merit in the grounds of appeal – Appeal dismissed FAMILY LAW - COSTS – orders for the receipt of written submissions |
| Family Law Act 1975 (Cth) Family Law Legislation Amendment (Superannuation) Act 2001 |
| Cabbell and Cabbell [2009] FamCAFC 205 CDJ v VAJ (1998) 197 CLR 172 Clauson and Clauson (1995) FLC 92-595 Coulton v Holcombe (1986) 162 CLR 1 Dowling and Molloy [2007] FamCA 68 G & G [2004] FamCA 1179 Gronow v Gronow (1979) 144 CLR 513 Harrington and Harrington (2007) FLC 93-317 Hickey& Hickey (2003) FLC 93-143 House v King (1936) 55 CLR 499 Mallet v Mallet (1984) 156 CLR 605 Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 Mims & Green & Green (2008) FLC 93-359 N and N (unreported, Family Court of Australia, Fogarty, Lindenmayer, McCall JJ, 10 June 1992) Napthali and Natpthali (1989) FLC 92-021 Norbis v Norbis (1986) 161 CLR 513 Pierce & Pierce (1999) FLC 92-844 Shaw and Shaw (1989) FLC 92-010 Woollams and Woollams (2004) FLC 93-195 |
| APPELLANT: | Ms Norman |
| RESPONDENT: | Mr Norman |
| FILE NUMBER: | CSC | 985 | of | 2007 |
| APPEAL NUMBER: | NA | 35 | of | 2009 |
| DATE DELIVERED: | 1 April 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Finn, May, Murphy JJ |
| HEARING DATE: | 19 November 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 March 2009 |
| LOWER COURT MNC: | [2009] FamCA 239 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr George with Mr Pieterse |
| SOLICITOR FOR THE APPELLANT: | Bruce Kay Gillan Solicitor |
| COUNSEL FOR THE RESPONDENT: | Mr Westbrook |
| SOLICITOR FOR THE RESPONDENT: | Williams Graham Carman Solicitors |
Orders
That the appeal be dismissed.
That each party file and serve within 21 days the orders sought, if any, in respect of the costs of the appeal and submissions in writing in support of same.
That any reply by either party to the submissions referred to in paragraph 2 of these orders be filed and served within 14 days after service of the submissions.
IT IS NOTED that publication of this judgment under the pseudonym Norman and Norman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA35 of 2009
File Number: CSC985/2007
| Ms Norman |
Appellant
And
| Mr Norman |
Respondent
REASONS FOR JUDGMENT
On 25 March 2009 Watts J made orders effecting a settlement of property between the appellant and respondent whose relationship had ceased after 15 years of cohabitation. That cohabitation ended in 2005, some four years prior to the trial before his Honour.
The orders made by His Honour reflected an overall assessment that the “property of the parties or either of them” (valued at approximately $1.5 million) should be divided 60 percent to the husband and 40 percent to the wife. The wife appeals the orders made by Watts J effecting that division.
Leave was granted at the hearing of this appeal for the wife to substitute three amended grounds in lieu of the grounds of appeal set out in her Notice of Appeal filed 16 April 2009.
The grounds essentially challenge the exercise of discretion by the trial Judge in considering and weighing the significance of initial contributions, the adjustment to be made for the matters enumerated in s 79(4)(d) to (g) of the Family Law Act 1975 (Cth) (“the Act”) and the overall justice and equity of the orders.
Grounds founded in terms similar to those in this appeal are frequently found in Notices of Appeal in this court. The Act prescribes a number of matters for mandatory consideration in the exercise of a judicial discretion. The discretion is “very wide” (per Gibbs CJ in Mallet v Mallet (1984) 156 CLR 605 at 608). Reasonable judicial minds can vary without attendant error because:
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 … (per Brennan J, Norbis v Norbis (1986) 161 CLR 513 at 540).
As a result, as will emerge from the discussion of applicable principles below, appeals to this court challenging the weight attached by a trial Judge to s 79’s component factors, or to the ultimate result arrived at, confront, as a matter of law, a considerable hurdle.
