TS & VC

[2005] FamCA 1183

[2005] FamCa 1183

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT MELBOURNE  Appeal No. SA24 of 2005

File No MLM8101 of 2003

BETWEEN:

TS

(Appellant Husband)

and

VC

(Respondent Wife)

CORAM:  THE HONOURABLE JUSTICE KAY

DATE OF HEARING:          17 November 2005

DATE OF JUDGMENT:      17 November 2005

REASONS FOR JUDGMENT

APPEARANCES:

The appellant husband in person.

The respondent wife in person.

TS & VC

SA24 of 2005

CORAM:Kay J

DATE OF HEARING:         17 November 2005

DATE OF JUDGMENT:     17 November 2005

Catchwords:           Appeal, property, wife receiving all the assets, land gifted by her parents, house built by her father and brother (although financed by joint borrowings), short marriage, wastage by husband, orders within discretion.

1. This is an appeal against orders that were made by O'Dwyer FM on 3 February 2005 in property proceedings between the parties.  The orders were unusual in that the effect of the orders was to leave the wife with retention of all of the assets of the parties and to leave the husband with none of the assets that the parties had accumulated in the course of their relationship. 

1. The husband has filed a Notice of Appeal seeking that the net assets of the parties be divided 60 per cent for the wife and 40 per cent for the husband.  The Notice of Appeal was drawn by his former solicitors and contains several detailed grounds of appeal, none of which have been effectively advanced in the course of the morning by the husband who has been acting for himself in these proceedings for some time.

1. The Federal Magistrate's reasons for judgment are fairly short.  They establish the history relating to the background of the parties, identify the assets and liabilities of the parties, deal with issues of credit, focus on issues of contribution and then come to the conclusion that it is appropriate for the wife to receive everything and the husband nothing.

1. The major focus of the proceedings related to the issue of what ought happen to the parties' jointly owned real estate at a north-western Melbourne suburb.  It was a property which the Federal Magistrate found had an agreed value of $267,500 encumbered by a mortgage with the Commonwealth Bank of $75,000, thus leaving an equity of around about $192,500.  As each of the parties were joint registered proprietors they would, without any alteration of interest, each be entitled to half.  Effectively the orders was settle upon the wife the husband's half-interest in that property which was effectively to give her almost $100,000 that otherwise belonged to the husband. 

1. The other assets of the parties included the wife's superannuation entitlement of $13,500; the furniture and effects that the parties had accumulated and the parties' business which was of little value.  There was also a car owned by the husband, but it seemed to have a negative equity. 

1. The background, as identified by his Honour and which has not been the subject of any attack before me, was that the parties at the time of the trial were both 31 years of age.  They married in 1996 and separated in 2002, some six years after marriage.  There were no children born of the marriage.  

1. During the first three years of the marriage the parties had lived in a property owned by the wife's parents.  They were then given some land owned by the wife's parents. The wife's brother received title to the land as well.  It was then subsequently subdivided, and for a period of about 18 months the parties lived with the husband's parents whilst a home was erected on that land.

1. The home was financed by borrowings from the Commonwealth Bank of some $80,000.  In order to achieve the borrowings it was necessary for the husband's parents to act as co-guarantors of the borrowings but they have never been called upon to meet any liabilities as a result of that co-guarantee.

1. Two units were built on the land, one occupied by the wife's brother and the other by the parties.  Construction of the property was effectively carried out by the wife's father and brother and although other professional builders were engaged from time to time to carry out necessary works. 

1. The creation of the equity has been mainly due to the inflationary effects upon the land brought about as a result of market movement rather than any efforts by the parties in relation to either the acquisition, conservation or improvement of the property.  The Magistrate accepted in the evidence of the significant contributions that were made on behalf of the wife by her family and that seemed to become the overwhelming consideration as to the outcome of the proceedings. 

1. The parties seemed to live with a degree of some conflict during the course of their relationship and there was some evidence by the husband that they were significantly estranged for much of the latter part of their relationship.  In his evidence‑in‑chief he said that the parties had basically lived separate lives for about two and a half years. 

1. The Magistrate concluded that on issues of credit he found the husband to be cavalier and had an unbridled disregard for the law and the consequences of his conduct and he was a person without credit.  He was particularly concerned about evidence that the husband had incurred many traffic offences and debts relating to the use of Citylink without paying moneys that were incurred in driving on tollways.  He was driving a car in the name of the wife and this led the wife to significant inconvenience and distress.  Issues surrounding the way in which the husband has conducted his business affairs with disregard to his obligations towards authority had loomed large in the course of the proceedings.  The Magistrate indicated that these matters reflected ill upon the credibility of the husband.  Where there were matters in dispute between the parties he preferred the evidence of the wife and that of her witnesses.

1. His Honour was particularly concerned about the manner in which the husband, who had been taking the responsibility for paying the mortgage, had defaulted in relation to payments or made payments that were dishonoured and although he gave evidence of meeting the payments, the evidence proved to be fallacious.  The wife found herself after separation under threat of the bank foreclosing on the mortgage and throwing her out and she was able to, by borrowing some $12,000 from her parents, rescue the situation, pay the bank the arrears that had accumulated and put herself back into a stable position in relation to the conservation or the preservation of the home.  This was a matter that appeared to be of significant concern to the Magistrate.

