Vernon and Vernon - [2010] FamCAFC 215

FAMILY COURT OF AUSTRALIA

VERNON & VERNON

[2010] FamCAFC 215

FAMILY LAW – APPEAL- Appeal against orders for settlement of property - Not established that Federal Magistrate’s conclusions with respect to contributions was plainly wrong or beyond ambit of reasonable exercise of discretion – Not established that s 75(2) adjustment plainly wrong or beyond ambit of reasonable exercise of discretion – Discussion of impact of 26 years of contributions on inheritance received by husband 5 years prior to separation – House v The King (1936) 55 CLR 499, CDJ & VAJ (1998) 197 CLR 23 applied – “Erosion” discussed (Pierce & Pierce (1998) 24 Fam LR 377, Kardos v Sarbutt [2006] NSWCA 11 - Appeal dismissed – Court not of opinion that any order for costs of appeal should be made - Norbis v Norbis (1986 161 CLR 513 applied.

Family Law Act 1975 (Cth)

Soulemezis v Dudley (Holdings) Pty Ltd (1987)
Bennett and Bennett (1991) FLC 92-191
Housing Commission of NSW v Tatmar PastoralCo Pty Ltd (1983) 3 NSWLR 378
House v The King (1936) 55 CLR 499
CDJ & VAJ (1998) 197 CLR 230
Norbis v Norbis (1986) 161 CLR 513
Warren v Coombes (1979) 142 CLR 531 (13 March 1979)
SSHontestroom v SS Sagaporack [1927] A.C. 37
Powell & Streatham Manor Nursing Home [1935] AC 243
Pierce & Pierce (1998) 24 Fam LR 377
Kardos v Sarbutt [2006] NSWCA 11
Farmer v Bramley (2000) FLC 93-060
Penfold v Penfold (1980) 144 CLR 311

APPELLANT:

MR VERNON

RESPONDENT:

MS VERNON

FILE NUMBER:

PAC

2092

2008

APPEAL NUMBER:

2010

DATE DELIVERED:	17 September 2010
PLACE DELIVERED:	Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Coleman J

HEARING DATE:

17 September 2010

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

14 May 2010

LOWER COURT MNC:

[2010] FMCAfam 447

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Sweet

SOLICITOR FOR THE APPELLANT:

Stojanovic Solicitors

COUNSEL FOR THE RESPONDENT:

Ms Snelling

SOLICITOR FOR THE RESPONDENT:

Valenti & Valenti Solicitors

Orders

That the appeal be dismissed.
That there be no order for costs.

IT IS NOTED that publication of this judgment under the pseudonym Vernon & Vernon is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PARRAMATTA

