Roverati & Roverati
[2021] FamCAFC 89
•11 June 2021
FAMILY COURT OF AUSTRALIA
Roverati & Roverati [2021] FamCAFC 89
Appeal from: Roverati & Roverati [2020] FCCA 561 Appeal number(s): SOA 33 of 2020 File number(s): ADC 1325 of 2017 Judgment of: STRICKLAND, RYAN & AUSTIN JJ Date of judgment: 11 June 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Primary judge found equality of contributions – Adequacy of reasons – Failure to take into account relevant considerations – Husband’s inheritance vis-à-vis the wife’s inheritance significantly greater contribution from which the parties’ generated income and met household expenses – Primary judge’s reasons failed to recognise that approximately 30 per centum of the parties’ asset pool was derived from the husband’s inheritance and the use to which the parties’ inheritances were put respectively – Merit in grounds of appeal – Appeal allowed – Re-exercise of discretion to effect a 55:45 division in the husband’s favour.
FAMILY LAW – APPEAL – NOTICE OF CONTENTION – Add-backs – No appealable error demonstrated in primary judge’s finding not to add-back amounts received by the husband to pay legal fees – Notice of Contention dismissed.
Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2) 79(4)
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9
Cases cited: Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621; [1953] HCA 25
Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91
Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63Horrigan & Horrigan [2020] FamCAFC 25
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Lovell v Lovell (1950) 81 CLR 513; [1950] HCA 52
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17Steinbrenner & Steinbrenner [2008] FamCAFC 193
Sun Alliance Insurance Ltd v Massoud (1989) VR 8Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Division: Appeal Division Number of paragraphs: 79 Date of hearing: 23 November 2020 Place: Adelaide Counsel for the Appellant: Dr Smith Solicitor for the Appellant: Howe Jenkin Lawyers Counsel for the Respondent: Mr Tredrea Solicitor for the Respondent: Di Rosa Lawyers ORDERS
SOA 33 of 2020
ADC 1325 of 2017APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR ROVERATI
Appellant
AND: MS ROVERATI
Respondent
ORDER MADE BY:
STRICKLAND, RYAN & AUSTIN JJ
DATE OF ORDER:
11 JUNE 2021
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.Paragraph 1 of the order made on 24 March 2020 be set aside, and in lieu thereof the following order be made:
There be a 55 per centum/45 per centum division of the net assets of the parties, excluding superannuation, in favour of the husband, with the following orders to give effect to the same:
a.Within 60 days of the making of these orders, the husband shall do all acts and things and sign all documents necessary to transfer to the wife all of his interest and estate in the property situated at B Street, Suburb C in the State of South Australia (‘the former matrimonial home’) being the whole of the land comprised and described in Certificate of Title Register Book Volume … Folio … at the expense of the wife.
b.Within 60 days of the making of these orders the husband shall pay to the wife the sum of $56,807.
3.By application of the slip rule the paragraph number in paragraph 4 of the order be varied from “Paragraph 2” to “This paragraph”.
4.The Notice of Contention filed on 11 November 2020 be dismissed.
5.The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by him in relation to this appeal.
6.The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent wife in respect of the costs incurred by her in relation to this appeal.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Roverati & Roverati has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND AND RYAN JJ
By his Amended Notice of Appeal filed on 16 September 2020, Mr Roverati (“the husband”) appeals from one of the final property settlement orders made by the primary judge on 24 March 2020. Ms Roverati (“the wife”) opposes the appeal.
The order the subject of the appeal provides for an equal division of the net assets of the parties, including superannuation, and to achieve that the husband is to transfer to the wife his interest in the property in Suburb C, the wife is to pay to the husband the sum of $126,085.50, the parties are each to retain certain assets, and there is a superannuation splitting order in order to equalise the superannuation interests of the parties.
Although the order appealed against includes a reference to the superannuation interests of the parties, in fact there is no appeal from the superannuation splitting order which equalises the parties’ respective superannuation interests.
On 11 November 2020, the wife filed a Notice of Contention asserting that the primary judge erred in failing to notionally add-back to the asset pool available for division between the parties, a payment of $34,942.65 made by the husband for his legal fees.
BACKGROUND
The husband was born in 1957 and was aged 60 years at the time of the trial. The wife was born in 1959 and was aged 58 years at the time of the trial.
In May 1983, the parties purchased the property in Suburb C.
The parties married in 1983 and commenced cohabitation in the Suburb C property.
In 1987 the parties’ first child X was born. In 1988, Y, the parties’ second child was born. X and Y were 31 and 29 years old respectively at the time of the trial. X has married and lives independently, whereas Y remains living with the wife in the Suburb C property.
On 1 January 2016, the parties separated but remained living under the one roof until 8 December 2017.
On 5 April 2017, the wife commenced proceedings by filing an Initiating Application in the Federal Circuit Court of Australia seeking final property settlement orders.
Although the parties disagreed about how their property should be distributed, there were few factual disputes for determination by the primary judge. The approach to various transactions required consideration and otherwise, as counsel for the wife who authored her Summary of Argument for this appeal said, the only salient legal controversies were the contribution issues relating to the husband’s inheritance received in 2006, and his inability to earn an income and thus contribute throughout the marriage.
THE APPEAL
The husband’s Amended Notice of Appeal filed on 16 September 2020 asserts three grounds of appeal:
1.The learned primary judge erred in assessing the contributions of the parties in giving no weight, or insufficient weight, to the inheritance received by the husband.
2.The learned primary judge failed to consider the use to which the parties’ respective inheritances were applied in assessing the parties’ contributions.
3.In assessing the contributions of the parties, the learned primary judge gave inadequate reasons.
Before this Court, counsel for the husband explained that Ground 3 is a corollary of Grounds 1 and 2, and Ground 3 is the primary ground agitated by the husband.
Grounds 1 and 2 allege that the primary judge failed to give weight, or sufficient weight, to certain contributions made by the husband, in exercise of a discretionary decision. Thus it is appropriate to recall the principles applicable to appeals from discretionary decisions as expressed by the majority of the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 504–505, namely:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
In Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419, Bathurst CJ and Leeming JA, apropos a ground of appeal that contended the result to be “unjust or plainly unreasonable”, said of the passage from House v The King quoted above that:
10.It is wrong to seek to apply the references to “unreasonable or plainly unjust” in that passage in isolation. The premise of this aspect of the test in House v The King is that the reasons do not explain the result reached.
In relation to appeals alleging that a discretionary decision maker failed to give appropriate weight to particular matters, Stephen J said this in Gronow v Gronow (1979) 144 CLR 513, at 519–520:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.
(Our emphasis)
It is also useful at this juncture to note the husband’s submissions arising from the 16 month period between closing submissions and delivery of judgment. The contention is that this might explain some of the frailties in the trial reasons and otherwise deprives the primary judge of the presumption of correctness. So much can be accepted, but it is well understood that delay per se cannot justify upholding an appeal, and error on the part of the primary judge must still be established.
Ground 1 – The learned primary judge erred in assessing the contributions of the parties in giving no weight, or insufficient weight, to the inheritance received by the husband
First, it is necessary to describe briefly the parties’ respective inheritances and how they dealt with them.
In September 2003, the wife inherited a one-quarter interest in the property at D Street, Suburb E, with her three brothers (“D Street”). In 2003, the property was valued at $189,000 with an associated rental account balance of $12,547.
In June 2006, the wife and her brothers established a discretionary trust and transferred D Street and its associated rental account to that trust (“D Street Trust”). The wife and her three brothers were the trustees, and their respective children were the beneficiaries. Upon its establishment, it was generally agreed between the wife and her brothers that any rental income received by the trust would be distributed to their children, and accordingly the wife never received any distribution from the trust ([66]–[68]).
The husband inherited certain real and personal property in 2006 following the death of his father, with that property said to be valued at a total of $445,486. We note though that the wife asserted that the value was somewhat less, namely $404,619.64 ([71]). The husband’s inheritance included the property at F Street, Suburb G (“F Street”), cash, shares, sale proceeds from another property, and conveyancing fees.
In March 2007, the husband established the F Street Trust, with himself as the appointor, trustee and primary beneficiary. He transferred F Street and the sum of $11,650 to this trust, and F Street was rented out.
The husband tendered financial statements for the F Street Trust which indicated that it had made distributions totalling $79,108.51 to the parties, and to the Roverati Family Trust ([74]). It was agreed that these distributions were either reinvested or applied by the parties towards household expenses.
The primary judge found that at the time of the trial F Street was valued at $400,000, and the F Street Trust investments were valued at $6,565 ([54]).
In July 2006, the parties established the Roverati Family Trust with the husband and wife as the appointors, trustees and primary beneficiaries. The initial assets comprised the sum of $35,433, $8,682 received by the wife as a gift from her late grandmother, and the balance being some of the proceeds of the husband’s workers compensation payments. Then, from early 2007 to mid-2014, the husband transferred assets he had inherited, namely cash, shares, and the sale proceeds of another property, from the F Street Trust to the Roverati Family Trust, totalling $161,103 ([77]).
The parties agreed that the Roverati Family Trust’s value at the date of trial was $365,825 ([78]).
Since this trust was established, distributions made to the parties totalled $127,718.36. However, these were made on paper with the profits being reinvested, and there was no dispute that significant household expenses were paid out of this trust.
The genesis of the husband’s complaint here is his claim that in [65] his Honour implicitly concluded that both inheritances were similar in nature, and as a result his Honour erred by giving no or insufficient weight to the inheritance received by the husband.
His Honour said this at [65]:
Throughout their marriage, the parties each received a significant inheritance from their parents’ estates, which was placed in various trust entities.
The use of the word “significant” is of itself noteworthy and makes plain, that for these parties, even the amount of $50,000 being the approximate value of the wife’s inheritance is significant. Or put differently, material. However, we do not accept that the remarks at [65] can be described as an implied conclusion that the inheritances were similar in nature and given equivalent weight. Rather, this paragraph simply introduces his Honour’s recording of the details of the respective inheritances and what became of them. That does not dispose though of the husband’s complaint to the approach taken to the husbands inheritance (as distinguished from the use the parties made of it which is considered under Ground 2). In our view, properly understood, the balance of the submissions raised under Ground 1, challenge the adequacy of the trial reasons, including that they fail to deal with an essential integer of the husband’s case concerning the significance of his inheritance. It is preferable that this issue is considered in conjunction with Ground 3, which as we said earlier, is the primary ground.
It follows, that subject to consideration of the outstanding issues under Ground 3, Ground 1 has not been established.
Ground 3 – In assessing the contributions of the parties, the learned primary judge gave inadequate reasons
The principles governing the adequacy of reasons are well known. For example, in Bennett and Bennett (1991) FLC 92-191 the Full Court adopted the test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud (1989) VR 8 at 18, namely:
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.
An analysis of the inheritances demonstrates that the husband’s inheritance was far greater in value than the wife’s. When received it was valued at least at $404,619.64, whereas the wife’s was valued at approximately $50,000. Thus, it can immediately be seen that the husband’s financial contribution in this regard was significantly more than the wife’s, and that is without taking into account the income subsequently derived therefrom, and the increases in the value of the assets over time, let alone the use made of that income and those assets.
Of course, as recognised by the wife, the assessment of contributions is not a mathematical or accounting exercise, and even more importantly, it is an holistic undertaking with all of the contributions of the parties of whatsoever nature being taken into account (Dickons & Dickons (2012) 50 Fam LR 244 at [23]–[26]) (“Dickons & Dickons”).
That said, it is not apparent from his Honour’s treatment of the respective contributions of the parties culminating in a finding of equality, how the contributions of the wife informed that outcome, such that the significantly greater financial contributions of the husband in the form of his inheritance did not result in a weighting in his favour.
The wife did suggest that the husband overlooked the wife’s contributions to the conservation of the trust assets derived from the husband’s inheritance, but that does not form any part of his Honour’s reasons in concluding as he did.
His Honour dealt with the topic of the contributions of the parties by:
(a)recording the details of the purchase of the B Street property ([61]);
(b)identifying the assets they each brought into the relationship (62]);
(c)detailing the husband’s employment and income during cohabitation, and likewise the wife’s ([63] and [64]);
(d)tracing the placement of their respective inheritances into the various trusts, and the use of those assets and the income derived therefrom ([65]–[81]); and
(e)addressing their respective homemaker and parent contributions ([82]–[86]).
Then, without any detailed analysis of those contributions, his Honour concluded as follows at [89]:
The parties supported each other, financially and non-financially, in different ways over many years. At times their individual levels of contribution, both financial and non-financial fluctuated. I have concluded that contributions between them should be apportioned on a 50:50 basis. I am further satisfied that it is appropriate to make orders providing for an equalisation of superannuation interests as sought by both parties.
