T v L
[2006] WASCA 46
•21 MARCH 2006
"T" -v- "L" [2006] WASCA 46
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASCA 46 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | FUL:159/2004 | 16 NOVEMBER 2005 | |
| Coram: | MALCOLM CJ MCLURE JA MURRAY AJA | 21/03/06 | |
| 48 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | "T" "L" |
Catchwords: | Family law Property Division of assets following termination of a de facto relationship Alteration of property interests Whether global approach or asset-by-asset approach should be applied Failure to adopt a particular approach not an error of law |
Legislation: | Family Court Act 1997 (WA), s 205ZD(3), s 205ZG, s 211(3), s 211(5) Family Law Act 1975 (Cth), s 75(2), s 79 |
Case References: | House v The King (1936) 55 CLR 499 In the Marriage of Anastasio [1981] FLC 91-093 In the Marriage of Goodwin and Goodwin Alpe (1990) 14 Fam LR 801 In the Marriage of Hickey (2003) 30 Fam LR 355 In the Marriage of JA and SM Gill (1984) 9 Fam LR 969 In the Marriage of Lenehan (1987) 11 Fam LR 615 In the Marriage of McMahon (1995) 19 Fam LR 99 In the Marriage of Turnbull (1990) 102 FLR 443 In the Marriage of Zyk (1995) 128 FLR 28 K v P (1996) 16 WAR 39 Norbis v Norbis (1986) 161 CLR 513 United Engineering Workers' Union v Devanayagam [1968] AC 356 Gronow v Gronow (1979) 144 CLR 513 In the Marriage of Ferraro (1992) 111 FLR 124 Kearney v Roucek (1997) 21 Fam LR 537 King v Kemp (1996) 127 FLR 279 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : "T" -v- "L" [2006] WASCA 46 CORAM : MALCOLM CJ
- MCLURE JA
MURRAY AJA
- Appellant
AND
"L"
Respondent
ON APPEAL FROM:
For File No : FUL 159 of 2004
Jurisdiction : FAMILY COURT OF WESTERN AUSTRALIA
Coram : MARTIN J
Citation : "T" v "L"
Catchwords:
Family law - Property - Division of assets following termination of a de facto relationship - Alteration of property interests - Whether global approach or
(Page 2)
asset-by-asset approach should be applied - Failure to adopt a particular approach not an error of law
Legislation:
Family Court Act 1997 (WA), s 205ZD(3), s 205ZG, s 211(3), s 211(5)
Family Law Act 1975 (Cth), s 75(2), s 79
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant : Mr S J Jones
Respondent : Mr J B Hedges
Solicitors:
Appellant : Rouphael & Associates
Respondent : E N Stamatiou & Co
Case(s) referred to in judgment(s):
House v The King (1936) 55 CLR 499
In the Marriage of Anastasio [1981] FLC 91-093
In the Marriage of Goodwin and Goodwin Alpe (1990) 14 Fam LR 801
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of JA and SM Gill (1984) 9 Fam LR 969
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of McMahon (1995) 19 Fam LR 99
In the Marriage of Turnbull (1990) 102 FLR 443
In the Marriage of Zyk (1995) 128 FLR 28
K v P (1996) 16 WAR 39
Norbis v Norbis (1986) 161 CLR 513
United Engineering Workers' Union v Devanayagam [1968] AC 356
(Page 3)
- </CRJ>
Case(s) also cited:
Gronow v Gronow (1979) 144 CLR 513
In the Marriage of Ferraro (1992) 111 FLR 124
Kearney v Roucek (1997) 21 Fam LR 537
King v Kemp (1996) 127 FLR 279
(Page 4)
1 MALCOLM CJ: This is an appeal against a judgment dated 2 September 2004 of the Family Court of Western Australia in its non-federal jurisdiction by way of a distribution of property between the appellant and the respondent. The appellant was the respondent's de facto husband and the parties had been in a de facto relationship which had broken down.
2 An appeal lies to the Court of Appeal from such a judgment pursuant to s 211(3) of the Family Court Act 1997 (WA) ("the WA Act") which provides that:
"In respect of the non-federal jurisdictions of the Family Court of Western Australia an appeal lies from a decree of the Family Court of Western Australia given in its original or appellate jurisdiction to the Court of Appeal and upon any such appeal the Court of Appeal may affirm, reverse, or vary the decree the subject of the appeal and may make such decree as, in the opinion of the Court of Appeal, ought to have been made in the first instance."
3 So far as I can ascertain, this is the first such appeal to come before the Court of Appeal or its predecessor, the Full Court.
4 The original ground of appeal was that:
"1. The learned Trial Judge erred by failing to adopt an asset by asset approach rather than the global approach having regard to:
(a) the short duration of the parties [sic] relationship;
(b) (with the exception of the property situate at 182 Bishopsgate Street Carlisle) the origin and nature of the [appellant's] assets and the respondents [sic] minimal contribution to them;
(c) the impact of the respondents [sic] ill-health which minimised her contribution as a home maker."
(Page 5)
- "The discretion of the learned trial Judge further miscarried in her adoption of a global approach by failing to properly consider the respondent's disposition of the sum of $25,550.00."
6 It was made clear by counsel for the appellant that this additional ground involved an error of fact in respect of the adoption of the global approach. An objection to the amendment by the respondent was overruled on the ground that notice of the contention of the point in the ground was given prior to the hearing, counsel for the respondent was prepared to meet it, and the error, if any, was insignificant. The amendment was allowed on the basis that there was no real prejudice as a result of the amendment.
7 Section 211(5) of the WA Act provides that appeals to the Court of Appeal are to be made in the manner and within the time prescribed by the Rules of Court. The appeal comes to the Court of Appeal because it involves the exercise of jurisdiction in respect of persons in a de facto relationship pursuant to the provisions of Part 5A of the WA Act.
8 The issues for determination in the Family Court, as identified by the learned trial Judge, were:
- (a) whether in the circumstances, the Court should adopt an asset-by-asset approach or a global approach to the financial contribution of the parties;
- (b) the making of an assessment of the financial and non-financial contributions each party had made to the relationship during the relationship and, in particular, with respect to the Carlisle property; and
- (c) whether there should be an adjustment for s 205ZD(3) factors; and
- (d) what would be a just and equitable division of property between the parties.
9 As at September 2004 when the judgment of the Family Court was delivered, the parties had been separated for over one year. For convenience, I will refer to the de facto husband as "the appellant" and the de facto wife as "the respondent".
10 The learned Judge summarised the issues before the Court in paras [1] - [2] as follows:
(Page 6)
- "The issues before the Court are competing applications for property settlement, the applicant filing a Form 3 application on 23 May 2003, to which the respondent filed a response on 30 May 2003. At trial, the applicant proposed to pay the respondent the sum of $200,000, but the respondent be responsible for payment of the mortgage on 182 Bishopsgate Street. This was $51,000 at separation, but by trial was $104,000. The parties were to otherwise retain their respective assets. In his affidavit of evidence in chief, the applicant had proposed to pay the respondent $300,000, on the basis she was responsible for the Bishopsgate Street mortgage.
The respondent considered purchasing the applicant's interest in the property, but eventually accepted it was not practicable for her to do so. She sought that the applicant pay her $320,000 and she then transfer the property at 182 and 182A Bishopsgate Street to the applicant, with the applicant to be responsible for the mortgage on the property to about $65,000, and provide her with indemnities. She would be responsible for the balance on the mortgage of $39,000 some of which was incurred to meet her legal fees. The parties would otherwise retain their respective assets, but the respondent would deliver a number of items to the applicant. She sought the right to stay in the home for three months while she sought alternate accommodation."
11 On 2 September 2004, the learned Judge made the following orders:
1. Within 42 days, the applicant pay to the respondent the sum of $260,000.
2. Upon payment of this sum the respondent transfer to the applicant her right, title and interest in the property at 182 and 182A Bishopsgate Street, Carlisle, with the applicant to indemnify the respondent with respect to liability on the mortgage to $104,000 and with the respondent to meet any balance owing.
3. The respondent vacate the property within 10 days after payment of this sum.
4. The parties otherwise retain their respective assets and superannuation entitlements.
(Page 7)
- 5. There be liberty to apply in relation to implementation of these orders, and with respect to the division of furniture.
6. The proceedings otherwise stand adjourned to 11 am, Thursday, 16 September 2004 in relation to any argument as to costs.
7. The applications otherwise be dismissed.
History of the relationship
12 The parties were previously married from 1971 to 1983. Soon after they separated, they agreed on a property settlement and then divorced. Under the property settlement, the respondent received $20,000 for her interest in the former matrimonial home. They recommenced living together in January 2000, but separated again on 10 April 2003. The parties have two children, both in their thirties.
13 Following the divorce, the respondent remarried and had two children, twin girls who were aged 19 at the time of the proceedings. They were then living with the respondent. The respondent separated from her second husband in 1992.
14 The appellant and the respondent subsequently met on Father's Day in 1999 and began meeting socially after that. They commenced a de facto relationship in January 2000 when the appellant commenced sleeping at the respondent's house. At the same time, he went regularly to his house to feed the cat and collect his mail, etcetera. The learned Judge found that the parties lived in a de facto relationship for just over three years until they separated on 10 April 2003.
