R & H

[2003] FamCA 125

[2003] FamCA 125

FAMILY LAW ACT 1975

IN THE FULL COURT       
OF THE FAMILY COURT OF AUSTRALIA                  Appeal No EA84 of 2002
AT SYDNEY  File No CA322 of 2000

BETWEEN:

R
Appellant Husband
- and -

H
Respondent Wife

REASONS FOR JUDGMENT

CORAM:  NICHOLSON CJ, KAY & BROWN JJ
DATE OF HEARING:                 12 February 2003
DATE OF JUDGMENT:             5 March 2003

APPEARANCES:  Mr Thomas of Counsel, instructed by David Lardner, Lawyer, appeared on behalf of the Appellant Husband.

Mr Brzostowski of Counsel, instructed by Campbell & Co., Solicitors, appeared on behalf of the Respondent Wife.

R & H
Appeal No EA84 of 2002
File No CA322 of 2000
Coram:   Nicholson CJ, Kay and Brown JJ
Date of hearing:                 12 February 2003
Date of judgment:             5 March 2003
Trial Judge:  Faulks J

Catchwords:           PROPERTY – Settlement in relation to marriage - Property division – Contributions – Post-separation contributions –contributions in supporting step-child

PROCEDURE – Effect of delay in delivering judgment on reliability of credit findings

The parties separated after a nine-and-a-half-year relationship.  The wife had a child from a previous relationship. One child was born during the marriage.  Post-separation, the husband and the wife shared the parenting of their child on a “week-about” basis.

After separation the husband completed renovations to the former matrimonial home and sought an adjustment in his favour for that work.

All other contributions being equal, in a pool of $690,000 Faulks J allowed the husband 4% for renovation work done prior to separation which he off-set against a similar allowance to the wife for her additional role as homemaker and parent while he was renovating and working away from home. He then allowed the husband a 1% adjustment for an inheritance and his contribution to the wife’s daughter. The 51/49 contribution assessment was reduced to 45/55 in the wife’s favour for s75(2) considerations (imbalance in earning capacity).

The husband sought to have the assets of the parties divided 60/40 in his favour.  This adjustment would include allowance for the husband’s financial contributions to his step-daughter (Robb v Robb (1995) FLC 92-555), and for his post-separation contributions.

Faulks J’s judgment was delivered nearly ten months after the trial.  Counsel for the husband argued that as a consequence, any credit findings made by his Honour, should be disregarded or treated with extreme caution.

Held:

• Although delay between trial and judgment is not per se a ground of appeal, the trial Judge’s advantage over an appellate court in assessing the evidence becomes less significant. A Full Court should bear in mind the delay and the effect that it might have had on the accuracy of the findings, and logical processes undertaken by the trial Judge. Haddon v Osmond [2000] FamCA 1149 and Bedow v Bedow [2000] FamCA 1634.

• The trial Judge erred in considering the 4% as an adjustment to pre-separation contributions, when in fact it was conceded as a contribution made post-separation.  This could not be balanced by the wife’s childcare contributions as post-separation childcare was shared between the parties.

• There were no findings to determine the value of the post-separation contribution.  The costs of a remitter for rehearing would have been disproportionate to the likely change of outcome.  An adjustment of $20,000 for post separation contributions was appropriate on the scant evidence available.

• The 6% adjustment in favour of the wife due to income disparity was open to the trial Judge.

• The significance of Robb is that it recognises that, in an appropriate case, some allowance can be given to a step-parent who makes a contribution to the support of his or her step-children. Nothing in Robb mandates such an adjustment.  Each case must turn on its own facts. The significance of a Robb contribution can easily be overstated. It is not necessarily appropriate to place a commercial value on such a relationship.

• There is need for caution over the possibility of double-counting contributions where the contributions given in the course of a relationship happen to benefit step-children as well.  Here, the effect of the step-child’s presence on the financial situation of the parties was equivocal, and any determination on this would be merely speculative.  As the value if any to be given to the contribution was a matter for the discretion of the trial Judge, Faulks J’s decision was not plainly unjust and should be left undisturbed on this issue.

