SCRIVEN & SCRIVEN
[2020] FamCAFC 236
•23 September 2020
FAMILY COURT OF AUSTRALIA
| SCRIVEN & SCRIVEN | [2020] FamCAFC 236 |
| FAMILY LAW – APPEAL – SUPERANNUATION SPLITTING – Where the primary judge failed to make the required determination pursuant to s 90XT(2) of the Family Law Act 1975 (Cth) – Where absent that determination the primary judge was not able to make a splitting order pursuant to s 90XT(1)(b) of the Family Law Act 1975 (Cth) – Where there is merit in the assertion that the primary judge erred by not assessing the respective contributions of the parties separately in relation to each asset – Where Ground 3 is an unnecessary ground in this appeal and there is no requirement to come to a conclusion about its merits – Where it is not apparent that the primary judge took the appellant’s health and income earning capacity into account – Where in some areas the primary judge’s reasons were inadequate – Where there is merit in four of the five grounds of appeal – Appeal allowed – Paragraphs 5, 6, 7 and 8 of the Order under appeal set aside – The issue of the appellant’s superannuation interest be remitted to the Federal Circuit Court of Australia for rehearing by a judge other than the primary judge. FAMILY LAW – COSTS – Where in the event that the appeal is allowed the parties sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) – Where the appeal is being allowed on a question of law and no order for costs is being made – Costs certificates to issue as sought. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 90XT Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9 |
| Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 |
| APPELLANT: | Mr Scriven |
| RESPONDENT: | Ms Scriven |
| FILE NUMBER: | MLC | 7084 | of | 2018 |
| APPEAL NUMBER: | SOA | 57 | of | 2019 |
| DATE DELIVERED: | 23 September 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 8 April 2020 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 26 July 2019 |
| LOWER COURT MNC: | [2019] FCCA 2046 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Dr R Smith |
| SOLICITOR FOR THE APPELLANT: | J A Middlemis |
| THE RESPONDENT: | In Person |
Orders
The appeal be allowed.
Paragraphs 5, 6, 7 and 8 of the Order made on 25 September 2019 be set aside.
The issue of the appellant husband’s superannuation interest be remitted to the Federal Circuit Court of Australia for rehearing by a judge other than the primary judge.
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.
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.
The Court grants to each party a costs certificate pursuant to the provisions of s 8 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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the rehearing of these proceedings.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Scriven & Scriven has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
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 r 17.02 Family Law Rules 2004 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 57 of 2019
File Number: MLC 7084 of 2018
| Mr Scriven |
Appellant
And
| Ms Scriven |
Respondent
REASONS FOR JUDGMENT
Introduction
By Amended Notice of Appeal filed on 10 March 2020, Mr Scriven (“the husband”) appeals against certain orders for property settlement made by a judge of the Federal Circuit Court of Australia on 25 September 2019.
Ms Scriven (“the wife”), who appeared without legal representation, opposes the appeal, despite failing to file a summary of argument.
The orders appealed against provide for the splitting of the payments received by the husband from his superannuation interest, and are as follows:
…
5.Pursuant to section 90XT(1)(b) of the Family Law Act 1975 (Cth) whenever a splittable payment becomes payable from the superannuation interest held by Mr Scriven (member spouse) in the Superannuation and Benefits Scheme, the trustee shall pay to Ms Scriven (non-member spouse) 25% of each splittable payment and there be a corresponding reduction in the entitlement the member spouse would have had but for these orders.
6.The operative time for the payment split under these orders is four (4) business days after the date of service of a certified sealed copy of these orders on the trustee of the Superannuation and Benefits Scheme.
7.Orders (5) to (7) herein are binding on the trustee of the Superannuation and Benefits Scheme.
8.Each party and the trustee of the Superannuation and Benefits Scheme have liberty to apply in relation to the implementation of the orders affecting the superannuation interest.
