SINDEL & MILTON (AKA SINDEL)
[2010] FamCAFC 232
•19 November 2010
FAMILY COURT OF AUSTRALIA
| SINDEL & MILTON (AKA SINDEL) | [2010] FamCAFC 232 |
| FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – s 75(2) factors – whether the trial judge erred in taking into account the husband’s earning capacity rather than his actual earnings at the date of trial – whether future earning capacity is a matter to be taken into account pursuant to s 75(2)(b) – whether the trial judge erred in his findings as to the husband’s future employment prospects and his future earnings and failed to attach sufficient weight to these matters – whether the trial judge failed to properly assess all relevant s 75(2) factors – no merit in any ground. FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – contributions – whether the trial judge erred in his finding as to a termination payment received by the husband – whether the trial judge erred in the assessment of the parties’ respective contributions – no error established. FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – liabilities – whether the trial judge erred in failing to include a potential capital gains tax liability in the balance sheet – no merit in ground. FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – whether the overall result was outside the bounds of a reasonable exercise of discretion – no merit in ground – appeal dismissed. FAMILY LAW - APPEAL – COSTS ORDERS – where the husband also appealed costs orders made by the trial judge – where this appeal was only pursued in the event that the substantive appeal was allowed and a certain outcome was achieved on the Court’s re-exercise of discretion – where the substantive appeal is dismissed – costs appeal dismissed. FAMILY LAW - APPEAL – COSTS – order for costs sought by the wife in relation to the substantive appeal, the costs appeal and a further appeal from a stay order discontinued by the husband prior to the hearing – where the husband was wholly unsuccessful – where the appeal grounds as initially drafted were prolix and difficult to understand – orders for costs made. |
| Family Law Act 1975 (Cth) ss 75(2), 79 & 117 |
| Aleksovski & Aleksovski (1996) FLC 92-705 Waters and Jurek (1995) FLC 92-635 |
| APPELLANT: | Mr Sindel |
| RESPONDENT: | Ms Milton (aka Sindel) |
| FILE NUMBER: | SYC | 5856 | of | 2007 |
| APPEAL NUMBER: | EA | 102 | of | 2009 |
| EA | 135 | of | 2009 | |
| EA | 37 | of | 2010 |
| DATE DELIVERED: | 19 November 2010 |
| PLACE DELIVERED: | BRISBANE |
| PLACE HEARD: | SYDNEY |
| JUDGMENT OF: | Bryant CJ, Strickland and Murphy JJ |
| HEARING DATE: | 14 September 2010 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 19 August 2009 9 September 2009 |
| LOWER COURT MNC: | [2009] FamCA 882 [2009] FamCA 883 [2010] FamCA 243 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Lethbridge SC |
| SOLICITOR FOR THE APPELLANT: | Ewan Eggleston Slade Manwaring |
| COUNSEL FOR THE RESPONDENT: | Mr Kearney |
| SOLICITOR FOR THE RESPONDENT: | Moira Ryan Lawyers |
Orders
Appeal numbers EA102 of 2009, EA135 of 2009 and EA37 of 2010 are dismissed.
The husband shall pay the wife’s costs of and incidental to each of Appeal number EA102 of 2009, and Appeal number EA37 of 2010, in an amount as agreed or, failing agreement, to be assessed.
The husband shall pay the wife’s costs of and incidental to Appeal number EA135 of 2009 up to and including the filing of the Notice of Discontinuance on 8 September 2010, in an amount as agreed or, failing agreement, to be assessed.
Each of the parties, or their respective legal practitioners as the case may be, shall confer with a view to filing, within 21 days of the date of these Orders, a minute of order reflecting all such orders as are necessary to effect changes to the machinery provision of the orders made by Fowler J as necessitated by the sale of properties referred to therein.
IT IS NOTED that publication of this judgment under the pseudonym Sindel & Milton (aka Sindel) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA102 of 2009, EA 135 of 2009 & EA37 of 2010
File Number: SYC5856 of 2007
| Mr Sindel |
Appellant
And
| Ms Milton (aka Sindel) |
Respondent
REASONS FOR JUDGMENT
On 3 June 2010, Boland J ordered that three appeals instituted by the husband against orders made after a trial by Fowler J be consolidated and heard together. The substantive and first appeal is against the orders made pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The second appeal is against orders for costs and the third appeal is against orders made for a stay.
Prior to the commencement of the hearing of these appeals, a Notice of Discontinuance was filed in respect of the appeal against the orders for stay.
At the outset of the hearing before us, Senior Counsel for the husband indicated that the costs appeal (EA37 of 2010) was pressed only in circumstances where the substantive appeal was allowed and this Court re-exercised for itself the s 79 discretion to make orders, and made orders the effect of which was that the husband receive 55% or more of the property of the parties or either of them. In the event that the substantive appeal failed, it was conceded on behalf of the husband that the costs appeal must also fail.
For reasons about to be discussed, we are of the view that the substantive appeal must fail. Accordingly, the costs appeal must fail and an order will be made dismissing both appeals.
The husband represented himself at the trial and in the filing and preparation of these appeals. His “grounds of appeal” in each of the appeals were extremely lengthy. As an example, there were 110 “grounds” in respect of the appeal against property settlement orders, each of which comprised a lengthy paragraph, in a document which extended over 41 typed pages.
Shortly prior to the commencement of the hearing of the appeals, and consequent upon the husband securing legal representation, a Further Amended Notice of Appeal was filed on behalf of the husband in relation to the property settlement appeal which abandoned those earlier “grounds” and replaced them with 10 grounds upon which the hearing of that appeal proceeded.
Grounds of Appeal
The 10 grounds contained in the Further Amended Notice of Appeal filed on 13 September 2010, are as follows:
1.That the learned trial judge erred in finding that the husband’s “earning capacity” rather than his actual earnings at the date of trial was, in the circumstances of this case, the appropriate comparison to be made against the wife’s actual earnings for consideration under s 75(2). (Judgment AB-1, p.67 ¶ 75 and p.74 ¶ 130) where:
1.1The husband had been unemployed between April 2007 and February 2008 obtaining new employment at that date and then being made redundant in May 2009;
1.2At the date of the trial, the husband was unemployed and while hopeful had no future permanent employment in prospect (AB-3, p.771 Line 45; AB-3, p.772 Lines 15-34; AB-3, p.787 Line 40 to p.788 Line 5; AB-3, p.833 Line 20 to p.834 Line 20);
1.3Was of an age that indicated any early re-employment at a level commensurate with his past earnings was much less likely than the husband’s optimistic outlook indicated to the Court; and
1.4Wrongly determined that the husband’s scope of re-employment was greater than that available to the wife who was in secure permanent government employment.
2.That in the alternate to (1), the learned trial judge failed to have any or any sufficient regard to the fact that the husband may not be employed as his Honour found in a period of months where there was no issue that the husband had been attempting to obtain employment consistently since his redundancy and prior to that had in recent years been unemployed for some months.
3.That the learned trial judge erred in finding as a fact, employment would be available to the husband in a matter of months and at a level of at least two times the wife’s earnings (Judgment, AB-1, p.74 ¶ 130).
4.That the learned trial judge failed properly to assess all relevant s 75(2) factors in particular in that he failed to have regard to:
4.1The husband’s age as a limiting factor in his obtaining future employment;
4.2The fact that the wife was in permanent employment;
4.3The fact that the husband may not obtain employment at a remuneration level commensurate with his past earnings level; and
4.4The fact that in the event that all or any of these matters eventuated, the husband’s expenses at a reasonable level would likely not be met by his earnings.
Note – These grounds replace Grounds 1, 2, 3, 4, 5, 6, 7, 8, 9, 80, 81, 82, 95, 96, 97 and 98 in the grounds in the Husband’s Amended Notice of Appeal (“Amended Notice”) commencing at AB-1, p.14.
5.That the learned trial judge erred in finding that the husband’s [A Pty Ltd] termination payment was a payment likely to be received by him in the normal course when in fact following that termination he was re-employed in some months rather than the period reflected in the payment, namely the period of 3 years. Consequently, the trial judge further erred in assessing the weight to be attached to the contribution of that amount. (Judgment, AB-1, p.65 ¶ 44 and AB-1, p.71 ¶ 98-102).
Note – The above ground replaces Grounds 10, 11, 12, 13, 15, 16, 17 and 18 in the Amended Notice.
6.That the learned trial judge failed to place any sufficient weight upon the significant amount by which, in the first 15 years of the parties’ marriage, the husband’s income exceeded that of the wife.
Note – This ground replaces Ground 14 of the Amended Notice.
7.That the learned trial judge erred in failing properly to assess and give sufficient weight to the contribution made by the husband with respect to the period of his employment with [GP Company] and the consequences of that employment on the parties’ financial situation. In particular:
7.1It was the husband’s case, not contested, that he had been a significantly successful employee with the company as a consequence of which he received significant salary and other benefits; and
7.2It was not a matter of contest before the trial judge that the other benefits afforded to the husband by reason of his successful employment included shares which upon sale generated before tax proceeds of $2,892,210 (Judgment, AB-1, p.72 ¶ 115-124).
