Saville & Saville

[2007] FamCA 349

FAMILY COURT OF AUSTRALIA

SAVILLE & SAVILLE [2007] FamCA 349

FAMILY LAW - APPEAL – Property settlement – Section 75(2) factors – 14 year marriage – $2.4 million pool – 2% adjustment for section 75(2) factors – The wife received 57% of the asset pool – The wife claimed adjustment was inadequate considering the disparity in the parties’ earning capacities and the wife’s obligations towards the children – The relevant factors to be considered in determining an appropriate adjustment were: 

·    The wife’s contribution based entitlements exceed the husband’s by $240,000;

·    Each of the parties was likely to gain an inheritance, the husband’s to exceed the wife’s by approximately $212,000;

·    The wife was assessed as having virtually no future earning capacity from paid work whilst the husband was earning $102,000 per annum and was likely to have an increasing professional income;

·    The children were residing with the wife who had the principal responsibility for their support;

·    The husband was presently contributing child support and also had an obligation to contribute to the support of his daughter of his current relationship;

·    The assets to be retained by the husband included superannuation entitlements of $154,000 that would not be available to him for many years;

·    Each of the parties faced a massive bill for legal costs of similar proportion;

·    The capital that would be left to provide for each of them for their future needs would clearly be likely to be inadequate to meet those anticipated needs.

– Whilst consideration of these factors may have led to a different conclusion as to what was an appropriate section 75(2) adjustment, the Trial Judge’s adjustment did not fall outside the generous ambit of discretion – Appeal dismissed – Of the 8 volumes of appeal books only the judgment and two other pages were referred to in argument – Caution to be exercised when settling appeal book index so as not to include unnecessary material

Family Law Act 1975 (Cth)

CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828; (1998) 23 Fam LR 755
Clauson v Clauson (1995) FLC 92-595; (1995) 18 Fam LR 693
Coghlan v Coghlan (2005) FLC 93-220; 33 Fam LR 414
Gronow v Gronow (1979) 144 CLR 513; (1979) FLC 90-716; (1979) 5 Fam LR 719
House v The King (1936) 55 CLR 499
 P v P [2007] All ER (D) 294 (Mar)Waters v Jurek (1995) FLC 92-635; (1995) 20 Fam LR 190
Wrona v Wrona (2004) FLC 93-207; (2004) 33 Fam LR 71

APPELLANT: MS SAVILLE

RESPONDENT: MR SAVILLE

FILE NUMBER: SYF 3363 of 2003

APPEAL NUMBER: EA 56 of 2006

DATE DELIVERED: 20 April 2007

PLACE DELIVERED: SYDNEY

JUDGMENT OF: KAY, BOLAND & STEVENSON JJ

HEARING DATE: 30 MARCH 2007

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 17 MAY 2006

LOWER COURT MNC: [2006] FamCA 349

REPRESENTATION

COUNSEL FOR THE APPELLANT: MR SCHONELL

SOLICITORS FOR THE APPELLANT: NEWNHAMS

COUNSEL FOR THE RESPONDENT: MR BELL

SOLICITORS FOR THE RESPONDENT: THE ARGYLE PARTNERSHIP

Orders

1. The appeal be dismissed

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Saville v Saville.

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 56 of 2006
File Number: SYF 3363 of 2003

MS SAVILLE

Appellant

And

MR SAVILLE

Respondent

REASONS FOR JUDGMENT

1. This is the wife’s appeal against property orders made by Cohen J on 17 May 2006 the effect of which was to divide a pool of assets found by his Honour to be worth approximately $2.4 million so that the wife was to receive 57 per cent of the pool of assets and the husband the remainder. 

2. The trial judge had determined that the pool should be divided according to the respective contributions of the parties as to 55 per cent to the wife and 45 per cent to the husband and that there should be a further adjustment of 2 per cent in favour of the wife as an allowance for what are generally called s 75(2) factors. In this appeal the wife asserts that an inadequate allowance has been made for those factors. Her counsel submitted on her behalf that an appropriate adjustment should have seen her receive 65 per cent of the pool of assets.

Background

1. The husband was born in May 1957 and the wife was born in June 1955.  They commenced to cohabit in 1988 and were married in December 1988.  They separated in September 2002 after 14 years of cohabitation. 

2. There are two children born of the marriage, P born in November 1990 and R born in June 1995.  The children have remained living with their mother.  Part of the proceedings before Cohen J concerned contested applications for residence (as it was then referred to in the legislation).  His Honour determined those proceedings by making orders that the children remain living with their mother but that they have frequent and regular contact with their father entailing alternate weekends, alternate Wednesday evenings and approximately half the school holidays.

3. The father has repartnered and lives with Ms M.A. and their daughter C who was born in August 2003.

4. The pool of assets as determined by the trial judge was as follows:

   Husband’s interest in the B Street property    $876,000.00

   Husband’s interest in the P Street property    $375,000.00

   Husband’s and wife’s equal interest in the former

   matrimonial home  $815,000.00

   Wife’s interest in the F Street property           $400,000.00

   Husband’s superannuation  $154,620.00

   Wife’s superannuation  $    6,454.00

   Husband’s shares  $    5,438.00

   Husband’s household contents  $    8,000.00

   Contents of former matrimonial home  $  19,744.00

   Wife’s car  $  13,800.00

   Wife’s jewellery  $    2,000.00

   Wife’s Notional Assets for paid legal costs  $  29,000.00

   Husband’s Notional Assets for paid legal costs  $  83,700.00

   Total  $2,788,756.00

   Capital Gains Tax  ($112,820.00)
              Other liabilities  ($269,020.00)
     ($381,840.00)

   Net Assets  $2,406,916.00

5. There is no appeal about the trial judge’s determination of the pool of assets nor is there any appeal against the trial judge’s determination that the contributions to that pool should be measured as to 55 per cent by the wife and 45 to the husband.  The disparity in contributions was mainly brought about by initial capital introduced into the marriage by the wife as a result of her ownership of a property at B, and her acquisition by way of gift from her mother in 1998 of an interest in the F Street property.

The judgment

1. After dealing with the competing residence claims and establishing the pool of assets and the manner in which it was appropriate to determine the relevant contributions of the assets to that pool, the trial judge then turned to consider relevant matters under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) that might lead to any further adjustment of the division of the pool.  His Honour said:

   140.There are some matters which come to the fore when considering s75(2) and any need for adjustment to ensure the parties are treated in an equally just and equitable manner. The first is the prospect of inheritance or the like, the second is the inequality in the parties’ respective earning capacities from employment, the third is the continuing need of the wife to primarily care for the children, the fourth is the fact that the husband has rights to superannuation which he seeks to split between himself and the wife with the implication that, because it is not immediately available for use, it may be less worthwhile than other assets of the same face value. There are some less significant matters which also much be considered.

   141.The wife has only one sibling.  Her brother is the other joint tenant in their mother’s home.  The circumstances are such that the wife is likely to become a half owner of it with her brother in the foreseeable future because their mother is now about 88 years old.  It is realistic to expect the wife and/or her brother to then decide to sever the jointure and become tenants in common in their mother’s home.  The wife stands as likely to receive property worth another $200,000.00 within a few years.  Although there is a possibility that the brother will predecease their mother, without specific evidence it is too remote to give it any weight.  The possibility that the wife will predecease her mother and/or her brother is irrelevant because, on her death she will have no needs and that death is quite unlikely in the foreseeable future.

   142.The husband is in a stronger position in relation to future windfalls.  He is bound to inherit his mother’s estate if he outlives her, which is highly likely.  He will probably inherit [the H Street property] within a few years.  It is worth $612,000.00 but the debt on it is only a little less than $200,000.00.  Some of this will be paid off by the time he inherits.

   143.The husband is 2 years younger than the wife. He is very well presented and looks younger than he is.  His current employment income is $102,000.00 per annum gross including about $10,000.00 in fringe benefits which are, for him, not subject to tax.  He has a relatively dormant business related to his profession which he would not have commenced if he did not intend to develop it.  I think he is likely to endeavour to expand it once these proceedings end.  Whether it will expand enough to warrant leaving his job is uncertain, but in either event he is likely to have an increasing professional income over that which he now receives.  I think the husband is likely to continue in employment until the retiring age of 65 at least.  He will have the capacity to work after that because of his professional skill and experience and his embryonic business. 

   144.The husband’s de facto wife also has the potential to contribute to the husband’s cost of living.  She has property.  For the purpose of these proceedings she has an asset of about $59,000.00 in the [B Street] home.  She has an Honours degree in Science and until [C] was born in 2003 was employed as a receptionist.  She is only about 38 years old.  She has the capacity to return to the workforce although is probably unlikely to do so for a few years.  There is the possibility that she may have another child which will delay her return.

   145.The wife’s future earning capacity from paid work is, in my opinion, virtually non-existent.  She has not worked for years and has no particular skill or recent experience which would assist her to gain paid employment.  Her personality is, in my opinion, such that she will find it difficult to maintain any employment she might obtain.  She has poor insight and judgement and little self restraint or self discipline and at her age, 50, is unlikely to be able to successfully complete any training which might qualify her better for employment.  She will have to live on her income from investment.  Her mother’s home, a substantial part of the property which she will have once these proceedings are completed, will not produce an income for some years.  In any event, the wife will continue to have the responsibility for most of the care of the children.  That care will continue for about 7 years in [R’s] case. 

   146.The husband will have a continuing responsibility to contribute to the boys needs according to his financial capacity under the Child Support (Assessment) Act for as long as the wife will need to care for them, but he will also need to support Ms M.A and C for many years. He has always paid the child support he has been required to pay. Currently he pays about $1,560.00 per month. It has always been substantial and is likely to continue to be substantial. Nevertheless, the wife must fill in all the deficits in full support for the boys which are the result of the substantial but still not totally sufficient financial support they receive from the husband. She will not be able to do this with the ease that the husband will be able to meet his financial obligations to them.

   147.In view of the above, it is clear that if the parties’ assets are divided according to their contributions, the husband will be much better off than the wife if the husband’s superannuation is split between the parties.  After all, in less than two years, the husband can earn, after tax, the current value of his superannuation.  The wife has no earning capacity from employment.  She will need to use her income as it is earned.  She therefore needs cash for investment to produce that income.  Unavailable capital gain and compound accumulation of superannuation rights cannot meet her immediate needs.  The husband will be better able to cope financially than the wife despite some of his funds being tied up in superannuation.  In the circumstances, it would be most unjust and inequitable to make a splitting order.

   148.Both parties are in good health.  Once a division is made each party will be able to afford adequate accommodation considering their accustomed way of life and all the other circumstances without need to have any debt.  If either wishes to continue to have debt for the sake of obtaining capital gain, that is a matter for him or her and should not be a concern of the Court.  The wife ought to be put into a position where, if she chooses, she can invest in income earning assets to better her meet her living costs.  Currently, the outgoings which each party states he or she has is quite likely to change substantially once their situations in life are settled.  It is sufficient to say that each should be able to meet them easily once the division of their property is made.  If they cannot, it will be because they have chosen to continue to live in homes which are far too expensive and valuable for people in their situations or because they have decided to overextend themselves for the sake of investing in property which will provide capital gain and allow negative gearing.

   149.Both parties owe and notionally owe very large debts to their lawyers for fees and for representation in these proceedings. The husband’s costs have probably been about $140,000.00. The wife’s costs have probably been about $10,000.00 more than those of the husband. I must take this liability into account, yet cannot make orders which, in effect, would cause one party to indirectly or directly have to pay the legal costs of the other without an order pursuant to s117 of the Act. I shall endeavour to meet these conflicting statutory obligations.

   150.In all the circumstances, I am satisfied that for a just and equitable division of property there should be an adjustment of property over their respective contributions to it of 2% in favour of the wife.  The wife should receive 57% with the husband to receive 43% including all his superannuation.

The appeal

1. The sole ground that was argued was that the adjustment for s 75(2) factors was inadequate having regard to the matters identified by the trial judge. Particular emphasis was placed on the disparity in the parties’ earning capacities and the wife’s obligations towards the children.

2. The husband submitted that the overall outcome of the case saw the wife receive the first 14 per cent of the pool of assets before the balance was divided between them.  This created a disparity of capital of approximately $336,000 in favour of the wife.  His counsel submitted that could not be seen to be a manifestly unjust outcome especially when a significant part of the assets retained by the husband consisted of superannuation entitlements that he would not actually receive any benefit of for a period that could exceed 15 years.  It was further submitted that in the event the Court was persuaded by the appellant that the amount allowed to her by the trial judge was inadequate, the Court ought give consideration to revisiting the trial judge’s decision not to make a splitting order and that any further adjustment in favour of the wife ought be met by providing her with a share of the husband’s superannuation. 

