Varnham & Moses
[2021] FamCAFC 31
•2 February 2021
FAMILY COURT OF AUSTRALIA
Varnham & Moses [2021] FamCAFC 31
Appeal from: Varnham & Moses [2020] FamCA 83;
Varnham & Moses (No. 2) [2020] FamCA 1002
Appeal number(s):
EAA 32 of 2020;
EAA 169 of 2020
File number(s):
NCC 1058 of 2017
Judgment of:
STRICKLAND, KENT & TREE JJ
Date of reasons for judgment:
5 March 2021
Date of order:
2 February 2021
Catchwords:
FAMILY LAW – APPEAL – PROPERTY – Assessment of contributions – Where no legitimate comparison of the parties’ respective post-separation contributions results in an adjustment of 10 per cent in the wife’s favour – Consideration of s 75(2) factors – Where the primary judge failed to analyse the effect of any further adjustment in real money terms – Adequacy of reasons – Where the primary judge’s reasons do not satisfactorily explain the assessment of post-separation contributions and the approach in addressing relevant s 75(2) factors – Appeal allowed – Costs certificates granted.
Legislation:
Family Law Act 1975 (Cth) ss 75, 79
Federal Proceedings (Costs) Act 1981 (Cth) ss 8, 9
Cases cited:
Bondelmonte v Bondelmonte (2017) 259 CLR 662; [2017] HCA 8
Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168
Phipson & Phipson [2009] FamCAFC 28
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Wayne & Wayne [2010] FamCAFC 33
Division:
Appeal Division
Number of paragraphs:
70
Date of hearing:
2 February 2021
Place:
Heard in Sydney (via video link), delivered in Brisbane
Counsel for the Appellant:
Ms Christie SC
Solicitor for the Appellant:
Lander & Rogers
The Respondent:
In person
ORDERS
EAA 32 of 2020;
EAA 169 of 2020
NCC 1058 of 2017APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR VARNHAM
Appellant
AND: MS MOSES
Respondent
ORDER MADE BY:
STRICKLAND, KENT & TREE JJ
DATE OF ORDER:
2 FEBRUARY 2021
IT IS ORDERED IN APPEAL NO. EAA 32 of 2020:
1.The appeal be allowed.
2.The orders of the trial judge be set aside.
3.The proceedings be remitted to the Family Court of Australia for rehearing by a judge other than the trial judge.
4.The Court grants to the appellant husband a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by him in relation to the appeal.
5.The Court grants to the appellant husband and the respondent wife costs certificates pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the parties in respect of the costs incurred by them in relation to the rehearing.
IT IS ORDERED IN APPEAL NO. EAA 169 of 2020:
6.The appeal be dismissed.
7.No order as to costs.
IT IS NOTED THAT:
The reasons for judgment of the Full Court will follow these orders and will be published and provided to the parties as soon as is practicable.
Note: The form of the order is subject to the entry in the Court’s records.
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 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Varnham & Moses has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND, KENT & TREE JJ:
By Notice of Appeal filed on 13 March 2020, Mr Varnham (“the husband”) appealed from orders made by the primary judge in the Family Court of Australia on 14 February 2020 determining property settlement proceedings between the husband and Ms Moses (“the wife”).
In advance of the hearing of this appeal on 2 February 2021, the wife advised the Appeals Registrar to the effect that it was not her intention to appear on the hearing of the appeal or to make any submissions. Consistent with that position the wife did not file any Summary of Argument for the appeal which was ordered to be done by 26 August 2020. In the event, the wife did appear on the hearing of the appeal (by electronic means) and she was permitted to make some submissions.
At the conclusion of the hearing of the appeal on 2 February 2021 we made orders allowing the appeal, setting aside the orders of 14 February 2020, and remitting the proceedings for rehearing by a judge other than the primary judge. We also granted costs certificates to each party pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) for the appeal and for the rehearing. As the husband’s further appeal from the orders made by the primary judge on 27 November 2020 dismissing his application for a stay of the orders made on 14 February 2020 was thus rendered nugatory, we also made an order dismissing that appeal.