Appeal Number: EA 65 of 2010
File Number: PAC 2092 of 2008

MR VERNON

Appellant

And

MS VERNON

Respondent

EX TEMPORE REASONS FOR JUDGMENT

This is an appeal by Mr Vernon, (“the husband”), against orders for settlement of property made by Terry FM on 14 May 2010 in proceedings for settlement of property between the husband and Ms Vernon (“the wife”).
The orders made by the learned Federal Magistrate provided that the superannuation and non-superannuation assets of the parties be shared equally by them. The husband appealed against those orders and, in lieu of those orders, sought orders as appearing at Part F of his Amended Notice of Appeal.
The effect of the orders sought by the husband, in lieu of those made by the learned Federal Magistrate, is that the husband pay to the wife, after the deduction of $40,000.00, 50 per cent of the balance as at 14 December 2009 of funds held with the Credit Union in an identified account and that, contemporaneously with the completion of the sale of real estate at H, (“the [H] property”) the husband pay to the wife an amount equivalent to 10 per cent of the net proceeds of sale received by the husband with respect to such sale, the husband’s entitlement to the proceeds of sale being some 25 per cent. It is readily apparent that, as at trial, the husband sought that the orders for settlement of property made in favour of the wife be substantially less generous to her than the trial Magistrate’s orders provided.
The wife has resisted the husband’s appeal and sought to maintain the orders of the learned Federal Magistrate.
Some matters of background to the appeal are instructive. These find expression in the judgment of the learned Federal Magistrate. They are not controversial. As will be seen, no finding of fact made by the learned Federal Magistrate in the course of determining the proceedings before her is controversial for present purposes.
The parties separated under the one roof at the H property in 2004 after a 26-year relationship. The wife commenced the property settlement proceedings subsequent to the husband seeking a decree dissolving the parties’ marriage in 2008.
The property of the parties was uncontroversially found by the learned Federal Magistrate to comprise non-superannuation assets totalling, in round figures, $524,000.00 net and a superannuation interest of the husband worth about $70,000.00.
The learned Federal Magistrate assessed the contribution entitlements of the wife at 40 per cent and those of the husband at 60 per cent with respect to the property to which reference has been made. To that entitlement, her Honour made a 10 per cent adjustment in favour of the wife, pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). Her Honour concluded that the proposed equal division of the parties’ superannuation and non-superannuation assets which thus resulted was just and equitable by reference to the provisions of s 79(2) of the Act.
There were three children of the marriage of the parties, they being aged 26, 25 and 23 at the date of her Honour’s judgment. It is readily apparent that by the time the parties separated under one roof, the children were either adult insofar as they had attained 18 years of age, or in the case of the third child, close to attaining that age.
The husband had been employed throughout the whole of the cohabitation of the parties and, indeed, for a period of about 38 years prior to her Honour’s judgment, by R as a process worker. The wife had not had paid employment at any material time, that is to say, from the time the parties commenced cohabitation in 1978 to the date of her Honour’s judgment.
In 1981, some three years after the cohabitation of the parties commenced, they occupied a dwelling on a property variously suggested to have been from nine to 25 acres in area at H, south-western Sydney. That property was then owned by the husband’s parents. It is common ground that the parties occupied that property until their separation under the one roof and that they did on what was described accurately as a rent-free basis. The husband continues to occupy the property.
The husband’s father passed away in 1998 and his mother passed away in the year following. The mother’s estate, as the two estates effectively became, presumably by operation of survivorship with respect to the H property, was left by her to her four children in equal shares, the husband being one of those four children.
In about 2003 the husband received his one-quarter share, $40,000.00, of the cash portion of his late mother’s estate. The H property, as at the date of her Honour’s judgment, was still to be sold. The husband was occupying the property.
The principles which govern this appeal are not in doubt and do not require extensive restatement. To the extent that there is any suggestion, and although some of the grounds of appeal appear to raise the prospect of that being so, the Court does not understand, ultimately, that there is any sustained complaint about the adequacy of the learned Federal Magistrate’s reasons for judgment, such challenge fails.
The decision of the Court of Appeal in the Supreme Court of New South Wales in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 24, and in particular the judgment of McHugh J, then a Judge of Appeal, is relevant at page 279:
… without the articulation of reasons, a judicial decision cannot be distinguished from an arbitrary decision. In my opinion the giving of reasons is correctly perceived as “a necessary incident of the judicial process” because it enables the basis of the decision to be seen and understood both for the instant case and for the future direction of the law.