This court said recently in Mims & Green & Green (2008) FLC 93-359 (in an appeal also involving an attack on the weight attached by the trial Judge to initial contributions):
As Brennan J explained in Norbis (supra), the “range” in this case was reasonably wide. Others may have reached a conclusion more favourable to the husband than did the trial Judge. Others may have been less generously disposed. This does not mean that the trial Judge was in error. Nothing to which we have been referred persuades us that the trial Judge failed to either properly assess the husband’s initial contribution or to give him appropriate credit for it. Her Honour’s conclusion was “within the range” (at [119]).
And, as was said by Wilson J twenty-five years ago in Mallet v Mallet (1984) 156 CLR 605 at 634
… an appellate court is not entitled to substitute its own decision for that which is the subject of appeal merely because it prefers a different result or even merely because it thinks that a different result would be more just and equitable.
We are ultimately of the opinion that the appeal in this case must fail. Our reasons follow.
Factual Background
The trial Judge set out a chronology of events at paragraphs 19-55 of his Honour’s ex tempore reasons for judgment. Save in one minor respect to which reference will later be made, none of the findings there made are challenged on this appeal. The facts necessary to elucidate the grounds of appeal and our reasoning can be shortly stated.
At the commencement of cohabitation the husband owned three properties; two pieces of property on N Street and one on E Road in Northern Queensland. Prior to cohabitation the husband had suffered an injury as a result of a work accident for which he received a compensation payment some two years after the parties commenced living together.
Each party entered the relationship with savings in personal bank accounts, the husband having a larger bank balance than the wife. The wife also brought in household chattels of some significant value.
In 1992 the parties jointly purchased a property at H Street Northern Queensland which became the first matrimonial home. In early 1996, six years into the period of cohabitation, the husband accepted a redundancy package from his employee. Later that same year the husband became unwell and was unable to work for the remaining five months of the year.
In October 1996, the husband inherited a property at P Street from his mother and the parties purchased a property on I Road, Northern Queensland. The inherited property became the matrimonial home in early 1997 after the parties sold the H Street residence. The sale proceeds from H Street were used to pay off the mortgage on the I Road property which was used as an investment rental property.
The two N Street properties and the E Road property were sold some 10 or more years in to the cohabitation. The monies from these sales were put towards sharemarket investments.
From 1997, the husband undertook some part time work before returning to full time employment in 2002. The wife worked part time from 2000, commencing full time self-employment in retail business post separation. The parties have two children, A (born in 1993) and B (born in 1995) who have each lived with the wife since separation.
The Grounds of Appeal (as amended)
The grounds of appeal as ultimately relied upon are as follows:
1.That in finding “the contributions that the parties have made to the overall assets on the balance sheet as being a 65 percent contribution made by the husband and a 35 percent contribution made by the wife” the learned Trial Judge erred in that he:
a) Failed to have regard to the effect of the off-setting contributions made by the wife when considering the proportionality of the husband’s original contribution: and
b) Failed to find that it was inappropriate to include within the “balance sheet” the full equity of the wife in the home acquired by her subsequent to the parties’ separation: and
c) Failed to attach sufficient (or any) weight to the original contributions made by the wife.
2.That in finding “an appropriate adjustment to be made in the wife’s favour would be 5 per cent” by reference to s. 79(4)(d) to (g) the learned Trial Judge erred in that he failed to attach sufficient (or any) weight to:
a) The significant disparity in the parties income: and
b) The fact that the orders ultimately made would have the effect of making that disparity even more significant: and
c) The financial (and other) consequence to the wife of being the primary carer for the children in the long period between separation and trial and for the foreseeable future: and
d) The fact that the husband did not (directly) pay child support during the period from separation until May 2008 thus freeing his income for (inter alia) additional deposits to his superannuation fund.
3.That the learned Trial Judge erred by his failure to consider whether the orders made “adjusting the property, assets and liabilities of the parties is just and equitable”.
