Perrin & Perrin (No 2)
[2018] FamCAFC 122
•9 July 2018
FAMILY COURT OF AUSTRALIA
| PERRIN & PERRIN (NO. 2) | [2018] FamCAFC 122 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – INDIRECT CONTRIBUTIONS – Whether the primary judge considered the wife’s indirect contributions to the husband’s superannuation interest – Whether the primary judge considered the nature, form and characteristics of the interest – Where there was evidence of the wife’s non-financial contributions that should have at least been considered as possible indirect contributions to the husband’s superannuation interest – Appeal allowed. FAMILY LAW – APPEAL – JUDGMENTS – Adequacy of Reasons – Where the appellant wife submits the primary judge’s reasons were inadequate – Where the primary judge’s reasons did not sufficiently indicate to the parties what evidence was considered or expose the basis for the findings and conclusions that were reached – Appeal allowed. FAMILY LAW – APPEAL – COSTS – Where no order for costs made – Where the appeal has succeeded on a point of law – Costs certificates issued for appeal and re‑hearing. |
| Family Law Act 1975 (Cth) ss 75(2), 79(4), 81, 94AAA(1) Federal Proceedings (Costs) Act 1981 (Cth) Police Regulation (Superannuation) Act 1906 (NSW) s 10 |
| Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 Atwill and Atwill (1981) FLC 91-107; [1981] FamCA 72 Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124 Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Carter and Carter (1981) FLC 91-061; [1981] FamCA 18 Cobb & Simons [2011] FamCAFC 78 Daines & Daines (2014) FLC 93-585; [2014] FamCAFC 61 Darcy & Darcy [2011] FMCAfam 126 Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154 Fane & Lemott [2013] FamCA 604 G and G (1984) FLC 91-582; [1984] FamCA 60 Hayton v Bendle (2010) 43 Fam LR 602; [2010] FamCA 592 Hickey and Hickey (2003) FLC 93-143; [2003] FamCA 395 House v The King (1936) 55 CLR 499; [1936] HCA 40 Jarvis & Seymour [2016] FCCA 1676 Linch & Linch [2014] FamCAFC 69 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 Schmidt & Schmidt [2009] FamCA 1386 Semperton v Semperton (2012) 47 Fam LR 626; [2012] FamCAFC 132 Shaw and Shaw (1989) FLC 92-010; [1989] FamCA 5 Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52 Surridge & Surridge (2017) FLC 93-757; [2017] FamCAFC 10 Townsend and Townsend (1995) FLC 92-569; [1994] FamCA 144 T & T [Pension Splitting] (2006) FLC 93-263; [2006] FamCA 207 Waterways Authority v Fitzgibbon (2005) 221 ALR 402; [2005] HCA 57 Welch & Abney (2016) FLC 93-756; [2016] FamCAFC 271 Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48 |
| APPELLANT: | Ms Perrin |
| RESPONDENT: | Mr Perrin |
| FILE NUMBER: | NCC | 556 | of | 2015 |
| APPEAL NUMBER: | EAA | 65 | of | 2017 |
| DATE DELIVERED: | 9 July 2018 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Alstergren DCJ, Murphy & Aldridge JJ |
| HEARING DATE: | 9 April 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT ORDERS MADE: | 15 February 2018 18 May 2017 |
| LOWER COURT MNC: | [2018] FCCA 633 [2017] FCCA 1606 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Gardiner |
| SOLICITOR FOR THE APPELLANT: | Mitchell Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Weightman |
| SOLICITOR FOR THE RESPONDENT: | Collett Lawyers |
Orders
The appeal be allowed.
The orders made in this proceeding on 15 February 2018 be set aside.
The matter be remitted to the Federal Circuit Court of Australia for rehearing before a judge other than Judge Myers.
The Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) 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 wife in respect of the costs incurred by the appellant wife in relation to this appeal.
The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) 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 husband in respect of the costs incurred by the respondent husband in relation to this appeal.
The Court grants to each party a costs certificate pursuant to the provisions of
s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) 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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Perrin & Perrin (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 65 of 2017
File Number: NCC 556 of 2015
| Ms Perrin |
Appellant
And
| Mr Perrin |
Respondent
REASONS FOR JUDGMENT
ALSTERGREN DCJ & ALDRIDGE J
Introduction
This is an appeal against property settlement and spousal maintenance orders made by Judge Myers on 15 February 2018. Those orders were made subsequent to orders made by the primary judge on 18 May 2017, which provided:
(1)The court finds it is just and equitable to make an adjustment of property as to 56.5% to the husband and 43.5% to the wife.
(2)The parties have liberty to provide a Minute of Order to the court reflecting an adjustment of property as to 56.5% to the applicant husband and 43.5% to the respondent wife to those assets and liabilities the court found in the document titled “balance sheet” attached hereto and marked with the letter ‘A’.
(3)Should the parties fail to submit to the court within 14 days of receiving these orders, the Minute of Order referred to in order 1 above, the court will thereafter relist the matter and make orders dividing the assets and liabilities between the parties without further recourse to the parties.
The parties did not provide a Minute of Order to the court as directed. The court did not relist the proceedings as order 3 envisaged.
On 14 June 2017, the wife filed a Notice of Appeal against the orders of 18 May 2017. By consent, on 14 August 2017, the primary judge stayed the operation of these orders.
On 9 February 2018, the wife filed an Application in a Case seeking orders to give effect to the findings noted in the orders of 18 May 2017. Each party proposed similar but slightly different orders. The difference is not relevant to the determination of the appeal.
On 15 February 2018, the primary judge delivered some short reasons as to why his Honour proposed to make the orders proffered by the husband.
In short, the husband was to transfer his interest in the parties’ Property G to the wife who was obliged to discharge the mortgages over it. The parties were to retain their other assets which meant that the husband retained Property R. A superannuation splitting order was made allocating the base amount of $246,554 to the wife out of the husband’s superannuation. The wife’s application for spousal maintenance was dismissed. The orders were stayed pending determination of the appeal.
On 20 March 2018 an Amended Notice of Appeal was filed.
Background
The husband was born in 1960 and was aged 56 years at the time of trial.
The wife was born in 1952 and was aged 63 years at the time of trial.
The parties commenced cohabitation in mid to late 1998 and married in 1999.
The husband commenced employment with the New South Wales Police Force in August 1982, and at the time of cohabitation the husband was working full‑time as a police officer. From 1982, the husband contributed to the Police Superannuation Scheme (“the PSS”) provided by the Police Regulation (Superannuation) Act 1906 (NSW).
The husband was discharged from the Police Force due to various injuries in March 2007, and became entitled to a hurt on duty superannuation interest pursuant to s 10 of the Police Regulation (Superannuation) Act 1906 (NSW). The primary judge accepted the husband’s submissions that his superannuation interest comprised a retirement component and an injury component (the hurt on duty benefit).
The husband’s superannuation was held to have a total value of $727,996 at trial out of a total asset pool of $1,155,437 (or approximately 63 per cent).
The parties made a range of property investments during the course of their relationship, which were detailed in the primary judge’s reasons. It is not necessary to outline them here, save to note that the parties purchased Property G in March 1999 as the matrimonial home.
There were no children of the marriage however both parties had children of previous marriages.
The parties separated in May 2014 and the husband has since re-partnered.
The husband commenced proceedings for property settlement orders on 6 March 2015.
The trial commenced before the primary judge on 6 June 2016, and continued on 7 and 8 June, and 19 and 20 October 2016. On 8 June 2016 orders were made by consent for a superannuation split to the wife of $166,132.91 to pay a joint debt of the parties and the wife’s legal fees, of which $22,060 remained in the wife’s bank account at trial.
The primary judge delivered oral reasons for judgment and made orders on 18 May 2017 and 15 February 2018.
The Appeal
The Amended Notice of Appeal contained five grounds of appeal under the following headings:
(1)Assessment of contributions;
(2)Adequacy of reasons;
(3)Requirement for a just and equitable order;
(4)Manifestly unjust result; and
(5)Spousal maintenance.
Ground 1
Ground 1 as stated in the Amended Notice of Appeal was:
1.1His Honour’s approach to the determination of the appellant’s entitlement constituted both an error of principle and a miscarriage of discretion.
1.1.1His Honour failed to consider the indirect contributions of the wife to the husband’s hurt on duty superannuation entitlement and the contributing relevant factors.
The crux of ground 1 was that the primary judge was in error in failing to consider any indirect contribution made by the wife to the husband’s hurt on duty superannuation interest. Counsel for the wife argued that whilst the primary judge considered whether the wife made direct contributions to the husband’s superannuation interest, the primary judge’s reasons were silent as to indirect contributions and no findings were made. In particular, the wife argued the primary judge failed to consider relevant factors such as:
·The amount of the husband’s salary at the time he was hurt on duty;
·The wife’s contributions to the family when the husband was hurt on duty;
·The wife’s contributions during the remainder of cohabitation; and
·The parties’ contributions and circumstances post-separation.
Additionally, the wife contended that the primary judge’s analysis of the parties’ contributions to the husband’s superannuation interest did not consider the “nature, form and characteristics” of that interest: Hayton v Bendle (2010) 43 Fam LR 602; Semperton v Semperton (2012) 47 Fam LR 626; Welch & Abney (2016) FLC 93-756.
At [38] and [39] of the reasons, the primary judge accepted the argument raised by the husband at trial that the wife could not claim any direct contribution to the husband being hurt on duty:
38. At paragraph 101 of the submissions for the husband, it is suggested that the husband being hurt on duty and the pension that has then flowed from those injuries is tantamount to a damages award, such that the wife cannot be said to have made any contribution to the injury component. Counsel for the husband drew attention to the decision in various cases, including the decision of Watts J in Schmidt & Schmidt [2009] FamCA 1386 at paragraph 108 where Watts J concluded:
The wife could not claim any direct contribution arising from the husband being hurt on duty.
39. The Court finds favour with this argument and accepts as at 3 March 2007, the husband’s then increase in value of his superannuation interest was as a result of receiving a hurt on duty pension entitlement and should be taken into account as a contribution made by the husband; a change in value of close on $620,000.
As can be seen, as a consequence the primary judge found that the increase in the amount of the husband’s superannuation interest as a result of receiving a hurt on duty pension was a direct contribution made solely by the husband.
Notwithstanding that the husband’s superannuation entitlement represented a very large proportion of the total pool of assets, there was no distinct consideration in the reasons by the primary judge as to whether the wife could be said to have made an indirect contribution to the husband’s superannuation.
Was his Honour’s approach in error?
As is apparent from the primary judge’s reasons at [38]–[39], the primary judge reasoned or adopted the following syllogism:
(1)A hurt on duty pension is tantamount to an award for damages for a personal injury claim;
(2)The wife cannot be said to have made any contribution to the husband’s injury whilst on duty;
(3)It therefore must follow that the wife has made no contribution to the husband’s superannuation entitlement for the hurt on duty pension and the contribution is entirely that of the husband.
With respect, that reasoning is incorrect. In the context of the evidence available in this case, the primary judge was required to at least consider indirect contributions to the husband’s superannuation interest pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) and the relevant case law.
Paragraphs 79(4)(b) and (c) of the Act state:
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
…
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
…
(Emphasis added)
Before turning to the evidence, it is necessary to refer to the failure by the parties’ practitioners on the hearing of this appeal to comply with Practice Direction No.1 of 2017 – Conduct of Appeals. At trial, significant parts of the parties’ trial affidavits were the subject of successful objections. Unfortunately, in this appeal, the parties filed copies of the original affidavits which failed to indicate the parts that had been ruled inadmissible. Further, the parties did not tell this Court prior to the hearing that much of that material was in fact struck out by consent. This was a most unsatisfactory state of affairs and in contravention of the practice direction, which dictates that parties must give the appeal registrar a schedule which identifies any material in the appeal books which was not relied upon at trial or struck out. This practice direction was annexed to the procedural orders made on 23 August 2017 in preparation for the appeal.
Despite the significant objections, there remained evidence before the primary judge of the wife’s non-financial contributions as a homemaker and carer of the husband’s children. The primary judge addressed these contributions to some extent at [13], [34], [59] and [66] of the reasons. These paragraphs read as follows:
13.At the time of the marriage, both parties had children of previous relationships namely, [Mr S born in] 1989, [Mr C born in] 1991, [Ms M born in] 1982, and [Mr A born in] 1984. It is not controversial that during the course of the marriage the children of the parties lived with them from time to time. The wife suggests at paragraph 5 of her affidavit she did not seek or receive any Child Support from [Ms M] and [Ms A’s] father, nor did they spend any time with their father. [Mr M] and [Mr C] lived with the parties essentially on alternate weekends and for some time during school holidays. The wife suggests at paragraph 6 of her affidavit that [Mr C] was diagnosed with Asperger Syndrome such that his behaviour was what she described as “difficult”.
…
34.Similarly, the husband suggested at paragraph 33 of his affidavit that he carried out major renovation works to [Property G], including removing the existing garage, building a new large Colorbond garage, “gutting” the inside of the home and doing what the husband describes as completing internal renovations, extending the back of the home and putting a second storey on the house. The husband suggests that he did all of the yard work and assisted from time to time with cooking, but that the wife did the housework and was the main cook for the home.
…
59.The Court notes the greater initial financial contribution made by the wife and subsequent contribution made by the husband by virtue of the increase in the value in his superannuation interest as a result of receiving a hurt on duty entitlement. The Court notes the parties to the marriage both worked to the best of their ability. The Court notes the greater non-financial contributions made by the husband in the form of the husband’s improvements to [Property G] and accepts the greater contribution having been made by the wife in her capacity as homemaker.
…
66.…The Court considers the decision in Robb & Robb (1994) 18 FamLR 489 as to both parties’ contributions to the welfare of the other’s children where there was no legal obligation to do so.
It is apparent from those paragraphs that the primary judge did not refer to and must be taken not to have considered the evidence, including the husband’s own evidence, about the amount of time Mr S, and particularly Mr C, lived full time with the parties, and the extent of the involvement of the wife in the care of the husband’s children.
For example, it was the husband’s sworn evidence that his son Mr C, who has Asperger’s Syndrome, came to live full time with him and the wife “in or about 2003” and “until he was 18 years old”.[1] This was a period of about six years. The husband admitted that the wife “helped … with the care of [Mr C]” and that “[h]e was not an easy teenager”.[2] The husband also acknowledged his other son Mr S lived with him and the wife “for a period of approximately 12 months full time during [their] relationship”.[3]
[1] Affidavit of [Mr Perrin] filed 24 March 2016 at paragraph 35.
[2] Ibid.
[3] Ibid.
The wife also gave evidence about the difficulties of looking after Mr C and the fact that the husband’s children lived with the parties full time apart from visiting their mother on alternate weekends.[4]
[4] Affidavit of [Ms Perrin] filed 22 March 2016 at paragraph 11.
During cross examination by counsel for the wife, the following exchange occurred between counsel for the wife and the husband:
Suffice it to say, she readily took into the combined household,
both her and your children? --- That’s correct. Yes.[5][5] Transcript 8 June 2016 p 3 ln 34–35.
The husband then also agreed that he was confident in the wife’s commitment to bringing up his children, and so continued to perform night duties and work overtime.[6]
[6] Transcript 8 June 2016, p 4 ln 5–35.
The wife’s written submissions filed at the conclusion of the trial extracted parts of the transcript that addressed the wife’s non-financial contributions including those referred to above upon which the wife relied.
As stated in Hayton v Bendle (2010) 43 Fam LR 602 at [105], “[i]t has always been the task of courts making orders pursuant to s 79 to properly examine the nature, form and characteristics of the property forming part of the pool for division”. An examination of the nature, form and characteristics of the husband’s superannuation interest reveals that a component of his entitlement under the PSS was the amount of his salary at the date of discharge. This is clear from s 10 of the Police Regulation (Superannuation) Act 1906 (NSW). The wife’s contributions as a parent to the husband’s children and as a homemaker allowed the husband to maintain his employment as a police officer, and earn that amount of salary.
It is well established that a spouse can indirectly contribute to his or her partner’s salary. For example, in T & T [Pension Splitting] (2006) FLC 93-263; [2006] FamCA 207 (“T & T”) at [143] Watts J stated “the wife can point to contributions that she made that are relevant to the amount of the husband’s salary at the date of discharge” (emphasis in original). In that case the wife’s contribution was assessed as 15 per cent. See also Darcy & Darcy [2011] FMCAfam 126, Fane & Lemott [2013] FamCA 604, Linch & Linch [2014] FamCAFC 69, Jarvis & Seymour [2016] FCCA 1676.
In Schmidt & Schmidt [2009] FamCA 1386 (“Schmidt”), after considering direct contributions at [108], Watts J immediately addressed whether the wife had made indirect contributions at [109] and [110] and made an allowance of 10 per cent to the wife:
108. The wife cannot claim any direct contribution arising from the husband being hurt on duty.
109. The wife has made contributions after separation in her role as parent to the two children of the marriage. I infer that the wife's role as parent has to some degree, at least initially during the period of the husband's impairment, increased, although over time that additional contribution which the wife has made has lessened as the husband has recovered. The wife can point to contributions that she made to the amount of the husband's salary by supporting him in the move to V and to his move to N associated with his employment. I infer that during the course of the cohabitation the wife made sacrifices to enable the husband to pursue his career. There were additional burdens imposed upon the wife, particularly around about the time of the birth of the first child when the husband was away from the home because of his promotion.
…
110.The level of salary which the husband received at the time that he was hurt on duty is in part a result of contributions made by the wife during the cohabitation.
The primary judge did not refer to the entirety of the reasons of Watts J in Schmidt, nor as we have explained above did his Honour consider the evidence of the wife’s indirect contributions.
Counsel for the husband submitted on the hearing of this appeal that the totality of the assistance provided to the Court at trial by the wife in respect of her contributions to both superannuation and non-superannuation assets was contained in five somewhat imprecise paragraphs of the wife’s written submissions at trial. Counsel for the husband argued that the points now sought to be agitated by the wife on appeal regarding indirect contributions to the husband’s superannuation interest were too great of an extension of the points put to his Honour at trial such that they represented an impermissible “second go”.
With respect, this argument has no merit.
Counsel for the husband conceded that he could not take this point as far as to say that the wife’s arguments on appeal were completely new and that the wife was bound by her case at trial: Metwally v University of Wollongong (1985) 60 ALR 68.
It may be accepted that the wife’s submissions at trial did not characterise any of her contributions as indirect contributions to the husband’s superannuation interest. The wife simply sought a contribution assessment to superannuation assets of 50 per cent.
But it is clear from the husband’s submissions to the primary judge that the issue of contributions to the husband’s superannuation interest was agitated by both parties at trial. For example, in written submissions at trial, the husband conceded in relation to the wife’s contributions that “[t]he Court must give a proper reflection of the retirement component accrued prior to the granting of the Hurt on Duty benefit and reflect a very modest contribution to the invalidity component”.[7] The husband suggested overall that a contribution of 10 per cent to his superannuation interest by the wife was appropriate but that the court could find that 15 per cent was warranted.[8]
[7] Husband’s Written Submissions filed 4 November 2016 at paragraph 148.
[8] Ibid at paragraph 172.
Conclusion as to ground 1
Paragraphs 79(4)(b) and (c) of the Act required the primary judge to consider both direct and indirect contributions by the parties to the superannuation interest. Specifically, the primary judge was obliged to consider and conclude whether the wife made any indirect contribution to the husband’s superannuation interest but did not do so.
Nowhere in the reasons is there an examination of the nature, form and characteristics of the husband’s superannuation interest. An examination of the characteristics of the husband’s superannuation interest would have led the primary judge to consider the wife’s non-financial contributions as possible indirect contributions to the husband’s salary.
The absence of any consideration as to whether the wife made indirect contributions to the husband’s superannuation interest represents a failure to take into account a material consideration and so is a miscarriage of the primary judge’s discretion. This constitutes an appealable error: House v The King (1936) 55 CLR 499 at 504 – 505.
Accordingly, there is merit in this ground.
Ground 2 – adequacy of reasons
Ground 2 was stated in the Amended Notice of Appeal as:
2.1His Honour erred in principle by failing to provide adequate reasons
2.1.1His Honour failed to provide adequate reasons in the reasons for judgment handed down contemporaneously with the orders.
Grounds 1 and 2 of the appeal overlap. As the wife’s Summary of Argument notes:
22.A number of the complaints about the failure of the trial Judge to give adequate reasons have already been addressed and thus it is not necessary to repeat the submissions.
The Summary of Argument filed by the husband simply sets out the following under ground 2:
21.No separate submissions are made on behalf of the wife in respect of ground 2 as they are otherwise encapsulated in the submissions concerning ground 1.
22.The only point made on behalf of the husband is that the Trial Judge’s reasons (AB1:41 – 42 [69] – [70] “did justice to” (Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [56] – [67]), the case ran by the wife at trial, particularly having regard to the fact the wife had the opportunity to file written submissions.
The principles in relation to adequacy of reasons are well settled. In Waterways Authority v Fitzgibbon (2005) 221 ALR 402 at 428, Hayne J (McHugh and Gummow JJ agreeing) stated:
130.…because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue.
In Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at 464 [62], Gleeson CJ, McHugh and Gummow JJ stated:
A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
In Bennett and Bennett (1991) FLC 92-191 at 78,266 the Full Court stated:
In Sun Alliance Insurance Ltd v Massoud [1989] VR 8, the Full Court of the Supreme Court of Victoria, consisting of Fullagar, Gray and Tadgell JJ, followed the principles established by the New South Wales Court of Appeal. Gray J, who delivered the principal judgment, said, at 18:
“The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if: —
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.”
In Babett & Falconer (2015) FLC 98-067 at 96,730 – 96,731 the Full Court stated:
43.The relevant principles also embrace caveats on a too-slavish intervention by appeal courts. The frequently-cited judgement of Mahoney JA in Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, 386 with respect, bears repeating. It is apposite to the challenge in this case as exemplified by the written contention just quoted. His Honour said (at 386):
Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemize, for example, in the assessment of damages for tort, each of the factual matters to which he has had regard. … Nor is a judge required to make an explicit finding on each disputed piece of evidence. It will be sufficient, if the inference as to what is found is appropriately clear …
…
But, subject to matters such as these, the basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it.
44.Within the family law context, those comments should be seen as reinforced by the fact that the nature of the s 79 inquiry is, in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and which, effectively as a corollary, requires a “broad-brush approach” (See for example, Dickons & Dickons (2012) 50 Fam LR 244, [25]).
The length or brevity of a judgment should not be viewed as the determinative factor in assessing adequacy of reasons. A succinct judgment that readily indicates to the reader and the appellate court the reasons why the decision was made will be sufficient. Conversely, a lengthy judgment will not necessarily sufficiently elucidate the reasoning process: Cobb & Simons [2011] FamCAFC 78 at [25].
However, the fundamental need for adequate reasons cannot be understated. What is critical is that in the context of the nature of the dispute and the breadth of the issues raised by the parties, the reasons are sufficiently clear to demonstrate why the decision was made so that justice is seen to have been done.
Evaluation of the primary judge’s reasons for judgment
Both parties accepted on appeal that there was a paucity of reasons in this matter. With the greatest respect to the primary judge, his Honour’s reasons were inadequate in a number of respects.
a) Consideration of the wife’s non-financial contributions
As set out above, there was a substantial amount of evidence that remained before the primary judge as to the wife’s indirect contributions that did not appear to be the subject of any of the findings or reasons for judgment.
b) Assessment of contributions to the husband’s superannuation interest
As also set out above, the primary judge failed to consider whether the wife indirectly contributed to the husband’s superannuation interest.
Once established that the primary judge was obliged to consider indirect contributions in the context of the issues raised in these proceedings pursuant to s 79(4)(b) of the Act, the primary judge’s failure to provide such consideration represents a deficiency in his reasons.
c) Assessment of post-separation contributions
On appeal, counsel for the wife argued that the primary judge’s reasons failed to adequately address the parties’ post-separation contributions. In particular, counsel for the wife focused on the primary judge’s failure to take into account the husband’s post-separation treatment of his superannuation interest.
As recorded above, on 8 June 2016 the court ordered by consent a superannuation split which allocated a base amount of $166,132.91 to the wife. In the husband’s affidavit sworn 13 September 2016, he detailed how soon after this superannuation split he commuted a gross lump sum of $140,637.39 of his superannuation interest. The husband used this money to obtain a loan that allowed him to purchase a property with his new partner. On affidavit, the husband attached a State Super letter that evidenced that the husband’s fortnightly pension was reduced by $477.68 as a result of this commutation.[9] At trial, counsel for the wife estimated that the reduction in the Family Law Value as a result of the commutation was approximately $209,000.[10]
[9] Affidavit of [Mr Perrin] filed 13 September 2016, Exhibit D.
[10] Transcript, 20 October 2016, p 69 ln 2.
At [37], the primary judge acknowledged the effect of the superannuation split to the wife, but did not mention the commutation or make a finding as to its effect on the value of the husband’s superannuation interest. Whilst the primary judge included the property purchased by the husband in the balance sheet, the primary judge should have considered whether the effect of the commutation on the value of the husband’s superannuation interest was relevant under s 75(2)(o) of the Act or as a premature distribution of a matrimonial asset: Townsend and Townsend (1995) FLC 92-569 at 81,654.
d) The primary judge’s approach to calculating percentage adjustments
On appeal, counsel for the wife argued that the percentages used by the primary judge to make adjustments for contributions and s 75(2) factors were difficult to follow. There is, in our view, merit to that complaint.
At [60], the primary judge allowed an adjustment for contributions as to 54 per cent to the husband and 46 per cent to the wife. Then at [67], the primary judge made what appeared to be a 2.5 per cent adjustment to the husband for s 75(2) factors, but described this as a 52.5 per cent allowance to the husband and 47.5 per cent to the wife.
Cumulatively, this description was somewhat confusing as it could have been interpreted as a 1.5 per cent adjustment to the wife for s 75(2) factors.
This confusion could have been avoided if the primary judge clearly stated that what was intended was a 4 per cent adjustment to the husband for contributions and a 2.5 per cent adjustment to the husband for s 75(2) factors.
e) The primary judge’s dismissal of the spousal maintenance claim
Although the challenge to the primary judge’s dismissal of the spousal maintenance claim was articulated in a separate ground of appeal, as the substance of the challenge centred on the adequacy of the primary judge’s reasons, it is conveniently dealt with within this ground of appeal.
On appeal, counsel for the husband acknowledged that the reasons in relation to spousal maintenance were even briefer than those on the other matters. The primary judge dealt with the entirety of the spousal maintenance claim in [69] – [70] of the judgment:
69.The Court considers the lump sum spousal maintenance claim by the wife. The power to make orders for spousal maintenance is found at section 72 of the Family Law Act 1975. Section 72 provides:
(1) a party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so if, and only if, the other party is unable to support herself or himself adequately whether:
a)by reason of having the care and control of a child of the marriage who has not obtained the age of 18 years;
b)by reasons of age or physical and mental incapacity for appropriate gainful employment;
c)or for any other adequate reason; having regard to any relevant matters referred to in section 75(2).
70.The Court is not satisfied, where there will be a significant adjustment of property in the wife’s favour, by virtue of this decision, that the wife is able to demonstrate in any way that she is unable to support herself adequately by reason of having the control of a child of the marriage under the age of 18 years which, of course, she does not. Again noting the significant adjustment of property in favour of the wife the Court is not satisfied on the evidence of the wife that she is unable to support herself adequately by reason of age, physical and mental capacity for appropriate gainful employment or for any other adequate reason. Accordingly, the wife’s application for spousal maintenance must fail.
It is not clear from the primary judge’s reasons how his Honour arrived at this conclusion. Apart from stating that the wife was to receive a significant adjustment of property by virtue of the primary judge’s decision, there was no discussion of the wife’s income or circumstances that would have been relevant to a claim for spousal maintenance.
There was evidence available of the wife’s financial circumstances that should have at least been considered. On affidavit and in her financial statement, the wife detailed her employment history, period of unemployment, wages and rental income.[11] This evidence should have informed an enquiry into whether the wife would be able to generate income from resources or earning capacity in order to support herself adequately: Atwill and Atwill (1981) FLC 91-107 at 76,792.
[11] Affidavit of [Ms Perrin] filed 22 March 2016 at paragraphs 25 and 116.
It is of course true that where a court must make a discretionary assessment a holistic analysis is required: see Dickons v Dickons (2012) 50 Fam LR 244 at [23] – [27]. However, such an approach does not permit courts to fail to have regard to cogent evidence, which in our view for the reasons we have explained, the primary judge failed to do in this case.
Counsel for the husband contended that the wife’s claim for spousal maintenance was poorly particularised at trial, and so the primary judge’s brief dismissal of the claim was appropriate. We do not accept that submission. The primary judge did not refer to the ample evidence relevant to the wife’s claim for spousal maintenance.
If the primary judge found that the claim was poorly articulated and without foundation, then this should have been stated in the reasons. The primary judge’s decision to reject the wife’s claim was not supported by reasons adequate to explain it.
Conclusion as to ground 2
Accordingly, the wife’s challenge to the adequacy of the primary judge’ reasons is upheld. As noted above, the primary judge’s reasons did not adequately indicate to the parties what evidence was considered or expose the basis for the findings and conclusions that were reached.
Ground 5 – spousal maintenance
Ground 5 has been dealt with above as it overlaps with ground 2. Given the primary judge’s lack of reasons demonstrating any consideration of the evidence pertaining to the wife’s financial circumstances or her ability to support herself, this ground of appeal should also be allowed.
Conclusion
It follows that the orders made on 15 February 2018 must be set aside. The wife also sought orders setting aside the orders made on 18 May 2017 and 14 August 2017. These orders were expressions of the court’s opinion at that stage but were not definitive of the parties’ rights. It follows they were not “decrees” from which an appeal lies (see s 94AAA(1) and the definition of “decree” in s 4 of the Act; Daines & Daines (2014) FLC 93-585 at [14] – [20]).
Those orders therefore cannot be set aside but as they were steps on the path to the final orders, which are being set aside, they have no force and effect.
We note that the Amended Notice of Appeal purports to appeal against the orders of 18 May 2017, although it clearly refers to the orders of 15 February 2018 as the orders the subject of the appeal. No objection was taken to the form or competence of the Amended Notice of Appeal and we have proceeded on the basis that any necessary leave which may be required has been given.
In considering whether to re-exercise discretion or remit the matter for rehearing, this court is bound to consider the principles of the High Court in Allesch v Maunz (2000) 203 CLR 172. The discretion must be exercised with reference to circumstances as they currently exist.
Both parties on appeal acknowledged the inherent difficulty faced by the appellate court in re-exercising discretion in this matter. The trial commenced in June 2016, almost two years ago. There is no up to date evidence about the parties’ financial circumstances or any changes that may have occurred. There are facts that remain controversial and findings that have not been made. Particularly, the absence of adequate reasons means that it is not possible for the appellate court to re-exercise discretion in this matter.
As this matter will be remitted to the Federal Circuit Court of Australia for rehearing, the discretion of the judge who is to rehear the matter may be restricted if we address grounds three and four which concern the exercise of the primary judge’s discretion. Therefore we will not address these grounds.
Costs
Notwithstanding that the wife has been wholly successful in her appeal, having regard to the submissions made at the conclusion of the appeal we are of the view that no adverse order as to costs should be made.
An order will be made for both parties to receive cost certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) for both the appeal and any rehearing.
MURPHY J
The relevant circumstances giving rise to this appeal are set out in the joint reasons of Alstergren DCJ and Aldridge J and need not be repeated. I agree that the appeal should be allowed and agree generally with their Honour’s reasons. I wish to add some observations of my own.
Failure To Consider Relevant Consideration And Error Of Law
It is by no means infrequent that appeals before this Court include the assertion that a trial judge has “failed to consider” one or more matters. Very frequently, reference to the reasons establishes that assertion as being without foundation. In the instant appeal, that is not so. There can be no doubt, as the wife asserts in ground 1 of her appeal, that the trial judge did not at all consider the wife’s indirect contributions to the husband’s superannuation interest. There can equally be no doubt that the wife made indirect contributions. Neither the evidence, nor any finding by his Honour suggests that she did not.
Both s 79(4)(b) of the Act and authorities of long standing make it clear that any such indirect contributions are a relevant consideration in the exercise of the relevant s 79 discretion. Here, those contributions were particularly important because of the dramatic imbalance between the amount of the superannuation interests the subject of the proceedings and the nature and value of the property otherwise the subject of the proceedings.
The failure to consider an important relevant consideration in the exercise of the s 79 discretion should alone see the appeal being allowed.
Further, as their Honours point out, that failure was based, with respect, on an entirely erroneous reading of what had been said by Watts J in Schmidt. The trial judge does not specify the “decision[s] in various cases” to which his Honour refers at [38] but no decision of which I am aware suggests that, where there is evidence of indirect contributions, that they cannot, and should not, be taken into account in the exercise of the discretions and nor were any authorities cited to this Court to that effect.
His Honour’s failure to take account of the wife’s indirect contributions, itself an error, is also based upon an apparent misunderstanding of the relevant principle and, thus, an error of law.
I respectfully agree with the reasons of Alstergren DCJ and Aldridge J for holding that the wife is not precluded from raising those issues on appeal.
The Superannuation Interest
His Honour records at [18] that “[t]here is a real issue in these proceedings as to the value of the husband’s superannuation entitlements as at the date of cohabitation” and goes on to explain that, for reasons irrelevant to the appeal, adversarial experts were engaged. No agreement was reached between them as to “the value of the husband’s superannuation entitlements as at the date of cohabitation”.
His Honour refers to the evidence of those experts and reaches a conclusion in respect of their evidence in the following passages:
21.The affidavit sworn by [Ms T] affirmed 10 August 2016 annexes a report, or what might be better described as a critique of [Mr P’s] opinion. Under the heading September 1998 Valuation, [Ms T] suggests:
We question the relevance of the calculations [Mr P] has made. Firstly, the valuation methodology for valuing superannuation interest is relevant to current values when a superannuation interest is to be split. They were not, in my opinion, envisaged to be used to calculate valuations many years in the past.
The PSS has its own scheme, a specific method. In fact, it is regarding superannuation interests and the factors reflect the complexity of the scheme. The actuarial calculations are based on assumptions about the future of the whole population of superannuants at the age and state of their career. The future outcomes of any individual member may or may not be reflected in the actuarial assumptions. For example, a calculation of the value of an interest more than 20 years ago using the actuarial formula may reflect what could be reasonably expected of an average interest, but not reflective of the value of the particular interest being valued. Therefore, using actuarial calculation to calculation of an interest in 1998 is not reasonable.
Prior to reaching age 55, a PSS member has two options if he or she resigns and crystallises their superannuation benefit. They can withdraw their benefit, in which case they are entitled to the return of their contribution plus interest or they can get a further benefit in which case they will receive their contribution plus employer contributions. Annexed hereto and marked with the letter B is a copy of the PSS 1997 statement of [Mr Perrin]. We note that [Mr Perrin’s] PSS statement at 30 June 1987 shows a withdrawal benefit of $44,423 or a deferred benefit of $87,435 plus a basic benefit of $10,402.
If a valuation is needed of [Mr Perrin’s] superannuation at September 1998, we would recommend using this amount shown on the actual statement. We do not have access to the 1998 statement.
22.The opinion of Ms T does not suggest an actual alternate figure. For the purposes of the proceedings, the Court notes the parties prepared a final joint written report that reflects values, at different times and those areas of agreement and disagreement. The joint report was prepared and signed by Mr P and Ms T. The joint report was e–filed on 14 October 2016. Nothing contained within the report suggests an agreed initial value of the husband’s superannuation interest as at commencement.
23.Having heard the experts give evidence during the course of proceedings in circumstances where they were cross-examined together, the Court finds that the value of the husband’s interest in his Police Superannuation Scheme as at commencement was that of $178,374.28. [Ms T’s] suggestion in her report that using the value shown in the statement from 1998 carries little weight where [Mr Peter’s conceded she did not have access to the 1998 statement and therefore no knowledge of what that statement provided.
I agree with their Honours that the proceedings should be remitted for rehearing by a judge other than Judge Myers. A consequence is that significant caution should attend comments about the judgment under consideration that may be the subject of controversy on the new trial.
Yet, I feel bound to observe that the absence of the 1998 statement and any “value” of the interest said to be there shown was not germane to the issue which his Honour was obliged to determine. Rather, the issue raised by the competing expert opinions was whether the scheme-specific method for arriving at the “amount” of the husband’s superannuation interest as at the date of commencement of cohabitation was of any evidentiary value at all. The wife’s expert said it was not. That issue was not at all addressed by his Honour.
It should not be assumed on the retrial that his Honour’s conclusion reflects a correct basis for rejection of the evidence of the wife’s adversarial expert.
The wife’s expert identifies a number of premises for the conclusion reached, contending centrally that the use of the scheme-specific method for calculating the amount of the superannuation interest with its inherent actuarial assumptions for calculating present value (more accurately “amount”) rendered that method inappropriate for ascertaining the “value” of the superannuation interest as at 1998 (when, it should be noted, the superannuation interest had entirely different characteristics). That issue was not addressed by his Honour. It bears careful scrutiny on the retrial.
Their Honours point out at [27] above that the trial judge’s reasons, according to a syllogism which they there set out, leads in turn to an erroneous assessment of contributions. I respectfully agree.
However, as it seems to me, the error also arises, with respect, from a fundamental misunderstanding of the husband’s superannuation interest by seeking to categorise it as something which, for the purposes of s 79 of the Act, it is not. Again, it should not be assumed on the new trial that his Honour’s categorisation or understanding of the superannuation interest is correct.
In T & T,[12] Watts J considered comprehensively an analogous superannuation interest. His Honour, correctly in my respectful view, rejected as “an inaccurate categorisation” an argument that the “hurt on duty” pension payments that “the husband receives between now and normal retirement age should not be categorised as the husband receiving a superannuation interest but rather being the equivalent of a payment under an income protection policy from an insurance company”. In the instant case, a comparison was drawn between the superannuation interest and an award of damages arising from personal injury. That too, in my view, is an inaccurate categorisation.
[12] (2006) FLC 93-263; [2006] FamCA 207 at [120] – [121].
The first task of the trial judge was to “identify the property of the parties or either of them”.[13] Section 90MC(1) of the Act mandates that an interest of a party in something that meets the definition of “a superannuation interest”[14] is to be “treated as property for the purposes of paragraph (ca) of the definition of ‘matrimonial cause’ in section 4”. Their Honours refer above to my decision in Hayton v Bendle. I said there at [67]:
Once an interest is a “superannuation interest” as defined, the court is mandatorily required to determine an amount in relation to the interests in accordance with the Regulations, if the Regulations provide for the determination of that amount in relation to the interest (s 90MT)(2)(a)). In the event that the Regulations do not so provide there is an alternative mandatory requirement upon the court, namely to “determine the value of the interest by such method as a court considers appropriate” (s 90MT(2)(b)).
[13] Family Law Act 1975 (Cth) s 79. Stanford v Stanford (2012) 247 CLR 108.
[14] Family Law Act 1975 (Cth) s 90MD.
Thus, analogues such as income protection payments or damages awards have no place in the relevant analysis. The simple fact is that the husband has a “superannuation interest” as defined in the Act (and relevant Regulations) and, as such, that interest at its assessed amount is to be “treated as property” with the consequence that contributions of all types made by both parties throughout the whole of the period up to trial need to be assessed.
Assessing contributions must take account of the nature, form and characteristics of the particular superannuation interest and the nature, form and extent of the respective contributions made. As Watts J points out in T & T a superannuation interest in the nature of a hurt on duty pension will have particular characteristics that have to be considered just as other superannuation interests (and indeed other types of property) do.
Two considerations follow in this case. First, the fact that it was the husband and not the wife who suffered the relevant injury is a matter to be taken into account not by reference to an analogue, but within a “holistic assessment” of the differing contributions made by both parties.[15]
[15] See, for example, Dickons v Dickons (2012) 50 Fam LR 244.
It should always be borne in mind that:[16]
…a spouse’s contribution to the welfare of the family or in the capacity of homemaker or parent may be recognised by an order under sec. 79 in relation to some property even though such contribution has no connection whatsoever with that property, or any other property of the parties or either of them (whether in relation to its acquisition, conservation or improvement or otherwise).
[16] Shaw and Shaw (1989) FLC 92-010 at 77,292. See also, what was said by Nygh J in G and G (1984) FLC 91 582 at 79,694–5.
To similar effect, the Full Court there quoted with approval what was said by an earlier Full Court in Carter and Carter:[17]
Where property is absolutely owned by one spouse before marriage, different considerations may apply under sec. 79(4)(a) and (b), in the sense that the other spouse may not be able to show any direct or indirect contribution to the acquisition of that property … Nevertheless, the other spouse may be able to rely on a contribution to the conservation or improvement of that property. Further, the factors arising under para. (4)(c) and (d) do not depend on the time of acquisition, or on the extent or either party’s contribution. The position is that all property is to be brought into account and appropriate weight is to be given to the different factors relevant to each item.
[17] (1981) FLC 91-061 at 76,492.
Matters specific to superannuation interests and the mandated manner of arriving at their “amount” can also be important as is illustrated, for example, in Surridge & Surridge.[18]
[18] (2017) FLC 93-757 at [32] – [33].
It will be a matter for the judge hearing the retrial to assess those respective contributions.
Finally, the value and type of the property that each party might receive in respect of a mooted contributions adjustment can be an important s 75(2) consideration.[19] That can be a particularly important consideration where a splitting order is mooted and where, for example, one party has met vesting requirements and the other has not. Again, a similar point is made by Watts J in T & T:
[19] Family Law Act 1975 (Cth) s 75(2)(b); (f); (n).
176. In [K (formerly V and V] [2005] FamCA 1207, Boland J determined the splitting order she intended to make prior to her considerations of s.75(2) factors (step 3) and "the just and equitable requirement" (step 4) (see para 146-184 of her Honour's judgment).
177. I shall not be so bold.
178. It is, however, at least important to know at the end of step 2 what splitting order (if any) is proposed given that in step 3:
1. Section 79(4)(d) Family Law Act requires the Court to take into account the effect of any proposed order upon the earning capacity of the party.
2. Section 79(4)(e) Family Law Act and Section 75(2)(f) require the Court to take into account the eligibility of either party to a pension under any superannuation fund or scheme.
179. Whether the proposed splitting orders fit an overall adjustment of property and assets will be revisited when considering whether the order to be made under Section 79 FLA is just and equitable (“step 4”).
(As per original)
I am unable to see where his Honour has given any consideration to any of these matters. Again, those factors have the potential to be particularly important in this case given the marked difference between the value of the property and the amount of the wife’s superannuation interest on the one hand and the amount of the husband’s superannuation interest on the other. Once again, a consideration of those matters, and s 79(4)(e) of the Act more generally, will be a matter for the judge hearing the retrial.
The “Orders” Made on 18 May 2017
I respectfully agree with their Honours that, although described as such, the “orders” made on 18 May 2017 were not orders at all. They do not require anybody to do anything; they contain no obligations which can be enforced. I accordingly also respectfully agree that they are not “decrees” from which an appeal lies.
There are occasions when the particular circumstances of a case suggest that the parties can, or should, be given the opportunity to arrive at the precise terms of orders following a determination by the Court of the issues joined. For example that can occur, consequent upon a determination of percentage entitlements, where the parties agree and contend to the Court that they should have the opportunity to reach agreement about the form of the orders so as to take account, for example, of taxation ramifications.
Yet, even if a court is persuaded of that course of action, orders should be made imposing obligations upon the parties to undertake the actions required for the Court to make orders upon completion of those actions and what shall occur in default of that occurring. (Of course, orders can also be made to facilitate consent minutes being filed if that be the outcome).
However, on no account should “orders” be framed that are not in fact orders the effect of which is, as here, to abdicate to the parties the mandatory judicial function of making orders that will finally determine the financial relationships between the parties[20] and ending the proceedings which the judge has a duty to decide. The difference is not sophistry, but central to the judicial function.
[20] Family Law Act 1975 (Cth) s 81.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren DCJ, Murphy and Aldridge JJ) delivered on 9 July 2018.
Associate:
Date:
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