Whent & Marbrand
[2018] FamCAFC 95
•25 May 2018
FAMILY COURT OF AUSTRALIA
| WHENT & MARBRAND | [2018] FamCAFC 95 |
| FAMILY LAW – APPEAL – PROPERTY – Whether the primary judge erred in determining pursuant to s 79(2) of the Family Law Act 1975 (Cth) that it was not just and equitable to make an order for property adjustment in favour of the husband – Where no appealable error established – Appeal dismissed. FAMILY LAW – COSTS – Husband to pay wife’s costs of and incidental to the appeal. |
| Family Law Act 1975 (Cth) ss 75(2), 79(2) |
| Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91 House v The King (1936) 55 CLR 499; [1936] HCA 40 Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52 |
| APPELLANT: | Mr Whent |
| RESPONDENT: | Ms Marbrand |
| FILE NUMBER: | MLC | 7514 | of | 2015 |
| APPEAL NUMBER: | SOA | 67 | of | 2017 |
| DATE DELIVERED: | 25 May 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Foster JJ |
| HEARING DATE: | 22 March 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 August 2017 |
| LOWER COURT MNC: | [2017] FCCA 1873 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Andrew GE Robinson |
| SOLICITOR FOR THE APPELLANT: | Clancy & Triado |
| COUNSEL FOR THE RESPONDENT: | Ewan Hall |
| SOLICITOR FOR THE RESPONDENT: | Kingston Lawyers |
Orders
The appeal be dismissed.
The appellant husband pay the respondent wife’s costs of and incidental to the appeal fixed in the sum of $10,000, such sum to be paid within twenty-eight days of this order.
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 Whent & Marbrand 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 FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 67 of 2017
File Number: MLC 7514 of 2015
| Mr Whent |
Appellant
and
| Ms Marbrand |
Respondent
REASONS FOR JUDGMENT
Mr Whent (“the husband”) appeals against property settlement orders made by Judge Williams on 11 August 2017. Ms Marbrand (“the wife”) opposes the appeal.
The primary challenge is to the order made by her Honour dismissing the husband’s application for property settlement.
The thrust of the challenge to that order rests in her Honour’s application of s 79(2) of the Family Law Act1975 (Cth) (“the Act”). Her Honour said, having set out and considered the principles in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) and the cases that followed it, Bevan & Bevan (2013) FLC 93-545 (“Bevan”) and Chapman & Chapman (2014) FLC 93-592 (“Chapman”):
80. In the majority of matters the decision as to whether or not it is just and equitable for the Court to make property orders is resolved by the breakdown of the marital relationship and the mutual applications of the parties to the court for orders altering their respective property interests.
81. This is not such a case. In this matter, although the parties have separated and both parties have made an application to the court, the husband seeks orders adjusting their respective property interests. However, the wife seeks orders that there be no adjustment of the parties interests in any property or superannuation, and that the husband’s application for property settlement filed 16 March 2016 be dismissed.
82.The orders which the wife seeks are premised on the fact that it would not be just and equitable to make an adjustment of the parties’ property.
The husband contends that her Honour was wrong in coming to the conclusion that justice and equity dictated that no order for property adjustment be made. We do not agree and consider her Honour’s decision to be entirely correct and the appeal will be dismissed for the reasons that follow.
The primary judges reasons for judgment
Her Honour, as required, determined the parties’ existing legal and equitable interests in property at [109]:
Asset Husband Wife Property A $1,940,000 Property D $1,100,000 Shares $1763 [Motor vehicle 1] $6000 [Motor vehicle 2] $2000 Wife’s [business] $153,000 [Motor vehicle 3] $8000 [Motor vehicle 4] $7000 Total $15,000 $3,202,763 Superannuation Superannuation $360,000 Superannuation $1000 Liabilities Centrelink debts $14,000 Mortgage on Property A $870,000 Mortgage on Property D $790,000 Motor vehicle finance $11,478 [Bank] team leasing $22,000 [Bank] premium funding $8,000 Wife’s ATO debt $25,659.22 Sub – total -$25,478 -$1,715,659.22 Nett Assets -$9,478DR $1,847,103.78CR
Her Honour then turned to the matters she took into account in determining whether it was just and equitable to make an order adjusting property as between the parties.
None of her Honour’s factual findings are challenged and it is thus convenient to set them out under the headings she ascribed to the various matters.
Her Honour considered:
·The length of the parties’ marriage:
The parties began living together in September 2006, and married in February 2008. As for the date of separation, despite the husband’s contention that the parties remained in a marital relationship until October 2014 ([113]), her Honour was of the view that the contact between the parties from January 2011 to October 2014 did not constitute a continuation of the marriage ([131]), and therefore found that separation occurred in January 2011 ([132]).