8.That the learned trial judge having regard to the totality of the husband’s specific financial contributions failed adequately to assess the weight to be attached to them in the circumstances of the [sic] this case notwithstanding that his Honour found that those contributions were the factor which overall would lead to a finding that the husband contributed to a greater extent than the wife (Judgment, AB-1, p.73 ¶ 124). Such contributions including the husband’s contributions as follows:
(1) The acquisition of the [G] property;
(2) The [A Pty Ltd] and [GP Company] proceeds;
(3)The creation of the superannuation fund and the timing of various sales and purchases of its assets.
Note – This ground replaces Grounds 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 70, 71, 72, 73, 74, 75, 76, 77, 78, 83, 84, 85, 86 and 87 of the Amended Notice.
9.The learned trial judge in determining the liabilities to be included in the balance sheet, failed to have any regard to the capital gains tax payable in the event of the sale of the [G] property in circumstances where it was plain having regard to the husband’s evidence that his Honour’s orders would lead to that sale.
Note –Grounds 88, 89, 90 and 91 which relate to the drafting of affidavit evidence and the manner of Mr Richards of counsel who appeared on behalf of the wife at trial in respect of his cross-examination are not pressed.
10.That the learned trial judge having regard overall to the husband’s contributions and the relevant s 75(2) factors, erred in the exercise of his discretion in finding that the combination of these considerations could properly lead to a division of the parties’ assets on the basis that they be divided equally between each of them.
Note – All other grounds not specifically referred to above are [sic] included in the Amended Notice are not pressed.
The appeal against the property settlement orders
At the outset of the appeal, Senior Counsel for the husband submitted that the ten grounds of appeal could be seen as falling into groups.
The first “group” comprises grounds 1 through 4 inclusive, and, in essence, attack the trial judge’s treatment of s 79(4)(e) – the so-called “s 75(2) factors”. In particular, an attack is mounted upon the findings made by the trial judge as to the husband’s future employment prospects and suggests that the trial judge failed to draw a distinction between the actual earnings and the “earning capacity” of the respective parties.
The second “group” of grounds relate to his Honour’s assessment of contributions. Specifically, ground 5 relates to a termination payment from the husband’s prior employment; grounds 6 and 7 attack the weight attached by the trial judge to, respectively, a disparity in income between the husband and the wife in the first 15 years of the marriage, and the contribution made by the husband resulting from the acquisition and sale of shares derived through his employment with a motor accessories company, E Ltd. Ground 8 also attacks the weight attached by the trial judge to “the totality of the husband’s specific financial contributions” and refers to three particular aspects:
(1) The acquisition of the [G] property;
(2) The [A Pty Ltd] and [GP Company] proceeds;
(3)The creation of the superannuation fund and the timing of various sales and purchases of its assets.
Ground 9 (the third “group”) asserts that the trial judge erred in failing to include a potential Capital Gains Tax liability in the “balance sheet” in which his Honour set out the property of the parties or either of them, together with their superannuation interests and liabilities.
Finally, ground 10 can be seen as a “catch-all” ground which contends that the overall result arrived at by the trial judge falls outside the bounds of a reasonable exercise of discretion.
The factual background
No factual finding made by the trial judge forming the background against which the ultimate findings were made are challenged on this appeal. Those factual matters can be briefly stated.
The husband was aged 52 at trial, born in April 1957. The wife was aged 50 at trial, born in March 1959.
The parties commenced co-habitation in September 1982, married in April 1983, separated under the one roof in April 2006 and commenced to live separately and apart in 2008. The parties have one child N born in July 1997 (aged 12 at trial).
Parenting issues were resolved by agreement and made the subject of orders by consent on 18 September 2008. Those orders essentially provided for shared care of the child N between the parties.
In May 1982, the husband purchased a home in his name at S, subject to a mortgage to the Commonwealth Bank of Australia. About four or five months later the parties commenced living together at that home. In March 1983, the husband’s sister arrived in Australia and commenced living with the husband and the wife at that property.
When the parties commenced co-habitation, each was employed. Shortly after their marriage, the wife commenced permanent employment within the New South Wales public service. The husband commenced part-time study for a Masters of Business Administration. In early 1984, the wife commenced studies on a part-time basis at the University of New South Wales.
In July 1984 the husband’s parents and his other sister commenced living with the husband, the wife, and the sister at the S property.
Each of the parties was remuneratively employed during the first 15 years of the relationship. Toward the end of that period, the wife was promoted within the Commonwealth Public Service.