The Statutory Provisions

1. Family Law Act 1975(Cth)

   79  Alteration of property interests

   (1)      In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; …

   …

   (2)      The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

   …

   (4)      In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   (g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

   75 (2)  The matters to be so taken into account are:

   (a)      the age and state of health of each of the parties;

   (b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

   (c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

   (d)commitments of each of the parties that are necessary to enable the party to support:

   (i)himself or herself; and

   (ii)a child or another person that the party has a duty to maintain;

   (e)the responsibilities of either party to support any other person;

   (f)… the eligibility of either party for a pension, allowance or benefit under:

   (i)any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party;

   (g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

   …

   (j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

   (k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

   (l)the need to protect a party who wishes to continue that party’s role as a parent;

   (m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;

   …

   (na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   …

Appellate principles

1. This was a discretionary judgment.  The circumstances in which the Full Court should interfere with a discretionary judgment are well known. In Gronow v Gronow (1979) 144 CLR 513 at p 519; (1979) FLC 90-716 at 78,848; (1979) 5 Fam LR 719 at 722 Stephen J said:

   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.

2. In House v. The King (1936) 55 CLR 499, at pp 504-505 , Dixon, Evatt and McTiernan JJ. said:

   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 discretion is reviewed on the ground that a substantial wrong has in fact occurred.

3. In Clauson v Clauson (1995) FLC 92-595 at 81,909; (1995) 18 Fam LR 693 at 707 the Full Court said:

   Section 79 grants to the trial Judge a very wide discretion: see generally De Winter and De Winter (1979) FLC ¶90-605 at 78,092 per Gibbs J; Mallett v Mallett (1984) FLC ¶91-507 at 79,110; (1984) 156 CLR 605 at 608; Norbis v Norbis (1986) FLC ¶91-712; (1986) 161 CLR 513, and the discussion of this aspect in Ferraro, supra, at 79,565-6.

   That being so, the limited nature of the appeal process must be recognized, as the numerous authorities in relation to the appellate review of discretionary orders demonstrate: see, for example, House v The King (1936) 55 CLR 499 at 505; Lovell v Lovell (1950) 81 CLR 513-519; Gronow v Gronow (1979) FLC ¶90-716; (1979) 144 CLR 513; Mallett, supra, at 79,111 and 79,119, and Ferraro, supra, at 79,556.

   In the absence of an error in approach or principle, the failure to take into account relevant circumstances, or the taking into account of irrelevant circumstances, the challenge must be that the orders fell outside a reasonable exercise of discretion, that is, that the orders were “unreasonable or plainly unjust''.

   In its widest formulation the discretion and its immunity from challenge was described by Brennan J in Norbis, supra, at FLC 75,178; CLR 540 in relation to the decision of the Court of Appeal in Bellenden (formerly Satterthwaite)v Satterthwaite (1948) 1 All ER 343 at 345 as:

   “The ‘generous ambit within which reasonable disagreement is possible' is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.''

4. Counsel for the wife asserts that the orders made were unreasonable or plainly unjust whilst counsel for the husband asserts that the orders fit within the generous ambit within which reasonable disagreement is possible.

5. It is by no means clear when the generous ambit has been exceeded.  Kirby J in CDJ v VAJ (1998) 197 CLR 172 at p 230 (1998) FLC 92-828 at 85,465; (1998) 23 Fam LR 755 at 802 commented:

   To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion that is plainly wrong [House v R (1936) 55 CLR 499 at 504-5]. Obviously, what is “plainly wrong” will vary in the eyes of different beholders…the reference to “plainly wrong” is designed to remind the appellate court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.

6. We agree with the observations of Finn J in Wrona v Wrona (2004) FLC 93-207; (2004) 33 Fam LR 71 at par 46 that it is not always easy to determine whether a particular assessment falls within (or perhaps just outside) the “generous ambit of reasonable disagreement” and is thus within “the area of immunity from appellate interference”.

7. Some would argue that in borderline cases the appeal must fail as the threshold test described by Stephen J in Gronow (above) will not have been met.  

Discussion

1. The relevant features that were necessary for the trial judge to give consideration to in determining the extent of an appropriate adjustment can be identified as follows:

   ·As a result of the contribution assessment the wife’s contribution based entitlements exceed the husband’s by $240,000.

   ·Within the foreseeable future each of the parties was likely to inherit from their respective mother’s estates.  The husband’s inheritance would exceed the wife’s by approximately $212,000.

   ·The wife was assessed as having virtually no future earning capacity from paid work whilst the husband was earning $102,000 per annum and was likely to have an increasing professional income.

   ·The children were residing with the wife who had the principal responsibility for their support, her unchallenged evidence being that she required $630 per week to meet her obligations towards them.

   ·The husband was presently contributing child support at the rate of $360 per week.  He also had an obligation to contribute to the support of his daughter C.

   ·The assets to be retained by the husband included superannuation entitlements of $154,000 that would not be available to him for many years.

   ·Each of the parties faced a massive bill for legal costs of similar proportion.  Thus the pool of assets that were otherwise available for division between them would be significantly reduced.

   ·The capital that would be left to provide for each of them for their future needs would clearly be likely to be inadequate to meet those anticipated needs.

2. This inadequacy of capital available to meet each of the parties’ predictable future needs significantly magnifies the impact of the disparity in their future income earning capacity.  At the same time it brings into sharp focus the words recently spoken by Coleridge J in the Family Division of the English High Court in P v P [2007] All ER (D) 294 (Mar) where his Lordship said at par 60:

   In the family jurisdiction there was only a finite pot of resources which had to be divided up between the two parties fairly by balancing their competing claims by reference to [the relevant legislation].  The balancing exercise was very sensitive to even a slight adjustment causing an exaggerated discrepancy/result.

3. Those words are apposite to an application of the principles under s 79 of the Act. In a pool of $2,400,000 each 1 per cent adjustment in favour of one party or the other has the effect of creating a $48,000 discrepancy between their relative positions. In this case the 2 per cent adjustment allowed by the trial judge for s 79(4)(e) considerations had the effect of granting the wife $96,000 more of the available capital than the husband was to receive. The question we must then ask ourselves is whether, in light of the factors we have already identified it can be said that such an adjustment falls outside of the generous ambit of discretion.

4. Consistent with the majority view in Coghlanv Coghlan (2005) FLC 93-220; 33 Fam LR 414 we think it useful to restructure the pool of assets before determining our answer to that question. If we remove the superannuation entitlements of the parties from the pool of assets and place them in a separate pool the immediately available assets can be defined as follows:

   Nett assets  $2,406,916

   Less superannuation       161,076

   Available assets  $2,245,849

5. The wife’s share of that pool of assets as determined by the trial judge can be calculated as follows:

   57 per cent of $2,406,916 =                   $1,371,942

   Less superannuation         6,454

   $1,365,488

   This represents 60.8 per cent of the presently available assets of $2,245,840.  Expressed in a different manner it means that the wife is receiving one and a half times as much as the husband of the available asset pool or $485,101 more than the husband from that pool of assets.  He retains a significantly greater earning capacity, a larger inheritance expectation and the vast majority of the superannuation entitlements of the parties.  He remains with an obligation to provide child support but that obligation will diminish as the older child turns 18.  He retains of course his obligation to support the younger child for several years as well as to provide towards C’s support for many years to come.

6. In Waters v Jurek (1995) FLC 92-635; (1995) 20 Fam LR 190 the Full Court was asked to consider whether it was appropriate for the trial judge to have made an adjustment to the parties’ entitlement to their comparatively modest amount of capital because of a disparity in income-earning capacity. Both parties were medical practitioners and whilst the husband was earning approximately $100,000 more than the wife, the wife was found to be earning an amount adequate for her own support. In upholding the trial judge’s entitlement to make an adjustment based on the disparity of the earning capacity, Fogarty J with whom Hase J agreed said at 82,378 – 82,379; 199 - 200:

   Disparity in income and income earning capacities is a common basis for making an adjustment under s 79, quite independently of its maintenance implications. The rationale for that usually lies in the circumstance that the difference in income earning capacities is significant and/or has arisen either directly or indirectly as a consequence of the marriage and the roles which the parties played during the marriage.

   In most marriages, there is a division of roles, duties and responsibilities between the parties. As part of their union, the parties choose to live in a way which will advance their interests — as individuals and as a partnership. The parties make different contributions to the marriage, which the law recognises cannot simply be assessed in monetary terms or to the extent that they have financial consequences. Homemaker contributions are to be given as much weight as those of the primary breadwinner.

   On separation, the partnership, and the division of roles and responsibilities which it produced, come to an end. Individually, the parties are left largely in the personal situations that the marriage has assigned to them. However, the world outside the marriage does not recognise some of the activities that within the marriage used to be regarded as valuable contributions. Homemaker contributions, for example, are no longer financially equal to those of the breadwinner. Post-separation, the party who had assumed the less financially rewarded responsibilities of the marriage is at an immediate disadvantage. Yet that party often cannot simply turn to more financially rewarding activities. Often, opportunities to do so are no longer open, or, if they are, time is required before they can be accessed and acted upon.

   When the marriage ends, especially where that marriage has been a long one, one cannot separate the parties as individuals from the people they became in the context of the marriage relationship, and the allocation of roles, duties and responsibilities which it entailed. In some cases, an adjustment is called for because it would be unjust for the roles and activities of a party, which were recognised until separation, and which largely determined or influenced the personal development of that party and the arrangements between the parties, to suddenly count for little, while those of the other party, which were of equal significance during the marriage, to now have a far greater financial impact outside the home — in circumstances where it was the joint decision of the parties that that be the way in which they would conduct their affairs, and where that decision was made in the expectation of the relationship continuing.

   An order under s 79 would be unjust and inequitable in its operation if it failed to address the manner in which the value of the parties’ roles, adopted in the course of, and for the purposes of, the marriage, can be altered by the fact of separation. Those roles can be instantaneously converted into liabilities. The equality of the parties’ positions is terminated.

   This court values different kinds of contributions of parties equally while the marriage subsists. It would be inconsistent with the equality which that position recognises not to take into account the transformation which the termination of the relationship results in, at least in terms of the capacity for present and future income generation.

7. In Clauson v Clauson (1995) FLC 92–595; (1995) 18 Fam LR 693 Barblett DCJ, Fogarty and Mushin JJ heard an appeal concerning an asset pool of $1.4 million. The parties had been married for some nine years and at the end of their relationship the wife was left to care for four children under eight. She had virtually no earning capacity whilst the husband was earning in excess of $150,000 per annum. The trial judge had determined contributions on the basis of 75 per cent in favour of the husband and 25 per cent in favour of the wife and then made a further 15 per cent adjustment for s 75(2) factors. The court held that the adjustment for s 75(2) was grossly inadequate. Their Honours said:

   It has long been recognised that in most cases the most valuable “asset'’ which a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best [1993] FLC 92-418 at 80,295; (1993) 16 Fam LR 937.

8. The Full Court increased the wife’s share of the assets by a further sum of approximately $130,000 or just under 10 per cent of the asset pool.

9. Of course the s 79 exercise is not designed to bring about equality. It is about making an adjustive order, where appropriate, that is just and equitable in all of the circumstances. How such an outcome is achieved is an answer about which minds may greatly differ.

Conclusion

1. Whilst we are conscious of the significance of the disparity in income earning capacities much of which has been brought about as a result of the different roles that the parties chose to play during the course of their marriage, given the various factors that we have already described, some of which favour a further adjustment in favour of the wife and some of which favour the husband, whilst some other judges may have reached a different conclusion in respect of an appropriate s 75(2) adjustment, we are not persuaded that the exercise of discretion by the trial judge fell so clearly outside the boundaries of a reasonable exercise of discretion that it is appropriate to attract appellate interference. It is not asserted that the trial judge overlooked any relevant consideration. It is simply asserted that the result is plainly wrong. We are not so persuaded.

2. In these circumstances the appeal will be dismissed.

Costs

1. Whilst counsel for the respondent indicted that in the event the appeal was dismissed he would seek an order for costs, he acknowledged that given the comparative financial positions of the parties the Court may be persuaded that there were not circumstances that justified it in making an order for costs.  We think that that is an appropriate approach and propose to make no order.

2. Before leaving the question of costs however we do wish to comment upon the size of the appeal book. It appears from pages 57 to 62 of the appeal book that the appeal book index was settled by the consent of the parties. The appeal book consists of eight volumes of material totalling 1687 pages. Besides the Notice of Appeal and the judgment of the trial judge we were referred to only two other pages of the entire appeal book. It seems to us that it was quite inappropriate for the appeal book to be as extensive as it was given the very narrow ambit of the appeal (see rule 22.21(1)(i) of the Family Law Rules 2004). It may well have been adequate for the appeal book to consist merely of the Notice of Appeal and of portions of the reasons for judgment that dealt with the property issues rather than containing, as it did the whole of the transcript relative to both the parenting and property proceedings (see rule 22.22(3)(g)). Whilst the question is not presently before us we feel it appropriate to comment that it would seem to be inappropriate for the practitioners to require their clients to be contributing towards the costs of the preparation of such an unnecessarily extensive appeal book. The appeal book index in this case was presented to the Court as a consent order. We think it is appropriate and necessary for judicial officers and appeals registrars conducting procedural hearings to ensure that any appeal book contains only relevant documents which are necessary for the appeal to be properly conducted. This may entail the rejection of an index which does not comply with the rules and is more extensive than necessary, even if the index has been subject of consent by both parties to the appeal.

I certify that the preceding Thirty One (31) paragraphs are a true copy of the reasons for judgment of this Honourable Full Court

Associate: 

Date:  20 April 2007