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Scott & Scott

Case [2006] FamCA 1379 21 December 2006

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FAMILY COURT OF AUSTRALIA

SCOTT & SCOTT

[2006] FamCA 1379

PROPERTY - CHATTELS – VALUATION – Alleged error in exclusion of chattel from the asset pool where there was evidence from the husband and wife as to its value – Discretion to offset chattels retained by each respective party rather than account for item in property pool

PROPERTY – VALUATION – Medical Practice – Adversarial expert evidence - Capitalisation of maintainable earnings methodology – Valuation of income stream as “Value to Owner” adopted by Trial Judge – Relevance of partnership agreement containing goodwill figure - Divergent figures for reasonable salary for partner of practice and capitalisation rate applied to earnings – Trial Judge’s discretion to determine the issue with relevance to the material before her, including expert evidence - Lenehan and Lenehan (1987) FLC 91-814 - Where neither expert’s evidence was inherently unbelievable, or outside their area of expertise

PROPERTY – CONTRIBUTIONS – Post-separation – Inclusion of property in the pool which was acquired using monies generated after separation - Where contributions of one party to the welfare of the family in the post separation period equated to significant financial contribution of the other party

Family Law Act 1975 (Cth) s 79, s 75(2)

Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621
C & T [2002] FamCA 196
CDJ v VAJ(No 1) (1998) 197 CLR 172
Farmer & Bramley (2000) FLC 93-060
Gronow v Gronow (1979) 144 CLR 513

Harrison and Harrison (1996) FLC 92-682

House v. The King (1936) 55 CLR 499

In the marriage of Best and Best (1993) FLC 92-418.
In the marriage of Jacobson and Jacobson (1989) FLC 92‑003

In the Marriage of Mallet (1984) 156 CLR 605

Lenehan and Lenehan (1987) FLC 91-814

In the Marriage of Norbis v Norbis (1986) 161 CLR 513

Reynolds and Reynolds (1985) FLC 91-632
Turnbull and Turnbull (1991) FLC 92-258
Williams and Williams (1984) FLC 91-541

APPELLANT:

SCOTT

RESPONDENT:

SCOTT

FILE NUMBER:

ADF

2642

2003

APPEAL NUMBER:

2004

DATE DELIVERED:

21 December 2006

PLACE DELIVERED:

Melbourne

JUDGMENT OF:

Bryant CJ, Holden & Boland JJ

HEARING DATE:

30 November 2004

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

9 June 2004

LOWER COURT MNC:

[2004] FamCA 532

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Berman

SOLICITORS FOR THE APPELLANT:

Lesley Hastwell & Associates, Solicitors

COUNSEL FOR THE RESPONDENT:

Ms Pyke

SOLICITORS FOR THE RESPONDENT:

Ms W Botting, Solicitor

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 Scott v Scott.

Orders

The appeal is dismissed.
That the appellant husband pay the respondent wife’s costs as agreed and failing agreement as assessed under Chapter 19 of the Family Law Rules 2004 (Cth).

IN THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA
AT PERTH

Appeal Number: SA 39 of 2004
File Number: ADF 2642 of 2003

SCOTT

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Scott & Scott

Details

AGLC: Scott & Scott [2006] FamCA 1379
Case: [2006] FamCA 1379
Decision Date: 21 December 2006

CaseChat Overview and Summary

The Full Court of the Family Court of Australia considered an appeal concerning the division of property between a husband and wife. The primary dispute revolved around the valuation of a medical practice, the inclusion of certain assets in the property pool, and the court's discretion in valuing and offsetting chattels.

The legal issues before the Full Court included whether the trial judge erred in excluding a particular chattel from the asset pool, given conflicting evidence as to its value, and whether the court had the discretion to offset chattels retained by each party rather than formally accounting for them in the property pool. Further, the court was required to determine the correctness of the trial judge's valuation of the medical practice, which involved assessing adversarial expert evidence on the capitalisation of maintainable earnings, the adoption of a "Value to Owner" methodology, and the relevance of a partnership agreement's goodwill figure. The court also considered whether property acquired using monies generated after separation should be included in the pool, and how post-separation contributions to the welfare of the family should be weighed against financial contributions.

The Full Court affirmed the trial judge's broad discretion in valuing assets and determining property division, particularly in light of conflicting expert evidence. The court held that where neither expert's evidence was inherently unbelievable or outside their expertise, the trial judge was entitled to determine the valuation based on the material before her, referencing principles from *Lenehan and Lenehan*. The court also found that the trial judge had the discretion to offset chattels retained by each party. Regarding post-separation contributions, the court agreed that contributions to the welfare of the family during this period could be equated to significant financial contributions.

The Full Court dismissed the appeal, upholding the trial judge's orders.

Orders