In Steinbrenner & Steinbrenner [2008] FamCAFC 193, Coleman J sitting in the appellate jurisdiction of the Family Court of Australia, intuitively said this:
234.Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective. …
We consider that the “leap” here is so great, and so “unheralded” by the discussion that precedes it as to render his Honour’s reasoning process “defective”. There is no recognition that approximately 30 per centum of the asset pool at least was derived from the husband’s inheritance, and his Honour’s failure in that regard cannot be masked by suggesting that his Honour duly applied the requisite holistic approach in assessing contributions, and that to find other than equality would be to reduce the wife’s contributions to of secondary importance.
Here it is not possible to discern from the reasons for judgment, how his Honour treated the inheritances or their use holistically with the myriad of the other contributions made by the parties. There is no mention of the inheritances in his Honour’s assessment of contributions at [87]–[89]. They are simply overlooked and thus, an essential aspect of the husband’s case at trial, in reality probably the pivotal aspect of his case went unanswered. The assessment of contributions is a comparative exercise and when, as here, a relevant and important aspect of contributions is not considered in the ultimate evaluative exercise, the reasons are inadequate and the conclusion reached cannot stand.
This ground of appeal must succeed.
Ground 2 – The learned primary judge failed to consider the use to which the parties’ respective inheritances were applied in assessing the parties’ contributions
It was incumbent on the primary judge to not only take into account and afford appropriate weight to the introduction of the inheritances into the relationship, but also to have regard to the use(s) made of those contributions (Dickons & Dickons at [14]).
Here, it was common ground that the parties did not derive any direct income or benefit from the wife’s inheritance, because any income was to be distributed to her children, and those of her three brothers ([68]). However, with the husband’s inheritance, income was generated for the parties which was either reinvested or went to meet household expenses ([74] and [81]). It is also relevant that it was the husband who actively managed the investments.
In his Honour’s assessment of the respective contributions of the parties at [87]–[89], just as with the issue of the contribution of the inheritance per se, it is not apparent that his Honour gave any consideration to the use of the inheritances of the parties. It could not be said that the husband’s contention for a finding other than of equality of contributions was a fait accompli and could permissibly be waived through. Otherwise, coupled with a proper consideration of the inheritance of the husband, that ought to have led his Honour to an assessment other than an equal division between the parties.
This ground of appeal also has merit.
NOTICE OF CONTENTION
In an attempt to “fortify the ultimate conclusion” of the primary judge, the wife submits that his Honour erred in failing to notionally add-back to the pool of assets an amount of $34,942.65, which it is claimed the husband expended on legal fees from money distributed to him post-separation as the beneficiary of the F Street Trust.
The husband submits in response that his Honour did not err by refusing to notionally add-back this amount.
His Honour addressed the claimed add-back at [43]–[46], recording in [45] that the husband withdrew the sum of $34,942.65 from the H Bank working account of the trust to pay his legal fees. His Honour then said this at [46]:
The add-back of legal fees is, as noted in [Trevi & Trevi] ((2018) FLC 93-858), a discretionary matter. The disbursement of funds from the working account to pay the legal fees of the husband should properly be regarded as being received in his own right by virtue of being a beneficiary of the Trust. In such circumstances funds of that nature expended on legal fees would not ordinarily be added back as a notional asset…
(Footnote omitted)
However, as the wife’s counsel sought to explain in oral submissions, there was confusion between what each of the parties said about this in their affidavit material, and what his Honour said in [45] and [46]. The confusion primarily related to what the amount in fact was, and where it came from; i.e., was it $34,942.65 as is set out in [45], or $37,793 as in the husband’s affidavit, and did it come from the working account or from a term deposit. Further, as conceded by the wife’s counsel, he was unable to inform this Court from where his Honour obtained the figure of $34,942.65.
There was further confusion in that it was unclear to what his Honour was referring to in [46] by describing the funds “as being received in [the husband’s] own right by virtue of being a beneficiary of the Trust”. It seems that his Honour adopted that wording from what the Full Court said in Trevi & Trevi (2018) FLC 93-858 (“Trevi & Trevi”) at [34], and that as such the funds were thereby able to be utilised by the husband in meeting his legal fees, without those funds being notionally added-back. However, it was accepted by the wife’s counsel that “the foundation of this conclusion is unclear”, and the husband’s counsel described the wording of his Honour as “infelicitous”.
In any event, as was explained by the wife’s counsel, the wife was only looking to bring this alleged error to the attention of this Court in order to fortify his Honour’s finding that there should be an equal division of the assets of the parties. He stressed that it was not brought in the manner of a cross-appeal, where the wife was seeking that the amount expended by the husband on legal costs be now in fact notionally added-back, the wife recognising that the question of whether to add-back legal fees is at the discretion of the primary judge, and to do so would be the exception rather than the rule (Trevi & Trevi).
Given that principle, and the confusion as to the amount and where it came from, we are not able to find that his Honour erred in failing to add-back whatever amount it was that the husband obtained from whatever account of the trust, to pay his legal fees.
Thus, this contention cannot fortify his Honour’s decision, and it does not impact upon the merit that we have found in the grounds of appeal. Indeed, the Notice of Contention must be dismissed.
OUTCOME
The husband has established error and the appeal should be allowed and the order appealed from set aside.
The question then becomes whether this Court should re-exercise the discretion or remit the proceedings. Both parties submitted that in the event that the appeal was allowed, it was open to this Court to re-exercise the discretion, and if that was done, the discretion could be re-exercised on the evidence that was before the primary judge, and no further evidence would be adduced.
We are satisfied that it is open to this Court to re-exercise the discretion, and that it is appropriate to do so. There was no dispute as to the legal and equitable interests of the parties in their property, there was no issue as to the value of the property of the parties, and there was no challenge to the findings of fact of the primary judge. Further, given the lack of success of the Notice of Contention, there is no longer any challenge to his Honour’s treatment of add-backs, or to the asset pool as found by his Honour. Finally, it was common ground that there was no basis for an adjustment pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
The only issue for the re-exercise of the discretion is the assessment of contributions, and in particular how the inheritances of the parties and there use should be taken into account. Indeed, there is no dispute about any of the other contributions of the parties as found by his Honour.
We consider that given the significant financial contribution by the husband of his inheritance, and its use, the respective contributions of the parties should be assessed at 55 per centum/45 per centum in the husband’s favour.
In so finding we are acutely aware of how inappropriate it would be to tinker with the percentages as found by his Honour, but the husband’s inheritance was simply too significant to not result in the percentage division that we have found.
As found by his Honour, the net non-superannuation pool of assets has a total value of $1,317,405. Fifty-five per centum of that amount is $724,572.75, and again, as found by his Honour, the husband is to retain net assets to the value of $781,380. Thus, to achieve a 55 per centum/45 per centum division in the husband’s favour, the husband will be required to pay to the wife the sum of $56,807 (rounded to the nearest dollar).
As to the superannuation entitlements of the parties, there was no challenge to his Honour making a superannuation splitting order in order to equalise those superannuation entitlements. In that regard, and as found by his Honour, the base amount of $45,965 is to be allocated to the wife out of the interest of the husband in his superannuation fund.
We note though that there was an error in his Honour’s order addressing the parties’ superannuation, namely, in paragraph 4 his Honour referred to paragraph 2 of the order being binding on the trustee of the husband’s superannuation fund, where it seems his Honour was intending to refer to that paragraph, namely paragraph 4. Thus, we need to correct this in the orders we make.
Finally, as is required by s 79(2) of the Act, we are satisfied that having now taken into account in assessing holistically the contributions of the parties, the significant financial contribution of the husband in the form of his inheritance and its use, it is just and equitable in all the circumstances to make the order that we do.
COSTS
In the event that the appeal was allowed, both parties sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
Given that there will be no order for costs, and the appeal is being allowed on a question of law, we are content to make the orders sought.
AUSTIN J
I respectfully dissent and consider the appeal should be dismissed.
All three grounds of appeal challenge the efficacy of the primary judge’s treatment of two inheritances received by the parties many years before their separation in 2016: one by the respondent wife in 2003 and the other by the appellant husband in 2006. The grounds contend insufficient weight was given to the husband’s inheritance (Ground 1), the primary judge failed to consider the use to which the inheritances were put (Ground 2), and inadequate reasons were given for the finding as to the parties’ comparative contributions (Ground 3). In my view, each ground should fail.
The parties agreed their superannuation interests should be equalised (at [2]–[3]), as was then ordered by the primary judge.
Excluding the superannuation interests, the parties’ property was found to have a net value of $1,310,821 (at [54]), to which finding there was no challenge in the appeal. The husband applied for 60 per cent of the property and the wife sought 55 per cent, meaning their positions were 15 per cent apart. The disparity was entirely due to the parties’ differential assessment of their contributions under s 79(4) of the Act, since they agreed there should be no adjustment either way pursuant to s 75(2) of the Act.
None of the contributions upon which the parties each relied was overlooked by the primary judge. Nor was it contended his Honour made any mistaken findings about their contributions, since there was remarkably little dispute about the underlying facts. It was merely a situation in which the parties held divergent views about the weight attributable to their respective contributions.
The primary judge concluded:
89.The parties supported each other, financially and non-financially, in different ways over many years. At times their individual levels of contribution, both financial and non-financial fluctuated. I have concluded that contributions between them should be apportioned on a 50:50 basis. I am further satisfied that it is appropriate to make orders providing for an equalisation of superannuation interests as sought by both parties.
As can be seen, the result of equality fell between the parties’ stated positions, though marginally closer to the wife’s position: five per cent less than the wife wanted and 10 per cent less than the husband wanted.
The value of the wife’s inheritance in 2003 approximated $50,000 (at [66]), whereas the value of the husband’s inheritance in 2006 was in the range of $404,000 to $445,000 (at [70]–[71]). The parties put the capital value of both inheritances to work within the family economy in one way or another. Neither was squandered. The use of the wife’s inheritance for the benefit of the parties’ children made it no less relevant than the husband’s inheritance, used for the benefit of the whole family.
The husband’s case was that the superiority of his inheritance necessarily meant his contributions should have been assessed as being greater. Although the capital value of his inheritance was much greater, it had to be weighed holistically against all other contributions made over some 33 years (Dickons & Dickons; Chapman & Chapman (2014) FLC 93-592 at [100]); Jabour & Jabour (2019) FLC 93-898 at [59]–[69]; and Horrigan & Horrigan [2020] FamCAFC 25 at [35]–[48]). Without being exhaustive, other material contributions included the wife’s superior capital contribution at marriage (at [62]), the wife’s longer history of paid employment (at [63]–[64]), and the wife’s superior contribution as a homemaker and parent (at [82]–[86]).
The primary judge’s reasons were succinct, but that was all they needed to be in the absence of any material factual dispute. Reasons need not be lengthy nor elaborate to be adequate (Thorne v Kennedy (2017) 263 CLR 85 at [61]). Both parties urged the primary judge to take a global approach to the assessment of their contributions, thereby eschewing the need for intricacy and mathematical precision (Norbis v Norbis (1986) 161 CLR 513 at 520–523, 534–535 and 541).
In the end, although not argued in this way, the husband was really only left with the contention that the primary judge’s failure to give sufficient weight to his inheritance amounted, in effect, to a failure to exercise the discretion entrusted to the court (Lovell v Lovell (1950) 81 CLR 513 at 519) which high hurdle, in my view, he could not jump. The presumptive correctness of the primary judge’s discretionary decision (Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627) could not be rebutted by the bare submission that greater emphasis should have been placed upon the husband’s inheritance, as but one important contribution in a very long relationship.
The majority, by re-exercising discretion in the appeal, have concluded that the appellant’s contributions should be assessed at 55 per cent in lieu of 50 per cent, as was found by the primary judge. Given the established value of the parties’ property, the percentage differential amounts to about $65,000, which is contextually quite modest. In my respectful view, in the particular circumstances of this case, that differential does not tend to show the decision was plainly wrong because it exceeds the generous ambit within which reasonable disagreement is possible, but rather tends more to show a modest difference in the exercise of discretion (Norbis v Norbis at 535 and 539–540).
I would dismiss the appeal and order the husband to pay the wife’s costs in the sum of $8,550, which quantum the appellant commendably conceded in the event of dismissal of the appeal.
Given the result of the appeal, it is obviously sensible for the slip in the superannuation splitting orders to be corrected.
I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Strickland, Ryan & Austin. Associate:
Dated: 11 June 2021
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