These are our reasons for those orders.
BACKGROUND
The following facts are largely extracted from the reasons for judgment of the primary judge.
The husband was born in Country S in 1958 and is presently 62 years of age. He moved to Australia in July 1996. He has two now adult daughters from a previous marriage aged 32 years and 28 years respectively.
The wife was born in Country U in 1961 and is presently 59 years of age. She also has two adult children from a previous marriage, a son presently aged 38 years and a daughter presently aged 26 years.
The parties commenced cohabitation in 2006 and married in 2007. Upon marriage the wife and her youngest daughter, then aged 12 years, moved into a property owned by the husband with the husband and his youngest daughter, then aged 14 years.
At the commencement of cohabitation the husband worked as a General Manager for a company earning $180,000 per annum. The wife worked in the health industry and operated a business, earning a combined income of $150,000 per annum (at [51]–[53]).
At [146] of the reasons the primary judge set out her findings as to the assets and liabilities of the parties at the commencement of cohabitation. The primary judge found that the wife had assets, including superannuation, net of liabilities worth $588,000 whilst the husband had assets, including superannuation, net of liabilities worth $310,017.
In March 2007 the husband relocated to New Zealand to take up a new position with his employer (at [56]–[59]). The wife and her younger daughter joined him in June or July 2007
(at [67]–[68]). The parties purchased a property at B Street, Suburb C New Zealand (“the New Zealand property”) as joint tenants for AUD$938,000. To fund the purchase the husband sold four investment properties and the parties obtained a loan in joint names. The wife otherwise did not contribute towards the purchase price despite the husband requesting that she do so (at [63]–[66]).Following the move to New Zealand the wife worked at QQ University, where she earned about $90,000 per annum, and then at Organisation in City QQ, where she earned about $65,000 per annum. Following her reporting to the husband that she was being bullied at work, the wife ceased employment in January 2014. On the wife’s contention the husband wanted her to support him in his job, on the husband’s contention he wanted the wife to seek alternate employment (at [75]–[76]). In any event, the wife has not worked in external employment since and has no plans to return to work (at [69]–[72]).
The date of separation was a matter of dispute. On the husband’s case the parties separated on 30 May 2016 but continued to live under the same roof for some six months subsequently. On the wife’s case the parties separated on 29 September 2016.
Between August and September 2016 the husband negotiated a redundancy package with his long-standing employer and the husband ceased working with that employer in October 2016 and then received a redundancy package of $891,082.30, being three years of earnings at his final rate of salary. The net payment to the husband amounted to AUD$529,003 (at [80]–[86]).
The husband deposed to having used these funds towards the reduction of mortgages, purchase of a car, purchase of a boat, renovations, about $80,000 on living expenses and some $180,000 deposited into the husband’s personal account (husband’s affidavit filed 5 June 2019, paragraph 389).
In November 2016 the husband commenced paying the wife $4,000 a month towards her living expenses. On 1 December 2016 the husband agreed to pay the wife one half of his annual and deferred bonus amounting to $14,074.68 (at [88]–[89]). The primary judge found that from separation to the date of trial (by September 2016 until July 2019) the husband paid home insurance premiums over the New Zealand property and from 2 December 2016 until 30 July 2019 the husband made mortgage repayments for the New Zealand property at a cost of $3,600 per month (at [90]–[91]).
In December 2016 the husband returned to Australia where he has lived since. He initially resided at a property he owned at 1 F Street, Suburb G before moving into rental accommodation. The wife remained living in the New Zealand property and has lived in the New Zealand property ever since.
In November 2017 the husband commenced working as the Chief Executive Officer (“CEO”) of a company earning $245,760 net per annum. He resigned from this position effective June 2019 (at [128]). He remained unemployed at trial in July 2019 (at [129]), though gave evidence that he intended to seek further employment and work for another two or three years before retiring (husband’s affidavit filed 5 June 2019, paragraph 399).
APPROACH OF THE PRIMARY JUDGE
The primary judge recorded findings (at [143]) as to the total assets, superannuation and liabilities of the parties, or either of them, determining the “net asset pool” to be worth $2,806,396.
In assessing contributions under s 79(4) of the Family Law Act 1975 (Cth) (“the Act”) the primary judge considered “initial contributions” and, as earlier noted, found that at the commencement of cohabitation the wife had net capital (including superannuation) worth $588,000 whilst the husband had net capital (including superannuation) worth $310,017 (at [146]), a difference of approximately $280,000.
The primary judge recorded (at [154]) an initial capital disparity between the parties in percentage terms of 65 per cent/35 per cent in the wife’s favour, but having recorded findings (at [156]–[160]) about the use made of introduced capital concluded:
161. Overall there should be a disparity of 55/45 favouring the wife.
(Emphasis in original)
After considering and making findings about “[c]ontributions during the relationship” (at [162–[176]) the primary judge concluded:
177.Overall the ratio of contribution by separation, given how the respective assets of the parties were used during the marriage, should be adjusted to equality between the parties.
(Emphasis in original)
From [178] to [187] the primary judge considered, and made findings about, contributions “post separation” including findings about the husband’s redundancy payment earlier referred to paid in October 2016 soon after separation in the net sum of approximately $529,000. The primary judge recorded a finding at [178] in relation to the husband’s use of that payment “which he mostly spent in a discretionary personal way, for example on overseas travel, gifts and clothes”.
At [188] the primary judge concluded the discussion of this topic with the following:
188.By the date of trial the contributions of the husband should be weighed against the balance of redundancies not accounted for, other than some items in the Balance Sheet and income available to the husband. The ratio should move in favour of the wife 60/40.
(Emphasis in original)
The primary judge then considered some (but as we will further discuss, not all) “[r]elevant factors under section 75(2)” and concluded that there ought be a further 10 per cent adjustment in the wife’s favour, resulting in an overall division of 70 per cent/30 per cent in the wife’s favour (at [217]).
The primary judge declined to make any splitting order with respect to the husband’s superannuation to give effect to that apportionment. Rather, the husband was ordered to pay a cash sum of $301,406 to the wife with the primary judge recording that the husband would likely borrow to fund that payment (at [222]). The effect of the orders made by the primary judge was that the wife was to retain or receive wholly non-superannuation capital worth $1,964,472 whilst the husband would retain $841,917 mostly comprising his superannuation worth $542,386. Self-evidently, the 40 per cent disparity produced by a 70 per cent/30 per cent outcome represents, in dollar terms, $1,122,555.
CHALLENGES ON APPEAL
Whilst the husband’s Notice of Appeal filed on 13 March 2020 advanced 10 grounds of appeal, in his Summary of Argument filed on 29 July 2020 the husband abandoned Grounds 7 and 9. The remaining grounds are as follows:
1. That [the primary judge] erred in making Orders for the alteration of property interests, being an overall adjustment of 70 per cent to the wife and 30 per cent to the husband, which is manifestly unjust and inequitable so as to create appellable error.
2. That [the primary judge] failed to provide adequate reasons for the Orders which were made.
3. That [the primary judge] erred in the exercise of her discretion in finding that the Orders were just and equitable in circumstances where:
a. [The primary judge] attributed to the wife $370,000 worth of assets as initial contributions which was disputed by the husband and in support of which the wife adduced inadequate and/ or insufficient evidence.
b. [The primary judge] failed to give sufficient weight to the fact that the majority of the Husband’s redundancy payment was referable to his engagement with his employer prior to the commencement, and after the conclusion, of the marriage.
4. That [the primary judge] erred by finding an adjustment of 10% in favour of the wife for section 75(2) factors was appropriate because (in part) the wife’s access to superannuation was much less than that of the husband in circumstances where:
a. All of the parties’ superannuation interests were already accounted for in the balance sheet; and
b. Both parties had sought a superannuation splitting order and the [primary judge] had refused to make one.
5. That [the primary judge] erred at law in failing to afford the parties procedural fairness in circumstances where:
a. [The primary judge] identified (albeit incorrectly) the wife’s final proposal (at paragraph 22 of the Reasons for Judgement dated 14 February 2020), which included a superannuation splitting order;
b. [The primary judge] identified the husband’s final proposal (at paragraph 20 of the Reasons for Judgement dated 14 February 2020, which included a superannuation splitting order; and
c. [The primary judge] failed to afford either of the parties procedural fairness by failing to advise them that she proposed not to, and did not, make a superannuation splitting order.
6. That [the primary judge] erred by failing to properly assess the husband’s contribution to the purchase of the property at [B Street, Suburb C] New Zealand (“the New Zealand property”) in circumstances where the [primary judge] incorrectly found there were “minimal net proceeds of sale” from four of the husband’s investment properties.
8. That [the primary judge] erred in finding that the redundancy payment received by the husband had been unaccounted for.
10. That [the primary judge] erred in failing to properly assess each of the parties’ earning capacity and capacity to work.
(As per the original)
ASSESSMENT OF THE HUSBAND’S CHALLENGES
We observe at the outset of this discussion that it was necessary for the husband to establish, on an appeal from a discretionary judgment, error on the part of the primary judge of the kind identified by the High Court of Australia in the well-known formulation discussed in House v The King (1936) 55 CLR 499 at 504–505 and Bondelmonte v Bondelmonte (2016) 259 CLR 662 at [31]. It is trite that such error is not established merely by demonstrating that another judge, or an appellate court, may have reached a different conclusion (Gronow v Gronow (1979) 144 CLR 513 at 519–520).
For the reasons which follow we were satisfied upon hearing the appeal that appellable error was established.
In the manner in which senior counsel for the husband addressed her oral argument of the appeal, topics, or categories of asserted error, were addressed rather than confining argument strictly or discretely to each ground of appeal, and there is an obvious overlap between some of the grounds including, for example, the over-arching nature of Ground 1. Moreover, the complaint in Ground 2 as to adequacy of the primary judge’s reasons permeates a number of grounds. It is expedient that we likewise address the challenges advanced on appeal in topic form.
THE PRIMARY JUDGE’S ASSESSMENT OF POST-SEPARATION CONTRIBUTIONS
As already noted, having concluded at [177] that the parties’ “overall” contributions to the point of separation were equal, the primary judge moved to consider post-separation contributions.
At [178] and [179] the primary judge recorded:
178.There were further contributions post separation. The husband received a solid redundancy payment in 2017 of more than $500,000 which he mostly spent in a discretionary personal way, for example on overseas travel, gifts and clothes.
179.The husband paid for an overseas holiday for himself, a companion and his two adult children. This was part of extensive discretionary spending by the husband after he received his redundancy payment in 2017.
Leaving aside that the husband’s redundancy payment was received in October 2016 and not 2017, as the primary judge had earlier in the reasons recorded (at [86]), we fail to see how the finding at [178] that the husband’s redundancy payment of approximately $529,000 was “mostly spent [by the husband] in a discretionary personal way, for example on overseas travel, gifts and clothes” was open, even on the primary judge’s own findings.
