Simons & Simons - [2020] FamCAFC 128

FAMILY COURT OF AUSTRALIA

SIMONS & SIMONS

[2020] FamCAFC 128

APPEAL – FAMILY LAW – PROPERTY – Appeal from orders made by the primary judge dividing the parties property under Part VII of the Family Law Act 1975 (Cth) – Where the primary judge made an assessment of the parties’ contribution-based entitlements pursuant to s 79(4) of the Family Law Act 1975 (Cth) and an adjustment under s 75(2) in favour of the wife – Where the husband’s complaint on appeal is that the primary judge erred at law by failing to give adequate reasons – Where the husband also contends the result was plainly wrong – Where the findings about the parties’ contributions and future needs were open to the primary judge – Where the primary judge’s reasons are not explicit about why the s 75(2) adjustment was found to be assessed at 7.5 per cent, but the explanation is easily inferred – Where it is not accepted the primary judge failed to give sufficient reasons for the property settlement orders – Where both grounds of appeal fail – Appeal dismissed.

APPEAL – FAMILY LAW – COSTS – Where the appeal is wholly unsuccessful – Where the wife sought an order for the husband to pay her solicitor/client costs in a fixed amount – Where part of the husband’s appeal was belatedly discontinued and the remainder lacked merit – Where the husband concedes an order for costs but not in the sum claimed – Where the husband’s financial circumstances do not preclude an order for costs against him – Where the wife’s counsel conceded it was open to fix a lesser sum of party/party costs – Where reliance upon r 19.18(1)(a) of the Family Law Rules 2004 (Cth) – Where the husband ordered to pay the wife’s costs of and incidental to the appeal in a fixed sum.

Family Law Act 1975 (Cth) Pt VII, VIII, ss 75(2), 79(4)

Family Law Rules 2004 (Cth) r 19.18(1)(a)

Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
DL v The Queen (2018) 356 ALR 197; [2018] HCA 26
Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33
Lovell v Lovell (1950) 81 CLR 513; [1950] HCA 52
Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

APPELLANT:

Mr Simons

RESPONDENT:

Ms Simons

FILE NUMBER:

PAC

4076

2016

APPEAL NUMBER:

EAA

2019

DATE DELIVERED:

29 May 2020

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Sydney (via video link)

JUDGMENT OF:

Kent, Austin & Tree JJ

HEARING DATE:

22 May 2020

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

2 August 2019

LOWER COURT MNC:

[2019] FCCA 2058

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Dart

SOLICITOR FOR THE APPELLANT:

Rowlandson & Co Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Batey

SOLICITOR FOR THE RESPONDENT:

Matthews Dooley & Gibson Solicitors

Orders

The appeal is dismissed.
The appellant husband shall pay the respondent wife’s costs of and incidental to the appeal, fixed in the sum of $10,000.

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 Simons & Simons 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 FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EAA 79 of 2019
File Number: PAC 4076 of 2016

Mr Simons

Appellant

And

Ms Simons

Respondent

REASONS FOR JUDGMENT

Introduction

By an Amended Notice of Appeal filed on 14 November 2019, the appellant husband appeals from orders made by a judge of the Federal Circuit Court of Australia on 2 August 2019, dividing the parties’ property under Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
Initially, the appeal also encompassed orders made under Part VII of the Act in respect of the parties’ children, but that aspect of the appeal was abandoned shortly before the hearing.
The appeal was resisted by the respondent wife and, for the reasons which follow, the appeal should be dismissed with costs.

The appeal

The background to the appeal may be shortly stated. The parties commenced cohabitation in May 2006, separated under the same roof in August 2015, and the wife permanently vacated the family home in January 2016. Proceedings for relief under Parts VII and VIII of the Act were commenced by the husband in August 2016. The proceedings were heard in May 2019 and the appealed orders were pronounced in August 2019.
In its ultimate iteration, the appeal related to only part of the property settlement ordered by the primary judge.
Grounds 3 and 4 pertain to Orders 1 to 4 made under Part VIII of the Act, which enable the husband to choose whether he retains the former family home. If he chooses to do so, then he is obliged to re-finance the mortgage and pay a cash adjustment to the wife. If he chooses not to do so, then the parties are obliged to sell the property and divide the net proceeds of sale between them, with the husband required to meet the mortgage repayments and outgoings and to keep the property in neat condition until sold.
During the litigation, the parties reached an agreement, formalised by a consent order, to equalise their superannuation in their self-managed superannuation fund. That rendered it unnecessary for the primary judge to make any property adjustment with respect to superannuation interests, but his Honour clearly took account of the consent order and the amounts involved (at [297], [310], [334]–[335]).
The primary judge established that the parties’ non-superannuation property interests had a net value of $555,554. The most significant asset by far was the encumbered former family home (at [309]–[311]). It was bought in 2007 for $536,100 (at [281]) and its value at trial was nearly double that (at [309]).
At trial, the husband sought orders enabling him to acquire sole legal title in the former family home, subject to his re-finance of the mortgage and his payment to the wife of a cash adjustment in the sum of $258,000. In the event he failed to meet those conditions, then he proposed that the property be sold and the net proceeds divided between the parties in equal proportions. He sought orders which required him to meet the expenses and outgoings and to maintain the property in the interregnum. It was the husband’s intention to effectively divide the parties’ property in equal shares.
The wife wanted the former family home sold and her payment of 75 per cent of the net proceeds realised on the sale, together with an extra cash adjustment of $40,000. The intended effect of her application was for her to acquire 75 per cent of the parties’ property overall. She agreed the husband should meet the expenses and outgoings and maintain the former family home pending its sale.
The appealed orders were in the form proposed by the husband, but differed as to the quantum of the cash adjustment payable to the wife. The orders require the husband to pay the wife $354,316 to acquire sole proprietorship of the former family home or, upon its alternate sale, for the wife to obtain 65 per cent of the net proceeds plus an additional cash adjustment of $14,536. Either way, it was intended the wife would receive 65 per cent of the parties’ property. In other words, under the appealed orders, the wife’s eventual share of the property was marginally closer to her proposal than to the husband’s.
The husband’s complaints in the appeal are that the primary judge erred at law by failing to give adequate reasons for both his Honour’s assessment of the parties’ contributions-based entitlements and for the adjustment made for s 75(2) factors (Ground 3), and further, that the result was plainly wrong (Ground 4).
It was not alleged in the appeal that the primary judge overlooked any material consideration or took into account an immaterial consideration when assessing the parties’ contributions under s 79(4) of the Act. His Honour concluded that, on the basis of their respective contributions, the wife was entitled to 57.5 per cent of the property and the husband entitled to 42.5 per cent (at [323]), which finding fell exactly between the husband’s contention for equal entitlements and the wife’s contention for her entitlement to 65 per cent (at [321]–[322]).
Given the admitted equivalence of the parties’ other financial and non-financial contributions, as was described in the reasons by the primary judge, the differential in their contributions was only rationally explicable by the wife’s greater capital contribution at the commencement of their cohabitation, in a relationship of about nine years’ duration. That differential was described by the primary judge in the following terms:
278.At the commencement of the parties’ relationship the mother had a sum of about $98,585 which she had as a result of a previous investment in a property, together with her parents. From that sum the wife paid out finance on a motor vehicle she had owned since 2005.
279.At the commencement of the parties’ relationship the father had a motor vehicle under finance and a modest amount of savings.
…
281.The purchase price of the property was $536,100, with the parties taking a mortgage of $482,490, with the mother contributing the sum of $73,553, $600 from the father, and $7,000 from the first homeowners grant.
…
314.The Court takes into account the wife’s initial contribution of $73,553, in 2006, towards the purchase price of the property which was a contribution of substance.
As is clear, the primary judge found at [278] that the wife introduced capital worth $98,585 and, by necessary inference from the finding at [279], that there existed a significant disparity between the parties of initial capital contribution. The primary judge recorded that $73,553 of the wife’s capital was used by the parties to purchase the former matrimonial home and gave relativity to that contribution by recording the purchase price of that asset and the other sources of its funding at [281]. That provides context to the primary judge’s finding at [314] that the wife’s initial contribution of $73,553 in 2006 towards the purchase price of the former matrimonial home “was a contribution of substance”, given also his Honour’s finding of the current worth of that asset at $1 million (at [309] –[311]). The primary judge specifically rejected the husband’s contention that there was any “offsetting” of the wife’s initial contribution in the post-separation period, given the husband’s exclusive occupancy of the former matrimonial home in that four year period whilst the wife rented accommodation (at [318]).
The primary judge made specific reference, at the conclusion of his discussion and findings about “[c]ontributions” (at [313]–[322]), to how the 15 per cent disparity in the assessment of the parties’ contributions-based entitlements represents, in dollar terms, $83,333 (at [323]). Given the quantified differential between the parties’ initial capital contributions and the use made of the wife’s initial capital in acquiring the parties’ most valuable asset, we reject the husband’s contentions in the appeal that the primary judge attached too much weight to the wife’s initial contribution or that his Honour’s reasons were inadequate.
The state of the law concerning the adequacy of reasons is well settled and hardly needs repeating (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Bennett and Bennett (1991) FLC 92-191). Relevantly for present purposes, reasons must identify the relevant principles of law, refer to relevant evidence, state the judge’s findings upon material questions of fact and provide an explanation for those findings and the ultimate conclusions reached by the judge (DL v The Queen (2018) 356 ALR 197 at [130]). The primary judge did that quite satisfactorily in this instance.
True it is, the reasons are not explicit about why the s 75(2) adjustment was found to be properly assessed at 7.5 per cent, but the explanation is easily inferred. The parties are of similar age, keep similar health, have comparable earning capacity, have modest superannuation, and share the burden of financially maintaining the children. Those facts were uncontentious. The only material distinction between them is the wife’s ongoing primary care for the children (at [332]), both of whom are still quite young. The youngest child does not attain her majority for almost another 11 years. The 7.5 per cent adjustment in the wife’s favour gave her additional cash of $41,667 which, in the circumstances, is quite modest. As is well established in relation to s 75(2) adjustments, the real impact of the adjustment in money terms is ultimately the critical issue (Clauson and Clauson (1995) FLC 92-595 at 81,911).
Commendably, the husband’s counsel conceded during the appeal that an adjustment of five per cent under s 75(2) of the Act would have been within the primary judge’s discretion, which necessarily meant the argument over the adjustment concerned only the extra 2.5 per cent – or less than $14,000 in real terms. The corollary of the concession must be an assertion that such a small relative difference tipped the balance between soundness and error of the discretionary exercise, which is not a submission we can accept in the context of the parties’ overall property having a net value of $555,554.
In our view, the findings about both the parties’ contributions and future needs were undoubtedly open. We reject the husband’s contention in the appeal that the decision exceeds the generous ambit within which reasonable disagreement is possible and is plainly wrong (Norbis v Norbis (1986) 161 CLR 513 at 539–540). It is impossible to sustain an argument that the decision really amounts to a failure to exercise the discretion actually entrusted to the Court (Lovell v Lovell (1950) 81 CLR 513 at 519). Ground 4 therefore fails. Ground 3 also fails because we do not accept that the primary judge failed to give sufficient reasons for the property settlement orders.

Conclusion and costs

In the event of dismissal of the appeal, as will now occur, the wife sought an order for the husband to pay her solicitor/client costs and disbursements in the total sum of $12,625.31.
Part of the husband’s appeal was belatedly discontinued and the residue is dismissed for lack of merit, which factors the wife legitimately called in aid of her application. The husband conceded an order for costs should follow dismissal of his appeal, but did not concede the sum claimed.
We agree with the implicit concession that the husband’s financial circumstances do not preclude an order for costs against him. Before the primary judge, the husband deposed to his full-time employment with gross weekly income of $1,968. Under the property settlement orders, he will receive 35 per cent of the parties’ assets, which will equate to property with a net value of $194,443.90, and he will retain his superannuation of around $45,000.
Quite properly, the wife’s counsel conceded it was open to fix a lesser sum of party/party costs than that claimed, but in the absence of instructions was unable to make any concession as to the appropriate sum. The husband’s counsel conceded she could not be heard against an assessment of $10,000. In reliance upon r 19.18(1)(a) of the Family Law Rules 2004 (Cth), so as to avoid the time, inconvenience and expense which would be incurred by further dispute over costs assessment (see the authorities referred to in Graham & Squibb (2019) FLC 93-892 at [92]–[93]), we shall order the husband to pay the wife’s costs in that fixed sum.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Kent, Austin & Tree JJ) delivered on 29 May 2020.

Associate:

Date: 29 May 2020