Applicable Legal Principles
The principles to be applied in dealing with an appeal from a discretionary judgment are well settled, of long standing and familiar. They were well summarised by Warnick J in G & G [2004] FamCA 1179. We respectfully adopt this summary by his Honour.
Warnick J said:
82.…Revisiting those statements, one is struck by the regularity with which the width of discretion of the trial court and the caution that the appeal court should exercise, are stressed. This is demonstrated by adding emphasis within some of the often quoted statements of principle. In Bellenden (formerly Satterthwaite v Satterthwaite) (1948) 1 All ER 343 at 345, Asquith LJ stated the rationale of an appellate court’s approach:
“…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.” (emphasis added)
83.In Norbis v Norbis (1986) 161 CLR 513; (1986) FLC 91‑712 at 75,178 Brennan J stated:
“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.” (emphasis added)
84.Kitto J in Australian Coal & Shale Employees Federation v. The Commonwealth (1953) 94 CLR 621 at 627 said:
“…there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.”
85.In Gronow & Gronow (1979) 144 CLR 513 at 520, Stephen J said:
“…an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight.”
86.Finally, in CDJ & VAJ (1998) 197 CLR 172 at 231, touching upon the features applicable to the exercise of discretion in the Family Court, Kirby J said:
“1.…The reference to “plainly wrong” is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.
2.Such reasons for appellate restraint…have particular relevance to appeals within, and from, the Family Court of Australia. This is because of the functions and purposes of that Court and the difficulty and evaluative decisions which it often has to make. The peculiar nature of decisions relating to the intensely personal questions of the division of the property of parties to a failed marriage and the welfare of their children makes it essential that those who decide appeals respect the onerous responsibilities of those whose decisions they review. They need to recognise that it is of the very nature of such decisions, including those relating to the residence of children, that any two decision-makers may, with complete integrity and upon the same material, often come to differing conclusions.” (emphasis added)
[emphasis markings as appearing in Warnick J’s judgment]
Grounds of Appeal
Grounds 1((a) and (c)
Grounds 1(a) and (c) can conveniently be dealt with together; each attack the overall findings made in respect of the parties’ contributions and the “original contributions” (as they were called in the appellant’s submissions) made within it.
The trial Judge’s ex tempore reasons set out at some length the contributions made by the wife. His honour did so, in our view, plainly conscious of the need to weigh contributions of all types by each of the parties. His Honour relevantly found:
35. In March 1999 the wife began studying … and also commenced part time work in [child care]. As I have said, I reject the husband's assertion that she did that for her own personal gain. The income disclosed by the husband in his 1997, 1998 and 1999 tax returns was not at a sufficient level to be able to maintain the family and I infer that the wife went back to work in 1999 to financially assist the family.
…
37.In June 2000 the wife commenced part time employment with [a] State School.
…
67. The husband conceded in his oral evidence that the mother fulfilled the primary role of homemaker and parent, although given that the husband was not in full time employment for a period of six years, I infer that he was involved with the children to some degree when they were little in a role as parent. I find, however, that it was primarily the wife who fulfilled that role while the husband was doing other things, including part time work and working on maintenance of the properties that the parties had.
...
78. … I find that the wife was not paid the normal rate of child support during the post separation years and as a result she bore a disproportionate burden in terms of paying for the children's expenses. … Given that the parties have been apart for four years after the separation, the fact that the wife has played the primary role of providing for the children's housing and food and education are matters that I give some weight to.
79. The children were aged 11 and 8 at the time their parents separated. Overall, in respect of post separation contributions, I find the contributions favour the wife in as much as she bore a far greater day to day responsibility for the costs of the children and she invested the funds that she had more wisely. Considerable physical work was done in relation to working on various properties during the time the parties were together. I find that the husband did the majority of that work, but I also find that the wife assisted in the ways that she has asserted in her evidence. The photographs which are Exhibit F demonstrate a snapshot of the husband's efforts, but they also contain one photograph of the wife standing in work attire in a large cutting on one of the properties.
82. … I have accepted the wife's evidence that in relation to [one of the N Street properties] a reasonable amount of work was done to that property after the parties moved in and I otherwise infer that the wife was involved in the maintenance of the property after the parties moved in.