15 When cohabitation commenced, the appellant was engaged in a business known as Welshpool Demolition, a company he established in 1986. In September 2002, the business was sold to his son for $100,000 and since April 2003, the appellant had worked full-time as a bricklayer. At the time of the trial, the son had paid $35,000 of the purchase price, but still owed $65,000 which he was paying at the rate of about $400 per week. The respondent was a sales assistant who worked on a casual basis.
16 At the beginning of the relationship, the appellant moved into the respondent's home at 401 Alexander Drive, Dianella. He paid the respondent $50 per week for board and later paid for the lawn mowing, gardening and private health insurance. He also contributed to the
(Page 8)
- payment of some other bills. The respondent paid her mortgages and general household expenses, such as groceries.
17 When the de facto relationship commenced, the respondent had been working as a real estate agent. Subsequently, she suffered health problems which impacted upon her earning capacity. Her evidence was that in January 2000, her health seriously deteriorated with the result that she was sleeping 15 – 16 hours a day. In June 2000, she started to receive sickness benefits at the rate of $3000 per month under an insurance policy which she had taken out in October 1999. These continued until December 2001.
18 In the meantime, the respondent purchased a home on a large subdivided block comprising two titles at 182 and 182A Bishopsgate Street, Carlisle for $151,000 financed by taking out a mortgage of $150,000. The parties intended to renovate the original dwelling at the front and rent it out and build a second dwelling on the rear block, in which they would reside. The appellant had the skills and resources to build a house at minimum cost. He had many friends in the construction business who would be able to "do favours" for him, so that he could obtain labour at a reduced cost. It was planned that they would then go travelling around Australia and the twin girls would find it easier to maintain the property on their own.
19 The parties rented out the front property at 182 Bishopsgate Street to a friend of the appellant. The friend lived there at a reduced rent in return for maintaining the property and assisting with the renovating of the house. In the meantime, the parties resided at the respondent's home in Dianella until late September 2002, when they moved into the rear property at Bishopsgate Street, which still required some additional work before completion.
20 When the parties separated in April 2003, the appellant left the home. The respondent said that the separation was a result of the appellant's poor conduct and the fact that he wanted to travel around Australia, but she was not prepared to leave the twins. She was, as the learned Judge found, "clearly unhappy that the [appellant had] repartnered".
21 The respondent continued to reside in the rear property at Bishopsgate Street. The front property was unoccupied and subject to a council work order because of the presence of asbestos and other work which was needed prior to further occupation.
(Page 9)
22 In the meantime, the property at 401 Alexander Drive, Dianella and a unit owned by the respondent, were both sold during the relationship and the proceeds used to reduce the mortgage debt on Bishopsgate Street. The appellant had several other properties which he owned prior to the relationship and which he had maintained during the relationship. At the time of the trial, he lived in a new de facto relationship in accommodation which he did not own.
The preferred approach of the Family Court
23 Section 205ZG of the WA Act provides that in proceedings with respect to the property of de facto partners or either of them, the Court may make such order as it considers appropriate altering the interests of the parties in property. The Court however is directed not to make an order unless it is satisfied, in all the circumstances, that it is just and equitable to do so.
24 As the learned Judge noted in par [22], the legislative provisions are virtually identical to the like provisions in relation to applications for settlement of property between parties to a marriage. In this case, it was not suggested to the trial Judge that the approach should be any different from that had the parties remarried, and the proceedings brought under the Family Law Act1975 (Cth). In the case of In the Marriage of Hickey (2003) 30 Fam LR 355 at [39] Nicholson CJ, Ellis and O'Ryan JJ said that:
"The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, the court should consider
(Page 10)
- the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case."
25 The relevant provisions are s 205ZG(4) of the WA Act and the equivalent of s 75(2) of the Family Law Act being s 205ZD(3).
Contributions – s 205ZG(4)(a), (b) and (c)
26 The learned Judge noted that the appellant had estimated that Bishopsgate Street was worth $480,000 at the time of separation, but the value at the date of trial was agreed at $425,000. It was concluded that the respondent's estimate of value at that time of $380,000 was more likely to be correct. The learned Judge found that, at the date of separation, the values of the assets and liabilities of the parties were as follows:
Applicant |
| |
| (E)380,000 | |
| 470,000 | |
| 180,000 | |
| 80,000 | |
| (E)50,000 | (E)6,000 |
| (E)35,000 | |
| 20,000 | |
| 15,000 | |
| 2,000 | |
| 3,000 | |
| 2,000 | 5,000 |
| 1,250 | 2,500 |
| 51,000 | 15,000 |
| 17,000 | 5,000 |
(Page 11)
| |
| 136,000 |
| 51,000 |
| 2,000 |
775,250 | 375,500 |
27 The learned Judge noted that the assets and liabilities of the parties had changed slightly by the time of trial. In July 2003, the appellant acquired an interest in another property at 79 Henry Street, Cannington. He sold his shares on 27 August 2003 for $57,725 to acquire the Cannington property. This was valued at $50,000. The venture was a property development syndicate of which he was one of five members. He also purchased 2/121 Brighton Road, Rivervale, for $175,000 in August 2003, borrowing $185,000 for the purchase.
28 The learned Judge also noted that the appellant's evidence, supported by a valuer, a Mr Kevin Eaton, was that the current replacement value of the three-bedroom, two bathroom unit at the rear of the Bishopsgate Street property was $200,000. It was agreed, however that the block value of the whole Bishopsgate Street property was $295,000 so that, since the total value was agreed at $425,000, the rear property would add no more than $130,000 to the value of the property, even including no value for the building on the front of the property.
29 At the trial, the parties ultimately agreed that the superannuation of the parties should be treated as an asset, although the superannuation amendments to the Family Law Act did not apply to applications under the WA Act. It was agreed ultimately that the appellant's jewellery should be included at $1250.
30 In the result, the learned Judge found that the actual asset position and values were as set out in the following table:
Applicant | Respondent |
| 515,000 |
(Page 12)
| 180,000 | |
| 425,000 | |
| 175,000 | |
| 50,000 | |
| 65,000 | |
| 30,000 | |
| 16,500 | |
| 11,000 | |
| 2,000 | 5,000 |
| 1,250 | 2,500 |
| 51,000 | 15,000 |
| 900 | 6,000(E) |
| 26,000 | |
| 2,000 | |
| 3,000 | |
| 1,117,650 | 464,500 |
| ||
| 104,000 | |
| 136,000 | |
| 185,000 | |
321,000 | 104,000 | |
| 796,650 | 360,500 |
31 It followed that the total assets available for division at the time of trial were $1,157,150.
32 The learned Judge also commented in pars [33] to [35] of her reasons that:
(Page 13)
- "33. The applicant has claimed, in a letter from his accountant at the conclusion of the proceedings, that he has a capital gains tax liability for the portion of the sale proceeds of his business allocated to goodwill, which was $27,460. However, there was no evidence as to what his liability would be, nor any explanation as to why it is now being raised, in fact, and in these proceedings, when the business was sold in 2002. Apparently, the figure had only just been provided. I have therefore only included this as a possible liability in considering s 205ZD(3) factors.
34. To trial, the applicant had incurred legal fees of $17,152, of which apparently none had been paid, and expected to incur counsel's fees of up to a further $5000. The respondent had incurred fees of $16,829 and she had funded these fees by drawing on the mortgage.
35. Therefore, the applicant will have legal fees plus some tax to pay, and the respondent will probably have some further legal fees, and possibly a debt for the increased mortgage since separation, depending on my conclusion on this issue."
33 Section 205ZG of the WA Act, which deals with alteration of property interests, is in substantially the same terms as those in s 79 of the Family Law Act, to parties to a marriage, namely:
"(1) In proceedings with respect to the property of de facto partners, or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the partners to make, for the benefit of either or both of the partners or a child of the de facto relationship, such settlement or transfer of property as the court determines.
…
(3) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(Page 14)
- (4) In considering what order (if any) should be made under this section in proceedings with respect to any property of de facto partners, or either of them, the court must take into account –
(a) the financial contribution made directly or indirectly by or on behalf of a de facto partner to the de facto relationship or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the de facto partners, or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them;
…
(c) the contribution made by a de facto partner to the welfare of the family constituted by the de facto partners and any children of the de facto partners, including any contribution made in the capacity of homemaker or parent … "
35 The trial Judge in Norbis v Norbis (supra) adopted an asset-by-asset approach rather than a global approach to the assessment of the value of the parties' assets and made orders varying the interests of the parties in the subject properties. The Full Court of the Family Court set aside the order on the ground that the trial Judge's failure to adopt a global approach was an error in law justifying the fresh exercise of the discretion by the appellate court. The High Court held on appeal that, when a Court assesses the entitlement to property of the parties to a marriage pursuant
(Page 15)
- to s 79, it was not obliged to adopt either a global approach or an asset-by-asset approach to the exclusion of the other. Failure to follow a global approach did not amount to an error in law.
36 Mason and Deane JJ noted that it was not disputed that an appeal such as this required the appellate court to apply the principles expressed long ago in House v The King (1936) 55 CLR 499 at 504 – 505, namely:
"It is not enough that the Judges composing the appellate court consider that, if they had been in the position of the primary Judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the Judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary Judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred."