In September 1992, the husband commenced working at A Pty Ltd (“A Pty Ltd”) but that employment was terminated in October 1995. He was unemployed for a period of approximately six months before commencing employment with a new employer in April 1996.
Significant difficulties attended the conception of N, who was ultimately born in July 1997.
The termination of the husband’s employment was the subject of legal proceedings taken by him alleging unfair dismissal. He was successful in that action and received $318,000 net. The trial judge found that “[t]he amount he received was an amount that would have been due to him in any event had his employer properly paid him in accordance with his terms of employment and the cost of the proceedings”.
In early 2002 the husband commenced employment with the company which was the forerunner to GP Company. At that time the wife was working as a tutor at a university.
The trial judge found that it was a requirement of the husband’s employment contract that he acquire shares in GP Company. In the middle of 2002 the parties’ private superannuation fund was established with a company of which the husband and wife were shareholders and directors as its trustee. The shares in GP Company became an asset of the fund.
In 2003 the wife commenced study for the degree of Masters ... In September 2003 further shares in GP Company were purchased by the parties’ company as Trustee of the superannuation fund.
In November 2003 GP Company became a publicly listed company and 50% of the shares issued to the husband were sold in the initial public offering. The remaining shares were sold about 16 months later in March 2005. The trial judge found that the shares were sold at a premium to their acquisition costs, and since the husband caused tax to be paid at the time of their acquisition, tax was not payable upon the sale.
On 30 June 2005 the husband resigned from GP Company and commenced teaching at TAFE. At that time the wife was employed by the Commonwealth Public Service as a senior officer working three days a week. From about March 2006, she was made a permanent senior officer within that Department.
The Trial Judge’s Findings
The net property and superannuation interests of the parties were found to have a total value of about $5.5 million. Save for the issue of capital gains tax earlier referred to, that finding is not challenged on this appeal.
Relevant to the arguments advanced on the appeal in respect of contributions, the trial judge found:
·In accordance with the husband’s claim, that his direct financial contributions were superior to those of the wife;
·On the basis of the husband’s concession that (with minor exceptions only) each party contributed throughout the marriage all such income and capital as they received from all sources to the welfare of the family;
·That the wife’s net income after tax for the period 1982 to the period 1997 was $398,555 and the husband’s net income was $605,519, “showing a disparity in earnings of $206,964”
·That “[t]here is no doubt in my mind that the financial contributions in a direct sense of this husband to the acquisition conservation and improvement of property were superior to those of the wife”.
His Honour correctly pointed out, however, that these financial contributions “are not the only things to be taken into account in making a determination of what is just and equitable”. The husband had argued that there were a number of “moments of wealth” during the parties’ marriage for which he should be given credit in the assessment of contributions.
The trial judge’s ultimate findings in respect of contributions can be seen in the following paragraphs of the judgment:
124.Overall, however, as I have said, I think the husband’s financial contribution has to be regarded as being superior to that of the wife.
125.I accept that the wife’s contribution to acquisition of the property of the parties or either of them in non financial way was indeed equal to that of the husband.
126.I do not accept that the wife’s contribution to the welfare of the family was equal to the husband’s contribution. I accept that her contribution was greater particularly in the role of homemaker and parent. It was put to the husband that had he not been freed by her fulfilment of the role of primary care giver to attend to his business he would not have been able to make the contribution that he did. He seemed to concede this.
Neither the second or third of the ultimate findings just quoted are challenged on this appeal. The first finding is in effect challenged as to the weight that the trial judge applied to the husband’s “superior” financial contributions.
The central findings in respect of the so called “s 75(2) factors” are contained in two paragraphs of his Honour’s judgment. It is convenient to quote them in full:-
130.The husband spent a lot of time analysing his superior earning capacity and investment and other business acumen. He put strongly before the Court his superior financial contributions, the esteem in which his services were held and the approbation of his business associates and others in his industry and decision making. It is that which is reflected in the significant disparity in the income earning capacities of each of the husband and the wife. The husband has historically out-earned the wife by an amount of up to 3:1. The husband says that employment would be available to him which would mean he was at least out-earning the wife in the order of 2:1. He is presently unemployed but his evidence is that in but a few months he will again be employed. That development of his earning capacity was in part due to his innate intelligence but also due to the opportunities afforded to him by the wife because of the work that she did and the contributions she made to the family.
131.The wife has a […] degree and the husband has engineering and a Masters in Business Administration degree available to him. He is in sense more flexibly qualified than the wife. He has a shorter life expectancy than the wife. He has as demonstrated in this case a confident manner and a lively intelligence. I have no doubt he will continue to demonstrate those skills for some time.
