W and W (No. 2)

[2007] FamCA 705

FAMILY COURT OF AUSTRALIA

W & W (NO. 2) [2007] FamCA 705

FAMILY LAW – APPEAL – RE-EXERCISE OF DISCRETION OF FEDERAL MAGISTRATE - On findings of fact of Federal Magistrate and additional agreed facts – contribution entitlements held to be equal – Section 75(2) adjustment determined by Federal Magistrate applied – wife held to be entitled to 55 per cent of net assets of parties and husband to 45 per cent.

Family Law Act 1975(Cth) S 75(2)
Allesch v Maunz (2000) 203 CLR 172
W v R [2002] FamCA 780

APPELLANT: Ms W

RESPONDENT: Mr W

FILE NUMBER: PAM 2225 of 2005

APPEAL NUMBER: EA 89 of 2006

DATE DELIVERED: 12 March 2007

PLACE DELIVERED: Parramatta

JUDGMENT OF: Coleman J

HEARING DATE: 17 November 2006

LOWER COURT JURISDICTION: Federal Magistrates Court

LOWER COURT JUDGMENT DATE: 16 August 2006

LOWER COURT MNC: Federal Magistrate Donald

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr. R.B. Tilley

SOLICITOR FOR THE APPELLANT: Maclarens Lawyers

COUNSEL FOR THE RESPONDENT: Mr. Brown

SOLICITOR FOR THE RESPONDENT: Browns Family Lawyers

Orders

1. That Counsel for the parties prepare and submit to a Registrar of the Court at Parramatta Minutes of Order reflecting this decision.

2. That a Registrar of the Court make orders in accordance with the minutes referred to in Order 1 hereof.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as W & W (No. 2).

FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: EA 89 of 2006
File Number: PAM 2225 of 2005

Ms W

Appellant

And

Mr W

Respondent

Supplementary judgment

1. On 15 December 2006, for reasons which the Court then published, the orders of a learned Federal Magistrate of 16 August 2006 with respect to settlement of property were set aside.

2. This Court having been invited, in the event that the appeal was successful, to re-exercise the discretion of the learned Federal Magistrate, the Court so ordered when allowing the appeal on 15 December 2006.

3. Subsequently, and in accordance with the orders of the Full Court, written submissions have been made on behalf of the husband on 2 January 2007 and on behalf of the wife on 24 January 2007.

4. It is appropriate to provide a context for this Court’s re-exercise of the discretion of the learned Federal Magistrate to refer briefly to the reasons for judgment in the appeal.

5. In its Reasons for Judgment in relation to the appeal, the Court recorded (paragraph 93) that the “only contested challenge to the learned Federal Magistrate’s Judgment” which had been successful related to the issue of contributions, the challenge to the Section 75(2) adjustment determined by his Honour failing, such adjustment having “not been shown to fall outside the generous ambit of his discretion in that regard” (paragraph 90). In those circumstances, and subject to the implications of the decision of the High Court in Allesch v Maunz (2000) 203 CLR 172, the Court proposed “limiting the re-exercise of discretion” to the issue of contributions.

6. As the decision of this Court in W v R [2002] FamCA 780, and the High Court’s subsequent refusal to grant special leave to appeal such decision confirm, as indeed does inferentially Allesch v Maunz (supra), the Court’s power to limit the scope of a re-hearing is not in doubt. Accordingly, subject to further agreed material, to which reference will shortly be made, this Court re-exercises the discretion of the learned Federal Magistrate to the limited extent previously indicated.

7. As a reading of the Court’s Judgment of 15 December 2006 confirms, no finding of fact of the learned Federal Magistrate was successfully challenged in the appeal against his orders of 16 August 2006. The challenge to those orders was confined to so-called “weight” grounds. It is trite to record that this Court has not seen either party give evidence and is in no position to make findings of fact in relation to any matters which may be in dispute. The evidentiary basis for this Court’s re-exercise of the learned Federal Magistrate’s discretion is thus the findings of fact made by his Honour and the further material which the parties have consensually placed before this Court.

8. The re-exercise of the learned Federal Magistrate’s discretion entails evaluating contributions of the parties by reference to the findings of fact of the learned Federal Magistrate in the light of any relevant additional agreed facts. Save to the extent either that the outcome of re-determining the contribution entitlements of the parties might provide a basis for doing so, or to the extent that any further material might provide such basis for doing so, the Section 75(2) adjustment determined by the learned Federal Magistrate to be appropriate will then be applied. His Honour made an adjustment of 5 per cent with respect to an asset pool the net worth of which was not controversial at trial and is not controversial for the purpose of this Court’s re-exercise of his discretion.

9. The findings of fact of the learned Federal Magistrate have been referred to extensively in the Court’s Judgment of 15 December 2006. It is unproductive to again set those findings of fact out in any detail. It is necessary to record however the additional and agreed “facts for re-exercise of discretion”. These provide:

   1.   Between Hearing and Judgement the parties completed the pool, tiling and landscaping leaving a balance in the joint account of $11,511.00.

   2.   The Child B moved to live with the husband on 28^th July 2006 and has just completed the HSC. The husband is organising casual work for him at T. He is seeking an apprenticeship with a builder.

   3.   K will be repeating year 11 in 2007 and attending College at S with annual fees of $11,772 per annum. The wife paid an enrolment fee of $1,450.00.

   4.   The home is not yet listed for sale.

   5.   The child J returned to live with the wife on 1^st December 2006.

10. The child B referred to in the agreed facts was born February 1988 and is thus aged 19 years. K was born  May 1990 and is thus aged 16 years. Given that K is repeating Year 11, for the purpose of re-exercising the Court’s discretion the wife can be seen as having an obligation to house and accommodate the child until the end of 2008, albeit K will attain 18 years of age in May of that year. The child J was born on August 1986. J is accordingly 20 years of age.

11. Whatever moral adjustment either party may assert to be appropriate, having regard to the fact that both B and J are adults, the Court does not propose having regard to them for the purpose of re-exercising the discretion of the learned Federal Magistrate in the property settlement proceedings. To the extent that K residing with the wife has financial implications in terms of school fees or the like, those are matters which can and be and are best addressed by agreement or, failing agreement, recourse to the appropriate provisions of the child support legislation.

12. On behalf of the husband it was submitted that the Court would determine the contribution entitlements of the parties to be equal. It was submitted that no Section 75(2) adjustment was “called for” notwithstanding that the decision of the learned Federal Magistrate had not been found to have been erroneous with respect to Section 75(2) in the appeal. The husband had not cross-appealed to suggest that the Section 75(2) adjustment ordered by the learned Federal Magistrate was excessively generous to the wife.

13. In support of the submission that there be no Section 75(2) adjustment reliance was placed upon the fact that the wife “no longer has the care and control of the child B and that the child K is somewhat older”. So far as the former is concerned, the Court has no regard to the fact that B now resides with the husband given the child’s age, whether or not the husband is supporting that child, the “obligation” with respect to which is not of a legal nature. Whilst it is clear that the child “K” is somewhat older, the learned Federal Magistrate was aware of the child’s circumstances when determining the Section 75(2) adjustment made by him and not challenged by the husband. These factors, and the fact that the child J, who is also an adult, has resided with the wife since 20 December 2006 would not be matters which would cause this Court to re-visit the Section 75(2) adjustment made by the learned Federal Magistrate.

14. It was submitted that the factors “in favour of the husband” inferentially counterbalanced those “in support of the wife” insofar as Section 75(2) was concerned. It was submitted, accurately in the Court’s view, that the husband had a greater earning capacity than the wife and that the wife’s care of K was also a relevant factor. The Court does not accept that the wife’s support of J is a factor relevant to determining the appropriate Section 75(2) adjustment. The factors in favour of the husband included “his support of B”, a factor which the Court does not accept to be relevant for the purpose of determining Section 75(2) adjustment.

15. More significantly it was submitted on behalf of the husband that:

    10.b.The greater capital sum available to the wife from this settlement, particularly bearing in mind that the wife will receive a greater proportion of her settlement in available cash, whilst the husband will take a substantial proportion of his in Superannuation, which is not currently available to him. Under the orders of the Learned Federal Magistrate, and assuming the work was completed on the home, the wife would receive a cash sum of $190,547.00 and the husband $132,231.00 (In this regard, reference is made to the document entitled “effect of orders” tendered in the course of argument on appeal by the solicitor for the husband). This disparity will be more acute if an overall 50/50 division of the assets is not effected and therefore the section 75(2) factors are shifted further away from the wife.

    Necessarily, this submission can only be evaluated once the Court’s conclusion with respect to the contribution entitlements of the parties has been reached.

16. On behalf of the wife reliance was placed upon the submissions made to the learned Federal Magistrate in August 2006. The Court does not propose referring extensively to those submissions, the Judgment of 15 December 2006 having dealt extensively with the contribution issues which arose for determination by the learned Federal Magistrate.