The crux of his Honour’s judgment was that the giving of reasons was a necessary incident of the judicial process as it enabled the basis of the decision to be seen and understood both for the parties, courts, appellate courts and the future direction of the law.
This Court applied Soulemezis in 1991 in the case of Bennett and Bennett (1991) FLC 92-191 the Full Court said at paragraph 78,266 with respect to the adequacy of reasons:
In Sun Alliance Insurance Ltd v Massoud (1989) VR 8, the Full Court of the Supreme Court of Victoria, consisting of Fullagar, Gray and Tadgell JJ, followed the principles established by the New South Wales Court of Appeal. Gray J, who delivered the principal judgment, said, at 18:
"The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if: --
(a) the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected."
We think that the test propounded by Gray J is a particularly useful one, and one which also applies to discretionary judgments.
In Bennett, this Court also endorsed what had been said by the Court of Appeal of the Supreme Court of New South Wales in Housing Commission of NSW v Tatmar PastoralCo Pty Ltd (1983) 3 NSWLR 378 and, in particular, the judgment of Mahoney J at 385 and 386.
The crux of the decisions to which the Court has alluded is that the process of reasoning emerging from the judgment under review must be discernable. To the extent that there is any challenge of that kind in this appeal, it arises only tangentially in the context of some of the grounds of appeal. As learned counsel for the appellant’s comprehensive written submissions and ability to agitate and amplify those submissions orally confirms, there can be no real doubt as to why the learned Federal Magistrate concluded as she did. With respect to her Honour, her reasons for judgment leave no one in doubt as to why she concluded as she did with respect to the issues which give rise to this appeal.
As learned counsel for the appellant correctly suggested, the authority most directly relevant for present purposes is the decision of the High Court in House v The King (1936) 55 CLR 499. The judgment of Dixon, Evatt and McTiernan JJ at 504 to 505, records the grounds upon which appellate intervention may be enlivened in cases, such as this, involving the exercise of discretion. It is perhaps helpful to refer to those parts of the judgment in House v The King (1936) 55 CLR 499 which do not arise in this appeal.
As recorded by the High Court, it is not enough that the judges composing the appellate Court consider that if they had been in the position of the primary judge, they would have taken a different course. As will be seen, this is an appeal where there is a likelihood that, had the Appeal Court been exercising the discretion of the primary judge (the Federal Magistrate), the case may have had a different outcome. Such a conclusion, as the authorities make clear, would not, without more, enliven appellate intervention. The High Court identified some of the particular grounds upon which an error in the exercise of discretion may be demonstrated.
The first of those was if a judge acts on a wrong principle. Fairly and sensibly, learned counsel for the appellant does not suggest that the learned Federal Magistrate, in this case, acted upon a wrong principle. Nor is it suggested, sensibly, that the learned Federal Magistrate allowed extraneous or irrelevant matters to guide or affect her. Nor is it suggested that her Honour mistook the facts. It is not suggested that her Honour failed to take into account any material consideration. The crux of the two substantive challenges in this appeal, that is, to the conclusion with respect to the contribution entitlements of the parties and the s 75(2) adjustment determined by the learned Federal Magistrate, is to be found in the following passage of the judgment in House v The King (1936) 55 CLR 499:
…It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
In this case, how the learned Federal Magistrate reached the result embodied in her order is readily apparent. The issue is whether, upon the facts as found, the result was unreasonable or plainly unjust, thereby, enlivening appellate intervention. Kirby J in the 1998 decision of the High Court in CDJ & VAJ (1998) 197 CLR 230 to 231 set out in some greater detail, but not in any way inconsistently with how the High Court had expressed it earlier in House v The King (1936) 55 CLR 499, what his Honour described as the reasons for appellate restraint which he suggested had particular relevance to appeals within and from the Family Court of Australia. His Honour referred to the difficult and evaluative decisions which the Court often has to make and also to the broader principle that the Court cannot approach an appeal on the basis that the Appeal Court would have reached a conclusion different from that under appeal.
His Honour suggested that, although no error of principle need be identified, it was necessary, in seeking to impugn a discretionary judgment, to demonstrate that a conclusion was reached which was “plainly wrong”. His Honour clarified that what is plainly wrong will vary in the eyes of different beholders and that it was not necessary for an appellant to demonstrate the kind of unreasonableness that must be shown to authorise judicial intervention in the decision of an administrator otherwise acting in power. The reference to “plainly wrong”, his Honour suggested, was designed to remind the Appellate Court of the need to approach an appeal with much caution in a case where an error of principle cannot be clearly identified.
The judgment of Brennan J in Norbis v Norbis (1986) 161 CLR 513 is also relevant, and particularly the reference in it to the reasonable ambit of disagreement in relation to discretionary judgments. That is to say, different minds may on the same facts come to different conclusions without either of those minds being in error.