…
84. In relation to [P Street], the husband concedes that the wife over a six year period maintained the property and the husband himself conceded that a reasonable amount of work was done to [P Street] after they moved in. …
No challenge is made to any of the findings there contained.
The trial Judge was also plainly cognisant of other contributions which give context to those findings.
The husband contributed equity in three properties at the commencement of the relationship. Approximately two years after cohabitation commenced, the husband contributed a compensation payment of about $48 000 in respect of an accident occurring about six years pre-cohabitation. About six years after cohabitation commenced, the husband contributed a redundancy payment of about $124 700 (the payment was made in respect of 15 years employment of which the relationship occupied about six years). At about the same time, the husband contributed, through inheritance, a property (at P Street). It was used as the matrimonial home. The parties were free of debt by about half way through their cohabitation.
The trial Judge recorded this evidence as to the use of the properties as follows:
65.As mentioned above, the husband received $48 000 [compensation payment] in 1992 and there is no evidence as to what happened with those monies, but I have already indicated what inference I draw in respect of how those monies were used.
66.I have referred to the redundancy the husband received in 1996. I pause to note that at that time the parties had been living together for six years. The husband had been with [his employer] for 15 years. I have also mentioned that the husband, in 1996, received unencumbered from his late mother's estate the property at [P Street] which soon after became the family home. It freed up [H Street] which was the previous matrimonial home which was then sold and, as I have said, the proceeds of that sale went to extinguish the borrowing that was used to acquire the [I Road] property.
…
68.It is an agreed fact that by 1997 the parties were basically debt free. …
In Cabbell and Cabbell [2009] FamCAFC 205 this Court said:
44.In Williams & Williams [2007] FamCA 313 the Full Court (Kay, Coleman and Stevenson JJ), after discussing conflicting cases determined in the New South Wales Court of Appeal under the Property (Relationships) Act1984 (NSW) which involved discussion of how initial contributions should be assessed in a property adjustment case under that legislation, said at paragraph 26:
We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
Expressed in 2009 values (but noting the direct contributions earlier outlined were made in, respectively, 1990, 1992 and 1996 dollars) the equities in the real property, compensation, redundancy and inherited property represents nearly 25 percent of the property available for distribution in 2009. Although not expressing himself in numerical terms, his Honour was clearly aware of the contributions just outlined, as the following excerpts from his Honour’s reasons make plain:
68. …The share portfolio which currently stands at a value of $217 000 was primarily put together as a result of the sale of the properties which the husband owned on an unencumbered basis prior to the commencement of cohabitation, subject to the improvements that had been carried out to one of the [N Street] properties.
...
73. To reiterate, the [I Road] units were purchased with the combination of the husband's redundancy package and a borrowing from [a] Bank, which was then paid off from the proceeds of the sale of [H Street]. That property is now a major asset of the parties. It is worth $600 000. After separation, the husband concedes that the wife bore a greater day to day responsibility for the care of the children.
Mr George, counsel for the appellant wife, submitted that the initial contributions of property by the husband ought to have been ‘offset’ by the wife’s significant contributions throughout the cohabitation. In the Amended Outline of Argument the appellant asserted that:
“…the wife’s off-setting contributions made during the period of the relationship and marriage were of such moment as to reduce the significance of the original contribution made by the husband…”
As was said to counsel during the hearing of the appeal, we consider the reference to “offsetting” contributions, as with references to “erosion”, to be unhelpful. The better approach is that to which this court referred in Pierce & Pierce (1999) FLC 92-844 at 85,881:
… 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 weigh 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. …
Reference should also be made in that respect to the discussion in the recent decision of this Court in Cabbell and Cabbell, above, at 43.
Counsel for the appellant wife submitted that the essence of this ground was that, however the respective contributions of the parties were viewed, and giving full weight to the initial contributions of the husband and their use, a 65 percent / 35 percent assessment of contributions favouring the husband was not open to his Honour and was beyond the generous ambit of his Honour’s discretion.
