Tobey & Rezek - [2017] FamCAFC 84

FAMILY COURT OF AUSTRALIA

TOBEY & REZEK

[2017] FamCAFC 84

FAMILY LAW – APPEAL – PROPERTY – Appeal from a re-hearing – Where the proceedings were re-heard after a partly successful appeal – Add backs for legal fees – Exclusion of a party’s tax liability from the property pool, where the liability was incurred after separation – Whether the primary judge relied on the correct balances for the parties’ superannuation entitlements in making new property orders – Whether an adjustment pursuant to s 90SF(4) of the Family Law Act 1975 (Cth) was properly made – Whether the primary judge’s orders were just and equitable – Whether the Full Court can correct an arithmetical error in the primary judge’s reasons and orders pursuant to r 17.02 and r 17.02A of the Family Law Rules 2004 (Cth) – Where no error is established – Appeal dismissed.

Family Law Act 1975 (Cth) ss 90MC, 90SF, 90SM

Family Law Rules 2004 (Cth) rr 17.02, 17.02A

Adair & Milford [2015] FamCAFC 29
Allesch v Maunz (2000) 203 CLR 172
Bennett and Bennett (1991) FLC 92-191
Gilles & Irby (2016) FLC 93-687
Gronow v Gronow (1979) 144 CLR 513
Hearne v Hearne (2015) 53 Fam LR 454
L Shaddock & Associates Pty Ltd v Parramatta City Council

[No 2] (1982)
151 CLR 590

Manolis & Manolis (No 2) [2011] FamCAFC 105
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Russo & Wylie (2016) FLC 93-747
Stanford v Stanford (2012) 247 CLR 108
Teal & Teal [2010] FamCAFC 120
Tobey & Rezek (2013) FLC 93-541
Tobey & Rezek (No 3) [2011] FMCAfam 1336
Trask & Westlake (2015) FLC 93-662

APPELLANT:

Mr Tobey

RESPONDENT:

Ms Rezek

FILE NUMBER:

CAC

740

2008

APPEAL NUMBER:

101

2015

DATE DELIVERED:

5 May 2017

PLACE DELIVERED:

Sydney

PLACE HEARD:

Canberra

JUDGMENT OF:

May, Ryan & Aldridge JJ

HEARING DATE:

22 November 2016

LOWER COURT JURISDICTION:

Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE:

5 June 2015

LOWER COURT MNC:

[2015] FCCA 1504

REPRESENTATION

THE APPELLANT:

In Person

COUNSEL FOR THE RESPONDENT:

Ms Curran

SOLICITOR FOR THE RESPONDENT:

Legal Aid ACT

Orders

The appeal be dismissed.
The Application in an Appeal filed 13 April 2016 be allowed.
The oral application of the respondent made on 22 November 2016 for the amendment of the orders and reasons of Judge Jarrett made on 5 June 2015 be dismissed.
The respondent is to file and serve any written submissions as to costs within 21 days hereof. The appellant is to file any submissions in reply within a further 21 days.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tobey & Rezek has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA

Appeal Number: EA 101 of 2015
File Number: CAC 740 of 2008

Mr Tobey

Appellant

And

Ms Rezek

Respondent

REASONS FOR JUDGMENT

Introduction

On 5 June 2015 Judge Jarrett ordered Mr Tobey (“the appellant”) to pay Ms Rezek (“the respondent”) $30,374 by way of a final property settlement between them. The respondent was also to receive approximately $132,000, which had been held in a bank account pending the making of final orders.
The appellant challenges these orders, asserting that the primary judge made a number of fundamental errors in the determination of the assets and liabilities that were taken into account in the property division and errors with respect to the adjustments to those interests. As we shall explain, we are not satisfied that there is merit in the appellant’s submissions.
At the outset it is necessary to record that the matter before the primary judge was a re-hearing after a successful appeal.
The property proceedings were first heard by Federal Magistrate Neville (as his Honour then was). On 14 December 2011 his Honour ordered the appellant to pay to the respondent the sum of $124,493 (Tobey & Rezek (No 3) [2011] FMCAfam 1336). His Honour also made the following order:
(21)In accordance with section 90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of [Mr Tobey] from his interest in the Public Sector Superannuation Scheme (PSS), [Ms Rezek] is entitled to be paid (by the Trustee of the PSS) the amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulation 2001 using a base amount of $98,068.00 and there shall be a corresponding reduction in the amount [Mr Tobey] would be entitled to receive but for these Orders.
On 7 May 2013 the Full Court of the Family Court of Australia set aside the order for the payment of $124,493 and remitted the matter for re-hearing (Tobey & Rezek (2013) FLC 93-541). The superannuation order was expressly left in place. Judge Jarrett heard the remitted proceedings.
The continued operation of the superannuation order is central to many of the appellant’s submissions. In short, he contends that the re-hearing was limited to the non‑superannuation property and that no regard should have been given to the superannuation entitlements held by the parties at the time of that hearing. For reasons which follow, we consider that the primary judge correctly took into account all of the parties’ assets and liabilities, including superannuation, held at the time of the hearing.