37 After quoting that passage, their Honours went on to say at 518:
"The sense in which the terms 'discretion' and 'principle' are used in these remarks needs some explanation. 'Discretion' signifies a number of legal concepts: see, eg, the discussion in Pattenden, The Judge, Discretion, and the Criminal Trial (1982), pp 3 - 10. Here the order is discretionary because it depends on the application of a very general standard – what is 'just and equitable' – which calls for an overall assessment in the light of the factors mentioned in s. 79(4), each of which in turn calls for an assessment of circumstances. Because these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, the making of the order involves the exercise of a judicial discretion. The contrast is with an
(Page 16)
- order the making of which is dictated by the application of a fixed rule to the facts on which its operation depends."
38 Their Honours went on to make the point that the principles enunciated in House v The King (supra) were fashioned with a close eye on the characteristics of a discretionary order in the sense their Honours outlined. It is a matter for the Courts to develop rules or guidelines affecting the exercise of discretion on the basis of the development of well-settled principles: United Engineering Workers' Union v Devanayagam [1968] AC 356 at 384 per Lords Guest and Devlin.
39 In Norbis v Norbis (supra), Mason and Deane JJ said in this context at 519 – 520:
"The point of preserving the width of the discretion which Parliament has created is that it maximises the possibility of doing justice in every case. But the need for consistency in judicial adjudication, which is the antithesis of arbitrary and capricious decision-making, provides an important countervailing consideration supporting the giving of guidance by appellate courts, whether in the form of principles or guidelines. The tension between the two considerations, each of fundamental importance in family law, has inevitably led to a near dilemma for the Full Court of the Family Court. To avoid the risk of inconsistency and arbitrariness, which is inherent in a system of relief involving a complex of discretionary assessments and judgments, the Full Court, as a specialist appellate court with unique experience in the field of family law in this country, should give guidance as to the manner in which these assessments and judgments are to be made. Yet guidance must be given in a way that preserves, so far as it is possible to do so, the capacity of the Family Court to do justice according to the needs of the individual case, whatever its complications may be. Reconciliation of these goals suggest that in most, if not all, cases the Full Court of the Family Court should give guidance in the form of guidelines rather than binding principles of law."
40 In Norbis v Norbis (supra), the High Court concluded that the Full Court had intervened on the footing that the trial Judge erred in law in failing to apply the global approach rather than the asset-by-asset approach and that this failure justified a fresh exercise of the discretion by the Full Court.
(Page 17)
41 Mason and Deane JJ went on to say in Norbis v Norbis (supra) at 523:
"Although it is natural to assess financial contributions under s. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of the parties' property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an 'asset-by-asset' basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient. … In saying this we are not to be understood as denying the legitimacy of the trial Judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets. It is difficult to conceive how the trial Judge in many cases could otherwise take account of such contributions as he is required by s. 79(4)(a) of the Act. In this respect we agree with the comment of Nygh J in G. and G. [In the Marriage of JA and SM Gill (1984) 9 Fam LR 969; [1984] FLC 91 - 582 at 628] that, although mathematical precision is certainly not required, there is ordinarily a need to know the circumstances in which assets were acquired and the general extent of each party's contribution to them."
42 In the present case, her Honour, the trial Judge, noted that the asset-by-asset approach had been used in cases concerning short marriages and went on to say that it was significant in this case that the respondent used her assets to acquire the Bishopsgate property. She sold her Dianella home and Joondana property and used the proceeds to reduce the mortgage debt on the Bishopsgate Street property. As a result, she no longer had any substantial assets apart from the Bishopsgate property. It was also relevant that the appellant lived for much of the duration of the relationship at the respondent's home in Dianella. As a result, he was able to rent out his other properties and essentially keep them separate from the respondent. They then both moved into the Bishopsgate property and the respondent was responsible for the mortgage. Although it was accepted that the respondent made minimal contributions to some of the appellant's other property, an asset-by-asset approach was regarded by the learned
(Page 18)
- Judge as making it difficult to give credit for the respondent's "unchallenged contributions as a homemaker".
43 It was in these circumstances that the learned Judge decided to adopt a global approach to the determination of the respective contributions of the parties. It is this conclusion which is challenged by the grounds of appeal.
44 Both parties owned significant assets at the time of commencement of cohabitation. The appellant owned the business of Welshpool Demolition and an unencumbered property in Como at 89 Birdwood Avenue in the name of his company Tonbril Pty Ltd. He estimated this property was valued at approximately $400,000 as at June 2000. There were two houses on the property which were unencumbered. The appellant acquired the property in 1988 and built on the rear of it in 1995. The front home had been rented since 1996 and the rear property since 2000. The appellant also owned a unit at 3/178 Star Street, Carlisle, which he had purchased in 1999 for $180,000, borrowing $200,000 to acquire the property, which included a loan of $50,000 for a truck for use in his business. He had a caravan valued at $37,000 purchased in March 2000 and a Nissan Patrol vehicle he valued at $25,000. It had been purchased new in 1994 for $52,000. He had furniture and contents valued at $5000. He also had his business then estimated to be worth $100,000 and superannuation then worth $50,000. He had shares estimated to be worth $53,798, personal effects and superannuation. He had total liabilities of $196,000. He estimated the value of this property, less his liabilities, which included the mortgage over the Carlisle property, was $659,798. The respondent estimated his net assets as being about $542,800. A significant difference was that the respondent estimated the value (at January 2000) of the property at 89 Birdwood Avenue, Como, at $330,000. That property had an agreed value of $515,000 at the time of the hearing. In this context, the learned Judge noted that neither party had adduced any valuation evidence regarding the value of that property at that time.
45 The learned Judge found that the respondent also owned considerable assets at the time of cohabitation. The respondent owned her home at Dianella which she estimated was worth $213,500 and an investment property in Joondana which was worth $71,000. These were found to be reasonable estimates given their sale prices not long afterwards. The respondent estimated her total liabilities were then $167,793. She also had shares, jewellery, a small amount of superannuation, personal effects and a motor vehicle. The respondent
(Page 19)
- estimated she had assets totalling $154,000 in her affidavit, although in her Papers for the Judge she said her interest in real property totalled about $150,000. The appellant estimated her assets were worth about $152,000.
46 On the parties' estimates, the appellant claimed that the respondent's initial contribution was about 20 per cent and the respondent claimed, on her own evidence, that it was about 22 per cent. As to financial contributions during the relationship, the appellant was self-employed in his company, Welshpool Demolition, until he sold his business to his son. From May 2000, he earned rent from the Como property. His earnings were used to pay for telephone bills and utilities and for some of the time, while the parties were residing at Dianella, the appellant paid the respondent $50 per week. The appellant paid for lawnmowing and gardening. He also paid for outings and provided the caravan in which the parties stayed on several holidays in Western Australia. He was solely responsible for paying the mortgages on his Star Street property and the truck loan. He also used his income for the construction and renovations to the Bishopsgate properties. The respondent was employed for some part of the relationship. When the parties first started living together, she was employed as a real estate consultant, earning a modest income. She also made a financial contribution in that she received sickness insurance benefits of $3000 per month from June 2000 to September 2001.
47 In about August 2001, she started helping the appellant with his books. In November 2001, she began formally working for the appellant's firm as a book-keeper. She was paid $225 per week gross. This was for about 15 hours per week. From her income, she purchased the groceries and paid household bills and her mortgages on the Dianella property, the Joondana property and, later, the Bishopsgate property.
48 The respondent made a substantial financial contribution to the Bishopsgate Street property. She used equity from her own properties to acquire the Bishopsgate Street property and it was her responsibility to pay the mortgage. The tenant paid her $560 per month rent from August 2000 to May 2003. She had purchased the Bishopsgate Street property on 28 June 2000 for $151,000. For this purpose, she borrowed $150,000 from the Challenge Bank. There is still a substantial amount of this debt owing and the amount of the mortgage had increased since separation. The respondent had an obligation to pay $885 per month, but without rent from the front property since August 2003, she has not been able to meet that obligation.
(Page 20)
49 In mid December 2002, the respondent sold her Dianella home for $253,500. After discharging the mortgage and paying fees, she was left with $128,177. She used this money to reduce the amount of the mortgage on 182 Bishopsgate Street by $118,177. The balance of the money discharged a credit card debt. On 18 December 2001, she sold her unit in Joondana for $81,000. After discharging the mortgage and paying fees, she was left with $25,550. The learned Judge concluded that it was not clear what she did with those proceeds, but she believed that the respondent used it to pay bills and contribute towards the construction of the new home.
50 The learned Judge found that the appellant made the overwhelming financial contribution to the construction of the property at 182A Bishopsgate Street, and the renovations to 182 Bishopsgate Street. He paid for most of the materials in cash or through his business, and used stored materials that he had acquired from former demolition sites. He estimated the value of the work done at 182A Bishopsgate Street was $159,950. He had receipts for only $70,000 of that amount. Many items in his list were his estimates of market values of work he had done and goods provided by him, rather than actual financial expenditure. There is some overlap between this list and items purchased by the respondent, for which she was reimbursed.
51 In relation to the front property at Bishopsgate Street, the appellant paid $179 for a new television antenna, $400 for an electrician to do rewiring and $1706 for the costs of the appeal against a council ruling regarding a double carport. He accepted that the respondent paid for half of the new curtains and clothesline and plants for the front gardens, and that the respondent also paid $1000 for a building licence.
52 The respondent provided an extensive list of items purchased on her credit card and used in connection with the construction of Bishopsgate Street. The total of these contributions was $48,000. When cross-examined, she accepted that the appellant reimbursed her for a substantial amount of those expenses in cash and was prepared to accept that the amount reimbursed was between $25,000 and $30,000, so that she would have contributed between $18,000 and $23,000. The parties had agreed to make the purchases on the respondent's credit card to accumulate frequent flyer points.
53 Against this background, the learned Judge concluded that:
(Page 21)
- "The position was quite uncertain so it is impossible for me to reach a conclusion on the evidence as to the actual financial cost of the building and renovations, to the [appellant], nor to the respondent. The cost to the respondent would appear to be the equity of her Dianella home plus a minimum of another $8000 according to counsel for the [appellant], and the respondent accepted no more than $18,000 to $23,000."
54 Following the first property settlement between the parties, the respondent, as she readily admitted, had nothing to do with assets the appellant had acquired after the parties resumed cohabitation. She did not know where 79 Henry Street, East Cannington was. She had nothing to do with the property unit 12, 2 Brighton Road in Rivervale. She had "absolutely nothing" to do with another property at unit 3, 178 Star Street, Carlisle.
55 It was against this background that the appellant contended that the asset-by-asset approach should have been adopted, rather than a global approach. It was contended that the relevant consideration in the present context was the contention that, because he was able to live in the respondent's home, this meant that the respondent made a contribution as a homemaker. It was submitted on behalf of the appellant that the homemaking contribution of the respondent was minimal "at best".
56 It was in this context that the Family Court was required to ascertain the property of the parties, value the relevant properties and exercise the discretion under s 205ZG(4) of the WA Act to which I have already referred.
57 It has been accepted that while the discretion conferred by s 205ZG(1) of the WA Act is very wide, it is not totally at large given the operation of s 205ZG(4) and the matters which the Court is required to take into account.
58 Section 205ZG(4)(e) requires the Court to take into account the additional matters stated in s 205ZD(3) so far as they are relevant. Finally, s 205ZG(3) requires a Court not to make a property order unless it considers that in all the circumstances it is just and equitable to do so.
Non-financial contributions – s 205ZG(4)(b)
59 The learned Judge concluded in par [60] that the appellant had made "by far the greater proportion of non-financial contributions". The appellant estimated the market value of the work he did as being $13,785
(Page 22)
- to the property at the front of Bishopsgate Street, which included stripping out the kitchen, sanding, sealing and varnishing floors, doing painting and tiling, taking out some windows and replacing them, replacing a leadlight door, building two sliding doors on the verandah and building a new storeroom and side fence, digging footings and pouring concrete and supplying and laying paving bricks, including bricks for a two car bay hardstand and letterbox. Garden and lawn was planted. As a result of his own skills and calling on "favours lent" by his friends, the appellant enabled much of the new dwelling to be established and for the original dwelling to be renovated.
60 One Dennis Brunning helped to draw the plans and other friends, Daryl Caddy and Robert Blacklett, helped in constructing the roof. They say they are owed modest amounts for their services.
61 The appellant worked part-time on the houses during the week, in between his work in connection with his demolition business. He would also work on the properties most weekends.
62 The learned Judge accepted that the respondent helped in limited ways on weekends. She chose the colour of the paint and tiles for the original Bishopsgate Street house. For the new house, she made the majority of the phone calls to obtain quotations, select furnishings, paint colours and tiles. She also carried out some painting, gardening, shifting bricks and levelling sand.
63 The appellant helped prepare the respondent's Dianella property for sale shortly prior to the sale. He relayed some brickpaving, reconstituted the soak well, painted the outside of the home and installed a gate. The respondent also carried out maintenance on the property, including painting. The respondent made some but, as the learned Judge found, minimal, contribution to painting and gardening at the appellant's home in Como, when they were readying the property for occupation by interstate visitors who were to attend a joint 50th birthday party in May 2000.
64 The respondent also gave evidence that she made a non-financial contribution in assisting the appellant with the book-keeping for his demolition business. She was "officially" unpaid in this role for approximately 15 months. In cross-examination, the appellant gave evidence that he was paying her in cash "off the books" so as to not interfere with her sickness benefits. The dates that the respondent asserted that she was working voluntarily coincide with the dates she was receiving sickness benefits. The learned Judge concluded that there was
(Page 23)
- no significance in this as the respondent was, in any event, working and contributing, and whether directly or indirectly making a contribution, as best she could. As her Honour commented:
"Even if it was a rort, which I do not accept, she was contributing her sickness insurance benefits."
65 Her Honour also observed at par [68] that:
"It was not disputed that the respondent performed almost all domestic duties for the duration of the relationship including cooking, gardening, washing, ironing and cleaning, despite her ill health."
66 Consequently, she had made a much greater contribution than the appellant in this respect.
Conclusions of the trial Judge – s 205ZG(4)(a), (b) and (c)
67 At pars [69] - [71], the learned Judge expressed her conclusions regarding the parties' respective contributions under s 205ZG(4)(a), (b) and (c) as follows:
"The parties' respective positions on contributions (and s 205ZD(3) factors) was not really consistent with the division actually proposed. For the respondent it was said that she should be entitled to close to 30% on contribution, and the applicant said her entitlement was more like between 15% and 20%. He said that the respondent contributed 35% to the Bishopsgate Street property and the [appellant] the balance, and the respondent had made no contribution to his other properties.
On any view of the evidence, the respondent's initial contribution was at least 20%, and probably very slightly more, depending mainly on the value of the [appellant's] Como property. Both parties made substantial contributions during the relationship, [the appellant] financially through his income, and indirectly, his provision of materials and the increase in the value of his assets and his work on the properties, particularly, the Bishopsgate Street property. The respondent made less financial contribution, and indirect contribution, but greater contribution as a homemaker. I have taken into account the fact that the respondent has been expected to bear the financial
(Page 24)
- responsibility for the mortgage on Bishopsgate Street since separation. The [appellant] has also incurred additional debt.
Having carefully considered the evidence in relation to the parties' contributions to the Bishopsgate Street property, I have concluded that the value of the respondent's contribution in this regard is more likely than not to be slightly higher than that of the [appellant]. However, having regard to the increase in the mortgage since separation, which was partly to pay her legal fees and some living expenses, but also to maintain the Bishopsgate Street mortgage, I have concluded that, overall, the parties have made contributions to the present total net asset pool as to 80% to the [appellant], and 20% to the respondent. As a cross check, 20% represents only 0.2% more than the proportion the net block value of Bishopsgate Street plus the respondent's other assets bear to the total asset pool."
Section 205ZD(3) factors
68 Her Honour was required by s 205ZG(4)(e) of the WA Act to take into account the matters referred to in s 205ZD(3) of the Act, so far as they were relevant, and adjust any distribution based on contribution to ensure that the division of property between the parties is just and equitable. In this context, the learned Judge noted that the second time around there had been a short relationship between the parties of just over three years. At the time of the hearing, the appellant was aged 54 and in good health. He was a self-employed bricklayer earning a gross income of $1470 per week. He expected to continue working as a bricklayer for some time. He had significant financial resources. He collected $420 per week rent from his Como properties as well as rent from properties in Cannington and Rivervale. He also received payments from his son for Welshpool Demolition of $400 per week. His financial statement stated his weekly income as $2220. He had superannuation benefits greater than those of the respondent, which he will be able to access in due course. He expected to continue to develop property and improve his financial position. He had no commitments to support anyone other than himself.
69 The respondent was also 54 years of age. She was a casual sales assistant. At the time of trial she was earning $565.50 per week in a full week working 29 hours. In the past, she had generally worked as a clerk or payroll officer at a care facility for a time. The learned Judge found she had an average earning capacity in the range of $25,000 to $30,000 per annum. She has had health problems and suffered from high blood
(Page 25)
- pressure, cholesterol, gastric reflux, depression and anaemia. The respondent had some obligation towards her 19-year-old twins, who were both studying for a Bachelor of Nursing degree. They worked on a casual basis. The respondent's evidence was that she did not receive financial assistance from the children's father for their education. She met some of their costs, totalling $281 per week.
70 At the time of the hearing in the Family Court, the appellant was cohabiting with one Janice Jones, who was self-sufficient and owned properties of her own. It was not suggested that her financial circumstances were relevant to the determination by the trial Judge. The appellant was able to share living expenses with a person of means. Neither party submitted that the appellant's relationship with Ms Jones had an impact on either parties' earning capacity.
Consideration of the merits
71 The learned Judge approached the matter on the basis that both parties were entitled to a reasonable standard of living. The respondent submitted that she should be entitled to an additional 5 per cent to 10 per cent on this account. The appellant submitted that there should be no adjustment. The learned Judge noted that, in the event that the property was divided on the basis of contributions, the appellant would receive property worth $925,720 and the respondent, property worth $231,430. The learned Judge went on to say in pars [84] – [88] that:
"I accept that it is a relevant consideration under s 205ZD(3)(o), that while both parties' expectations of the relationship were not met, it was the respondent who sold her home and investment unit, which represented all her real property, to enter into a venture which both parties supported. While the [appellant] invested his time and some resources and money into the Bishopsgate Street project, he was not as affected as the respondent by the agreed actions taken by the parties during the relationship. He conceded the respondent would probably not have sold her properties if she had known the relationship was not to continue. It is relevant that the respondent, if she wishes to purchase a home, will have to buy into a rising market, when the [appellant] has been able to retain all the property he had at the commencement of the relationship, plus acquire further property.
The [appellant] did not claim any contribution to the support of the respondent's twins.
(Page 26)
- Even though this has been a short relationship, having regard to the [appellant's] much better financial circumstances than the respondent and the background to the present position, I have determined it is just and equitable that a modest adjustment be made in this case for s 205ZD(3) factors, to take the total assets the respondent is to receive to nearly $300,000 which represents about 25.8% of the total asset pool. This would entail a percentage adjustment of 5.8% or an additional $68,070. In the event that I have underestimated the extent of the respondent's contributions overall, which is a possibility, given the unsatisfactory state of the evidence as to financial contributions to the Bishopsgate Street property, the adjustment may be less, but I am still satisfied that the overall division proposed is just and equitable in all the circumstances of the case.
A substantial sum, but not a large amount of the asset pool, as a percentage, is represented by the parties' superannuation entitlements, which the parties, and counsel, have agreed are regarded as an asset.
In the event that the property is divided on this basis, the [appellant] will receive assets worth $857,650 and the respondent assets worth $299,500."
72 The learned Judge pointed out in par [89] that if the property was divided on this basis, the appellant would be required to pay the respondent the sum of $260,000. She would retain other assets of a total value of $39,500 but have some liability for legal fees. The appellant would retain assets with a total value of $857,650 and have legal fees and probably some capital gains tax to meet.
73 It was conceded on behalf of the appellant that the judgment of the learned Judge contained no factual errors.
74 The background to the decision in Norbis v Norbis (supra) is clearly set out in the judgment of Nygh J in the case of In the Marriage of JA and SM Gill (1984) 9 Fam LR 969, to which Mason and Deane JJ referred to in their reasons at 522 - 523. Nygh J observed (at 981):
"At the moment the Family Court is divided between those who favour the so-called global approach and those, of whom I am one, who seek to achieve some degree of precision. In my view, despite what was said in [Norbis v Norbis (1983) 9 Fam LR 385], both approaches are legitimate unless the High Court
(Page 27)
- rules otherwise provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered and that those who favour the more precise approach do not mistake the trees for the forest, i.e. add up their individual items without standing back at the end to review the overall result in the light of the needs of the parties."
75 Mason and Deane JJ went on to say in Norbis v Norbis at 523 - 524 that:
"As a matter of construction of [the provisions], Nygh J is right in saying that the section imposes no obligation on the Family Court to pursue in relation to this issue either the global approach or the asset-by-asset approach to the exclusion of the other. We do not understand the Full Court in the present case to suggest otherwise. What the Full Court asserts is that the global approach is the only 'realistic', ie, convenient, means of arriving at the entitlements of the parties. Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases. The Family Court has rightly criticized 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 parties' financial contributions necessarily entails reference to particular assets in the manner already indicated."
76 Their Honours went on to say:
"It has not been suggested that there is any fundamental difference between the two competing approaches which we have considered, in the sense that one will yield more just and equitable entitlements than the other. The general preference which has been expressed for the global approach is not by reason by any notion that it is the only approach authorized by the Act, but by reason of considerations of convenience. Accordingly, quite apart from the fact that its status as a prescribed approach is that of a guideline and not that of a
(Page 28)
- principle of law, the application of the asset-by-asset approach does not of itself amount to an error of law.
It follows from what we have already said that the Full Court was not entitled to set aside the order made by the trial judge on the ground that he erred in law in failing to apply the global approach."
77 It was submitted on behalf of the appellant in the present case that in the context of short relationships, the asset-by-asset approach comes into its own because there is not necessarily a merging of assets.
78 It was also submitted on behalf of the appellant that while the learned Judge did consider the arrangement in respect of the Bishopsgate Street development, her Honour failed to consider the lack of contribution that the respondent may have made to the appellant's other properties and that the reality was that she had not made any meaningful contribution to those properties. She had not been involved in respect of their acquisition, conservation or improvement.
79 Counsel for the appellant submitted that the approach espoused by Nygh J in the case of In the Marriage of JA and SM Gill (supra) was the appropriate one for her Honour to take if she took the global approach, but her Honour did not and that, in itself, indicated error. This point, however, was not raised in the single ground of appeal, which was that the learned Judge should have taken an asset-by-asset approach, not that the learned Judge erred in her application of the global approach. Counsel for the appellant then clarified that his submission was that the learned Judge should have taken the asset-by-asset approach. Alternatively, it was submitted that in taking the global approach, her Honour did not do that properly. It was contended, however, that while her Honour had listed the parties' assets and liabilities, both at the time of the commencement of the relationship and as at the time of trial, having considered what the parties brought into the relationship, there was a further obligation to consider what the appellant and the respondent had respectively contributed.
80 It is clear that the appellant brought into the relationship substantial assets compared with those of the respondent. This is generally regarded as significant: cfIn the Marriage of Zyk (1995) 128 FLR 28 at 32 - 33. It may be accepted that in assessing domestic contributions in relation to marriages or relationships of a short duration, the Court will examine the respective contributions of both parties to a relationship more closely in the case of a comparatively short period of cohabitation than in the case of
(Page 29)
- a longer period of cohabitation: cfIn the Marriage of Goodwin and Goodwin Alpe (1990) 14 Fam LR 801.
81 In the Marriage of Turnbull(1990) 102 FLR 443, where cohabitation lasted for two years, there was one child of the marriage. The overwhelming financial contribution had been made by the husband, being some $5 million, compared to $10,601 made by the wife. The wife, however, had made a significant contribution as a wife and homemaker as well as labouring on the family farm and keeping the books of the partnership which resulted in a contribution being assessed at $125,000 or 2.5 per cent of the total asset pool and the award of a further adjustment of $150,000 for factors under s 75(2) of the Family Law Act, the equivalent of s 205ZD(3) of the WA Act.
82 In the case of In the Marriage of Anastasio [1981] FLC 91-093, the parties had married in October 1977 and separated in December 1978. The relationship lasted only 14 months. Their marriage was dissolved in June 1980. Throughout the marriage, the wife had worked and her earnings represented 22.78 per cent of the parties' total income. While the parties were married and still living together, a lottery ticket purchased by the husband in the name of "new home" resulted in the husband winning $60,000. On the wife's application under s 79 of the Family Law Act, it was held that a win in a lottery was no different to the acquisition of a block of land, or other asset purchased or acquired by the parties during the marriage with funds provided by either or both of them. The purchase of lottery tickets had been in furtherance of a joint and matrimonial purpose of buying a home. In that case, it was held that the lottery win should be distributed between the parties in the same proportion and in the same manner as other assets.
83 Given the shortness of a particular marriage, while a mathematical approach may not be appropriate for all property applications, the circumstances of that case (and particularly the shortness of the marriage) was such that each party should receive what he or she contributed directly to the marriage financially. In Anastasio it was held that the case should be decided having regard to the direct financial contributions of each of the parties to the marriage. As the wife's earnings during the marriage represented 22.78 per cent of the parties' total income, the wife should have an equivalent percentage of the parties' joint savings throughout the marriage, including the lottery win of $60,000 and a sum representing 22.78 per cent of the parties' total income being moneys she contributed by virtue of her employment during the marriage.
(Page 30)
84 Counsel for the appellant relied heavily on Anastasio for the proposition that in short relationships not involving children, the Family Court usually determines that a party should take out of a relationship what they put in financially and share in any capital gain that might have accrued to any joint asset. It was conceded on behalf of the appellant, however, that the particular discretion to assess contribution pursuant to one or other of the approaches was a very wide one. It has been recognised that in addition to adopting a global approach or an asset-by-asset approach, the circumstances may be such as to warrant a combination of the two approaches: see In the Marriage of Lenehan (1987) 11 Fam LR 615 at 626.
85 In any case, appropriate weight needs to be given to a discretionary judgment made in a specialist jurisdiction such as the Family Court: see K v P(1996) 16 WAR 39. In the case In the Marriage of Lenehan (supra), the Full Court of the Family Court of Australia said at 626:
"The judgments of the High Court in [Norbis v Norbis] demonstrate the very wide discretion which a trial judge has in the approach that he may adopt under s 79. In particular the judgments in that case discuss the 'global' and the 'asset by asset' approaches, and demonstrate that this is largely a matter for the trial judge to determine in the exercise of his discretion. However Norbis' case is not a carte blanche to adopt either view irrespective of the circumstances of the individual case. There are cases where one approach or the other is clearly appropriate and a failure by the trial judge to adopt that approach may demonstrate error. We think this is one such case. His Honour's initial approach of treating the parties' contributions to the home as separate from their contributions to the other (largely business) assets was, we think, a proper approach in the circumstances."
86 In the case of In the Marriage of Zyk (supra), the Full Court of the Family Court of Australia said at 32 - 33:
"Either approach is permissible, depending on the circumstances, but generally the global approach is to be preferred: see generally the discussion in Norbis v Norbis … and [In the Marriage ofLenehan].
The global approach enables the Court to assess the contributions aspect of the s 79 exercise in an overall way by
(Page 31)
- considering the parties' contributions to their property as a whole although factoring into that exercise the circumstance, if it be so, that they may have made varying contributions to the total property at trial or which formed part of the history of their property during the marriage. It is the generally preferred and the generally adopted approach. It enables a broad approach to be taken to the varying contributions of the parties over the years of their marriage and in particular it usually has the advantage of more easily dealing with and giving proper recognition to pars (b) and (c) contributions. However, where the contributions to the components of the total property are disparate, caution needs to be exercised in this approach and the overall conclusion tested against the requirement that the orders be 'just and equitable'. [In the Marriage of Lenehan] is an example of a case where difficulties arose for that reason.