We repeat, this ground challenges the discretionary judgment of the trial Judge as to the weight which ought attach to the “original contributions” (and other contributions) of the wife. The argument on behalf of the appellant in this case has echoes of that raised in Harrington and Harrington (2007) FLC 93-317. There, at 81,472 – 81, 473, it was held:
35. The arguments for the wife essentially fell into two propositions. The first was that the trial Judge, in the way in which he treated the husband’s initial contribution of the matrimonial home, in effect unencumbered, overestimated its significance, given the substantial improvements made to it during the period of cohabitation.
36. The second argument was simply that, taking all of the contributions of each party, the assessment was manifestly inadequate to the wife.
…
38. Where, as here, a trial Judge has recorded all relevant contributions, we see no reason, apart from consideration of the second argument, to consider that the trial Judge has fallen into error with regard to weight given to one particular aspect of contribution.
39. … it is not asserted that the trial Judge failed to have regard to some relevant matter or took into account an irrelevant matter. In those circumstances, the many statements bearing upon the breadth of the trial Judge’s discretion are apposite. …
No challenge is made in this appeal to the accuracy of the trial Judge’s findings with respect to contributions or that his Honour failed to take account of relevant matters or took account of irrelevant matters in the assessment of contributions; the appellant’s argument rests solely on an attack upon the weight attached to those matters and the result ultimately arrived at.
In our view, the argument derives such strength as it has from the fact that his Honour’s assessment reflects a disparity in the party’s respective contributions with a dollar value of about half a million dollars, and when viewed in that light in particular, we would assess it as generous to the husband.
But, as earlier explained, that is insufficient unless this court is satisfied that its generosity takes it outside the bounds of a proper exercise of discretion. On balance, we are ultimately not satisfied that it cannot be so described. But, that view is, of itself, irrelevant. Such a view is relevant only to the extent that it informs the ultimate enquiry on this appeal, which is whether the result so arrived at is beyond the bounds of the generous ambit of the discretion and, as a result, erroneous.
We are not satisfied that the appellant has satisfied that test, and as a result, demonstrated that the trial Judge’s treatment of contributions was erroneous.
Ground 1 (b)
This ground asserts that the equity in a home acquired post-separation by the wife ought not to have been included in the “balance sheet” – that is, in a listing of “the property of the parties or either of them” within the meaning of s 79 of the Act.
The argument confronts two difficulties.
First, property acquired by one or both parties after cohabitation has ceased is not immune from the reach of s 79. Indeed, the opposite is the case; “the property of the parties or either or them” includes all property of whatever type, whenever acquired (see Hickey & Hickey (2003) FLC 93-143 at [40]). Further, it is not necessary to prove that any particular form of contribution is connected with any particular part of the property (See Shaw and Shaw (1989) FLC 92-010; Napthali and Natpthali (1989) FLC 92-021).
Of course, the nature, form and characteristics of property, and the manner and timing of its acquisition, may have an impact upon the manner in which contributions are assessed and, in an appropriate case, the court might determine to exclude it by reason of those matters.
Here, though, the parties specifically included the property in an agreed list of property submitted to his Honour at the commencement of the trial. The trial transcript reveals that the wife’s trial counsel made a specific admission that “step one in the proceedings is settled and there is a defined pool, an agreed pool”.
The trial Judge was entitled to rely upon the assertion that the “pool” of property was uncontested and his Honour plainly did so.
Thus, a second difficulty confronting the appellant on this ground is that, absent features not asserted to be present in the instant case, a party is bound on appeal by the case argued below (see Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 (at 71); Coulton v Holcombe (1986) 162 CLR 1 (at 7)).
This ground must fail.
Grounds 2 (a) – (d)
Each of these grounds challenges the weight attached by the trial Judge (when determining a 5 percent adjustment in favour of the wife) to the specified factors contained within each ground. Again, all of these grounds can be conveniently dealt with together.