The trial judge ultimately concluded that the contributions of the parties should be assessed in the proportion 53% to the husband and 47% to the wife. That is, the trial judge concluded that the respective contributions made by each of the parties as found by his Honour ought be reflected in an ultimate disparity in contributions between the parties of 6%.
Put another way, the trial judge found that the disparity in the parties’ respective contributions should be represented by the husband receiving about $330,000 more than the wife.
As earlier observed, his Honour considered that the findings made in respect of the s 75(2) “considerations” should result in an adjustment to the wife of 3%. In monetary terms, then, his Honour assessed that adjustment as being about $165,000.
Thus his Honour ultimately determined that, after the parties’ approximately 26-year co-habitation, their property and superannuation interests should be divided equally between them. That division of assets and superannuation interests saw each of the parties being entitled to in excess of $2.7 million.
His Honour then, separately, looked at the justice and equity of the result and noted that this division would “enable [each of the parties] not only to rehouse themselves but to produce investment income”. His Honour concluded that the result was just and equitable.
The section 75(2) factors
Earnings and earning capacity – Ground 1
As pleaded, the ground specifies four particular aspects of the alleged error: the husband’s unemployment between April 2007 and February 2008 and subsequent redundancy from the latter job in May 2009; the fact that the husband was unemployed at the date of trial and “while hopeful” had “no future permanent employment prospect”; that the husband was of an age that “indicated any early re-employment at a level commensurate to his past earnings was much less likely than the husband’s optimistic outlook indicated to the Court” and, finally, that the trial judge “wrongly determined that the husband’s scope of re-employment was greater than that available to the wife who was in secure permanent government employment.
Senior Counsel submitted that an apparent concession made by the husband in the witness box was, particularly given that the husband was self represented, not as “optimistic as that found by the trial judge”. Attention was drawn in particular to a passage where the husband said:
It is very difficult for someone at my age to simply walk into a job at 320K or thereabouts, or even 200K if, you know, I am in a position as I am, unemployed at the moment. If you were working and were in a senior job and had been there three years, it gives you a greater prospect, your Honour. I hope you appreciate that.
However, the difficulty with the husband’s submissions is one which was pointed out by the trial judge during the trial. His Honour said:-
But you are bound by your own evidence, aren’t you, in that? You have said that you thought it would be a matter of months before you got a job.
We do not accept the central proposition asserted by Senior Counsel for the husband as to the husband’s concessions. In fact, as the transcript reveals, the husband’s evidence was clear and unequivocal. Examples from the evidence before his Honour include:-
·An acknowledgement, put forward by the husband to the Child Support Agency, that “not withstanding the current market”, the husband’s “experience and skills, employment history” were such that he could “have employment in months”;
·The husband confirmed clearly in his evidence that this was in fact his expectation;
·The husband conceded that any expected employment would “be in a similar position to the one that [he] occupied recently”;
·The husband conceded that his “total remuneration, including bonuses, might be something in the order of about $300,000 per annum” if “he was lucky”;
·The husband conceded that, if he was “unlucky”, his remuneration “might be about $200,000”;
·The husband conceded that someone with his experience and skill would be looking at remuneration in terms of a base salary of about $200,000 or thereabouts.
It should be pointed out that the wife’s income at the date of the trial was about $107,000 per annum.
Based upon the evidence just referred to, the trial judge put directly to the husband the proposition that, ultimately, was included in his Honour’s reasons:-
His Honour: Well I think it is pretty clear that you can out earn the wife by an order of something of 3 to 1.
[Mr Sindel]: I am sorry, I beg your pardon your Honour? I missed that
His Honour: It seem pretty clear that you can out earn the wife by an order of 3 and something to 1.
[Mr Sindel]: Right
His Honour: Yes
The findings made by the trial judge encapsulated in paragraphs 130 and 131 of the reasons earlier cited were plainly open to his Honour and no error is demonstrated.
We reject the argument on behalf of the husband that the findings attribute a concession to the husband that is different in its nature or extent to that found by the trial judge.
As the argument progressed, Senior Counsel for the husband contended that s 75(2)(b) was not directed towards “future earning capacity” at all (although Counsel conceded that this may be a matter which might be taken up pursuant to s 75(2)(o)) but rather to actual earnings.
We reject the argument that future earning capacity is not a matter which should be taken into account pursuant to s 75(2)(b), (a consideration of which is required by s 79(4)(e)).