During the course of his submissions learned counsel for the appellant reminded the Court of what the High Court had said in the decision in Warren v Coombes (1979) 142 CLR 531 (13 March 1979), a personal injury case. In the course of their joint judgment, Gibbs ACJ and Jacobs and Murphy JJ at page 537 referred to the quaintly named English decision of SS Hontestroom v SS Sagaporack [1927] A.C. 37 and the judgment of Lord Sumner discussing the principles arising from what has traditionally been called the trial judge’s advantage over this Court, that being, that the trial judge has seen and heard the witnesses give evidence.
That aspect of the law does not arise in this case because there is no challenge to any finding of fact and no suggestion that the trial Magistrate palpably misused the advantage which she thus enjoyed. The High Court also referred to the House of Lords decision in Powell & Streatham Manor Nursing Home [1935] AC 243, a negligence case, and reiterated that where a finding of fact is reliant upon, or significantly reliant upon, questions of credibility the advantage of the trial judge over an appeal court such as this needed to be recognised and respected. The passage to which learned counsel for the appellant referred, which is found at page 541 of the Commonwealth Law Reports, records that the High Court had, in a number of cases, stated and applied principles consistent with those which their Honours had earlier set out, some of which have been referred to, and recognised that where the question is whether particular inference should be drawn from proved facts the appellant court has the right and duty to decide the question for itself. It is that part of the High Court’s judgment on which counsel for the appellant particularly relied.
As will be seen, this is an appeal in which the facts as found by the learned Federal Magistrate are not sought to be challenged but, rather, the inferences drawn by her Honour were submitted to have not been permissible or, as learned counsel for the appellant submitted, to have been manifestly unreasonable even allowing for the generous ambit within which disagreement is permissible as explained by Brennan J in Norbis v Norbis (1986) 161 CLR 513. Against that background, it is appropriate to proceed to consider the grounds of appeal.
The Court has had the benefit of comprehensive and cogently reasoned written submissions and oral submissions in support of those written submissions. As will be seen these reasons do not record, in their entirety or anything approaching their entirety, the written submissions with which the Court has been provided. The Court has, however, been mindful of those submissions and will deal with the substance of each of them.
In essence, there are two broad challenges to the learned Federal Magistrate’s exercise of discretion. The first is that her Honour’s conclusion that the contributions made by the parties should favour the husband by only 20 per cent was manifestly inadequate to the husband and fell beyond the ambit of a reasonable exercise of discretion. Within that broad challenge there were two components. The first was that, in part, her Honour’s error was referable to the failure to give proper weight to the provision by or on behalf of the husband of rent-free accommodation by his parents during their lifetime, and by the husband and his siblings following the death of the husband’s mother in 1999.
The second component of the asserted error of discretion in relation to the evaluation of contributions related to the reality that the husband inherited from his mother’s estate some $40,000.00 in cash which he received in 2003, and an entitlement to receive one-quarter of the H property the value of which was uncontroversially determined for the purpose of the proceedings before the learned Federal Magistrate to be some $367,500.00.
The second broad challenge to the learned Federal Magistrate’s discretion was that the s 75(2) adjustment made in favour of the wife was manifestly excessive in favour of the wife, and that it fell beyond the ambit of a reasonable exercise of discretion. Not surprisingly, having regard to these challenges, it was submitted that the learned Federal Magistrate’s order failed to satisfy the requirements of s 79(2).
The challenge pursuant to s 79(2) would be established if either of the contribution and/or s 75(2) challenges was established. Conversely, if neither of those challenges is successful, it is very difficult to see any scope for an independent basis of a successful challenge via s 79(2). No other matter or fact or circumstance was relied upon by the learned Federal Magistrate under s 79(2) beyond those to which her Honour had regard within the context of s 79(4) and s 75(2).
Learned counsel for the respondent conceded as, with respect, she was probably obliged to that in terms of the range, as it may be described, the conclusions of the learned Federal Magistrate, both with respect to contributions and s 75(2), represented the top of the range. Not insignificantly, what the wife sought with respect to the division of the parties’ assets and the components of that determination were precisely what she received. The case for the appellant is, ultimately, that whilst the learned Federal Magistrate may have, and did, proceed to exercise her discretion by reference to findings of fact which were reasonably open to her, she could not possibly have reasonably drawn the inferences or reached conclusions which she did thereby without either a demonstrated error or principle, or one or more of the other criteria specifically identified in House v The King (1936) 55 CLR 499, or matters falling within the last limb of House v The King (1936) 55 CLR 499.

