W & W

[2006] FamCA 1368

FAMILY COURT OF AUSTRALIA

W & W [2006] FamCA 1368

FAMILY LAW - APPEAL –Against exercise of discretion by Federal Magistrate in proceedings with respect to settlement of property - Challenges to contribution and s 75(2) conclusions in reliance upon “weight” afforded relevant facts and circumstances involving no suggested errors of fact or principle - Contribution finding favouring the husband set aside as “plainly wrong” on Federal Magistrate’s findings of fact. Appeal otherwise unsuccessful - Full Court to re-exercise Federal Magistrate’s discretion - Costs certificates awarded to each party.

House v The King (1936) 55 CLR 499
Norbis v Norbis (1986) 161 CLR 513
CDJ v VAJ (1998) 197 CLR 172
Gronow v Gronow (1979) 144 CLR 513
Pierce v Pierce (1999) FLC 92-844
Kardos v Sarbutt [2006] NSW CA 11

APPELLANT: MW

RESPONDENT: RWW

FILE NUMBER: PAM 2225 of 2005

APPEAL NUMBER: EA 89 of 2006

DATE DELIVERED: 15  December 2006

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
232 Merrylands Road
MERRYLANDS NSW  2160
Tel: [phone]
(Mr. R.B. Tilley - Solicitor)
DX: 25406 MERRYLANDS

COUNSEL FOR THE RESPONDENT: Mr. Brown

SOLICITOR FOR THE RESPONDENT: Browns Family Lawyers
Suite 5, 154 Marsden Street
PARRAMATTA NSW 2150
Tel: [phone](Mr. M. Brown - Solicitor)
DX: 5038 LIVERPOOL

Orders

1. That the appeal against the orders of the Federal Magistrates Court of 16 August 206 be allowed.

2. That orders 3, 4, 5 – 12 made on 16 August 2006 be set aside.

3. That the discretion of the Federal Magistrates Court be re-exercised by this Court.

4. That within 21 days the parties, or such longer period as the parties agree, file such further factual material as is agreed and such further submissions with respect to contributions and the form of order to be made as each is advised.

5. The Court grants to the appellant wife a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act 1981.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 wife in respect of the costs incurred by the appellant wife in relation to the appeal.

6. The Court grants to the respondent husband a certificate pursuant to the provisions of section 6 of the Federal Proceedings (Costs) Act 1981 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 respondent husband in respect of the costs incurred by the respondent husband in relation to the appeal.

FAMILY COURT OF AUSTRALIA AT BRISBANE

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

MW

Appellant

And

RWW

Respondent

REASONS FOR JUDGMENT

Introduction

1. By Notice of Appeal filed 29 August 2006 MW (“the wife”) appealed against orders made by a Federal Magistrate in proceedings between herself and RWW (“the husband”) on 16 August 2006.

2. The husband resisted the wife’s appeal and sought to maintain the learned Federal Magistrate’s orders.

3. The effect of the orders of the learned Federal Magistrate was to divide in equal shares the non superannuation assets and superannuation interests of the parties.

4. His Honour concluded that contributions with respect to those assets and interests should be determined in proportions of 55% to the husband and 45% to the wife, to which entitlements on adjustment of 5% was made in favour of the wife, pursuant to Section 75(2) of the Family Law Act (“the Act”).

5. In lieu of the learned Federal Magistrate’s orders, the wife sought by her Notice of Appeal that the assets of the parties be divided in shares of 65% to the wife and 35% to the husband.

6. The parties married in 1988 and separated in July 2002, a cohabitation of approximately 14 years. The wife is 44 years of age, as is the husband. There are three children of the marriage, those children being aged 20, 18 and 16.

7. The non superannuation assets and superannuation interests of the parties were found by the learned Federal Magistrate to have a net worth of $427,331.00.

The Reasons for Judgment of the Federal Magistrate

1. Having identified the competing applications of the parties, accurately there is no doubt, his Honour recorded matters by way of “background” none of which is controversial. His Honour identified the evidence to which he had regard.

2. Under the heading “Relevant Law” his Honour stated, accurately there can be no doubt, the legislative provisions governing the proceedings before him and referred to authority relevant to those legislative provisions.

3. The “assets, liabilities and financial resources of the parties as at the date of hearing” were identified and quantified; accurately there is no doubt, by the learned Federal Magistrate. His Honour adopted a “global” approach to that exercise and there is no suggestion that so doing was not reasonably open to him. Within the net assets and superannuation interests of the parties of $427,331.00, a superannuation interest of the husband worth $72,832.00 and a superannuation interest of the wife worth $8,259.00 were included. There is no suggestion that either party could access such superannuation interest for, potentially, many years. Such inclusion is not controversial.

4. The most significant controversial issue before the learned Federal Magistrate related to the assessment of the contribution entitlements of the parties. His Honour approached the evaluation of such contributions pursuant to a series of subject headings, the first of which dealt with “property acquired at the outset of marriage and direct financial contributions”. There is no suggestion that any finding of fact recorded under that subheading was not available to the learned Federal Magistrate.

5. As will be seen, the major issue in this appeal is whether, in all the circumstances, the contribution finding of the learned Federal Magistrate was reasonably open to him, or, more correctly, whether the wife has discharged the onus of establishing that the contribution entitlements of the parties as determined by his Honour fell outside the ambit of a reasonable exercise of his discretion.

6. Under the heading “Non-financial contributions” the learned Federal Magistrate considered a number of matters in reliance upon findings of fact made by him in that regard. As is apparent from the wife’s Notice of Appeal and Summary of Argument, the challenge to the assessment of contribution entitlements does not entail challenges to any finding of fact. Nor does it entail any suggestion that the learned Federal Magistrate either failed to have regard to relevant facts or circumstances for the purpose of determining contribution entitlements or, in that process, had regard to irrelevant or extraneous facts or circumstances.

7. For the reasons which he detailed in earlier paragraphs of his Judgment, the learned Federal Magistrate concluded that the parties’ contribution should be assessed as “55% to the Husband and 45% to the Wife”. As those reasons will necessarily be examined in some detail later in these reasons, doing so now is not necessary or constructive.

8. The learned Federal Magistrate then considered the impact of Section 75(2) of the Act on the contribution entitlements of the parties and, for reasons which he detailed, concluded that the wife should receive “an additional 5%”, the effect of that being that the parties should each receive 50% of their net assets and superannuation interests. As those reasons will also necessarily be examined in some detail later in these reasons, doing so now is not necessary or constructive.

9. As with the challenge to his Honour’s conclusions with respect to contributions, the wife’s challenge to the Section 75(2) adjustment involves no challenges to any findings of fact relevant to that aspect of his Honour’s discretion. Nor is it suggested that the learned Federal Magistrate failed to have regard for that purpose to any relevant fact or circumstance, or that he had regard to any irrelevant or extraneous facts or circumstances.

The Grounds of Appeal

1. The grounds of appeal raise challenges to the exercise of discretion with respect to three aspects of the proceedings, they being:

   (a)    The learned Federal Magistrate’s conclusions with respect to monies expended by the husband on drinking and gambling (Ground 1),

   (b)  The contributions entitlements of the parties (Ground 2) and;

   (c) The section 75(2) adjustment appropriate to be made to such contribution entitlements (Ground 3).

2. Sensibly, Ground 6 was, not pursued before this Court.

3. Before considering the three controversies raised by the Notice of Appeal, it is convenient to dispose of an issue which is ultimately uncontroversial. Grounds 4 and 5 of the Notice of Appeal provided:

   “4.His Honour failed to make any Order dealing with the completion of the home for sale and application of the ‘building fund’ for that purpose despite the evidence as to the work to be done and the interim orders made on 15^th August 2005.

   5.His Honour’s Order for the ‘building fund’ to be divided between the parties and for the husband to pay the agreed costs of completing the home was wrong at law or an improper exercise of discretion (leave will be sought to adduce evidence at the hearing of the appeal as to the partial expenditure of the fund during the period between the date of Hearing and the date of Judgment).”

4. It is common ground that neither party sought orders in the terms complained of in those grounds. It is also common ground that the Court should, if not on any other basis, allow the challenge raised by these grounds and, by way of re-exercise of the learned Federal Magistrate’s discretion, discharge Order 4 of the orders of 16 August 2006. No criticism of the learned Federal Magistrate is inherent in so doing. Had his Honour been asked to do so pursuant to the “Slip Rule” there is little doubt that he could and would have discharged Order 4. The effect of discharging Order 4, as each party had envisaged would occur at trial, is to leave in place orders made on 15 August 2005 by consent with respect to the “building fund” on. The Court will so order, and, to enable it to do so, allow the wife’s appeal. It remains to consider the three substantial challenges raised on behalf of the wife.

Relevant Law

1. The law which governs this appeal is not in doubt. In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-505:

   “The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. 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. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. 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.”

1. As will be apparent from earlier observations in this Judgment, of necessity the wife relies particularly on the final two sentences of the passage from House v The King cited above. That is so because, sensibly, there is no suggestion that the learned Federal Magistrate acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts, or failed to take into account any material consideration.

2. As will be seen, the issue raised by each of the three challenges to the learned Federal Magistrate’s decision in this appeal is whether, with respect to each of the three topics raised by those challenges, the exercise of discretion fell outside the “generous ambit” of “reasonable disagreement” which attracts “immunity from appellate interference”.

3. The learned Federal Magistrate was exercising an undoubtedly broad discretion. In Norbis v Norbis (1986) 161 CLR 513 Brennan J said at 539 – 540:

   “The difficulties in the way of developing guidelines beset an appellate review of the exercise of discretion under s.79. Unless the primary judge reveals an error in his reasoning, the Full Court can intervene only if the order made is not just and equitable. How does the Full Court arrive at that conclusion? In Bellenden (formerly Satterthwaite) v. Satterthwaite [1948] 1 All ER 343 at p.345 Asquith LJ. stated the rationale of an appellate court’s approach:

   “…It is, of course, not enough for the wife to establish that this court might, or would, have made a different order.  We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable.  It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.”

   The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.”

4. In CDJ v VAJ (1998) 197 CLR 172; Kirby J said at 230 – 231:

   ‘Discretionary and evaluative decisions

   186.   A number of general propositions may be stated:

   1.Neither this Court, nor the Full Court in relation to appeals to it, has authority to disturb a decision under appeal simply because the appellate judges, faced with the same material, would have reached a conclusion different from that under appeal. To approach the appellate function in such a way would contravene established authority. It would involve one level of the judicial hierarchy, without lawful warrant, intruding into the decisions of another. To authorise appellate disturbance, where the decision under appeal is discretionary or involves quasi-discretionary evaluation, it is necessary for those mounting the challenge to demonstrate that, in reaching the orders the subject of the appeal, the court below has acted on a wrong principle or (although the precise error of principle cannot be identified) has reached a conclusion which is plainly wrong. Obviously, what is “plainly wrong” will vary in the eyes of different beholders. It is 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 within power. The reference to “plainly wrong” is 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.

   2.Such reasons for appellate restraint are of general application. However, they have particular relevance to appeals within, and from, the Family Court of Australia. This is because of the functions and purposes of that Court and the difficult and evaluative decisions which it often has to make. The peculiar nature of decisions relating to the intensely personal questions of the division of the property of parties to a failed marriage and the welfare of their children makes it essential that those who decide appeals respect the onerous responsibilities of those whose decisions they review. They need to recognise that it is of the very nature of such decisions, including those relating to the residence of children, that any two decision-makers may, with complete integrity and upon the same material, often come to differing conclusions. This is an inescapable feature of the nature of this jurisdiction.’

10.A final consideration is pertinent, both to the approach that is proper to the Full Court reviewing the primary judge and to this Court reviewing a decision of the Full Court involving the evaluation of competing considerations and the exercise of a judicial discretion. Every appellate judge knows that the reasons given for a decision can never express the entire range of matters which the decision-maker has taken into account. In matters of evaluation and discretion, this would be impossible to achieve and undesirable to attempt. Judicial reasons, whilst they must be adequate for the purposes of the exercise of any right to appeal (192) cannot possibly catalogue all of the subtle considerations that lie behind a judicial decision (193).