It is first necessary to observe that the trial Judge made findings about each of the matters specified in the grounds:
89. [The husband] has been in full time employment since 1981, except for the period between 1996 and 2002. …
90. …[The wife] estimated in her financial statement that her business was worth $20 000, but the parties have agreed not to ascribe a value to the business, but rather to treat it as a resource from which the wife generates her income
91. According to her financial statement, the wife's total average weekly income is $687. That is to be compared with the husband's average weekly income on his financial statement of $1035.
92. The children live primarily with their mother, but spend five nights a fortnight with their father and half school holidays. The wife spent $6668 on school fees on the two children since separation without any assistance from the husband in relation to payment of school fees. The husband said he is content with the secondary schools which the children currently attend, although he complained that he had not been properly consulted in relation to their placement there. He did, however, give unimpressive evidence about whether or not he intended to contribute towards the cost of their schooling in the future.
93. … I do not currently have any confidence given the attitude that the husband displayed that he would make more generous contributions towards the cost of the children's schooling in the future and I find that it will probably be that the wife in the future is the one who bears that financial responsibility.
…
95. The husband, as I have said, now pays regular child support in accordance with his assessment and the wife makes no complaint about the punctuality with which those payments are made. She says there are no arrears in relation to the current assessed payments. Given my findings in relation to contributions, if assets were divided on that basis, the husband would have a superior financial position in terms of the assets which he held compared to the wife and, as I have already said, the husband has a better ability to regenerate capital given that his income is higher and his financial responsibilities for the children are less.
96. Apart from what I have already described, the 15 years of cohabitation has not significantly affected either party's ability to earn income.
The essential challenge embodied in the grounds is that the wife ought to have received a larger adjustment in her favour than the 5 percent arrived at by the trial Judge.
In written submissions, counsel for the appellant asserted that the impact of the adjustment in monetary terms was not considered by the trial Judge and that, of itself, ought support a finding of appealable error.
We do not consider that the failure by a trial Judge to attribute a dollar figure to the consideration of the matters specified in s 79(4)(d) to (g) is, of itself, appealable error.
It is the Act which ultimately governs the process and the parameters of the s 79 exercise. The legislative requirement is to “take into account” the matters enumerated in the sub-paragraphs of the section. There is no legislative requirement as to the process that should attend it (save that, ultimately, it must produce a just and equitable outcome).
This court has made it clear that the court’s reasoning process and the ultimate result, giving effect to the clear legislative mandate, can be better illuminated by reference to the dollar value of a result which is, almost invariably, expressed in percentage terms.
But, as this court has made clear in Clauson and Clauson (1995) FLC 92-595 the desirability of giving monetary expression to a result has, as its counterpoint, “artificially delineated boundaries” sometimes marked by expressing adjustments in percentage terms. It is not, of itself, a legal requirement. Indeed, this court can (and does) itself use the dollar value of adjustments and results as a pointer to error. But, the absence of a monetary analysis is not, of itself, an error.
The trial Judge made findings about the matters relevant to s. 79(4)(d) to (g); those matters were clearly in his Honour’s mind in arriving at the adjustment which his Honour did. The path of the trial Judge’s reasoning is easily discernible.
No error of approach is demonstrated and we are not satisfied that the appellant has established that the finding reached was outside the generous ambit of discretion.
Ground 3
This ground raises a challenge to the trial Judge’s application of what has been called “the fourth step” in arriving at a just and equitable order pursuant to s 79 (See, eg: Hickey& Hickey (2003) FLC 93-143).
Mr George, counsel for the appellant, submitted that the trial Judge erred in not making substantive changes to the division of property at “the fourth step” consequent upon a consideration of the justice and equity of the percentage property division arrived at by the application of the preceding three “steps”.
Under the heading “Just and Equitable”, the trial Judge set out the impact of the property division in monetary terms and how the division of property was to be achieved by listing asset tables for each party. The trial Judge then made provision for how the husband was to make the payment to the wife to meet her entitlement. By this process the trial Judge considered the “effect of those findings and determination” (see Hickey, above, at 78,386).