Appeal allowed

Property adjusted by a further $20,000 in favour of the husband

Cost certificates granted

NOT REPORTABLE

1. This is the husband’s appeal against orders made by Faulks J on 6 August 2002 in property proceedings between the parties.  We have already pronounced our orders increasing the husband’s entitlements by $20,000.  We now publish our reasons for so doing.

1. The learned trial Judge valued the property of the parties in the sum of $690,501.  He determined that it should be divided between them as to 55 per cent to the wife and 45 per cent to the husband.  That division was calculated on the basis that the husband’s contributions were evaluated at 51 per cent but were reduced by reason of s 79(4)(e) factors which favoured the wife.  By his amended Notice of Appeal the husband sought to have the assets of the parties divided as to 60 per cent in his favour and 40 per cent in favour of the wife.

The effect of the delay in delivering judgment

1. The trial took place between 8 and 10 October 2001 but judgment was not delivered until 6 August 2002.  In those circumstances it was submitted by the husband’s counsel, Mr Thomas, that credit findings by the trial Judge should be disregarded or treated with extreme caution.

1. There have been several unreported decisions of the Full Court where the issue of the effect of delay in delivery of a judgment has been discussed.  In Haddon v Osmond (2000) FamCA 1149, (unreported decision of Finn, Coleman and Wilczek JJ delivered 15 September 2000), the Court dealt with a judgment that had been delayed eight months from the time of the trial. Their Honours determined it was appropriate to apply the dicta of the Supreme Court of New South Wales Court of Criminal Appeal in R v Maxwell, (unreported decision delivered 23 December 1998) where Spigelman CJ, Sperling and Hidden JJ said:

“Although mere delay is not a ground of appeal, this Court must apply the strictest of scrutiny to a criminal judgment which may have been affected by the inevitably adverse consequences of delay.”

1. The Full Court in Haddon noted further that the Maxwell court adopted the analysis of the English Court of Appeal in Goose v Wilson Sandford & Co, (unreported English Court of Appeal - Criminal Division 13 February 1998) wherein it was stated:

“Because of the delay in giving judgment, it has been incumbent on us to look with especial care at any finding of fact which is now challenged.  In ordinary circumstances where there is a conflict of evidence a judge who has seen and heard the witnesses has an advantage, denied to an appellate court, which is likely to prove decisive on an appeal unless it can be shown that he failed to use or misused, this advantage.  We do not lose sight of the fact that the judge had transcripts of the evidence, as well as very extensive written submissions from counsel.  But the very fact of the huge delay in itself weakened the judge’s advantage, and this consideration had to be taken into account when we reviewed the material which was before the judge.  In a case as complex as this, it is not uncommon for a judge to form an initial impression of the likely result at the end of the evidence, but when it comes to study the evidence (both oral and written) and the submissions he has received with greater care, he will then go back to consider the effect the witnesses made on him when they gave evidence about matters that are now troubling him. At a distance of twenty months, Harman J denied himself the opportunity of making this further check in any meaningful way’.

Considerations such as these have informed this Court in its review of the reasons for judgment given by his Honour, specifically the statements made by his Honour in his judgment of a general assertive character, which in the normal course would be accepted as encompassing a detailed consideration of the evidence before him, have been treated by us with reserve.”

1. The issue again arose in Bedow v Bedow [2000] FamCA 1634 where a residence order changing a long standing status quo was made almost six months after the trial concluded. Finn and Coleman JJ said:

“4.        As the authorities reviewed in Haddon v Osmond (supra) make clear, delay of itself does not constitute a Ground for appellate intervention.  Rather, as was said in R v Maxwell (supra), the Court should apply ‘...the strictest of scrutiny’ to a judgment, including in my view a civil judgment, which ‘...may have been affected by the inevitably adverse consequences of delay.’ (page 16).  Whether it be expressed in terms of considering disputed findings of fact ‘...with especial care’ (Goose v Wilson Sandford & Co (supra)) or with the ‘...strictest of scrutiny’, we have applied that extra vigilance when considering each of the Grounds raised by the wife in this appeal. 