1. The challenge to the exercise of discretion in this appeal turns substantially on challenges to the “weight” given to relevant facts and circumstances.

2. In Gronow v Gronow (1979) 144 CLR 513, Stephen J said at 519-20:

   ‘The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.’

3. Examining the challenges to the learned Federal Magistrate’s exercise of discretion must proceed with faithful observance of the caveats which emerge from these statements of principle. 

4. Ground 1 of the Notice of Appeal provided:

   “1.    His Honour’s finding that the husband’s expenditure on drinking and gambling did not constitute waste or have a negative impact and the proved expenditure should not be added back into the pool is wrong at law and or not a proper exercise of discretion.”

5. Counsel for each of the parties provided succinct and helpful submissions in relation to this topic.

6. On behalf of the wife it was submitted that the learned Federal Magistrate erred in not taking into account, either by way of notional add-back, or in relation to the assessment of contributions, or otherwise pursuant to section 759(2)(o) of the Act, the husband’s conduct in having expended on drinking and/or gambling some $16,000.00 between 1999 and 2003.

7. It was submitted that the findings of fact of the learned Federal Magistrate, which were not challenged, precluded him from exercising his discretion to decline to have regard to such losses, on at least one of the three bases indicated above.

1. It was submitted:

   ‘7. … that the evidence clearly demonstrated that the husband acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which was to reduce the net assets. The proven funds gambled by the husband were drawn by him from loan facilities established by the parties to build their new home and are reflected directly in the current mortgage balance. The conduct falls within the guidelines set out in Kowaliw’s case (1989) FLC 91-092. The proven losses should have been added back to the asset pool and debited to the husband’s side of the ledger (see also Omacini (2005 FLC 93-218). If the husband’s gambling did not fall within the Kowaliw principle, then it represented a premature distribution of a proportion of the matrimonial assets by the husband and should be added back into the pool (see Townsend 1995 FLC 92-569 and Omacini).’

   34.On behalf of the husband, it was submitted that the circumstances relied upon by the learned Federal Magistrate in support of his decision not to take into account to the husband’s detriment the expenditure on gambling and/or drinking constituted a reasonable exercise of his discretion, particularly having regard to the facts and circumstances upon which his Honour in fact relied and indicated that he had relied.

   35.In order to evaluate the challenge raised by this ground, it is necessary to have regard to the learned Federal Magistrate’s Reasons for Judgment. his Honour found that the husband had “spent something less than an average of $78.00 per week in the four years leading up to 13 October 2003 on “gambling and drinking”. Counsel agreed that a total of approximately $16,000.00 was the result of annualising the sum of $78.00 per week.

   36.His Honour then referred to an earlier decision of another Federal Magistrate (as Ryan J then was) and noted the substantial difference in the sum which had been lost by the husband in the case before him and by the husband in the earlier case. His Honour was influenced by “the fact that there is no demonstrated negative impact flowing from his (the husband’s) conduct” in losing the sum which his Honour found that he had, although as he noted, “if he had not spent those funds on drinking and gambling, they would have been available for other purposes”.

   37.Regard was had to the fact that the husband “has established that his child support obligations have been complied with”, to the fact that the husband had “maintained mortgage payments on the parties’ residence”, and that “there was no evidence that the husband has failed to make any provision that was necessary for the family”. Finally, his Honour relied upon the fact that “the amount expended was not high in the context of the assets of the parties”. His Honour thus did not “conclude that the husband has wasted assets to the extent that they should be added back into the pool”.

   38.Whilst others may have reached a different conclusion with respect to adding back, or declining to add back, the gambling and/or drinking losses, the Court is not satisfied that so doing fell beyond the ambit of a reasonable exercise of discretion or was “plainly wrong”. His Honour gave reasons for so concluding. The factors upon which he relied provided a rational foundation for the conclusion his Honour reached.

   39.The Court thus finds this challenge has not been made out. Given however the way in which this topic was agitated at trial, and in this appeal, so concluding is not the last reference necessary to be made to that topic.

