Spiteri & Spiteri

[2005] FamCA 66

[2005] FamCA 66

FAMILY LAW ACT 1975

IN THE FULL COURT

OF THE FAMILY COURT OF AUSTRALIA

AT BRISBANE  

Appeal Nos. NA 9 of 2004
and NA 62 of 2003

  

File No. TVF 1133 of 2001

IN THE MATTER OF:

SJS

Appellant Husband

- and -

NS

Respondent Wife

REASONS FOR JUDGMENT

CORAM:  Finn, May and Guest JJ   

DATE OF HEARING:          10 March 2004

DATE OF JUDGMENT:     18 February 2005

APPEAL SUMMARY

MATTER:SJS and NS

APPEAL NUMBER:  NA 9 of 2004; NA 62 of 2003

(TVF 1133 of 2001)

CORAM:Finn, May and Guest JJ

DATE OF HEARING:  10 March 2004

DATE OF JUDGMENT:  18 February 2005

CATCHWORDS:                  FAMILY LAW – APPEALS – Property settlement – Whether the trial Judge failed to give weight to the initial financial contribution of the appellant – Whether the trial Judge erred in determining the parties’ entitlements relative to the property pool at separation, rather than at the date of trial – Whether the trial Judge failed to give weight to the post-separation contributions by the appellant in increasing the assets – Whether the trial Judge correctly off-set the appellant’s post-separation contributions against the respondent’s responsibility for the children and limited financial support.

Caselaw cited:

Antmann and Antmann (1980) FLC 90-908

Appeal dismissed.

Directions made for the filing of written submissions in relation to the appeals against the costs orders and the costs of the appeal.

Introduction and background

1. This judgment is principally concerned with an appeal by the husband against orders for property settlement made by Bell J on 27 August 2003.  However it is necessary at the outset to explain the various Notices of Appeal and Cross Appeal which had been filed by both the husband and the wife prior to the hearing before us on 10 March 2004.

2. The wife, who was born in 1969, and the husband, who was born in 1964, married in February 1990 and separated in July 1999.  There are three children of the marriage: a daughter born in 1992; a son born in 1995; and a second daughter born in 1996.

3. After a hearing on 25 and 26 August 2003 Bell J made orders on 27 August 2003 providing, inter alia, that by way of property settlement the husband pay to the wife the sum of $499, 842, that the three children of the parties marriage reside with the wife and the husband have contact every second weekend, every Wednesday evening and half of the school holidays.

4. On 17 October 2003, Bell J made the following orders with respect to costs (“the costs orders”):

   1.That there be no order as to the costs of the property settlement application.

   2.That the husband pay the costs of and incidental to the residence application.

   3.That the husband pay the reserved costs of and incidental of 27 June 2003 before the Honourable Justice Barry.

   4.That there be no orders as to the costs of the costs application.

   5.That the husband pay the costs as aforesaid within twenty-one days of agreement or, failing agreement, that such costs be taxed.

5. On 14 November 2003, the wife filed a Notice of Appeal (NA62 of 2003) against Order 1 of the orders of 17 October 2003 (being the order that there be no order as to the costs of the property settlement application).

6. On 5 December 2003, the husband filed a Notice of Cross-Appeal (NA65 of 2003), which stated that all the orders made by Bell J on 17 October 2003 were appealed, but which having regard to the grounds and orders sought, was clearly directed only to orders 2 and 3 of the orders of 17 October 2003 (being, the orders requiring the husband pay certain costs).  However an annexure to that Notice of Cross Appeal indicated that the husband also sought to appeal the orders that the children should reside with the wife and the property settlement orders.

7. On 10 February 2004, the husband filed a Notice of Appeal (NA9 of 2004) against the property settlement order and most of the parenting orders made by Bell J on 27 August 2003, as well as against orders 2, 3 and 5 of the orders with respect to costs made by his Honour on 17 October 2003.

8. At a directions hearing on 24 February 2004 May J made the following orders:

   1.That leave be given to amend the Notice of Appeal filed 10 February 2004, being NA9 of 2004 against the Order of Justice Bell made 27 August 2003.

   2.That leave be given to amend the Cross Appeal filed on 5 December 2003 to appeal only against the Orders made on 17 October 2003.

   3.That leave be given to the Wife to file a Cross Appeal from the Notice of Appeal first filed on 10 February 2004 on or before 2 March 2004.