In oral submissions, counsel asserted that the submission rested upon the notion that, in considering the justice and equity of the orders at “the fourth step”, the Court ought have a broader ambit than merely an analysis of the justice and equity of the form of the orders. The submission did not go so far as to assert that, in all property cases, the Court should turn its mind to altering the outcomes reached by reference to the three “steps” which preceded it, but, rather, the submission was that the Court can, and, in an appropriate case should, ought, alter the outcome otherwise earlier arrived at.
Mr George cited the judgment of Thackray J in Woollams and Woollams (2004) FLC 93-195 in support of this interpretation of the fourth step as a “substantive step”. Thackray J, after a careful consideration of the relevant authorities, said ( at 40):
“…I am not entirely convinced that the Full Court in Hickey [above] made it clear that the fourth step is restricted to a consideration of “the form of the orders”.”
On its face, this passage plainly provides some support for the appellant’s submission. But, having carefully considered Thackray J’s analysis of the issue in Woollams, in its entirety, it seems to us that the appellant’s argument (and, indeed, the debate about the number and content of “steps” within a s 79 process) is best met by reference to the decision of the High Court in Mallett v Mallett (1984) 156 CLR 605. There Gibbs CJ said at 608:
…[Parliament] has conferred on the court a very wide discretion to make such order as it thinks fit when it is satisfied that it is just and equitable that an order should be made (see sub-s (1) and (2) of s 79), although there are some broad principles to which the court is required to give effect, and some circumstances which it is required to take into account … The circumstances which the court is specifically required to take into account may be regarded as falling within two main classes. First, the court must consider the extent to which either party has in the past contributed to the acquisition, conservation or improvement of the property … Secondly, the court must consider all those circumstances which relate to the present and future needs, and to the means, resources and earning capacity, actual and potential, of the parties: see s. 79(4)(d) and s 75(2)(a)-(m) … The Act does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved – those things are left to the court’s discretion, which must, of course, be exercised judicially.
It is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result. For all its usefulness and merit as a “disciplined approach” or a “structured process of reasoning” (per Fogarty, Lindenmayer, McCall JJ, N and N, unreported, 10 June 1992), the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.
A structured approach is, of course, desirable and also provides to litigants and practitioners alike predictability in the manner in which cases will be dealt with and judgments delivered. But, that is not the same thing as a legal requirement, the failure to comply with which will result in appealable error. The words of Gibbs CJ in Mallett, (given in another context) are apposite:
… it is understandable that practitioners, desirous of finding rules, or even formulae, which may assist them in advising their clients as to the possible outcome of litigation, should treat the remarks of the court in… cases as expressing binding principles, and that judges, seeking certainty, or consistency, should sometimes do so. Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case. (at 608-9)
The overall result arrived at by his Honour sees a disparity of 20% between the parties’ respective entitlements – in dollar terms, around $300 000.
Ultimately, we are not persuaded that his Honour’s result is “plainly wrong” or falls outside the ambit of the discretion available to his Honour at law.
An Error of Fact
The parties highlighted an error of fact in the reasons for judgment that appears upon a reading of paragraphs 33 and 61 of his Honour’s reasons. In these paragraphs the trial Judge records two of the properties as each having an estimated value of $100 000.
Both parties to the appeal submitted before us that the reference in paragraph 61 to the N Street property correctly records the evidence of the wife which provides the $100 000 value. The paragraph 33 reference to the inherited property on P Street being valued at $100 000 is an error.
In our view, nothing turns on this error.
The trial Judge has accurately recorded the history of the acquisition of the properties. The error, (occurring in ex tempore reasons) informs no error in the consideration by his Honour of the party’s respective contributions and does not otherwise impact upon his Honour’s findings or the orders effecting the division of property arrived at. This minor error in historical valuation estimates is not such that any interference by this appellate court is warranted. This is all the more so in light of the ex tempore nature of the trial Judge’s reasons for judgment.
Conclusion
Having found that no appealable error is demonstrated, the appeal must fail.
At the end of the hearing before us we sought the party’s submissions on the question of costs. Each submitted that they would like the opportunity to make costs submissions following receipt of these reasons.
We can see no reason why that course should not be adopted and we will order accordingly.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 1 April 2010
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