First, such an interpretation of the subparagraph is contrary to long-standing authority. The decisions of this court in Clauson and Clauson (1995) FLC 92-595 and Kennon v Kennon (1997) FLC 92-757 are but two examples. In the latter, it was held at 84,300 (per Fogarty and Lindenmayer JJ):
Paragraph (b) (income, property, financial resources of the parties and their capacity for employment) had importance in several respects, namely their future incomes and income earning capacities, the disparity in their property and the disparity in their superannuation…
(and at 84,303)…On the other hand, there are huge differences between the parties’ incomes, assets, future income-earning capacities and superannuation benefits. [emphasis added in each case]
The analysis required by s 79(4)(e), as part of the process of arriving at orders reflecting a just and equitable settlement of property is, primarily, an analysis of the likely future shaped by the dissolution of the marriage partnership and the financial consequences of the breakdown. By definition the enquiry is about employment or earning capacity as distinct from current employment and current income. The passages cited later in these reasons, particularly from Waters and Jurek (1995) FLC 92-635 are apposite.
Prospects of Employment – Ground 2
Senior Counsel for the husband submitted that “ground two was really an alternative to ground one”. It is, essentially, a ground that asserts that the trial judge failed to attach sufficient weight to the obverse proposition contained in his Honour’s findings. The ground asserts error by reason of the trial judge failing to “have any or any sufficient regard to the fact that the husband may not be employed as his Honour found in a period of months…”
For the same reasons as those earlier outlined, we consider there is no merit in this ground.
Future Earnings – Grounds 3 and 4
Grounds 3 and 4 can be seen to be a subset of the earlier general attack made on the judgment by reference to findings about future employability and earnings just referred to.
In short, the husband’s own evidence at the hearing, clarified by his Honour and confirmed by the husband, provided an entirely sufficient basis for the ultimate findings made by the trial judge in respect of the s 75(2) factors and there is, in our view, no merit in the attack made upon the judgment in that respect.
Regard should be had to the monetary value of adjustments which, for understandable and proper reasons, are traditionally made in percentage terms. Nowhere is this more so than in adjustments made in respect of s 79(4)(e) – “it is the real impact in money terms which is ultimately the critical issue” in that respect. (Clauson and Clauson).
Here, an adjustment of 3% of the total value of the property and superannuation interests of the parties can be seen to have a monetary value in the region of $165,000. The evidence of the husband himself, reflected in findings by the trial judge, is that if he was “lucky” he would out-earn the wife by a factor 3:1 or if “unlucky” by a factor of 2:1.
On an “unlucky” scenario the $165,000 adjustment made by his Honour pursuant to s 79(4)(e) represents less than 18 months prospective earnings. As the Full Court pointed out in Clauson:
It has long been recognized that in most cases the most valuable “asset” which a party can take out of a marriage is a substantial, reliable, income-earning capacity. See Best and Best (1993) FLC 92-418 at 80,295.
Contributions – Grounds 5 to 8
The trial judge observed that:-
87. This is a case in which the husband placed great emphasis and spent great time and energy in detailing the financial contributions of the parties to the acquisition, conservation and improvement of the properties or either of them.
Reflections of that approach can also be found in the husband’s submissions which refer to the termination payment received consequent upon litigation for wrongful dismissal and the amount resulting from the sale of GP Company shares (which were, it will be recalled an incident of the husband’s employment with that company.)
The husband argued before the trial judge that these contributions were “special” - a proposition rejected by his Honour.
Given the approach adopted by the husband at trial, to which the trial judge refers, and the presentation of this aspect of the appeal, we consider it important to emphasise relevant principles applicable to the assessment of contributions.
The High Court in Norbis v Norbis (1986) 161 CLR 513 said (per Mason and Deane JJ at 524):-
The Family Court has rightly criticised the practice of giving over-zealous attention to the ascertainment of the parties’ contributions, and we take this opportunity of expressing our unqualified agreement with that criticism, noting at the same time that the ascertainment of the parties’ financial contributions necessarily entails reference to particular assets in the manner already indicated.
In Aleksovski & Aleksovski (1996) FLC 92-705 Kay J held:-
90. …What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship. Just as early capital contribution is diminished by subsequent events during the marriage, late capital contribution which leads to an accelerated improvement in the value of the assets of the parties may also be given something less than directly proportional weight because of those other elements.
Calculations that might be seen to have a “mathematical” or “accounting” emphasis can, particularly in the context of a lengthy marriage, be prone to mislead
An assessment of contributions is not a mathematical or accounting exercise because the assessment required by the Act is “a matter of judgment and not a computation”. (In the Marriage of Garrett (1984) FLC 91-539 at 79,372; see also Norbis.) It is important not to “overvalue” direct financial contributions merely because they can be measured in money just as it is important not to “undervalue” indirect contributions or contributions to the family because they cannot be (commensurately) measured in money.
So, too, it is important to give recognition to the fact that the wife’s homemaker and parent contributions have themselves contributed to the direct financial contributions made by the husband resulting from his remunerative employment. The income produced from that employment is itself referable to a number of factors, some related to the individual talents and abilities of the husband, some to plain good luck and others societal.
A marriage partner can arrive at a particular point (or points) in time at which they earn remuneration (or, not as the case may be) by reason of the contributions made by each of the parties across the length of a marriage partnership. So it is here, in respect of the husband’s remuneration, significant though it was.
In this particular marriage partnership the roles of each of the parties led them to a point where the husband received and made a substantial financial contribution from his employment effort, and the wife made significant contributions by way of income from her employment, albeit less than the husband, but greater contributions as homemaker and parent.
We also refer to what was said by this Court in Kennon v Kennon at 84,299:
Marriage involves a myriad of matters, large and small, which go to make up that union and differentiate it from more casual, transitory relationships. It involves sharing the minutiae of daily life, support during good and bad times, care and intimacy. These and other matters are intended to be encompassed by the matters in s.79, the actual balance of those components varying from marriage to marriage. Essentially it is an intimate sharing of mutual but diverse talents for their joint benefit… [citations omitted]
The Full Court there also cited with approval what was said by an earlier Full Court in Waters and Jurek at 83,379, namely:
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 recognizes 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, comes 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 recognize 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.
The Full Court continued - in a passage which resonates with the husband’s submissions in the appeal with respect to s 75(2)(b) of the Act:
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 recognized 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.
Turning then to the specific grounds, Senior Counsel for the husband properly conceded that these grounds attack the weight attached by the trial judge to aspects of the evidence with respect to contributions.
As counsel also properly conceded, there is a long line of authority, binding upon this Court, with respect to the interference by appellate courts where the asserted error of a trial court relating to the attribution of weight. In a well-known and often-repeated passage, Stephen J held in Gronow v Gronow (1979) 5 FamLR 719 at 722:
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 of 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…
Ground 5 might be seen to contain an asserted error of fact. It alleges “that the husband’s A Pty Ltd termination payment was a payment likely to be received by him in the normal course, when in fact, following that termination, he was re-employed in some months rather than the period reflected in the payment, namely the period of three years.” In final addresses, the trial judge clarified with the husband the evidence in respect of that payment. The trial judge asked the husband to confirm that the amount received was “in fact compensation for amounts that otherwise would have been payable to you had you continued employment and the rest was costs”. The husband said:
The amount of 260 – you are quite right. It was in relation to payments that would have been made during the employment of the husband, they were not made.
As pointed out during the course of submissions in this Court, even if earlier re-employment by the husband meant that the amount received by way of payment for wrongful termination exceeded a direct recompense for wages lost during a period of unemployment, any balance represented a “windfall” resulting directly from the husband’s employment.
By reason of the matters of principle earlier referred to, this windfall should be seen to be a contribution by each of the parties and not by the husband alone.
Taken together, grounds 5 to 8 inclusive can be seen to raise the following specific matters:
· The imbalance in the parties’ earnings during the first 15 years of marriage;
· The husband’s employment with GP Company and the consequences of that employment (including in particular the acquisition and sale of shares associated with that employment);
· The acquisition of an investment property at G;
· The termination payment and the proceeds of sale of shares from, respectively, A Pty Ltd and GP Company;
· The creation of a superannuation fund;
· The timing of sales and purchases of shares;
· The taxation effectiveness of the investment of sale proceeds in a superannuation fund.
It is plain from the trial judge’s reasons that his Honour was aware of, and carefully took into account, each and all of those matters in arriving at the assessment of contributions.
It is important to point out that his Honour did not at all disregard the specific contributions of the husband, nor their totality; indeed his Honour made a specific finding that “[t]here is no doubt in my mind that the financial contributions in the direct sense of this husband to the acquisition conservation and improvement of property was superior to those of the wife”. In that respect, his Honour assessed that the respective contributions of the parties taken as a whole, should result in a disparity in them of 6% (53% to 47%) or, in monetary terms, a disparity valued at about $330,000.
No error is demonstrated in the weight which his Honour attached, or did not attach, to any matters relevant to the determination of contributions. We consider that his Honour’s assessment of contributions was well within the range of the generous ambit of discretion inherent in the process required by s 79 of the Act.
Capital Gains Tax – Ground 9
Capital Gains Tax was payable by the parties in the event of a sale of a jointly-owned property at G It was common ground in the appeal that the property has been sold. Equally, it was common ground that capital gains tax would be paid by each of the husband and the wife by reference to their respective marginal taxation rates.
During submissions we pointed out that the payment (which, by reason of his Honour’s treatment of the tax, would be paid from each of the respective property entitlements pursuant to his Honour’s orders) effected, of itself, a just and equitable result. Indeed, it is arguable that failing to include the potential Capital Gains Tax as a liability, but rather leaving it to the parties to pay the tax as and when it fell due by reference to their respective marginal rates, may in fact have been generous to the husband.
Whilst Senior Counsel for the husband did not formally concede that the ground had no merit, it was faintly pressed. We consider that, contrary to that which is asserted in the ground, his Honour was plainly correct in omitting from his “balance sheet” the then potential Capital Gains Tax. There is no merit in this ground.
The Overall Assessment – Ground 10
Precisely the same considerations as those outlined in respect of the earlier grounds relating to contributions and the s 75(2) adjustment apply to this ground.
His Honour’s conclusion of equality, consisting of an assessment of contributions in the proportion of 53% to the husband and 47% to the wife, and a s 79(4)(e) adjustment of 3% to the wife, was a decision well open to his Honour on the evidence before him and, in our view, plainly falls within reasonable exercise of the discretion inherent in s 79. Thus this ground has no merit.
Result of the Appeal
For the reasons just outlined, the appeal must fail.
As we have earlier referred to, it is conceded that in this circumstance the appeal against the order for costs made by the trial judge must also fail.
Costs
In the event of the appeals being unsuccessful the wife sought orders for costs. She also sought an order for the costs of the stay appeal. The husband’s position was that each party should bear their own costs of the substantive and costs appeals, and with the stay appeal, because of the notice of discontinuance, any costs ordered should be “proportional”.
Costs under the Act are governed pursuant to s 117. Insofar as this appeal is concerned the relevant provisions are sub-sections 117(1), (2) and (2A).
We note that s 117(2A) of the Act sets out matters that the Court should take into account in determining whether there should be a departure from the provisions of s 117(1) being, that each party pay their own costs of or incidental to the proceedings.
In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 the Full Court discussed, at paragraph 41 of their reasons, the effect of s 117(2A) of the Act as follows:
A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
In our view, the relevant matters in favour of an order for costs are those in s 117(2A)(c) and (e) which provide:
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)…
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings…
The husband has been wholly unsuccessful in respect of each of the costs and substantive appeals.
The husband was self-represented during the course of the trial, and subsequently prepared his own material in respect of the appeals. The grounds of the substantive appeal, as initially drafted, could not properly be described as such. They were prolix, and difficult to understand. Yet, until amended, they were the grounds which had to be met. The grounds of the costs appeal were also prolix and difficult to understand.
As Senior Counsel for the husband submitted, once the husband engaged practitioners to act on his behalf, the material was properly contained and the proceedings were conducted expeditiously. But, we do not consider that these matters are, when weighed in the balance, sufficient to suggest that an order for costs in favour of the wife ought not be made.
There will be an order that the husband pay the wife’s costs of and incidental to the substantive appeal.
For the same reasons as just advanced, we see no reason why the husband should not pay the wife’s costs of and incidental to the appeals in respect of the costs order, and the stay.
Costs in each case should of course be restricted to such matters necessary to meeting each appeal and that can be agreed or assessed.
In respect of the appeal against the stay, costs should be payable up to the date of the filing of the Notice of Discontinuance and costs in respect of the appeal against his Honour’s costs order should not include any appearance at the hearing of the appeal.
Orders
Consequent upon the application by the husband for a stay of the orders made by the trial judge, his Honour made orders which changed the substance of the orders made by his Honour at trial by ordering the sale of properties and the provision of cash to the wife. It is common ground on this appeal that those orders for sale have been carried into effect. No party takes issue with that.
However, as it seems to us, consequent upon the dismissal of these appeals, it will be incumbent upon the parties to vary the machinery provisions of the orders made by his Honour. With that in mind, we will direct that each of the parties or their legal practitioners, as the case may be, confer with a view to filing a minute of order reflecting the changes in those machinery provisions within 21 days of the date of these orders.
I certify that the preceding One hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Strickland and Murphy JJ) delivered on 19 November 2010.
Associate:
Date: 19 November 2010
0
2
1