5.        The dicta of the English Court of Appeal in Goose v Wilson Sandford & Co (supra), we think, provides the balance necessary when appellate courts are called upon to examine disputed findings of fact against a background of delay.  …  In our view, given the implications of the decision which the trial Judge was called upon to make, the length of the trial, the complexity of the issues, the nature and volume of the material to be considered, including numerous reports produced by third parties and tendered in evidence, though regrettable, the delay in this case did not deprive the trial Judge of the advantage, denied to this Court, of having seen and heard witnesses, formed impressions in relation to their evidence and thus been, prima facie, best placed to decide the issue before him.  Nothing to which we have been referred persuades us that ‘the inevitably adverse consequences of delay’ vitiate any finding of fact made by the trial Judge.”

1. Kay J in Bedow said of Haddon v Osmond and the principles discussed therein:

“66.     I was not a member of that bench.  I do not have enough available information or the submissions relevant to that decision.  However on the face of it, a delay of nine months in handing down a judgment in a child welfare matter, where it is intended to reverse an existing status quo, seems to me to be inordinate in all the circumstances. 

…

68.      Having regard to the admonition set out in [Haddon, Maxwell and Goose], I have carefully considered all of the evidence in this matter with a view to determining whether or not there is appealable error.  The delay of itself does not amount to such an appealable error, as unfortunate as such delay may seem.

69.      It seems to me that in cases where there is to be a change in the residence of children, and such a change is seen as compelling, then unless there are very unusual circumstances which would justify the delay, priority should be given by the trial Judge to ensuring an expeditious delivery of judgment.  There is an inherent inconsistency between allowing the child to stay in the less satisfactory home and ensuring that the child's welfare is catered for.  If the welfare of the child demands that the child move from an existing situation to another situation, then leaving the child in the less satisfactory situation for longer than is necessary cannot be seen to be consistent with that child's welfare.

70.       If this means that arrangements need to be made administratively for the judge to have time to write the judgment, then so be it.  There are already significant delays in getting matters to trial.  The burdens placed on trial judges which make it impossible for them to spend adequate time in preparing judgments need to be alleviated by appropriate administrative arrangements.  To achieve that end it is essential that there be adequate resources made available to the Court to enable the proper preparation of judgments.  The Court's obligation is not only to hear disputes but to determine them.  A large backlog of reserved judgments places undue strain on both judge and litigant.  Justice must be perceived as being something less than ideal when decisions are not forthcoming for many months.”

1. The principles seem to be clear.  Where there has been delay between trial and judgment the natural advantage of the trial Judge of having the matter fresh in his or her mind diminishes.  An appellate court becomes more able to sit in the position of the trial Judge than it might otherwise have been.  To the extent that it is relevant to the appeal before us, we approach our task bearing in mind the delay and the effect that it might have had on the findings and logical processes undertaken by the trial Judge.

Background

1. The relevant background can be succinctly discussed.  The wife was born in 1957 and the husband in 1960.  The parties cohabited from July 1991 to January 2000.  At the time of cohabitation the wife was already the parent of a daughter from a previous relationship.  That child, J, was born in 1986 and lived with the parties throughout the time of cohabitation.  The wife was in receipt of some child support for J but otherwise J was supported from the joint earnings of the parties in these proceedings.

1. There was one child of the marriage, E, who was born in 1993.  After separation the care of E has been shared between the parties on a week-about basis.

1. As already indicated, the value of the property of the parties was approximately $700,000.  Each of the parties brought assets into the relationship.  The trial Judge took the view that they balanced each other out and there has been no appeal against that finding.