…
Relevant Background
The husband was born in 1975, and was aged 43 years at the time of the trial.
The wife was born in 1978, and was aged 41 years at the time of the trial.
The parties commenced cohabitation in 1998/1999. At that time the wife had a child born in 1997 from a previous relationship.
The parties married in 2001, and separated in 2017.
There are two children of the relationship, one born in 1999, and aged 19 years at the time of the trial, and the other born in 2002, and aged 17 years at the time of the trial. The youngest child was living with the wife, and the husband was paying child support for that child.
The husband joined the Defence Force in 1995, and was discharged on grounds of ill-health in 2014. He was receiving a Departmental pension of $1,057.55 net per fortnight, and an Invalidity pension of $2,017.25 net per fortnight, neither of which can be commuted to a lump sum either in part or in whole. The husband also has a totally and permanently incapacitated gold card, which ensures his medical expenses will be met for life. It is not anticipated that he will be able to return to any form of paid employment.
The wife was employed as a public servant, but she has been unable to work since 2018, because of injuries sustained in a motor vehicle accident in 2017, and the subsequent development of severe mental health issues. At the time of the trial, the wife was receiving income protection payments of $4,121.12 net per month. She was only entitled though to receive those payments for a total period of two years. At the time of the trial it was unknown whether she would ever be able to return to work, or whether she would ultimately have a compulsory third party claim arising from the accident.
The husband has re-partnered, and the wife did as well, but that relationship had ended at the time of the trial.
The Appeal
There are five grounds of appeal propounded in the Amended Notice of Appeal. However, it is necessary to first address Ground 2, given that if that ground succeeds, then the appeal must be allowed. Accordingly, I turn to that ground of appeal.
Ground 2 – The learned trial judge erred in exercising power pursuant to s 90XT(1) without first making a determination of an amount in relation to the interest as mandatorily prescribed by s 90XT(2).
Section 90XT of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides as follows:
SECTION 90XT SPLITTING ORDER
90XT(1) A court, in accordance with section 90XS, may make the following orders in relation to a superannuation interest (other than an unsplittable interest):
…
(b)an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non-member spouse is entitled to be paid a specified percentage of the splittable payment; and
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
…
90XT(2) Before making an order referred to in subsection (1), the court must make a determination under paragraph (a) or (b) as follows:
(a)if the regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the regulations;
(b)otherwise, the court must determine the value of the interest by such method as the court considers appropriate.
…
As submitted by the husband, subsection (2) is in mandatory terms, but her Honour failed to make the required determination. Absent this determination, her Honour was not able to make a splitting order pursuant to paragraph 90XT(1)(b) (see for example Carron & Laniga (2019) FLC 93-909 at [36] and [37]; Surridge & Surridge (2017) FLC 93-757 (“Surridge”) at [30]; Welch & Abney (2016) FLC 93-756 at [37] and [61]).
As that was precisely what her Honour did in making paragraphs 5, 6, 7 and 8 of the Order for property settlement, her Honour has clearly erred, and the appeal must be allowed.
It is still necessary though to address the remaining grounds of appeal (Kuru v New South Wales (2008) 236 CLR 1 at [12]).
Ground 1 – Having concluded that it was appropriate to approach the adjustment of the parties’ legal and equitable property interests and superannuation entitlements on an asset by asset basis, the learned trial judge erred in failing to apply the matters in s 79 to the husband’s superannuation entitlements in the Superannuation and Benefits Scheme separately from the other assets.
Her Honour determined to adopt an asset by asset approach here (see [50]), and identified the relevant assets as follows:
(a)Proceeds of sale of the former matrimonial home.
(b)The wife’s superannuation.
(c)The husband’s superannuation.
(d)The chattels in respect of which the parties were unable to agree a value.
However, it is not readily apparent that her Honour addressed each asset by assessing the respective contributions of the parties, and then determining any adjustments to be made pursuant to the relevant s 75(2) factors, in respect of each asset. That clearly provides the basis for the complaint in this ground, and in other grounds as well.
