Oamra & Williams

Case [2021] FamCAFC 117

FAMILY COURT OF AUSTRALIA

Oamra & Williams [2021] FamCAFC 117

Appeal from: Williams & Oamra [2020] FCWA 109
Appeal number(s): WEA 14 of 2020
File number(s): PTW 7613 of 2017
Judgment of: STRICKLAND, WATTS & SUTHERLAND JJ
Date of judgment: 13 July 2021
Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellant wife argues that the parties agreed to keep their property separate and there should be no alteration of property interests – Whether it was just and equitable to make any property settlement order – Whether there needed to be mutuality in any stated or unstated assumptions that the parties would keep their finances entirely separate and to separately retain the benefits of their efforts to the exclusion of the other – Where the wife could not rely upon unilateral unstated assumptions – Where the “use” of property during cohabitation is not confined to a legal or equitable entitlement to use property – Where in a long marriage, the primary judge gave adequate reasons to find an order altering property interests should be made – Where the primary judge did not assume equality of contributions as a starting point, nor treat negative gearing inappropriately, nor place inappropriate weight on the husband’s organ donation to the second youngest child – Where the primary judge gave adequate reasons for the assessment of contributions – Where the primary judge did not err when considering the tax consequences of potential property sales nor was the wife denied procedural fairness in respect of that issue – Where it was open to the primary judge not to add back legal fees because of the inadequacy of evidence on both sides in relation to the source of funds used to pay them and the relatively small difference in the amount paid in legal fees – Appeal dismissed – Costs ordered in a fixed sum.
Legislation:

Family Law Act 1975 (Cth) s 79 and s 117

Family Court Rules 1998 (WA) r 13A

Family Law Rules 2004 (Cth) r 13.01 and r 19.04

Cases cited:

Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148

Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303

CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67

Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633

Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63

House v The King (1936) 55 CLR 499; [1936] HCA 40

Kioa v West (1985) 159 CLR 550; [1985] HCA 81

Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28

Rosati and Rosati (1998) FLC 92-804; [1998] FamCA 38

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Sun Alliance Insurance Ltd v Massoud [1989] VR 8

Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173

Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48

Division: Appeal Division
Number of paragraphs: 133
Date of hearing: 29 March 2021
Place:

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AGLC
Oamra & Williams [2021] FamCAFC 117
Case
[2021] FamCAFC 117
Decision Date

CaseChat Overview and Summary

In this family law appeal, the wife contested the property settlement order made by the primary judge, arguing that the parties had agreed to keep their property separate and that there should be no alteration of property interests. The court was required to decide whether it was just and equitable to make any property settlement order, and whether there needed to be mutuality in any stated or unstated assumptions that the parties would keep their finances separate. The court also considered whether the primary judge erred in various respects, including in his assessment of contributions and tax consequences.

The court found that the wife could not rely upon unilateral unstated assumptions, and that the primary judge was correct in finding that it was just and equitable to make a property settlement order. The court held that the primary judge gave adequate reasons for his assessment of contributions and did not err in considering the tax consequences of potential property sales. The court found that it was open to the primary judge not to add back legal fees because of the inadequacy of evidence on both sides in relation to the source of funds used to pay them and the relatively small difference in the amount paid in legal fees.

The court dismissed the wife's appeal and ordered that the wife pay the husband's costs fixed in the sum of $19,635.00 within 28 days.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. Within 28 days the appellant wife pay the respondent husband’s costs fixed in the sum of $19,635.00.

Background

Background to the litigation

For reasons which follow, the wife’s appeal against the property settlement order shall be dismissed.BACKGROUND FACTS The parties met and began a relationship in mid-1998. The husband moved in to live with the wife in around October or November 1998. The parties ceased cohabiting in late August or early September 1999. In October 2000, after the wife fell pregnant with their first child, the parties recommenced their cohabitation. The wife suffered a miscarriage in early 2001, but subsequently the parties had four children who at the time of the hearing before the primary judge were aged 18, 16, 14 and 12 years. The parties married in 2004. Both parties owned real property at the commencement of the cohabitation, the wife’s property being significantly more valuable. Real property was bought and sold by each of the parties during the marriage, and at the time of the hearing, the wife owned seven and the husband owned two properties. The second youngest child was born with a rare and life-threatening liver condition which required a transplant in early 2007; the husband was the donor. The parties separated in November 2017 when the husband moved out of the matrimonial home. At the time of the hearing, the husband was aged 59 and the wife 48. The husband had recently lost employment he had held for almost 30 years, but was optimistic that he would be re-employed. The husband received a substantial redundancy. The wife was working as a business analyst earning about $271,178 per annum. The children live with the wife. The husband’s current relationship with the children is problematic and parenting applications before the primary judge were resolved by consent on the basis that the children would spend time with the husband in accordance with their wishes and that the parties and the children would attend family therapy aimed at supporting the husband’s relationship with the children.REASONS OF THE PRIMARY JUDGE The primary judge was faced with a stark contrast between irreconcilable versions of conversations and exchanges between the parties relating to their financial agreements and assumptions during the marriage. In those circumstances, the primary judge made the following finding with respect to the parties’ credibility:49For reasons that follow, where recourse to contemporaneous materials and objectively established facts or suitably independent corroboration was not available to resolve factual disputes between the parties, I preferred the evidence of the husband to that of the wife. The primary judge then gave extensive reasons (at [50]–[76]) for so finding. In Ground 4 of the wife’s Notice of Appeal, the credit findings of the primary judge were challenged, but that Ground has been abandoned, and so those findings stand unchallenged. Having resolved two minor issues (not the subject of challenge in this appeal), the primary judge settled a table of the parties’ property, superannuation and their liabilities (at [90]). The wife held net assets and superannuation in the sum of $6,643,891 and the husband held net assets and superannuation in the sum of $2,116,220. Thus, the overall net assets and superannuation were $8,760,111.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Overall, there is no merit in the wife’s complaints about the primary judge’s findings as asserted in Grounds 2 and 3.Did the primary judge err in his conclusions in relation to the potential sale of properties owned by the wife and the failure to bring to account the taxation consequences of the same? (Ground 5) In Ground 5 the wife argues that the primary judge failed to take sufficient, or any account of the possible or likely indirect taxation consequences of the property settlement order his Honour intended to make and suggests that he should have afforded the wife time to identify property to be sold and the likely taxation consequences of sale. When discussing s 79(4)(d)–(g) considerations, the primary judge addressed the evidence in relation to latent capital gains tax at [251]–[257] and [272]–[275]:251.I have considered also the evidence of the parties as to their intentions in relation to various properties, and the evidence of their accountants as to the likely capital gains tax payable on any relevant sale.252.The husband’s evidence was that, if orders were made as proposed by the wife and there was no alteration of property interests, he would likely look to sell one or both of the [E Street] and [F Street] properties, so that he could “get a nice home somewhere”. He acknowledged that if orders were made as proposed by him, or if he received even half of the proceeds of any sale of [the former matrimonial home] he would likely not find himself in a position where he was required to sell either property.253.The husband’s accountant had not calculated the likely capital gains tax payable by the husband on the sale of either property. He acknowledged that, while the husband has made capital gains on both the [E Street] and [F Street] properties, given his current unemployment and capital losses he has retained, he could likely expect to pay a relatively modest amount of capital gains tax on any sale.254.The wife sought orders enabling her to sell [the former matrimonial home] and retain the whole of the proceeds, which she would intend to apply towards the reduction of debt. On the evidence of her accountant, if she sold [the former matrimonial home] at its agreed value she would likely incur capital gains tax of $7,099.255.Under cross-examination, the wife said that her intention was to retain her other investment properties and receive income from them into her retirement, before possibly passing them on to the children, or selling one or more of them to fund deposits for the children on their own properties.256.That said, on the evidence of her accountant if she sold the [G Street] property she would likely incur capital gains tax in the vicinity of $127,000. If she sold the [H Street] property she would likely incur capital gains tax in the vicinity of $124,000, and if she sold the [K Street] property she would likely incur capital gains tax of $75,717. No capital gains tax would be payable on any sale of either of the [Suburb F] properties as they have reduced in value; a sale of the [I Street] property would result in a capital loss for tax purposes of $176,119, and a sale of the [J Street] property would result in a capital loss for tax purposes of $145,424.257.While the various properties, other than [the former matrimonial home], were acquired for the purposes of investment, in the circumstances outlined above I conclude that the possibility of capital gains tax being incurred does not impact on the assessment of what is a just and equitable alteration of property interests. I do not propose to order the sale of any of the properties. Their sale is not in any sense inevitable, nor is there even a significant risk of sale in the near future.…272.The husband seeks the transfer of [the former matrimonial home] to him. The wife does not seek to retain that property, regardless of the outcome of these proceedings. I conclude, therefore, that it is appropriate to make the order for transfer sought by the husband.273.The agreed value of [the former matrimonial home] is $1,550,000. A further payment to the husband by the wife of $275,830 is therefore required.274.I have considered whether the effect of these orders will trigger any capital gains tax liability payable by the wife. In circumstances where she presently has just over $515,000 in various bank accounts, and where as earlier noted any sale of either Joondalup property would trigger capital losses able to be offset, I conclude that it would not. 275.I therefore propose to order that the wife transfer [the former matrimonial home] to the husband, and pay him the additional sum of $275,830.(Footnotes omitted)