The Court accepts, as it must, that whilst there has been no challenge to the findings of fact of the learned Federal Magistrate, the very crux of this appeal is whether the inferences her Honour drew from them were reasonably open to her. Nothing emerging from the authorities to which reference has been made detracts from the general principles which have been long recognised. There is a presumption that the decision of the lower court is correct. The fact that this Court may have concluded differently is not of itself a basis for appellate intervention. The test is not whether the inferences drawn or conclusions reached by the learned Federal Magistrate were the only ones reasonably open to her or that others were reasonably open but rather whether, in all the circumstances, those reached by her Honour were not reasonably open to her.
Turning to the grounds which address what can be described as the accommodation issue, learned counsel for the appellant submitted that her Honour must, in order to have concluded that the husband’s contributions should only be regarded as 20 per cent higher than those of the wife, have elevated the wife’s contributions during the period the parties had the benefit of rent-free accommodation to a status which they did not reasonably deserve or, unfairly demeaned or diminished or discounted the contributions of the appellant husband during that period.
With respect to learned counsel for the appellant, the unchallenged findings of fact of the learned Federal Magistrate create difficulties in terms of this challenge. As is not in doubt the case of the appellant before the learned Federal Magistrate was that the provision by his parents of rent-free accommodation on their H property for 18 years between 1981 and the death of the husband’s mother should have been seen as overwhelmingly a contribution by or on his behalf. The case of the wife, it is not in doubt, was that such a conclusion ought not be reached, given the basis upon which the husband and wife accepted rent-free occupancy of the husband’s parents’ property and the matters which the evidence revealed, as found by her Honour occurred after they did so.
In terms of the period subsequent to 1999, that is, the time when the husband and his three siblings became entitled, as tenants in common in equal shares, to the H property but did not realise it, thereby providing the parties with ongoing rent-free accommodation for a significant period, the case for the husband was that the provision of such accommodation should be seen as overwhelmingly a contribution by or on his behalf. The wife’s case in relation to that issue was that no such intention should be inferred. The learned Federal Magistrate dealt extensively with this topic in the course of her reasons. She made extensive findings of fact, none of which has been challenged. A balanced reading of the transcript of the proceedings before the learned Federal Magistrate provides not so much as a glimmer of hope that a challenge to the findings of fact made by her Honour could have been successful applying recognised appellant principles.
Her Honour identified the wife’s case as being that she and the husband were invited to live on the property in return for looking after the acreage as caretakers, and looking after the parents of the husband as they became elderly. The learned Federal Magistrate recorded that the husband initially maintained that the sole reason his parents offered the use of the second dwelling on the property rent-free was to help the parties get ahead financially. During cross-examination, the husband conceded that his parents also proposed the arrangement with a view to getting some assistance from the parties as the parents grew older. Her Honour then explored this topic in some detail.
The learned Federal Magistrate reiterated at the commencement of that deliberation the submission of counsel for the appellant husband that he should receive credit for the rent-free accommodation his parents provided to the parties. Her Honour then set out her findings in relation to this issue. The first, which does not appear to have assumed great significance, was that there was little evidence that the rent-free accommodation helped the parties to get ahead financially. Her Honour speculated about that but ultimately does not seem to have regarded these things as significant, particularly when she proceeded to record that, however, the rent-free accommodation may well have had some impact on the husband’s ability to save, and that it was, if nothing else, a contribution to the welfare of the family.
Her Honour then, having referred to the submission understandably made by counsel for the husband as to the significance of the contribution by or on his behalf, proceeded to consider the evidence of the wife. Her Honour identified the wife’s case as being that because from the outset the bargain had been that rent-free accommodation would be provided in return for services to be rendered by both the husband and the wife, the contribution ought not be seen simply as wholly or even overwhelmingly a contribution by or on behalf of the husband. The learned Federal Magistrate accepted the evidence of the wife that she had fulfilled her part of the bargain. That finding has not been challenged in this appeal.
The learned Federal Magistrate identified, with ample evidentiary foundation there is no doubt, some of the things which the wife did, both, with respect to the property and activities upon it and in terms of assisting the husband’s parents. Her Honour then referred to the evidence the husband gave about what he did around the property, to help his parents, and recorded that the husband had been dismissive of the wife’s assertions in relation to those matters. Having detailed what each of the parties asserted, both with respect to activities on the property and activities in support of the husband’s parents, the learned Federal Magistrate expressed her preference for the evidence of the wife to that of the husband. That preference has sensibly not been challenged. Her Honour recorded, again uncontroversially, that for much of the marriage the husband worked long hours and worked six days a week.
Her Honour observed that the husband was not at home to see what the wife was doing. As is not in doubt, for those long hours, six days a week, the husband was not in a position to be at home making contributions. He was not criticised for that. Nor should he have been. Her Honour’s ultimate conclusion was that, for what was necessarily a period ranging over 17 or 18 years, the wife had done the work around the property and about assisting the husband’s parents which she asserted that she had. Against that background her Honour recorded her conclusion that the rent-free accommodation came from the husband’s parents but should not be treated as a contribution made solely by the husband. The learned Federal Magistrate accepted that, from the outset, it was made clear that both the husband and the wife were expected to provide services in return for it and that they lived up to their part of the bargain.
