WARRINER & WARRINER
[2020] FamCAFC 33
•14 February 2020
FAMILY COURT OF AUSTRALIA
| WARRINER & WARRINER | [2020] FamCAFC 33 |
| FAMILY LAW – APPEAL – PROPERTY – Where the primary judge determined adjustments as 52.5 per cent to the wife and 47.5 per cent to the husband – Where the wife argues that the adjustment was not reflected in the superannuation orders – Where the wife sought to add back property into the property pool – Discretion correctly exercised by the primary judge – Conclusion drawn by the primary judge not plainly wrong – Parties agreed that the wife should receive an additional sum of $63,146.88 from the joint superannuation fund – Appeal allowed in part – Discretion re‑exercised. FAMILY LAW – APPEAL –COSTS – Where the appeal was wholly unsuccessful bar the adjustment in the superannuation split –Wife to pay the husband’s costs of the appeal in a fixed sum. |
| Family Law Act 1975 (Cth), s 75(2) and s 94(2) |
| Carron & Laninga (2019) FLC 93-909;[2019] FamCAFC 115 De Winter v De Winter (1979) FLC 90-605 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Holland & Holland (2017) FLC 93-798; [2017] FamCAFC 166 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 |
| APPELLANT: | Ms Warriner |
| RESPONDENT: | Mr Warriner |
| FILE NUMBER: | SYC | 8565 | of | 2015 |
| APPEAL NUMBER: | EAA | 68 | of | 2019 |
| DATE DELIVERED: | 14 February 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 19 November 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 28 June 2019 |
| LOWER COURT MNC: | [2019] FCCA 1803 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Bridger |
| SOLICITOR FOR THE APPELLANT: | Jo-Anna F S Moy Solicitor |
| COUNSEL FOR THE RESPONDENT: | Mr Lethbridge SC |
| SOLICITOR FOR THE RESPONDENT: | De Saxe La Cava O'Neill |
Orders
The appeal EAA 68 of 2019 against the orders of Judge Boyle made on 28 June 2019 be allowed in part.
The parties shall within fourteen (14) days of the date of these orders, prepare a minute of order to give effect to the provision for the wife of the sum of $63,146.88 from the Joint Superannuation Fund and that order will be made in Chambers.
The appeal is otherwise dismissed.
The wife to pay the husband’s costs of and incidental to the appeal in the sum of $8,000.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Warriner & Warriner has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 68 of 2019
File Number: SYC 8565 of 2015
| Ms Warriner |
Appellant
and
| Mr Warriner |
Respondent
REASONS FOR JUDGMENT
Ms Warriner (“the wife”) appeals against property settlement orders made by Judge Boyle on 28 June 2019. Mr Warriner (“the husband”) opposes the appeal.
The parties began to live together in April 1992, married in 1996 and separated in December 2012. There are two children of the marriage both of whom are over eighteen.
Her Honour’s orders reflect her findings that the parties’ contributions to the time of separation were equal and, although she found that the husband’s contributions after separation favoured an adjustment in his favour of
2.5 per cent, having regard to the matters to which s 75(2) of the Family Law Act1975 (Cth) (“the Act”) relates, her Honour concluded that there should be an adjustment in the wife’s favour of 5 per cent. Thus her Honour ordered the sale of the parties’ marital home and the investment in C Project, and the net proceeds of those sales to be divided as to 52.5 per cent to the wife and the balance to the husband. The parties’ net assets were assessed by her Honour in the order of $2.348 million.
Her Honour made a superannuation splitting order in the wife’s favour in relation to two funds to which the husband was entitled, to the effect that sums of $45,000 and $10,000 to be paid to her. The husband’s superannuation entitlements were in the order of $260,597.
It is helpful to give some contextual background to the parties’ relationship to assist understanding the issues argued on appeal.
After commencing to live together, the parties purchased a property in Suburb A in Sydney. The purchase of the property was funded by a mortgage and the husband’s savings. They purchased the property as tenants in common in unequal shares, the husband having an 85 per cent interest. Some few years later, the husband’s grandmother gave him $130,000 some of which was used to reduce the mortgage. In 1994 the parties had a brief separation during which the husband purchased the wife’s interest in the Suburb A property for about $15,000.
In April 1994 the husband’s employment caused him to be transferred to the United States of America (“USA”). The wife and he reconciled in June 1994. Thereafter it seems that although working for different companies in different cities, the parties lived in the USA until late 2002. During the time they lived in the USA, the husband’s remuneration was substantial. The wife was not permitted to work because of her visa conditions. The parties’ children were born in the USA and it was accepted that the wife was their primary carer and attended to their needs while the husband worked.
While living and working in the USA, the Suburb A property was sold and the net proceeds apparently added to the parties’ savings. On their return to live in Australia, the parties purchased a home in Suburb B which was to become their marital home for $1.365 million of which they contributed $1.2 million from their savings.
The parties invested $240,000 into the C Project which was funded by an interest loan secured over the property purchased in Suburb B. At the date of the hearing, it seems that there was no evidence of the value of that investment however, her Honour’s orders require it to be sold and the proceeds of the sale be divided according to her determined percentage adjustment as between the parties.
After the parties separated, the wife and children continued to live in the Suburb B home.
The mortgage secured over the home at separation was in the order of $42,000 but by December 2015, some three years later, had risen to $250,000. The increase in the mortgage is explained by both parties drawing against the mortgage for their living expenses.
Before her Honour, the wife sought an order that there be “added back” into the pool of assets of the parties and each of them, two sums; $260,000 being the amount of the mortgage and $160,453 being a payment received by the husband on being made redundant in 2012.
Her Honour declined to add back the drawings on the mortgage on the basis that the money was used by each party for his or her own financial needs in a manner which her Honour said was consistent with the way the parties had conducted their lives during the marriage (at [43]).
Her Honour further noted that after separation, the husband contributed to the mortgage account a sum of money he received in a personal injury payment and the redundancy payout received by him in 2012.
Her Honour also noted that the wife remained in the home with the husband paying the mortgage after she commenced full time work, albeit at a salary less than that earned by the husband.
Turning then to the challenges on the appeal.
The appeal
Four challenges to her Honour’s orders are advanced in the grounds. It is useful to first consider Ground 2 which, in effect, contends that her Honour’s orders do not reflect her intention as expressed in the reasons in relation to the division of the parties’ superannuation entitlements.
Her Honour said at [76] “…The wife shall receive 52.5 % of the pool”.
The pool as her Honour termed it, was first considered at [40] where the primary judge dealt with disputed matters going to the constitution of the pool, such as whether sums would be “add[ed] back” or the husband’s then bank accounts would be included in the assets for division as between them. Having resolved those issues, her Honour then at [44] set out in a table the assets and liabilities of the parties and each of them and in a separate section set out each party’s superannuation entitlements.
It was argued for the wife that her Honour’s orders do not in fact provide for the wife to have 52.5 per cent of the pool because the orders referrable to the superannuation funds do not give that result.
There was no dispute that this was so. The parties agreed that, had her Honour’s orders reflected her expressed intention, the wife would receive a sum of $63,146.88 from the Joint Superannuation Fund in addition to the other orders made in relation to the superannuation.
Counsel for the husband argued that, this point having been agreed, the matter should be referred back to her Honour for amendment of her orders to give effect to her intention. However, the Court having been seized of the appeal, counsel for the husband agreed that this Court could find Ground 2 established and order, pursuant to s 94(2) of the Act that the wife receive that amount from the husband’s interest in the Joint Superannuation Fund.
Turning then to the remaining grounds of appeal.
Ground 1
Ground 1 contends that her Honour erred in excluding from the property of the parties available for distribution, their respective bank accounts. It further argues that her Honour erred in failing to include as an “add back” (at [40]) the mortgage debt of $260,000 against the Suburb B property.
Parties’ bank accounts
At the date of the hearing before her Honour, some six years after the parties separated, they each held money in bank accounts. During the appeal, the parties tendered the joint balance sheet that was before the primary judge. It shows that the wife had bank account balances of $5,000. Since separation and at the time of the hearing before her Honour, the wife had acquired a car said to have a value of $18,000. The husband held $45,417 in several bank accounts.[1] During the hearing the husband argued that their bank account balances and the wife’s car should not be included in the property available for division between the parties because of the time that had elapsed since the parties separated and on the basis that the parties had been conducting their separate financial affairs. The primary judge acceded to the husband’s argument that the bank accounts and the wife’s car should be excluded because, the hearing being some six years after the parties separated, the accounts must represent accrued earnings of each of them.
[1] It appears that Item 3 on the Balance Sheet (Exhibit 1 on the Appeal) is incorrect. According to the transcript of the proceedings on 17 August 2018, p. 105 line 17 the correct amount of Item 3 is $24,289.
She said:
41. …Whilst the funds are financial resources of the parties and should be taken into account, I do not regard those funds as available for distribution. On that same basis the husband’s Westpac account and the wife’s [Motor vehicle] should be removed…
(Footnote omitted)
It was argued that her Honour’s characterisation of the bank accounts as “financial resources” was incorrect and they were in fact property able to be brought to account.
In Holland & Holland (2017) FLC 93-798 the Full Court said as to the meaning of “financial resource”:
20. The expression “financial resource” requires similar caution. It has been used by the court throughout the Act’s history in contradistinction to “property” to highlight a proposition central to the operation of s 79 of the Act. Orders pursuant to s 79 of the Act can alter interests in respect of “property”; “financial resources” cannot be the subject of such orders. However, those same financial resources can be important to the making of s 79 orders by reason of a consideration of them pursuant to s 79(4)(e) of the Act (i.e. the “s 75(2) factors”).
21. It should be recognised immediately that the expression “financial resource” has sometimes been used to describe a situation where property the subject of an inheritance has been assessed within an “asset by asset” or “separate pool” approach. However, with respect to those who have used that expression in that context, we would seek to reiterate what was said by the Full Court in Bonnici and Bonnici, referred to by her Honour:
The expression “resource” [or, we would respectfully add, “financial resource”] is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement”.
22. Such an approach is supported by the recent statement by the High Court in Stanford earlier referred to.
23. Thus, despite an apparent pedigree of sorts, we consider it important to state that there is no doubt that her Honour erred in referring to the husband’s vested interest in the Wantirna property as a “financial resource”. It was, with respect, not a financial resource; it was property of the husband. It is property to which the parties are, or a party is, presently entitled – see the definition of “property” in s 4 of the Act and the recent discussion in Calvin.
(Footnotes omitted) (Emphasis in original)
It is important to understand that the argument before her Honour about the bank accounts and the car was not as to their characterisation but whether they should be included in the pool of property of the parties available for division. In my view, her Honour’s use of the term “financial resource” (at [41]) was infelicitous. Her Honour’s reasons show that while she declined to add those particular assets into the pool of property for division, she intended to take them into account when considering the application of the matters to which s 75(2) of the Act refers. Thus I am unpersuaded that her Honour erred.
In any event, even if her Honour did mischaracterise the nature of the assets as was contended by the wife, the error does not necessarily invite appellate intervention. Counsel for the husband argued that had the bank accounts and the wife’s car been included in the property available for division, the difference as between the parties of those included assets was in the order of about $22,000, which in the context of the net property pool of $2.3 million was insignificant. Thus even had her Honour erred, it was not material to her ultimate conclusion as to the division of property and would not invite appellate intervention (see De Winter v De Winter (1979) FLC 90-605).
Increase in the joint mortgage
At the date of separation the mortgage over the parties’ property at Suburb B was $42,466. At the date of the hearing before the primary judge it was in the order of $250,000. The wife’s contention before the primary judge was that $260,000 should be “added back” to the pool of assets available to divide between the parties to reflect the drawings down on that mortgage by the husband. It was argued that the husband had wilfully and rashly drawn down on the mortgage and increased the parties’ joint debt rather than use his income or accrued savings to meet joint debts.
Her Honour rejected that argument and said:
43. The add backs sought by the wife ignore the sums she has drawn from the mortgage. The account has been utilised by both parties for the support of themselves, and the children. There is no evidence that suggests that the husband has used funds for any improper purpose. For example, the costs for the husband to maintain a relationship with the children was significant when he was working in the United States. The children have spent time with him during school holidays outside of Australia. This is consistent with the previous lifestyle of the parties, and was the only practical way for those relationships to be maintained…
Her Honour then added:
54. It is unsurprising that the mortgage increased in circumstances where the parties had two children at private schools, and were maintaining two separate households from the joint account. Payment of school fees was assisted by the [Education] fund in the amount of $20,000 per annum, totalling $60,000 given the wife’s retention of one such payment, which was not applied to school fees. The annual fee for one child was, conservatively, $30,000 per annum. Over the four year period following separation $240,000 was required to meet school fees. $180,000 of post-tax income was required to meet school fees for the children.
Her Honour noted at [52] that after separation money from the husband’s redundancy payment and damages paid to him in relation to a personal injury claim were deposited into the mortgage account.
The wife’s argument advanced to the primary judge, and rejected by her Honour, was that the husband deliberately incurred joint debt by using the mortgage account to pay school fees and other expenses rather than using his redundancy payments or income. The husband’s evidence before her Honour was that he took that course because each of he and the wife would then be jointly responsible for the payment of those expenses rather than he alone meeting the costs from his redundancy payments or income from time to time.
In submissions, counsel for the wife sought to modify the ground saying that her Honour’s error was in not adding back some $78,000 which was said to refer to money drawn from the mortgage and paid directly to the husband’s credit card and expended for his own purposes.
This submission cannot be maintained on appeal because it was not advanced to the primary judge and cannot now be entertained (see Metwally v University of Wollongong (1985) 60 ALR 68 at 71).
However, the challenge as articulated in the ground of appeal in effect argues that her Honour was wrong not to have accepted the submissions made on behalf of the wife about the treatment of that particular debt. No error of principle was asserted either in the written or oral submissions. The decision was one of the exercise of her Honour’s discretion. The bar to appellate intervention in respect of such discretionary decisions is set high. An appellate court’s decision that a trial Judge’s discretionary conclusion is wrong must have a discernible proper foundation and that foundation cannot be merely that it would have reached a different decision based on the same facts (see Gronow v Gronow (1979) 144 CLR 513).
Nothing put persuades me that her Honour’s conclusion in this regard is “plainly wrong” and this ground must fail.
Ground 3
Ground 3, expressed in the alternative to Ground 1, contends that her Honour erred in concluding that the husband’s post separation contributions were greater than those of the wife leading to an adjustment in his favour on this account of
2.5 per cent.It was argued that, properly considered, the husband’s post separation contributions were from joint funds drawn against the parties’ mortgage and thus her Honour over valued those contributions.
While it seems uncontentious that some of the funding of the husband’s contributions were from the mortgage draw down, he had paid funds into that account from his income, a personal injury payment and redundancy payments. Further, her Honour noted that despite being in full employment (albeit not earning an amount comparable to the husband) the wife did not contribute to the mortgage repayments. Her Honour further took into account that the wife and children had the benefit of remaining living in the family home and the high costs to the husband of maintaining his relationship with the children while working overseas. Her Honour clearly recognised the husband’s contribution in maintaining the wife and children in the marital home, the most valuable asset of the parties, was a significant one. (see Carron & Laninga (2019) FLC 93-909).
It is clear from her Honour’s reasons that she distinguished between the payment of family expenses by drawings against the mortgage and through payments by the husband (at [59]). To the extent that the ground contends that her Honour wrongly attributed weight to the payment of expenses through the joint debt or double counted that contribution, it is rejected.
It was also argued that in considering the contributions of the parties following their separation, her Honour failed to give account to the wife’s contribution of being solely responsible for the children’s care while the husband was working abroad. While her Honour did not directly refer to the wife’s continuing her contribution of caring for the children after separation and at times when the husband was working abroad when considering the parties’ post separation contributions, her Honour was fully aware of the burden cast on the wife in taking on that role in the absence of the husband (at [51]).
However, it is in her Honour’s assessment of the adjustment referrable to the s 75(2) factors where she attributed clear weight to that contribution at [64] and it is reflected in her further adjustment in the wife’s favour of 5 per cent.
The assessment of the weight or value to be given to the evidence is a matter quintessentially for the primary judge, and an Appeal Court will not lightly intervene. Nothing in either the written or oral submissions persuades me that her Honour’s discretion miscarried.
There is no support for this ground.
Ground 4
By this challenge it was argued that her Honour erred in concluding that the application of the matters to which s 75(2) refers should reflect in an adjustment in the wife’s favour of 5 per cent rather than some greater figure.
Her Honour’s reasons make it clear that in coming to that adjustment her Honour considered that the husband was the primary source of economic support within the family and the wife was the primary carer of the children. Additionally, her Honour also considered the age difference between the parties, the husband being nine years older than the wife, and the husband being unemployed at the time of the trial (at [62]-[63]).
This ground, as does Ground 3, challenges the exercise of her Honour’s discretion, arguing that she was wrong in coming to these conclusions. It is important to understand that there is no challenge to the findings of fact underpinning her Honour’s conclusions, and the challenge is that her Honour ought to have come to a different conclusion. Without repeating the well-known formulation, nothing argued on the appeal persuades me that her Honour’s conclusion in relation to this aspect was plainly wrong.
Thus, Ground 2 having succeeded, the appeal will be allowed in part and an order will be made to give effect to her Honour’s stated intention.
Costs
At the conclusion of the appeal hearing both parties addressed as to the costs of the appeal. The husband submitted that if the appeal succeeded he should have a costs certificate reflecting an acceptance that the error, if established would be that of the primary judge. However, the husband further submitted that if the appeal succeeded only in relation to Ground 2, then the wife should pay 90 per cent of his claimed costs because the error could have been remedied by returning the matter to the primary judge rather than prosecuting the appeal. The claim for 90 per cent of the costs was said to represent a deduction of the costs necessarily incurred in returning to the primary judge. The wife opposed any order as to costs.
In this case, the wife’s appeal has, for the significant part, been wholly unsuccessful. The clear slip in the primary judge’s orders in relation to superannuation could have been remedied by application to her. That, in the result, the ground of appeal going to that matter succeeded does not render the wife immune from a costs order if one would otherwise be made and, in my view a costs order should be made against the wife.
Turning then to the quantification of those costs. At the conclusion of the appeal hearing, the issue was discussed of whether, if the appeal was successful, the Full Court would exercise the discretion of the primary judge. Each party wished to put before the Full Court updating evidence in that event. Given the outcome of the appeal there is no call for a consideration of re-exercise of the primary judge’s discretion. However the evidence does provide detail of the husband’s present financial circumstances, who was unemployed at the time of the hearing before the primary judge is presently working in the USA. The wife’s further evidence did not refer to her employment but her evidence before the primary judge was that she was working and it is clear that she has always earned considerably less than the husband, which I assume to be the case presently.
The husband’s costs amount to $25,375.86 of which 90 per cent is claimed, some $22,828. Given the disparity of earning as between the parties I will order the wife to pay the husband’s costs in the sum of $8,000.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on 14 February 2020.
Associate:
Date: 14 February 2020
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