Background

Before we turn to the appeal it is necessary to identify some relevant background facts.
The parties commenced a relationship in October 2002 and started living together in July 2003. They separated either in late 2007 or early 2008.
The parties have one child, X (“the child” or “the parties’ son”), who was born in 2005. The mother has a child from a previous relationship, Y, born in 1997 and who is now 19 years old.
The living arrangements for X have been a constant source of litigation. Proceedings were commenced by the appellant on 6 May 2008. Orders governing X’s care were made on 28 August 2009 (by consent), 29 July 2010, 12 August 2010, 9 September 2010, 9 November 2010, and 14 December 2011.
The orders of 12 August 2010 and 9 September 2010 were necessitated by an illness of the respondent and provided for the child to live with the paternal grandmother of the respondent’s adult child. Otherwise, the orders each provided for the child to live with the respondent and to spend time with the appellant.
The parenting orders of 14 December 2011 were the subject of an appeal brought by the appellant. The appeal was largely unsuccessful. Only one of the parenting orders, which prescribed the people the child was to live with should the mother be unable to care for him, was set aside and that issue remitted for re-hearing.
The present appeal deals only with the property orders made by Judge Jarrett after the re-hearing; there is no appeal from his Honour’s parenting orders.
The primary judge identified the assets, liabilities and financial resources of the parties at the time of the hearing in the following table (found in his Honour’s Reasons at [50]):

Assets:	[Q] Property (H)	$1,100,000.00
Cash at bank (w)	$644.00
Cash at Bank (H)	$11,702.00
Cash at Bank (J)	$132,000.00
Furniture and household contents (W)	$4,400.00
Furniture and household contents (H)	$35,760.00
Legal Fees add-back (H)	$91,274.00
Vehicle (W)	$7,890.00	$1,383,670.00
Liabilities:	Mortgage – [Q] Property	$941,174.00
Income Tax (H)	$9,366.23	$950,540.23
Superannuation:	Wife	$146,171.00
Husband	$528,091.00	$674,262.00
Total Nett non-super assets:	$433,129.77
Total assets:	$1,107,391.77

The appeal

The Amended Notice of Appeal filed on 13 April 2016 contains 15 grounds. In his Summary of Argument and in his oral submissions, the appellant helpfully grouped the grounds into four topics. We shall follow the same course. Ground 15 was not in fact a ground of appeal, but rather was an explanation of how the parties’ funds ought to have been distributed, according to the appellant’s calculations.

Were the appellant’s legal costs of $91,274.00 correctly “added back”? (Grounds 2 and 12)

Under this topic the appellant submitted that:
·The primary judge did not give adequate reasons for the exercise of the discretion to add back the legal costs;
·No blame should be attached to the appellant for paying the legal fees in the manner that he did; and
·Both parties should bear the financial vicissitudes of the case.
As can be seen from [14] above, the primary judge included as an asset of the parties available for division an “add back” for legal fees of $91,274.00.
The claim for the “add back” came about in the following way. The appellant had paid his lawyers $237,079 for the various proceedings between the parties. Most of that sum had been paid from his income. However, $91,274 remained unpaid and so the appellant had secured that liability against his property at Q (“the Q property”). After the property orders were made in December 2011, the appellant needed to borrow $126,000 to comply with the order made by Neville FM for the payment of $124,493. He did so by raising a mortgage secured against the Q property. In order to obtain the advance, the appellant needed to release his lawyer’s caveat over the property, which he did by increasing the loan he obtained in order to pay them.
Thus, the liability of $941,174 shown in the list of assets and liabilities includes the $91,274 which the appellant had borrowed to pay his lawyers. The property available for division was accordingly reduced by that amount.
Of this the primary judge said:
53.That real property, situated in [Q], is a property which forms part of the asset pool for distribution between the parties in these proceedings. Thus, to the extent that [Mr Rezek’s] equity in that property was diminished by him raising borrowings to meet his legal expenses, the amount received by him should be added back to the asset pool (see Chorn & Hopkins (2004) FLC 93-204 and Omacini & Omacini (2005) FLC 93-218).
54.In cross-examination [Mr Rezek] said that the balance of his legal fees was met from payments made by him from his income. I do not propose to add those funds back to the asset pool. The income from which he met those expenses was earned by him after the parties’ separation.
The appellant did not challenge the proposition that, in appropriate cases, a court may make an adjustment to the property presently available for distribution so as to take into account the use by one party, for their own benefit, of property that would otherwise have been available for division. Rather, he submitted that this was not an appropriate case for such an adjustment to be made. This was because the orders of Neville FM obliged him to raise $126,000 so that he could comply with the orders. The only way he could pay those funds was to borrow them and by securing that borrowing against the Q property. In order to do so he first needed to remove the caveat lodged by his lawyers. This, in turn, required him to borrow further funds to pay them. Otherwise, he submits that, in due course, he would have paid the debt owed to his lawyers from his income.
That may be so, but the fact remains that the effect of the appellant’s actions was to reduce the property available for division between the parties for his benefit alone. Had the appellant not increased the borrowing over the Q property, a further $91,274 of equity would have been available for distribution between the parties.
It is not to the point that the appellant was “obliged”, in his words, to borrow to repay the lawyers because that was the only way he could obtain the funds to comply with the December 2011 orders. Rather, the Court looks to the effect of what was done and, as we have said, the effect of the appellant’s actions was that the amount available for distribution was reduced so that the appellant could pay his post-separation legal expenses. Although the appellant was entitled to do so, it is clear the primary judge was not satisfied that the respondent ought to, in reality, contribute to the appellant’s expenses. We agree.
Finally, the appellant contended that the primary judge failed to give adequate reasons for making the add back.
The obligations cast upon judges to give adequate reasons are well known: see, for example, Bennett and Bennett (1991) FLC 92-191 (“Bennett”) at 78,266. The parties must be able to understand the basis of the decision and the extent to which their arguments have been understood and accepted: Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 (“Pollard”) at [59].
This is the case here. It is clear from the primary judge’s reasons why he made the order that he did.
These grounds of appeal have not been established.