1. Much of the evidence in the case concerned itself with construction work done on the parties’ properties, particularly the former matrimonial home, which was only partially constructed at the time of separation. 

1. It was the husband’s case that after separation he spent over $10,000 on materials to finish the home and worked on it personally.  He estimated his labour costs to be $34,500. 

1. The wife asserted that at separation all the material required to finish the home had already been bought.  She estimated the value of the cost of labour of finishing the house to have been $5,700.

1. It was further common ground that in addition to an equality of input in the course of the marriage by the parties in their respective fields, either via income earned or as a homemaker and parent, the husband had inherited $10,000 that found its way into general family expenses.

The judgment

1. Faulks J said (footnotes omitted):

“34.I have already indicated above that, in my opinion, there is no appropriate difference to be ascribed to the parties initial contributions.  Thereafter, the parties applied themselves in the renovation of two properties.  There is agreement between them that the husband applied more physical effort than did the wife.  He was not at the time a qualified builder although he has recently so qualified.  He described his occupation as ‘running, managing taxis and a small amount of building on the side.  And I am looking after my daughter’.  However, I am satisfied that he did bring to bear, significant practical skills and labour in the renovation of the properties.  This was an advantage to the parties.  His counsel claimed 4% as an adjustment.  I accepted this in dialogue with the wife’s counsel.

35.I am however, also satisfied, that during this period, he did not spend a lot of time in his parenting of [E]. [E] was born in 1993. During part of her life, the husband was away working … and his opportunity to be involved in her upbringing was very small during that time. While he may not ascribe the same decree of value to the care that the wife applied to the upbringing of [E] (and [J]) in my opinion, it should be given a proper weight, particularly in accordance with the terms of Section 79(4)(c) of the Family Law Act. Notwithstanding his careful attempts to reduce the effect of the wife’s financial contributions there was no suggestion that he was unhappy with the arrangements of the parties reached about division of labour and indeed in his evidence he quite properly and appropriately generously agreed that his wife had worked hard, and volunteered ‘I loved my wife’.

36.If there is a difference between the efforts of the parties, it is a difference of perception rather than of significant degree.  His physical and skill contributions said by his counsel to be worth 4% are in my opinion offset by the additional contributions by the wife as home-maker and parent.

37.It is fair, however, to say that the husband did contribute two inheritances from his family totalling $10,000.  It is appropriate that that should be ascribed to him as some form of contribution.  I am satisfied that it was applied towards common purposes.”

An adjustment for helping to support a step-child

1. His Honour then went on to discuss what was referred to as the Robb v Robb contribution.  Robb v Robb (1994) 18 Fam LR 489; (1995) FLC 92-555 was a decision concerning (in part) whether it was appropriate to allow a step-parent an extra share of the property on the basis that that parent voluntarily provided for the support of two step-children. The parties had cohabited from 1979 to 1992. The household included the wife’s two daughters from a former marriage. There were net assets of $57,650 to be divided between the parties. Mullane J as the trial Judge took the view that the husband’s contribution towards the support of his step-daughters supported an adjustment in the husband’s favour. The Full Court (Lindenmayer, Finn and Joske JJ) were of the view that the justice of the case clearly required the husband’s contribution to be taken into account under s 75(2)(o). Their Honours decided that the trial Judge had allowed the husband about $7,000 (a little over 12% of the parties’ net assets) as an adjustment and indicated that were it not for other reasons they would not interfere with that adjustment. The Full Court then decided there were other bases for interfering with the assessment by the trial Judge and readjusted the outcome of the case. It is not entirely clear from a reading of the judgment precisely what allowance was made for the husband’s contributions towards his step-children other than to say the wife’s share of the net assets was increased from $9,000 to $17,000 approximately.

1. The significance of Robb v Robb is that it recognises that in an appropriate case some allowance can be given to a step-parent who makes a contribution to the support of his or her step-children.  There is nothing in Robb v Robb that mandates the adjustment and each case must turn on its own facts.

1. In this case Faulks J said that the issue of the contribution towards J was first raised by counsel during final address.  His Honour concluded the husband’s actual contribution in physical care of J was small to the point of insignificance.  His Honour then assessed an adjustment that was appropriate, taking into account both the inheritance and the contributions to J to be the equivalent of the first 2 per cent of the pool of assets, that is approximately $14,000.

1. One of the submissions before us was that the adjustment made in respect of the contributions towards J was inadequate.  It was submitted that:

“By inference the support given to the wife and to the child [J] must have been of significant assessment.  The wife complains of difficulty in managing financially after the Husband moved out of the matrimonial home after separation.  At this time he had contributed $200.00 per week to the wife to assist her with her support.”

1. An adjustive exercise under s 79 is not an accounting exercise.  The Court has to weigh up and evaluate the various contributions made at different times, all of which have to be taken into account in determining an appropriate division of the available pool of assets.  They include not only capital introduced into the relationship, but also earnings during the relationship, physical labour expended upon improving or conserving assets, and services performed in the role of homemaker and parent.  The process of evaluating these diverse contributions and attributing weight to them is not a scientific one.  Minds will differ significantly on where weight should be placed.  An appellate court cannot simply substitute its own assessment for that of the trial Judge unless it can be demonstrated that the trial Judge has erred on the facts or on the application of the law or has reached a result which is plainly unjust.  

1. There is a danger of double counting in too readily making such an adjustment. .  Where each party brings in equivalent capital and the efforts of each party during the course of the marriage are seen to be equal, the fact that children from another relationship benefited in some way by support given to them arising out of that relationship, does not necessarily lead to the conclusion that a further adjustment should be made on behalf of the non-parent.  One cannot necessarily conclude that, absent the step-children, the parties would be any the richer.  Their quality of life may have been enhanced in terms of expenditure on themselves rather than on the children, or there may have been opportunity for capital gain or savings, but these things are merely speculative.  Ultimately it is a matter for the discretion of the trial Judge.

1. There are further difficulties with the so-called Robb v Robb concept. Whilst it is true that a step-parent has no legal obligation to support a step-child unless an order has been made under s 66M of the Family Law Act, a moral obligation may well be created before then.  In any event, the relationship between a step-parent and a step-child is not necessarily a one way street.  Nor is it one upon which it is necessarily appropriate to put any commercial value. 

1. Bearing in mind that the facts of this case outlined above are not the subject of any challenge by the parties, we are of the view that it would be inappropriate for this Court to interfere with the adjustment for this factor made by the trial Judge

Post-separation renovations

1. As already discussed, the trial Judge made an allowance in favour of the husband for the “significant practical skills and labour in the renovation of the properties” but then reduced that allowance by an equivalent amount for what was said to be, during the period of the renovation of the properties, the father not spending a lot of time in his parenting of E. 

1. A 4 per cent adjustment in a pool of $700,000 is equivalent to making an allowance of the first $28,000 to a party.  The 4 per cent discussed between counsel and his Honour in final addresses related to post-separation contribution and not pre-separation contribution.  The concession made in respect of it also related to the post-separation contribution. 

1. The discussion appears at AB 369 and 382.  Counsel for the husband says:

“…but my submission to you would be that you would have evidence that would enable your Honour to find the husband has made a greater contribution to the parties’ assets on the least case by virtue of the work that he performed after separation.  And that is something that I would submit, your Honour, would – and then, when you consider the contribution that the husband has made to the welfare of [J] that that is a contribution that you would perhaps weigh in his favour by 10 per cent there being something for the building work done and then at least 6 per cent for [J] based on, I think, Robb v Robb.”

1. In his discussion with counsel for the wife his Honour says:

“There has to be a contribution, in my view, afforded to him or some credit for a contribution afforded to him for that work [the post physical separation contribution] because it prevented him from doing something else.  Now, the amount suggested by Mr Thomas in the long run was relatively modest.  It was a 4 per cent adjustment and I would have thought that was probably about right as far as that is concerned.

MR BRZOSTOWSKI:         Well, I can only be in your Honour’s hands about the choice which your Honour considers appropriate.  I would simply draw this attention that if he had walked off the site and got himself into another job position the project, in my submission, would have either been sold as to what it is – in the state as it was then or, alternatively, contractors would have finished it.  There was a financial capacity to complete it because there was the capacity - - -

HIS HONOUR:        I accept that.  I accept the force in your argument which is why I listened with interest to Mr Thomas’s submissions.  If he had attempted to put it any higher than that I certainly would not have accepted it.  It seems that there is force in the proposition that, yes, he was doing it, there was an element of self-help in the process.  I think he deserves some recognition.  I would have thought that the relatively modest percentage put on it by Mr Thomas is appropriate.

MR BRZOSTOWSKI:         And I was perhaps endeavouring to reduce it a bit.

HIS HONOUR:        Yes.  I understood what you were doing.”

1. It may be that the time between the trial and the judgment may have led to some confusion in his Honour’s mind when his Honour referred in the judgment to the claim and the concession being made of a 4 per cent adjustment for contribution.  That concession was not to contributions made in the course of the relationship, but to contributions made post-separation.

1. There was no suggestion by either party, nor by counsel, that because the husband’s post-separation contributions to the house led to an imbalance in the care of the child that they somehow balanced each other out.  In fact, post-separation the parents shared their daughter’s care, so that could not have been the case.

1. It is on the basis of this clear error that we determined that the appeal must succeed.  We determined that an appropriate adjustment, in the circumstances, was to make a further allowance of $20,000 to the husband.  Given that there were no findings of fact as to exactly how much was expended post-separation or how much effort was put into the property, that was the best we could do.  Given the likely range of results, the costs of a retrial on that issue alone would have been disproportionate to the likely change of outcome.  Wisely, counsel for each party agreed that we should attempt to do the best we could with what we had, rather than inflict a retrial upon the parties.

Income disparity

1. The remaining grounds argued on behalf of the appellant concerned the adjustment made by the trial Judge pursuant to s 79(4)(e).  The trial Judge, in making an adjustment of 6 per cent in favour of the wife, relied inter alia upon his finding (para 42):

“…While I cannot find with any certainty what the husband’s exact earning capacity is, I am comfortably satisfied that it is significantly more than the wife’s. I accept she wishes to work part time until [E] leaves school…”

1. It was urged upon us by counsel for the husband that the evidence did not support that finding.  This matter can be dealt with very simply.

1. In his affidavit filed as his evidence-in-chief in the proceedings, the husband said (AB 68):

“75.[The wife] is earning income as a gardener and as a bookkeeper.  [The wife] has the capacity both physical and mental to undertake full time work in either of the aforementioned activities.  I estimate that [the wife] is capable of earning between $40,000 and $45,000 per annum.

…

77.I currently lease 3 taxis, own one and have drivers for these 4 vehicles.  After payment of all expenses associated with these 4 vehicles I estimate my weekly income from this source, all things being equal, at approximately $1,300.00.  The set up costs in relation to this aspect of my earnings have been extensive and I am not currently earning that estimated income.  My plan is for the level of income to be achieved within 18 months to 2 years.”

1. On those admissions alone the finding of the trial Judge at para 42 of his judgment was clearly open to him.

Summary

1. Apart from the error concerning the weight to be given to the post-separation contribution by the husband, we are of the view that none of the other grounds of appeal was substantiated.  In the circumstances, the orders that we made allowed for a diminution in the wife’s share of the assets and an addition to the husband’s share of the assets of $20,000.  We granted each of the parties appropriate certificates under the relevant provisions of the Federal Proceedings (Costs) Act 1981. The appeal was otherwise dismissed.

I certify that the 36 preceding
 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.


Associate