WICKER & CRUSSETE
[2012] FamCAFC 183
•13 November 2012
FAMILY COURT OF AUSTRALIA
| WICKER & CRUSSETE | [2012] FamCAFC 183 |
| FAMILY LAW – APPEAL – NOTICE OF APPEAL – PROPERTY – where the Federal Magistrate erred in attributing a credit card debit of only $198 to the wife when the wife had conceded at trial that a total of $2,000 would have been for her benefit – where the Federal Magistrate erred in failing to take into account the husband’s contributions to the mortgage repayments post-separation – where the evidence is not clear as to how much the husband contributed to the mortgage repayments post-separation – where there is accordingly merit in two of the grounds of appeal – where the error identified in one of the grounds of appeal requires a reassessment of the respective contributions of the parties – where the matter is to be remitted with priority to the Federal Magistrates Court for a partial rehearing – appeal allowed in part. FAMILY LAW – APPEAL – APPLICATION TO ADDUCE FURTHER EVIDENCE – where the appellant seeks to adduce further evidence – where the respondent does not oppose the application – where the court has a discretion whether or not to receive the evidence – where it is not apparent how the fact that the parties had an ongoing financial relationship after separation demonstrates that the Federal Magistrate has erred – where there is no basis for admitting the further evidence – application dismissed. FAMILY LAW – APPEAL – NOTICE OF APPEAL – COSTS – where neither party was legally represented – no costs issues to be considered – no order for costs made. |
| Family Law Act 1975 (Cth) ss 75(2), 79(2), 79(4), 93A(2) |
| Abalos v Australian Postal Commission (1990) 171 CLR 167 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others (1999) 160 ALR 588 |
| APPELLANT: | Mr Wicker |
| RESPONDENT: | Ms Crussete |
| FILE NUMBER: | MLC | 10728 | Of | 2010 |
| APPEAL NUMBER: | SOA | 65 | Of | 2011 |
| DATE DELIVERED: | 13 November 2012 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 22 March 2012 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 2 September 2011 |
| LOWER COURT MNC: | [2011] FMCAfam 923 |
REPRESENTATION
| THE APPELLANT: | In Person |
| THE RESPONDENT: | In Person |
Orders
The appeal be allowed in part.
Order 1 of the orders made by Federal Magistrate O’Dwyer on 2 September 2011 be set aside.
The proceedings for property settlement orders be remitted to the Federal Magistrates Court for a partial rehearing by a Federal Magistrate other than Federal Magistrate O’Dwyer with priority, such partial rehearing to be concluded within and subject to the following conditions:
(a) The issues to be determined are:
(i)the extent of the husband’s contributions to the mortgage repayments in respect of the former matrimonial home post-separation;
(ii)the adjustment that should be made to the contribution-based entitlement of the parties as found by Federal Magistrate O’Dwyer as a result of the husband’s contributions to the mortgage repayments in respect of the former matrimonial home post-separation; and
(iii)what if any adjustment should be made to the reassessed contribution-based entitlements of the parties as a result of a consideration of the relevant s 75(2) factors.
(b)For the purposes of the partial rehearing:
(i)the net asset pool is to be as found by Federal Magistrate O’Dwyer;
(ii)the respective contributions of the parties are also to be as found by Federal Magistrate O’Dwyer save and except for crediting the husband with the contributions made to the mortgage repayments in respect of the former matrimonial home post-separation; and
(iii)the amount of $2,000 is to be deducted from the amount to be paid to the wife by the husband in respect of the use by the wife of the husband’s Citibank Visa credit card.
