Whiton & Dagne
[2019] FamCAFC 192
•31 October 2019
FAMILY COURT OF AUSTRALIA
| WHITON & DAGNE | [2019] FamCAFC 192 |
| FAMILY LAW – APPEAL – DE FACTO RELATIONSHIP – Where the wife appeals final property orders providing for a 75 per cent/25 per cent apportionment in favour of the husband to a de facto relationship – Where the relationship began in 1998 and ended in 2016 with multiple periods of separation throughout that time due to domestic violence perpetrated by the husband – Where the wife was the primary carer for the parties’ two children for the duration of the relationship – Where the trial judge erred in law by discriminating between the worth of the wife’s contributions as a homemaker and parent made in a de facto relationship, as compared with their worth had the parties been married – Where the trial judge erred by giving weight to the husband’s financial assistance to the wife for debts she incurred during periods of separation caused by domestic violence – Where the trial judge failed to take account of, or give weight to, the consequences for the wife of such domestic violence – Where the trial judge’s assessment of the s90SF(3) matters was incorrect, inadequate and unsupported by adequate reasons – Where the appeal is allowed and the matter is to be remitted. FAMILY LAW – APPEAL – COSTS – Where the wife seeks her costs in the amount of $13,773.17 – Where there was significant contribution by the husband, in the manner of the conduct of his case and the submissions put to the trial judge on central issues, which contributed to the trial judge’s errors – Where the identified errors ought to have been obvious to the husband – Where the husband should have conceded the appeal – Costs order made in a fixed sum. |
| Family Law Act 1975 (Cth) ss 79, 90SF(3), 90SM, 117 Federal Proceedings (Costs) Act 1981 (Cth) s 9 |
| Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 Brease v Brease (1998) FLC 92-793; [1997] FamCA 23 Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 Mackie and Mackie (1981) FLC 91-069; [1981] FamCA 34 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Steinbrenner & Steinbrenner [2008] FamCAFC 193 Sun Alliance Insurance Ltd v Massoud [1989] VR 8 Wardman and Hudson (1978) FLC 90-466; [1978] FamCA 68 Warne and Warne (1982) FLC 91-247; [1982] FamCA 33 Wells and Wells (1977) FLC 90-285; [1977] FamCA 62 Zappacosta and Zappacosta (1976) FLC 90-089; [1976] FamCA 56 |
| APPELLANT: | Ms Whiton |
| RESPONDENT: | Mr Dagne |
| FILE NUMBER: | BRC | 12665 | of | 2016 |
| APPEAL NUMBER: | NOA | 110 | of | 2018 |
| DATE DELIVERED: | 31 October 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Aldridge, Kent & Tree JJ |
| HEARING DATE: | 1 August 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 2 November 2018 |
| LOWER COURT MNC: | [2018] FCCA 3519 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms McArdle |
| SOLICITOR FOR THE APPELLANT: | Freeman Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kissick |
| SOLICITOR FOR THE RESPONDENT: | Fallu McMillan Lawyers |
Orders
The appeal from the orders made in the Federal Circuit Court of Australia on 2 November 2018 be allowed and those orders be set aside.
The proceedings be remitted for rehearing in the Federal Circuit Court of Australia by a judge other than the trial judge.
The respondent husband pay the appellant wife’s costs of the appeal fixed in the amount of $13,773.17.
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 Whiton & Dagne 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 BRISBANE |
Appeal Number: NOA 110 of 2018
File Number: BRC 12665 of 2016
| Ms Whiton |
Appellant
And
| Mr Dagne |
Respondent
REASONS FOR JUDGMENT
On 2 November 2018 a trial judge in the Federal Circuit Court of Australia (“the Federal Circuit Court”) made orders for property settlement[1] in proceedings between Mr Dagne (“the husband”) and Ms Whiton (“the wife”) after the breakdown of their de facto relationship.
[1] Pursuant to s 90SM of the Family Law Act 1975 (Cth).
Those orders gave effect to the trial judge’s determination that the combined property interests of the parties, found to be worth $2,121,235, ought be divided between them in the proportions of 75 per cent/25 per cent in favour of the husband. That apportionment reflects the trial judge’s assessment of the parties’ respective contributions pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”), there being no adjustment made by the trial judge in favour of either party for s 90SF(3) matters.
The wife’s challenges on appeal
A central contention raised by the wife in her appeal from the property settlement orders is whether the trial judge erred in law by discriminating between the worth of the wife’s contributions as a homemaker and parent made in a de facto relationship, as compared with their worth had the parties been married. The wife contends that the trial judge made that distinction with the effect of undervaluing her contributions and that his Honour was wrong in law to so do.
The wife also contends that in assessing contributions, the trial judge credited the husband solely with an initial capital contribution from the sale of a property known as the Suburb B property and thereby failed to take account of the wife’s contributions to that property.
Having accepted the wife’s evidence that the parties’ relationship was “punctuated by domestic violence” perpetrated by the husband which brought about separations during the relationship (reasons at [40]), and having rejected the husband’s denials of the extent of domestic violence alleged by the wife (reasons at [42]) the wife contends that the trial judge:
a)erred by giving weight to the husband’s financial assistance to the wife for debts she incurred during periods of separation caused by domestic violence; and
b)failed to take account of, or give weight to, the consequences for the wife of such domestic violence.
An associated complaint by the wife concerning the trial judge’s assessment of contributions is that the trial judge failed to give adequate reasons for the assessment his Honour made.
Finally, the wife contends that the trial judge’s assessment of the s 90SF(3) matters was incorrect, inadequate and unsupported by adequate reasons.
For the reasons which follow, we are satisfied that the wife’s central contention that the trial judge undervalued her homemaking and parenting contributions, as a consequence of wrongly distinguishing between contributions made in a de facto relationship as compared with those made in a marriage, in undertaking the assessment, should be accepted.
It follows from that acceptance that the appeal must succeed and that the orders made be set aside, irrespective of the outcome of the balance of the wife’s challenges. It was accepted by both parties on the hearing of the appeal that if the appeal succeeds, the proceedings must be remitted for rehearing in the Federal Circuit Court, rather than this Court re-exercising the discretion. Thus, whilst we will discuss the balance of the wife’s challenges, we do so conscious that the discretion is to be re-exercised by another trial judge in the Federal Circuit Court and it may be potentially unhelpful to that process for this Court to express conclusions about some aspects of the wife’s challenges.
Factual context
The husband was born in 1964 and was 54 years of age at trial. The wife was born in 1972 and was 46 years of age at trial.
Whilst not entirely clear from the reasons for judgment, it would seem that the trial judge accepted the husband’s evidence as to the parties’ de facto relationship having commenced in July 1998. The trial judge found that the relationship ended on 26 October 2016 (reasons at [1]).
The parties’ first child was born in 1999 and their second child in 2000. Of critical significance to this appeal, for reasons we will elaborate upon, is the unchallenged finding of the trial judge that the wife bore the major share of responsibility as a homemaker and parent for the parties’ children throughout the relationship. By necessary inference, that endured throughout the numerous periods of separation of the parties in the course of their relationship.
The duration of the parties’ separations during their relationship was in dispute at trial. The trial judge appears to have viewed that issue as of central importance in the assessment of contributions, his Honour noting early in the reasons (at [2]) that “[t]he nature of the relationship is the real matter in issue for determination.” Indeed much of the reasoning of the trial judge is directed to discussing and determining when the parties were living together and whether or not relevant property dealings were transacted when they were cohabiting or during periods of separation. As will be discussed, it appears the trial judge equated each separation with the de facto relationship having then ended, for the purpose of assessing contributions.
The trial judge recorded at [9] that on the wife’s case the relationship was punctuated by domestic violence perpetrated by the husband leading to some 20 periods of separation during the relationship. Whilst the trial judge recorded his acceptance of the wife’s evidence “about the relationship being punctuated by domestic violence” (reasons at [40]); and rejected the husband’s denials of the extent of the domestic violence (reasons at [42]); the trial judge apparently did not accept the wife’s case “… of a continuous relationship from 1996 to 2016 where there may have been short separations, but such did not affect the existence of the relationship” (reasons at [11]). The trial judge recorded at [24] with respect to the wife’s evidence, in the context of discussing periods of separation, that “[i]t’s very clear that she [the wife] has completely overstated the nature of the relationship.”
On the trial judge’s findings when the reasons are read as a whole, within the approximate 18 year period between the commencement of the parties’ cohabitation in July 1998 and their final separation in October 2016, the parties cohabitated for about 12.5 years. However, it bears repeating that the wife was the primary carer for the children throughout.
The trial judge’s findings concerning the main property transactions that occurred can be summarised as follows:
a)In 1996, prior to the commencement of the parties’ relationship, the husband acquired an interest in the real property referred to as the Suburb B property (reasons at [18]);
b)On 16 July 2003, the Suburb B property was sold and the husband used the $160,000 he received from that sale towards the purchase of the property referred to as the Suburb C property for $258,000, the balance being funded by a mortgage loan (reasons at [5]). The trial judge characterised the $160,000 contributed by the husband as an “initial contribution” made solely by him (reasons at [21]);
c)The Suburb C property contained the main dwelling house for the family and another house which was rented. In 2011, that second dwelling was damaged or destroyed by fire and an insurance payout of $150,000 was applied in reduction of the mortgage (reasons at [6]);
d)In January 2014, the State Government paid the husband $2,336,288 upon the resumption of the Suburb C property. After paying loans, the husband retained net proceeds of $2,126,666.90 (reasons at [6]);
e)On 23 June 2014, the husband invested over $1 million in an investment portfolio from which he was drawing $1,000 per week as at trial (reasons at [7]); and
f)On 2 October 2014, the husband purchased a property at Suburb D for $685,000 (reasons at [7]) which at trial was valued at $750,000.
The trial judge’s undervaluation of the wife’s contributions
We have recorded our acceptance of the wife’s central contention on appeal that the trial judge discriminated between the worth of the wife’s contributions as a homemaker and parent made in a de facto relationship as compared with those made in a marriage. In our judgment, the trial judge’s discrimination is patent from what is contained in [51] to [55] of his Honour’s reasons as follows:
51.The submissions as to contributions also really are predicated upon a premise that this was a relationship that endured for the 18 years from when they first got together till when they have finally called it quits.
52.If they had been married for that time, much of the submissions would have had a far greater weight, but it seems to me when I look at the material before me that the de facto relationship did end a number of times and then did start again. This, I should say, is significant, and it seems even the wife realises the significance, otherwise she would not have done what she had done and tried to play out that this de facto relationship was a longstanding one of 20 years.
53.If it were, as her Counsel has urged upon me, that it really doesn’t matter that a de facto relationship can be looked at as the same as a marriage, there would be no reason for her to have misrepresented the true situation.
54.It has been said that a marriage is something that needs the imprimatur of government authorities to begin and also needs the decree of a Court to end; whereas no one but the parties can determine when a de facto relationship starts, and a de facto relationship doesn’t need any order to end; it just simply ceases to exist. That is because the mutual commitment to a shared life just simply goes away.
55.It seems to me on many occasions during this 18 years, the mutual commitment to a shared life between the husband and wife did simply just disappear.
(Emphasis added)
Leaving aside the circular reasoning at [52] and [53] attributing motives to the wife for her attempting to “play out” that the de facto relationship was of longstanding, it bears emphasis that commencing in mid 1999 with the birth of the parties’ first child, and continuing thereafter (including with the birth of the parties’ second child in late 2000) the wife maintained her contribution as the primary homemaker and parent for the children, irrespective of any period or periods of separation of the parties.
In addition, the wife maintained external employment for much of the de facto relationship and provided financial support to the family and to the children irrespective of any periods of separation.
It is plain from what is contained in [51] to [55] of the reasons that the trial judge took the view that if the wife’s contributions had been made in a married relationship they would carry more weight in the assessment of contributions than they did in the parties’ de facto relationship. An associated and obvious inference from what is stated is that the trial judge discounted the wife’s contributions by confining their impact only to those periods when the parties were living together. Nowhere within the quoted passages does the trial judge take into account the wife’s continuing and significant homemaking and parenting contributions, together with her financial support of the children from her employment earnings, during periods when the parties were separated.
These conclusions about what the trial judge recorded are fortified by the trial judge’s reference, earlier referred to, at [2] of the reasons that “[t]he nature of the relationship is the real matter in issue for determination” (emphasis added). Also, as earlier referred to, the trial judge recorded at [24] of the reasons with reference to the evidence of the wife, that “[i]t’s very clear she [the wife] has completely overstated the nature of the relationship” (emphasis added). With respect to the trial judge, the central issue for determination was not the nature of the relationship but the proper assessment of contributions, in circumstances including that the wife maintained primary responsibility for the care and parenting of the children throughout, despite any periods of separation of the parties. This ought to have been brought into stark focus by the feature, accepted by the trial judge, that the periods of separation were brought about as a consequence of domestic violence perpetrated by the husband.
One obvious example of the trial judge having apparently confined consideration of the wife’s contributions only to periods when the parties lived together appears within the trial judge’s discussion about, and findings concerning, the Suburb C property. The trial judge recorded at [36] that the husband’s purchase of the Suburb C property (in 2003) “occurred during a time of separation”. The trial judge also recorded at [36] that the husband “solely serviced that mortgage”, a reference to the mortgage on the Suburb C property, notwithstanding the wife’s wage earning and financial support of the family, irrespective of periods of separation, whilst that mortgage debt existed. At [46], the trial judge recorded with respect to the Suburb C property “[t]he wife did not contribute at all to that property”. Then, within [47] the trial judge recorded:
47.… I accept that from the end of 2008 till the end of 2012 and then from about a month into 2013 to September 2013, the wife did live at the premises. During that time, even though the husband was the one who was maintaining the payment of the mortgage, the wife was contributing by paying her way with regard to her wage and being the homemaker and the primary carer to the two children. It was after she left and without any concern of hers that the government then came calling.
It appears that the trial judge’s fixation upon the fact that the Suburb C property was acquired at a time of separation (in 2003) and the fact that it was resumed (in 2014) at another time of separation, led the trial judge to the erroneous conclusion that the husband was largely, or solely, to be credited for the capital gain derived from the Suburb C property in assessing the parties’
contributions-based entitlements.
For all relevant intents and purposes, the terms of s 90SM of the Act, including subsection (4) specifying what the Court must take into account in considering the property settlement order to be made with respect to de facto relationships, are identical to the terms of s 79 and subsection (4) of the Act with respect to marriages. It is consistent with fundamental principles of statutory interpretation and jurisprudential comity that the meaning and manner of application of these respective statutory provisions is the same. It follows that the settled jurisprudence, in particular of the High Court of Australia and the Full Court of this Court, as to the proper interpretation and application of s 79 including subsection (4) applies to its counterpart in s 90SM, and subsection (4) of that section.
We are unaware of any authority to support the notion of the trial judge that if the wife’s contributions had been made in a marriage they would somehow carry more weight in the assessment of contributions. Notably, no authority to support this approach was identified by the trial judge. Nor, on the hearing of this appeal, did counsel for the husband seek to support the trial judge’s approach by reference to authority.
The approach adopted by the trial judge was wrong in law. Thus, the trial judge’s exercise of discretion as to the assessment of the parties’ respective contributions-based entitlements was infected by the error of the trial judge having acted upon wrong principle.
As will be further discussed, the trial judge’s erroneous approach produced consequential errors in the assessment process.
Errors as to the husband’s “initial contribution”
As earlier referred to, the trial judge treated the sale proceeds of $160,000 which the husband received from the 2003 sale of the Suburb B property as the husband’s “initial contribution” to the Suburb C property (reasons at [21]). The trial judge clearly treated that as solely the contribution of the husband given that, at [46] of the reasons, the trial judge recorded, with respect to the acquisition of the Suburb C property, that “[t]he wife did not contribute at all to that property”.
These findings are wrong.
In the five (5) year period from 1998 when the parties’ cohabitation commenced, until the 2003 sale of the Suburb B property, during which both children were born and the wife assumed her primary homemaking and parenting role (in addition to earning income from employment) the husband was making mortgage payments on the Suburb B property (reasons at [44]). That is, funds which would otherwise have been available to the parties were devoted to the Suburb B mortgage. Moreover, on the unchallenged evidence of the wife[2] the husband’s income at the commencement of the period was exceedingly modest, in the order of $9,000 per annum and, further, from the commencement of cohabitation the husband was contributing to the financial support of his two children from a previous relationship.[3]
[2] Wife’s affidavit filed 17 May 2018 at paragraph 19.
[3] Wife’s affidavit filed 17 May 2018 at paragraphs 51 to 55.
The Suburb B property and its sale proceeds, received some five (5) years after the relationship had commenced, were obviously contributed to by the wife in both a financial sense, given her employment, and the payments towards the Suburb B mortgage, and by her non-financial contributions to homemaking and parenting. Thus, the trial judge was clearly wrong to treat the $160,000 as solely the husband’s contribution and consequently wrong to find that the wife made no contribution to the acquisition of the Suburb C property.
In summary, the wife’s contributions of wage earning, homemaking and parenting, and mutual support in the relationship were contributions by her to both the Suburb B property and the Suburb C property. The trial judge’s findings as to the wife not having contributed to these properties are unsustainable.
These errors were compounded by the trial judge having apparently credited the husband, at least to some extent, with what was obviously a windfall gain concerning the Suburb C property. As already noted, the Suburb C property was purchased in 2003 for $258,000. Some 11 years later, in 2014, the property was resumed by the State Government for $2,336,288. At [4] of the reasons the trial judge recorded:
4.The value of the pool is not truly in dispute. The value is $2,121,235.00. The pool has come about because of what I, during the course of the trial, described as a canny investment decision, though it must seem that there was a bit of luck that played into it.
(Emphasis added)
In characterising the husband’s acquisition of the Suburb C property in 2003 as a “canny investment decision”, the trial judge has obviously credited the husband with the huge capital gain on the property achieved in 2014. This overlooks that, on his evidence, the husband acquired the property for its development potential. However, the capital gain yielded was not the consequence of any development, but because the property was compulsorily resumed. There is no suggestion on the evidence that at the time of acquisition the husband foresaw potential compulsory resumption of the property by the State Government more than a decade later.
It is well settled by authority,[4] that a sharp rise in property value brought about by a rezoning or resumption is properly treated as a windfall gain for which neither party can take sole credit. We note that in his final submissions to the trial judge, counsel for the wife specifically submitted that as a matter of principle, by reference to Zappacosta, the capital gain in respect of the Suburb C property properly fell to be treated as a windfall gain. Despite that assistance, the trial judge took the approach which he did, without reference to any authority or distinguishing the authorities binding upon him and without otherwise providing any reasons.
[4] Zappacosta and Zappacosta (1976) FLC 90-089 (“Zappacosta”); Wells and Wells (1977) FLC 90-285; Wardman and Hudson (1978) FLC 90-466; Warne and Warne (1982) FLC 91-247; Mackie and Mackie (1981) FLC 91-069; Brease v Brease (1998) FLC 92-793.
Taken with the trial judge’s extensive discussion of the evidence concerning the purchase of the Suburb C property, culminating in a finding that it was purchased at a time when the parties were separated, the plain inference is that the trial judge credited the husband, at least to some extent, with the windfall gain in assessing contributions (reasons at [36]). That was an error.
It is not possible to be definitive about the extent to which the husband was wrongly credited with what ought to have been treated as a windfall gain as the trial judge’s reasons do not illuminate an answer to that. We will revisit this aspect in discussing the wife’s challenge as to the adequacy of the trial judge’s reasons.
The trial judge’s treatment of domestic violence
Allied with the wife’s case at trial that multiple separations during the relationship were brought about because the husband perpetrated domestic violence against her and the children, was her case that she bore major responsibility for the financial support of herself and the children in periods when the parties were separated. In support of that case, the wife relied upon subpoenaed records of the history of payments of child support by the husband.
Whilst the trial judge, as already noted, accepted the wife’s evidence (and rejected that of the husband) as to the separations of the parties being brought about as a consequence of the husband’s domestic violence, the trial judge cannot be seen to have engaged with the wife’s case concerning her financial support of the children during periods of separation. That was an important aspect of the wife’s contributions and lends further support to the conclusion that the trial judge wrongly disregarded, or failed to give appropriate consideration to, the wife’s contributions during periods when the parties were separated.
Further, a significant aspect of the wife’s case concerning her contributions was the financial consequences to her resulting from the rental arrangements she made for herself and the children, and funds she borrowed to support herself and the children, during periods of separation initiated by the husband’s domestic violence.
No doubt this aspect of the case will be revisited in the retrial of these proceedings such that, as earlier noted, it would be potentially unhelpful for us to state definitive conclusions about it. That noted, we simply cannot pass over this without some comment about the trial judge’s treatment of this aspect of the case.
At [13], [14] and [15] of the reasons, the trial judge summarises the wife’s case as to the relevant financial consequences for her as follows:
13.The [wife] claims that during the relationship, because she had to leave the husband on a number of occasions, she began renting properties without sufficient funds and she had to obtain loans, use credit cards or ask for help. She said that she accumulated several debts in her name because of this.
14.In 2010, she said her financial difficulties escalated as she and the husband struggled to pay their bills, and she personally owed debts of about $30,000.00. She said that these debts were for expenses of the family and included items such as school fees, rent, new car and furniture.
15.The wife says that the husband refused to give her any financial help and that she was forced to declare herself bankrupt. She said that she entered into a debt agreement under the bankruptcy legislation to make full repayments, less any interest owing, over a three year period.
Remarkably as it seems to us, the trial judge ultimately resolved this aspect of the case by giving credit to the husband in the assessment of contributions. At [50] of the reasons the trial judge records:
50.These are matters where one again has to look at the overall context. Whilst the wife gives evidence that she became bankrupt because of the incurring of debts on behalf of the family, I am not satisfied that this was so, and I accept that the husband’s generosity did end up pulling her, as it were, out of the fire. Notwithstanding that, part of that does fit with the nature of the husband as has been depicted in the affidavits back in 2003 and the police material. I actually see that sort of action as being extremely consistent with what the [husband] had done.
Implicit in the findings at [50] is that the wife had incurred debts, but there is nothing in the reasons to illuminate the trial judge’s non-acceptance of the wife’s case as to why they were incurred. However, the remarkable feature is that there is nothing in the reasons to explain why, in the circumstances in which the separations were brought about, any subsequent financial assistance provided by the husband could properly be characterised as his “generosity”.
Whilst this is an example of the trial judge’s failure to provide adequate reasons for judgment, a topic to be separately addressed, we are comfortably satisfied that the wife’s complaint that this is an example of error on the part of the trial judge in assessing contributions is established.
Failure to provide adequate reasons
The principles governing the obligation to provide adequate reasons for a discretionary judgment are well established by authority and often repeated by this Court.[5]
[5] Bennett and Bennett (1991) FLC 92-191 citing Pettitt v Dunkley [1971] 1 NSWLR 376; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378; Soulemezis v Dudley(Holdings) Pty Ltd (1987) 10 NSWLR 247 and Sun Alliance Insurance Ltd v Massoud [1989] VR 8.
The often cited summary of the principles by McColl JA in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [57] to [59] includes reference to the principles that it is essential to expose the reasons for resolving a point critical to the contest between the parties and for the reasons to do justice to the issues posed by the parties’ cases – and the need to show the extent to which the parties’ arguments have been understood and accepted – and the need to explain why one party’s case is preferred over that of another.
We have, in the foregoing discussion, identified areas where the reasons of the trial judge are inadequate, including with respect to the wife’s central contention as to the trial judge’s error in undervaluing her contributions by acting upon wrong principle. As already observed, the reasons contain no explanation for the approach taken by the trial judge beyond the application of some personal view or opinion of the trial judge, as opposed to the application of settled principles of law.
A critical point raised by the wife was the financial affects upon her of separations brought about by the husband’s domestic violence towards her and the children. Whilst some aspects of the wife’s case in this respect were summarised at [13] to [15] of the reasons as quoted above, the trial judge provides no explanation for the conclusionary finding at [50], also quoted above, rejecting the wife’s case. Further, there is no engagement at all by the trial judge with the wife’s case as to her enduring financial support of herself and the children in periods of separation without any adequate assistance, financial or otherwise, from the husband. It is thus unknown whether the trial judge understood the wife’s case on this central aspect and the reasons fail to adequately explain why the wife’s case was apparently rejected. Indeed, as we have earlier observed, it seems that it was the husband who was given some credit for meeting debts acquired by the wife during separations but again, why that was so, and the extent of the credit given, is not explained in the reasons for judgment.
As we have also observed, the lack of reasons provided by the trial judge does not enable this Court, or indeed the parties, to know to what extent the husband was solely credited for the increase in capital value of the Suburb C property.
In the end result, the trial judge fails to adequately explain by any discernible path of reasoning how his Honour has arrived at a contributions assessment in the husband’s favour of 75 per cent/25 per cent. That conclusion, as expressed at [56] of the reasons, is a “leap from words to figures” insufficiently heralded by any reasoning preceding it (Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]).
The only conclusion that can be made is that the trial judge must have arrived at a 75 per cent/25 per cent apportionment for contributions by undervaluing the wife’s contributions in consequence of acting upon wrong principle as earlier identified, together with the errors to which we have referred.
We are satisfied that there is merit in the wife’s challenges directed to the inadequacy of the trial judge’s reasons concerning the assessment of contributions.
The trial judge’s assessment of s 90SF(3) matters
The wife contends that the trial judge’s assessment of s 90SF(3) matters was incorrect, inadequate and unsupported by adequate reasons.
The outcome of the trial judge’s assessment of the parties’ contributions-based entitlements at an apportionment of 75 per cent/25 per cent in favour of the husband, of a total pool found by the trial judge to be worth $2,121,235, would see the husband retain or receive capital worth $1,590,926.25, and the wife retain or receive capital worth $530,308.75 (including her superannuation worth $207,000).
The trial judge’s reasons for judgment concerning the s 90SF(3) matters were limited to the following two paragraphs:
57.I then look at the factors pursuant to s.90SF and I have gone through all of those. There is really no difference between the two, they are both able to work full-time if they so desired. They are both in good health. The wife has superannuation. The husband has a scheme that gives him, in effect, a pension or a stipend of $1000.00 a week.
58.Whilst there has been a lot of care afforded by the [wife] to the children, during the time, I have taken that into consideration looking at the contributions. The children now, or will in less than two months, be adults and will be taking care of themselves. In all the circumstances, I am not of the view that there should be any adjustment.
The husband was living in his unencumbered residence at Suburb D valued at $750,000. The wife was renting. Aside from the capacity to work full-time, the husband was receiving $1,000 per week in passive income from his invested capital of approximately $1 million. In contrast, the wife had no capital to invest and was dependent on earnings from employment for her livelihood. Her superannuation, worth only $207,000 was not accessible by the wife (at age 47 years) until, in the normal course, her retirement at age 60 years. When account is taken of that superannuation at $207,000; the $60,000 in notional property which was “added back” as part of the wife’s entitlement; and her motor vehicle at $10,000; out of her entitlement of approximately $530,000 the wife would have a capital sum of only $253,000 for her future needs, including for her housing.
It is readily apparent that there is absolutely no foundation for the trial judge’s finding that “there is really no difference between the two…” (reasons at [57]). To the contrary, the contrast between the parties’ respective circumstances could hardly have been more stark. That contrast, and those circumstances, brought into focus a number of the mandatory matters to be considered as expressed in s 90SF(3) including, in particular, the following subsections:
…
(b) the income, property and financial resources of each of the parties…
…
(g) a standard of living that in all the circumstances is reasonable;
…
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
…
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i)the property of the parties;
…
Review of the transcript reveals that each of these relevant s 90SF(3) matters falling for consideration were the subject of submissions to the trial judge. The failure of the trial judge to engage with those submissions and to take into account the matters referred to was a fundamental flaw in the exercise of discretion.
The wife’s contentions that the trial judge’s assessment of s 90SF(3) matters was incorrect, inadequate and unsupported by adequate reasons is readily established.
Conclusion and costs
The appeal must be allowed, the orders made by the trial judge set aside, and the proceedings remitted for rehearing in the Federal Circuit Court by a judge other than the trial judge.
In the event the appeal were to succeed the wife sought an order that the husband pay her costs of and incidental to the appeal. The wife filed a Schedule of Costs detailing a total for legal fees of $12,153.18 plus outlays of $1,619.99 giving a total of $13,773.17 for costs on a party and party basis.
Whilst no opposition was raised by the husband to the wife’s calculation of her party and party costs, the husband opposed an order for costs being made against him essentially on the contention that if the appeal succeeds on a question of law, there should be a certificate issued with respect to costs[6] and that this Court would not find that the husband had contributed to the errors founding the appeal’s success.
[6] Pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
With respect to the latter submission, on our review of the record and transcript and submissions at trial we consider that there was significant contribution by the husband, in the manner of the conduct of his case and the submissions put to the trial judge on the husband’s behalf on central issues, which contributed to the errors on the part of the trial judge which we have identified.
Moreover, the errors which we have identified and addressed, ought to have been obvious to the husband and, at the latest, by the time the husband received the wife’s Summary of Argument for the appeal. An obvious and sensible course would have been for the husband to concede errors on the part of the trial judge and thus to concede the appeal, but this the husband did not do, with the costs consequences for the wife.
We are therefore of the opinion that there are circumstances within the meaning of s 117(2) of the Act that justify an order for costs in the wife’s favour. The husband is in a substantially superior financial position than the wife and he has been wholly unsuccessful in the appeal.
Having regard to the particulars contained in the wife’s Schedule of Costs we consider the sum sought by the wife for her costs to be reasonable and indeed is in a modest total having regard to the nature of the appeal, and by comparison with like appeals and consequent costs.
We make the orders set out at the commencement of these reasons.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Aldridge, Kent & Tree JJ) delivered on 31 October 2019.
Associate:
Date: 31 October 2019
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