It is suggested by the husband that in adopting an asset by asset approach, her Honour is obliged to first separately consider in respect of each asset, whether it is just and equitable to make any order.
Counsel for the husband cites two authorities for this proposition, namely Zaruba & Zaruba (2017) FLC 93-776 (“Zaruba”) and Surridge. I do not consider that the latter authority supports the proposition. There, the trial judge found that it was not just and equitable to make a splitting order of the wife’s pension, and the Full Court agreed with that finding. However, that finding was not made in the context of applying s 79(2) of the Act, as mandated by the High Court in Stanford v Stanford (2012) 247 CLR 108. It was done by taking into account the nature, form and characteristics of the pension, and by finding that with the ultimate order for property settlement, “the property and superannuation interests of the parties permit justice and equity to be achieved without [a splitting] order” ([28]).
The decision of Zaruba though does support the proposition put on behalf of the husband, but not to the extent that it is something that must be undertaken in all cases.
There, the Full Court held as follows:
26.We consider with respect that his Honour erred in the application of s 79(2) of the Act in relation to Mindarie. Having determined to approach the parties’ respective s 79 claims on an asset by asset basis, his Honour did not consider whether it was just and equitable to make any order pursuant to s 79(2) in respect of that property. (The same can be said of the husband’s cash and shares valued in total at about $70,000, and the wife’s superannuation interest.)
The context though was that the asset being considered was “a property owned solely by [the wife] and acquired without reference to, or financial support from, the husband at a time well after [the parties] had commenced living separate financial lives” ([25]). Thus, it was readily apparent that that property should not be the subject of a s 79 order (see [36]).
Importantly though, the Full Court went on to say this:
38.In the vast majority of cases, it will be appropriate to address the s 79(2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets. That is because the “express and implicit assumptions that underpinned the existing property arrangements” can be seen to apply (to the extent and degree to which they do apply) to all of the property of the parties or either of them, including property in which the legal interests vary.
In my view, the case at bar is one of those cases, and what her Honour said at [29]-[31] is sufficient, namely:
29.The High Court in the matter of Stanford v Stanford [2012] HCA 52 held that prior to making orders for the division of the property in which the parties have an equitable interest in accordance with the provisions of section 79 of the Family Law Act 1975 (“the Act”), the Court must first determine that is just and equitable that the Court make such orders.
30.The High Court in Stanford (supra) held that in the majority of matters the decision as to whether it is just and equitable for the court to make property orders is easily resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
31.This is such a matter, and thus it is apparent it is just and equitable that orders be made adjusting property matters between the parties.
Thus, her Honour did not err by failing to address s 79(2) of the Act separately with each asset.
I also do not accept the submission of the husband that if her Honour had separately considered s 79(2) in relation to the husband’s superannuation interest “her Honour would have been faced with circumstances which gave rise to a ‘compelling case’ that it was not just and equitable to adjust the husband’s superannuation interest” (Husband’s summary of argument filed on 10 March 2020, paragraph 11).
Nothing was put in support of that bald statement in the written summary of argument, but, in oral argument, the husband’s counsel indicated that it would not be just and equitable because:
(a)the superannuation was in the payment phase, and
(b)any increase in value resulted from contributions made entirely by the husband, and
(c)the relevant s 75(2) factors all favoured the husband.
However, that is not an argument that I accept in this case. Certainly, authorities such as Bevan & Bevan (2013) FLC 93-545 and Chapman & Chapman (2014) FLC 93-592 permit consideration of contributions and s 75(2) factors in determining whether it is just and equitable to make an order, but those issues were in contention here, and on the evidence before her Honour, it is not necessarily apparent that the argument of the husband is unanswerable. Further, as referred to above, in my view what her Honour said at [29]-[31] is sufficient to satisfy the requirement that it needs to be just and equitable to make an order. The issues of contributions and s 75(2) factors would then be considered in determining what order should be made, although, of course, that consideration may nevertheless result in there being no order.