Ratio Decidendi

Legal Principle Established

There is consequently no merit in Ground 2.Did the primary judge fail to give proper weight to particular considerations? (Grounds 3(b), 3(c) and 3(d)) On appeal it is notoriously difficult for complaints about the weight a primary judge gave to various mandatory considerations to succeed. As the authorities make clear, the weight liable to be given to particular facts and circumstances will vary in the exercise of judicial discretion without thereby involving appealable error (Gronow v Gronow (1979) 144 CLR 513 (“Gronow”) at 519). Ground 3(c) complains that whilst at [212] the primary judge found that the husband’s donation of his liver to the second youngest child was a significant contribution by him as a parent, the primary judge did not give any weight or any proper weight to the five pregnancies endured by the wife, particularly in the context of uncontested evidence of her morning sickness and associated difficulties while continuing to work and earning a greater income than the husband. There was no dispute on the evidence that the wife had suffered from pregnancy related sickness through all of her pregnancies, and had suffered a miscarriage. The primary judge referred to the wife’s miscarriage and the birth of the other four children (at [7]) and to the wife working throughout, apart from short periods around the birth of each of the children (at [187]). In so far as this Ground complains that the primary judge did not specifically mention the wife’s pregnancy related sickness, reasons are not required to mention every fact relied on by a party and that is particularly so in a case where the hearing takes place over eight days generating an appeal book in excess of 2,000 pages (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447). There is no merit in Ground 3(c). Ground 3(d) complains that the primary judge did not give proper weight to the wife’s greater homemaker and parent contributions during the relationship and since the separation. As already indicated, we are of the view that the primary judge did make a finding of unequal s 79(4)(c) contributions, which is to be read as a finding in favour of the wife. We are unable to agree that the primary judge did not give proper weight to those contributions. Ground 3(b) challenges the weight that the primary judge gave to the wife’s significantly greater initial contributions or contributions made on her behalf by her family. The husband says that the primary judge clearly identified and made findings about the wife’s “initial contributions” and contributions made on her behalf (at [94], [128], [190]–[195]). The husband makes no complaint about those findings. All other findings as to contributions made by each of the parties over a long period were open to the primary judge. The weight which his Honour placed on particular contributions were well within the ambit of the exercise of his Honour’s judicial discretion. There is no merit in the challenges as to weight in Grounds 3(b), 3(c) and 3(d).Did the primary judge err when concluding that the net assets and superannuation of the parties should be divided 55/45 in the wife’s favour based on contributions? (Grounds 3(a) and 3(g))