The asset by asset approach enables the Court to assess separately the parties' contributions to particular assets or groups of assets. It is the less preferred approach largely because it can at times be an artificial exercise and also because it can create difficulties in the proper evaluation of pars (b) and (c) contributions. But there are a number of circumstances where it may be appropriate to do so, for example an inheritance received post separation, or where the financial relationship of the parties during the marriage was such that they treated some property as exclusively the property of one party to which the other party made no, or at least no par (a), contributions to it. It may be convenient in cases like that to treat that property separately rather than assess the overall contributions of the parties to the totality of their property.
However, the trial judge has a discretion as to which course to adopt and does so having regard to what appears more suitable to the circumstances of the particular case."
87 In the present case it is significant that the catalyst for the appellant to find the initial capital to acquire the property at Bishopsgate Street was obtained from the sale of the respondent's house. This enabled both parties to make an investment which would not otherwise have been possible and to provide both alternative accommodation for them as well as enabling them to proceed with the acquisition of other properties. The end result was that the appellant was able to retain the ownership of the other properties he had acquired.
(Page 32)
88 In my opinion, it has not been demonstrated that the learned Judge was in error in adopting a global approach rather than an asset-by-asset approach, notwithstanding the comparatively short duration of the relationship. It is conceded in ground 1(b) that the Bishopsgate Street property was one in which the respondent made a substantial contribution by way of the net proceeds of the sale of her Dianella property. It was conceded by the appellant in relation to the remaining particulars of ground 1, that the learned Judge made no factual error. For these reasons, I consider that ground 1 of the appeal has not been made out.
89 So far as ground 2 is concerned, the contention was that the discretion of the learned Judge further miscarried in respect of the adoption of the global approach by failing to consider the respondent's disposition of the sum of $25,550. While this may be so, I consider that this was justified by the circumstances. The Bishopsgate Street property acquisition was the subject of a significant contribution by the respondent by way of the sale of her house at Dianella, whereas the appellant's contribution was primarily by way of work and materials. In respect of the other properties at Como and Carlisle, they were in the context of assets which were combined into what was, in effect, a joint venture in property development.
90 These factors combined with the reasons already expressed, provided ample basis in the evidence to justify the conclusion reached by the learned trial Judge in the exercise of discretion. There was nothing put before the Court to demonstrate that the discretion miscarried.
91 For these reasons I would dismiss the appeal.
92 MCLURE JA: The appellant appeals from the decision of Martin J of the Family Court of Western Australia altering the property interests of the appellant and the respondent under s 205ZG of the Family Court Act 1997 (WA) ("FCA"). Section 205ZG is in Pt 5A of the FCA which deals with de facto relationships.
93 The appellant and the respondent were in a de facto relationship in the period from January 2000 to April 2003. Many years before the commencement of the de facto relationship, the parties had been married, had two children and then divorced. However, it was not suggested that the prior marriage had any relevance to the decision under appeal.
(Page 33)
94 The appellant and the respondent filed competing applications for property settlement under s 205ZG of the FCA. Section 205ZG(1) materially provides:
"In proceedings with respect to the property of de facto partners, or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the partners to make, for the benefit of either or both of the partners … , such settlement or transfer of property as the court determines."
95 The trial Judge concluded that the respondent was entitled to 25.8 per cent of the total net assets of the appellant and the respondent as at the time of trial. She made orders giving effect to that conclusion. The appellant relies on two grounds of appeal, one of which was added at the hearing of the appeal. The original ground of appeal states:
"The learned Trial Judge erred by failing to adopt an asset by asset approach rather than the global approach having regard to:
(a) the short duration of the parties relationship;
(b) (with the exception of the property situate at 182 Bishopsgate Street Carlisle) the origin and nature of the applicant's assets and the respondents minimal contribution to them;
(c) the impact of the respondents ill-health which minimised her contribution as a home maker."
96 By his second ground of appeal the appellant contends the trial Judge made an error of fact which vitiated the decision.
Statutory framework
97 The Court must not make an order under s 205ZG unless it is satisfied that, in all the circumstances, it is just and equitable to make the order: s 205ZG(3).
98 Section 205ZG(4) lists the matters the Court is required to take into account and materially provides:
(Page 34)
- "In considering what order (if any) should be made under this section in proceedings with respect to any property of de facto partners, or either of them, the court must take into account -
(a) the financial contribution made directly or indirectly by or on behalf of a de facto partner to the de facto relationship … to the acquisition, conservation or improvement of any of the property of the de facto partners, or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them;
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a de facto … to the acquisition, conservation or improvement of any of the property of the de facto partners or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them;
(c) the contribution made by a de facto partner to the welfare of the family constituted by the de facto partners … , including any contribution made in the capacity of homemaker …;
(d) …
(e) the matters referred to in section 205ZD(3) so far as they are relevant;
(f) …
(g) … "
99 Relevant matters referred to in s 205ZD(3) include:
"(a) the age and state of health of each of the de facto partners;
(Page 35)
- (b) the income, property and financial resources of each of the de facto partners and the physical and mental capacity of each of them for appropriate gainful employment;
(c) …
(d) commitments of each of the de facto partners that are necessary to enable the partner to support –
(i) himself or herself;
(e)-(i) …
(j) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration."
100 Section 205ZG of the FCA is in materially the same terms as s 79 of the Family Law Act 1975 (Cth) ("FLA") and s 205ZD(3) is in materially the same terms as s 75(2) of the FLA. It was accepted by both parties that the authorities concerning the approach to be taken to settlement of property between parties to a marriage also applied to settlement of property between de facto partners under s 205ZG of the FCA.
101 The trial Judge adopted what she referred to as the "global approach" to the determination of the contributions of the parties. This was described in In the Marriage ofHickey (2003) 30 Fam LR 355 at [39] as follows:
"The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the
(Page 36)
- parties established at step two. Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case."
102 The trial Judge followed each of these steps and concluded that the respondent should be awarded 25.8 per cent of the total asset pool of the appellant and the respondent at the time of trial.
Background and findings
103 The trial Judge considered the net asset position of the appellant and the respondent as at the commencement of the de facto relationship. The appellant owned his own business, Welshpool Demolition, an unencumbered property at 89 Birdwood Avenue, Como, a unit in Star Street, Carlisle, a truck, a caravan, a motor vehicle, superannuation, shares, furniture and personal effects. He estimated the net value of his assets at the commencement of the relationship at $659,798. The respondent estimated the appellant's net assets at that time as around $542,800, the difference being attributable to differing opinions as to the value of the Birdwood Avenue property.
104 The respondent also owned assets at the time of commencement of cohabitation. She owned her home at Dianella, an investment property in Joondanna, shares, jewellery, a motor vehicle, superannuation and personal effects. She estimated her net worth at around $150,000 - $154,000.
105 The appellant claimed the respondent's initial financial contribution to the total of the net assets was about 20 per cent. The respondent claimed it was about 22 per cent.
106 When the relationship commenced the appellant (indirectly) owned the Welshpool Demolition business which he sold to his son in September 2002. He then worked as a bricklayer. The respondent worked as a sales assistant on a casual basis. She became ill and in June 2000 commenced receiving sickness benefits under an insurance policy at the rate of $3000 per month until December 2001. She performed unpaid work for the appellant's business from August 2000 and became a paid employee of that business around November 2001.
107 At the commencement of the relationship, the appellant went to live with the respondent at her home in Dianella. The appellant rented out his Como premises in which he had been living. The appellant paid the respondent $50 per week for board and later paid for lawn mowing,
(Page 37)
- gardening, private health insurance and contributed to some other bills. The respondent paid the general household expenses.
108 In June 2000 the respondent purchased a house on a large block at 182 Bishopsgate Street, Carlisle ("Bishopsgate Street property") for $151,000 taking out a mortgage of $150,000. At all material times, the respondent paid the mortgage for the Bishopsgate Street property of some $885 per month. The appellant and the respondent intended to renovate the original dwelling at the front of the property (which remained 182 Bishopsgate Street) and rent it out, and to build a second dwelling on the rear block (which became 182A Bishopsgate Street), in which they would reside. The appellant had the skills, resources and contacts to build the house at a reduced cost.
109 The parties resided at the respondent's home in Dianella until September 2002 when they moved into the house that they constructed at 182A Bishopsgate Street. When the parties separated in April 2003, the appellant left that property and the respondent continued to reside there.
110 The parties rented out the front property, (182 Bishopsgate Street) to a friend of the appellant at a reduced rent in return for him maintaining and assisting with renovating the house. After the parties separated in 2003, the tenant vacated the front property which thereafter remained unoccupied because it was the subject of a council work order relating to asbestos.
111 On 18 December 2001, the respondent sold her unit in Joondanna and was left with a surplus of $25,550. The trial Judge said "[i]t is not clear what she did with these proceeds, but I believe that the respondent used it to pay bills and contribute towards the construction of the new home". It was common cause in the appeal that the trial Judge erred in this regard. The uncontradicted evidence was that the respondent paid the surplus in reduction of her secured indebtedness under the mortgage of her Dianella home. This is the factual error the subject of the second ground of appeal. However, in mid-December 2002 the respondent sold her Dianella home. The sale produced a surplus of $128,177 of which $118,177 was paid in reduction of the amount secured by the mortgage of the Bishopsgate Street property. The balance of the surplus money discharged a credit card debt.
112 The trial Judge concluded that the appellant made the overwhelming financial contribution to the construction of the new house and the renovations to the original house on the Bishopsgate Street property. He
(Page 38)
- paid for most of the materials in cash or through his business and used stored materials that he acquired from former demolition sites. However, the trial Judge said it was impossible for her to reach a conclusion on the evidence as to the actual financial contribution made by the appellant to the construction and renovation work at the Bishopsgate Street property.
113 The respondent used her credit card to purchase items for the new house. However, she accepted that the appellant reimbursed her for a substantial amount of the expenses. Her estimation was that she contributed between $18,000 - $23,000 for items for the new house. The appellant put the respondent's contribution at around $8000.
114 The trial Judge concluded that the extent of the respondent's financial contributions to the Bishopsgate Street property was the equity in her Dianella home, plus a minimum of $8000 and a maximum of $23,000 on items for the new house.
115 As to the non-financial contributions under s 205ZG(4)(b), the trial Judge found that the appellant had made the greater proportion of such contributions represented by work he undertook renovating the original house and in assisting in the construction of the new house on the Bishopsgate Street property rear. The trial Judge also had regard to the respondent's unpaid work in the appellant's business.
116 The value of the Bishopsgate Street property at the date of trial was agreed at $425,000. It was also agreed that the block value of that property at that time was $295,000.
117 As to the contributions to the welfare of the family (under s 205ZG(4)(c)), the trial Judge stated:
"It was not disputed that the respondent performed almost all domestic duties for the duration of the relationship including cooking, gardening, washing, ironing and cleaning, despite her ill health. She therefore made a much greater contribution in this regard."
118 At the time of separation the appellant had net assets valued at $775,250 and the respondent had net assets (which included the full value of the Bishopsgate Street property) of $375,500. Apart from the sale of the respondent's Dianella and Joondanna properties and the purchase of the Bishopsgate Street property, there had been no material change in the parties' asset position.
(Page 39)
119 At the time of trial, the appellant had net assets of $796,650 and the respondent had net assets of $360,500 (which included the full value of the Bishopsgate Street property), making a combined total of $1,157,150. Between separation and trial, the appellant had acquired an interest in a property in Henry Street, Cannington funded by the sale of his shares and a property in Rivervale funded by borrowings that exceeded the purchase price. The respondent's position had deteriorated as a result of an increase in the debt secured by the Bishopsgate property at the time of separation from $51,000 to $104,000.
120 After considering the parties' financial contributions, their non-financial contributions and their contributions to the welfare of the family the trial Judge concluded as follows:
"On any view of the evidence, the respondent's initial contribution was at least 20%, and probably very slightly more, depending mainly on the value of the applicant's Como property. Both parties made substantial contributions during the relationship, the applicant financially through his income, and indirectly, his provision of materials and increase in the value of his assets and his work on the properties, particularly, the Bishopsgate Street property. The respondent made less financial contribution, and indirect contribution, but greater contribution as homemaker. I have taken into account the fact that the respondent has been expected to bear the financial responsibility for the mortgage on Bishopsgate Street since separation. The applicant has also incurred additional debt.
Having carefully considered the evidence in relation to the parties' contributions to the Bishopsgate Street property, I have concluded that the value of the respondent's contribution in this regard is more likely than not to be slightly higher than that of the applicant. However, having regard to the increase in the mortgage since separation, which was partly to pay her legal fees and some living expenses, but also to maintain the Bishopsgate Street mortgage, I have concluded that, overall, the parties have made contributions to the present total net asset pool as to 80% to the applicant, and 20% to the respondent. As a cross check, 20% represents only 0.2% more than the proportion the net block value of Bishopsgate Street plus the respondent's other assets bear to the total asset pool."
(Page 40)
121 In relation to the cross-check, the trial Judge had regard to the block value of the Bishopsgate Street property so as to ignore any increase in value of that property resulting from the improvements (the renovation of the original house and construction of the new house) to which the appellant had made financial and non-financial contributions. The block value of the Bishopsgate Street property together with the respondent's other assets (valued at $39,500) was around 0.2 per cent less than the extent of the respondent's financial contribution to the total of their assets at the commencement of the relationship.
122 The trial Judge then turned her attention to the relevant s 205ZD(3) factors. She had regard to, inter alia, the duration of the relationship, the age of the parties at trial (54), their occupation and means. It was not suggested the trial Judge failed to take into account any relevant consideration or took into account any irrelevant considerations. The trial Judge concluded:
"I accept that it is a relevant consideration … that while both parties' expectations of the relationship were not met, it was the respondent who sold her home and investment unit, which represented all her real property, to enter into a venture which both parties supported. While the applicant invested his time and some resources and money into the Bishopsgate Street project, he was not as affected as the respondent by the agreed actions taken by the parties during the relationship. He conceded the respondent would probably not have sold her properties if she had known the relationship was not to continue. …
Even though this has been a short relationship, having regard to the applicant's much better financial circumstances than the respondent and the background to the present position, I have determined it is just and equitable that a modest adjustment be made in this case for s 205ZD(3) factors, to take the total assets the respondent is to receive to nearly $300,000, which represents about 25.8% of the total asset pool. This would entail a percentage adjustment of 5.8%, or an additional $68,070. …
In the event that the property is divided on this basis, the applicant will receive assets worth $857,650 and the respondent assets worth $299,500."
(Page 41)
123 Save for the factual error the subject of the second ground of appeal, the appellant does not challenge the correctness of any of the findings made by the trial Judge.
124 As at the time of trial the respondent had other assets with a total value of $39,500, the trial Judge ordered that the appellant pay to the respondent the sum of $260,000. It was also ordered that upon payment of that sum, the respondent was to transfer to the appellant her right, title and interest in the property at 182 and 182A Bishopsgate Street, Carlisle, with the appellant to indemnify the respondent with respect to liability on the mortgage to $104,000 and with the respondent to meet any balance owing.
125 The net effect of the orders is that upon the appellant paying the respondent $260,000 he was to receive the Bishopsgate Street property which at the time of trial and having regard to his indemnity obligation, had a net value of $321,000 ($425,000 less $104,000). Thus, the appellant's net asset position at trial was increased by $61,000 in recognition of his contribution to the increase in value of the Bishopsgate Street property.
Legal principles
126 In making orders under s 205ZG of the FCA, the Court is exercising a judicial discretion: Norbis v Norbis (1986) 161 CLR 513 at 517. It is discretionary because it depends on the application of the very general standard of what is "just and equitable": Norbis at 518.
127 As the decision under appeal is a discretionary judgment, the principles expressed in House v The King (1936) 55 CLR 499 at 504 - 505 apply. That means an appellate court is not entitled to intervene merely because it would have exercised the discretion in a manner different from the trial Judge. It is only entitled to intervene if a material error of fact or law is discerned in the trial Judge's reasoning. Alternatively, error may be inferred if the result is unreasonable or unjust, in which case it will be outside the limits of a sound discretionary judgment.
128 Section 205ZG imposes no obligation on the Court to use either the global approach or the asset-by-asset approach to the exclusion of the other; that is, the application of either approach does not of itself amount to an error of law: Norbis at 523 - 524. However, the High Court accepted that in most cases the global approach is more convenient. The
(Page 42)
- reason for that is helpfully explained by the Full Court of the Family Court in In the Marriage of Zyk (1995) 128 FLR 28 at 32 - 33 as follows:
"The global approach enables the Court to assess the contributions aspect of the s 79 exercise in an overall way by considering the parties' contributions to their property as a whole although factoring into that exercise the circumstance, if it be so, that they may have made varying contributions to the total property at trial or which formed part of the history of their property during the marriage. It is the generally preferred and the generally adopted approach. It enables a broad approach to be taken to the varying contributions of the parties over the years of their marriage and in particular it usually has the advantage of more easily dealing with and giving proper recognition to pars (b) and (c) contributions. However, where the contributions to the components of the total property are disparate, caution needs to be exercised in this approach and the overall conclusion tested against the requirement that the orders be 'just and equitable'. …
The asset by asset approach enables the Court to assess separately the parties' contributions to particular assets or groups of assets. It is the less preferred approach largely because it can at times be an artificial exercise and also because it can create difficulties in the proper evaluation of pars (b) and (c) contributions. But there are a number of circumstances where it may be appropriate to do so, for example an inheritance received post separation, or where the financial relationship of the parties during the marriage was such that they treated some property as exclusively the property of one party to which the other party made no, at least no par (a), contributions to it. It may be convenient in cases like that to treat that property separately rather than assess the overall contributions of the parties to the totality of their property.
However, the trial Judge has a discretion as to which course to adopt and does so, having regard to what appears more suitable to the circumstances of the particular case."
(Page 43)
- had concluded that the parties' contributions to the matrimonial home should be treated as equal in which event she would be entitled to half the value of that property. However, by applying the global approach to all of the assets, the wife received significantly less than the value of a half share in the matrimonial home. The Full Court considered that the proper approach was to treat the matrimonial home separately from the remaining assets to which it applied the global approach.
130 In In the Marriage of McMahon (1995) 19 Fam LR 99 the trial Judge made errors that enlivened the Full Court's power to itself exercise the discretion. The trial Judge had erred as to the extent of a concession made by one of the parties and failed to give adequate reasons for his decision. Further, the trial Judge concluded that the parties had contributed equally to the assets. The Full Court was unable to discern how, regardless of the approach taken, the trial Judge could properly have arrived at that result. Exercising the discretion afresh, the Full Court applied the asset-by-asset approach because the parties themselves had identified what both regarded as their separately held assets and what they accepted were joint assets. Further, the homemaker contribution did not loom large and the marriage was a short one.