Did the primary judge properly exclude the husband’s tax liability of $115,547.50? (Ground 1)

The appellant submits that the primary judge wrongly excluded his tax liability of $115,547.50 from the parties’ assets and liabilities, thereby increasing the net assets available for distribution.
In order to bolster that submission, the appellant brought an Application in an Appeal, filed 13 April 2016, to adduce further evidence. The evidence was that on 2 November 2015 the Deputy Commissioner of Taxation obtained a judgment against the appellant in the sum of $121,356.86. On 18 February 2016 he was served with a bankruptcy notice seeking payment of that sum.
There was no opposition to the application and we will receive the evidence. We were informed, again without opposition, that the debt was paid by instalments on 9 and 10 May 2016.
As to this liability the primary judge said:
55.The second issue that arises in respect of the asset pool is whether a purported tax liability, to which [Mr Rezek] says he is subject, should be included. There is little evidence about the tax liability. The only evidence appears in [Mr Rezek]’s affidavit that was filed on 22 April, 2014. As to the tax liability, [Mr Rezek] says that when the matter was before the Court in 2011, he had an estimated liability to the Australian Tax Office. There was no liability but, rather, his estimate of what might be owed to the Tax Office.
His Honour then referred to the evidence before him, which consisted of only two documents.
The first was a document obtained through the Australian Taxation Office Tax Agent Portal on 10 April 2014, which showed an “Integrated client account” balance of $115,547.50. As the primary judge explained, it is not possible to discern from that document the nature and quantum of the liability or when it was incurred.
The second was the appellant’s Financial Statement filed on 22 April 2014, in which he described the sum of $115,548 as “Total income tax assessed and unpaid for the last financial year Date due: 31/04/2014”. On the basis of this evidence it would appear that the financial year in which the income was earned and for which the tax was payable was the year ending June 2013, which was well after the parties separated.
The primary judge concluded:
59.In any event, if the amount of $115,547.50 represented in the integrated client account is provisional tax for the current year, it is clear that that is an amount which has been provisionally assessed on income to be earned in the relevant taxation year, which is well after separation.
60.I have included in the abovementioned asset table the income tax debt of $9366.23. Although the evidence does not clearly disclose when that debt came into existence, or how it came into existence (that is to say whether it was incurred as a result of the earning of pre-separation income), I am satisfied of the existence of the debt. However, the balance of the alleged tax debt, given that it seems to be a provisional assessment for future income to be earned by [Mr Rezek], I have excluded from the asset pool.
The evidence of the appellant’s Financial Statement supports his Honour’s finding that the provisional taxation liability arises from income earned and retained by the appellant well after separation. Despite the appellant’s assertion that the court should take the assets and liabilities of the parties as they find them, we perceive no error in his Honour’s approach that the respondent not bear any responsibility for the appellant’s post-separation income tax.
To the extent that the precise nature of the tax liability is not known, it was up to the appellant to adduce adequate evidence properly to explain his liabilities (Adair & Milford [2015] FamCAFC 29).
The fresh evidence, namely the judgment in favour of the Deputy Commissioner of Taxation and service of the bankruptcy notice, does indicate that the sum referred to in the “Integrated client account” did, at some stage, become a firm liability. However, neither document explains the nature of the liability or when it was incurred. Thus, the position remains, as best as can be determined from the evidence, that the liability arose from post‑separation income.
Thus, even in the light of the further evidence, the decision of the primary judge correctly states the position, as far as the evidence permits.
We do not find any merit in this ground.

Did the primary judge rely on incorrect balances for the parties’ superannuation entitlements? (Grounds 8, 9, 10, 11)

In compiling the list of the parties’ assets, liabilities and financial resources the primary judge referred to the balances of the parties’ superannuation interests at the date of the hearing.
The appellant submits that as the superannuation splitting order was made in December 2011 and as it remained undisturbed on appeal, the correct values to use were the December 2011 amounts. To take into account the current amounts, he submitted, would, in effect, alter the percentage split of the superannuation.
Plainly, this is not so. The order made by Neville FM on 14 December 2011 allocated a base amount to the respondent rather than splitting the superannuation by using a percentage. The effect of the order was to convert the appellant’s superannuation fund into two funds – one in the name of the appellant and one for the respondent. Each will continue to fluctuate in value over time. Such variations do not, of course, alter the original order.
The real complaint of the appellant is that the primary judge took into account the parties’ superannuation entitlements at all. He submitted that the effect of the Full Court orders of 7 May 2013 was to quarantine the primary judge’s exercise of discretion to the non-superannuation assets and that his Honour was obliged to ignore the superannuation entirely. This was said to be because if the court was to take into account the superannuation balances, any adjustment of property interests which followed would have the effect of altering the superannuation splitting order. Again, this is not so.
First, whilst the parties’ interests in superannuation were taken into account in determining the appropriate orders for the division of their other property, the superannuation orders remained unchanged.
Secondly, the primary judge was obliged by the terms of the Act to take the superannuation interests into account.
Section 90SM(1)(a) of the Act provides that in property settlement proceedings the court may make such order as it considers appropriate, in the case of proceedings as to the property of the parties, altering the interests of the parties in their “property”.

Section 4 of the Act defines property settlement proceedings as proceedings with respect to “…the property of the parties or either of them”. Property is defined by that same section as being property of the parties, or either of them, whether in possession or in reversion.
Section 90MC(2) of the Act provides that a superannuation interest is to be treated as property for the purpose of paragraph (c) of the definition of “de facto financial cause”. That definition provides that proceedings between parties to a de facto relationship with respect to the distribution of their property constitute a de facto financial cause.
In determining the division of the parties’ property, the court must take into account a number of considerations. These include:
·    The direct or indirect financial or non-financial contribution to the acquisition, conservation or improvement of the property of the parties or either of them (s 90SM(4)(a) and (b));
·    Any other order made under the Act affecting a party to the de facto relationship (s 90SM(4)(f));
·    The income, property and financial resources of each of the parties (s 90SF(3)(b));
·    The eligibility of either party for a pension, allowance or benefit under any superannuation fund or scheme (s 90SF(3)(f)(ii));
·    The extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party (s 90SF(3)(j)); and
·    The terms of any order made under s 90SM in relation to the property of the parties (s 90SF(3)(n)).
Thus, although the primary judge was making orders to divide only the non‑superannuation assets he was statutorily obliged to take into account the parties’ superannuation in the various ways just described. His Honour could not ignore the entitlements as was submitted by the appellant.
The property adjustment orders did not alter the existing superannuation order. Rather, those orders were fashioned by taking into account the value of the parties’ current superannuation and their contributions to those balances and other relevant factors as required by the Act.
Accordingly, no error has been established.

Did the primary judge err in making an adjustment to the parties’ contributions-based entitlements? (Grounds 3, 4, 5, 6, 7, 13 and 14)

Under these grounds the appellant challenges the adjustment of the parties’ property interests in the sum of $100,000 pursuant to s 90SF(4) of the Act and submits that:
·The primary judge made an error of law in mistakenly identifying the respondent’s contribution-based entitlement of $221,478 as being 25 per cent of the property pool when it was only 20 per cent of the pool (Grounds 3 and 4);
·The primary judge gave inadequate reasons for the adjustment (Ground 5);
·The primary judge was swayed by irrelevant facts (Ground 6);
·The primary judge improperly awarded the respondent all of the accretions to the money held on account pending the remitted hearing (Ground 7);
·The primary judge erred in deciding that it was just and equitable to make an order altering the parties’ interests in their property (Ground 13);
·The primary judge erred in finding that it was just and equitable to make an alteration to the parties’ interests in their property of $100 000 in favour of the respondent (Ground 14).

Was there an error of law in assessing a contributions-based entitlement of $221,478 for the appellant, mislabelling it as a 25 per cent contribution and then making a further adjustment of $100,000?

His Honour found that the parties’ contributions to their property and the welfare of their family were 75 per cent as to the appellant and 25 per cent to the respondent. The appellant does not challenge this assessment.
In purporting to apply that assessment, his Honour said:
89.Thus, on the basis of that assessment, [Mr Tobey] is entitled to $885,913.77 and [Ms Rezek] is entitled to $221,478.
When regard is had to the net assets being divided it can immediately be seen that this figure represents an 80/20 division and not the 75/25 outcome intended by the primary judge. The calculation error is in the appellant’s favour and allocates him some $55,000.00 more than his Honour intended.
His Honour then considered the s 90SM(4) factors and concluded:
97.I accept [Ms Rezek’s] submissions that it is necessary to adjust the parties’ contribution based entitlement to take account of the matters I have just outlined. It is appropriate, in my view, to adjust that contribution based assessment by a further $100,000 or a little less than one third of [Mr Tobey’s] annual gross income. It is less than 10% of the value of the nett asset pool. Combined with her other resources that would provide her with some cash resources from which she might fund some independent accommodation for she and [X].
98.That would mean that [Ms Rezek] would be entitled to $321,478. [Mr Tobey] would be entitled to the balance of $785,913.77.
The effect of this is that if the primary judge intended to adjust the contributions‑based entitlements of 75/25 by $100,000, giving an approximate division of 65/35, he failed. The effect of the error and the adjustment is to effect a property division of approximately 70/30.
If that was the position, the error again is in the appellant’s favour. There is no cross-appeal by the respondent. However, the appellant submits that the error cannot be overlooked because it must have infected the process of assessing any adjustment under s 90SM(4).
Although we accept that his Honour’s quantification of the respondent’s entitlement at [89] is incorrect, we need to be concerned with the materiality of the error. As the error plainly works in the appellant’s favour, we struggle to see how it is material to an appeal brought by him. Furthermore, the primary judge ultimately calculated the property division in dollar terms. He derived a lump sum each party was to receive representing their contributions‑based entitlement (albeit incorrectly calculating it) and then adjusted this amount by a further lump sum. Thus the respondent was to receive $221,478 plus $100,000. The adjusting figure was based upon the lump sum of $221,478 and not the percentage used to derive it. The adjusting sum was not derived by altering the percentage of the contributions‑based entitlement.
There was no finding after the consideration of the s 90SM(4)(e) – s 90M(4)(g) factors that a division of property in the vicinity of 65 per cent to the husband and 35 per cent to the wife was appropriate. Rather, the primary judge ultimately exercised his discretion on the basis of dollar values for both the contributions-based entitlements and the adjustment.
His Honour determined that the appropriate adjustment was $100,000. As it was not based on a percentage alteration of the contributions-based entitlement it is not infected with that error. Rather, the adjustment was based on the appellant’s income, the value of the asset pool, the respondent’s needs and the lump sum figure derived from the parties’ contributions. We do not consider that the error flowed through into the calculation of the s 90SM(4) adjustment.
The next submission is that the primary judge erred because the percentage adjustment actually made was in the order of 44 per cent of the property pool and not 10 per cent as noted by the primary judge.
The appellant derives the figure of 44 per cent by adopting the value he asserts should be attributed to the net property and not the property as found by the primary judge. Thus, to derive the figure of 44 per cent, he excluded from the pool the superannuation entitlements and the add back for legal expenses and included his taxation liability – all of which leads to net property of $226,308.27.
We have rejected the appeal insofar as it deals with the composition of the net property and thus the premise for this aspect of the submissions cannot be made out.
We are not satisfied that this aspect of the ground has any merit.