Turning then to consider the submission of the husband that he should receive credit for the rent-free accommodation provided after his mother died, which came partly courtesy of his siblings, the learned Federal Magistrate recorded that there was no evidence that the husband’s siblings deliberately set out to confer a benefit on the husband and wife by allowing them to continue to live rent-free at the H property. Rather, it seemed to her Honour that, for whatever reason, there was inertia about the inheritance being divided up. Her Honour was not persuaded that the husband should be able to claim some credit for this inertia.
As observed during the course of submissions by learned counsel for the appellant husband, there was no evidence before the learned Federal Magistrate by any of the husband’s siblings, nor was there evidence in relation to the failure to adduce such evidence. Her Honour may have reached other conclusions in relation to the post-1999 accommodation but that does not establish, nor has it been otherwise established, that her Honour erred in concluding as she did in the terms to which reference has been made. To the extent that it was submitted by learned counsel for the appellant husband that her Honour unfairly placed excessive emphasis upon the wife’s contributions during the rent-free accommodation periods, her Honour’s judgment does not support such a proposition.
Ultimately, the test of whether or not her Honour erred in relation to her evaluation of contributions comes down, as learned counsel for the appellant sensibly acknowledged, to what her Honour said, when she expressed her conclusions. Given that the contribution-based entitlement was clearly the result of her Honour’s conclusions with respect to two controversial areas, one of which has just been referred to, the second of which will now be referred to, it is only possible to meaningfully consider the real challenge to the contribution entitlement after having considered the second matter of significance in relation to contributions. That can, for convenience, be referred to as the inheritance.
The topic of the husband’s inheritance is agitated in a number of grounds of appeal. The learned Federal Magistrate considered the inheritance question in her judgment. Her Honour recorded correctly, there can be no doubt, the husband’s contention that he should receive credit for the substantial inheritance which came in five years prior to separation. Her Honour rejected, correctly, the contention on behalf of the wife that the husband’s parents intended to benefit both the husband and the wife when they left the husband the interest in H. Had the parents been so minded, it would have been a simple matter by testamentary instrument to make that intention clear. They did not do so and her Honour rejected, as a basis for recognising any claim by the wife, any asserted intention on the part of the husband’s parents.
The history of the husband’s parents’ wills was briefly referred to in the context of her Honour recording her satisfaction that the husband received his inheritance because he was one of the four children of his parents, and not because of any work that he and the wife did at the H property, or any assistance they gave the husband’s parents. Her Honour said, correctly, on the findings of fact made by her, that the husband’s inheritance should be treated as a contribution by the husband alone. Her Honour then, however, in the context of her assessment of contributions, revisited that topic. She recorded that elevating the importance of the husband’s inheritance by offsetting against it only five years’ worth of contributions by the wife as a homemaker and a parent was not a legitimate approach, and would result in the wife’s contributions as homemaker and parent over a period of 26 years being seriously undervalued.
As is not in doubt, having regard to the terms of s 79(4) of the Act and the decisions of the High Court and this Court in relation to it, the contributions which can be recognised are, in part, referable to property and, in part, have no such nexus. Homemaking and parenting contributions fall into the latter category. As is not in doubt, contributions of one kind within s 79(4) are not inherently or otherwise superior to, or entitled to greater recognition than, any other category of contribution. Particularly is this true of home making and parenting. Her Honour referred to the wife’s unchallenged contributions over a period of 26 years as a homemaker and parent.
Her Honour proceeded to say that the only appropriate course, and the only one which would ensue that proper weight was given to the homemaking and parenting contributions made by the wife over a period of 26 years, was to assess contributions globally. Her Honour identified the need to weigh the contribution of the inheritance with all the other relevant contributions of the husband and the wife over the course of a 26-year relationship. It is sensibly not suggested that her Honour was not entitled to have regard to the wife’s homemaking and parenting contributions over a period of 26 years as she did.
Her Honour recorded that the husband’s inheritance was substantial and was acquired five years prior to the end of the marriage. She reiterated that the wife carried out over a period of 26 years her expected role as homemaker and parent, and this contribution had to be given considerable weight. Her Honour concluded that an appropriate assessment of contributions was 60 per cent to the husband and 40 per cent to the wife. As learned counsel for the respondent wife submitted, the husband’s contributions were recognised as being 50 per cent more than were those of the wife. As her Honour said, the husband’s contributions were recognised as being worth $120,000.00 more than those of the wife. After contributing $40,000.00 in cash in 2003 from his inheritance and equity valued at $367,500.00, about $400,000.00 in total, the husband’s contributions were regarded as being, by reference to those funds, as being worth $120,000.00 more than were those of the wife.
The findings of fact of the learned Federal Magistrate and her conclusions as to the contribution based entitlements of the parties leave little room for doubt that it was the inheritance which led her Honour to conclude that the husband’s contributions significantly exceeded those of the wife. The Court is not persuaded that her Honour erred in drawing the inferences she did from the unchallenged findings of fact made by her with respect to the rent-free accommodation, provided by the husband’s parents and later by the husband and his siblings.