131 If the global approach is adopted, it remains the case that the origin and nature of the different assets ought to be considered: In the Marriage of JA and SM Gill (1984) 9 Fam LR 969 at 981.
Ground 1 – Whether Error in Approach
132 The trial Judge gave a number of reasons for adopting the global approach to the determination of contributions. First, the respondent used her assets to acquire the Bishopsgate property. Secondly, the appellant lived for much of the relationship at the respondent's home in Dianella with the result that he was able to rent out his other property. Thirdly, both moved into the Bishopsgate Street property and the respondent was responsible for the mortgage. Finally, the trial Judge said the asset-by-asset approach would make it difficult to give credit for the respondent's unchallenged contributions as homemaker.
133 I see no relevant error in the trial Judge's adoption and application of the global approach to the facts of this case. It is apparent from the trial Judge's reasons for adopting the global approach that she had regard to the origin and nature of the different assets of each of the parties. It is also apparent from her application of the approach. In particular, in assessing the parties respective contributions under pars (a), (b) and (c) of s 205ZG(4) her primary focus was, correctly in my respectful view, on
(Page 44)
- matters related to the Bishopsgate Street property. In addition, there was no material alteration in the nature or value of the remaining assets of the appellant and the respondent between the commencement of cohabitation and trial that rendered the use of the global approach inappropriate. Moreover, the cross-checking mechanism used by the trial Judge demonstrated that 20 per cent of the total net assets for par (a) to (c) contributions was well within the range of a sound discretionary judgment. Finally, there was no challenge to the allocation of an additional 5.8 per cent for s 205ZD(3) factors. I see no material error in approach or outcome in that regard.
134 The appellant did not detail precisely how the asset-by-asset approach should be adapted to the circumstances of this case or how that approach would and should have produced a different result to that reached by the trial Judge in circumstances where she had regard to the nature and origin of the parties' assets. The appellant has not demonstrated that the trial Judge erred in using the global approach in this case. I would dismiss ground 1.
Ground 2
135 I would also dismiss ground 2. It was common cause that the trial Judge erred in her belief that the surplus from the sale of the respondent's unit in Joondanna was used to pay bills and contribute towards the construction of the house on 182A Bishopsgate Street. However the error is not material because the substantial part of the surplus from the sale of the Joondanna unit was indirectly used to increase the respondent's equity in the Bishopsgate Street property.
136 For these reasons, I would dismiss the appeal.
137 MURRAY AJA: This appeal was brought to this Court under s 211(3) of the Family Court Act 1997 (WA) from the judgment of a Judge of the Family Court of WA given in the original non-Federal jurisdiction of that Court.
138 I have had the advantage of access to the reasons of Malcolm CJ and McLure JA. I agree with them, and it follows that I too would dismiss the appeal.
139 However, I wish to make a few brief observations about the nature of the appeal itself which, in my opinion, with respect, in this case was misconceived.
(Page 45)
140 As is evident from the judgments of Malcolm CJ and McLure JA, the jurisdiction of Martin J at first instance was exercised under provisions of the Family Court Act which replicate provisions of the Family Law Act 1975 (Cth) that have been in existence for some years. The jurisdiction is that under Pt 5A of the Family Court Act inserted in 2002. The applications before Martin J were competing applications for property settlement under Pt 5A, Div 2, subdivision 2. Specifically, the applications potentially involved the alteration of property interests of the respective parties to the de facto relationship, the appellant and the respondent. The power to make such orders is provided by s 205ZG and, so far as they were relevant, the matters referred to in s 205ZD(3) were to be taken into account, pursuant to s 205ZG(4)(e).
141 This statutory framework for the making of orders has been discussed in detail, together with reference to the decided cases under the Family Law Act, by Malcolm CJ and McLure JA. I do not wish to traverse the same ground. For present purposes it is sufficient to note that under s 205ZG(1), the court is given a broad discretionary power to "make such order as it considers appropriate altering the interests of the parties in the property". However, that discretion is circumscribed by s 205ZG(3),which provides that the court must not make an order under the section "unless it is satisfied that, in all the circumstances, it is just and equitable" to do so. In other words, the proponent of an order bears an onus to satisfy the court that there is affirmative reason in justice and equity why the application should be granted and the order made.
142 In considering whether any order should be made and, if so, in what terms, with respect to the property, or any property, of either or both de facto partners, the Court "must take into account" the matters set out in s 205ZG(4). So far as material to the application before Martin J, the relevant provisions in par (a), (b) and (c), have been set out in the judgments of Malcolm CJ and McLure JA. Broadly speaking, those matters are concerned with the financial contributions of the de facto partners to the acquisition, conservation or improvement of the property, their non-pecuniary contributions to the acquisition, conservation or improvement of such property, and the contributions made by them to the welfare of the family generally "including any contribution made in the capacity of home-maker or parent". These are, it must be said, matters which would generally have informed the exercise of discretion in the equitable jurisdiction of this Court, the former jurisdiction replaced by these provisions of the Family Court Act.
(Page 46)
143 As I have said, by s 205ZG(4)(e), the matters referred to in s 205ZD(3) are to be taken into account. There are a great many factual matters to which regard is to be had, concerned with matters personal to each de facto partner, their financial resources, their commitment to care for children or others, their eligibility for any pension or superannuation, what would be, for each of them, a reasonable standard of living, the commitment to pay maintenance and what might be its effect upon the party who is to receive it, the financial circumstances surrounding any other current cohabitation, etcetera.
144 As has been seen, there are two grounds of appeal. The second ground identifies what is an admitted factual error, but for the reasons explained by Malcolm CJ and McLure JA, the error is not material to establish any miscarriage of the discretionary judgment of her Honour the trial Judge. I agree that this ground should not be upheld.
145 The substantive ground is the first, which asserts that Martin J erred in her approach to the decision of the competing applications before her because she failed to adopt an asset-by-asset approach, but instead chose to adopt a global approach to the resolution of the matter. It is not asserted that upon that ground her Honour's discretion miscarried, or that as a result the final orders made by her Honour represented an exercise of discretion which was unsupportable within the framework of the statutory provisions. The ground does not assert that the orders made by her Honour were, in themselves, inappropriate, although they did not accord with the orders which the appellant sought at first instance.
146 Neither at first instance nor on appeal did the matter turn on the application of s 205ZG(3). Neither party asserted that it would not be just and equitable to make any order. The appellant's application was effectively that the whole of the Bishopsgate Street, Carlisle, property be vested in him on the payment of $200,000 to the respondent, he taking over the outstanding mortgage commitment. The respondent's application was substantially that the Bishopsgate Street property be vested in her, and other substantive orders were sought for the payment of $75,000 to her and the discharge of the mortgage by the appellant.
147 As has been seen, the final orders of Martin J were effectively that the appellant pay the respondent the sum of $260,000, whereupon the Bishopsgate Street property would vest in him, on condition that he provide $104,000 towards the discharge of the mortgage.
(Page 47)
148 As Malcolm CJ and McLure JA observe, it is accepted that her Honour was required to exercise her discretion as to the orders properly to be made. For my part, an appellant who merely complains about the process adopted without making any challenge in terms to the outcome of the process, assumes an enormous burden because, for the appeal to succeed, the error identified, if it be established, would have to be of the kind which would, of itself, show that the discretion had miscarried because it was revealed to have been misconceived by the Judge at first instance. No such exercise was attempted by the appellant in this case.
149 The leading judgment as to the approach to be adopted by a court in dealing with such an application in respect of the property of the parties is still the decision of the High Court in Norbis v Norbis (1986) 161 CLR 513. There the Court made it clear that unless an error was established which of itself vitiated the exercise of the discretion in the way I have mentioned, the question for the appellate court would remain simply whether it was shown that the trial Judge's order fell outside the limits of sound discretionary judgment.
150 The Court adverted to the approach of the Family Court which generally expressed a preference for a global, rather than an asset-by-asset, approach to the question of the making of orders varying the interests of the parties before the court. It was held that it was open to adopt such a guideline, but as the cases before and since Norbis have made clear, there will be cases which stand outside the general run and in respect of which an asset-by-asset approach is to be preferred. The High Court held that such an approach and the prescription of a guideline of that kind was perfectly legitimate, but such a guideline was not of itself to be treated as a principle of law, with the result that the application of the asset-by-asset approach would not, of itself, amount to an error of law, vitiating the exercise of the discretion: see, for example, Mason and Deane JJ at 523-525.
151 The point is a short one, but an important one. An appeal of this kind cannot be made good merely by establishing that the case was, perhaps, one more suited to the application of an asset-by-asset approach, unless to take that approach is, in the circumstances of the particular case, an error of a kind which is to be regarded as taking the exercise of the jurisdiction by the trial Judge outside the proper application of the relevant statutory provisions or, if that cannot be established, it is nonetheless established that the result achieved by the Judge falls outside the range of sound discretionary judgment in the particular case. Neither
(Page 48)
- outcome was, on this appeal, able to be established and neither was sought to be established. It follows that I agree that the appeal could not succeed and it ought to be dismissed.
Key Legal Topics
Areas of Law
-
Family Law
-
Property Law
Legal Concepts
-
Division of Assets
-
Alteration of Property Interests
-
Appeal
9
6
2