The application in an appeal filed on 25 January 2012 by the husband be dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Wicker & Crussete has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 65 of 2011
File Number: MLC 10728 of 2010
| Mr Wicker |
Appellant
And
| Ms Crussete |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed 14 September 2011 Mr Wicker (“the husband”) appeals against property settlement orders made by O’Dwyer FM on
2 September 2011. The respondent in the appeal is Ms Crussete (“the wife”).
In summary, the orders appealed against provided for funds held on trust by
CE Family Lawyers in the names of the parties to be distributed as to $59,194 to the wife and the balance to the husband. Upon the wife receiving payment she was to withdraw her caveat lodged over the property at B (“the property”), the husband was to transfer to the wife, at her expense, the registered proprietorship of the Holden Commodore, and he was to forthwith pay out the liability on the joint ANZ Visa credit card and then cancel that card. Thereafter the husband was to indemnify and keep indemnified the wife in respect of all debts and liabilities of X Pty Ltd, any mortgage secured over the property, any credit cards, bank overdrafts and loans associated with him or
X Pty Ltd, and any liability of the wife to the Australian Taxation Office arising out of her involvement in, or employment by, X Pty Ltd. Thereafter each party was solely entitled to all other property to which they were legally or beneficially entitled as at 2 September 2011, any monies held in any joint bank account to the credit of the parties was deemed to belong to the husband, each party was to retain any superannuation benefits, forgoing any claims to superannuation benefits belonging to or earned by the other of them, insurance policies were to remain the sole property of the owner named therein, any joint tenancy of the parties in real or personal property was severed and each party was liable for any liability encumbering any item of property to which that party was entitled pursuant to the orders, indemnifying the other of them against the same.
The husband seeks that the above orders be varied such that there be s 79(4) adjustments in his favour recognising his greater post-separation financial contributions towards the mortgage repayments on the former matrimonial home and the property, together with his contributions to improvements thereon. The husband recognises the wife allowing him to use the former matrimonial home as security for his purchase of the B property and says that that should result in there being a s 79(4) adjustment of 5 per cent in her favour. In summary the husband says that the division of property as between the parties should be 51.5 per cent in his favour and 48.5 per cent in the wife’s favour.
The wife opposes the appeal.
Background
The wife was born in 1973 and was 39 years of age at the time of trial. The husband was born 1978 and was 34 years of age at the time of trial.
The parties commenced cohabitation in 1998 and married in August 2005, in Melbourne. The parties separated on 2 May 2009 and were divorced in January 2011.
The husband has subsequently re-partnered.
There are two children of the marriage, A born in 2007 and who was five years of age at the time of the trial, and B born in 2008 and who was four years of age at the time of the trial. The children are to spend equal time with each of the parties but the husband says that in fact they are with him for 53 per cent of the time and with the wife for 47 per cent of the time.
Both the husband and the wife are consultants. The husband runs his own business through X Pty Ltd (“X”) and the wife is employed on a contract basis with her employer.
The wife has an assessment against her for child support which she says eventuated because of the manner in which the husband minimises his income for taxation purposes through X.
The husband says that he has heart problems which he manages but which he says may cause him difficulties later on. The wife disputes this claim and says that the husband is able to earn an income, and does so.
After separation in May 2009 the wife remained in the former matrimonial home and for six months after separation she cared full-time for the children as the youngest child was still breast-feeding and the elder child experienced separation issues. During this time the husband lived with his parents.
In July 2009 the husband purchased an apartment in B using the equity in the former matrimonial home to finance that purchase. That mortgage was discharged on the sale of the former matrimonial home.
In January 2011, after settlement of the sale of the former matrimonial home, the wife moved to rental accommodation in B.
On 4 February 2011 the wife filed an Initiating Application in the Federal Magistrates Court seeking, on an urgent basis, interim property and child support orders, and by way of final property settlement orders leave to particularise the amount to be paid to her and any other orders once a single expert valuation of the property had been carried out and the husband had “provided full and frank financial disclosure”. The Application was supported by an Affidavit and Financial Statement both filed on 4 February 2011.
On 14 February 2011 the husband filed a Response together with an Affidavit in support. In his Response the husband sought interim and final property settlement orders. I note that the husband included in his draft appeal index a copy of a Financial Statement sworn by him on 14 September 2010, but not filed with the Court.