It is to be borne in mind that the husband’s redundancy payment was received post-separation in October 2016 contemporaneously with the husband’s departure from his then long-standing employment. The husband did not undertake employment for the subsequent period of more than a year, until obtaining a CEO position in November 2017. It was in that context that,
post-separation, the husband paid “$50,000 to the wife in the first year [of separation] for her expenses” (at [183]); finance payments for the wife’s vehicle between November 2016 and June 2017 totalling $5,400 (at [100]); and “about $150,000 towards mortgage, house insurance and outgoings. Those payments were for the joint benefit of the parties in preserving an asset” (at [182]), that being the New Zealand property in which the wife continued to live.At [181] the primary judge recorded:
181.The husband bought a new boat ($45,000), bought 2 F Street, Suburb G ($290,000) and renovated 1 F Street, Suburb G ($50,000). Those assets are in the Balance Sheet.
Those capital amounts in respect of assets reflected in the Balance Sheet, total $385,000. To this may be added the “new car” the husband purchased for $64,000, as referred to by the primary judge at [183], which appears in the Balance Sheet as found by the primary judge at a value of $45,000. The husband also applied $60,000 of the redundancy payment in mortgage reduction (husband’s affidavit filed 5 June 2019, paragraph 389).
In summary, whilst the husband utilised borrowings to purchase 2 F Street, Suburb G, substantial capital items which must have been substantially funded by the husband from the redundancy payment, were reflected in the Balance Sheet. In circumstances where the husband was unemployed for the 12 months or so subsequent to receiving the redundancy payment he obviously was reliant upon it to fund his living expenses and ongoing loan obligations, including in respect of the home in which the wife continued to live.
Plainly, the finding that the husband “mostly spent” the redundancy payment “in a discretionary personal way” to the extent it conveys unreasonableness, or expenditure to be brought to account is wrong. That erroneous finding permeates the primary judge’s conclusion at [188] that:
188.By the date of trial the contributions of the husband should be weighed against the balance of redundancies not accounted for, other than some items in the Balance Sheet and income available to the husband. The ratio should move in favour of the wife 60/40.
(Emphasis in original)
It bears emphasis that the task of the primary judge was to assess each party’s relevant contributions in the post-separation period. It was not legitimate to minimise the husband’s contributions, as the primary judge appears to do, by criticisms of the husband for any perceived failure to fully account for his post-separation income or by him having devoted some of it or some of the redundancy payment to discretionary spending (at [178]–[179] and [187]).
This was not a case where, post-separation, a wife continues to make significant homemaking and parenting contributions to the children of the relationship, freeing a husband to earn income. In those cases, the wife can be seen to make an important ongoing indirect contribution to the husband’s post-separation income and ongoing non-financial contribution within the meaning of s 79(4)(c) of the Act.
In this case the husband’s earning capacity had been well-established prior to the commencement of the relationship at which time the husband was 48 years of age, this being the second marriage for both parties. The parties’ cohabitation subsisted for slightly less than 10 years and there were no children of the relationship. The husband’s application of some of his post-separation income to things such as an overseas holiday for himself and his adult children and the purchase of a car for his new partner, did not diminish the significance of the substantial contributions he made post-separation for the benefit of both of the parties.
Throughout the post-separation period the wife had the benefit of living in the parties’ New Zealand property, partly subsidised by the husband by the payment of maintenance to the wife and other expenses, including substantial mortgage payments, whilst the wife elected not to work despite having the capacity to do so, albeit that on the primary judge’s findings the wife was not capable of earning the same level of earnings as the husband (at [217]).
When the entirety of the primary judge’s discussion of, and findings about, post-separation contributions is reviewed (at [178]–[188]) the sole finding capable of being characterised as a contribution by the wife is the finding at [187] that “[t]he wife has been increasingly unsupported and meeting the mortgage and other expenses from draw downs on her superannuation”. Obviously, the wife’s superannuation is a capital item that would otherwise be available in the assessment of the parties’ property entitlements.
We fail to see how any legitimate comparison of the parties’ respective post-separation contributions, as identified by the primary judge, results in an adjustment of 10 per cent giving rise to a 20 per cent disparity between the parties worth, in dollar terms, $561,279.20 in the wife’s favour. The primary judge’s reasons do not adequately explain this outcome, unless it be accepted that the primary judge erroneously took the approach of minimising or diminishing the husband’s actual post-separation contributions by reason of the husband not entirely accounting for his post-separation income and the fact that he applied some of the redundancy payment and his income for his personal benefit.
To this may be added reference to a material consideration apparently not taken into account by the primary judge. It was uncontroversial that the husband’s redundancy payment was explicitly calculated by reference to the husband’s 21 years of employment with his employer. Less than 10 years of that overall period of service occurred during the period of the parties’ cohabitation. This provides important materiality to the husband’s post-separation contribution of the redundancy payment towards the acquisition and conservation of assets in the Balance Sheet, a material consideration the primary judge clearly failed to take into account.
It follows that in respect of the primary judge’s assessment of post-separation contributions we find merit in each of Grounds 1, 2, 3(b) and 8.
THE PRIMARY JUDGE’S ASSESSMENT OF S 75(2) FACTORS
Having determined that a 60 per cent/40 per cent apportionment in the wife’s favour was the proper outcome of the assessment of contributions, the primary judge examined what her Honour described as the “relevant matters to be taken into account” under s 75(2) of the Act.
The 60 per cent contribution-based entitlement of the wife determined by the primary judge represented, in money terms, $1,683,837.60 as compared to the husband’s 40 per cent entitlement worth $1,122,558.40.
The primary judge did not have regard to that as a starting point when assessing the s 75(2) factors. Her Honour’s consideration of s 75(2)(b) “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment” in respect of the wife appears to be confined to her existing property interests (at [191]) and her employability (at [198]–[201]). Moreover, s 75(2)(n)(i) mandates that account be taken of “the terms of any order made or proposed to be made under section 79 in relation to … the property of the parties”. That factor was not identified or addressed by the primary judge in her Honour’s listing of the factors her Honour considered to be relevant.
The primary judge erred in failing to consider, for example, potential income to the wife, or the financial resource of the investment of capital consequent upon the 60 per cent the wife was to receive, as compared with the husband’s position and his 40 per cent entitlement, given also that her Honour did not propose to make any splitting order with respect to the husband’s superannuation.
These errors also manifest themselves in the conclusion the primary judge expressed at [217] as follows:
217.Taking those matters into account an adjustment in favour of the wife is appropriate in circumstances where her earning capacity and access to superannuation is much less, by a factor of 10 percent.
(Emphasis added)
The property pool determined by the primary judge (at [143]) included the wife’s superannuation of $31,000 and the husband’s superannuation interests totalling $542,386. All of the parties’ superannuation interests were accounted for. On a 60 per cent/40 per cent contribution assessment overall the wife was obviously to receive the equivalent of 60 per cent of the parties’ combined superannuation. In circumstances where the primary judge did not propose to make any splitting order with respect to the husband’s superannuation, the wife was already to receive, wholly by way of non-superannuation capital, the majority of the value of the parties’ combined superannuation.
The primary judge’s reference then in [217] to the wife’s “access to superannuation is much less” as part of the foundation for a further 10 per cent adjustment in the wife’s favour for s 75(2) factors is an obvious error.
We have considered whether the primary judge’s error with respect to superannuation is capable of being characterised as immaterial on the basis that the primary judge’s 10 per cent adjustment for s 75(2) factors is supportable by reference to only the disparity between the parties’ respective earning capacities as discussed by the primary judge.
However, a 10 per cent adjustment for s 75(2) factors gives rise to a 20 per cent disparity between the parties worth, in money terms, $561,279.20.
As at trial in July 2019 the husband was soon to turn 61 years of age and whilst he was then unemployed his evidence was that he was actively seeking employment and, if successful, he intended to work “for two or three years at the maximum” before retiring (husband’s affidavit filed 5 June 2019, paragraphs 398–399). There was no challenge in the course of the husband’s extensive cross-examination at trial as to his stated intention in this respect. That is perhaps unsurprising given the husband’s age and the feature that as at trial the wife, at age 58 years, already regarded herself as retired as found by the primary judge (at [201]).
For the purposes of making some comparison, it is notable that the primary judge recorded:
193.The husband received a substantial redundancy package (AUD$529,000) equivalent to three years employment, paid to him in June 2017.
(Emphasis added)
On that comparison, the disparity of $561,279.20 is a present capital sum greater than the redundancy package the husband historically received calculated by reference to three years of his employment.
Self-evidently the disparity amount exceeds the entirety of the husband’s probable (or possible) total net (after tax) earnings for the anticipated balance of his notional working life. Viewed another way, the husband would have to work for many more than three years to ever have any prospect of accumulating an amount of capital approaching that magnitude and there was no evidentiary basis for such a conclusion. As noted, the unchallenged evidence of the husband was that he would work for a further period of two or three years before retiring.
It is well settled that the primary judge was obliged to analyse the effect of any further adjustment for s 75(2) factors in real money terms (Clauson and Clauson (1995) FLC 92-595; Steinbrenner & Steinbrenner [2008] FamCAFC 193; Phipson & Phipson [2009] FamCAFC 28; Wayne & Wayne [2010] FamCAFC 33 at [106]; Lovine & Connor (2012) FLC 93-515 at [80]). We are satisfied that the primary judge failed to so do and that error vitiates the exercise of discretion.
It follows that we are satisfied of merit in each of Grounds 1, 2, 4 and 10.
ADEQUACY OF REASONS
We have already made reference to the inadequacy of the primary judge’s reasons to satisfactorily explain her Honour’s assessment of post-separation contributions and her Honour’s approach in addressing (or failing to address) relevant s 75(2) factors. It follows that the primary judge’s reasons do not adequately explain the overall 70 per cent/30 per cent apportionment arrived at.
We are further satisfied that in circumstances where both parties proposed that a splitting order be made with respect to the husband’s superannuation interests her Honour’s reasons do not explain how it was just and equitable to both parties for the wife to receive the entirety of her 70 per cent entitlement in non-superannuation property whilst most of the husband’s 30 per cent entitlement ($542,386 out of a total of $841,917) comprised superannuation interests. The focus of the primary judge’s reasons addressing the justice and equity of “the adjustment” at [220]–[222] is upon the wife’s position without explanation of how the orders also do justice and are equitable to the husband.
We are thus satisfied of merit in Ground 2 in this respect.
BALANCE OF THE HUSBAND’S CHALLENGES ON APPEAL
Having found that appellable error attended the primary judge’s assessment of contributions and the primary judge’s consideration of s 75(2) factors and the inadequacy of the primary judge’s reasons, and having regard to our determination that the proceedings are to be remitted for rehearing by a judge other than the primary judge, it is unnecessary, and potentially unhelpful to a judge considering the matter afresh, for us to traverse the balance of the challenges advanced on appeal. For example, the challenge in Ground 3(a) invites detailed examination of the quality of the evidence before the primary judge concerning initial capital contributions. The judge rehearing the matter will obviously consider the issues on the evidence then presented.
For the foregoing reasons we made the orders of 2 February 2021 already referred to.
STAY APPEAL
We reiterate that the outcome with respect to the substantive appeal (EAA 32 of 2020)
self-evidently rendered the stay appeal (EAA 169 of 2020) nugatory and for that reason we ordered the dismissal of the stay appeal.COSTS
Neither party sought costs with respect to the stay appeal.
Each party sought costs certificates pursuant to the relevant provisions of the Federal Proceedings (Costs) Act 1981 (Cth) both in respect of the substantive appeal and the rehearing.
We were satisfied that the substantive appeal was allowed by reason of errors of law on the part of the primary judge justifying the grant of such certificates.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Strickland, Kent & Tree.
Associate:
Dated: 5 March 2021
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