   4.That the Appeals NA62/2003, NA65/2003 and NA9/2004 be consolidated and heard together on 10 March 2004.

9. On 4 March 2004 the husband filed a further Notice of Cross Appeal (NA65/03), which again stated that it was directed to all the orders with respect to costs made by Bell J on 17 October 2003, but which in substance was directed only to orders 2 and 3 of those orders.

10.At the commencement of the hearing before us on 10 March 2004, we were informed by Counsel for the husband that his client proposed to abandon his appeal against the parenting orders and also (at least as we understood it) the appeal against the order of 17 October 2003 requiring him to pay the costs of and incidental to the residence application (that is, order 2 of the orders of 17 October 2004).  We were also informed that the husband wished to proceed before us on the basis of the Notice of Appeal (NA9/04) originally filed on 10 February 2004, but in the revised or amended form which was filed in Court at the hearing before us.  His appeal would therefore be against the property settlement orders and the costs order relating to the property settlement application. 

11.It was accordingly agreed that we should formally dismiss the husband’s Notice of Cross Appeal (NA65/03) filed on 5 December 2003.  It was also agreed that the wife’s appeal (NA62/03) against order 1 of the costs orders of 17 October 2003 and the husband’s appeal against certain of those orders (as contained in his notice of appeal (NA9/04)) should be the subject of written submissions after delivery of our judgment in the husband’s appeal against the property settlement orders.

The property settlement Orders

12.The orders with respect to property settlement which are the subject of the husband’s appeal are as follows:

1.That the husband pay the wife the sum of $499,842.00 such sum to be paid in the manner:

a)  $100, 000.00 within 21 days from the date of this Order;

b)  balance within three months thereafter.

2.Upon the husband paying to the wife the sum referred to in Order 1 herein in full, and contemporaneously with the final payment the wife shall transfer to the husband all of her interest in:

a)  The farming properties … all in the Country of [N], Parish of [J] and all improvements thereon; and

b)  Any share or interest that the wife may have in [SF] Company Pty Ltd and [H] Pty Ltd; and

c)  The property owned by the [SF] Pty Ltd as Trustee for the … Family Trust.

3.The husband transfer to the wife all his interest in the Ford Falcon Motor Vehicle … in the possession of the wife.

4.That upon the transfers referred to in Order 2 occurring the husband shall assume sole responsibility for the payment of any and all debts or loans of what so ever kind owed by the wife to the … Family Trust or the company [H] Pty Ltd.

5.The husband shall assume sole responsibility and shall indemnify the wife in relation to, the payment of any and all tax debts arising from the operation of the … Family Trust or the company [H] Pty Ltd or which is attributable to the wife’s taxable income for any period prior to the date of this Order and including any tax assessment, penalties or interest payable as a consequence of lodgement of amended tax returns in respect of the parties, the … Family Trust or [H] Pty Ltd for any period during the marriage.

6.The husband shall indemnify and keep indemnified the wife against all or any manners of actions, suits, causes of action, arbitration, debts, dues, loans, guarantees, costs, interest and demands whatsoever both at law and in equity which the husband, [SF] Company Pty Ltd, [H] Pty Ltd and the … Family Trust now have or may have at any time or times thereafter against the wife or which may arrive in respect of any act or thing done or omitted to be done by the wife up to and including the date of these orders.

7.The husband shall indemnify the wife and hold her indemnified against all payments and liabilities pursuant to any mortgage and all rates taxes and outgoings of or with respect to the [SF] Company Pty Ltd, … Family Trust and [H] Pty Ltd of whatsoever nature and kind.

8.The husband shall pay his own costs and stamp duty if any associated with the transfer of assets into his name or his nominee and the wife shall pay her own costs and stamp duty if any associated with the transfer of assets into her name or her nominee.

9.That unless specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent order:

a)  Each party shall be solely entitled to the exclusion of the other to all other property (including choses in action) in the possession of such party as at the date of these orders;

b)  Insurance policies remain the sole property of the owner named therein;

c)  Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;

d)  Each party is solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

10.In the event that either party fails to sign or execute any deed or document necessary to give effect to these Orders the Deputy Registrar of the Family Court of Australia … shall be authorised pursuant to section 106A of the Family Law Act 1974 to sign or execute all such documents and an affidavit by the Solicitor of the Party seeking the execution of such document shall be sufficient evidence of such failure.

11.That each party do all such acts as may be required to facilitate the registration and removal of the wife as an office holder of [SF Company Pty Ltd] and [H Pty Ltd] and her removal as a beneficiary of the … Family Trust.

12.Each party do all such acts as may be required to facilitate the removal and or release of the wife as guarantor in respect of any loan or debt presently owing by [SF Company Pty Ltd] and the … Family Trust.

13.These orders gave effect to the trial Judge’s determination which was in broad terms that the net value of the parties’ property (which was in the order of $1.6 million) should be divided in the proportion of 40% to the wife and 60% to the husband. The 40% award to the wife was arrived at on the basis of 25% on account of her contributions with a further 15% adjustment on account of the matters contained in s 75(2) of the Family Law Act 1975 (“the Act”).

Grounds of Appeal

14.The amended grounds of appeal on which the husband was permitted to rely at the hearing of the appeal are as follows:

His Honour erred in fact and in law in finding that the wife should receive 40% of the matrimonial property since

a)No account was taken of the significant initial financial contribution made by the husband to that matrimonial property;

b)Further or alternatively no account was taken of the facts as found by the learned judge that

I.   The wife made no contribution to the matrimonial property post the date of separation

II.  The increased value of the matrimonial property was due to the work and expenditure of the husband.

15.Because Senior Counsel for the wife had submitted that this late amendment of the husband’s grounds of appeal could well cause prejudice to the wife, we permitted grounds for a cross appeal by the wife against the property settlement orders to be filed in Court.  However, we were informed by Senior Counsel that the wife would only wish to pursue the cross-appeal in the event that the husband’s amended grounds of appeal were to lead to a successful appeal in the sense that the trial Judge’s order was to be changed by us in the course of a re-exercise of the discretion by us.

The value of the property and the parties’ entitlements

16.Before considering the husband’s grounds of appeal, it will be useful to make some reference to what can be termed the figures or values for the parties’ property and entitlements which were used by his Honour. 

17.His Honour did not, at any stage in his judgment, set out a schedule of the parties’ assets and liabilities as at the time of the hearing before him.    However, in paragraph 26 of his judgment his Honour stated that “it appears there were gross assets of $1,653,786”, and that the parties had “agreed that the net value…after the payment of the tax and the interest is $1,603,043”.

18.Also in paragraph 26 his Honour referred to an aide-memoir which was to be incorporated into his judgment as Annexure A.  No such document appeared in the Appeal Books.  However we were provided with a copy of what was understood to be that document.  It shows a gross figure of $1,653,786 and a net figure of $1,603,143.  That net figure is slightly different to the net figure of $1,603,043 used by his Honour, but we understood both parties to proceed before us on the basis of the figure used by his Honour, being $1,603,043.

19.His Honour then proceeded in paragraphs 27, 28 and 29 to refer to the fact that the wife already had “superannuation and some other items of small value by way of personal property which came to $51,030”; that she had received an amount by way of “a Hogan order” which his Honour understood was $50,000 (although the correct figure was apparently $60,000); and that an amount of $50,643 should be deducted from the wife’s entitlement on account of tax.

20.His Honour’s calculations of the wife’s entitlements and the amount which the husband had to pay were as follows:

29.…Consequently, I am of the opinion that the wife should receive an amount of 40 per cent of the assets of the parties; $615,000.  From that must be deducted the tax to which I have hereinbefore referred which was $50,643.  That has been agreed between the parties and the property which is in the possession of the wife being $51,030. 

30.$559,842.  There are other orders which I understand have to be made in relation to the $50,000.  I understand that a draft will be placed before me in relation to that. 

31.I will order that the husband pay $100,000 within 21 days of today and the balance at the expiration of three months thereafter. …

21.It appears that prior to the engrossment of his Honour’s orders, written submissions were made to his Honour by Counsel for the wife in which it was conceded that the $60,000 which had been paid by the husband to the wife pursuant to the Hogan order did “not have to be deducted from the property pool as the amount shown still includes that amount.”  It was then submitted on behalf of the wife that the amount payable to her was as follows:

Property pool agreed at $1,653,786.00 × 40%	=	$ 661,514.40
Less:
·     property in the wife’s possession	$ 51,030.27
·     tax penalties & interest total	$ 50,643.00
·     $60,000 Hogan application	$ 60,000.00
$ 161,673.27
$ 499,841.13

22.It will be seen that order 1 of his Honour’s orders (as set out in paragraph 12, above) reflects at least in round figures, this submission made on behalf of the wife. 

23.We were informed that the husband had by the time of the hearing of the appeal paid the sum of $100,000 to the wife.

24.Before us, there was no issue in relation to the identity and value of the assets – it being agreed that the value of the assets at the date of trial was $1,653,786.  In addition, there is no dispute in relation to the nature and value of the items to be added or subtracted from each party’s share.  The only issue so far as the appellant husband was concerned, was the appropriate percentage division to be applied to the property in order to provide a just and equitable result.

25.Essentially, the position of the appellant husband (and as reflected in a calculation placed before us by his Counsel) was that different percentages should be or should have been applied to the value of the assets as at the date of separation of the parties (25 per cent of $445,000) and to those applied to the value of the assets as at the date of trial (15 per cent of $1,653,786).  It seems that such an approach was pursued on the basis of what was one of the central points in the husband’s case, being that the parties’ assets had increased substantially in value from the date of separation to the date of trial. 

26.We mention here that we requested and subsequently received from Senior Counsel for the husband further calculations based on the global approach used by the trial Judge but altering the wife’s entitlement to 30 per cent of the assets at trial.

The husband’s initial contribution

27.The first matter addressed by Senior Counsel for the husband in support of the appeal was the apparent failure on the part of the trial Judge to take into account the significant initial financial contribution made by the husband to the parties’ property.  The principal passages in the evidence to which we were taken concerning this matter are as follows.

28.In his affidavit filed on 10 February 2003, the husband stated:

3.In 1986 I gave my job up to go farming full time and have not looked back since.  By 1990 I had 50 acres of [fruit], fully irrigated, packing shed and machinery, producing top quality fruit.

Before I met [the wife] I had the following assets-

Landcruiser Utility	$ 25000-00E
Fiat 4 wheel Tractor	$ 25000-00E
Spreader	$ 1800-00E
Mister	$ 2000-00E
Massey Ferguson 65 Tractor	$ 1500-00E
Cat D2 Bulldozer	$ 1500-00E
[Fruit] Trailer	$ 1500-00E
Irrigation Motor and Pump	$ 5000-00E
Irrigation plant for 40 acres	$ 40000-00E
[Fruit] Shed and wheel	$ 30000-00E
Standing [fruit] crop	$ 80000-00E
TOTAL	$ 213300-00E
[The wife] had a Ford laser	$ 1000-00E

29.In her affidavit filed 24 February 2003, the wife responded in the following terms:

3.In relation to paragraph 3 of the Affidavit I say that at the time that we were married [the husband] did not have a Landcruiser Utility.  The CAT D2 bulldozer was his father’s.  I had more assets that (sic) he has listed.

30.In a further affidavit filed on the same day the wife stated:

55.When we were married I had the following assets:-

a)a 1989 Ford Laser, which I had paid about $5,000.00 for;

b)  furniture and kitchen appliances.  I had enough to furnish the flat that we lived in after we were married.  The only new furniture we bought was a bed and a fridge.  [The husband] had no furniture;

c)  $4,000.00 in savings in the ANZ Bank.

56.[The husband] was working for himself growing [fruit] on land that was owned by his parents at [J].  [The husband] was drawing a wage of $360.00 per week net from the [fruit] farm business.

57.To the best of my recollection [the husband] had the following assets when we got married:-

a)a Sigma car worth about the (sic) $5,000.00 or a bit more;

b)40 or 50 acres of [fruit] growing on his parent’s farm; and

c)some machinery;

d)  [the husband] had some money.  I don’t recall how much he had but I think it was in excess of $20,000.00;

58.I can not really say what [the husband’s fruit] plantation was worth at the time that we were married.

31.The husband then responded to the wife in a further affidavit sworn on 23 May 2003 but apparently only filed on 21 August 2003 in the following terms:

25.In relation to paragraph 55, I say that [the wife] was paying off a car when we first met, and she had some furniture.  The flat in which we lived was furnished partly from furniture she had, partly from wedding gifts, and partly from our own purchases.  I have no knowledge, nor did I see any evidence, that [the wife] had $4,000.00 in savings in the ANZ Bank.

26.In relation to paragraph 57, I have previously deposed to what I had at marriage.  The paper writing now produced and shown to me and marked with the letter “A” is a true copy of my balance sheet for the tax year 1990 showing my financial position.  

32.The annexed balance sheet showed that as at 30 June 1990 (that is within about four months of the parties’ marriage) the husband had net assets of $109,084.  It appears from a document entitled “Summary of Argument of the Husband” which appears in the Appeal Book, and which we can therefore assume was before the trial Judge, that it was the husband’s case that in addition to the assets shown in the balance sheet, he also had the fruit crop worth $80,000 referred to in his earlier affidavit.  The relevant passage in the summary of argument document is as follows:

5.… The Respondent Husband had significant assets at the commencement of cohabitation – at least $109,089.00 by his balance sheet, plus a standing [fruit] crop … worth $80000.00. … The wife’s initial contribution is negligible. 

33.Neither party appears to have been challenged in cross examination concerning their above-quoted affidavit evidence.  Such cross examination as there was of the husband on the issue of his property at marriage appears to have been limited to whether or not he had an interest in the land on which the fruit crop was grown (Transcript – 25/08/03 at p84).

34.We understood that for purposes of the appeal, Counsel for the husband was prepared to proceed on the basis of what had apparently been the husband’s case at trial, being that at marriage the husband had assets worth $109,000 (as shown in the balance sheet to 30 June 1990) together with a fruit crop worth $80,000.  It was submitted before us that particularly given the income-producing nature of these assets and their value when compared with the value of the wife’s assets at marriage (according to her own evidence) that this disparity in the parties’ initial assets should have been the subject of a finding by his Honour and that that finding should then have been taken into account in his assessment of the parties’ contributions.  If the husband was not to be given credit for this initial financial contribution, then, it was submitted, some explanation should have been provided in his Honour’s judgment.

35.We can find no reference in his Honour’s judgment to this relatively significant initial financial contribution by the husband, and we agree with the submissions made on behalf of the husband that, having regard to the evidence, it was a matter which should have been taken into account by his Honour.  In the absence of any reference by his Honour to the husband’s initial contribution, we cannot be certain that the husband has received credit for it.  This apparent oversight on the part of his Honour accordingly requires our intervention.  We understand that both Counsel accepted that it was a matter in relation to which we could re-exercise the discretion given the state of the evidence as we have outlined it above.  We will return to this matter in due course.

The wife’s expenditure of business monies

36.The second matter addressed by Counsel for the husband in his submissions in support of the appeal was the wife’s wrongful use of monies from the family business during the marriage.  This matter was explained by the accountant for the business in an affidavit filed on 10 February 2003 in the following way:

4.I was requested by [the husband] and [his solicitor] to investigate certain cheques written by [the wife] as to where they were claimed in the financials.  The cheques covered the period from the 8^th January 1993 to 24^th June 1999.  The cheques totalled an amount of $300,314.78.  What had allegedly been happening was that [the wife] had been writing amounts for expenses on the cheque butts (fertiliser, repairs), but was in fact cashing the cheques for herself.  This has meant that $226,977.28 has been incorrectly coded in the financials for the family trust.  Assuming that the profit distribution had gone to [H] Pty Ltd the tax rate would have been 36c/$, thus equating to a tax bill of $81,711.82.  Because this would be viewed as a deliberate evasion by the Tax Office, penalties would more than likely be 100% of tax evaded, plus interest would also be charged.  Therefore final tax assessment could range from $160,000.00 to $220,000.00.

37.In her principal affidavit filed on 24 February 2003, the wife admitted that for a period of about four years she had written cheques on “the Farm account” and “just spent the money”.  She was unable to say precisely what she spent the money on, but she maintained that it was spent “mainly” on herself and the children and that some was also spent on food for the family.  She had “no real idea of what amount of money she had spent” but thought it was “probably about $150,000.”  (See paragraphs 83-97 of her affidavit.)

38.The first reference made by his Honour to this matter in his judgment is as follows:

4.… There were difficulties between the parties from the inception of the marriage and unfortunately the wife, it may have been as a direct result of a depressive illness which she suffered from, spent an enormous of money of the parties (I say “of the parties” because some of it was hers) between 1993 and about 1999 at the latest.  On one occasion the husband had attempted, as I understand, to restrain the wife from spending such moneys by cutting up her credit card in front of the bank manager.  I think that was in the year 1995 or 1996.

5.Notwithstanding that, the wife has gone through something in excess of $300,000 in a period, at the maximum, of six years and probably more like four.  They are the amounts as set out.  There is an Exhibit setting out each cheque number and the amount for which the cheque was drawn.  Enormous amounts of money have been spent.  Admittedly the wife has said, and I think to a certain extent the husband does not totally disagree with this, that in fact some of those moneys were expended upon the family by way of groceries and things of that nature.

6.The wife attempts frankly, as I understand it, to explain her behaviour by saying that the husband was mean; that he gave her some $300 per week with which she had to pay for virtually everything, including medical expenses, school expenses, food, groceries, etcetera whilst the husband retained moneys that he took, quite properly, from the farming accounts.  He put it into savings accounts in his own name.  I am quite satisfied on the evidence before me that it is probably one of the reasons why these parties have got such an asset pool after a period of about nine years, that it is that the husband is, shall we say to use a neutral word, particularly careful with his money.

39.His Honour then proceeded to refer to the work which the husband had performed on his fruit farms and to the income which was accordingly generated which had permitted the husband to discharge significant liabilities.  His Honour next considered the difficult financial position in which the wife had found herself following separation.  Again in this context he referred to the issue of the wife’s expenditure during the marriage saying as follows:

10.… [Counsel] for the wife has submitted that, notwithstanding there may have been no direct contribution or indirect contribution by way of home maker, subsequent to separation the wife has lived hard.  And I must say that with respect to the respondent husband I think she has lived very hard.  She has been existing initially on a pension.  She subsequently received some $230 per week as and by way of child support on an assessable income, according to the husband, of $30,000 per year.  I commend his accountant.  It seemed that the total net for 2003 was $181,000.  The previous year it had been $712,000.  The wife was, I think, doing some odd jobs but not of much magnitude.  She was living hard.  She had three children.  They were having contact with their father but she had to feed them; she had to educate them; she had to send them to doctors on occasions and at one stage the husband even dropped, as he says, the payment (because there was some fight over the pension entitlements) to $163 per week.

11.I must say I am staggered that the husband, who professes such love and affection for his children, would not, having the income that he has, spend more moneys on his children.  A tape was put before me and I listened to it very briefly I must say.  On the tape there is once more the complaints by the wife (this is subsequent to separation and I will be touching upon the funeral at a later stage) that she was unable to get washing machines fixed; she was unable to get boots for Jacob to play soccer.  This, I think, is quite clearly corroborated by the evidence of not only herself, but of the husband when he thought that $163, I think he says on two occasions, was adequate for the maintenance of his children.  I think not.

12.The wife has complained that she was put in a similar position during marriage.  That may have been the case but it has fallen from … counsel for the husband that if the figures are correct, and he does not appear to suggest that the figures are not correct, she was expending something like $1600 per week over and above the allowance for housekeeping which she was getting from the husband.  I think that was probably drawings. 

13.The wife complains that she did not have any money to assist in her mother's funeral.  I think it was two days or a week subsequent to the funeral she drew two cheques for cash in excess of $3000.  This of course was perhaps at the height of her spending spree.

14.I have emphasised that because I think that the amount of the assets of the parties at June 1999 were $445,000.  This was at a time when the wife had virtually stopped spending money because the marriage had totally disintegrated at that stage and she no longer had the opportunity to do so.  $300,000 as against net assets of the parties in June 1999 of $445,000.  It is an enormous amount of money which has been expended and even if 50 per cent of that was expended directly upon clothing and things of that nature for the children, there still is a considerable amount which has been unexplained and she made, I thought, rather futile attempts to tell us how she has spent it.  For instance, buying maternity clothes when she was not pregnant, allegedly spending $2000 on preparing a child for school which I think even she recognises is impossible to do.

40.Ultimately, his Honour determined that the wife’s excessive expenditure, or indeed waste, of monies during the marriage required that her “indirect contribution to the acquisition of the assets” should be “severely discounted”.  The relevant paragraphs from his judgment are as follows:

16.Insofar as s.79 of the Act is concerned, this is a very difficult one. It has been said for many, many years that generally, all things being equal, we must look at those contributions direct and indirect during cohabitation as being 50/50. In this case I cannot find that at all. I really cannot find that. I am unfortunately unable to say that the wife's spending is other than (and I am mindful of using this word) a negative contribution. She in fact wasted moneys which should not have been wasted, and would have put the parties at separation in a much better financial position than what they were. Now, of course, the husband is in a particularly strong position.

17.Doing the best I can on that, and I am basically looking at the fact that the wife's conduct was such that her indirect contribution to the acquisition of the assets must be severely discounted, unfortunately I am going to find that she has only made a 25 per cent contribution to the property. 

41.It thus seems clear that his Honour considered that he was unable to find an equality of contribution by the parties up until separation because of the waste which the wife had committed, and that because of that matter he considered her contribution should be assessed at only 25 per cent.

42.Notwithstanding the fact that this Court has discouraged the use of the concept of “negative contribution” (see for example the judgment of the Full Court (Evatt CJ, Bulley and Nygh JJ) in Antmann and Antmann (1980) FLC 90-908 at 75,744), we consider that it was open to his Honour in the circumstances of this case to treat the wife’s wastage of funds in the way in which he did. Indeed, we have some difficulty in understanding the exact nature of the husband’s complaint about this aspect of his Honour’s decision – although we appreciate that it is the husband’s position (being a position with which we agree) that the wife’s contributions should have been further discounted in order to take account of the husband’s significant initial financial contribution relative to that of the wife.

43.As best as we can understand it, the husband’s case in relation to the wife’s waste of monies, is that at least for the purposes of determining the parties’ entitlements on account of their contributions, his Honour should have applied the 75 per cent to 25 per cent division on account of their contributions to the value of the parties’ assets at separation (being the amount of $445,000 referred to in paragraph 14 of his Honour’s judgment). 

44.However, we do not accept that his Honour was in error in not applying the percentage division based on the parties’ contributions to the value of the parties’ property at separation rather than at the date of the trial, if only for the reason that no such suggested approach seems to have been put to his Honour.  Moreover, we are not persuaded that on a re-exercise of the discretion it would be appropriate for us to adopt such an approach.  It would certainly be an unusual approach and not one justified in the circumstances of this case.

The parties’ post-separation contributions

45.The final matter argued before us on behalf of the husband was that the trial Judge had failed to have regard to the fact that the increased value of the parties’ property between the parties’ separation in 1999 and the trial in 2003, had to have been solely attributable to the husband’s work and expenditure, with no contribution being made by the wife to that increased value. 

46.We consider that this complaint by the husband is without substance.  His Honour recognised the wife’s lack of direct contribution to the increase in the value of the property in paragraph 9 of his judgment which needs to be read in conjunction with paragraph 8:

8.The husband has worked particularly hard, as I have already said.  In 1997, I think I am right in saying, one of the farms was virtually wiped out ….  He replanted and continued to make a considerable income.  The income figures are set out in the report of KPMG dated 22 August 2003 which is before me.  It shows that in June 1999 the liabilities of the parties were some $775,000, which included two large loans for the properties.  That was one from NAB for $421,000 and one from  QRAA of $240,000.  In June 2002, some two years later (and I must say that this was when the second farm was starting to come on line), he commenced planting on the second farm, which was a cane farm, with [fruit] in October 1997 and in October 1999 he was served his first crop.

9.In two years, as a result of the income from these farms, the loans to the NAB were paid off in full - $421,000.  The loan to QRAA was reduced by some $70,000 and by 2003 was reduced to $129,000.  The income of these two farms is quite enormous.  I think last year, 2003, it was something in excess of two million dollars for the sale of the [fruit].  It appears to me, unfortunately, that the wife is a bit on the horns of a dilemma.  She has made little or no direct or indirect contribution to the second farm because the parties separated in July 1999 and the second farm, whilst coming on line (the first crop as I have said was in October 1998), was by no means generating the income that it has been doing at this stage. 

47.It is clear that his Honour effectively set off the husband’s contribution to the property in the post-separation period against the limited financial support which the wife had received from the husband for the care of the children in that period.  We have already set out above paragraphs 10 and 11 of his Honour’s judgment where he canvassed this matter.  His Honour subsequently returned to this matter in paragraphs 18 and 19 of his judgment saying:

18.Subsequent to separation, of course, it is different.  As I have already touched upon, the wife is in bad shape.  I would have thought, for a person of the means of the husband, she has been insufficiently supported by the husband, particularly in relation to the children.

19.The wife has done it hard.  She has done the best she possibly can and I will be touching upon the residence claim by the husband in a short moment.  She has to be, I think, adequately compensated for that, particularly as the husband is in a financially stable position.  The wife is in a difficult financial position. 

48.As we have already said, it is clear to us that his Honour has effectively set off the husband’s contribution to the property post-separation against the wife’s responsibility for the children in that period with limited financial support for the children from the husband.   We consider that this course was not only open to his Honour, but also an appropriate course in the circumstances of the case.  We would also observe that the situation concerning the post-separation contributions of the parties provides good reason why it would not be appropriate to calculate the parties’ entitlements on account of their contributions by reference only to the value of the property available at separation as urged on us on behalf of the husband.

49.In summary, therefore, of the matters argued before us on behalf of the husband, we consider that there is substance only in the complaint concerning his Honour’s apparent failure to have regard to the husband’s relatively significant initial financial contribution.  As we indicated earlier, this is a matter which requires us to re-exercise the discretion.

Re-exercise of the discretion

50.Again, as earlier indicated, we understood that both parties would have us re-exercise the discretion if we considered we could do so.  We also did not understand either party to seek to put before us up-dating evidence in the event that we were to re-exercise discretion.

51.We will re-exercise the discretion on the basis of the property at the date of the trial, being $1,653,786.00, which we understand to be an agreed figure.  We have already explained why we would not be persuaded to use the value of the property at separation for the purposes of the assessment of the parties’ contributions based entitlements. 

52.So far as the parties’ contributions are concerned, we are of the view that on the evidence overall there would have been an assessment of equality were it not for the husband’s initial contribution which was in the order of $189,000 against the wife’s initial contribution which could only have been in the order of $10,000, and the wife’s wastage of at least some $150,000.  Having regard to these matters we consider that an assessment of 80 per cent to 20 per cent in the husband’s favour as being appropriate. 

53.We regard the husband’s post-separation contributions to the increase in the value of the property and the wife’s post-separation contributions to the care of the children as off-setting each other, or in order words as being absorbed in the finding of equality of contribution which is departed from only on account of the two matters mentioned. These post-separation contributions by the parties are not matters that have any relevance in our consideration of the s 75(2) matters which are concerned only with the future.

54.We see the principal relevant s 75(2) matters as being:

·       the wife’s responsibility for the three children (aged 12, 10 and 8);

·       the wife’s lack of qualifications and the consequent “huge disparity between her future earning capacity and that of the husband’s” (as found by his Honour in paragraph 15 of his judgment); and

·       the capital disparity which would result from the 80 per cent to 20 per cent division of property (which has a gross value of $1,653,786.00) in the husband’s favour on the basis of the parties’ respective contributions. 

55.We consider that these matters would warrant an adjustment of at least 20 per cent in the wife’s favour. 

56.Accordingly, like his Honour, we would award the wife 40 per cent of the parties’ gross property.  Thus we would not interfere with his Honour’s orders which we understood accurately reflected the agreed figures submitted to his Honour following the delivery of his judgment.  Accordingly we would dismiss the appeal. 

57.It is therefore unnecessary for us to hear from the wife in relation to her foreshadowed possible cross-appeal against the property orders.  As we do not understand any formal notice of cross-appeal to have been filed, it is unnecessary that we make a formal order dismissing that cross-appeal.  It will only be necessary for us to receive submissions in relation to the parties’ appeals and/or cross-appeal against the various costs orders, which we discussed at the commencement of this judgment, and also in relation to the costs of the husband’s appeal against the property settlement orders.  We will make the necessary directions for such written submissions.

Orders

58.For the above reasons, the orders we make are as follows:

1. That the appeal by the husband (as contained in notice of appeal NA 9 of 2004) against the orders with respect to property settlement made on 27 August 2003 by the Honourable Justice Bell be dismissed.

2. That the appeal by the wife (as contained in notice of appeal NA 62 of 2003) and the appeal by the husband (as contained in notice of appeal NA 9 of 2004) against the orders with respect to costs made by the Honourable Justice Bell on 17 October 2003 be the subject of further written submissions according to the schedule contained in order 4 of the these orders.

3. That the parties be at liberty to make written submissions in relation to the costs of and incidental to the appeal by the husband against the orders with respect to property settlement referred to in order 1 of these orders also according to the schedule contained in order 4 of these orders.

4. (a)       That the wife be at liberty to file and serve written submissions as referred to in orders 2 and 3 of these orders within 30 days of the date of these orders.

(b)That the husband be at liberty to file and serve written submissions as referred to in orders 2 and 3 of these orders within 60 days of the date of these orders.

(c)That within 90 days of the date of these orders each party file and serve any response that they may wish to make to the submissions referred to in paragraphs (a) and (b) of this order.

I certify that the 58 preceding paragraphs are a true copy of the reasons for judgment delivered by this Honourable Full Court.

Associate