The crux of these challenges is, accordingly, whether in all the circumstances as they emerge from the findings of fact, inferring that the husband’s contribution should be regarded as only 50 per cent more than the wife fell outside the ambit of a reasonable exercise of discretion.
In the course of her judgment the learned Federal Magistrate referred to the decision of the Full Court in Pierce & Pierce (1998) 24 Fam LR 377. Relevant in that context is the decision of the Court of Appeal of the Supreme Court of New South Wales in Kardos v Sarbutt [2006] NSWCA 11, the leading judgment in which was written by Brereton J. The question is, in part, although not strictly solely, the extent to which the wife’s contributions over 26 years could have permissibly eroded the impact of the husband’s contribution late in the cohabitation of his inheritance. The topic was also not unrelated to the sorts of considerations which were relevant to the Full Court’s decision in Farmer v Bramley (2000) FLC 93-060. Farmer v Bramley (2000) FLC 93-060 perhaps being of potentially greater relevance.
It was undoubtedly the case, as learned counsel for the respondent wife sensibly conceded, that if it fell within the ambit of a reasonable exercise of discretion, the conclusion of the learned Federal Magistrate represented the top of the range. This Court is, ultimately, not persuaded that her Honour’s exercise of discretion fell beyond the ambit of a reasonable exercise of discretion. Her Honour had regard to every relevant fact and circumstance. She did not fail to have regard to any relevant fact or circumstance. Her discretion was not vitiated by any erroneous finding of fact. It is readily apparent that the effect of having regard to the wife’s unchallenged and substantial home making and parenting contributions over a 26 year period resulted in the husband’s contribution of approximately $400,000.00 of inherited assets being significantly eroded in favour of the wife.
On balance, whilst this Court may not have been of the same mind, applying recognised appellant principles, the Court is not persuaded that reflecting the difference in contributions as a sum of $120,000.00 did in all the circumstances fail to constitute a reasonable exercise of discretion.
The s 75(2) challenge asserts in the alternative that the learned Federal Magistrate erred in making any s 75(2) adjustment at all or that if her Honour had been entitled to make any s 75(2) adjustment, so doing could not reasonably have been to the extent which her Honour did. That is to say that a 10 per cent adjustment, which represented a differential of about $104,000.00, could not reasonably have fallen within the ambit of a proper exercise of discretion.
No finding of fact made by the learned Federal Magistrate has been challenged in relation to this issue nor, having regard to the evidence before her, could it have successfully been. It is instructive to have regard to the matters upon which her Honour relied in concluding as she did. The first matter was the wife’s actual income, albeit it was a welfare payment of $221.00 a week, and her capacity to derive more than that sum. Her Honour recorded that the wife had been on the government allowance she was currently on since about 2007. She had been assessed as being capable of working between 23 and 29 hours a week. The wife was registered with a number of entities seeking work but since March 2008 had not been able to obtain employment.
The learned Federal Magistrate rejected any suggestion by the wife that medical matters impacted on her ability to obtain employment. Her Honour referred to the Centrelink assessment to suggest that her capacity to work was restricted to part-time hours. The learned Federal Magistrate then referred to some other matters that she regarded as significant impediments to the wife obtaining employment. These included the wife having left school at 15, having done unskilled work with horses, and as a process worker between the ages of 15 and 19, having left the paid workforce in 1978 and not worked in paid employment since.
Her Honour referred to the wife’s absence of qualifications or recognised skills which might boost her employment chances, her absence of a driver’s licence and the fact that there was no suggestion in cross-examination that the wife was deliberately making no effort to seek employment. Her Honour referred to some other circumstances which did not inspire confidence that she was likely to obtain paid employment in the future. Nevertheless, her Honour did not accept that the factors militating against the wife obtaining appropriate gainful employment were an insurmountable barrier to the wife obtaining some unskilled work. Her Honour was conscious of the fact that the contributions of the wife, as determined by her, would see her receive about $210,000.00, a not insignificant capital sum. Reference was then made to a number of other matters in relation to the wife’s capacity for employment, including the absence of skills or any suggestion that the wife was likely to immediately step into a job paying what the husband is currently receiving.
Her Honour then turned to consider the position of the husband who had just turned 60, was employed by R as a process worker earning $50,000.00 per annum, R having been his employer for 38 years. The learned Federal Magistrate relied upon the evidence of the husband that he expected to continue working until he was 65. Her Honour accepted the husband’s medical condition to be, as he asserted, but recorded, correctly there is no doubt, that no medical evidence adduced on the husband’s behalf established that his health conditions were likely to force him into early retirement. Her Honour referred to the husband’s potential to contribute a further $22,500.00 to his superannuation, and potentially accumulate a small amount of savings.
The s 75(2) adjustment which generated a difference of about $100,000.00 can be seen, in a mathematical sense, as equating to approximately half the difference in likely earnings of the parties over the period before the husband is likely to retire at age 65. That is not the test but it does provide some degree of quantitative support for the adjustment determined by the learned Federal Magistrate. On any view of the learned Federal Magistrate’s findings of fact, a s 75(2) adjustment in favour of the wife was open to the learned Federal Magistrate. The issue is, thus, whether an adjustment of the quantum determined by her Honour exceeded the generous ambit of her discretion.

