ROBERTSON & ROBERTSON
[2012] FamCAFC 60
•4 May 2012
FAMILY COURT OF AUSTRALIA
| ROBERTSON & ROBERTSON | [2012] FamCAFC 60 |
| FAMILY LAW – APPEAL – Adequacy of Reasons – Valuation of superannuation interest – Whether the Federal Magistrate failed to make relevant findings of fact as to the value of the asset pool – Where valuation of superannuation interest was six years old – Where Federal Magistrate failed to make findings in relation to the value of the husband’s superannuation interest – Where the Federal Magistrate failed to make findings as to the respective contributions of the parties – Where it was not open to the Federal Magistrate to find that the orders were just and equitable – Appealable error established – Appeal allowed – Matter remitted for rehearing. FAMILY LAW – Appellant’s success on appeal arose because of errors by the Federal Magistrate – Appropriate to grant certificates to both parties under Federal Proceedings (Costs) Act 1981 (Cth) for the appeal and the re-hearing. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) Family Law Amendment (Superannuation) Regulations 2001 (Cth) |
| Bennett and Bennett (1991) FLC 92-191 Coghlan & Coghlan (2005) FLC 93-220 Ferraro and Ferraro (1993) FLC 92-335 In the Marriage of Lee Steere (1985) FLC 91-626 |
| APPELLANT: | Ms Robertson |
| RESPONDENT: | Mr Robertson |
| FILE NUMBER: | BRC | 7301 | of | 2008 |
| APPEAL NUMBER: | NA | 130 | of | 2010 |
| DATE DELIVERED: | 4 May 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Finn, Strickland & Ryan JJ |
| HEARING DATE: | 1 March 2012 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 23 November 2010 |
| LOWER COURT MNC: | [2010] FMCAfam 1483 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Crabb |
| SOLICITOR FOR THE APPELLANT: | Schultz Toomey O’Brien Lawyers |
| SOLICITOR FOR THE RESPONDENT: | Ms Farnell of Family Law Solutions |
Orders
The appeal be allowed.
The orders made by Federal Magistrate Burnett on 23 November 2010 be set aside.
The proceedings be remitted for rehearing to the Federal Magistrates Court before a Federal Magistrate other than Federal Magistrate Burnett.
That there be no order for costs in relation to the appeal.
That the Court grants to the appellant wife a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act1981 (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 her in relation to the appeal.
The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (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 him in relation to the appeal.
The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (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 of the parties in respect of the costs incurred by them in relation to the new trial ordered.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Robertson & Robertson 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 BRISBANE |
Appeal Number: NA 130 of 2010
File Number: BRC 7301 of 2008
| Ms Robertson |
Appellant
And
| Mr Robertson |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by Ms Robertson (“the wife”) against property settlement orders made by Burnett FM on 23 November 2010 in proceedings between her and Mr Robertson (“the husband”).
The property settlement orders were made following an undefended hearing. Essentially, following cohabitation which spanned 20 years and contributions over an even longer period, the Federal Magistrate ordered that the wife receive the family home located near the South Coast of Queensland (“the family home”) subject to identified liabilities and that the husband retain superannuation in the payment phase which provided him with an annuity in the amount of $23,598.64 annually and other assets of modest value.
Relevantly, in relation to the parties’ most valuable assets, namely the family home and the husband’s superannuation, the valuation evidence was some years out of date. Primarily because of the lack of valuation evidence and an asserted inadequacy of reasons, it is the wife’s contention that his Honour erred in the evaluation of the parties’ contributions, failed to consider s 75(2) of the Family Law Act 1975 (Cth) (“the Act”), and did not, in accordance with s 79(2) of the Act, make orders which were just and equitable.
In order to bolster her contentions in relation to the significance of the lack of valuation evidence and that the orders are neither just nor equitable, leave was initially sought by the wife to adduce further evidence. This comprised a valuation of the husband’s superannuation interest calculated in accordance with the Family Law Amendment (Superannuation) Regulations 2001 (Cth) (“the Regulations”). In the event, it was agreed that this material would only be admitted if the appeal was successful and we decided that we would re-determine the property settlement applications.
The husband opposed the appeal and sought to maintain the Federal Magistrate’s orders. In summary, it is argued that valuation evidence was unnecessary and that although his Honour’s reasons were brief, they were sufficient.
Background Facts
To give context to this appeal, it is useful to record the key components of the chronology of events. Primarily these are taken from his Honour’s reasons or are otherwise not the subject of challenge in this appeal.
The husband was born in 1956.
The wife was born in 1959.
In 1982, the parties commenced cohabitation. They married in July that year.
The elder of the parties’ two children, S, was born in 1986.