17. To the extent that it was submitted that the superannuation interests of the parties should be included at their present values, that is what the learned Federal Magistrate did and no complaint was raised in that regard in the appeal. There seems to be no suggestion that the value at the time of trial is other than the valuation to which the Court will have regard for present purposes.

18. As to how the husband’s “proved gambling losses” should have been taken into account, the submission (paragraph 1.3) to this Court does not take matters greatly further. This Court expressed views in relation to the topic in the course of its Judgment of 15 December 2006 and nothing now submitted causes the Court to take a different view.

19. The husband’s accrued long service leave entitlements do not in this Court’s view impact upon the contribution issue, given the nature of long service leave and its potential financial consequences.

20. Under the heading “Submissions on Appeal” Counsel for the wife reiterated his reliance upon the submissions made in the appeal. It was further submitted that “a proper assessment of contributions favours the wife as to 60% to the husband’s 40%”. Other than by reference to submissions previously made, nothing further seems to have been advanced in support of that proposition. Curiously, having regard to the Court’s earlier conclusion in the appeal, it was submitted that a 10 per cent adjustment in favour of the wife under Section 75(2) would be awarded. Perhaps more curiously, after outlining the “List of Agreed Facts for the Court to consider when re-exercising the discretion” it was submitted “that the changes would not have any impact on assessment of the section 75(2) factors”.

21. The rival contentions in relation to contribution entitlements are 50/50 (husband’s case) as opposed to 60/40 (wife’s case). The Court considers that a just and equitable determination of contribution entitlements would be one of equality. The Court does so on the basis of the findings of fact of the learned Federal Magistrate in the light of such changes as have been agreed to have occurred since that time, albeit the changed circumstances of the parties have minimal potential to impact upon their contribution entitlements.

22. The Court does not propose setting out extensively why it concludes that equality of contributions is the appropriate conclusion. The Reasons for Judgment of 15 December 2006 provide insight into the Court’s process of reasoning which leads the Court to so conclude. In essence, as the Reasons for Judgment of 15 December 2006 suggest, whilst the periodic contributions of the parties in various ways can be seen as approximately equal, each party can rely upon other contributions having the potential to increase the contribution entitlement of that party. Conversely, each party can point to other contributions having an offsetting or countervailing impact in those respects. Only by the most artificial elevation of the latter contributions, on purely subjective grounds, could it fairly be held that, on balance, the contributions of either party should be considered greater than those of the other party.

23. So far as the Section 75(2) issue is concerned, the Court does not accept the contention on behalf of the husband that changed circumstances now render it inappropriate to preserve the 5 per cent adjustment ordered by the learned Federal Magistrate. As noted earlier the wife’s challenge to that conclusion was unsuccessful and the husband did not by way of cross-appeal challenge that assessment. Nothing in either the changed circumstances agreed upon by the parties or the change to the contribution entitlements arising from the re-exercise of discretion would cause this Court to reduce the 5 per cent Section 75(2) adjustment determined by the learned Federal Magistrate.

24. The claim on behalf of the wife to increase that sum is even less potentially meritorious given that no additional fact or circumstance relied upon on her behalf within the context of Section 75(2) could materially increase the wife’s entitlement to an adjustment pursuant to the Section and that, by virtue of the Court’s conclusion with respect to contributions, the wife will in fact receive more capital than the learned Federal Magistrate’s orders envisaged. In short, if anything, the wife’s entitlement to Section 75(2) adjustment could be said to have been weakened as a result of the Court’s conclusions with respect to the appeal.

25. Whilst the wife will receive more by way of tangible assets than will the husband, he will receive significantly greater superannuation benefits than will she in the future, and have a greater chance of further increasing such benefits than will the wife. Those are functions relevant to the s 75(2) adjustment appropriate to be made in favour of the wife.

26. On balance, the changed circumstances of the parties and/or changes to their entitlements by virtue of the Court’s conclusions with respect to contributions do not provide a basis for concluding other than, as did the learned Federal Magistrate, a 5 per cent adjustment under Section 75(2) to be appropriate. In the circumstances, the Court concludes that the parties should share the assets and liabilities as found by the learned Federal Magistrate, and varied in the light of subsequent circumstances, in shares of 55 per cent to the wife and 45 per cent to the husband.

27. The most expeditious and effective way that this can be achieved is for Counsel for the parties to prepare and submit to a Registrar of the Court at Parramatta Minutes of Order reflecting this decision. The Registrar can and will then make orders in accordance with those minutes.

I certify that the preceding twenty seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate: 

Date: