ON v ON

Case [2005] FamCA 1110

[2005] FamCA 1110

FAMILY LAW ACT 1975

IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA
AT MELBOURNE  

Appeal No. SA60 of 2004

File No. MLF7114 of 2001

IN THE MATTER OF:

ON

Appellant Husband

AND

ON

Respondent Wife

REASONS FOR JUDGMENT OF THE FULL COURT

Coram:  Kay, May and Boland JJ
Date of Hearing:                 2 March 2005
Date of Judgment:            22 November 2005

Appearances:  

Mr St John of Senior Counsel, with Mr Crofts, appeared on behalf of the appellant husband.

Mr Bartfeld of Queens Counsel, with Mr Dickson, appeared on behalf of the respondent wife.

APPEAL SUMMARY

MATTER:  ON and ON
APPEAL NUMBER:  SA 60 of 2004(MLF7114 of 2001)
CORAM:  Kay, May & Boland JJ
DATE OF HEARING:  2 March 2005
DATE OF JUDGMENT:                  22 November 2005

CATCHWORDS:                  

FAMILY LAW – APPEALS – PROPERTY – Appeal from orders providing fixed sum allocation of property distribution – Changed proposals of the wife post judgment prior to orders – Inadequacy of reasons for decision – Exclusion of business from the property pool – Manifestly excessive decision – Adult child maintenance – Appeal allowed and matter remitted for rehearing.

CASELAW CITED:

Aleksovski v Aleksovski (1996) FLC 92-705

Browne v Green (1999) FLC 92-873

Clauson v Clauson (1995) FLC 92-595

Docters van Leeuwen and Docters van Leeuwen (1990) FLC 92-148

Ferraro v Ferraro (1993) FLC 92-335

Gamble and Gamble (1978) FLC 90-452

H and H (1981) FLC 91-083

Hickey v Hickey (2003) FLC 93-143

House v The King (1936) 55 CLR 499

Mercer and Mercer (1976) FLC 90-033

Merriman v Merriman (1993) FLC 92-422

Norbis v Norbis (1986) FLC 91-712

Oliver and Oliver (1977) FLC 90-227

Tuck and Tuck (1981) FLC 91-021

Waters and Waters (1981) FLC 91-019

Appeal allowed
Costs certificates ordered for each party for the costs of the appeal and of the new trial.

  1. Introduction

  1. This is an appeal by the husband from property and adult child maintenance orders made by Bell J on 8 September 2004. There are thirty five grounds of appeal. The judgment is contained in seven pages.

  1. The value of the pool of assets to be divided between the parties, as found by the trial Judge was $6,434,593. The judgment provided that the wife receive 55 per cent of that pool.

  1. The property order provided, in essence, that the wife retain the home in east Melbourne, valued at $4,350,000, together with the antique furniture, that she pay the husband $938,404 and that the husband retain the parties’ businesses and investment interests which had a net value of $823,000 (exclusive of asset realisation costs). Other furniture and chattels were to be divided between the parties by agreement.

  1. In addition, by retaining the business interests, the husband was to be entirely responsible for total liabilities, including capitalised lease payouts, of $1.9 million related to what was described as the “new pharmacy”. The new pharmacy and its liabilities were quarantined from the pool.

  1. Further evidence received by us discloses that there has been compliance…

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AGLC
ON v ON [2005] FamCA 1110
Case
[2005] FamCA 1110
Decision Date

CaseChat Overview and Summary

The Full Court of the Family Court of Australia heard an appeal concerning property settlement orders made between a husband and wife. The parties had been married for a significant period and had accumulated substantial assets through their joint efforts and the husband's business acumen, including multiple properties and pharmacies. The dispute arose from the husband's unilateral decision to establish a new pharmacy, which impacted the turnover of an existing pharmacy, and the subsequent disagreement over the division of their considerable asset pool.

The primary legal issues before the Full Court were whether the trial judge erred in his valuation of the old pharmacy, whether the trial judge correctly determined the contributions of each party to the acquisition, improvement, and conservation of the property pool, and whether the adjustment made in favour of the wife was appropriate. The court also considered the husband's argument that the trial judge had failed to adequately consider his contributions and the wife's argument that the trial judge had not sufficiently accounted for her contributions and the husband's conduct.

The Full Court found that the trial judge had made no error in his valuation of the old pharmacy, nor in his assessment of the parties' contributions to the asset pool, which he determined to be equal. However, the Full Court held that the trial judge had erred in his adjustment of 5% in favour of the wife. The court reasoned that while the husband's superior earning capacity, the wife's obligations to adult children, and the husband's post-separation conduct were relevant considerations, the trial judge had not provided sufficient justification for the specific percentage adjustment made. The court also noted that the trial judge had failed to make specific orders regarding the maintenance of the adult children, despite this being a point of contention.

Consequently, the Full Court set aside the trial judge's orders and remitted the matter back to the Family Court for redetermination of the adjustment to be made to the property settlement and for the making of appropriate orders regarding the maintenance of the adult children.

Orders

Orders of the court

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Background

Background to the litigation

Background The parties married in 1966 and lived together until 2001. They adopted four children, the two youngest aged 23 and 21 at the time of the trial. The husband is a pharmacist. The parties had been extremely successful in business and in property investment and at the time of the trial owned homes in east Melbourne and South Victoria, a ski lodge, and properties in London. In addition, there were two pharmacies in Melbourne referred to as the “old pharmacy” and the “new pharmacy”. The old pharmacy had been conducted by the husband from about 1991. In 2002 the major tenant at the shopping complex at which the pharmacy operated, withdrew from the complex and from February 2003 the complex underwent major building works. The turnover of the old pharmacy was said to be severely affected. In 2003 the husband was advised by the management of the shopping complex that they wanted to establish a new pharmacy at the complex. He had a right of first refusal. The husband made a decision to commence the new pharmacy in order to protect the value of the old pharmacy. This decision was made without consultation with the wife. On 3 August 2004, shortly before trial, the husband filed an amended response seeking orders for the sale of the Australian real estate and a division 55/45 in his favour. He sought sole ownership of the businesses, the English assets and other assets that were held in the family’s discretionary trust. At the commencement of the trial the husband asked for orders that would ensure the realisation of all assets and an apportionment of net proceeds as to 45 per cent in favour of the wife and 55 per cent in his favour. In an outline of argument filed on behalf of the wife on 31 August 2004, the wife sought an order for the retention by her of the former matrimonial home and for a payment of $166,000 from the husband. The basis was that the pool of assets, asserted by her to be worth $8,440,000, should be divided as to 55 per cent in her favour. She also sought orders for the maintenance of the youngest two children in the sum of $220 per week for each boy for as long as they continued their tertiary education. At the commencement of the trial the wife sought to have interim orders made which would see all the properties and the businesses, except the former matrimonial home, sold to properly identify the pool of assets available for division. Once identified, it was submitted, the determination could be properly made as to the manner in which the entire pool of assets should be divided. That application was refused. At the trial there were agreed valuations for each of the properties save for the value of the old pharmacy. The trial Judge resolved the dispute about the value of the old pharmacy in the husband’s favour and concluded that there was a pool of assets available, excluding the new pharmacy, of approximately $6,435,000. His Honour decided that the contributions to that pool should be seen as equal, but that there should be a 5 per cent adjustment to the wife by reason of the husband’s superior earning capacity, her obligations to the adult children and the husband’s conduct towards the family post separation. He delivered reasons for judgment that concluded with the statement, “I order that the wife do receive an amount of $3,411,596”.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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