Although I consider that her Honour adequately addressed s 79(2), it is a different story in relation to the issue of the respective contributions of the parties. There can be no doubt that her Honour was obliged to address those contributions in respect of each asset, and her Honour failed to do so.
Her Honour’s consideration of the parties’ contributions is found at [51]-[60] and [81], and her Honour concluded that “the [w]ife’s contributions were greater than those of the husband” ([60]). However, there was no separate consideration of the respective contributions of the parties to each asset, and in particular to the husband’s superannuation interest.
Thus, her Honour has erred in this respect.
It is then alleged that her Honour also failed to consider the relevant s 75(2) factors in relation to each asset. Her Honour’s consideration of those factors can be found at [61]-[70], and it is apparent that her Honour adopted a global approach to that consideration. However, I am not persuaded that her Honour has erred by taking that approach. It seems to me, that just as with the consideration of s 79(2) of the Act, it is not in all cases that the s 75(2) factors must be considered separately in relation to each asset. The s 75(2) factors lend themselves to an overall approach being taken to them in some cases, even where the court has opted for an asset by asset approach; and this is one of those cases.
Nevertheless, in the end result, by not assessing the respective contributions of the parties separately in relation to each asset, there is merit in this ground of appeal.
Ground 3 – The learned trial judge failed to give weight, or any adequate weight, to the contribution made by the husband to his superannuation entitlements in the Superannuation and Benefits Scheme.
Plainly, this is a weight challenge, and the husband has recognised the hurdles in the way of such a challenge being successful. As Stephen J said 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. In the present case it should not have done so at all.
However, here I have already found error by her Honour in failing to consider the respective contributions of the parties to each asset, and thus it is not only an issue of weight that is engaged.
In any event, it is not apparent that her Honour took into account the direct financial contribution made by the husband to his superannuation interest, and in particular, there is no express weighing of that contribution with all of the other contributions to and in respect of that interest.
The most that can be said is that by implication, the 75 per cent/25 per cent division of the husband’s superannuation payments in his favour, must have resulted from her Honour taking into account the direct financial contributions of the husband, but the difficulty is that her Honour does not say how she arrived at that result. That perhaps smacks though of a complaint of a lack of adequate reasons rather than a weight challenge, and that of course is the subject of Ground 5.
In these circumstances, I find it unnecessary to come to a conclusion about the merits of this ground of appeal. In short, it seems to me that it is an unnecessary ground in this appeal.
Ground 4 – The learned trial judge failed to give weight, or any adequate weight, to the Husband’s health and income earning capacity when considering the matters listed in s 75(2) of the Act.
This is a further weight challenge, but one that can stand on its own, given that I did not find that her Honour erred in failing to consider the relevant s 75(2) factors in relation to each asset.
The husband’s health and income earning capacity are plainly relevant s 75(2) factors to be taken into account (s 75(2)(a) and (b)). However, nowhere in [61]-[70] where her Honour deals with s 75(2), is there any discussion, let alone finding by her Honour, as to these two factors.
It was the husband’s case that he was incapable of obtaining employment because of his health condition, but that is not adverted to by her Honour.
In discussing in [63] the wife’s circumstances, her Honour did say that “[t]his contrasts with the Husband’s circumstances where the ongoing pension payment is all that now remains to him”. However, what her Honour was contrasting, was the prospect of the wife receiving a “not inconsiderable capital payment” when she reaches retirement age. Thus, this was in no sense addressing the husband’s health and inability to work.
Again though, to describe this as a weight issue may not be accurate. It is more a case of her Honour either failing to take into account a relevant consideration, or if she did, failing to explain how it was taken into account. The latter of course is a lack of adequate reasons argument, and that is also raised in Ground 5. However, I am comfortable to find that it is not apparent that her Honour took these relevant factors into account, and thus this ground has merit.
Ground 5 – The learned trial judge gave inadequate reasons in relation to:
5.1 To the extent her Honour did so, it is not possible to identify the contribution assessment made by her Honour in relation to the husband’s superannuation entitlement;
5.2 In light of the fact that her Honour declined to attribute particular percentages (or dollar amounts) to the assessment of contributions or the matters list in s 75(2) (see para 83 of the Trial Judgment), it is not possible to ascertain either the assessment of contributions or her Honour’s conclusions as to the matters listed in s 75(2) of the Act;
5.3 In light of the fact that her Honour declined to attribute particular percentages (or dollar amounts) to the assessment of contributions or the matters list in s 75(2) (see para 83 of the Trial Judgment), it is not possible how the assessment of contributions assessed the matters listed in s 75(2) of the Act.
As can be seen, there are three areas identified.
I have already commented on the first area, and confirm that her Honour was obliged to consider the respective contributions of the parties in relation to each asset, and in particular, the husband’s superannuation interest, but her Honour failed to do so, and the reasons are therefore plainly inadequate in that regard.
In relation to the second area, certainly, her Honour said this in [83]:
83.This is not a matter where the Court is assisted by attributing particular percentages to the adjustments to be made against each of the parties’ assets on the basis of contributions and section 75(2) factors. Rather, it is a matter of balancing all the relevant factors in this matter to determine the appropriate way in which to divide the parties’ assets.
However, putting aside the error identified above, the problem that this paragraph creates, is that her Honour’s reasons do not reveal how her Honour arrived at her conclusions in relation to the respective contributions of the parties, and any adjustment required pursuant to s 75(2). The Court knows of course that her Honour found that the wife’s contributions were greater than those of the husband, but her Honour’s reasons do not reveal the pathway leading to that finding. And with the s 75(2) factors, no conclusion is reached, and her Honour goes straight to her ultimate finding in [84]. Again, it is difficult to discern from her Honour’s reasons what assessment her Honour made of the relevant s 75(2) factors, and how she took them into account.
That is not to say that her Honour should have done anything other than assess the contributions of the parties, or the relevant s 75(2) factors, holistically in relation to each asset, but it is still necessary to provide adequate reasons revealing how the decision is based.
With the third area, that really follows on from the lack of adequate reasons in relation to the issues of contributions and the s 75(2) factors. As the Full Court has often held, when applying s 79 of the Act, it is necessary to “consider the effect of the findings as to contribution on the respective positions of the parties, before proceeding to determine whether any adjustment is warranted pursuant to s 75(2)” (Willis & Willis [2007] FamCA 819 at [50]; also see Marsh & Marsh (2014) FLC 93-576).
In the circumstances this ground of appeal has merit.
Conclusion
Having found merit in Grounds 1, 2, 4 and 5, the appeal must be allowed.
In that event, the husband simply sought that paragraphs 5, 6, 7 and 8 of the Order made on 25 September 2019 be set aside. However, that was on the basis of the Court concluding that her Honour erred in failing to find that any order should be made in relation to the husband’s superannuation interest. As can be seen, I have rejected that submission.
Thus, the question becomes whether the relevant orders should be set aside, and the matter remitted for rehearing, or whether this Court can re-exercise the discretion.
Given the nature of the errors made by her Honour, I do not consider that it is open to this Court to re-exercise the discretion, and thus I will set aside paragraphs 5, 6, 7 and 8 of the Order made, and remit the issue of the husband’s superannuation interest to the Federal Circuit Court of Australia for rehearing by a judge other than the primary judge.
Costs
In the event that the appeal was allowed, the husband sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth), and the wife made a similar application.
Given that the appeal is being allowed on a question of law, and no order for costs is being made, I consider it appropriate for costs certificates to issue as sought.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 23 September 2020.
Associate:
Date: 23 September 2020
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