The Federal Magistrate made interim and procedural orders on 15 February 2011 including interim consent orders which provided for the net proceeds of sale of the former matrimonial home to be held on trust by the wife’s solicitors pending final settlement, for the husband and the wife to produce a number of financial documents, restraining the husband from using the joint ANZ Visa credit card, further utilising any joint account of the parties and drawing down on the ANZ mortgage or in any way further encumbering any matrimonial asset. By way of child support the husband and the wife were each to pay
50 per cent of the costs of the private nanny employed by them, the expenses associated with the children attending T Child Care or any other child care centre, reasonable and proper costs of no more than two extracurricular activities as agreed between them, private health insurance costs (including extras), gap expenses which exceed $100 not covered by health insurance or Medicare and all out of pocket expenses of any dental, optical or orthodontic treatment for the children. There was also a departure order made from the administrative assessment of child support payable by the wife such that any arrears of child support payable by her were credited against her 50 per cent share of the expenses for the children set out above so that the husband was to pay 100 per cent of the T Child Care costs, or costs incurred at any other child care centre attended by the children, he pay the fees rendered by the private nanny every fourth week commencing forthwith upon the orders being made, and the wife otherwise pay the fees rendered by the private nanny. Any
T accounts were to be placed in the husband’s name and all invoices were to be forwarded directly to him, where the parties were unable to split invoices there was to be a monthly reconciliation of expenses between them on a 50 per cent / 50 per cent basis.
O’Dwyer FM heard the matter on 7 and 8 July 2011, and his Honour made orders and delivered his reasons for judgment on 2 September 2011.
Reasons for judgment of the Federal Magistrate
The central issue in this case, as expressed in the Federal Magistrate’s reasons for judgment, was a dispute over the net proceeds of sale of the former matrimonial home in the sum of $70,547, which sum was held in trust.
The Federal Magistrate noted that the difficulty which arose was the husband’s insistence that liabilities which he had incurred as a result of running his own business should be met from those proceeds and any remaining funds should then be distributed between the parties according to “contribution and any
s 75(2) factors”. The Federal Magistrate found “the husband’s untenable quest, and his unshakable determination, to burden the wife with debts clearly incurred after separation as strange, if not bizarre”.
A related major dispute between the parties as recorded by the Federal Magistrate was what liabilities were to be considered matrimonial. The manner in which the husband used X was central to that dispute.
X was initially set up by the husband as a structure through which he would operate a small business. This business was a failure and the husband then commenced to use X as a means of affording him certain taxation benefits, effectively allowing him to reduce his taxable income. He used it as a vehicle through which his personal exertion income as a consultant was earned. To enable that to continue however X had to employ more than one person, and the wife agreed to allow the income she earned as a consultant to be processed through the company for the period from June 2010 to October 2010.
The wife was appointed as a director of X but she resigned in July 2009 and her involvement as an employee with X ended in October 2010. His Honour found that the husband had not made any superannuation payments on behalf of the wife as he was required to do for the period June 2010 to October 2010.
The husband sought to have the wife share half of the debts of X because of her involvement in the company, but his Honour was not persuaded by the husband that that should be the case. For example, his Honour found that the husband’s Director’s loan, payable to X in the sum of $95,000 was the sole responsibility of the husband as were the liabilities arising from a Citibank Visa credit card ($33,000), an ANZ business overdraft ($18,000) and an ATO debt and PAYG withholding tax ($32,500). His Honour did find that the wife was responsible for one half of an ANZ Visa credit card debt in the sum of $10,500.
The liabilities of the parties were determined to be $515,000 which comprised the mortgage on the husband’s B property of $505,000 and the ANZ Visa credit card debt of $10,500. The wife had also agreed that she should meet $198 in respect of her use of the husband’s credit card. The net asset pool was found to be $478,747.
His Honour noted that the parties agreed that at the commencement of cohabitation their initial contributions were equal, save and except that the wife had a greater superannuation entitlement as she had been in paid employment longer than the husband. Both parties asked that no splitting order be made in respect of their individual superannuation entitlements.
The Federal Magistrate found that the husband would not have been in a position to purchase an apartment in B in July 2009 had the wife not executed a mortgage over the former matrimonial home to facilitate that purchase. His Honour found this to be a “significant contribution” made by the wife, post-separation.
His Honour then found that the husband had not, as he had alleged, made a contribution to mortgage repayments on the former matrimonial home, and rather, as the wife asserted, any payments made by him were in the form of paying his one half share of agreed childminding services and a nanny for the children of the marriage. Further, the Federal Magistrate found that the wife had borne the greater burden for the household bills pending the sale of the former matrimonial home and that she had been the one to get that property ready for sale.
The contributions of the parties were assessed as being 53 per cent in favour of the wife and 47 per cent in favour of the husband.
Turning to the relevant s 75(2) factors his Honour concluded that there appeared to be no factors to be taken into account “having regard to the fact that the parties have equal earning capacity, are physically healthy and essentially have equal share of the burden of caring for the children.” Where the husband had to meet mortgage repayments the wife had a rental commitment. Thus his Honour made no adjustment.
His Honour considered that just and equitable considerations required that the ANZ Visa credit card debt of $10,500 be discharged, with the wife having responsibility for meeting one half of that debt. In order to achieve that result his Honour deducted $5,250 from the monies to be received by the wife, with the husband to then discharge the debt in full, and cancel the card.
The Federal Magistrate noted that the parties agreed that the wife have the motor vehicle which was in her possession, but registered in the name of the husband, with the transfer of that vehicle to be effected at the expense of the wife. The wife had secured her interest over the property by the lodging of a caveat, and his Honour made orders that on payment of the monies due to her the wife was to remove that caveat.
The wife raised a concern that she may be a joint mortgagor in relation to the property and although there was a lack of evidence on this point the Federal Magistrate ordered that the husband indemnify the wife against any liabilities which might arise under “any mortgage”.
His Honour noted that the wife sought orders in relation to the children which went to child support and ancillary matters and which were not the subject of a formal application before him. As the husband did not consent to the orders being made his Honour indicated that he was not able to deal with these matters.
Finally, his Honour found that on the basis of the net asset pool being $478,747, and a property division of 53 per cent / 47 per cent in favour of the wife, the wife was entitled to be paid $64,642. Deducting from that amount the wife’s one half share of the ANZ Visa credit card debt of $5,250 and the $198 she agreed to pay for using the husband’s credit card, this resulted in a payment to be made to the wife of $59,194. That payment was to be met from the monies held on Trust by CE Family Lawyers with the balance to be paid to the husband. The husband would then have liability for all other debts “including the joint ANZ Visa credit card and those associated with him personally or with [X]”.
Orders made 2 September 2011
O’Dwyer FM made the following orders:
1.From the funds held on trust by CE Family Lawyers in the names of the parties the following payments be made:
i.to the wife, $59,194; and
ii.to the husband, the balance.
2.On payment to the wife:
i.she provide to the husband a withdrawal of her caveat lodged over the property situate and known as [B] (the property);
ii.the husband transfer the registered proprietorship of the Holden Commodore to the wife at the wife’s expense;
iii.the husband shall forthwith expunge the liability on the joint ANZ VISA card and cancel the card.
3.The husband shall indemnify, and keep indemnified, the wife in respect of all debts and liabilities:
i.of [X] Pty Ltd;
ii.any mortgage secured over the property;
iii.any credit cards, bank overdrafts and loans which are associated with him or [X] Pty Ltd; and
iv.any liability of the wife to the Australian Taxation Office arising out her involvement in or employment by [X] Pty Ltd.
4Unless otherwise specified in these orders, and save for the purposes of enforcing the payment of any moneys due under these or any subsequent orders:
i.Each party be solely entitled, to the exclusion of the other, to all other property (including choses-in-action) in the decision of such party, or to which such party is legally or beneficially entitled, as at this date;
ii.Any money standing to the credit of the parties in any joint bank account shall be deemed to be the husband’s;
iii.Each party is to retain any superannuation benefits belonging to or earned by him/her and forego any claims he/she may have to such benefits belonging to or earned by the other;
iv.Insurance policies remain the sole property of the owner named there;
vi.Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
vii.Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
The husband appeals against Order 1 asserting that the Federal Magistrate “discounted or ignored the extensive documentary evidence of the husband”, did not recognise or give weight to the financial relationship between the parties which continued until 2010 and the orders were not just and equitable in accordance with s 79(2) of Family Law Act 1975 (Cth) (“the Act”) as set out in Russell v Russell (1999) FLC 92-877.
At this point I observe that the wife seeks an order that her name be removed from the B mortgage, that the funds held by the Federal Magistrates Court pending determination of this appeal be released to her so that she can settle a Visa card debt. She also seeks what she describes as “compensation of costs of $6,000” to cover lost earnings as a result of having to attend at the Federal Magistrates Court on three occasions following the making of the final orders, and for preparation and attendance at Court for the purposes of the appeal hearing. However, as to the orders she seeks, there is no cross-appeal and thus there is no basis for this court to make any orders in her favour. As to “costs”, as I explained to the wife, if the appeal is not successful then she is able to claim any legal costs that she has incurred, but not recompense for lost earnings.
Grounds of appeal
The husband set out his grounds of appeal in his Notice of Appeal filed on
14 September 2011. However, in his summary of argument filed on 6 February 2012 those grounds of appeal were reframed and it is the grounds of appeal as they appear in the summary of argument that were pursued before this court. Those grounds are as follows:
Ground 1/ His Honour has accepted the wife’s mainly hearsay evidence as fact and made orders based on the wife’s application and affidavit, without the husband’s response, affidavit or documentary evidence appearing to have been considered.
Ground 2/ His Honour made a finding of fact not supported by the evidence in determining the Citibank credit card liability was solely a post-separation concern of the husbands.
Ground 3/ His Honour did not properly take into account the renovations and capital improvements made by the husband to his apartment and make an appropriate adjustment under section 79(4) to recognise his significant financial and non-financial contributions.
Ground 4/ His Honour arrived at a decision without proper evidence to support it by concluding that the wife solely covered the mortgage repayment post separation.
Ground 5/ His Honour did not properly take into account the documentary evidence that the respondent husband made a greater contribution than the wife post separation by paying over $34,000 in mortgage repayments on the former matrimonial home and make an appropriate adjustment under section 79(4).
Ground 6/ His Honour did not properly take into account factors under section 79(4) and has therefore erred in not making an adjustment to account for the fact that the husband has been solely responsible for the mortgage repayments, council rates and body corporate fees on his apartment, totalling more than $70,000.
Ground 7/ His Honour has erred in refusing to recognise the business overdraft, GST and PAYG liabilities to the ATO in the asset pool.
Ground 8/ His Honour has not taken into account the $9,413 of mortgage arrears, penalty interest and late payment fees paid out of joint funds.
Ground 9/ His Honour has not taken into account the $1,377 that the husband expended from his own funds to close a joint account.
Ground 10/ His Honour did not properly take into account factors under section 75(2) by not making an adjustment for the husband’s heart condition which is likely to affect his future earnings.
Ground 11/ His Honour did not properly take into account the contributions of the husband in relation to the substantial ($85-$90k) payment received when he was made redundant. The wife acknowledges the husband received the redundancy payout (see transcript page 41, line 4) early in the relationship, prior to the marriage.
Ground 12/ His Honour has improperly arrived at the conclusion that the wife contributed more at the start of the relationship by having a much larger amount ($5,000-$10,000) of superannuation.
Ground 13/ His Honour has improperly arrived at the conclusion that the wife has the greater share of care of the children, stating at paragraph 9 of the reasons for judgement (sic) that the husband only has custody “every second weekend”. However, there is an equal share arrangement in place which has seen the husband have slightly greater care (53% vs. 47%).
I note that in his summary of argument the husband indicates he no longer pursues Grounds 4, 8, 10 and 12 which he says he has “abandoned to simplify proceedings”. Further, during the hearing the husband in effect abandoned Grounds 1, 3, 9, 11 and 13. That leaves Grounds 2, 5, 6 and 7 to be addressed.
Discussion – Grounds of appeal
Ground 2
The husband’s complaint is that the Federal Magistrate’s finding was wrong in relation to this credit card, and that the evidence established that the debit balance should be treated as a joint liability of the parties. Alternatively, the debit balance as at the commencement of the account should be treated as a joint liability and the wife should be responsible for $5,000 of the increase in the debit balance since then.
It was common ground that prior to separation the husband had an ANZ Mastercard which had a supplementary card in the name of the wife, that that card account had a debit balance of $14,742.55 at separation, that it was maintained for a short period after separation, but then in June 2009 the balance outstanding of $15,183 was “rolled into” a Citibank Visa credit card taken out by the husband at that time.
Since then the husband has operated that Visa card, although it is also common ground that the wife has debited certain amounts on that card to pay for flights and accommodation for holidays. The husband says that a total of $5,000 was debited by the wife including other expenses, but this is not necessarily common ground.
There was a dispute on the evidence as to the operation of the ANZ Mastercard. The husband’s evidence was that the wife had her supplementary card and she used it. However, the wife’s evidence was that the husband retained both cards and used the supplementary card to purchase items for the wife when they were together, or allowed the wife to purchase items over the telephone using that card. She says though that her “use” of the card in this way was minimal, and the majority of debits on the card were for the husband’s sole benefit.
As to the debits by the wife to the Citibank Visa credit card, the wife’s evidence was that that was agreed to by the parties in order to “offset” her permitting some of the husband’s income to be included through X in her tax return because her income was lower than the husband’s at the time.
As to his Honour’s finding, it is quite apparent that his Honour, as he was entitled to do, preferred the evidence of the wife in relation to all of these issues. His Honour found that the outstanding balance of the Citibank Visa credit card should not be considered as a joint liability, and should be excluded from the asset pool as being a liability solely of the husband. As to the use of the ANZ Mastercard his Honour said this:
19.The wife has admitted to certain items purchased on the husband’s credit card for which she gave a reasonable explanation of how that happened. I am satisfied that the husband’s credit card was used solely by him except in circumstances where it was necessary for the wife to purchase items for her personal use, and he allowed her to do so using his credit card over the telephone. The amount proved in that regard was $198. The wife should pay this.
Save and except in one respect, I consider that it was reasonably open to
his Honour on the evidence before him to make these findings. The evidence did not demonstrate who between the husband and the wife had actually incurred the debits on the ANZ Mastercard, but the evidence clearly demonstrated the basis on which the wife debited amounts to the Citibank Visa credit card.
There is a presumption that the decision of a trial judge or a Federal Magistrate is correct. They enjoy advantages which an appeal court lacks. In the High Court decision of Abalos v Australian Postal Commission (1990) 171 CLR 167, at 178, McHugh J (with whom Mason CJ, Deane, Dawson and Gaudron JJ concurred) referred to “the power of the Court of Appeal” and to the judgment of Lord Sumner in SSHontestroom v SS Sagaporack [1927] AC 37, at 47:
[N]ot 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 they understand the decisions be let alone.
(Also see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others (1999) 160 ALR 588, per Kirby J at 619, paragraph 90).
However, it is apparent that his Honour did make one error in his finding, and that is that only a debit of $198 could be attributed to the wife. The wife conceded to his Honour that a total of $2,000 would have been for her benefit. She said this:
MS [CRUSSETE]:
…
I’m even willing to concede, based on the items that [Mr Wicker] had clearly put on Mastercard for myself – you know, a couple of thousand dollars towards – I always pay my way, if there’s stuff that he has put on those for me, I’m willing to concede a couple of thousand dollars to pay whatever he has put on that for me.
…
(Transcript 8 November 2011, page 119, lines 44 – 47)
Thus, his Honour has clearly erred in only requiring the wife to be responsible for $198, rather than $2,000, and to this extent this ground has merit.
Ground 5
Here the husband challenges his Honour’s findings that the husband did not make “any contributions effectively to the mortgage” after separation, and that such payments that were made “on the mortgage were made by the wife” (paragraph 25 of the reasons for judgment).
His Honour also found that the payments made by the husband during separation “are best described as his half-share to the agreed payment of childminding services and a nanny” (paragraph 25).
The husband has taken the court to the documentary evidence that was before his Honour, including the budget operated on by the parties post-separation and the relevant bank statements. It is apparent from that evidence that the husband did in fact contribute to the repayment of the mortgage in addition to making contributions to the expenses of the children, and to other related household expenses.
The husband has also taken the court to where the wife was cross-examined about these documents and what they demonstrated. Although the wife did not agree with the propositions put to her in cross-examination, she did not provide any evidence to the Federal Magistrate that indicated that the husband’s documentary evidence was wrong.
It seems then that the Federal Magistrate has erred in failing to take these mortgage payments into account when assessing the respective contributions of the parties. What is not clear though is how much the husband contributed to the mortgage repayments after separation. He claims to have contributed $34,000, but that is not borne out by his documentary evidence. On the basis of these documents the amount would appear to be somewhat less. In any event, there is still merit in this ground of appeal.
Ground 6
There can be no issue that the husband alone made the mortgage repayments and paid council rates and body corporate fees in relation to his property at
B, and that that property was included in the asset pool (as was the mortgage) to be distributed between the parties. There is also no doubt that his Honour did not refer at all to these contributions by the husband in his reasons for judgment.
However, the fact of the matter is that the husband was the party who was receiving the sole benefit of that property while the wife remained living in the former matrimonial home and contributing to the mortgage repayments and to the household expenses until it was sold in January 2011. The wife then moved to rental accommodation where she met all of the expenses including the rent.
Thus, even if his Honour had referred to the husband’s contributions to his property, his Honour would have then found that those contributions should not be taken into account, being offset by the wife’s payment of the mortgage, the rent, and other related expenses in order to provide herself and the children with accommodation.
It is beyond doubt that a trial judge or a Federal Magistrate is not obliged in their reasons for judgment to address every issue that is raised in the proceedings, and particularly where, as here, those issues would not affect his decision. (See State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others, per Kirby J at 90, and Whisprun Pty Ltd (formerly Northwest Exports Pty Ltd) v Dixon (2003) 200 ALR 447, at [62]).
Thus, there is no appealable error here by the Federal Magistrate.
Ground 7
This ground again challenges his Honour’s findings as to the liabilities to be taken into account.
The husband argues that these liabilities were accrued post-separation in producing the income that went to meet repayment of the mortgage over the former matrimonial home, to meet the payment of the expenses of the children, to repay the husband’s mother money lent to assist with the purchase of the B property, and to fund renovations to that property. Thus, as that property is included in the pool of assets these liabilities should also be taken into account. Further, the husband submits that the GST and PAYG liabilities relate to the time when both the husband and the wife were employees of the business in 2010, and for that reason alone they should be taken into account.
The simple and complete answer to these arguments is that the business was the husband’s business, and how he arranged his affairs including from where he generated his income, met expenses, paid liabilities, and made capital payments was entirely his affair. He of course is entitled to credit for the contributions he made post-separation, and apart from the error identified in Ground 5, his Honour afforded that credit to him, but there is no basis for the liabilities incurred to make these contributions to also be taken into account in the asset pool. They are clearly liabilities for which the husband has sole responsibility.
The husband relied on the decision of the Full Court in Gollings and Scott (2007) FLC 93-319 in support of this ground.
There the trial judge excluded from consideration a post-separation income tax liability of the husband, but the Full Court disagreed with this approach in the particular circumstances of that case. The Full Court said this:
79.There was no issue that the liabilities included the quarterly payment that was about to fall due and it would seem on the face of it that there is no valid reason for the sum being left out of the pool of assets, particularly where it was tax on income that was utilised in part to provide for the support of the wife and the children. At the same time it was also tax assessed on income that had been utilised for making gifts to Ms Y. Whilst it seems to us to be wholly inequitable for the wife to be responsible for the tax liability in respect of substantial gifts made by the husband to Ms Y in the post-separation period, we have not been provided with any calculations that would enable us to determine how much of the husband’s tax liability can be fairly attributed to any money spent on Ms Y. Given our proposed outcome, we think it safest to include the whole tax liability as claimed by the husband but make allowance for this element in determining what is ultimately an appropriate outcome.
Here of course there was also no evidence of how the husband expended all of the income which incurred the liabilities, and significantly the Full Court also said this in Gollings & Scott:
78.… each case must be considered on its own facts, particularly having regard to how the income derived was expended post-separation. (Authorities omitted)
Accordingly, in my view this decision does not provide a basis for interfering with the approach of the Federal Magistrate in the circumstances of this case.
The husband also sought to rely on authorities such as Kowaliw and Kowaliw (1981) FLC 91-092 and Browne v Green (1999) FLC 92-873, but as I explained to the husband during the hearing they are clearly distinguishable from the circumstances here.
The application to adduce further evidence
It remains to consider the husband’s application to adduce further evidence in the appeal filed on 25 January 2012. That application was not opposed by the wife but as I explained to the parties the court still has a discretion whether to receive that evidence or not.
The evidence sought to be led was the joint application by the parties on
15 June 2010 to refinance the loans secured over the former matrimonial home and the property at B. This application was declined, but the husband says it is relevant for two purposes; first to demonstrate that there was an ongoing financial relationship between the parties after separation, and secondly, because the application records the “joint credit card liabilities” of the parties, and includes the Citibank Visa credit card.
Section 93A(2) of the Act provides that in an appeal the Full Court can, in its discretion, receive further evidence upon questions of fact. In CDJ v VAJ (1998) 197 CLR 172 the High Court discussed the circumstances in which an appellate court may exercise its discretion to admit further evidence. McHugh, Gummow and Callinan JJ said:
109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
It is not apparent to this court how the fact that the parties had an ongoing financial relationship after separation demonstrates that the Federal Magistrate has erred. Indeed, there was no dispute at the hearing that the parties did have an ongoing financial relationship.
With the issue of the credit cards, as the husband sought to emphasise in oral submissions, this documents indicates that the Citibank Visa credit card was considered a joint liability by the parties. However, that is simply not the case. All that this document reveals is that at the time of the application there were a number of credit card liabilities, but it does not indicate whose liabilities they were, and certainly it cannot be said to demonstrate that any of the liabilities were joint.
Thus there is no basis for admitting this further evidence, and the application must be dismissed.
Conclusion
Of the grounds of appeal pursued by the husband, I have found no merit in Grounds 6 and 7, but there is merit in Grounds 2 and 5.
With the error established in Ground 2, it is possible for this court to rectify the same by adjusting the amount to be paid to the wife, but with the error in Ground 5 that is not the case, and the issue is whether it is possible for this court to re-exercise the discretion or whether that aspect should be remitted to the Federal Magistrates Court for rehearing. Unfortunately, given the error identified requires a reassessment of the respective contributions of the parties, and that may then require an adjustment pursuant to s 75(2) of the Act, it is not possible to re-exercise the discretion, and this matter has to be remitted to the Federal Magistrates Court for rehearing. However, that need only be a limited remission, to reassess the respective contributions of the parties on the basis of an acceptance of the husband’s evidence that he contributed to the repayment of the mortgage over the former matrimonial home post-separation, but with a need to identify the extent of that contribution, and then to consider whether there should be an adjustment pursuant to s 75(2) of the Act.
That rehearing, which would need to take place before a Federal Magistrate other than Federal Magistrate O’Dwyer, would proceed on the basis of the net asset pool as found by his Honour. There would then be an assessment of the respective contributions of the parties utilising his Honour’s findings, save and except as to the issue of the husband’s contributions to the mortgage repayments in respect of the former matrimonial home post-separation. A finding would need to be made as to the extent of the husband’s contributions in that regard, and credit given for those contributions. Finally, there would need to be a consideration of whether that reassessment of the respective contributions of the parties leads to any adjustment under s 75(2) of the Act.
To return to Ground 2, given that this matter will be remitted for a limited rehearing, I propose leaving it to the Federal Magistrates Court to make the adjustment to the amount to be paid to the wife by the husband by requiring the wife to be responsible for $2,000 rather than $198 in respect of the use of the husband’s Citibank Visa credit card.
Costs
Given that neither party was legally represented there are no costs issues here that need to be considered and I propose to make no order.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
13 November 2012.
Associate:
Date: 13 November 2012
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