   40.Ground 2 provided:

   “2. His Honour’s finding that contributions favoured the husband as to 55% to the wife’s 45% falls outside the reasonable ambit of discretion in that His Honour:

   2.1 Attached no weight to the husband’s proved expenditure of funds on drinking and gambling.

   2.2 Attached insufficient or no weight to the significance of the wife’s contribution of a vacant block of land at the commencement of the relationship.

   2.3 Attached insufficient or no weight to the significance of the parties’ living with the wife’s parents rent free during various periods of the relationship.

   2.4 Attached too much weight to the contribution of the husband to the demolition of the parties’ home and the construction of the new home.

   2.5 Attached insufficient weight to the wife’s contributions as a parent and home maker.

   2.6 Attached too much weight to the husband’s post separation contributions to the payments of the mortgage on the home and insufficient weight to the wife’s ongoing contributions as a parent and home maker.”

   41.In support of this ground, it was submitted that the facts and circumstances as found by the trial judge could not support as a reasonable exercise of discretion a conclusion with respect to contributions favouring the husband as against the wife by 10%. Such disparity translated as a monetary differential of approximately $42,000.00.

   42.The submissions on behalf of the wife (particularly paragraph 8) identify the specific facts and circumstances relied upon by Counsel for the wife in support of this challenge.

   43.As is also apparent from that document (paragraph 10) it was submitted that, whilst clearly aware of the ratio of the decision in Pierce v Pierce (1999) FLC 92-844, the learned Federal Magistrate had failed to adequately reflect the real impact of the wife’s initial contribution.

   44.It was further submitted that the learned Federal Magistrate “must have attached excessive weight to the husband’s non financial contribution to the construction of the M property”.

   45.The exercise of discretion was also asserted to have been vitiated by the failure of the learned Federal Magistrate to have any regard in the context of contributions to the unjustified expenditure by the husband of some $16,000.00 on drinking and gambling, the effect of which was, as his Honour found, to deprive the parties of the opportunity to have funds of that magnitude.

   46.In support of his broad submission that the wife failed to demonstrate appealable error in the exercise of the learned Federal Magistrate’s discretion with respect to the assessment of contributions, it was submitted by Counsel for the husband that:

   “53.It should also be remembered that his Honour included the current value of the superannuation of the husband in the asset pool, as he was entitled to do, at a value of $72,832. The evidence was that the value of the fund at separation was $47 485.13 (Report of Mr S, AB 178) His Honour said the increment in value was “a factor which can be taken into account in assessing contribution” (Judgement paragraph 19; AB 24)”

   47.It is common ground that, albeit not necessarily referrable solely to contributions made by him in that period, the value of the husband’s superannuation interest had increased by some $25,000.00 in the post separation period. It was submitted that the learned Federal Magistrate should be seen, having regard to an earlier observation in his Judgment (paragraph 19), as having had regard to that reality.

   48.It was thus submitted on behalf of the husband that, when all the factors were taken into account, albeit possibly approaching the upper limits of “the range”, the learned Federal Magistrate’s conclusion with respect to contributions fell within “the range”.

   49.To evaluate this challenge, it is necessary to carefully consider the reasoning process, which emerges clearly, by which the learned Federal Magistrate reached his conclusion that contribution entitlements should favour the husband by 10%.

   50.His Honour referred to the wife’s contribution of land at the commencement of the parties’ relationship. The husband conceded an approximate value of the land of $25,000.00. On that land the parties built a house for $42,000.00. To enable the house to be constructed the parties borrowed $35,000.00 and received the First Home Owner’s Grant of $14,000.00. These figures do not entirely accord with the learned Federal Magistrate’s findings as to the cost of constructing a home, but that is ultimately not a matter of significance. Whether the home cost $49,000.00 to build, or $42,000.00, on any view of it, the wife’s contribution of land worth $25,000.00 at that time must have been of very considerable assistance.

   51.During the time the home was being constructed on the land which the wife thus introduced, the parties lived in the home of the wife’s mother where, his Honour found, “they weren’t required to pay any rent or board”.

