Watts v Shaw

[2001] HCATrans 207

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M63 of 2000

B e t w e e n -

LACHLAN MACINTOSH FLINT WATTS

Applicant

and

JENNIFER MARGARET SHAW

Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 22 JUNE 2001 AT 11.34 AM

Copyright in the High Court of Australia

MR P.G. NASH, QC:   If the Court pleases, I appear for the applicant.  (instructed by N.A. Young & Co)

MR B.G. WALMSLEY:   May it please the Court, I appear on behalf of the respondent.  (instructed by Cohen Woolf & Weinberg)

GUMMOW J:   Mr Nash.

MR NASH:   If the Court pleases, can I start with an apology for two matters:  one, the late delivery of materials to the Court; and, secondly, the absence of a reply.  The only excuse I can make to the Court is a total breakdown of the logistics.

KIRBY J:   We have read the documents so we understand what the issues are all about.  So, speaking for myself, I am not going to cane you for what you failed to do.

MR NASH:   I was ready to bear the wrath of the Court.

KIRBY J:   We are very benign sometimes.

MR NASH:   I hope the Court will stay that way for the next 20 minutes or so. Basically, section 4 of the Child Support (Assessment) Act 1989 says that child support is to be determined in accordance with the provisions of the legislation and section 117(4) sets out criteria by which child support is to be determined. If I can go to section 117(4), paragraph (d) refers to:

The income, earning capacity, property and financial resources of each parent who is a party to the proceeding;

Essentially, our complaint is a simple one.  Both the learned trial judge and the Full Court took the view that the general financial situation of the wife was a side issue, was peripheral or was not something that had to be directly taken into account.

GUMMOW J:   Now, Mr Nash, can I take you to page 37 of the application book – I think this is where we have to focus perhaps – paragraph 29 of the Full Court’s reasons.  Now, everyone seems to be in agreement as to what the principles were governing leave to appeal in the Full Family Court.  It is then put against you that this is simply a case where you disagree with the way in which those criteria were applied to this particular litigation.

MR NASH:   There are two matters, your Honour.  First, in relation to the question of substantial injustice, in relation to that the answer possibly is yes, because it is a bit like Mr Micawber.  It may well be that Family Court judges are wealthier than they used to be, but a loss of $30,000 does not involve substantial injustice.

In relation to the other question, there is an error of principle, because the error of principle by the trial judge was – and it is expressed and accepted by the Full Court – to give primacy to the income earning situation.  That appears in the application book at page 42, paragraph 43 of their Honours reasoning, line 13:

This was not a property case, but a child support case, and although the overall financial circumstances of both parties were relevant to the determination of the proceedings, the primary focus was, and ought to have been, on their income and earning capacity, rather than upon their property and resources.

That is in direct contradistinction to the non‑discriminatory use of those terms in section 117(4)(d).  In a sense, if the Court please, this is the nub of our complaint.  We can got to other aspects of the judgment of the trial judge and of the Full Court which show that property and financial resources are not equal to income and earning capacity because this is a child support case, despite the fact that when one looks at the legislation, the legislation specifically does not draw the distinction which the Full Court accepts and which the learned trial judge adopted.  For example, page 11 of the application book, starting at line 7, the learned trial judge said:

There is no real capacity in the wife other than –

and this is the important part –

other than through the largesse of her extended family to make provision for these children at the present time unless she disposes of some of the family fortune which is represented in the art collection, the furniture collection and the jewellery which she owns.

Now, those words are general in their operation.  There was no tight or clear analysis of the wife’s full financial situation.  The value of the jewellery, the art collection, the furniture or the interest in the matrimonial home, the husband’s cross-examination on these matters was, to use the words of the Full Court, curtailed and yet those matters are just as important to a determination under section 117(2) as income or earning capacity.

What the judgment says, in effect, is if I have assets, if I am a spouse with the care of a child and I have non-income earning assets, I can keep them.  If I go out to work or I make my assets work for me, they are to be taken into account.

KIRBY J:   But did you not agree in the Full Court of the Family Court with the principles that were to be applied?  First of all, you required leave to appeal of that court, did you not?

MR NASH:   Yes, your Honour, and what we agreed on was that we had to show a misapplication of principle by the trial judge and a substantial injustice.

KIRBY J:   Well, is does not seem to be a very suitable vehicle for this Court to examine the principles applicable under the federal Act, the Child Support Act, given that you needed leave, there was no dispute as to the principles and it was just a matter of applying the principles to the facts of this particular case.

MR NASH:   No, your Honour, with respect.  In the course of the court’s reasoning to determine whether there had been a misapplication of principle by the trial judge, a matter necessary for the determination of the application and, of course, the way Full Court works, determination of the appeal, the one hearing being the two, the dispute was as to the principles which should have been applied by the trial judge, namely, what was the operation of section 117(4)?  What was the ambit of section 117(4)?  Did it permit ‑ ‑ ‑

KIRBY J:   But this has been the subject of many decisions in the Family Court, has it not, Gilmour, Hides and Hatton, and if you were seeking to articulate some new principles, one would have expected that you would have expressed that as a basis for the grant of leave.  Instead, it just got down to the facts of the case.  Tell me if I am wrong.

MR NASH:   With respect, your Honour, I am having difficulty with your Honour’s proposition.  It may well be that when one gets close enough to something, one does not see the obvious.  That may be my problem at the moment.  But as we see it and as we put it, the principles in issue in this case were not just what is the basis for giving leave, because it was an application for leave and a hearing of the substantive matter, as sometimes happens in this Court, with ultimately no leave being granted. 

KIRBY J:   One has to ask oneself, Mr Nash, why has Parliament imposed the requirement of leave?  Answer:  because these are cases that involve excruciating detail in evaluating the facts of the particular case and the assets and earning capacity of the different parties.  You needed leave and you did not even get leave and now you are coming to this Court seeking special leave upon leave.  It is piling Pelion on Ossa. 

GUMMOW J:   You see, you are advantaged in a way because you could have been turned out very shortly by just a refusal of leave, but the court went on to give reasons in some detail.  You now seek to turn that the other way around, but the fact is you did not get leave.

MR NASH:   I am just recalling what happened when Pelion was piled on Ossa.  I think it was rather unfortunate, the result.

MR WALMSLEY:   Bad result.

KIRBY J:   Well, I know you say that, but we have to look at it as a matter of principle.  The question is whether we open a doorway when you have two doorways to get through:  the grant of leave by the Full Court of the Family Court, which is there for a very good reason.  I mean many parties will waste more money fighting about these because of the bitterness of their relationship than has a marginal utility to the amount at stake and that is why Parliament has imposed that obligation of leave.  Now, you have special leave upon leave.

MR NASH:   I accept what your Honour puts and the only thing I can say in reply, which does not answer your Honour’s problem, is that when one analyses the reasons, they, with respect, do not stand up to analysis.  They do stand as authority for the ambit of section 114.  They are inconsistent with the clear legislative policy, another aspect of legislative policy.  Having said that, there is really nothing further I can put to the Court.  If the Court pleases.

GUMMOW J:   Thank you.  We do not need to call on you, Mr Walmsley.

No sufficient matter of principle is established by this application to warrant the grant of special leave. Before the Full Court of the Family Court, where the applicant required and failed to secure a grant of leave to appeal, it was found that counsel for the parties were in agreement as to the principles granting leave to appeal pursuant to section 102 of the Child Support (Assessment) Act 1989 (Cth). The Full Court applied principles established in the Family Court of Australia.

Accordingly, this case would not afford a suitable vehicle for this Court to have the opportunity to consider applicable principles.  Special leave is refused.

Costs were sought, I think?

MR WALMSLEY:   Costs were sought ‑ ‑ ‑

KIRBY J:   You sought it on an indemnity basis.

MR WALMSLEY:   ‑ ‑ ‑ your Honour, on an indemnity basis, having regard to the peculiar circumstances of this tragic history, as can be seen by reference to the respondent’s outline of argument at 72.

GUMMOW J:   Yes.  We have taken that into account.  We are not persuaded to grant costs at the indemnity level.

MR WALMSLEY:   May it please the Court.

GUMMOW J:   Special leave is refused with costs.

AT 11.49 AM THE MATTER WAS CONCLUDED