In 1988, the parties purchased the family home in relation to which the wife’s parents loaned them $14,000.00 and they took out a mortgage.
The husband became a member of a superannuation fund in 1993.
The parties’ younger son, N, was born in 1995.
The parties separated for the first time in October 2000. At separation the wife and the children remained in the family home.
In January 2002, the parties reconciled and the husband returned to the family home.
Final separation occurred in October 2002. At separation the wife and children remained in the family home. At that time the amount outstanding on the mortgage was approximately $140,000.00.
For a few months following separation, the husband paid the mortgage. However, once he was assessed for child support, he paid child support and the wife paid the mortgage. By the time the orders under appeal were made the wife had reduced the mortgage to $12,000.00.
The parties were divorced on 27 September 2005.
The husband commenced parenting and property settlement proceedings in the Federal Magistrates Court in November 2005 which, at some stage, were transferred to the Family Court.
Following a defended hearing, parenting orders were made on 30 June 2008, the effect of which was that N continued to live with the wife and was to spend time with the husband on alternate weekends and half of each school holiday. The property settlement proceedings were transferred back to the Federal Magistrates Court.
Following prolonged negotiations, on 4 November 2009, the wife’s former solicitor informed the husband’s solicitor that the wife accepted the husband’s settlement offer. Summarised, the agreement was to the effect:
·that within 30 days the husband transfer to the wife his interest in the former matrimonial home, she refinance the mortgage into her sole name and provide from her parents a release from any outstanding liability to them;
·the husband retain his superannuation;
·the parties otherwise retain personalty in their possession; and
·the settlement be formalised by orders pursuant to s 79 of the Act.
Proposed Minutes of Consent Order were submitted by the solicitors for the husband to the solicitors for the wife which the wife did not execute.
On 13 April 2010, the parties’ solicitors appeared before his Honour at which time the matter was listed for hearing and directions for that hearing were made. Order 10 of the orders made that day listed the matter for final hearing on 10 September 2010. Although the only outstanding applications were for property settlement orders, his Honour noted “[t]hat the issue for hearing is to be confined to the matter of whether or not there was a concluded bargain in respect of property proceeds”.
When his Honour listed the matter for final hearing the outstanding applications comprised the husband’s Amended Application filed on 14 April 2007 and the wife’s Response filed on 13 February 2006. Essentially, the husband sought the sale of the family home and, following payment to the wife’s parents of $59,000.00, that he receive 60 per cent of the balance and the wife receive the remaining 40 per cent. In addition, he would pay to the wife the sum of $40,000.00 from the money he received from his superannuation, the contents of the family home be divided equally and minor adjustments be made in relation to personalty. For her part, the wife sought 80 per cent of the undefined “pool of matrimonial property” and that she indemnify the husband in relation to the parties’ indebtedness to her parents.
In relation to the trial directions the husband complied and the wife did not.
On 20 May 2010 the wife’s solicitor filed a Notice of Ceasing to Act.
The matter came before his Honour on 10 September 2010 but was not reached and was adjourned until 14 September 2010, when it was again not reached.
On 8 November 2010, a letter was sent to the parties by the Federal Magistrates Court which informed them that the matter was listed for mention before his Honour at 9.30 am on 23 November 2010.
On 23 November 2010 the husband appeared but the wife did not, and his Honour found that the wife had chosen not to appear. Although the matter was listed for mention in relation to whether “there was a concluded bargain in respect of property proceeds”, his Honour decided that he would determine the matter in the wife’s absence. Given the nature of the listing, it is no surprise that current valuation evidence was not before the Court.
The husband’s solicitor provided his Honour with a case outline. There the documents relied upon by the husband are identified, namely, his Amended Application already referred to, an affidavit and Financial Statement both sworn by him on 12 August 2010 as well as an affidavit sworn by his solicitor and filed 13 August 2010. Unfortunately, neither in the transcript nor in his Honours reasons did he identify the documents relied on by him. Included in the case outline is a part headed “A Relevant Chronology”. Other than birth dates, dates of cohabitation, separation and key trial directions, which we have outlined above and that in April 2003 the husband commenced cohabitation with his partner, the chronology is silent. The chronology did not recite facts in relation to the acquisition of property, the pool of matrimonial assets or other matters upon which s 79(4) and s 75(2) of the Act findings could be made.
The Federal Magistrate’s Reasons for Judgment
Because the grounds of appeal challenge the adequacy of his Honour’s reasons it is useful that these are set out in full.
His Honour said:
1.This application comes back before me today following its initial listing for hearing for trial on 10 September 2010, and subsequently on 14 September 2010, and it was not reached on those dates. It was adjourned to today, and advice was given that it was probably likely to be undefended. Correspondence from the Court indicates that the respondent was informed of today’s date. It has not come back unreceived, and I am satisfied that the respondent has notice of today’s proceeding.