·That the parties’ relationship was characterised by financial autonomy and independence:
The parties held no joint bank accounts, acquired no property jointly nor held joint assets ([136]).
·The purchase of Property A:
The home in which the parties lived during their relationship was purchased by the wife in September 2006 intentionally in the wife’s name; she solely contributed the funds to its purchase, and the mortgage taken out to complete the purchase was in her name. Her Honour found that the parties did not intend it to be a joint asset ([149]). After separation the wife continued to bear the burden of the mortgage payments and other outgoings.
·The renovations to Property A:
Renovations were conducted to the property using funds provided by the wife from savings held by her before the commencement of the relationship. The husband made no direct or indirect contribution to the renovations ([150], [245]).
·The living expenses of the parties during cohabitation:
During the relationship the parties kept their finances separated but for shared living expenses. The husband contributed $2,300 per month to the household, that sum being calculated by reference to the rent they were each paying prior to the wife’s purchase of Property A ([154]). The primary judge considered it a contribution towards his costs and those of his children, who lived with the parties from time to time ([227] – [228]).
The parties “split” the costs of social outings which the primary judge found supported her conclusion that there was no intermingling of the parties’ funds ([159]).
The parties each conducted their businesses entirely separately from the other and each applied his or her income without recourse to the other. Each was responsible for his or her own debts. Although the wife provided services to the husband’s business and he provided services to her business, the primary judge concluded that the wife provided significantly more to the husband’s businesses ([167] – [169], [364] – [365], [378]).
·The sale of husband’s business interests:
In 2012, the husband sold his interest in Business A for $65,000, and the money was paid to him as income over a six-month period ([23]). He spent that without recourse to the wife ([172]).
·The receipt and disposition of the husband’s Total and Permanent Disability Insurance funds:
As a result of being diagnosed with a chronic and potentially disabling illness, in December 2012 and August 2013 the husband received insurance money totalling $1,196,326. The wife was not made aware of the receipt of part of that sum (amounting to $459,708) until the litigation between the parties had commenced ([176]). All of the funds were dissipated within 18 months of their receipt ([293]) without consultation with the wife, and she received no benefit from the funds.
In October 2014 the husband sent an email to the wife as follows (recorded by the primary judge at [182]):
When I received my insurance payout, we had been living separately for quite some time. I had no financial ties to you, and I had been extremely fragile about our whole situation. As I have expressed to you a number of times, I have never really got over being forced from our home. I fell in love with you 10 years ago and moved my whole life to [Suburb T] for you and to be with you, only to end up in a number of rental properties. All this seems to have made me withdrawal and not be able to discuss things with you or feel like big decisions were ours. Our relationship as a married couple has not been as such since that time, yet we’ve always tried desperately to hang on, unfortunately with a lot of painful consequences and unhappiness. I’m sorry for my part in all this.
·The establishment of a business by the husband:
Part of the disposition of the funds by the husband was in the purchase of a business. This decision was made by the husband without discussion with the wife ([191]). The husband claimed the costs of setting up the business were $350,000. The business closed 15 months after it opened with outstanding debts of $100,000 ([277]).
·The purchase of Property D:
In May 2013, namely two years after the parties had separated, the parties purchased a commercial property as tenants in common in equal shares at Property D. Each contributed one half of the purchase price and a mortgage in both names was taken out to complete the purchase. In October 2014 the husband wished to withdraw from the investment and the wife refinanced the mortgage and paid to the husband a sum equivalent to one half of the net equity of the property ([195]). The primary judge found the purchase of the property to be a commercial agreement and not a joint matrimonial endeavour ([197]).
·The loans between the parties:
On two occasions during the relationship the wife lent the husband money, and on each occasion the money was repaid. Equally the husband lent the wife money in September 2013 which was repaid the following day ([202]).
·Provision for the other in their respective wills:
Neither party made provision for the other in his or her will ([211– 212]).
·The alleged debts repaid by the husband:
The husband said he had repaid loans made to him by his sister ($50,000) and by his father ($43,000). The primary judge did not accept that these loans were made and there was thus no need to repay any money ([304] – [322]).
·The husband’s disposition of the insurance monies:
The primary judge found the husband’s disposition of the funds was reckless, negligent or wanton. She said:
333. As previously referred to in these reasons, I am unable to accurately particularise the amounts which constitute wastage, due significantly to the husband’s nondisclosure of contemporaneous documents.
334. What is apparent is:
a)The husband was given a lifeline for his future financial security by virtue of the [insurance] payouts of approximately $1.2 million;
b)The whole of the two payments was spent by him between December 2012 and December 2014;
c)I do not accept that this expenditure could be categorised as having been spent on reasonable living expenses;
d)The husband admitted that the expenditure of $273,000, between December 2012 and January 2013 was excessive;
e)He was solely responsible for the determination of the disposition of the monies;
f)As at January 2013 there was no debt of $50,000 owing to Ms S;
g)I am unable to find there was any requirement for the husband to repay his father Mr B Whent, $43,135;
h)The wife received no benefit, save for the husband’s investment in [Property D], which was subsequently repaid to him in December 2014.
The primary judge also considered the matters in s 79(4) including the s 75(2) factors in determining the issue required by s 79(2), and her Honour concluded that it was not just and equitable to make any order altering property interests ([336]).
the appeal
The husband asserted eight grounds of appeal.
Ground 1
Ground 1 contends that her Honour erred in principle in concluding that it was not just and equitable to make an order for adjustment of property in that the primary judge failed to find that the parties’ common use of property and its cessation on their separation meant that the requirements of s 79(2) had been satisfied.
As her Honour’s reasons demonstrate, she was well aware that for the period of cohabitation the parties lived together in the wife’s house and she made unchallenged findings about the circumstances of that cohabitation which do not need to be repeated here.
Support for this aspect of the ground was said to come from what was said in Stanford at [42] as to satisfaction that it is just and equitable to make an order for property settlement where:
… as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. …
To elevate one aspect of the parties’ relationship to being determinative of the issue is to attempt to confine the exercise of discretion. As the Court said in Stanford:
36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …
We therefore reject the contention that, having found the parties to have enjoyed common use of property, which use was then brought to an end by reason of their separation, the primary judge was wrong in principle to then not conclude that it would be just and equitable to make an order for property adjustment.
It is clear that the primary judge took into account the parties’ common use of the wife’s home during their relationship and its cessation along with many other factors to which she referred in her reasons in determining whether it was just and equitable to make an order for property adjustment.
The ground further asserts that the primary judge gave insufficient weight to the common use of property. The attribution of weight or importance to evidence is a matter quintessentially the role of the primary judge and will not be disturbed on appeal unless an appellant can demonstrate that the primary judge acted upon a wrong principle, allowed extraneous or irrelevant matters to affect her decision, mistook the facts, failed to take into account a material consideration or reached a result that is unreasonable, unjust or plainly wrong: House v The King (1936) 55 CLR 499 (“House v The King”). The husband’s arguments do not establish any of these matters and thus this ground must be rejected.
Ground 2 and Ground 8
Ground 2 asserts that when the primary judge had regard to the matters to which s 79(4) relates in coming to her conclusion she erred by “failing to make any specific conclusions in relation to those s 79(4) matters when considering the s 79(2) threshold”.
Aligned to this challenge is Ground 8 in which it is asserted that the primary judge failed to give adequate reasons for her findings in relation to the s 79(4) and s 75(2) matters.
The thrust of Ground 2 is that her Honour failed to quantitatively assess the parties’ contributions. That is, it was contended that her Honour was obliged to identify and quantify the parties’ contributions as part of the determination of s 79(2).
This challenge cannot be supported. Had her Honour done that for which the husband contends, she would have impermissibly conflated the determination of the issue of s 79(2) with the determination of the issues required by s 79(4). That is not to say though that the matters referred to in s 79(4) cannot be considered in determining whether it is just and equitable to make an order. What is to be avoided is the conflation of these two issues. As the Full Court said in Bevan:
84.Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
That approach was explained and confirmed in Chapman at [24] – [27].
Section 79(2) directs the court to determine whether any property settlement order should be made. If the answer to that question is in the affirmative, what order, if any, is then to be made is determined by applying s 79(4) (see Stanford at [42]).
Her Honour was alive to the task she was undertaking in answering the question posed by s 79(2) and made no error as contended.
We further find no support for the contention that her Honour failed to give adequate reasons. The challenge contained in Ground 2 is, as we have said, based on a misapprehension of the task being undertaken by the primary judge. Her reasons for her conclusions as to s 79(2) are amply disclosed. Therefore this ground cannot succeed.
Ground 3
Ground 3 asserts that her Honour gave inadequate weight to the husband’s contributions to the marriage.
In particular it was argued that her Honour failed to give proper weight to the husband’s contributions at the outset of the relationship. It was argued that these contributions amounted to $80,000, a sum that counsel for the husband sensibly agreed in oral argument, was incorrect. Her Honour at [223] accurately set out the husband’s financial position at the commencement of the relationship.
It was also contended that the primary judge failed to give sufficient weight to the husband’s direct financial contributions and his non-financial contributions made during the relationship. It was further argued on the appeal that the only conclusion arising from her Honour’s reasons was that she found that the husband made no contribution at all and thus, it was said, she was plainly wrong in her conclusion as to s 79(2). That submission cannot be sustained.
It cannot be argued that the primary judge failed to take those matters into account, because she clearly did. The contention then devolves to an argument that the primary judge did not attribute to them the importance asserted by the husband.
It is clear from reading her Honour’s carefully reasoned analysis of the parties’ finances, financial dealings and non-financial dealings that she did not consider the husband’s contributions in isolation but looked at them holistically against the other matters to which she referred.
No error in the exercise of her Honour’s discretion is revealed in this ground, and it is not made out.
Ground 4
This submission asserts that the primary judge, in considering the husband’s receipt and subsequent expenditure of the insurance funds, erred in the exercise of her discretion in a number of ways.
First, it was said that she “revers[ed] the burden of proof by requiring the husband establish that the expenditure was not reckless, negligent or wanton”.
This ground rests on a false premise, namely that because the wife asserted that the husband had wasted his money she must therefore prove that he did. We reject the premise.
There is no doubt that the wife asserted the husband had wasted the money he received and she contended that, as a result, there should be no property adjustment in any event.
However, the husband’s application was based in part on his contention that he had no money, and no property. On that basis he argued that it was just and equitable that an adjustment be made in his favour from the wife’s property. The obligation of supporting that application fell on him.
Next, it was argued that her Honour erred in that she failed to take into account the husband’s general living expenses, and nor did she make a finding about the standard of living that was reasonable for the husband in all the circumstances. The thrust of part of this argument is that her Honour failed to identify how much of the money he received was wasted, or put another way, failed to identify what of those funds expended could be characterised as reasonable living expenses.
It is important to a consideration of this ground to understand her Honour’s findings as to the husband’s credibility. Her Honour found that the husband did not disclose the receipt of the sum of $459,708 in his affidavit sworn for the proceedings, nor did he offer an explanation for the failure to disclose its receipt ([57]). Further, as her Honour noted at [58(ii)] the husband had been convicted of crimes of dishonesty relating to misconduct in relation to a company. Her Honour further took into account her finding that the husband “fabricat[ed]/reconstruct[ed]” an alleged loan agreement with his sister at [58(iv)] as well as his failure to disclose the receipt of $700 per week into his household from his son and his partner ([58(v)]). As a consequence the primary judge found that the matters to which she referred “significantly and adversely affect[ed] the husband’s credit” such that where there was a dispute as between the wife and the husband on an issue of fact, she preferred the wife’s evidence ([59]).
Thus it is against these findings as to the husband’s credibility and his failure to make proper disclosure, that her Honour considered the husband’s assertion that his expenditure of the insurance money was reasonable.
Returning then to the argument that her Honour failed to assess and take into account the husband’s reasonable living expenses. At [277] her Honour set out the receipt of funds according to the husband and equally, according to the husband, how those funds were dissipated.
Her Honour noted that the husband conceded in evidence that to spend $273,000 between December 2012 and February 2013 was “extraordinary” and further that he understood that the money paid to him was to provide for him for the rest of his life and that he had been “partially” careless in the expenditure of the money ([279] – [280]).
Her Honour’s conclusion about the husband’s expenditure of the funds is found at [332] – [334] of her reasons (see [8] of these reasons), and need not be repeated.
Her Honour’s reasons on this point make it clear that the husband himself produced no documents supporting his expenditure on the (omitted) business, or substantiating the claimed losses at the time the business ceased operating ([287]). Equally her Honour was unable to conclude in any particular way how the husband spent the $190,000 paid to him by the wife after his withdrawal from their commercial venture because no documentation was produced by him, but noted that the husband said it was spent on living and other expenses ([291] – [292]).
Her Honour found at [294] and [295] that the husband provided no documents to support his apparent expenditure on living expenses and rent and she observed that on “his own evidence” the husband spent $386,602 on living expenses in three years ([297]).
Her Honour’s findings reflect the paucity of evidence adduced by the husband to support his contentions and, given her Honour’s conclusions as to the husband’s credibility her approach in seeking documentary support for his assertions was entirely appropriate.
In short, the husband sought an order for property adjustment and, as part of that application asserted that he had neither money nor property. He was thus obliged to demonstrate that to make an order for property adjustment was just and equitable. On this aspect if no other, the husband bore the onus of showing that he had exhausted his funds and that the expenditure was reasonable. His credibility was significantly impaired and he produced no documents to support the asserted expenditure and repayment of debts.
Far from reversing the burden of proof her Honour squarely considered the husband’s assertion that his expenditure of the money was reasonable and she concluded at [299] that “in the absence of any documentation, it is very difficult for me to make precise findings about the reasonableness or necessity of such expenditure”.
We thus do not accept the errors contended in the ground.
Ground 5
This ground challenges the weight attributed by the primary judge to the various factors referred to in s 75(2).
We have already referred to the significant hurdle to appellate intervention when challenging weight attributed by a primary judge to a fact or circumstance and will not repeat what we have said.
First, it was said that the primary judge gave too much weight to the husband’s expenditure of the insurance money.
Here, her Honour in exercising her discretion took into account the receipt and disposition by the husband of some $1.2 million. She was clearly aware of the husband’s assertion that he had no money and no property. Equally, her Honour was entitled to place significant weight on the husband’s email to the wife set out by her Honour at [182] in which he makes it plain that the funds were his and she had no right to expect any share of those funds. Her Honour treated those funds exactly as the husband foreshadowed, as his to be applied as he chose, and having so chosen, her Honour did not consider it just and equitable to make an order adjusting the wife’s property (because that was all that was left) in the husband’s favour.
Next it was argued that the primary judge failed to give sufficient weight to the husband’s income, health, physical and mental capacity for work, and his care of his 16 year old child.
It was not suggested that the primary judge failed to take these matters into account. Indeed, on a number of occasions, the primary judge referred to the fact that the insurance money was intended to provide the husband with financial support for the rest of his life in circumstances where his illness may make it difficult for him to work.
The husband also claimed that her Honour failed to adequately consider, or gave insufficient weight to the wife’s income and capacity for gainful employment. Again, though we are satisfied that all of the matters raised in this ground of appeal, including this issue, were taken into account by the primary judge along with many other matters on which her Honour based her ultimate conclusions.
The basis of appellate intervention has not been established and no error has been shown in the exercise of her Honour’s discretion.
Ground 6
This is a challenge to her Honour’s treatment of certain business debts of the wife, namely $281,335.
Through apparent inadvertence, the wife, a professional, did not renew her licence to provide professional services but, thinking that it had been renewed, continued to provide such services. According to the relevant legislation the wife is potentially liable to return the fees to those clients to whom she provided professional services while not having a licence. The wife is required to notify these clients, but she had not done so at the time of the trial. The husband argued that the primary judge should not take the liability into account because the wife would not notify her clients of her position and thus the debt would not arise. The primary judge concluded that the wife was concerned for her professional obligations and took those obligations seriously and thus rejected the argument that the debt would not arise but indicated that she would take it into account as a “potential liability” under s 75(2)(o) ([93] – [103]).
During the appeal hearing, counsel for the husband conceded that the conclusion that the debt was a “potential liability” was one open to her Honour on the evidence and in that case, thus there is no error in her Honour’s approach.
This ground must fail.
Ground 7
This ground, in effect, asserts that her Honour’s conclusion that it was not just and equitable to make any order for property adjustment is “plainly wrong”. In so doing, the husband relies on the following passage from House v The King, Dixon, Evatt and McTiernan JJ said at 505:
… It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
It is to be recalled that there is no challenge to the primary judge’s findings of fact nor is it argued that the primary judge failed to take into account a relevant matter or that she took into account an irrelevant matter. Arguments as to the weight attributed to various matters have been raised in other grounds without success.
In our view, this challenge cannot succeed. As is apparent, the primary judge was alive to and careful of the discrete question to be answered by reference to s 79(2) and her Honour set about that determination by a close assessment of the facts. Nothing put to us persuades us that the result is “plainly wrong” in the appellate sense, indeed we are of the view that her Honour’s conclusion was entirely consistent with the evidence before her.
This ground has no merit.
Conclusion
Having found no merit in any of the grounds, the appeal must be dismissed.
Costs
The wife sought an order for costs in the event that the appeal failed. The husband opposed the making of such an order based on the husband’s poor financial circumstances, his only income being a government benefit.
We are of the view that the husband should bear the wife’s costs of the appeal because it was wholly unsuccessful. His impecuniosity is no bar to making a costs order if the circumstances otherwise admit of its making.
Counsel for the wife sought costs in a fixed sum of $10,000. In our view that sum is reasonable and we will make an order in that amount.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace & Foster JJ) delivered on 25 May 2018.
Associate:
Date: 25 May 2018
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