Petruski & Balewa - [2013] FamCAFC 15

FAMILY COURT OF AUSTRALIA

PETRUSKI & BALEWA

[2013] FamCAFC 15

FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – where the trial judge made orders requiring the wife to transfer to the husband her interest in the K property and pay him $54,000 from the parties’ money held on trust – where the wife’s central complaint was that the trial judge erred in his assessment of the parties’ contributions, given the wife’s “overwhelming financial contributions” – where the Full Court found the trial judge was well aware of the nature and extent of the parties’ respective contributions, that he recognised the significantly greater financial contributions made by the wife, and that he gave appropriate weight to the joint nature of the parties’ property acquisition during their relationship – where the wife failed to persuade the Full Court that the trial judge’s decision exceeded “the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong” – no merit found in any ground of appeal – appeal dismissed – costs ordered in favour of the husband.

Family Law Act 1975 (Cth) ss 75(2), 79(4), 117(2A)(f)

CDJ v VAJ (1998) 197 CLR 172
De Winter and De Winter (1979) FLC 90-605
Dickons & Dickons [2012] FamCAFC 154
Figgins and Figgins (2002) FLC 93-122
Lovine & Connor and Anor [2012] FamCAFC 168
Norbis v Norbis (1986) 161 CLR 513

APPELLANT:

Ms Petruski

RESPONDENT:

Mr Balewa

FILE NUMBER:

PTW

1705

2010

APPEAL NUMBER:

2011

DATE DELIVERED:

20 February 2013

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Perth

JUDGMENT OF:

Bryant CJ, Strickland & Moncrieff JJ

HEARING DATE:

29 March 2012

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

13 October 2011

LOWER COURT MNC:

[2011] FCWA 102

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Walker

SOLICITOR FOR THE APPELLANT:

Tyrone B Grantham

COUNSEL FOR THE RESPONDENT:

Ms Anderson

SOLICITOR FOR THE RESPONDENT:

Calverley Johnston

Orders

The appeal be dismissed.
The appellant wife pay the respondent husband’s costs of and incidental to the appeal on a party/party basis, such costs to be assessed or taxed in default of agreement.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Petruski & Balewa has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 30 of 2011
File Number: PTW 1705 of 2010

Ms Petruski

Appellant

And

Mr Balewa

Respondent

REASONS FOR JUDGMENT

Introduction

By Amended Notice of Appeal filed on 7 February 2012 Ms Petruski (“the wife”) appeals against final property settlement orders made by Jordan AJ on 13 October 2011 (as amended pursuant to the slip rule on 3 November 2011). The respondent in the appeal is Mr Balewa (“the husband”).
In summary, the orders appealed against provided for the wife to transfer to the husband her interest in a property in K, Western Australia (“the K property”) and for the wife to pay the husband $54,000 from the parties’ money held on trust. Each party was to retain, and the other was to relinquish any interest in, real estate, business interests, investments, superannuation, motor vehicles, furniture and personal property in the possession, ownership or control of the first mentioned party.
The wife seeks to have the court set aside various of the orders made, and re-exercise the discretion so that she retains the K property and pays the husband an amount of money calculated as being 7.5 per cent of the net asset pool, less an amount being the value of assets said to be retained by the husband. As will be apparent when we consider the grounds in more detail, the wife asserts that the trial judge erred in failing to give sufficient credit to her for property contributed at the outset of cohabitation, and her greater contributions throughout the relatively short period of cohabitation.

Background

The husband was born in Africa in 1975 and was 36 years of age at the time of trial. The wife was born in Europe in 1957 and was aged 54 years at the time of trial. She had moved to Australia in 1968.
The parties met on the internet in or about 2000 and developed a long distance relationship. In early 2002 the parties decided to live together in Australia and, after being granted a fiancé visa, the husband moved to Australia in May 2003. The parties were married in July 2003 and they separated in July 2008.
The wife is a professional and at the time the parties commenced cohabitation she was a director and shareholder of the R Group, where she remained until November 2005. That group, amongst other things, engaged in property development. The wife’s interest in the R Group was held by the Petruski Family Trust, which was created by the wife in 2001 and of which she was both the trustee and a beneficiary along with P Pty Ltd (of which the wife was the sole director).
It was common ground that at the commencement of the relationship the wife held some property, superannuation and business interests, although there was “no proper valuation evidence available”. The evidence available was that the wife acquired an interest in a property at S in 1998 for $256,000 using borrowings of $204,000, and subsequent borrowings of $45,000 for improvements to the property (being debts which were not substantially reduced by May 2003). The wife’s income from her work, her income-producing property and distributions from the Petruski Family Trust provided her with a combined annual income of approximately $280,000. According to the wife her superannuation was worth approximately $30,000 at the commencement of cohabitation.
The husband graduated from college in Africa in 2000 with a diploma, however, upon arriving in Australia there were “significant limitations” on his capacity to secure employment. He needed English lessons and an upgrade of his computer skills, and he undertook these courses. The wife met the costs of those courses and financially supported the husband during his period of retraining. The husband attended to the majority of household responsibilities during this time and until he found employment in 2004. At the time of trial the husband’s income was $70,000 per annum with the prospect of earning “slightly more” in the “not too distant future”. It was agreed that the husband arrived in Australia without any “property interests”.
In July 2003 the husband was added as a beneficiary to the Petruski Family Trust. Distributions of trust income were made at the direction of the wife throughout the relationship, totalling approximately $474,000 to the husband and $467,000 to the wife between 2004 and 2008.
In February 2004 the parties jointly acquired land in K and contracted the construction of a home which was completed in August 2004. This was done partly to reinforce the husband’s financial credentials with the Immigration Department, and the husband acknowledged that it was the wife who took responsibility for organising the acquisition, although financially she only contributed $3,000 of the $54,000 deposit. The remainder of the purchase price was financed by Challenge Bank and the construction of the home was financed by Westpac. Once tenanted the property was managed by an agent and the rent received covered outgoings. At the time of trial the parties’ equity in the property was almost $500,000 as a result of “market factors”.
In August 2004 the parties purchased a property in C for $162,500, using finance of $146,520. At the time of trial the agreed value of the C property was $295,000.
In April 2007 the parties purchased a property in Q for $534,000, using trust distributions received during the marriage from the wife’s interest in the R Group.
In July 2008 the wife was offered a 10 per cent shareholding in the company of her employer, G Pty Ltd, which she took up for $90,000. At the time of trial her interest therein had an agreed value of $270,000.
During the relationship both parties accumulated superannuation, the husband in the amount of $20,000 and the wife increasing her superannuation from $30,000 to approximately $180,000.
In March 2009, shortly after separation, the wife acquired a property at E for $417,000. The purchase was funded in the amount of $304,000 by Colonial Bank and the remaining $110,000 from the equity in the C property. This increased the mortgage on the C property from $130,000 to $240,000.
Shortly after separation the husband removed approximately $34,000 from the parties’ joint bank account, however, the bulk of these funds were subsequently returned to the account.
On 31 March 2010 the wife filed an Initiating Application, and on 7 May 2010 the husband filed his Response. Both parties sought orders by way of alteration of property interests.
The matter came before Jordan AJ for hearing on 12 and 13 October 2011.

His Honour made orders and delivered his reasons for judgment on

13 October 2011.

Reasons for judgment delivered 13 October 2011

The trial judge commenced his reasons for judgment by setting out the background of the parties and their property interests. His Honour acknowledged that, whilst there was uncertainty as to the value of the wife’s property and business interests at the commencement of cohabitation, there was no doubt that those interests provided the foundation for the parties’ subsequent wealth acquisition and there was little dispute between the parties as to facts. His Honour found the net pool of assets was valued at approximately $2,392,000 (of which $1,812,000 was real estate).
His Honour then turned to consider the issue of contributions. Counsel for the wife proposed in her minutes of order presented at the commencement of the trial that the wife pay the husband a cash sum equivalent to 4.11 per cent of the net asset pool. The calculations for arriving at such a figure were set out in a schedule whereby the husband’s taxable income was measured against the total property and returns from all sources during the marriage, upon the assumption that all other distributions made to the parties and their entities were contributed solely by the wife. During the trial the numbers were “re-worked” and “recalibrated down” by the wife to suggest that the husband’s entitlement should be fixed at 3.36 per cent.
His Honour found such an approach to be “flawed at a number of levels”. It ignored the wide range of factors to be taken into account pursuant to s 79(4) of the Family Law Act (1975) (Cth) (“the Act”) by effectively suggesting each party’s entitlement was limited to the proportional difference in their income, and that by taking responsibility for the management of the parties’ finances only the wife should enjoy the benefits of the returns. His Honour was of the view that counsel for the wife had confused “returns on effort or contributions from the contributions themselves” and that such an approach treated marriage as “an event without consequence, to be wound up at its conclusion by a distribution based on an audit of earnings”. The trial judge referred to the decision in Figgins and Figgins (2002) FLC 93-122 as to the perils of such an approach.
The trial judge found the husband had made several significant indirect financial contributions, particularly as the parties had merged their finances in a joint account, both parties were jointly responsible for the mortgage on the K property, the husband had become a beneficiary of the Petruski Family Trust and the distributions he received were utilised for joint purposes. In relation to the latter, the trial judge noted distributions were made during the marriage when the parties’ finances and efforts had been combined and both parties enjoyed tax advantages by splitting the distributions. There was also the circumstance that whilst the husband was making his contributions, the wife was making contributions to her superannuation fund. Further, the trial judge considered the husband’s non-financial contributions to the running of the household during his period of retraining, contributions which are disregarded under the wife’s approach.
His Honour determined that, whilst the wife had introduced property to the value of approximately $500,000, the estate had grown to nearly $2,500,000 during the period of the parties’ relationship and as a result of joint efforts.
In relation to the distributions from the R Group, the wife acknowledged the entitlement was not property at the commencement of the relationship, but rather an entitlement to “future contingent distributions” which were made to the wife and other joint venture partners upon the realisation of a property development during the time of the marriage. The trial judge questioned the proper characterisation of such distributions if they were not considered to be property at the time of the marriage, and concluded that the issue of distributions again demonstrated “the deficits of a simplistic mathematical approach”. Ultimately his Honour determined that “a proper approach” to the wife’s interest in the R Group required “the substantial ongoing benefits” provided by that interest to be taken into account, and the fact that the duration of the marriage was only five years added weight to that.
The trial judge found both parties had made “significant and meaningful direct and indirect contributions to the advancement of their relationship and to the acquisition, maintenance and improvement of their properties”, and that both parties had “worked to their full capacity and potential in their variety of endeavours during the entirety of the marriage”. His Honour rejected the proposition that the wife should be entitled to any extra loading simply because of her higher earnings during the marriage, and instead found there was “a merging of effort, finance, risk and support during the entirety of the relationship” and that the parties’ contributions in terms of effort during the marriage were of “equal value”. The trial judge also noted the significant increase in value of the parties’ properties was through “no particular ongoing effort of either of the parties”, and that since separation the wife had responsibility for, and the sole use and benefit of, the bulk of the property interests.
The trial judge determined on the basis of contributions that the property should be distributed 77.5 per cent/22.5 per cent in favour of the wife. In so finding his Honour said this:
83.The most significant features clearly relate to, firstly, the wife’s initial contribution, secondly, the benefits enjoyed by the parties because of what she had established prior to the marriage, and, finally, the fact of the significant combined efforts of each of the parties over a period of five years.
The trial judge then turned to consider the s 75(2) factors. First, his Honour recorded the husband’s annual income was $70,000 and the wife’s was $280,000. As to the wife’s submission that her future earning capacity was more limited because of her age, the trial judge noted her “income from exertion represents only some $50,000 of the $280,000 she currently receives” and thus, his Honour was satisfied the wife’s “current financial circumstances [are] a fair reflection of the future and there will remain a significant disparity in the income and earning capacity of each of the parties”. His Honour also noted the wife’s superannuation entitlement was more substantial at $180,000, compared to the husband’s $20,000. Taking into account the disparity in property, income and earning capacity, as well as the husband’s longer life expectancy, the trial judge proposed to adjust the husband’s entitlement by