2.This application has its genesis in an agreement which was reached between the parties in November 2009, which is to be found in email correspondence annexed to the affidavit of Bernadette Marie Farnell filed 13 August 2010. In particular, document 2 in two emails: first a letter of offer contained in an email of 4 November 2009 sent at 2.39pm in which the husband offered to settle the property proceedings on terms detailed there, which offer was accepted by an email sent on the same day in reply at 3.16pm.
3.It seems that despite that agreement, the respondent failed to fulfil her obligation which requires the Court to exercise its discretion today. Now, although it is not stated in the letter, it was clearly an implied term of the agreement that any agreement would be subject to sanction by the Court in terms of the s.79 of the Family Law Act.
4.The agreement simply provided in broad terms that the husband was to transfer to the wife the former matrimonial home, including the debt, and the husband was to retain a life interest in a superannuation fund which was in its pension phase and which constitutes an annuity of approximately $24,000 per annum. Having regard to the facts and circumstances set out in the chronology and supported by the material, the settlement in my view clearly constitutes a just and equitable settlement between the parties.
5.Having regard to all the matters required under s.79(4) and s.75(2), it follows that, had the wife attended at the last hearing, orders would have been made on that occasion. As I have noted, she has not appeared today. I am satisfied she knows that the application is on today, has chosen not to appear for whatever reason, and it is appropriate to proceed in her absence, as the Court is authorised to do pursuant to rule 13.03A, and to make final orders as I propose to do in terms of the case outline in orders 1 to 10.
6.So far as costs are concerned, the applicant also seeks costs. There is, in my view, no apparent reason why costs order ought not flow. Costs are, of course, to be analysed by reference to s.117 of the Act which requires, as a starting base that each party bear their own costs; however, subject to s.117(2), if the Court thinks it is otherwise just, it may award costs. The management of a costs order are detailed on s.117(2A) which require the Court to consider the financial circumstances of the parties, and in this case, each have the ability to pay costs, whether it pays in receipt of legal aid or something or other in this application.
7.To commence, the parties to proceedings in this instance have been put to unnecessary additional costs by reason of the respondent’s failure to engage. Other considerations include:
a)whether the proceedings were necessitated by a failure of the party to comply with the previous orders of the Court. In part that is a fact here, because the respondent did not attend on the previous occasions, requiring the need for the application to be determined today;
b)whether the applicant has been successful, and in this instance, he has; and
c)whether there has been an offer and, again, in this instance, there has been.
8.It seems to me, having regard to all those matters, that it is appropriate that there be an award for costs. I will make an award in terms of paragraph 11 of the final orders of the minutes provided for case outline. Generally I will make orders in those terms.
Grounds of appeal
In opening addresses, counsel for the wife abandoned ground 3 of the Notice of Appeal filed 21 December 2010. Two grounds thus remained, which can be summarised as follows:
· That the Federal Magistrate erred by failing to make findings and not giving necessary consideration and reasons in relation to the application of s 79(4) of the Act (ground 1).
· That the Federal Magistrate erred in that he failed to give adequate consideration to s 75(2)(b) and (f) of the Act and, as a consequence of the failure of the husband to disclose his superannuation and the joint debt of $102,600 owing to the wife’s parents, his Honour could not have been satisfied that the orders were just and equitable (ground 2).
Helpfully counsel for the wife then refined the challenge to the orders made by the Federal Magistrate as comprising the following elements:
1.The Federal Magistrate did not have a proper valuation of the husband’s superannuation available to him and his Honour failed to make relevant findings of fact as to the asset pool and its value.
2.The Federal Magistrate failed to make any findings as to the respective contributions of the parties.
3.As a result of the Federal Magistrate failing to make these findings it was not then open to the Federal Magistrate to find that the proposed orders were just and equitable under s 79(2) of the Act.
We propose to adopt this same approach in our consideration of this appeal.
Discussion
Inherent in the refined challenge of the wife is that his Honour failed to give reasons or reasons that are adequate. The principles which govern challenges to the adequacy of reasons in judicial proceedings are well settled. For present purposes, it is sufficient to refer to Bennett and Bennett (1991) FLC 92-191, where the Full Court (per Nicholson CJ, Simpson and Finn JJ) said at 78,266:
Counsel for the wife urged that there was a failure by her Honour to give adequate reasons for judgment, and that this, of itself, amounted to an error of law. In this regard he relied upon the line of New South Wales Court of Appeal decisions commencing with Pettitt v Dunkley (1971) 1 NSWLR 376, and including Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378, and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. In the latter case, McHugh JA said that without the articulation of reasons, a judicial decision could not be distinguished from an arbitrary decision. His Honour took the view that the requirement for reasons serves at least three purposes, namely, to enable the parties to see which of their arguments had been understood and accepted as forming the basis of a Judge’s decision; secondly, to further judicial accountability; and thirdly, to enable interested persons to ascertain the basis upon which like cases will probably be decided in the future.
Their Honours further said (at 78, 266):
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.”
We think that the test propounded by Gray J is a particularly useful one, and one which also applies to discretionary judgments. …
The approach to the determination of property settlement applications which include a superannuation interest was considered in Coghlan & Coghlan (2005) FLC 93-220. Their Honours, in the majority, Bryant CJ, Finn and Coleman JJ, determined at paragraph 63:
However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise). …
Their Honours also held, in relation to property settlement applications where no order is sought under Part VIIIB (which was arguably the case before his Honour):
Thus, we consider that because of the obligation under s 79(2) to make a just and equitable order, then in order to ensure such a result the Court should wherever there is a superannuation interest apply the provisions of s 79(4)(a) to (g) (which will include the matters contained in s 75(2)) to that superannuation interest whether or not a splitting order is sought. (original emphasis) (paragraph 108)
It is not in dispute that the valuation of the husband’s superannuation interest was six years old. When the hearing in the Court below commenced, his Honour questioned the solicitor for the husband in relation to the value of the husband’s superannuation. The solicitor for the husband informed his Honour that a valuation was required in relation to which an accountant had been retained. Discussion ensued about the nature of the husband’s superannuation interest, the effect of which is that his Honour appeared to accept that the husband could not convert his interest into a lump sum payment. Without more, his Honour proceeded to judgment. However, no findings were made by his Honour in relation to the value of the husband’s superannuation interest or the parties’ contributions to it.
We agree with the wife that the absence of evidence and findings as to the valuation of the husband’s superannuation interest constituted an error by his Honour.
As to the complaint that his Honour failed to make findings as to the respective contributions of the parties it is apparent that his Honour did no more than identify the relevant sections of the Act. It was submitted that his Honour was required to do more, namely to identify and assess the parties’ contributions in the context of findings in relation to the net value of the property of the parties. Reliance was placed upon authorities such as In the Marriage of Lee Steere (1985) FLC 91-626 and Ferraro and Ferraro (1993) FLC 92-335. We agree that the authorities referred to provide support for the submission. We also agree that his Honour’s reasons do not, even briefly, identify and assess the parties’ contributions or reveal how those contributions established entitlements to the assets of the parties. Thus, again his Honour was in error.
In relation to the third complaint identified above, that can be readily dealt with. Without his Honour making appropriate findings as to the asset pool and in particular the value of the husband’s superannuation, and without his Honour making appropriate findings as to the respective contributions of the parties (and as to the relevant s 75(2) factors) we agree that it was not open to his Honour to find that the orders that he proposed were just and equitable under s 79(2) of the Act. Thus, his Honour erred in this regard as well.
Conclusion
As a result of there being merit in the remaining grounds of appeal the appeal must be allowed.
At the commencement of the hearing before us the parties agreed that in the event the appeal was allowed we would be invited to re-determine the property settlement applications. During the hearing, however, there was consensus that remission rather than re-exercise was appropriate, and with this approach we agree. Although there were some orders made by his Honour that were not challenged, and in particular the order which required the husband to transfer his interest in the family home to the wife, given that we propose to remit this matter for rehearing we consider it appropriate to set aside all of the orders made by his Honour. Logically, that would also include the order for costs made by his Honour albeit that order was also not the subject of any ground of appeal. In this regard we observe that without explaining the basis for so doing, his Honour found that the wife chose not to appear. Nothing to which we have been taken would indicate that such an inference was available.
In the circumstances we propose to remit the matter, including the order for the costs of the first hearing, for rehearing.
Costs of this appeal
At the conclusion of the hearing, we took submissions concerning costs of the appeal. In the event the appeal was successful, the parties sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981(Cth) in relation to the appeal and retrial. Certificates may be granted in respect of the costs of an appeal where the appeal has succeeded on a question of law to the respondent (s 6), and also to the appellant provided no order for costs has been made under s 117 of the Family Law Act 1975 (Cth) (s 9). A certificate may also be granted to each party in respect of the costs of a new trial where the appeal has succeeded on a question of law. This appeal has succeeded on a question of law and there are no circumstances which would justify an order for costs in this case.
Therefore, we consider the granting of costs certificates to both parties for the appeal and rehearing is appropriate.
I certify that the preceding forty eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 4 May 2012.
Associate:
Date: 4 May 2012
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