1. His Honour, having made findings as to credit, and being particularly critical of the husband and what he perceived as the husband's financial irresponsibility during the course of the relationship, then turned to do an analysis of the contributions each party had made.  He found that the land was acquired by gift from the wife's parents; that the home was financed as to $20,000 from the wife's savings and as to the balance by borrowings, which borrowings had not been repaid and were still outstanding almost to their full extent even after the wife had rescued the arrears situation.  He found that the building of the property and any added value as a result was significantly contributed to by the wife's father and brother, although there were what his Honour described as token contributions made by the husband.  The husband's evidence was that he was working during the week and on weekends he would come and act as a builder's labourer. 

1. The Magistrate made reference to the wife's family providing the rent‑free accommodation for three years and concluded that whatever gifts the parties had received at their wedding had been spent by them either in the course of living or acquisitions of furniture.  He was again critical of the husband's claims to have made some contribution towards the repayment of the mortgage and then concluded that effectively the husband had really made no contribution towards the home and in the circumstances if there had been a contribution, there had been a negative contribution in other aspects of his acquisition, conservation and improvement of the home and presumably that means that he allowed the mortgage to fall into arrears.  The Magistrate concluded that it would be inappropriate for the husband, in the circumstances, to receive any of the benefit of the capital gain that had arisen out of the capital assets with the effluxion of time, simply because he was married and his name appeared on the title.

1. There were some issues brewing relating to chattels, but they do not appear to loom large in the course of the reasons for judgment and that may well be because they were not pressed by the husband's counsel in the course of the proceedings.  They are identified in a sense in the husband's application and he seeks the distribution of some chattels and they are also identified in his affidavit in the sense that he identifies all of the chattels the parties had, but it may well be that they were not in fact pressed before the Magistrate. 

1. In the course of the discussion before me today I have endeavoured to try to resolve those issues in the sense of seeing whether there was some common ground.  Unfortunately, there remains little, if any, common ground and a fair evidence of a degree of hostility in these proceedings, but the wife has conceded in the course of her discussion with me that there is a single bed, a computer desk and a DVD player available for collection by the husband and the parties have agreed that somebody on behalf of the husband can come to the wife's home and retrieve those items.

1. There are other items, a small list which the husband has sought to have made available to him.  The wife is not willing to concede them to him and unless I was to allow the appeal it would be inappropriate for me to make any orders about them, the Magistrate having ordered that the parties are each solely entitled at the exclusion to all other property in their possession as at this date.

1. This is an appeal from a discretionary order.  The authorities make it clear that the court ought not interfere in an exercise of discretion, unless there has been

• an error in approach or principle,

• the failure to take into account relevant circumstances,

• the taking into account of irrelevant circumstances,

• the making of findings of fact unsupported by the evidence,

• the orders were “unreasonable or plainly unjust”.

1. The power that the Magistrate was exercising was a power to make alterations of property interests under s 79 of the Family Law Act 1975. The matters his Honour was obliged to take into account are set out therein and they include the financial contribution made directly or indirectly by or on behalf of the party to the marriage towards the acquisition, conservation and improvement of the property; contribution, other than financial, made directly or indirectly by or on behalf of a party to the marriage towards the acquisition, conservation and improvement of the property; contributions made to the welfare of the family and other matters that are set out, including reference, so far as they are relevant, to the general financial circumstances of the parties.

1. The discretion is a generous discretion and whilst minds may differ in relation to the manner in which the discretion was to be exercised, it is not sufficient for an appellate tribunal to conclude that it would have reached a different result had it been hearing the matter at trial.  What the appellate tribunal has to be persuaded of is that there is error, namely that it is outside the range of fair results and that is a very subjective test, or some other error is palpable.

1. Whilst the end result may seem to be significantly unfair to the husband in the circumstances, I am, however, unable to be persuaded that there is error on behalf of the Magistrate.  This case has some very unusual facts about it.  The duration of the marriage was modestly short, the principal asset of the marriage was acquired towards the latter half of the marriage and its acquisition came about effectively financed by the wife and her family.  The value in the asset was created by capital growth outside of the contribution that the parties made and when one measured, what the husband put in, one could not say the Magistrate was in error in reaching the conclusion that he did.

1. In the circumstances, whilst no doubt the husband may remain with a significant air of grievance relating to the issues, I am not persuaded that any of the matters that are raised in the notice of appeal or in the oral argument before me today are substantiated and accordingly, I will dismiss the appeal.

1. I have noted for the purpose of the transcript the arrangement the parties have reached or agreed in relation to the collection of the three items that are already identified in the transcript, but otherwise I propose to dismiss the appeal. 

1. The order will be:

1.        The appeal will be dismissed. 

I certify that the preceding 25 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Kay
The 1st day of December 2005

Associate: