Wayne & Wayne

FAMILY COURT OF AUSTRALIA

WAYNE & WAYNE

[2010] FamCAFC 33

FAMILY LAW - APPEAL – PROPERTY – Section 75(2) adjustment – Whether the trial Judge placed sufficient weight on the proportion of time the children were living with the father – Whether the 10% adjustment in favour of the wife fell outside the reasonable ambit of discretion – Exercise of discretion miscarried – Appeal allowed – Full Court determined the section 75(2) adjustment should be 4%

Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

Abalos v Australian Postal Commission (1990) 171 CLR 167
Clauson and Clauson (1995) FLC 92‑595
Devries v Australian National Railways Commission (1993) 177 CLR 472
De Winter v De Winter (1979) FLC 90-605
House v The King (1936) 55 CLR 499
Norbis v Norbis (1986) 161 CLR 513
Phipson & Phipson [2009] FamCAFC 28
SS Hontestroom v SS Sagaporack [1927] AC 37
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588

APPELLANT:

Mr Wayne

RESPONDENT:

Ms Wayne

FILE NUMBER:

2008

APPEAL NUMBER:

2006

DATE DELIVERED:

8 March 2010

PLACE DELIVERED:

Perth

PLACE HEARD:

Perth

JUDGMENT OF:

Finn, Coleman and Thackray JJ

HEARING DATE:	1 July 2009
LOWER COURT JURISDICTION:	Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

5 February 2008

LOWER COURT MNC:

[2008] FCWA 11

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Self represented litigant

SOLICITOR FOR THE APPELLANT:

Self represented litigant

COUNSEL FOR THE RESPONDENT:

Mr S French

SOLICITOR FOR THE RESPONDENT:

Dwyer Durack

Orders

The appeal be allowed.
Order 1 of the Orders made by the Honourable Justice Crooks on 16 April 2008 be varied to read as follows:
The proceeds of sale of the property situate at … in the State of Western Australia (Certificate of Title Volume …, Folio …) be disbursed in the manner following:
(a)in payment of agent’s commission and reasonable expenses of sale;
(b)in payment to the wife of 61 per cent of the proceeds of sale;
(c)in payment of the balance to the husband.
There be no order for costs in relation to the appeal.
The Court grants to the appellant husband a costs certificate pursuant to the provisions s 9 of the Federal Proceedings (Costs) Act1981 (Cth) 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 in respect of the costs incurred by him in relation to the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) 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 in respect of the costs incurred by her in relation to the appeal.

IT IS NOTED that publication of this judgment under the pseudonym Wayne & Wayne is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: PT 90 of 2006
File Number: WA 20 of 2008

Mr Wayne

Appellant

And

Ms Wayne

Respondent

REASONS FOR JUDGMENT

This is an appeal against orders made by Crooks J on 16 April 2008 in property settlement proceedings between the appellant husband and the respondent wife.
His Honour determined that the pool of assets, which he found to be worth $938,665, should be divided in proportions 62% to the wife and 38% to the husband. His Honour found that the contributions had been made 52% by the wife and 48% by the husband. He then made a 10% adjustment in the wife’s favour on account of the factors in s 75(2) of the Family Law Act 1975 (“the Act”).
The husband considers the assets should have been divided equally. Although he challenges the contribution assessment and the s 75(2) adjustment, it is the latter which is the primary focus of the appeal.

Background

At the time of trial the husband was 50 years of age and the wife was 43.
The husband had worked for his employer since 1989, but resigned from his employment in mid 2006. The wife was employed at a school.
The husband and wife were married in 1986 and separated in early 2005. There are four children of the marriage; S (18), J (16), N (10) and R (8). The ages of the children are shown as at the date of judgment.
At the time of separation the wife and all four children went to live in rental accommodation. The husband remained in the matrimonial home, which was free of encumbrance.
J returned to live with the husband in early 2006. S went to live with her boyfriend’s family in late 2006. N and R were still primarily living with the wife at the time of trial.
The wife commenced proceedings in March 2006, seeking parenting and financial orders, including spousal maintenance. In the following month the husband voluntarily terminated his employment with his employer.
Consent orders were made at the commencement of the trial for J to reside with the husband and for N and R to reside with the wife. The husband was to have the two youngest children five nights each fortnight, as well as half of all school holidays. J was to spend time with the wife in accordance with his wishes. The orders were expressed to be “until further order”.
The hearing was conducted in November 2007; reasons for decision were published in February 2008; and orders were made in accordance with those reasons on 16 April 2008. The Notice of Appeal was filed on 30 July 2008, after the husband had secured an extension of time in which to appeal.

The trial Judge’s reasons

Given the relatively narrow compass of the appeal there is no need to refer to all of the findings made by the trial Judge. The full judgment is published as W and W [2008] FCWA 11.
In setting out the background facts his Honour noted that pursuant to the interim consent orders the husband would have the two youngest children each alternate week from after school Wednesday until commencement of school the following Monday, “together with the additional periods as set out in the orders”. As his Honour later indicated, these “additional periods” included the sharing of school holidays.
His Honour also noted that:
[J] has suffered from severe behavioural problems for a number of years. He was suspended from High School in 2006 because of problems over his attendance and disruptive behaviour… At the time of trial… [J] was living with the husband who said he had finished school and would be seeking employment.
His Honour recorded that the husband had voluntarily resigned his employment with his employer in April 2006 and became entitled to certain termination payments. He noted that as a result of the husband’s resignation the wife had made an application in May 2006 seeking orders that the husband provide disclosure of documents relating to his termination payment, as well as orders to prevent the husband from dealing with the payment.
He went on to record that an injunction had been made on 9 June 2006 preventing the husband from dealing with his termination payment other than to deposit it into a joint account. His Honour noted that later that month the husband received $3,571 from his former employer which he found “was covered by the injunctions made”. He found that the husband deposited the funds into his own account and spent them, notwithstanding the injunctions.
His Honour found that the wife’s solicitors had made requests for the husband to give disclosure of documents in order to establish how the husband had allegedly spent the savings he held at the time of separation. He went on to find that, notwithstanding these requests, the husband had failed to give “adequate disclosure”. He further noted that at a conference held in January 2007 the Registrar had recorded on the conference file note that the husband “should comply with disclosure requirements of the wife”.
His Honour also recorded that the husband accepted that $56,024 which he had withdrawn from his savings after separation should be added back into the asset pool. Although there was no dispute that this amount should be added back, his Honour nevertheless said he was not satisfied that the husband had spent the savings as he claimed. He set out reasons why he had “serious reservations about the accuracy and reliability of the husband’s evidence” on this point. Included amongst these was the fact that there was no evidence that the husband had produced the documents requested by the wife’s solicitors to establish how the funds had been disbursed.
His Honour also noted that the husband was asked during cross‑examination to explain a discrepancy in information relating to his superannuation entitlements. He recorded that the husband said that after he had left his employment he had accessed $20,000 from his superannuation which he had spent on “living”. His Honour found that the husband had made “no reference to this withdrawal of superannuation in his trial affidavit nor did he provide any documents to evidence the withdrawal”.
His Honour went on to find that “the husband’s failure to disclose the withdrawal of the $20,000 from his superannuation scheme fell far short of his obligations to make proper disclosure”. He also found that the husband had “set out to deliberately conceal this from the wife”. In these circumstances his Honour accepted the wife’s submission that the $20,000 should be added back into the asset pool. (His Honour had, in fact, earlier recorded that the husband had conceded in his trial affidavit that the wife should share equally in his superannuation as at the date of separation.) His Honour then determined that the pool of assets was worth $938,665.
The trial Judge found (as was not contested) that contributions to the asset pool to the date of separation were equal. He determined, however, that the wife had made the greater contribution following separation and he assessed contributions overall as having been made 52% by the wife and 48% by the husband. We will set out his Honour’s reasons for this finding when we come to discuss the ground of appeal relevant to contributions.
The trial Judge then turned to consider what he described as the “Section 75(2) and other factors”.
Having noted the ages of the husband and wife, his Honour found that “neither party has any health problems which might prevent or impact on either of them working in the future”. In arriving at this finding he noted that “although the husband referred in his affidavit material to having high blood pressure, he did not produce any medical evidence on this condition”.
The trial Judge then discussed the income and earning capacity of both parties. He noted that the wife was earning $664 gross per week from her work as an education assistant. He also noted that prior to his resignation from his employment the husband was earning about $750 gross per week. Given that his Honour’s conclusion concerning the parties’ earning capacities is challenged, we will set out the balance of his Honour’s findings on this topic when we come to deal with that part of the husband’s complaints.
When addressing s 75(2)(c), which deals with whether either party has the care or control of a child of the marriage under the age of 18 years, his Honour noted that the two youngest children live with the wife and spend time with the husband each alternate week from after school Wednesday until the commencement of school on the following Monday. He found that “for the foreseeable future at least, the wife will have the main responsibility for the care of these two children”. In making this finding he noted that the two youngest children had resided with the wife since separation.
His Honour went on to find:
59.[J], who is now aged 16 years, continues to reside with the husband. The husband said [J] has now finished school apart from a few units and will be looking for work. The wife’s ongoing responsibility for the care of the two youngest children however, will continue for the foreseeable future. This, I regard as a significant factor.
The trial Judge recorded that the wife was supporting herself from her income and found that “the husband has the capacity to fully support himself”. He also found that neither party had the responsibility or duty to maintain anyone other than their dependent children.
His Honour recorded that the husband had been receiving Centrelink benefits for J after the husband ceased working at his employment, but he commented that these benefits would no doubt stop when J found work.
The trial Judge said he would not take into account the “significant imbalance” in the parties’ superannuation entitlements as these entitlements had already been included in the asset pool.
His Honour found that the parties had “enjoyed a modest but reasonable standard of living” during their relationship. He said they should have sufficient income and capital to enable them to maintain a reasonable standard of living in the future.
The trial Judge determined that subparagraphs 75(2)(h) to (m) of the Act did not require additional consideration, particularly as the wife was not pursuing her application for spousal maintenance. He did note, however, that since separation the wife had obtained a diploma as an education assistant. Whilst he acknowledged that the wife wished to continue her “parenting role” for the two younger children and assist the two older children where possible, his Honour found that it appeared the wife’s present employment enabled her to work and still manage to provide for the needs of the two youngest children.
The trial Judge found that the husband had not re‑partnered. Despite the husband’s assertion to the contrary, his Honour found that the wife was not living with another person, and had no plans to do so.
He then recorded the history of child support payments. As his Honour regarded this as a relevant consideration in making the adjustment he did under s 75(2) we will set out his findings in full:
68.Prior to [J] moving in with the husband, his assessed child support liability was $790.42 per month. This amount was reduced to $380.17 per month after [J] commenced living with the husband and was later reduced further to $26.00 per month. The wife then describes in paragraph 49 of her trial affidavit how once the husband finished working for [his employer], the agency assessed that she should then pay the husband $21.67 per month given that he was unemployed and the wife was working part-time. This was even though the wife was solely supporting the two youngest children. The agency later determined that neither party should pay any child support to the other. For more than 18 months therefore the wife has received virtually nothing in child support from the husband and has paid rent for the accommodation she has occupied with the younger children.
The trial Judge then went on to note that he had been informed by counsel for the wife that the parties had reached agreement that “for so long as the current parenting arrangements continue” neither party would pursue the other for child support.
His Honour went on to say:
70.[N] and [R] will no doubt continue as full‑time students for many years to come and will need ongoing support. The wife will have the sole burden of supporting [N] and [R] unless there is some variation to the child support arrangements agreed upon between the parties. The husband, however, should not have any long term commitment to support [J] who has left school.
His Honour next dealt with a submission that the husband’s “uncooperative” conduct during the proceedings was a factor which should be taken into account under s 75(2)(o). In rejecting this submission his Honour said:
71.[Counsel for the wife] submits that the husband has been uncooperative throughout the proceedings, particularly after his solicitors ceased to act for him, causing the wife unnecessary added legal costs. The wife has incurred significant legal expenses during these proceedings but has also had all of the benefits of legal representation. I consider any costs incurred by the wife because of the husband’s failure to cooperate with his disclosure obligations or otherwise should be considered in an application for costs following the delivery of these Reasons. I do not take this factor into account in determining the property division.
His Honour then expressed his conclusion about the s 75(2) adjustment in these terms:
73.I am satisfied an adjustment of 10% in favour of the wife is appropriate after considering the s 75(2) and other factors. In coming to this decision I have taken into account in particular the fact that the wife will be primarily responsible for the care of the two youngest children and for accommodating those children. The wife has received no child support for those children since April 2006 and she will, in all likelihood, have the major responsibility for their future maintenance.
The cumulative effect of his Honour’s assessment of contributions and the s 75(2) adjustment was that the assets would be divided in proportions 62:38 in favour of the wife. His Honour went on to consider whether that proposed division was “just and equitable”. He concluded that it would be, provided there was a superannuation splitting order which would result in the wife taking a proportion of her settlement from the husband’s superannuation entitlements. His Honour said this was appropriate, given that the husband would not be able to access his superannuation for many years.

The Grounds of Appeal

The husband was self represented at trial, and also represented himself on the hearing of the appeal. His Grounds of Appeal are set out below (we have corrected some typing and grammatical errors):
1.This appeal relates solely to sub-paragraphs 1(b), 1 (c) and 8 of the minute of final orders dated 5 May 2008, a copy of which is attached.
2.The Court was wrong in determining an overall asset division of 62% to the wife and 38% to the husband, which should be divided 50/50.
3.The Court was wrong in concluding I had deliberately not disclosed $120,000 of superannuation.
4.I did not say the child [J] was leaving school/or seeking employment. [J] was and remains dependent on me, unemployable with no immediate prospect of employment.
5.The Court was wrong in concluding that I was strongly motivated by my desire to reduce or avoid my financial obligations.
6.The Court was wrong in concluding I am able to obtain fulltime employment, and that I have a greater capacity for fulltime employment than the respondent
7.In making the asset division the Court gave insufficient weight to the level and percentage of care I provide for the children.
8.As a result of these errors the Court divided our assets disproportionately in favour of the respondent.
Grounds 1 and 8 are not strictly grounds of appeal, but rather a preamble and a summation. We therefore do not propose to address them. (The orders to which the husband referred in Ground 1 are those which provided the mechanism by which the wife was to receive 62% of the superannuation and non-superannuation assets.)
We will address first the complaints that deal with findings of fact. We will then discuss the attack on the contribution finding, before turning to the most significant issue in this appeal, namely the extent of the s 75(2) adjustment.

Ground 5 – husband’s motives for giving up employment

By Ground 5 it is asserted that the trial Judge erred in concluding that the husband had been strongly motivated by his desire to reduce or avoid his financial obligations in electing to leave his employment.

This ground relates to the following findings made by his Honour:
51. The husband says he resigned from [his employment] to be available full-time to support [J] and help deal with his problems. He said in paragraph 24 of his affidavit sworn 27 March 2006 “I may not return to full-time work until I have sorted out the children, [J] in particular”. The wife’s case is that the husband’s decision to give up work was his response to the financial claims she made against him.
52.I have little doubt that the husband’s decision to resign from [his employment] was influenced by his desire to be available for [J] who he loves very much. However, the timing of this decision so soon after the wife made application for property settlement and spousal maintenance on 3 March 2006 and the husband’s comments to the wife that “I am going back to work when the case is finished” which I accept were made, cause me to view the husband’s evidence on this point with suspicion. The husband’s unsatisfactory evidence and failure to give proper disclosure concerning the draw-downs of his superannuation and the expenditure of the parties’ savings, simply add to my concerns about the husband’s explanation for giving up employment. I am satisfied that the husband’s decision to leave [his employment] was strongly motivated by his desire to reduce or avoid his financial obligations to the wife, particularly for the support of the children whilst they remained in her care after March 2006.
The husband submitted that in arriving at the finding about his motive for giving up his employment, the trial Judge had “failed to give any or sufficient weight to the undisputed facts that my son [J] came back to live with me on 14 March 2006, three weeks before I resigned from work on 10 April 2006”. The husband also submitted that the trial Judge did not take into account the serious behavioural problems J had experienced, which required the husband to be available to supervise him when he came into his care.
It was further submitted that his Honour had failed to take into account, or gave insufficient weight to, the husband’s evidence that his high blood pressure had contributed to his decision to leave work. The husband drew attention to paragraph 2 of his affidavit where he had said:
I resigned [from my employment] because [J] needed more help and because I have a history of high blood pressure which was being made worse by our separation, trying to build a new relationship with the kids and trying to cope with this Court case.
The husband went on to submit that the fact that he had high blood pressure was never challenged, nor was the fact that this had contributed to his decision to leave work. He said he “did not produce any supporting medical evidence of which there is a lot because my wife knew this was true and the Court should not have dismissed this out-of-hand”.
Finally, the husband submitted that his evidence about returning to work when “I have sorted out the children, [J] in particular” or “when the case is finished” did not support the finding made by his Honour concerning his motives in leaving his employment.
In dealing with the husband’s complaint that his high blood pressure had been overlooked when his Honour was considering his reasons for leaving his employment, counsel for the wife drew our attention to the part of the husband’s oral evidence in which the husband said this when asked whether he had been sacked by his employer:
No. I left of my own accord because of my son, [J]. Like I said before, he was having difficulties coping in life because of the paedophilia, and it was the best decision I made.
Counsel for the wife drew attention to a number of matters which it was asserted the trial Judge had properly considered in coming to his finding concerning the husband’s motives in leaving work. With respect to counsel, we have difficulty in understanding how a number of the matters to which he referred had any bearing on his Honour’s decision. The only matters which we consider to be of relevance were those to which his Honour referred in paragraph 52 of his reasons, namely the timing of the husband’s resignation; the comments made by the husband to the wife about going back to work when the case was finished; and the husband’s unsatisfactory evidence and failure to give proper disclosure.
The husband had not given his high blood pressure as a reason for leaving work when he volunteered in cross-examination his reasons for leaving work. He had conceded that he had a “history” of high blood pressure, and although he claimed this had been “made worse” by the separation, he had continued to work until just after J came to live with him and just after the wife commenced proceedings.
In the absence of a clear concession from the wife that the husband’s blood pressure impacted on his ability to work (and we were not referred to any such concession), it would be expected that the husband would produce medical evidence if he wanted the Court to seriously entertain his proposition. In the absence of such evidence, and in light of the answer the husband gave in cross-examination about his reasons for leaving work, we are satisfied his Honour did not err in failing to make further reference to the husband’s health when dealing with the husband’s motives for leaving work.
The only possible gap we can identify in the trial Judge’s treatment of this issue was his failure to highlight in paragraph 52 of his reasons that the husband’s decision to resign not only came very soon after the wife commenced the proceedings, but also very soon after J came to live with him (both having occurred in the month before his resignation). However, his Honour did accept that the husband’s decision to resign from his employment had been “influenced by his desire to be available for [J]”. He was also aware that the commencement of the proceedings by the wife and the change of residence for J had occurred at much the same time because he had recorded the relevant dates in paragraphs 7 and 14 of his reasons.
Having correctly identified all of the relevant facts, his Honour’s assessment was that the husband’s primary motivation had been the commencement of proceedings for property settlement and spousal maintenance. Ultimately this conclusion was a finding of fact. The circumstances in which an appellate court can interfere with findings of fact based upon credit were considered by the High Court in Devries v Australian National Railways Commission (1993) 177 CLR 472 where Brennan, Gaudron and McHugh JJ said (at 479):
More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against -- even strongly against -- that finding of fact. (See Brunskill (1985) 59 ALJR 842; 62 ALR 53; Jones v Hyde (1989) 63 ALJR 349; 85 ALR 23, Abalos v Australian Postal Commission (1990) 171 CLR 167). If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his advantage” (SS Hontestroom v SS Sagaporack [1927] AC 37 at p. 47) or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”. (Brunskill (supra)).
The judgment in SS Hontestroom v SS Sagaporack [1927] AC 37 at 47 was also cited with approval in the High Court in Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178. In the former case Lord Sumner had said:
…not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge’s conclusions of fact should, as I understand the decisions, be let alone.
In State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588 Kirby J commented on the advantages enjoyed by a trial Judge in making findings of fact. These advantages were described by his Honour at [90] and [91] as follows (footnotes omitted):
90.The true advantages in fact-finding which the trial judge enjoys include the fact that the judge hears the evidence in its entirety whereas the appellate court is typically taken to selected passages, chosen by the parties so as to advance their respective arguments. The trial judge hears and sees all of the evidence. The evidence is generally presented in a reasonably logical context. It unfolds, usually with a measure of chronological order, as it is given in testimony or tendered in documentary or electronic form. During the trial and adjournments, the judge has the opportunity to reflect on the evidence and to weigh particular elements against the rest of the evidence while the latter is still fresh in mind. A busy appellate court may not have the time or opportunity to read the entire transcript and all of the exhibits. As it seems to me, these are the real reasons for caution on the part of an appellate court where it inclines to conclusions on factual matters different from those reached by the trial judge.
91. All of the foregoing considerations leave to be weighed, in some cases at least, the impression which the trial judge holds of a particular witness, perhaps influenced by the witness’ demeanour and the kinds of considerations commonly referred to such as hesitation or displays of partisanship not readily conveyed, or conveyed at all, by the printed record. One can hold different views about whether such considerations should intrude in the assessment of qualified expert witnesses. One can strive to minimise resort to such considerations in the case of lay witnesses, out of recognition of the fallibility of human assessment of credibility from appearances. But because trials remain public procedures for the resolution of disputes, it is inescapable that, in some cases at least, credibility assessments will be required where there is no documentary, electronic or other incontrovertible evidence to resolve the conflict presented for decision. In such cases it will remain the fact that, try as it might, the appellate court cannot procure from the printed record exactly the same materials on which to base the judicial decision as the trial judge had.
Taking into account all of the advantages the trial Judge had in arriving at his assessment of the husband’s motives in leaving his employment we can find no basis on which we could interfere with the finding he made.

Ground 6 – earning capacities

This ground is directed at the finding made in paragraph 56 of the reasons where his Honour referred to the husband’s greater capacity for gainful employment and his capacity to earn a superior income to that likely to be earned by the wife.
The ground as drafted does not fully encapsulate the findings his Honour made in paragraph 56. To put the findings in context, it is also necessary for us to recite the paragraphs leading up to it, which were in the following terms:
53.Since leaving [his employment], the husband has obtained a heavy rigid driver’s license and obtained some seasonal work as a [sports instructor] with the [government] for which he was paid about $500 take home.
54.More significant, however, is the husband’s evidence that there was plenty of work available for him with [his former employer] and he had been asked to return to work for his former employer. The husband said he was considering returning to work for [his former employer] and would be earning between $45,000 and $50,000 per annum if he took the job. He also said he was now comfortable about leaving [J] at home.
55.I am satisfied the husband presently has an earning capacity of between $850 and $950 per week gross from full-time work and is able to adequately support himself in the future. The wife is currently working 35 hours per week [at a school] and these working hours enable her to attend to the needs of [N] and [R]. Before the parties’ separation, the wife was working less than full-time because she was the primary caregiver for the children. I am satisfied that the hours currently being worked by the wife are reasonable given her circumstances and she has the capacity to continue to work on this basis for the foreseeable future.
56.In summary therefore, I am satisfied that the husband has the greater capacity for gainful employment than does the wife and he can earn a superior income, although not a significantly superior income.
The husband again sought to agitate issues relating to his health in support of this ground. We have already made reference to the absence of any medical evidence to substantiate the husband’s proposition that his high blood pressure would be a relevant consideration in obtaining fulltime work in the future. We do not consider this requires further discussion.
The husband otherwise submitted that the trial Judge “drew selectively and unfairly from all the evidence and appeared to ignore [or] give insufficient weight” to other evidence. In seeking to support this proposition the husband referred to some matters that have occurred since judgment was delivered. As there was no application to introduce further evidence, we will ignore those matters in summarising the husband’s submissions.
The husband submitted first that while he had said he intended to return to work, “[his former employer] was never more than a possibility and the sums of $45,000 or $50,000 was never more than my best guess”. He submitted that there was no or insufficient evidence for his Honour to have concluded that he could earn $45,000 to $50,000 or that he would obtain work with his former employer.
The husband next conceded that he had said at trial that he was “now comfortable about leaving [J] at home”, but drew attention to the fact that he had also gone on to say in his evidence that “the thing about leaving him at home is I don’t know if he’s going to bring his mates around or what he’s going to get up to”. He had also earlier said in his evidence, “I couldn’t leave [J] by himself. His mum knows that”.
The husband therefore submitted that the evidence about his returning to work and leaving J alone was unclear and that the trial Judge had given no weight or insufficient weight to the possibility or likelihood that he would find it difficult or impossible to fulfil his obligations to the children, while holding down fulltime work. He submitted that he might only be able to work part time in the future, thereby reducing his future earning capacity. In this regard he noted that pursuant to the consent orders the time he was to have with the children included both school days and school holidays.
In response to the husband’s submissions, counsel for the wife took us to the following passage from the husband’s cross-examination:
If it wasn’t for considerations about [J], you could go back tomorrow ‑ ‑ ‑?---Look ‑ ‑ ‑
‑ ‑ ‑ to work for [your former employer] ‑ ‑ ‑?---I'm - I’ve actually started working and - and I feel comfortable leaving [J] at home. Now, before I could not leave him at home.
Right?---I felt very - the thing about leaving him at home is I don't know if he’s going to bring his mates around or what he’s going to get up to. There’s a (indistinct) supervision at that time and don’t imply that I left my work so that I can forego my responsibilities. At the time that I did have my family and my kids, I put in my work there. I didn’t neglect them at all. I could’ve run away with someone, did something else, but I didn’t. I stayed there.
Counsel also drew our attention to the following passage of transcript:
And during that time, your work has been more of a casual nature? The work with - you haven’t always been working with ‑ ‑ ‑?---No.
- ‑ ‑ the [sports instruction]; have you ‑ ‑ ‑?---No, I haven’t. No. I’ve done a bit of work at the beginning of this year and - end of this year, and then I'm going to go down to [instruct].
We consider that the findings made by the trial Judge concerning the husband’s capacity to work on a fulltime basis were open to him. In saying this we do not underestimate the difficulties that the husband may experience in endeavouring to manage fulltime employment as well as the care of the younger children during the times when they are with him. We observe, however, that the wife also has to juggle dual responsibilities.
Furthermore, although his Honour did conclude that the husband had a greater capacity for employment than the wife and the capacity to earn a superior income, he also noted in paragraph 56 of his reasons that it would not be a “significantly superior income”. Even more importantly, in paragraph 73, his Honour set out those matters that he had particularly taken into account in determining that there should be a 10% adjustment on account of the s 75(2) factors. There was no mention at all in that paragraph of the capacity of the husband to obtain fulltime employment or the greater income earning capacity of the husband. Thus, even if his Honour erred in concluding that the husband had better employment and income prospects than the wife, there is no indication that this had any impact on the decision
We therefore do not consider there is any merit in this ground.

Ground 4 – J’s future schooling and employment

By this ground the husband effectively challenges the trial Judge’s finding (at paragraph 59) that the husband had said that “[J] has now finished school apart from a few units and will be looking for work”. The ground goes on to assert that “[J] was and remains dependent on [the husband], unemployable with no immediate prospect of employment”.
The husband submitted that his Honour’s finding that J “will be looking for work” was a “presumption … which was not reasonable to infer or accept given all the agreed evidence about the complicated behavioural problems [J] was and is experiencing.” The husband claimed that there was no evidence that J was looking for employment and his Honour’s conclusion that he was looking for work amounted to a significant error.
The husband (in support of another ground) described what he regarded as J’s “complicated behavioural problems” and asserted there was no issue about these at trial. He said they included:
alcohol problems, drug problems, having punched his mother, been arrested for thieving, wagging school, changing schools, coping with our family split up, coping with unresolved sexual abuse issues…and more.
In these circumstances, the husband submitted that his evidence about J getting a job was put no higher than a “wish or a hope by me”. In support of this proposition he took us to three portions of his oral evidence which he said supported this submission. The first two of these are recited below (Transcript pages 61 and 62):
Have you made any enquiries about going back to [your former employment]?---I - I was actually thinking about doing that. After I got the ‑ ‑ ‑
Once the proceedings are over, yes?---No.
I‘m saying are you thinking about doing it after these proceeding are finished?---Well, [J’s] coming on a bit more.
Yes?---I couldn’t leave him by himself. His mum knows that. Are you implying that I did it once the proceedings are over, then I carry on with my life.
...
If it wasn’t for considerations about [J], you could go back tomorrow ‑ ‑ ‑?---Look ‑ ‑ ‑
‑ ‑ ‑ to work for [your former employer] ‑ ‑ ‑?---I'm - I’ve actually started working and - and I feel comfortable leaving [J] at home. Now, before I could not leave him at home.

The third extract from the husband’s oral evidence upon which he relied was also relied upon by counsel for the wife in submitting that the ground lacked merit. This extract appears at page 64 of the transcript - i.e. after the two extracts we have already recited. Here the husband said:
…My son’s – my son’s finished his year 10 – well, he hasn’t finished year 10, but he’s still got a couple of units to do but he’s finished school. I’d like to get him into a job otherwise he’s going to be sitting around doing nothing. And if he does nothing, he gets up to trouble. So, that’s another area to look into. Find him a job too. I don’t – I don’t fancy him spending two or three months out of work. He’s 16 and needs to work.
We accept the husband’s submission that nowhere in his evidence did he say that J was looking for a job. However, his Honour did not find that he was. What he said in paragraph 59 of his reasons was that J “will be looking for work” (our emphasis added). In our view this was a reasonable inference for the trial Judge to draw, especially taking into account the third extract from the husband’s oral evidence which we have set out in the previous paragraph.
His Honour was aware that J had been experiencing severe behavioural problems and made a finding to that effect. There is no reason for us to consider that he overlooked this when finding that J would be looking for work. Although we were not specifically referred to it, we note from our examination of the transcript (page 62) that the husband agreed with counsel for the wife that at the time of the trial there was a “full employment economy”.
We do not consider there is any substance in this complaint.

Ground 3 – disclosure of superannuation

By Ground 3 the husband complains that his Honour erred in concluding that he had deliberately not disclosed $120,000 in superannuation.
There is clearly an error in the formulation of this Ground, since his Honour’s finding of non-disclosure related to an amount of $20,000 the husband had accessed from his superannuation (the total value of which had been earlier estimated by the husband at $120,000).
It will be recalled that his Honour found that the husband had made “no reference to this withdrawal of superannuation in his trial affidavit nor did he provide any documents to evidence the withdrawal”.
The husband took issue with the finding that there had been no reference to the withdrawal of the superannuation in his trial affidavit. He noted, as his Honour correctly found, that he had disclosed that he had about $120,000 in superannuation when he completed his March 2006 financial statement. The husband then drew attention to a statement in his trial affidavit which he submitted indicated that he had, in fact, disclosed that he had used some of the superannuation. The relevant paragraph was in the following terms:
31.I’m happy to share our superannuation at the time of separation 50/50… Yes I spent some of that money on my living expenses (fixed the wiring, new washing machine etc) after I stopped working but that can be adjusted out of the proceeds of my share of the sale of the home. [Appeal Book 379, our emphasis added]
The husband submitted:
My duty of disclosure was in relation to the assets I had or controlled and the fact that I had spent some of my superannuation did not diminish the fact that I had disclosed the full amount in March 2006… and agreed that the full amount of $120,000 be included in and shared with my wife.
The husband also relied upon a statement made by the wife’s counsel in his closing address at trial in which he said, “I don’t make submissions on behalf of the wife that there are other assets at this stage because there doesn’t appear to be evidence to support that”. This statement does not assist the husband’s case, since reference to the transcript indicates that counsel made clear that he was not alleging there had been any non‑disclosure of assets apart from the non‑disclosure concerning the withdrawal of the $20,000. (Transcript page 78)
We nevertheless consider there is some substance in the husband’s complaint about the adverse finding made by the trial Judge concerning the husband’s failure to disclose he had withdrawn funds from his superannuation. It is apparent that in paragraph 31 of his affidavit the husband had, albeit somewhat obliquely, acknowledged that superannuation funds had been drawn after separation, and he had also conceded that the wife was entitled to share in the superannuation at its original value, not its reduced value after the drawdown.
Ultimately, however, the error made by the trial Judge in overlooking paragraph 31 of the husband’s affidavit does not assist the husband’s appeal. This is because the husband had accepted at trial, and continued to accept before us, that the funds he had withdrawn from the fund should be added back into the pool. This is what occurred. To that extent there were no adverse consequences for the husband associated with his Honour’s erroneous finding.
The husband nevertheless submitted that this erroneous finding had significantly influenced the final division of assets. Given what we have already said, this could only be true if the adverse credit finding on this issue had contaminated other findings his Honour made. Counsel for the wife submitted that this was not the case because of what his Honour had said in paragraph 71 of his reasons, which we have replicated above and will not repeat here.
We do not consider that paragraph 71 of his Honour’s reasons provides a complete answer, as it is apparent that in that part of his judgment his Honour was dealing only with a submission that the wife’s costs should be taken into account under s 75(2)(o). His Honour, in our view correctly, determined that costs issues should be dealt with separately after delivery of judgment.
Although there remains a theoretical possibility that his Honour’s erroneous finding about the superannuation drawdown might have had an important impact on other credibility findings, analysis of his Honour’s reasons indicates that this is not the case.
Credibility was considered relevant by his Honour on only two issues, apart from the alleged failure to disclose the drawdown of the superannuation. The first related to his Honour’s finding in relation to whether or not the husband had disbursed all of the $56,000 in savings he had removed following separation. Although his Honour found that he did not accept the husband’s evidence on this point, this finding had no impact because the husband had conceded that this amount should be added back to the asset pool.
The second issue in relation to which credibility was a factor concerned the reasons why the husband had terminated his employment with his employer. His Honour’s reasons for doubting the husband’s evidence on this point are set out at paragraph 52 of his reasons. Consideration of that paragraph, which we have already recited when considering Ground 5, indicates that the matters which caused his Honour to view the husband’s evidence with “suspicion” were the timing of the husband’s decision to leave his employment (soon after the wife commenced proceedings) as well as statements made by the husband to the wife that he was going to go back to work when the case was finished.
We accept that his Honour did go on to say in paragraph 52 that “the husband’s unsatisfactory evidence and failure to give proper disclosure concerning the draw‑downs of his superannuation and the expenditure of the parties’ savings, simply add to my concerns about the husband’s explanation for giving up employment”. However, it is apparent that the husband’s failure to give what his Honour regarded as adequate disclosure of the drawdown of his superannuation was not the primary reason for his Honour’s suspicion about why the husband left work, but “simply added” to the suspicion.
In this regard it is important to note that there was no challenge to any of his Honour’s other findings concerning the inadequacy of the husband’s disclosure of relevant information and documents (including documents concerning the extent of the drawdown). Thus it was not suggested that the husband had, prior to giving his oral evidence, ever disclosed the full extent of the funds he had withdrawn.
In these circumstances we are satisfied that the one error made by his Honour relating to the husband’s superannuation has not contaminated any of his other findings and has not affected the final result. The error therefore does not provide a basis for appellate intervention (see De Winter v De Winter (1979) FLC 90-605 per Gibbs J at 78,092).

Ground 2 – assessment of contributions

This ground asserts error in the overall division of the assets and claims that the property should have been divided equally. The difficulty with the ground as drafted is that it fails to identify the nature of the error his Honour is said to have made.
We do note, however, that whilst there are Grounds of Appeal specifically dealing with issues that are relevant to the s 75(2) adjustment, there are no grounds which specifically deal with the finding that the wife’s post‑separation contributions exceeded those of the husband. It is apparent, however, that the husband is aggrieved by his Honour’s contribution assessment, and we will therefore treat this ground as providing an opportunity to make some brief observations concerning his Honour’s treatment of contributions.
His Honour’s reasons for determining that the wife had made the greater contribution after separation can be found in paragraphs 45 to 47 of his judgment, which were in these terms:
45.When the parties separated, the husband was continuing to work for [his employer] on a taxable income of approximately $40,000 per annum. He remained living in [the matrimonial home] for which the husband was not required to meet any mortgage repayments. I accept that since the parties’ separation the wife has struggled to support herself and the children from income she has received. Following separation the wife was initially earning $227 per week which has increased since the separation to $664 per week. Until mid March 2006 the wife had the prime responsibility for accommodating and otherwise providing for the four children of the marriage. Since [early] 2006 [J] has lived mainly with his father and in [late] 2006 [S] moved from the wife’s home. The two youngest children continued to live with the wife. The husband resigned from his employment with [his employer] with effect from April 2006 and since this time the husband has been unemployed apart from some seasonal work as a [sports instructor]. As a result of this decision, the husband’s income all but ceased and it ended the husband’s opportunity to accumulate savings which was his practice before separation. Notwithstanding the husband’s greater role with [J’s] care after he gave up work, I am satisfied that the overall greater burden has fallen on the wife by reason of the abovementioned circumstances.
46.I have found that neither party had any significant assets at the date of commencement of cohabitation. I have also found that the contributions during the period of cohabitation should be regarded as being of equal value. I have, however, found that the wife made a greater contribution than the husband in the period following the separation. In considering the weight to be given to this factor, I keep in mind that this was a lengthy relationship of some 19 years and that whilst there was a discrepancy in contributions since separation, this occurred over a period of a little less than three years. In the exercise of my discretion, I determine that contributions overall should be assessed as having been made 52% by the wife and 48% by the husband.
47.[Counsel for the wife] in his submissions on post separation contributions also referred to the limited child support received by the wife from the husband to justify the wife’s claim. In arriving at my assessment on contributions, I have not taken child support payments into account notwithstanding that I consider the issue of child support to be significant in this case. I have done this because I propose to deal with child support when I consider the other factors in s 79(4).
The only part of the husband’s submissions which we see relevantly touching on any of these findings was his statement that an equal division of the assets would have been appropriate “particularly when our pre-separation period of the marriage was nearly 19 years and the post‑separation period was only 2½ years”. The implication we draw from this is that the husband submits that his Honour erred in placing any weight on the perceived disparity in contributions after separation, as this was a relatively short period in comparison to the length of the marriage (during which it was accepted contributions had been equal).
Given the absence of any successful challenge to the findings of fact, we consider that his Honour provided adequate reasons for determining that there was a disparity in contributions after separation. We are also satisfied that the assessment he made was within the reasonable range of discretion.
Accordingly there is no merit in any complaint the husband might have in relation to the assessment of contributions.

Ground 7 – s 75(2) adjustment – care of children

By this ground the husband asserts that his Honour gave insufficient weight to “the level and percentage of care” that he will be required to provide for the children.
Counsel for the wife properly conceded that this ground, when considered in the context of the other grounds and the husband’s submissions, should be treated as raising a challenge that the outcome was outside the reasonable range of discretion.
In support of this ground the husband essentially argued that the trial Judge had overlooked the fact that he had the children with him for what he said was 40% of the time. This calculation is not too far from the mark when allowance is made for the fact that the children are with the husband for five nights each fortnight and for half of all school holidays.
There are a number of paragraphs in his Honour’s reasons which need to be considered when assessing the merit of this ground:
·    In paragraph 10(a) his Honour accurately stated the terms of the fortnightly time sharing arrangement.
·    In paragraph 57 he noted that the school holidays would be shared (he did not say equally, but there is no dispute that this is in fact what was agreed).
·    In paragraph 58 he found that “for the foreseeable future at least, the wife will have the main responsibility for the care of these two children”.
·    In paragraph 59 he said he regarded it as a “significant factor” that the wife would have the “ongoing responsibility for the care of the two youngest children … for the foreseeable future”.
·    Finally, and most significantly, in paragraph 70 his Honour found that “the wife will have the sole burden of supporting [N] and [R] unless there is some variation in the child support arrangements agreed upon between the parties”. He went on to note that the husband would not have any “long term commitment to support [J] who has left school”.
We do not, for reasons we have already articulated, consider that his Honour can be criticised for finding that the husband would not have any long term commitment to support J. We do, however, accept that on occasions (paragraph 70 in particular) his Honour appears to have overlooked his finding concerning the significant amount of time the children are to spend with the husband pursuant to the consent orders. Given that there is to be no exchange of child support (at least while the current time sharing arrangements are in place), his Honour erred in saying in paragraph 70 that the wife will have “the sole burden” of supporting the two youngest children. That burden will be shared with the husband to a significant extent, albeit the wife will have the greater burden as the children will be with her for roughly 60% of the time.
It is important to note, however, that in paragraph 73 of his reasons the trial Judge moderated his finding to some extent by saying that “the wife will be primarily responsible for the care of the two youngest children and for accommodating those children”, and that she would “in all likelihood, have the major responsibility for their future maintenance” (our emphasis added).
It will be recalled that it was in paragraph 73 that his Honour was explaining why he had made the adjustment of 10%. It might therefore be reasonably argued that when it came to this critical paragraph his Honour expressed himself with greater precision than he had in earlier paragraphs. His Honour’s findings, as expressed in paragraph 73 could not be criticised, as it is true that under the agreed arrangements the wife will be “primarily” responsible for the care of the two youngest children and she will have the “major” responsibility for their maintenance as they are with her 60% of the time. There nevertheless remains some doubt in our mind, given what he had recorded in earlier paragraphs of his reasons, that his Honour may have placed insufficient weight on the fact that the husband was going to be very significantly involved in the care, accommodation and maintenance of the younger children.
We are also somewhat troubled that his Honour did not, in discussing the s 75(2) adjustment, make any reference to the monetary impact of the 10% adjustment which he decided was appropriate. The importance of having regard to the monetary effect of the orders made rather than the percentage division of assets has been emphasised on a number of occasions. For example, in Clauson and Clauson (1995) FLC 92‑595 at 81,911 the Full Court said:
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.
It is also important to recall what was said in Phipson & Phipson [2009] FamCAFC 28 when the Full Court was dealing with another appeal from the trial Judge in the present proceedings:
39.It is always important to keep in mind that an adjustment of X% for s 75(2) factors leads to a disparity in the value of property received by the parties representing 2 x X%. It is that disparity, measured in “money terms”, that requires consideration in determining whether the result is just and equitable: see Campbell v Kuskey (1998) FLC 92-795 at 84,928.
The 10% adjustment his Honour made on account of s 75(2) factors has led to a disparity in favour of the wife equivalent in value to 20% of the assets. In money terms this represents $187,733 out of a total asset pool of $938,665. Apart from the issues associated with the care, accommodation and maintenance of the children, the s 75(2) factors largely balanced out (save that as a result of the assessment of contributions the wife would have more capital than the husband). The husband was going to have whatever responsibility remained for the care, accommodation and maintenance of J. Both parties would have significant responsibility for the two younger children. It is true the wife will have the children with her about 20% more of the time than the husband, but this amounts to only a little more than 70 additional days a year.
In our view an assessment leading to a disparity of $187,733 in the capital/superannuation to be received by each party was outside the reasonable ambit of the trial Judge’s broad discretion, even taking into account the matters found by his Honour relating to the non-payment of child support in the period after the husband gave up his employment. Our conclusion is sufficient to enliven appellate intervention (House v The King (1936) 55 CLR 499 and Norbis v Norbis (1986) 161 CLR 513). The appeal will therefore be allowed.

Re-determination of the s 75(2) adjustment

Both parties asked us to substitute our own decision for that of his Honour if we found appealable error. Neither party applied to introduce further evidence. Given the absence of any successful challenges against findings of fact we propose to re-determine the s 75(2) adjustment.
We accept the husband’s submission that there can be no guarantee that the youngest children will necessarily remain primarily living with the wife. However, the husband has consented to an order that will ensure the children do primarily remain with the wife, at least for the time being. That fact needs to be considered in light of the fact that the two youngest children have primarily lived with the wife since the separation. Nevertheless, as we have already stressed, the children will also be spending a considerable period of time with the husband.
In our view, given that the children will be with him around 40% of the time, the husband’s accommodation needs for the children would not be significantly different to those of the wife. However, in light of the agreement in relation to child support, we accept that the wife will bear the greater proportion of the burden of maintaining the two younger children (at least for the time being). The husband, on the other hand, will have whatever responsibility remains for accommodating and maintaining J. The other s 75(2) factors, in our view, are evenly balanced, save for the fact that as a result of the assessment of contributions the wife will have 4% (or $37,546) more of the assets/superannuation than the husband.
Taking these matters into account, and the failure of the husband to pay child support after giving up his employment, we consider there should be a 4% adjustment for s 75(2) factors, creating a disparity of 8% between the parties – or in money terms an amount of $75,093.
Adopting his Honour’s assessment of contributions, this will lead to an overall division of assets 56:44 in favour of the wife. She will therefore receive $112,639 more than the husband. We consider such an outcome to be just and equitable.

Orders to give effect to the outcome

We were informed that the former matrimonial home had been sold and a significant sum from the proceeds had been set aside pending determination of this appeal. We were also informed that the superannuation splitting order had already been put in place. There was no objection to the redetermination of the matter being undertaken on the basis of the evidence at trial, provided account was taken of the fact that the superannuation splitting order had been implemented. (Appeal Transcript pages 28 and 29)
We do not consider it would be desirable to seek to undo the superannuation splitting arrangements that have been put in place. This would be time consuming and inconvenient and would be likely to lead to additional expense. The adjustments necessary to bring about an overall division 56:44 in favour of the wife can be achieved by varying the orders relating to the distribution of the proceeds of sale of the matrimonial home.
The orders made by the trial Judge provided for the wife to receive the first $48,843 from the net proceeds of sale of the home and 62% of the balance then remaining. The orders were structured in this fashion because the assets the husband was to receive, apart from the home and superannuation, were much more valuable than those to be received by the wife. In order to give effect to our intention that there be an overall division 56:44 in favour of the wife the orders providing for the distribution of the proceeds of sale of the home will be discharged and replaced by an order that the wife receive 61% of the net proceeds. This calculation takes account of the fact that the husband will have received $120,536 in superannuation and other assets, whereas the wife has received only $68,129.
The outcome is represented in the table below. The figures are based on the value of the home at the time of trial. We are aware the home has since been sold for a greater amount but we are unaware of the net amount received.

Assets	Husband	Wife
Division of sale proceeds of home based on a selling price of $750,000 without allowance for sale costs (61% to wife/39% to husband)	292,500	457,500
Savings retained by husband on separation	56,024
Furniture	2,000	400
[Motor vehicle]	1,000
Superannuation draw down	20,000
Superannuation after splitting order implemented	41,512	67,729
Total assets	413,036	525,629
Percentage division	44%	56%

Costs

We took submissions on costs at the conclusion of argument. Both parties sought a certificate under the Federal Proceedings (Costs) Act 1981 (Cth) in the event that the appeal succeeded on a question of law.
We do not consider that there is any basis for ordering the wife to pay the husband’s costs, notwithstanding that the appeal succeeded. The trial Judge erred in law and we consider that costs certificates should be granted to both parties as requested.

I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court

Associate:

Date: 8 March 2010

[2010] FamCAFC 33

8 March 2010

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Civil Litigation & Procedure

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Appeal

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