As with the contribution-based entitlement of the wife, this Court may have been less generous than was her Honour. That is not the test. On any view of it, as her learned counsel conceded, the wife achieved what could only be described as the top of the range, if not, as learned counsel for the appellant husband submits, beyond the range. Ultimately, the Court is not persuaded that it has been demonstrated that the learned Federal Magistrate’s exercise of discretion exceeded the bounds of a reasonable exercise of discretion, notwithstanding that this Court may have reached a different conclusion. In the circumstances, and given that no other matter could otherwise render unjust or inequitable her Honour’s decision, the appeal must be dismissed.
Everything which could reasonably have been asserted on behalf of the appellant husband has been by his learned counsel. As is the case with many appeals against discretionary judgments at first instance, it would not necessarily be the case that every Appeal Court would reach the same conclusion as this court has. That is the nature of appeals against discretionary judgments. But for the reasons the Court has given, and notwithstanding that, as the Court has suggested several times, this award must represent the top of the range, the Court is not persuaded that appellate intervention has been enlivened. So the order of the Court is that the appeal is dismissed.
Counsel for the respondent has sought an order for the costs of the appeal. The Court is not of the opinion that the circumstances of this appeal justify the making of a costs order. As the Court has suggested several times during the course of the hearing of the appeal and in its judgment, notwithstanding that this Court has concluded that appellate intervention has not been enlivened, on any view of the case, the wife did extremely well before the learned Federal Magistrate. As the Court acknowledged in the concluding portion of its judgment, it is quite conceivable, given the nature of these appeals, that another judge on another day may have concluded differently to this Court, that is to say, may have concluded that the award fell just outside the range, whereas this Court concluded that it just fell within the range.
It was entirely reasonable, having regard to the unusual circumstance, that the wife received exactly what she sought both in its overall terms and in terms of the components of what she sought, that the husband test this decision in this Court. He did so with economy in terms of court time and cost to the respondent. No ground of appeal which could not possibly have succeeded was agitated or maintained. His counsel presented his case in a very effective and concise manner. Moreover, in circumstances where the wife has, as this Court has acknowledged, done better than would have been the case had this Court decided the matter, to visit the costs of the appeal on the husband would not in the circumstances be, in this Court’s opinion, fair or reasonable.
As the High Court has made clear in Penfold v Penfold (1980) 144 CLR 311, albeit exercisable by reference to s 117(2) of the Act, the general provision of the Act is s 117 and it is only when the Court is satisfied that circumstances justify so doing that an order can and will be made. It is a broad discretion and this Court is persuaded that to exercise it in favour of the wife and make an order for costs would not be just or equitable.

I certify that the preceding sixty seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 17 September 2010.

Associate:

Date: 3 November 2010