Walters & Walters - [2007] FamCA 324

FAMILY COURT OF AUSTRALIA

WALTERS & WALTERS

[2007] FamCA 324

APPEAL – From decision of Family Court judge – property settlement – s 75(2) factors ‑ trial Judge made adjustment of 10% in favour of the wife – wife sought 20% adjustment – adequacy of reasons – trial judges not reasonably expected to discuss and make findings about every s 75(2) factor – whether adjustment fell short of a reasonable exercise of discretion – adjustment within the reasonable range – appeal dismissed

Family Law Act 1975, s 75(2)

Bennett and Bennett (1991) FLC 92-191

Collins & Collins (1990) FLC 92-149
Norbis v Norbis (1986) 161 CLR 513
Clauson and Clauson (1995) FLC 92-595

APPELLANT:

Walters

RESPONDENT:

Walters

FILE NUMBER:

PTW

1397

2004

APPEAL NUMBER:

2006

DATE DELIVERED:

18 APRIL 2007

PLACE DELIVERED:

Perth

JUDGMENT OF:

BRYANT CJ, THACKRAY AND CRISFORD JJ

HEARING DATE:

8 FEBRUARY 2007

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

7 July 2006

LOWER COURT MNC:

[2006] FCWA 72

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr J Hedges

SOLICITOR FOR THE APPELLANT:

R E Purvis & Co.

COUNSEL FOR THE RESPONDENT:

Self Represented

SOLICITOR FOR THE RESPONDENT:

N/A

Orders

(1)That the appeal be dismissed.
(2)That each party pay their own costs of the appeal.

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 Walters and Walters.

REASONS FOR JUDGMENT

This is an appeal against orders made by Penny J on 7 July 2006 in property proceedings between the appellant wife and the respondent husband.
The trial Judge found the parties’ assets were worth $224,402 and determined they should be divided as to 60% to the husband and 40% to the wife. This division was arrived at on the basis of an assessment of contributions in proportions 70:30 in favour of the husband, with a 10% adjustment in favour of the wife on account of the matters contained in s 75(2) of the Family Law Act 1975.
There was no dispute at trial as to the value of the asset pool and there was no challenge on appeal to her Honour’s assessment of the parties’ contributions. The only challenge relates to her adjustment for the s 75(2) factors. The wife considers it should have been 20%.

Brief background

There was no challenge to the findings of fact of the trial Judge. Given the very narrow scope of the appeal it is unnecessary to set out the full factual background.
The husband at the time of judgment was almost 33 and the wife 31 years of age. They were married in January 2000 and separated in October 2003. There was one child of the marriage, CW, now aged 4.
CW was living with the husband five nights each fortnight and with the wife the balance of the time. This shared care arrangement was pursuant to orders the trial Judge made only a few weeks before the delivery of judgment on the property issue.

The judgment

As we have already noted, her Honour assessed contributions in proportions 70:30 in favour of the husband. Without any adjustment for s 75(2) factors, the husband would have received about $157,000 and the wife more than $67,000. Although counsel for the wife placed no emphasis upon this fact in his submissions, we note that amongst the “assets” to be received by the wife was not only an amount of $23,000 held on trust by her solicitors, but also an “add back” of paid legal fees of more than $34,000.
Having assessed the contributions, her Honour turned to consider the s 75(2) factors. After a brief review of the relevant factors, her Honour said at [31]:
I am satisfied there should be an apportionment to take into account s 75(2) factors in favour of the wife because her income earning capacity will be limited as a result of her commitments to care for [CW]. I am not satisfied, however, that this apportionment should be anything like 20%, as suggested by the wife’s counsel. In my view, the percentage of assets which should be awarded to the wife to take into account s 75(2) factors should be 10%. I have limited the percentage to this sum because:
•     there is no evidence the wife was not exercising a significant earning capacity before the marriage;
•     the wife has the ability to work two days per week;
•     the husband will be paying child support on a child support assessment income of at least $35,000; and
•     the husband’s income earning capacity is also to be reduced as a result of the time he will spend with [CW], which may increase in the future.

The grounds of appeal

The original notice of appeal contained the following four grounds:
1.The adjustment for section 75(2) factors fell outside of a reasonable exercise of discretion.
2.The Learned Trial Judge in making the finding that “there is no evidence the wife was not exercising a significant earning capacity before the marriage” took into account an irrelevant circumstance that either led to, or contributed to, the inadequate adjustment for section 75(2) factors.
3.The Learned Trial Judge did not give adequate weight to the extent to which the marriage has affected the earning capacity of the wife.
4.The Learned Trial Judge did not give adequate weight to the need to protect the wife in her wish to continue in her role as a parent.
Leave was granted at the hearing of the appeal to add the following three additional grounds, all of which relate to the adequacy of her Honour’s reasons.
5.The learned Trial Judge failed to give any or any adequate reasons for her finding that “I have limited the percentage to this sum because there is no evidence the wife was not exercising a significant earning capacity before the marriage”.
6.The learned Trial Judge failed to give any adequate reasons for her finding that: “the husband’s income earning capacity is also to be reduced as a result of the time he will spend with [CW], which may increase in the future”.
7.The learned Trial Judge failed to give any adequate reasons in relation to her section 75(2) findings and in particular in relation to subsections (c), (d), (j), (k) and (l).

Grounds 5, 6 & 7 – adequacy of reasons

It is convenient to begin by considering the last three grounds of appeal, by which it is asserted the trial Judge failed to give any or any adequate reasons for two specific findings and for her overall assessment of the s 75(2) factors.
The law requiring trial judges to give adequate reasons is well settled. The adequacy of the reasons will depend upon the circumstances of the case, but reasons are generally inadequate if the appeal court is unable to ascertain the reasoning upon which the decision is based or justice is not seen to have been done. The rationale is that if the trial 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: Bennett and Bennett (1991) FLC 92‑191.
The first thing to be noted about Ground 5 is that it does not accurately reproduce her Honour’s judgment. As will be noted from the citation above, the absence of evidence concerning the wife’s income earning capacity prior to the marriage was the first of four matters that her Honour identified as justifying her decision to limit the s 75(2) adjustment to 10%.
In any event, counsel for the wife made the following submissions concerning this part of her Honour’s judgment:
If the finding is interpreted as meaning that the wife was exercising a significant earning capacity before the marriage, then:
(1)the finding is not supported by any evidence;
(2)the finding is difficult to reconcile with the apparent finding that the husband had the capacity to earn a significant income (1 AB18, paragraph 28) and the absence of any finding in relation to the comparative capacity of the wife.
If the finding is intended to merely comment on the absence of evidence about the wife’s earning capacity before the marriage, then it is submitted that there are no adequate reasons provided to explain why the absence of the evidence supports the conclusion that the section 75(2) adjustment should be limited to 10%.
Counsel for the wife was justified in drawing attention to the fact that the finding could be read in two ways. However, it is clear that her Honour’s judgment, when read in context, contains a grammatical or typographical error. We accept that her Honour intended to say “there is no evidence the wife was exercising a significant earning capacity before the marriage”.
Reading the finding in this fashion, we consider there is no substance in the complaint that her Honour gave no adequate reasons to explain why the absence of such evidence supported her conclusion that the s 75(2) adjustment should be limited to 10%. Her Honour’s finding was clearly directed to s 75(2)(k), which requires the Court to consider not only the duration of the marriage, but also the extent to which it has affected the earning capacity of the parties. Her Honour’s finding was a relevant consideration in determining the extent to which the marriage had affected the wife’s earning capacity.
The second complaint relates to the finding that “the husband’s income earning capacity is also to be reduced as a result of the time he will spend with [CW], which may increase in the future”. Counsel for the wife drew attention to the evidence given by the husband that he had been working as an underground fitter at Kalgoorlie in the period of about six months prior to the separation. In dealing with that part of his employment history, the husband said in his oral evidence, “I was earning a hundred grand a year and I believe that would probably be about my potential but I must say like I was doing 14½ hour shifts to achieve that”.
The husband was then asked, “How do you see your work program unfolding?”, to which he answered:
That will be dictated by the amount of time that I can spend with my son and I believe that I’m in a lucky position that my work will be able to complement the amount of time I spend with [CW].
The exchange continued:
Question: “So you’ve asked for a week on, week off?” – Answer: “Yeah”.
Question: “What type of employment can you get where you don’t work one week or you only work one week every fortnight?” Answer: “Well, that’s effectively what I’m doing now. I’m working three days a week and the place where I work they’re happy with me doing that and they would be happy with any amount extra that I can do as well”.
Having referred to this portion of the transcript, counsel for the wife said:
It is submitted that, in order to make the finding that the husband’s income earning capacity was also to be reduced, it was necessary for the learned Trial Judge to:
(1)explain her apparent rejection of the evidence of the husband;
(2)consider whether [CW]’s commencement of full-time schooling would leave the husband free to resume full-time work;
(3)consider whether [CW]’s commencement of full-time schooling would allow the husband to take advantage of employment similar to his previous work in Kalgoorlie …
It is submitted that by failing to consider these matters and explain her rejection of the husband’s evidence, the learned Trial Judge either was in error in giving weight to conclusions that were against the evidence or failed to give adequate reasons to explain the facts upon which her findings were based.
The first of these submissions is based on a false premise. We see no basis for concluding that the trial Judge rejected the evidence given by the husband in the passages set out above. It needs to be appreciated that by the time of trial, the husband was no longer working at Kalgoorlie. By then, he was employed in Perth at a rate of pay significantly less than he had been earning in the few months prior to the separation.
Her Honour found that, whilst the husband had a capacity to earn a “significant income”, his income earning capacity was:
…tempered by the fact that he spends time with [CW] for two week days in one week and for three days in the second week, including one day on a weekend. His earning capacity has not been affected by the marriage, other than his desire to be available to care for [CW] as set out above.
It was in the context of these findings that her Honour determined that the husband’s income earning capacity was to be reduced as a result of the time he will spend with CW.
Similarly, we find no substance in the complaints made about the failure of the trial Judge to consider whether or not CW’s commencement of full-time schooling would allow the husband to resume full-time work or allow him to take advantage of employment similar to his previous work in Kalgoorlie. Neither of these propositions was put to the husband in cross-examination and nor were any submissions made to this effect by counsel at the trial.
There would seem, in any event, to be little prospect of the husband being able to return to the type of employment he previously had in Kalgoorlie if he is to continue to play a significant role in the care of CW. Whilst it may be true that the husband will have the opportunity to work longer hours once CW commences full-time education, the same could equally be said of the wife.
The final complaint relating to the adequacy of her Honour’s reasons concerns her s 75(2) findings in general and the findings (or absence thereof) in relation to sub-secs 75(2)(c), (d), (j), (k) and (l) in particular.
The findings her Honour did make relating to the s 75(2) factors largely concerned the earning capacity of both parties and the impact CW’s care had on that capacity. Her Honour noted the husband’s erratic payment of child support in the past, which she found was mainly related to his lengthy periods of unemployment in 2004 and 2005. She found that the husband was now exercising his earning capacity and that there was no reason why he could not do so in the future. She also noted the husband’s statement that he was prepared to enter into an agreement requiring payment of child support at the rate appropriate for a payer with an income of $35,000 per annum. Having noted all of these matters, her Honour decided that the appropriate s 75(2) adjustment was 10%, taking into account, in particular, the four factors mentioned in the citation from her reasons above.
In dealing with this aspect of the appeal, counsel for the wife submitted:
In the absence of discussion in relation to subsections (c), (d), (j), (k) and (l), it is difficult to discern the weight, if any, given to these factors.
It is submitted that, by reason of the quantum of the section 75(2) adjustment, it can be inferred that insufficient weight was given to section 75(2)(d), (j), (k) and (l).
We will consider this aspect of the appeal by reference to each of the subsections mentioned by counsel for the wife in his submissions.

Section 75(2)(c)

This sub-paragraph requires the court to consider whether either party has the care or control of the child of the marriage who has not attained the age of 18 years.
In view of the fact that her Honour made findings in relation to the care arrangements for CW and specifically found that the earning capacity of both parents was adversely affected by their obligation to care for CW, there can be no basis for the submission that the trial Judge failed to consider s 75(2)(c).

Section 75(2)(d)

This sub-paragraph requires the court to take account of the commitments each of the parties have that are necessary to enable them to support themselves or a child or another person that the party has a duty to maintain.
It is true that her Honour did not specifically make findings concerning the commitments of each of the parties; however, we do not consider it was necessary for her Honour to do so. It was not suggested by either party that this factor was of any significance in the determination of the proceedings. The sole mention of this factor in the wife’s Papers for the Judge was the following:
The only commitment of either party of which the wife is aware is the commitment to support the child of the marriage.
Similarly, the husband did not raise any issue of significance concerning this factor in his Papers for the Judge, noting only that he was working three days a week to support himself and to pay child support.
Finally, it is noted that neither counsel made any submissions in their closing address relating to the relevance this factor might have in the ultimate determination.

Section 75(2)(j)

This sub-paragraph requires the court to consider “the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party”.
No submissions were made in the closing addresses to suggest that this factor was considered to be of relevance; however, the wife had asserted in her Papers for the Judge that she had “always provided support to the husband and has sacrificed her own career to the marriage by virtue of her duties of care in relation to the child of the marriage”.
Although her Honour did not specifically link her findings to this sub-paragraph, she had found that the wife had not been exercising a significant earning capacity before the marriage. By implication, her Honour therefore rejected the suggestion that the wife had “sacrificed her own career” in the manner asserted. Furthermore, her Honour expressly found that the wife’s obligation in relation to the care of CW did affect her income earning ability.
It is also worth noting that although the trial Judge had found that the parties’ contributions during the marriage were equal, she also observed that:
[t]his is an unusual situation where the parties’ assets have decreased during the course of the marriage, rather than increased. This occurred partly because of their lifestyle and, in particular, travelling for an extensive period of time without either working.
In these circumstances we are not persuaded that her Honour erred in failing specifically to address all aspects of s 75(2)(j).

Section 75(2)(k)

This sub-paragraph requires the court to consider the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
It will be apparent from the discussion above that her Honour did address the question of the impact of the marriage on both parties in that she expressly took into account the impact the care of CW will have on their respective earning capacities.

Section 75(2)(l)

This sub-paragraph requires the court to take into account the need to protect a party who wishes to continue their role as a parent.
The wife dealt with this issue in her Papers for the Judge by saying, “[t]he needs of the child mandate that the wife not enter the workforce until such time as the child begins to attend school”.
The trial Judge accepted that the wife was only working part-time and that her ability to earn greater income was affected by the fact that she was CW’s primary caregiver. Her Honour therefore did address this issue.

Conclusion on adequacy of reasons

Section 75(2) requires a trial judge to take into account 17 different categories of matters. It is not reasonably to be expected that a trial judge will discuss and make findings about each and every one of these factors in every application that comes before the Court. It would be expected that the trial judge would mention and briefly discuss only those matters that could arguably be relevant in the circumstances: Collins & Collins (1990) FLC 92-149 at 78,043–6 and Clauson and Clauson (1995) FLC 92-595 at 81,911 (“Clauson”).
In proceedings where both parties are represented at trial, which was the case here, the trial judge is entitled to expect counsel to highlight those areas which might arguably be relevant. In our view, her Honour dealt with each of the factors that were identified as being relevant. We consider there is no basis in the complaint that she failed to give any or any adequate reasons for her findings on those matters.

Grounds 1, 2, 3 & 4 – exercise of discretion

As counsel for the wife acknowledged in his written submissions, the essence of the balance of the wife’s appeal is that the section 75(2) adjustment fell short of a reasonable exercise of discretion.
Ground 1 raises this issue directly. Ground 2 asserts that the trial Judge took into account an irrelevant circumstance that led to, or contributed to, her making an inadequate s 75(2) adjustment. Grounds 3 and 4 assert failure on the part of the trial Judge to give adequate weight to two relevant factors.
These final two grounds, by which it is asserted the trial Judge did not give adequate weight to the extent to which the marriage had affected the wife’s earning capacity and the need to protect her desire to continue in her role as a parent are, in reality, part and parcel of the submission that the overall result is outside the range of reasonable discretion. There can be no doubt that her Honour did, in fact, take these matters into account, as she made specific findings relevant to each of them.
Ground 2 can also be dealt with briefly. We have already noted that the ground relates to a finding which contained a grammatical or typographical error. Read in the way her Honour clearly intended, this finding did no more than record that the wife had not been earning a significant amount prior to the marriage. Far from being an “irrelevant circumstance” as asserted, we consider this was a relevant matter for her Honour to take into account in determining what weight should be given to the impact the marriage had on the wife’s earning capacity.
Having dealt with these more specific grounds of appeal, we now turn to Ground 1, which we perceive to be the substantive matter requiring determination in this appeal, namely, whether or not the 10% adjustment fell outside the reasonable exercise of her Honour’s discretion.
This is, of course, an appeal against a discretionary judgment. The width of the discretion afforded the trial Judge in dealing with an application for property settlement was described in Norbis v Norbis (1986) 161 CLR 513 where Brennan J said at 539-540:
… 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 E.R. 343, at p. 345] Asquith L.J. 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.
In his attempt to overcome the heavy onus cast on any appellant aggrieved by the outcome of a discretionary judgment, counsel for the wife relied upon the following statement of the Full Court in Clauson (supra at 81,911):
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.
Counsel for the wife described this passage from Clauson as identifying “the preferred approach to the assessment of s 75(2) factors”. We would agree, but only to the extent that it highlights the importance of the trial judge keeping firmly in mind the economic impact of the proposed adjustment rather than paying attention only to the percentage adjustment.
In our view counsel for the wife appeared to be reading something more into the citation from Clauson when he went on to submit that:
(1)      the modest asset pool
(2)      the young age of the child
(3)      the husband’s erratic child support and employment history
called for the learned Trial Judge to approach the assessment of section 75(2) factors in the manner prescribed in Clauson.
In any event, counsel concluded by saying:
an adjustment that reflects a period of 14 years when the relevant section 75(2) factors will apply should have been reflected by an adjustment significantly greater than $1,600 per annum.
Although her Honour did not, when discussing the s 75(2) factors, record the dollar impact of the proposed adjustment, she did address the issue of whether the overall outcome was just and equitable. In doing so, her Honour observed that the effect of determining that the wife should receive an overall settlement of 40% of the assets was that she would receive a cash payment from the husband of $27,449.
Her Honour had, therefore, undertaken the mathematical exercise of working out the dollar impact of her decision. In these circumstances, we do not think it could be reasonably suggested that her Honour overlooked the fact that a 10% adjustment involved a relatively small monetary amount. It should also be remembered that the wife had sought only a 20% adjustment. If the trial Judge had made such an adjustment, the monetary impact would still have been quite modest.
It should also not be overlooked that some of the s 75(2) factors favoured the husband. In particular, his income earning capacity was also reduced as a result of his responsibilities in relation to the care of CW. Her Honour found that those responsibilities may increase in the future. In that regard it should be remembered that the parenting orders were made only a few weeks before the property orders were made. Her Honour had been dealing with the issues concerning CW for some time and she had expressed her orders to be “until further order”. Her Honour was well-placed to determine whether the husband might have even greater responsibility for the care of CW in the future.
Although she did not mention it in consideration of the s 75(2) factors, when determining whether or not the overall outcome was just and equitable, her Honour referred to the fact that $28,000 of the husband’s settlement would be in the form of superannuation. Her Honour commented that the husband was “a young man and will not be able to access these funds for many years”. In our view, that was a further factor upon which her Honour could (and presumably did) rely in determining that a 10% adjustment was adequate.
In the course of his oral submissions seeking to persuade us that the 10% adjustment was outside the range of reasonable discretion, counsel endeavoured to cast doubt on the accuracy of her Honour’s finding that the husband “will be paying child support on a child support assessment income of at least $35,000 [per annum]”. He drew attention, in particular, to the fact that in the course of hearing submissions, her Honour had said, “I am not convinced [the husband] is reliable in terms of what he is going to provide”.
We accept that this statement may be seen to be in conflict with her Honour’s ultimate finding that the husband would pay child support calculated on the basis of an income of $35,000 per annum; however, there are two answers to this. The first is that her Honour took time to consider her judgment and ultimately determined that the husband would, in fact, be likely to pay child support at the rate he said he would. The second answer is that there was no appeal against her Honour’s finding on this issue. Counsel for the wife candidly acknowledged that he had given thought to raising the matter in the Notice of Appeal, but elected not to do so on the basis that he anticipated (probably correctly) we would find her Honour was entitled to assess the credibility of the husband and make the finding she did.
Counsel for the wife also referred to what he described as the husband’s “undoubted erratic child support and employment history”. He submitted, in effect, that her Honour should also have taken that factor into account in the s 75(2) adjustment. This issue, if relevant, would have arisen pursuant to s 75(2)(na), which relates to the child support that a party has provided or is to provide for a child of the marriage. The difficulty with counsel’s submissions is that whilst complaint was made in the amended Grounds of Appeal about the inadequacy or absence of reasons directed to various sub-paragraphs of s 75(2), no reference at all was made to s 75(2)(na). Furthermore, in her short discussion of the s 75(2) factors, her Honour did note the husband’s erratic payment of child support in 2004 and in 2005. There is no reason to believe that her Honour did not take that matter into account.
As the authorities make clear, the fact we may have considered the wife was entitled to a somewhat greater adjustment by reference to the s 75(2) factors is immaterial. We are satisfied that her Honour’s decision fell within the reasonable range of her discretion, albeit arguably at the lower end of the range.

Conclusion and costs

Since none of the grounds of appeal have been established, the appeal will be dismissed.
At the conclusion of the hearing, we sought submissions in relation to the position each party would adopt on costs, depending upon the outcome of the appeal. The husband said that he had been put to a great deal of inconvenience as a result of having to respond to the appeal, but acknowledged that the only expenses he had incurred were minor. He said he would not pursue costs in the event the appeal was dismissed.
In those circumstances, there will be no order as to costs.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 18 April 2007