2.5 per cent.
His Honour then calculated that a 75 per cent/25 per cent division of the net asset pool in favour of the wife would “require the husband to receive property of the order of $598,000 and the wife to receive property of the order of $1,794,000.” On the basis then of the husband retaining his savings and his superannuation (totalling $50,000), and taking a transfer of the wife’s interest in the K property, the wife would be required to pay the husband a further sum of $61,000.
The trial judge went on to address the issue of the husband’s receipt of a $7,000 tax refund post separation and the orders sought by the husband that the wife indemnify him in relation to outstanding taxation matters. It was his Honour’s understanding that the husband may face further assessments and penalties as a result of distributions made to him, but not actually received by him, in the last year of the parties’ relationship. The trial judge determined it was appropriate for the husband to account for his tax refund and for the wife to indemnify the husband in relation to taxation matters. Furthermore, the trial judge considered whether the Court should take into account the potential capital gains tax obligations attached to the K property in the amount of $56,000. However, given the similar obligations on property owned by the wife and the lack of intention to sell the K property, his Honour proposed to disregard the capital gains tax implications.
Thus, the orders proposed by the trial judge would require the wife to transfer to the husband her interest in the K property and pay him the sum of $54,000, whilst the husband would retain his savings and superannuation. His Honour concluded those orders were just and equitable as both parties would have a home, superannuation and cash. His Honour also took into account that the outcome would see the husband “enriched by a factor of almost $600,000 as a consequence, whilst the wife “has been enriched by a factor of approximately $1,200,000”.
Lastly, the trial judge turned to the issue of costs. His Honour determined

s 117(2A)(f) was the most relevant consideration because “from a very early stage in the proceedings, the husband was willing, if not anxious, to compromise at very modest levels in comparison to what has been determined by the Court”. His Honour concluded, whilst the wife was entitled to reject the husband’s offers, she should bear the responsibility for doing so and thereby made an order for costs in favour of the husband.

Orders made 13 October 2011 (as amended on 3 November 2011)

The relevant orders, having regard to the Amended Notice of Appeal, are as follows:
1The Applicant, [MS PETRUSKI], forthwith transfer to the Respondent, [MR BALEWA], all of her right, title and interest in the property situate at and known as … [K Street, K], more particularly described as the whole of the land comprised in Certificate of Title Volume … Folio … (“the [K] property”).
2Upon transfer of the [K] property to the Respondent, the Respondent do all such things as are necessary to cause the Applicant to be released from any liability secured upon the title to the [K] property.
3The funds currently held in trust for the parties by [N Realty] in respect of rents relating to the [K] property, be paid and distributed as follows:
(a)as to $54,000 to the Respondent; and
(b)as to the remainder to the Applicant.
…
10.The Applicant pay the Respondent’s costs of and incidental to these proceedings, such costs as agreed and failing agreement, as taxed.
Other orders provided for each party to retain assets and superannuation in their respective possession, and provided relevant indemnities, none of which were ultimately the subject of any challenge, despite the wife seeking to appeal all orders.

Grounds of appeal and orders sought

The grounds of appeal as contained in the Amended Notice of Appeal filed by the wife on 7 February 2012 are as follows:
1.The Trial Judge erred in his consideration of the parties’ contributions to the acquisition, conservation or improvement of their properties by:
(a)failing to have regard to the evidence which showed with some precision the relative proportions of the financial contributions made by the parties at the commencement of, and during, cohabitation;
(b)considering the parties’ financial contributions to property in a very general way which, while perhaps appropriate in many cases of longer periods of cohabitation, was inappropriate on the facts of this case;
(c)giving undue weight to the notion of marriage as a partnership; and
(d)regarding equality of effort as a significant factor.
2.In considering the substantial increase in wealth that occurred during the period of cohabitation, the Trial Judge erred by failing to have regard, or sufficient regard, to the fact that it was overwhelmingly the Wife who contributed the property and income that resulted in this increase in wealth.
3.The Trial Judge erred in law:
(a)in concluding that the Wife should not be entitled to any extra loading simply because of her higher earnings during the marriage, when his Honour should have regarded such higher earnings as a notable contribution of property by her;
(b)in departing from the established principle that the party responsible for the introduction of property is the contributor not only of the item of property itself but also of any subsequent increase in its value; and
(c)in not treating distributions to the Husband from the [Petruski] Family Trust as contributions by the Wife.
4.In light of the facts that:
(a)the Wife was responsible for finding the property at [K Street, K], and organizing its purchase and the finance for its purchase;
(b)when this property was purchased the Husband had no income and the initial costs, being deposit and stamp duty, were paid solely by the Wife;
(c)the Wife overwhelmingly provided the funds which were utilised to make mortgage payments during the construction of the house on the property, and thereafter to meet the shortfalls between income and expenses (such shortfalls being a constant feature of the investment up to the final year of cohabitation);
(d)it was on the initiative of the Wife and in order to assist the Husband to obtain permission to reside in Australia that the property was registered in joint names; and
(e)the Husband made no significant financial or non-financial contribution to this property,
the Trial Judge erred in implying that the Husband made a significant contribution to the equity in this property.
5.The Trial Judge erred in finding that at the time of trial the Wife had approximately $200,000 in savings, when the evidence was to the effect that she had savings in the sum of $531 or thereabouts.
6.In light of the facts that:
(a)cohabitation between the parties lasted for only 5 years;
(b)at the commencement of cohabitation, the Wife had property with a net value of between $500,000 and $600,000, whereas the Husband had no property of any value;
(c)the Wife made almost the entirety of the contributions to property (direct and indirect, financial and non-financial) during cohabitation; and
(d)it was during the first year of the five years of cohabitation that the Husband had undertaken the majority of the domestic duties;
the Trial Judge erred in the exercise of his discretion in concluding that a proper assessment of the entitlement of the parties on account of their respective contributions should result in a distribution of property in the proportions 77.5 per cent to the Wife and 22.5 percent to the Husband.
7.The Trial Judge, in determining to increase the Husband’s entitlement by 2.5 per cent on account of the disparity in the property, incomes and earning capacities of the parties, erred in the exercise of his discretion, such error being demonstrated by the fact that such a conclusion was on the facts of the case outside the parameters of the sound exercise of discretion.
8.The Trial Judge erred:
(a)in making the Orders when it was not just and equitable to do so, contrary to Section 79(2) of the Family Law Act 1975 (Cth); and
(b)in concluding that the Orders and their outcome were in all the circumstances just and equitable.

In her Amended Notice of Appeal filed on 7 February 2012 the wife seeks that Orders 1, 2, 3 and 10 made by Jordan AJ on 13 October 2011 be set aside. The wife also seeks orders that she retain the K property and that within 30 days she pay the husband the sum of $179,400 (being 7.5 per cent of the net asset pool found by the trial judge to be $2,392,000) less the following sums:
·$50,000, being the value of the property (including superannuation) retained by the husband;
·$7,000, being the tax refund received by the husband;
·the total amount received to date by the husband pursuant to Order 3 made by Jordan AJ on 13 October 2011; and
·the total amount received to date by the husband from the rental income of the K property.
In relation to the grounds of appeal, counsel for the wife has conveniently and appropriately addressed them in discrete groupings. Grounds 1, 2 and 6 are dealt with together as “weight grounds”, Grounds 3 and 4 are dealt with together as grounds raising “errors of law”, and the balance of the grounds are dealt with individually. We propose to adopt this approach and consider the grounds in the same groupings, although, as will be seen, we do not necessarily agree with the description of the group comprising Grounds 3 and 4.
His Honour made an order for costs (Order 10), and that order was also the subject of this appeal. However, no ground of appeal was directed to this order and at the commencement of the hearing before us counsel for the wife indicated that that would only be pursued if the appeal against the other orders was allowed.

Discussion

Grounds 1, 2 and 6

These grounds comprise the central complaint by the wife in this appeal. In other words, it is said that his Honour erred in his assessment of the respective contributions of the parties in that in exercising his discretion, his Honour gave too much weight to the contributions of the husband and too little weight to the contributions of the wife.
The law relating to appeals against discretionary judgments is not in doubt. It has been expressed in many cases and has probably no more eloquently been expressed than by Kirby J in CDJ v VAJ (1998) 197 CLR 172, where at pages 230 and 231, his Honour reiterated what the authorities had consistently held over the decades:
A number of general propositions may be stated:
1.Neither this court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. To approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders. It is not necessary for an appellant to demonstrate the kind of unreasonableness that must be shown to authorise judicial intervention in the decision of an administrator otherwise acting within power. 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 are of general application. However, they 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 difficult 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. This is an inescapable feature of the nature of this jurisdiction. (footnotes omitted)
It is also useful to refer to what Brennan J said in the High Court decision of Norbis v Norbis (1986) 161 CLR 513 at 539 to 540:
The difficulties in the way of developing guidelines beset an appellate review of the exercise of a discretion under s.79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v. Satterthwaite [[1948] 1 All ER 343 at p.345], Asquith L.J. stated the rationale of an appellate court’s approach:
“It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. 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.”
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.
The focus then is on whether the decision “exceeds the generous ambit within which reasonable disagreement is possible”, and was “plainly wrong”.
Here it is first submitted that his Honour failed to have regard to the precise calculations presented by the wife through her counsel that demonstrated the “relative proportion” of the financial contributions made by the parties. However, this is simply not correct. His Honour referred at some length to these calculations and the submissions based on them in his reasons for judgment. His Honour then described the submission of the wife in this regard as promoting a broad proposition that “in cases where there is largely an equality of effort in the homemaker roles, the entitlement of the parties to share in the property acquired during the marriage is to be determined solely by reference to a measure of the impact of the respective incomes on the wealth accumulated by the parties individually during the marriage”, and “(n)ecessarily, the entitlement of the parties would be proportional to the differences in income”.
His Honour found that this proposition was “flawed at a number of levels both as a matter of principle and, in this matter, on the facts”. In so finding his Honour emphasised the following:
a)The submissions based on the calculations “ignores the terms of the legislation under which such matters are to be determined”, and in particular fail to take account of “a wide range of factors” s 79(4) of the Act requires the court to take into account.
b)“[T]he notion contended for by Counsel for the wife confuses returns on effort or contributions from the contributions themselves”.
c)If one party “takes responsibility for the investments of the parties during their marriage [that party] does not secure to himself [or herself] exclusive or principal benefit of the fruits of such endeavours”.
d)The “propositions” advanced “ignore the fact of and the consequences of marriage”. Further, “[i]t is to treat marriage as an event without consequence, to be wound up at its conclusion by a distribution based on an audit of earnings”.
e)The Act requires the court to also take into account the indirect financial contributions of each of the parties and their contributions to the welfare of the parties to the marriage including but not limited to contributions as homemaker. Yet, the issue, for example, of indirect financial contributions by the husband “did not feature in the assessment of the husband’s contributions fixed at either 3.36 per cent or 4.11 per cent” as suggested by the wife.
In conclusion his Honour said this:
65.In my view, a focus solely upon an assessment of the taxable earnings produced from physical exertion to determine entitlement of the party is inappropriate, unfair, inconsistent with legal principle and inconsistent with the notion of the [sic] marriage partnerships in general and inconsistent with the circumstances of this relationship in particular.
We can see no error in his Honour’s approach. However, in oral submissions the wife’s counsel suggested that the wife’s case was not as portrayed by

his Honour. Mr Walker took us to parts of the opening and the final address presented on behalf of the wife where the submissions were different than the order sought in the minutes of order tendered at the commencement of the hearing (see paragraph 18 above). For example, in opening, Mr Walker said that the 4.11 per cent that represented the husband’s contributions on the wife’s case only applied to the financial contributions and did not apply to the non-financial contributions. Then, in his final address, Mr Walker again explained that the 4.11 per cent (which became 3.36 per cent after recalculations were undertaken) only addressed the financial contributions and not the non-financial contributions.
However, what was then put in final submissions by Mr Walker was that “the non-financial contributions balance each other out and the overall contribution of the parties to the acquisition and improvement and so on to these assets should be measured as being very close to the financial contribution; in other words, in the region of 4 per cent.” That was then almost immediately changed to a submission that “the contributions of the parties should be assessed at no more than 5 per cent on the part of the husband and at least 95 per cent on the part of the wife”, and this became the wife’s final position.
It is apparent from these submissions that his Honour was quite correct in observing that the issue of indirect financial contributions by the husband did not feature in the calculations presented. Indeed, the submission made by

Mr Walker was that they were covered or included in the assessment of the financial contributions at 4.11 per cent (or later 3.36 per cent).
Whether the 4.11 per cent (later reduced to 3.36 per cent) covered the non-financial contributions as the wife’s counsel contended was his case at trial, or whether the percentage sought by the wife covered only direct financial contributions as his Honour believed, the gravamen of the appeal is that

his Honour gave too much weight to the husband’s contributions in awarding the husband 25 per cent. As explained to us by counsel, the wife’s position was that taking into account both indirect and non-financial contributions, the percentages being advanced by her did not alter. Thus, even if his Honour misunderstood the submission being put by counsel, it did not make any difference to his Honour’s assessment of the contribution of the parties or his criticism of the wife’s case as to how the assets should be divided, having regard to all of their contributions.
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship (Dickons & Dickons [2012] FamCAFC 154). As was also said by the Full Court in Lovine & Connor and Anor [2012] FamCAFC 168, at paragraphs 40 and 41 such an evaluation “inevitably involves value judgments and matters of impression”, and accordingly it cannot be treated as “a mathematical exercise”.
Nor, we add, does the suggestion that his Honour misunderstood the submission provide any support to the specific ground of appeal under discussion (Ground 1(a)) given that nothing we have been taken to demonstrates that his Honour failed to have regard to the evidence upon which the calculations as to the relative proportions of the financial contributions made by the parties was based.
Accordingly, we are still not persuaded that his Honour has erred in the manner suggested.
Next is it complained that his Honour erred by considering the parties’ financial contributions in a “general way” which was inappropriate where there was a short period of cohabitation (Ground 1(b)).
This complaint was not amplified in either the wife’s counsel’s written or oral submissions, but it seems that it is related to the argument that where there is a short period of cohabitation greater weight should be given to the actual financial contributions of the parties including the initial contributions, and less to the notion that marriage is a partnership. In this case that notion refers to the manner in which the parties conducted their financial affairs and the indirect financial contributions made by the husband, in particular, and the extent to which their relationship was a financial joint venture
Certainly, as can be seen from paragraph 65 of his Honour’s reasons set out above, his Honour did find that the focus of the wife upon “an assessment of the taxable earnings produced from physical exertion” was inconsistent with “the notion of the marriage partnerships [sic]”, and his Honour referred to the observations of the Full Court in Figgins and Figgins (2002) FLC 93-122, at paragraph 134 in this regard, however his Honour said this in the context of addressing the narrow and discrete approach to contributions promoted by the wife. His Honour did not lose sight of the fact that there was a short period of cohabitation and that greater emphasis should be placed on certain contributions as a result. Indeed, his Honour said this at paragraph 80 of his reasons for judgment:
I take account of the fact that the marriage was only of some five years’ duration. That results in a need to place greater emphasis upon the significance of the wife’s initial contribution and the ongoing benefits to which I have referred.
The ongoing benefits that his Honour was referring to were those primarily that flowed from the wife’s interest in the R Group which she had acquired pre-marriage.
However, as his Honour recognised, it was not appropriate to simply look at one category of contribution and give primary weight to that; all of the respective contributions of the parties are required to be assessed and taken into account. Thus his Honour continued:
81.At the same time, I take account of the fact that a not insignificant portion of the present estate is to be seen in the value of the properties acquired during the marriage largely on finance and which have increased in value through no particular ongoing effort of either of the parties. In particular, I take account of the husband’s interest in the jointly owned property acquired at the commencement of the marriage in which there is presently an equity of nearly $500,000. I find it particularly difficult to accept any proposition that he should be entitled to a significantly lesser share than the wife in that property given the circumstances of its acquisition and given the other ongoing contributions of each of the parties since that acquisition.
Accordingly, we can find no error here in his Honour’s approach.
However, before leaving this issue we make this further comment. What the wife’s counsel did elaborate on in his oral submission was a related complaint that his Honour took “a broad-brush approach” to the assessment of contributions and there was no indication in the reasons for judgment as to how his Honour arrived at a percentage entitlement to the husband of 22.5 per cent. Such a complaint of course is alleging a lack of reasons by the trial judge and the difficulty for the wife in pursuing this argument is that there is no ground of appeal which goes to this issue. Nevertheless, we propose to deal with this submission as it impinges on the argument as to weight.
The argument of the wife’s counsel was that his Honour should have determined discrete percentage entitlements for each category of contributions with the total of those entitlements becoming the overall assessment of all of the contributions. In that way, it is said, his Honour, appropriately, would have arrived at a far lesser overall percentage entitlement than 22.5 per cent for the husband.
We do not consider that the approach suggested by the wife’s counsel is an approach that was open to his Honour, and even if it was, that it would have the effect for which the wife contends. There is ample authority in this court to that effect (Dickons at 23-26). Indeed, in Lovine the Full Court said this at paragraph 41:
… No amount of devotion to mathematics is capable of transforming a discretionary exercise involving many component parts, each mostly unamenable to precise computation, into one of aggregating separately finely calculated components to reach an overall outcome.
And the Full Court continued at 42:
As part of the process of ultimately determining just and equitable orders under s 79 there is included a complex of discretionary assessments and judgments of many components of contribution, only some of which are capable of measurement in money terms and then often only in historical, rather than present, money terms. Any dictate to the effect that in the course of assessment each disparate component part or kind of contribution must be assigned a discrete and identifiable value or percentage is antithetical to the nature of the discretion involved.
Further, we do not agree that it is not apparent from his Honour’s reasons how his Honour arrived at his findings on contributions. His Honour identified the relevant contributions, he assessed and weighed those contributions, and then spelt out why he concluded as he did. In our view the reader is not in any real doubt why the husband’s contributions were assessed as they were.
The wife then complains that his Honour erred by “regarding equality of effort as a significant factor” (Ground 1(d)).
His Honour said this in paragraph 77 of his reasons for judgment:
I expressly reject the proposition that the wife should be entitled to any extra loading simply because of her higher earnings during the marriage. I find that there was a merging of effort, finance, risk and support during the entirety of the relationship.
And then in paragraph 78:
I find that, in terms of effort, the contributions of each of the parties during the marriage has equal value …
However, that finding, which was plainly open to his Honour on the evidence, did not fashion his Honour’s conclusion on contributions, as his Honour indicated he utilised that finding to reject the proposition that the wife should be entitled to an extra loading simply because of her higher earnings during the marriage. Indeed, that is also how his Honour used the notion that marriage is a partnership.
After making this finding his Honour continued:
… My qualification in that last observation relates to the need to identify, not only the tangible value of the property held by the wife at the date of marriage, but also to acknowledge the ongoing benefits I have referred to earlier which the parties enjoyed as a consequence of what the wife had worked for and put in place prior to marriage.

Thus, again this demonstrates his Honour’s awareness and appreciation of the need to assess and take into account all of the contributions of the parties, especially the wife’s initial contributions.
Accordingly, we can find no error in his Honour’s approach here.
As to the complaint in Grounds 2 and 6, they merely repeat the principal theme of the wife’s challenge, namely that his Honour failed to give adequate weight to the overwhelming financial contributions of the wife including her initial contributions and the benefits that flowed thereafter from that initial contribution.
We consider that his Honour was well aware of the nature and extent of the respective contributions of the parties, and he clearly recorded them, for example commencing at paragraph 73 of his reasons for judgment. Importantly, his Honour recognised the significantly greater financial contributions made by the wife, including her initial contribution, but equally his Honour analysed and took into account the combined efforts of the parties over the period of their cohabitation, finding correctly in our view that “[a] substantial increase in wealth has occurred during the period of the parties’ relationship and joint efforts”. Particular examples of that are the increase in the equity in the K property and in the C property during that period.
While the court always looks at contributions ex post facto, there is no reason to ignore the manner in which the parties conducted their financial dealings during the marriage, as his Honour strongly pointed out.
In this case these parties acquired properties in joint names as part of the marriage partnership. To ignore this and later treat it as if it was really an enterprise solely of the wife amounts to treating the husband as if he was nothing more than a bystander, and ignores the evidence of how they conducted their financial affairs.
The court must consider the matters required by s 79(4) of the Act and assess the respective contributions of the parties. But where there is property acquired during the marriage relationship, together, jointly at law, with borrowings by both, which results in a capital gain, there is no reason why the joint nature of the enterprise should not be given appropriate weight.
While giving due weight to the wife’s contributions in other respects, that is what his Honour did and the wife has not demonstrated any error in the weight his Honour attributed to the husband’s contributions.
Before leaving these grounds of appeal there is one matter on which we wish to comment. Counsel for the wife, in his written submissions, cited a number of first instance decisions where the court had, in relatively short marriages, assessed the percentage entitlements of the parties at levels similar to that contended for by the wife to indicate that the result reached by his Honour departed so much from the results in these cases that his Honour was plainly wrong. We consider such an exercise to be unhelpful. The task to be undertaken by a trial judge in applying ss 79(2), 79(4) and 75(2) of the Act requires the trial judge to consider the particular circumstances of the case before him or her in determining whether any and if so what order should be made. What another judge may do in another case on the basis of the facts in that case can rarely if ever determine what is done in the case at hand.

Grounds 3 and 4

In reality these grounds also raise weight challenges, and as such have to overcome the same hurdles as Grounds 1, 2 and 6, namely it is not enough that this court might come to a different conclusion, and it is only where the decision “exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong”, that an appeal court is entitled to interfere.
Further, these grounds are in many respects a repeat of the complaints raised in Grounds 1, 2 and 6. Thus, for example, we have there dealt with the complaint that the wife is not entitled to any extra loading simply because of her higher earnings. The income of each party is but one of the many contributions that a trial judge must assess and then take into account in reaching a decision, and this is what his Honour alluded to when his Honour made the comment complained of in paragraph 77 in his reasons for judgment. A fair reading of the entirety of his Honour’s reasons under the heading “Contributions” amply demonstrates this.
Accordingly, again there is no merit in this complaint.
It is next put (Ground 3(b)) that the trial judge departed from an “established principle” that a party who contributes property is “the contributor not only of the item of property itself but also of any subsequent increase in its value”.
This proposition was not the subject of any specific oral or written submission by the wife’s counsel, and there was no authority cited in support thereof. For our part it is not a proposition with which we can agree. Once property is introduced there is still a need to consider what contributions have been made by either party thereafter to the acquisition (if, for example, there is a mortgage involved), conservation or improvement of that property. Thus, although credit will usually always be given for the introduction of the property, it does not automatically follow that that party will receive the sole credit for any subsequent increase in value.
This is apparent in his Honour’s reasons in paragraph 81 set out above. The last sentence of that paragraph also highlights a point that seems to have been overlooked in the complaint raised here. In other words, where as here a global approach is applied, the trial judge is obliged to identify all contributions made to and in respect of all of the property of the parties and then weigh those contributions to arrive at an overall assessment.
Accordingly there is no merit in Ground 3(b).
Turning to Ground 3(c), it is not readily apparent from his Honour’s reasons how his Honour treated the distributions in terms of whose contributions they were. However, there is no ground of appeal alleging lack of reasons by

his Honour.
What his Honour did say is this:
61.Further, the parties merged their finances during the marriage and operated a joint account. This was the account into which, amongst other things, the husband’s income and any distributions made to him were deposited. There is no way of now determining for what purpose such funds were subsequently applied.
62.Further, the husband became a beneficiary of the [Petruski] Family Trust in July of 2003. During the marriage the trust received distributions from [the R Group] and the trustee chose to distribute funds to the husband as a beneficiary from time to time. The total received by the husband over a period of five years from that source was $474,000. That a party receives financial benefit without direct physical exertion is not a basis for ignoring that benefit. The husband’s receipts as a beneficiary were substantial and those funds were directed to consolidated revenue and utilised for investment purposes including for the acquisition of the [Q] property for $558,000 cash.
63.Of course, it is proper to examine the source of those funds. In this case, the distributions were as a result of an entitlement to a payment as a consequence of an interest the wife held as at the date of marriage. Nevertheless, they were distributions made after the marriage when the parties’ finances and efforts had been combined. Further, it was obviously to the financial advantage of each of the parties to split the distributions from [the R Group] with the consequential tax advantages they each enjoyed. The parties represented to the commission and to the world at large that the husband did in fact receive hundreds of thousands of dollars of distributions during the marriage.
A reasonable implication from those paragraphs is that his Honour took into account that the distributions arose from an entitlement of the wife, but in accordance with how the parties arranged their financial affairs, those distributions, including those received by the husband, were paid into the joint account of the parties and disbursed for their joint purposes.
Further, as his Honour pointed out, there were tax advantages resulting from the splitting of the distributions and that is an obvious indirect contribution by the husband that needs to be taken into account.
Finally his Honour made the valid point that by the husband receiving those distributions, the parties were representing to the “world at large”, including the Australian Taxation Office, that they were his. In other words, how he then dealt with them can in fact be seen as a contribution by him.
Accordingly, again, we find no error by the trial judge in relation to this ground.
Turning to Ground 4, this relates to how his Honour viewed the contributions of the parties to the jointly owned property at K.
First, his Honour was well aware of the circumstances surrounding the acquisition of the land and the construction of the home. He set these circumstances out in paragraphs 18 and 19 of his reasons for judgment, and in his written submissions counsel for the wife conceded that the facts therein contained were accurate.
His Honour then summarised these and other relevant circumstances in paragraph 60 when he set out his reasons for finding that the wife should not have the “exclusive benefit of the market growth over the period of the marriage”, and when in paragraph 81 his Honour said he found “it particularly difficult to accept any proposition that [the husband] should be entitled to a significantly lesser share than the wife in that property given the circumstances of its acquisition and given the other ongoing contributions of each of the parties since that acquisition”. There is no doubt that the wife made the contributions that she said she did; the husband acknowledged that and

his Honour recorded that in his reasons for judgment. However, that does not take anything away from the contributions that his Honour found the husband made, and his Honour’s acceptance of how the parties arranged their finances and acquired, conserved and improved their property.
We consider that it was reasonably open to his Honour to make the finding that he did in relation to the K property, and we are not persuaded that his Honour was “plainly wrong” in the exercise of his discretion. Accordingly, there is no merit in this ground of appeal.

Ground 5

This ground of appeal raises a mistake of fact made by the trial judge, a mistake which is acknowledged by the husband. It was common ground that the wife had $531 in savings at the time of the trial and not $200,000 as specified by his Honour in paragraph 41 of his reasons for judgment.
The issue is does this mistake represent an appealable error which would require this court to interfere?
The wife’s counsel has referred us to the High Court decision of De Winter & De Winter (1979) FLC 90-605 where Gibbs J said this (78,091-78,092):
It is apparent from this statement, and is clear law, that a discretionary judgment which is based on a mistake of fact will not be upheld merely because the result reached in itself does not appear unreasonable or unjust. In Storie v. Storie (1945) 80 C.L.R. 597, both Latham C.J., at p. 600, and Rich J., at p. 604, cited from the judgment of Viscount Simon L.C. in Blunt v. Blunt (1943) A.C. 517, at p. 526:
“If it can be shown that the court acted under a misapprehension of fact in that it either gave weight to irrelevant or unproved matters or omitted to take into account matters that are relevant, there would, in my opinion, be ground for an appeal. In such a case the exercise of discretion might be impeached, because the court’s discretion will have been exercised on wrong or inadequate materials…”.
There are many other authorities, from Young v. Thomas (1892) 2 Ch. 134, at p. 137, to Australian Coal and Shale Employees’ Federation v. The Commonwealth (1953) 94 C.L.R. 621, at p. 627, that recognize that a mistake of fact is a ground for overruling a decision involving discretionary judgment. It may in some cases appear that the mistake of fact has not affected the final result, or that its effect has been negligible, or that in any case the conclusion reached was correct, notwithstanding the error. But it is not right to say, as the majority of the Full Court appear to have said in the present case, that a discretionary judgment which has proceeded upon a mistake of fact should be upheld simply because the order was well within the range of the discretion of the primary judge.
Applying those principles, it is our view that this is not a mistake that would warrant overturning his Honour’s decision. It is apparent that it was a mistake which did not affect the final result.
The mistake appears in a discrete paragraph where his Honour is identifying the assets that each party has, apart from real estate, in the property pool. However, in paragraph 39 his Honour correctly identified the value of the “adjusted gross property pool” at $3,364,000 by reference to Exhibit 7. That exhibit comprised “a copy of a joint schedule of assets and liabilities submitted during the course of the trial”, and that correctly recorded the wife’s savings at $531.
Further, in paragraph 86 of his reasons for judgment, when calculating the contribution-based entitlements of the parties, his Honour arrived at the correct figures on the basis of the net asset pool which included the wife’s savings at $531. Then, in paragraph 92 of his Honour’s reasons for judgment, his Honour correctly calculated what each party was entitled to after the adjustment for the s 75(2) factors.
Finally, when addressing whether the orders that he proposed were just and equitable, his Honour identified in general terms what each party would have. In relation to the wife all his Honour said was that she would retain “her home and property and business investments to a total value of almost $1,800,000.” Significantly there was no mention of $200,000 in savings, and it is not apparent that his Honour was proceedings on the basis that the wife had that amount at her disposal.
Accordingly, there is no merit in this ground.

Ground 7

This is plainly another weight challenge.
It is suggested that this adjustment was outside the bounds of the sound exercise of the discretion reposed in the trial judge, or in the language of the High Court authorities, the adjustment “exceeds the generous ambit within which reasonable disagreement is possible” (Norbis).
In short it is submitted that given the contribution-based entitlements of the parties as assessed by his Honour, his Honour should not have adjusted the husband’s entitlement at all by reason of any factor in s 75(2) of the Act.
It is not disputed that the 2.5 per cent adjustment made by his Honour was based squarely on the disparity of property, income and earning capacity between the parties. His Honour said this at paragraph 91 of his reasons for judgment:
In all the circumstances and paying proper regard to the fact that the husband does have a longer life expectancy in terms of earning capacity, but otherwise taking particular account of the disparity of property, income and earning capacity, I am of the view that a modest adjustment in the husband’s favour is justified. I would further adjust his entitlement by a factor of 2.5 per cent to take account of these matters.
With that knowledge, we have not been taken to anything which persuades us that the trial judge erred in reaching his conclusion. There was a clear disparity in the property, income and earning capacity of the parties, and the submission of the wife amounts to nothing more than that the husband has received sufficient to meet his needs via his contribution-based entitlement, and he should not receive any more despite there being a disparity.
That is not an argument that finds favour with us, and we can find no error in the exercise of his Honour’s wide discretion. On the evidence before

his Honour, it was reasonably open to his Honour to make the small adjustment that he did for the reasons that he gave. Accordingly, there is no merit in this ground of appeal.

Ground 8

This is yet another ground where the challenge is that his Honour erred in the exercise of his discretion. It is said he should not have found that the orders he proposed were just and equitable.
It is apparent that his Honour’s consideration of this issue revolved around an analysis of the respective outcomes for the parties from the orders that he proposed, in the context of the parties having separated and the financial and other arrangements that had been in place coming to an end.
The wife’s complaint, as amplified in her counsel’s oral submissions, is that by revisiting the initial contributions of the parties, their contributions made during the marriage, and the relevant s 75(2) factors, including the length of the marriage, the result achieved by the husband is “unsustainable”. However, that approach conflates the s 79(2) exercise with the s 79(4) exercise when they are quite separate enquiries.
We have not been taken to anything which persuades us that his Honour erred in his application and consideration of s 79(2) of the Act. We have not been taken to anything which persuades us that his Honour erred in his application and consideration of s 79(2) of the Act. Both parties sought that the court alter their interests in property, albeit in different proportions. His Honour gave separate consideration to whether the orders he proposed to make were just and equitable and we can discern no error on his part.

Conclusion

We have found no merit in any ground of appeal and thus the appeal must be dismissed. That will also dispose of the “appeal” against the costs order made by his Honour.

Costs

At the conclusion of the hearing we took submissions as to the costs of the appeal.
In the event that the appeal was dismissed the husband sought an order for costs. Appropriately, the counsel for the wife conceded that such an application could not be resisted. Accordingly, we will make an order for costs in favour of the husband.

I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Strickland & Moncrieff JJ) delivered on 20 February 2013.

Associate:

Date: 20 February 2013