Did the primary judge give adequate reasons for the adjustment of $100,000?

The primary judge’s reasons for making an adjustment of $100,000 in favour of the respondent were:
91.[Ms Rezek] identified the disparity in the parties’ earning capacity. Presently [Mr Tobey] earns in excess of $370,000 per annum gross according to his financial statement filed on 22 April, 2014. [Ms Rezek] earns a fraction of that. Her current part-time income is about $33,000 per annum gross. She also receives $121 a week from Centrelink, $80 a week by way of child support from [Y’s] father and $292 a week from [Mr Tobey] for child support.
92.[Ms Rezek] will continue to be primarily responsible for [X’s] care when she is well. He spends 10 days out of every fortnight with her and, according to the material; she meets many of [X’s] expenses. [X] attends a grammar school and [Mr Tobey] meets the costs associated with that. Although, [Ms Rezek] purchased all of [X’s] uniforms and books for this academic year.
93.There is a contest between the parties about their standards of living since separation and, most particularly, since [Ms Rezek] vacated the [K] property. She contends that [Mr Tobey] now lives in a heritage listed house which is of a relatively grand scale. She suggests that his standard of living, having regard to his income and the property that he is able to afford, is much greater than hers. She suggests that she has a much lower income, as indeed she does, and she lives in accommodation which is not of the same standard as that occupied by [Mr Tobey]. I accept her arguments in that regard.
94.[Mr Tobey] suggested that [Ms Rezek’s] current arrangements were perfectly adequate and delivered to her a great deal of amenity. He suggested that she was living in a property which well suited her needs. The difficulty, of course, with that argument is that [Ms Rezek] is sharing her accommodation with her mother. Although she lives in a granny flat which, according to the evidence, is semi-detached from her mother’s residence, the fact is that she cannot afford her own accommodation. She is relying on the good graces of her mother to provide accommodation to her. It is hardly a satisfactory arrangement for a person who has significant responsibilities for two children.
95.[Mr Tobey] has significant financial resources. Under the superannuation splitting orders, which will remain undisturbed, he has superannuation of a little more than $528,000. [Ms Rezek] has superannuation of a little over $146,000. He also has the [Q] property.
96.Whilst [Mr Tobey] has been paying his assessed child support, at the time of the trial he was in arrears. He has failed to pay in the past. I note that he meets [X’s] school fees directly and some other expenses, but I am satisfied that [Ms Rezek] will not be paid anything other than the amount assessed by way of child support from time to time. [Ms Rezek] wishes to continue in her role as parent for [X]. The orders of December, 2011 provide for that and she should be supported in that endeavour.
97.I accept [Ms Rezek’s] submissions that it is necessary to adjust the parties’ contribution based entitlement to take account of the matters I have just outlined. It is appropriate, in my view, to adjust that contribution based assessment by a further $100,000 or a little less than one third of [Mr Tobey’s] annual gross income. It is less than 10% of the value of the nett asset pool. Combined with her other resources that would provide her with some cash resources from which she might fund some independent accommodation for she and [X].
These paragraphs clearly set out the basis on which the primary judge made the adjustment and his reasoning process is apparent (Bennett; Pollard). This aspect of the challenge does not succeed.

Did the primary judge improperly award the wife all of the accretions to the money held on account pending the remitted hearing?

The husband did not direct any submissions to this ground.
The principal sum was brought to account but as best we can tell the evidence did not provide a figure for the “accretions”. So much is clear from his Honour’s use of the words “accretions, if any” (at [101]).
Absent submissions and evidence on the point, this challenge could not establish error.

Was the primary judge swayed by irrelevant considerations?

The appellant’s ground asserts that in [93] to [97] of the Reasons, the primary judge took into account irrelevant matters. However, that ground was not addressed in those terms in the appellant’s submissions; rather, the appellant submitted that there were other relevant matters that were not taken into account and that the finding that a cash adjustment was needed so that the respondent could secure some independent accommodation was illogical and flawed.
As to the matters raised by the ground itself, [93] to [97] of his Honour’s reasons are clearly a discussion of the s 90SM(4) and s 90SF(3) considerations, as the following overview of his Honour’s discussion of this issue makes clear:
[93]                Discussion of s 90SF(3)(b), (d) and (g)
[94]                Discussion of s 90SF(3)(e) and (g)
[95]                Discussion of s 90SF(3)(b) and (c)
[96]                Discussion of s 90SF(3)(b), (c), (l) and s 90SM(4)(g)
[97]                His Honour’s conclusion.
Not only were each of the matters discussed in these paragraphs relevant, they were matters that the primary judge was obliged to consider.
The appellant submitted that the primary judge erred in excluding the costs of the sale of his property at K (“the K property”) in July 2010. The net proceeds of the sale of that property were used to acquire his Q property.
The appellant submits that agent’s fees of $21,000 and other sales costs of $17,501.04 should have been included in the list of assets and liabilities.
The primary judge did not mention the first expense. This is not surprising given that no evidence of it was placed before him. Submissions are no substitute for evidence. Although this is sufficient to dispose of this challenge, it needs to be understood that the primary judge evaluated the significance of the K property by reference to its net equity ($425,000) as at August 2010 (at [82]). It is fairly standard conveyancing practice for agent’s fees to be paid at settlement, which of course would have seen the appellant in fact introduce less than the net equity.
The appellant submitted that he had spent money maintaining and renovating the property before its sale and that these costs should have been taken into account.
As to these, the primary judge said:
77.[Mr Tobey] claims that he made payments necessary to prepare the [K] property for sale but I am not satisfied that those payments were necessary. I do not doubt that he made them but I am not satisfied, having regard to [Ms Rezek’s] evidence about the state in which she left the [K] property, that those payments were necessary. I accept [Ms Rezek’s] evidence about the state in which she left the [K] property in March, 2010. I am satisfied by her evidence that the property was in good condition and it did not require the repair or maintenance that [Mr Tobey] subsequently undertook to the property. Certainly it was not necessary for the purposes of a sale of the property, although clearly there was some benefit to [Mr Tobey] to ensure that the property was presented in the best possible way for the purposes of sale.
The course that his Honour followed was entirely open to him and no error has been shown. There was no evidence, other than for the appellant’s say so, that any renovations were necessary or had the effect of increasing the value of the property. It is implicit in his Honour’s finding that this evidence was not accepted and that the respondent’s evidence was preferred.
The appellant submitted that the primary judge failed to take into account the substantial adjustment already made to the parties’ superannuation interests. We have already dealt with aspects of this submission. All that remains to be said is that the parties’ superannuation entitlements were expressly considered by the primary judge (see [95] of his Honour’s Reasons).
The appellant’s next challenge was to the primary judge’s approach to child support and education.
First, the appellant submits that the following passage in his Honour’s reasons “is a failure of quantitative reasoning” (the appellant’s emphasis):
92.…[X] attends a grammar school and [Mr Tobey] meets the costs associated with that. Although, Ms [Rezek] purchased all of [X’s] uniforms and books for this academic year.
The failure is said to be equating the payment of school fees (said by the appellant to be $16,536 per annum) with uniforms and books (said by the appellant to be $676 per annum).
Both are relevant considerations. We are, however, quite unable to see that the primary judge regarded them as equal contributions.
As to child support, the primary judge recorded that the appellant paid the respondent $292 per week for child support, that he was in arrears at the time of the hearing and had failed to pay in the past (at [91] and [96]).
Apart from complaining that his evidence that he was paying child support of $312 per week was not accepted, the appellant did not challenge the above findings. The primary judge was obliged to take the payment or otherwise of child support into account.
Ultimately, the gravamen of the appellant’s complaint is that in the light of what he regards as his extensive support of the child, in particular, the adjustment in favour of the wife is excessive. An appellant who seeks to challenge the weight to be given to various factors in the exercise of a discretion faces a high bar: Gronow v Gronow (1979) 144 CLR 513. We are not satisfied that there is any error of that kind in the present matter.
Finally, we turn to the issue of the respondent’s accommodation, which the appellant submits was the subject of contradictory findings.
It is to be recalled that, at the time of the hearing, the respondent and the parties’ son were living in a granny flat at a property owned by the maternal grandmother.
In dealing with the parenting aspects of the case the primary judge said:
41.…I accept that he also has a good relationship with his mother and with his maternal grandmother, Ms [C].
…
46.The proposals of each of the parties carry benefits for [X]. His mother’s proposal provides for a continuity of care in familiar surroundings should she become unwell. [X’s] relationships would remain largely unchanged, save that he might not see as much of his mother than he would if she was well. But his relationships with [Y], Ms [C] and [Mr Tobey] will continue in much the same way as when Ms [Rezek] is well.
47.[Mr Tobey’s] proposal perhaps carries with it a benefit for [X], namely the opportunity to be cared for more often and for longer periods of time by his father. But it is a benefit that must be approached within the context of the primary finding that [X]’s best interests are served by him living in his mother’s care most of the time and him living with his father as set out in the orders of December, 2011. Further, [Mr Tobey’s] proposal carries with it the prospect of disruption in the continuity of [X’s] relationships with [Y] and Ms [C]. His relationship with his father would also change because he would be spending additional (although indeterminate) time living with him.
48.On balance, I consider that orders consistent with those sought by Ms [Rezek] are in [X’s] best interests. Those orders would reduce the potential disruption to [X], both on a day-to-day basis and on a relationship level. He would continue living in more or less the same household. He would live with and spend time with those people who are important to him – his father, [Y], Ms [C] and Ms [F] – in very much the same way as he would when his mother was well. The only issue with which he would have to deal is his mother being unwell. On [Mr Tobey]’s proposal, not only would he have to deal with that, he would also have to deal with some significant changes to his day-to-day life and relationships. In my view, Ms [Rezek]’s proposals carry more benefit to [X] than do [Mr Tobey’s].

The appellant submits that those findings are inconsistent with the finding at [94], which was:
94.[Mr Tobey] suggested that Ms [Rezek’s] current arrangements were perfectly adequate and delivered to her a great deal of amenity. He suggested that she was living in a property which well suited her needs. The difficulty, of course, with that argument is that Ms [Rezek] is sharing her accommodation with her mother. Although she lives in a granny flat which, according to the evidence, is semi-detached from her mother’s residence, the fact is that she cannot afford her own accommodation. She is relying on the good graces of her mother to provide accommodation to her. It is hardly a satisfactory arrangement for a person who has significant responsibilities for two children.
We do not see the asserted inconsistency. The parenting aspect of the matter that was before the primary judge was in large part concerned with who would care for the child if the respondent became unwell. The value of the close relationship then held by the mother and son was an important consideration. That relationship was obviously facilitated by the mother and the child living in close proximity to the maternal grandmother and aunt.
The fact that the child has an important relationship with members of his household does not mean, however, that the respondent should not be placed in a position where she has the financial means to choose the accommodation for herself and the children, rather than being forced to live in a granny flat.
The appellant then pointed to what he asserted was the cost of purchasing or renting a house in Canberra and submitted:
Given the amenity of Ms [Rezek’s] living arrangements, it is not apparent from his Honour’s reasons how she would be better off overall from living in a lesser dwelling in an inferior location in order to justify the adjustment made.
Whilst the sum of $100,000 may not, in the light of the overall orders, assist the respondent to acquire a home, it no doubt could do much to ameliorate her present living condition, in such manner as she chooses.
These aspects of the grounds have not been established.

Was the alteration to the parties’ property interests just and equitable?

The appellant submitted:
108.Whether or not his Honour properly considered s 90SM(3) in a global sense, it is not apparent how he considered whether the adjustment he made to the contributions‑based entitlement was also just and equitable.
109.The appellant husband contends that his Honour’s adjustment to the contributions‑based entitlement should be overturned on the grounds and arguments expressed above. This could leave his Honour’s contributions‑based assessment undisturbed and allows the Court to re‑exercise the discretion upon resolution of the asset pool.
Section 90SM(3) provides:
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.
The primary judge said:
99.There is no doubt, in my view, that it is just and equitable to make an order for property adjustment in this matter. Neither party contends to the contrary.
That statement is, of course, correct. Both parties asked the court to divide and adjust their present interests in their property. Section 90SM(3) requires that the court must be satisfied (either explicitly or by implication) that it is just and equitable to make a property settlement order. Therefore, the point must be addressed. See Stanford v Stanford (2012) 247 CLR 108 at 120-121 for the equivalent provisions in relation to parties to a marriage and also Hearne vHearne (2015) 53 Fam LR 454 at [71].
However, that was not the husband’s point – his point was that the adjustment of $100,000 to the contributions‑based entitlements was not just and equitable.
Contrary to the challenge raised by this ground, the primary judge did not say that he found the adjustment of $100,000 to be just and equitable. Neither the Act nor case law required him to do so. Rather s 90SM(4)(e) required the primary judge to consider the matters contained in s 90SF(3) so far as they are relevant. His Honour did so. However, we accept that the primary judge had to be satisfied that in all the circumstances it is just and equitable to make the order. Again that satisfaction can be inferred and in this instance should be.
His Honour described this division as “appropriate” at [97] and stood back to consider the effect of the proposed order. In so doing his Honour found that it was just and equitable to make a property settlement order and that his proposed division was appropriate. Those findings accord with the terms of s 90SM. Reading the judgment as a whole, it is apparent to us that his Honour was satisfied that the orders he was making, including the adjustment, were just and equitable, as it is difficult to see that they would otherwise be found to be “appropriate”.
Further, it is made clear by paragraph 109 of the appellant’s Summary of Argument that this aspect of the grounds was based on the grounds contained in his original Notice of Appeal, and not the amended grounds found in his Amended Notice of Appeal. As they were not successful, the basis for this submission falls away. The adjustment to the parties’ property interests is to be undertaken by reference to the considerations raised by s 90SM(4). There is no residual discretion to make a further adjustment under s 90SM(3) (see Manolis & Manolis (No 2) [2011] FamCAFC 105 at [65]-[66]; Russo & Wylie (2016) FLC 93-747).
These grounds do not succeed.
The appeal will be dismissed.

Can and should this Court correct the arithmetical error made by the primary judge?

At the conclusion of oral submissions counsel for the respondent made an oral application for this court to correct the primary judge’s orders by calculating the parties’ contributions‑based entitlements on the basis of a 75/25 division, ostensibly as intended by the primary judge, and to then add the $100,000 adjustment in favour of the respondent so as to arrive at a figure for payment to her of $276,847.94 (instead of a payment of $221,478).
As explained earlier, the primary judge quantified the parties’ contribution‑based entitlements as being $885,913.77 to the appellant and $221,478 to the respondent. This is an 80/20 division and not the stated 75/25 division.
The primary judge then adjusted these figures by $100,000 under s 90SM(4) to achieve the final result of $785,913.77 to the appellant and $321,478 to the respondent.
The respondent did not cross-appeal.
The appellant had not been given notice of this application and directions were made for it to proceed by way of written submissions.
The respondent’s written submissions identified her application as being brought under r 17.02 and r 17.02A of the Family Law Rules 2004 (Cth). The court was asked not only to amend the orders but also to amend the figures within the judgment itself which, she submitted, flowed from the arithmetical error.
These rules provide:
r 17.02 Varying or setting aside orders
(1)The court may at any time vary or set aside an order, if:
(a)it was made in the absence of a party; or
(b) it was obtained by fraud; or
(c)it is interlocutory; or
(d)it is an injunction or for the appointment of a receiver; or
(e) it does not reflect the intention of the court; or
(f)the party in whose favour it was made consents ; or
(g)there is a clerical mistake in the order; or
(h)there is an error arising in the order from an accidental slip or omission.
(2)Subrule (1) does not affect the power of the court to vary or terminate the operation of an order by a further order.
r 17.02A Varying or setting aside reasons for judgment
The court may, at any time:
(a)vary or set aside reasons for judgment if the reasons were issued by mistake; or
(b) correct a clerical mistake in reasons for judgment, or an error arising in reasons for judgment from any accidental slip or omission.
This is an appeal from a judgment of the Federal Circuit Court of Australia. It is not at all clear to us why these rules would apply in the exercise of the Family Court of Australia’s appellate jurisdiction. However, we do not need to consider that issue further as we consider that s 94AAA(6) enables us to determine the application. It provides:
On an appeal under subsection (1) or (1A), the Family Court may affirm, reverse or vary the decree or decision the subject of the appeal and may make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re-hearing on such terms and conditions, if any, as it considers appropriate.
That section permits the court to vary the decree or decision the subject of the appeal. Ordinarily, the court can only do so when an error has been established: Allesch v Maunz (2000) 203 CLR 172 at [44]. However, the section extends to permitting the court to correct accidental slips or omissions made by a trial judge in the orders the subject of the appeal: Gilles & Irby (2016) FLC 93-687 at [18]. It does not, however, extend so far as to enable us to amend the reasons for judgment of the primary judge.
In Trask & Westlake (2015) FLC 93-662 the Court said:
45.The parties were agreed before us that, if we were of the view that his Honour’s calculation is erroneous, it can be corrected by reference to “the slip rule”. “Courts have an inherent or implied jurisdiction to amend judgments which do not correctly state what was actually decided and intended” (Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 133 ALR 206, 209 (“Elyard”); DJL v The Central Authority (2000) 201 CLR 226). The general rule that, save with consent, orders cannot be amended without a rehearing has as an exception for “accidental slips or omissions” (Elyard (above)). In DJL (at 244), the High Court held that “An order … might be made in the action for the correction of the records of the court to make certain that they truly represented what the court had pronounced or had intended to pronounce”. That statement, emphasised as indicated, was said by Spigelman CJ in Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group (2007) 70 NSWLR 411 “should be accepted as authoritative” (at [80]). Of course, it is open to the parties to correct any mistake that might otherwise be the subject of the application of the slip rule by agreeing to vary the orders.
46.The operation of the rule as described by Spigelman CJ in Newmont might be seen to embrace the instant facts. That said, the “slip rule” has been described as both “surprisingly wide” and “that it is to be exercised sparingly” (Respectively R v Cripps; ex parte Muldoon (1984) QB 686, 695; Gould v Vaggelas (1985) 157 CLR 215, 275 per Gibbs CJ, each quoted in Russell v Russell (1999) FLC 92-877). Specifically, it has been held that it applies “… where the proposed amendment is one upon which no real difference of opinion can exist [and] it does not apply where the amendment is a matter of controversy; nor does it extend to mistakes that are the consequence of a deliberate decision” (Elyard at 210). Similarly, while the rule permits of correction for accidental slips or omissions of counsel, deliberate but mistaken acts or omissions may not be correctable by the application of the rule (L Shaddock & Associates Pty Ltd v Parramatta City Council No 2 (1982) 151 CLR 590 at 594-5; Gould v Vaggelas (above) at 274-5).
Here it is clear that the primary judge intended to make orders giving effect to a division of the property so that the appellant was to receive $785,913.77 and the respondent $321,478.
As we have explained, the primary judge arrived at these figures by using the dollar amounts of the contributions-based entitlement derived from the arithmetical error and by then making a further lump sum adjustment.
It is not at all clear that there has been an obvious slip or error which would enable us to intervene. This is therefore sufficient to indicate that the application must be dismissed.
Had we taken a different course we would have then needed to consider whether, in any event, we should make the orders sought by the respondent because of the delay by the respondent in raising this issue. In L Shaddock & Associates Pty Ltd v Parramatta City Council[No 2] (1982) 151 CLR 590 the Court said:
11. Third, we would observe that an order under the slip rule is not available as a matter of course. There is a discretion in the court to refuse an order if something has intervened which would render it inexpedient or inequitable that it be made (see Tak Ming (1973) 1 WLR, at p 306; (1973) 1 All ER, at p 572 ; and the cases there cited). In the present case, there was considerable delay in filing the notice of motion. The Court's decision was given on 28 October 1981 and the judgment entered at the end of November 1981. The motion to amend the order is dated 22 July 1982. The general principle in support of finality in litigation together with the fact that a party against whom judgment in a money sum is entered is entitled to regard that judgment as finally determining the extent of his liability combine to stress the importance of prompt action under the slip rule. The seriousness of the delay in this case is, however, minimized by the fact that the applicants promptly made known to the Council their claim for interest and the delay in making the application to the Court is, to no small extent, explained by the content of the correspondence between the parties during the months prior to the filing of the application.
That issue, however, now does not arise.
Thus, we are not satisfied that the basis for the application has been established. The oral application will be dismissed.

Costs

We have not yet received submissions as to costs and orders will be made for the parties to provide written submissions.

I certify that the preceding one hundred and twenty five (125) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (May, Ryan & Aldridge JJ) delivered on 5 May 2017.

Associate:

Date: 5 May 2017