   52.The home on the land the wife introduced was sold in 1992 and, albeit the parties had been cohabiting for some years by that time, and the house had been constructed on the land for some years, the net proceeds of sale approximated $90,000.00 - $100,000.00.  What part of that was referrable to the land itself was not the subject of evidence before the learned Federal Magistrate and, accordingly, his Honour could not make findings in that regard.

   53.In turn the proceeds of sale were applied to purchase the matrimonial home of the parties at M (“M”) for $140,500.00, $50,000.00 being borrowed to complete the purchase.

   54.Sometime between 1996 and 1998 the husband’s mother gave the parties $10,000.00 which was applied to reduce the mortgage over M. The $10,000.00 was clearly viewed by his Honour, as he was entitled to, as a contribution by or on behalf of the husband.

   55.The parties lived rent free in the wife’s mother’s home for about three months in 2000 during which time renovations at the M property continued. His Honour found (paragraph 40) that in 1990 that “they,” a reference to both parties, “commenced renovation work” on the M property, living in a “granny flat at the rear of the home for around seven months whilst the demolition and rebuilding was occurring”.

   56.The parties separated in July 2000 and lived separately and apart for one year thereafter, that not appearing to have assumed significance in his Honour’s thinking within the context of contributions. His Honour’s observations with respect to the financial arrangements during that period as found at paragraph 43 of his reasons are consistent with that conclusion.

   57.From July 2001 until the final separation, the parties again lived with the wife’s parents, inferentially on financially advantageous terms as the learned Federal Magistrate recorded in paragraph 44 of his judgment.

   58.In the post separation period the husband remained in the M property paying the mortgage and other outgoings on the property. Further work has been done on the property since separation as his Honour recorded in paragraph 46 of his reasons.

   59.The children have since separation “continued to live with the wife in her parents’ home” except for the eldest child J, who is an adult, and commenced to live with the husband in March 2005.

   60.The learned Federal Magistrate concluded “from the foregoing” that “the wife made the greater initial contribution, being the vacant block of land which had been purchased by her prior to commencement of cohabitation”.

   61.His Honour recorded the submission on behalf of the husband that the wife’s “initial contribution retains limited, if any, significance in the overall percentage given the length of the relationship and the fact that this contribution occurred in 1985”. With that submission his Honour recorded his disagreement, concluding that “although this contribution occurred so long ago, it was the contribution that enabled the parties to progress so quickly to the purchase of their own home. The importance of this contribution must, however, be seen in the light of the period of cohabitation and be balanced against each of the other financial contributions made by parties over the intervening period. It is not, however, a contribution that is of ‘limited, if any, significance’”.

   62.Reference was then made to the contribution of $10,000.00 which the husband’s mother provided, to the husband’s contributions as an “income earner throughout the relationship”, to the contribution by the wife from employment “often on a part time basis,” and to the fact that in the post separation period, the husband had continued to pay the mortgage and other outgoings on M and “continued to accumulate superannuation and other work entitlements” the former having been reflected in the net assets of the parties, the latter having not.

   63.The learned Federal Magistrate accepted that the husband had expended more on the mortgage over M than “it would have cost him to rent similar accommodation”.

   64.For the reasons which his Honour had previously provided, he concluded that he did not “find that the husband has made a negative contribution to the assets of the parties because of excessive use of alcohol or because of gambling”.

   65.In the context of “non-financial contributions”, his Honour recorded his acceptance of the wife’s evidence that the husband “assisted around the house only ‘on odd occasions’” or when asked and that “because of the shift work that he undertook, a lot of the time at home he was sleeping”.

   66.Inferentially his Honour found that the wife “did virtually all of the household chores” as well as taking the children “to all of their activities and social commitments” as well as undertaking part time work that would accommodate her availability for the children. He concluded that “clearly the wife was the primary carer for the children and principal homemaker”.

   67.His Honour however “balanced” against “the “substantial non-financial contribution by the wife” the “substantial contribution by the husband to the M property” from 1999, during which period the husband “completed much of the renovation work himself”, some of which his Honour detailed, which “contribution was substantial”.

   68.The learned Federal Magistrate recorded that the husband “also acknowledged the contribution of the wife, their children and other family members to this task” but was satisfied that the “non-financial contribution in this respect was overwhelmingly that of the husband”.

   69.Fairly, his Honour recorded that “given the devotion of almost all of the husband’s available time to this endeavour, it follows that the burden of homemaker and parent fell even more heavily on the wife” and added “This is also a factor that I take into account”.

   70.The matters to which his Honour thus referred and “balanced” led him to conclude that the contribution entitlement of the husband should be assessed at 55%, and that of the wife at 45%.

   71.As noted earlier in these reasons, his Honour was exercising a broad discretion. In so doing a number of different conclusions could have been reached with respect to contribution entitlements without error being thereby entailed. The practical effect of his Honour’s conclusion is that the contributions of the husband should be regarded as “worth” some $42,000.00 more than those of the wife.

   72.Some matters referred to by the learned Federal Magistrate warrant comment. His Honour was clearly aware, and accepted, the impact of the wife’s initial contribution of the land upon which the first matrimonial home was constructed.

   73.It is apparent that contributions subsequent to the wife’s initial contribution had the potential to “erode” that initial contribution (see Pierce v Pierce (1999) FLC 92-844, Kardos v Sarbutt [2006] NSWCA 11).

   74.The clear impression gained from the learned Federal Magistrate’s reasons, is that, at least until the parties separated, the impact of the wife’s initial contribution remained such as to elevate her contribution entitlement above that of the husband. To what extent that was so cannot be suggested.

   75.It is clearly apparent that his Honour declined to have any regard to the fact that the husband had, on gambling and/or drinking, alienated $16,000.00 of the parties’ monies over a period (1999-2003) part of which coincided with cohabitation, part of which coincided with separation. Whilst it was open to his Honour to decline to add back that sum, the Court struggles to accept in principle that the receipt by one party, in a case involving very modest assets, of $16,000.00 which was unmatched by anything received by the other party ought not have been taken into account in the context of evaluation of contributions, however slight its impact might have been.

   76.So far as the post separation period was concerned, the learned Federal Magistrate appears not to have had significant regard to the fact that, by the time of trial, the wife had, by way of offset to the husband’s greater financial contributions with respect to the mortgage on the matrimonial home in that period, lived with her family, receiving no benefit from the home, had significantly inferior earning capacity to the husband, and had, as between the parties, by far the greater obligation to care for the children.

   77.Given that the husband’s “other work entitlements” were not taken into account by his Honour with respect to Section 75(2) and can thus be seen as having been retained exclusively by the husband for his own use and enjoyment, having regard to the accumulation of such entitlements as an offsetting contribution factor appears difficult to justify.

   78.The $25,000.00 increase in superannuation entitlements was a matter to which his Honour was entitled to have regard, and, having regard to some recent Full Court decisions may have been in error to have disregarded, but that must be looked at in the light of the totality of the parties’ circumstances in the post separation period.  Not the least significant of these was that in that period the husband had a significantly superior capacity to earn income by comparison with the wife’s capacity in that regard.

   79.Turning then to the “non financial contributions”, his Honour found that the wife was “clearly” the primary carer for the children and principal homemaker. That was undoubtedly a correct conclusion on the unchallenged findings of fact made by his Honour.

   80.It was undoubtedly open to his Honour to conclude with respect to the renovation work that the contribution “was overwhelmingly that of the husband”. His Honour was clearly conscious of the reality that having devoted “almost all” of his available time to that endeavour, the “burden of homemaker and parent fell even more heavily on the wife”.

   81.     A combination of undue “erosion” of the wife’s initial capital contribution and/or undue recognition of the husband’s far greater contribution to renovation work on M in the post separation period, and affording disproportionate weight to the husband’s financial contributions in the post separation period, appear to have led his Honour to conclude that a disparity of 10% in the contribution entitlements of the parties was appropriate.

   82.    In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-505:

   “…although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred.”  

   Kirby J’s expression in CDJ v VAJ “plainly wrong” can be seen as another way of saying the same thing.

   83.These statements of principle are particularly relevant for present purposes. It is ultimately not possible to suggest why the learned Federal Magistrate’s conclusion with respect to contribution entitlements was erroneous. Nor is it necessary to do so given that the Court is satisfied that “a substantial wrong has in fact occurred”.

   84.     On the findings of fact made by the learned Federal Magistrate, a finding of equality of contributions would have been open to him. Such finding would not have been inconsistent with due weight being given to each of the significant contribution matters identified by his Honour. Nor would such findings have entailed, having regard to the totality of the evidence with respect to contributions, undue “erosion” of the wife’s initial capital contribution. That however is not a sufficient foundation for “appellate interference”.

   85.     To conclude that the wife’s contributions in their totality should be recognised as “worth” 10% less than those of the husband however, with great respect to his Honour, fell outside the ambit of a reasonable exercise of discretion. Based upon the careful and comprehensive findings of fact upon which he based such exercise of discretion, a contribution based entitlement of the wife of less than 50% was, with respect, “plainly wrong”.

   86.It remains to consider the challenge to section 75(2) adjustment which his Honour concluded to be appropriate. That adjustment translated as an adjustment of approximately $42,000.00 in favour of the wife.

   87.Ground 3 of the Notice of Appeal articulated that challenge and provided:

   “3. His Honour’s findings that the section 75(2) factors favoured the wife as to 5% was outside the reasonable ambit of discretion in that his Honour:

   3.1 Attached insufficient weight to the wife’s responsibility for the ongoing care of the children of the parties.

   3.2 Attached no weight to the disparity in the parties’ earning capacity.

3.3 Gave considerable weight to the receipt by the wife of FTB Part A and B and the husband’s greater superannuation entitlements.

3.4 Attached no weight to the contribution of the wife to the income, earning capacity, property and financial resources of the husband and in particular the husband’s accrued long service leave and sick leave entitlements.

3.5 Attached no weight to the duration of the marriage and the effect on the wife’s earning capacity.”

88.The learned Federal Magistrate, as was conceded on behalf of the wife, took into account all relevant facts and circumstances and did not take into account any irrelevant or extraneous facts and circumstances. His Honour recognised, accurately, the disparity in earning ability of the parties. He further had regard to the wife’s future obligation to house and accommodate a child of the marriage who has not attained 18 years of age.

89.His Honour can be seen as having had regard, by virtue of his earlier observations, to the fact that the assets receivable by the husband included approximately $72,000.00 by way of superannuation interest which was not likely to be receivable for many years, whilst on the wife’s part, a sum of only approximately $8,000.00 had that characteristic.

90.The adjustment which his Honour concluded to be appropriate pursuant to section 75(2) has not been shown to fall outside the generous ambit of his discretion in that regard. A greater adjustment might have been made to the contribution based entitlements of the parties but declining to do so was not “plainly wrong”.

Conclusion

91.Save with respect to the matter identified at the outset of these Reasons, and the challenge to the learned Federal Magistrate’s conclusions with respect to contributions, the grounds of appeal agitated on behalf of the wife have not been made out.

92.It is common ground that, if the appeal were to be allowed, this Court would be invited to re-exercise the learned Federal Magistrate’s discretion. It is further agreed that such re-exercise of discretion would be based upon further uncontroversial material which would be provided by Counsel for the parties. The Court’s orders will reflect this reality.

93.As the only contested challenge to the learned Federal Magistrate’s judgment, that with respect to contributions, has been successful, and the re-exercise of discretion in that regard is unlikely to impact upon the appropriate section 75(2) adjustment, the Court proposes limiting the re-exercise of discretion to that issue although evidence of changed financial circumstances would clearly be relevant and admissible (See Allesch v Maunz (2000) 203CLR 172). To that end, in addition to the further agreed material, the parties may wish to make further submissions, although, having regard to the submissions made on appeal and to the learned Federal Magistrate at trial, the scope for productively doing so would appear limited. Without pre-empting its decision, an overall contribution finding of equality would, on the detailed findings of fact of the learned Federal Magistrate, appear an almost inevitable outcome of this Court re-exercising his Honour’s discretion. The cost effectiveness of that process must be problematic.

Costs

94.Both parties agree that cost certificates are appropriate in the event of the appeal succeeding. The Court is satisfied that each party should receive a costs certificate.

I certify that the preceding ninety four (94) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate: 

Date: