Wynona v Friend
[2011] FamCAFC 6
•28 January 2011
FAMILY COURT OF AUSTRALIA
| WYNONA & FRIEND | [2011] FamCAFC 6 |
| FAMILY LAW - APPEAL – CHILDREN – Parenting Orders – Whether Federal Magistrate erred in failing to consider whether sole parental responsibility was in best interests of the children – Whether Federal Magistrate erred in finding that an equal shared time arrangement was not in best interest of the children – Whether Federal Magistrate failed to give sufficient weight to the Family Consultant’s report – Where credit and factual findings were open to the Federal Magistrate on the evidence – Discretionary judgment – No appealable error established. FAMILY LAW - APPEAL – PROPERTY – Whether the Federal Magistrate left certain assets and liabilities out of the list of assets and liabilities – Whether the Federal Magistrate erred in failing to make consent orders – No appealable error established. FAMILY LAW - APPEAL – PROPERTY ORDERS – Just and equitable – Whether the adjustment made under s 75(2) of the Family Law Act 1975 (Cth) was not supported by the evidence or was manifestly excessive – Whether the property orders were just and equitable – Where the orders had the effect of the wife receiving approximately one third of the total assets more than the husband – Where the Federal Magistrate failed to consider whether the orders where just and equitable in light of the resulting monetary distribution to each of the parties – Appealable error established – Matter re-determined. FAMILY LAW - APPEAL – CORRIGENDUM – Federal Magistrate’s judgment was amended by way of “corrigendum” 8 months after initial judgment was published – Meaning of “corrigendum” considered – Beazley JA’s comments in Todorovic v Moussa (2001) 53 NSWLR 463 on amending reserved judgments discussed – The editing of ex tempore reasons and the revision of judgments under the “slip rule” differentiated – Table included in “corrigendum” contained no matter of substance – The items published in the corrigendum were not disputed on appeal – No appealable error. |
| District Court Act 1973 (NSW) Federal Magistrates Court Rules 2001, r 16.05(2)(e) |
| A v J (1995) FLC 92-619 Allesch v Maunz (2000) 203 CLR 172 Bar Mordecai v Rotman [2000] NSWCA 123 Burrell v The Queen (2008) 238 CLR 218 Clauson & Clauson (1995) FLC 92-595 DJL v Central Authority (1997) 201 CLR 226 Essex & Essex [2009] FamCAFC 236 Fox & Percy (2003) 214 CLR 118 Gronow v Gronow (1979) 144 CLR 513; (1979) FLC 90-716 House v The King (1936) 55 CLR 499 Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 M & M (2006) 36 Fam LR 97 Monie v Commonwealth of Australia [2005] NSWCA 25 Neil v Nott (1994) 121 ALR 148 Newmont Yandal Operations Pty Ltd v J Aron Corp and Goldman Sachs Group Inc[2007] NSWCA 195 Palmer v Clarke (1989) 10 NSWLR 158 Rollings & Rollings (2009) 230 FLR 396 Sangara & Hamwood (2007) 39 Fam LR 237 Sea Containers v ICT Pty Ltd (2006) NSW CA 327 Todorovic v Moussa (2001) 53 NSWLR 463 Talbot-Price v Jacobs [2008] NSWCA 189 Teal & Teal [2010] FamCAFC 120 |
| APPELLANT: | Mr Wynona |
| RESPONDENT: | Ms Friend |
| FILE NUMBER: | BRC | 5174 | of | 2007 |
| APPEAL NUMBER: | NA | 59 | of | 2009 |
DATE DELIVERED: | 28 January 2011 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Faulks DCJ, Boland & Benjamin JJ |
| HEARING DATE: | 1 June 2010 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court of Australia |
| LOWER COURT JUDGMENT DATE: | 3 July 2009 Corrigendum – 12 February 2010 |
| LOWER COURT MNC: | [2009] FMCAfam 682 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Self-represented litigant |
| SOLICITOR FOR THE APPELLANT: | Self-represented litigant |
| COUNSEL FOR THE RESPONDENT: | Mr Laurie |
| SOLICITOR FOR THE RESPONDENT: | Piper Craig Henry Lawyers |
Orders
The appeal is allowed in part.
Order 1 of the orders made by Federal Magistrate Jarrett on 12 February 2010 restraining payment to the wife to the extent of $62,258.39 is set aside.
Order 14 (e) and (f), and Order 15 of the orders made by Federal Magistrate Jarrett on 3 July 2009 are set aside and the following orders substituted in lieu:
14. (e) Pursuant to s 79 of the Family Law Act 1975 (Cth) and subject to any payment made or due to be paid pursuant to Orders 14(a), 16, 17 and 18 of the orders of Federal Magistrate Jarrett of 3 July 2009 the parties’ assets and liabilities as set out in paragraph 190 of these reasons adjusted for any sum already received by them shall be divided between them as to 53 per cent thereof to the wife and 47 per cent thereof to the husband;
15.The parties shall within 21 days of the date of these orders do all acts and things necessary to authorise the holder of the net proceeds of sale of the matrimonial home […] and the [NC] property to pay such sum to each party as is necessary to comply with Order 14(e) of these orders.
Order 20(b) of the Orders made by Federal Magistrate Jarrett on 3 July 2009 is varied by deleting “63%” and substituting in lieu “53 per cent” and further deleting “37%” and substituting in lieu “47 per cent”.
That each party pay their own costs of and incidental to the appeal.
The husband shall file with the Northern Appeal Registrar and serve on the wife’s solicitors any written submissions in respect of the costs appeal (NA 12 of 2010) on which he seeks to rely on or before 17 February 2011.
The wife shall file with the Northern Appeal Registrar, and serve on the husband any written submissions in respect of the costs appeal on which she seeks to rely on within 21 days of receipt of husband's written submissions.
The husband shall file with the Northern Appeal Registrar and serve on the wife’s solicitors any written submissions in reply to the wife’s submissions within a further 14 days.
Each party shall endorse on the coversheet of the submissions the date of service on the other party.
The costs appeal shall be determined without the necessity for further appearance by either party by a Full Court nominated by the Chief Justice, the Honourable Justice Bryant.
IT IS NOTED that publication of this judgment under the pseudonym Wynona & Friend is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 59 of 2009
File Number: BRC 5174 of 2007
| Mr Wynona |
Appellant
And
| Ms Friend |
Respondent
REASONS FOR JUDGMENT
Introduction
By amended Notice of Appeal filed on 19 February 2010 Mr Wynona sought to appeal certain orders made by Federal Magistrate Jarrett on 3 July 2009 in respect of parenting and property proceedings under respectively Part VII and s 79 of the Family Law Act 1975 (Cth) (“the Act”). The appeal was resisted by Ms Friend. We will refer to this appeal as the substantial appeal.
A further Notice of Appeal (NA 12 of 2010) challenging a costs order made by the Federal Magistrate was also filed (“the costs appeal”).
Although the parties are divorced we will, for convenience, in these reasons refer to them as “the husband” and “the wife”.
Both parties sought, in the event the substantive appeal was allowed, that we would re-determine at least the property aspects of the proceedings.
The Federal Magistrate heard the proceedings between the parties, initially on 12 and 18 February 2008, and the matter was reopened on 15 August 2008. Written submissions were provided by the husband on 29 August 2008 and the wife on 9 September 2008, and his Honour delivered reserved reasons and made 35 orders on 3 July 2009.
In broad terms, his Honour’s parenting orders provide that the parties have equal shared parental responsibility for their two daughters who were aged 8 years and 6 years at the date of the orders (Order 1), that the children live with the wife, and provided the husband lives with 50 kilometres of the children’s school, they should live with him each alternate week from after school on Friday to before school Wednesday, or in the event he lives more than 50 kilometres from the children’s school each alternate weekend from after school on Friday until 5.00 pm on Sunday. Additionally the orders provide for the children to spend time with each of their parents on special occasions (Order 3) and for half of the school holidays (Order 4). His Honour made an order the children communicate with the parties by phone to the other’s landline telephone number.
The Federal Magistrate found the parties’ net assets to have a total value of $364,607.67 and that their respective contributions should be assessed at 52 per cent by the husband and 48 per cent by the wife. His Honour made an adjustment in the wife’s favour of 15 per cent under s 75(2) with the effect that the assets were divided between the parties in the ratio of 63 per cent to the wife (or $229,702.83) and 47 per cent (or $134,904.84) to the husband.
A dispute arose between the parties as to how the proceeds of sale of real estate held by the husband’s solicitors should be disbursed and the dispute was heard by his Honour on 12 October 2009. His Honour delivered further reasons and made orders on 18 December 2009 pursuant to r 16.05(2)(e) of the Federal Magistrates Court Rules 2001 (“the FMC rules”). Those orders were amended under the same rule on 20 January 2010.
In circumstances we will describe more fully when discussing his Honour’s reasons for judgment in respect of the division of the parties’ property, the Federal Magistrate published a corrigendum to his reasons on 12 February 2010. In the corrigendum his Honour inserted a table of “add backs” into paragraph 87 of his reasons for judgment published on 3 July 2009.
The husband was self represented before us, and had prepared his own Notices of Appeal, submissions and the appeal book (and a supplementary appeal book). The wife was, as she had been before the Federal Magistrate, represented by Mr Laurie of counsel.
In respect of the parenting orders, the husband asserted error by Jarrett FM in making the order for equal shared parental responsibility, and the orders which provided for the children to live, during school terms, with him 5 nights in each 14 day cycle. He also sought to challenge the school holiday arrangements asserting they were different from an agreement reached between the parties, reduced to writing and signed by them, and forwarded to the Federal Magistrate at the conclusion of the hearing on 25 August 2008 for the making of consent orders. He also challenged the provision made for telephone communication with his daughters, asserting it was inadequate.
The challenges to the property orders were articulated as:
· a failure by the Federal Magistrate to include in the agreed list of assets and liabilities furniture to the value of $20,000.00 retained by the wife;
· a failure to include as liabilities the husband’s credit card debt incurred to purchase a car (the car being included as an asset), and a sum of approximately $770.00 asserted to be owed to a third party for the construction of a cubby house for the children;
· error in making the adjustment under s 75(2) – it was asserted the adjustment made was based on inappropriate factual findings and was manifestly excessive;
· error in failing to make the consent orders which dealt with aspects of the property proceedings; and
· an assertion that the orders were not “just and equitable”.
Although the costs appeal was not consolidated with the substantive appeal for hearing before us, at the conclusion of the substantive appeal we advised the parties the costs appeal would be dealt with by way of written submissions after we published our reasons in the substantive appeal.
We propose to first refer to some relevant background material. We will record the somewhat unusual course of the proceedings, including the evidence relating to the consent orders, subsequent orders for distribution of proceeds of sale of real property, the corrigendum to his Honour’s reasons and an order made after a stay application. We will thereafter consider the husband’s parenting appeal grounds with reference, where appropriate, to his Honour’s reasons for judgment. We will then deal with the challenges to the property orders, and we will, if we determine there has been appealable error, consider whether we can appropriately re-determine the competing applications.
Background
(a)relevant to the parties
The following facts are set out in the reasons for judgment of the Federal Magistrate or the appeal book and are uncontroversial.
The parties were married in February 1990 and separated in early 2007.
The parties were divorced in November 2008, the divorce order becoming final in December 2008.
The wife was born in January 1972.The husband was born in August 1964.
There are two children of the marriage, O born in June 2001 and A born in February 2003.
At the commencement of cohabitation the husband was employed on a full-time basis and had enough savings for a deposit on a house. At the commencement of cohabitation the wife had “very little” (reasons, paragraph 97).
In 1998 the husband established his own business which was sold in 2005. Thereafter the husband devoted himself full-time to property development (reasons, paragraph 98).
The wife continued in full-time employment until shortly prior to the birth of the eldest child in 2001 (reasons, paragraph 99).
The parties bought and sold, at times through corporate entities, a number of properties over the course of the marriage. The parties carried out renovations to properties acquired and sold them for profit. It is unnecessary we set out details of these purchases and sales.
In November 2005 the parties purchased vacant land on the north coast of NSW (“the NC property”) in the name of D Pty Ltd.
In October 2006 the parties purchased a franchise business. The franchise was purchased for approximately $24,200.00 plus $11,000.00 for training, some of which the wife undertook.
In December 2006 the parties purchased a property in S on the Sunshine Coast (“the matrimonial home”).
Shortly after separation, the wife confirmed with the franchisor that the franchise could be surrendered for a full refund of $35,200.00. The wife indicated she wished to retain the franchise until September 2007. At that time, when the franchise was actually surrendered, only $11,000.00 was refunded to the parties (reasons, paragraph 102).
After separation the wife retained a motor vehicle registered in the name of a corporate entity controlled by the parties ( X Pty Ltd) and sold it to her mother.
Prior to the birth of the elder child the wife obtained a paraprofessional qualification which enabled her to conduct a practice in New South Wales and Queensland. Apart from a short period after separation when the wife worked as a paraprofessional for approximately three months, she was not in employment, but was involved with the parties’ business activities. She was not employed at the date of the hearing before the Federal Magistrate (transcript 12 February 2008, p 4; wife’s affidavit sworn 31 January 2008, paragraph 2).
At the date of the hearing the husband was working as a self-employed home handyman.
At the date of the hearing the parties had an investment with two other persons in a property development on the New South Wales far north coast.
At the date of the orders the husband’s solicitors held cash funds of $160,205.78 being the proceeds of sale of the matrimonial home. Each of the parties had received a distribution by way of an interim property settlement from the proceeds of sale of the property of $5,000.00. The solicitors also held the proceeds of sale of the NC property of $43,226.01.
The parties were directors and shareholders of a number of companies, and had established a family trust and a self management superannuation fund as follows:
· X Pty Ltd;
· D Pty Ltd;
· C Pty Ltd;
· Wynona Family Trust;
· Wynonoa Family Superannuation Fund.
At the date of the hearing the children were attending a private school but the wife proposed they should attend H State School. The husband proposed the children should attend O State School. By the date of the orders the parties had resolved, on an interim basis, the issue of the children’s schooling (letter dated 7 October 2008 forwarded to the Federal Magistrate).
(b) the procedural history
On 11 April 2007 the wife filed an application a the local court, seeking a recovery order for the children asserting the husband had removed them from the matrimonial home at S in March 2007.
On 23 April 2007 orders were made in a local court, for the children to live in the matrimonial home with the wife.
On 3 May 2007 the wife filed an application for a domestic violence order in a local court and on 8 May 2007 the husband filed an application for a protection order in the same court.
On 22 May 2007 protection orders were made in a local court.
On 19 June 2007 the wife filed an amended application for final orders. The husband had earlier, on 17 April 2007, filed a response to the wife’s initiating application.
On 21 June 2007 interim parenting orders were made in the Federal Magistrates Court at Brisbane. Further orders were made on 30 August 2007, 9 October 2007 and 30 November 2007.
The proceedings were heard by Jarrett FM on 12 and 18 February 2008. The evidence concluded on 12 February 2008 at which time counsel then appearing for the husband (Dr Kellie) provided written submissions to the Federal Magistrate and spoke to those submissions (transcript, 12 February 2008, pp 97-99). As his Honour had insufficient evidence before him about various taxation issues, the matter was adjourned to 18 February 2008. On that day his Honour was advised by the husband’s counsel that she had been unable to reach agreement with the wife’s counsel about an agreed list of assets and liabilities (transcript, 18 February 2008, p 102).Later in the morning, after the matter had been stood down to enable the parties to inspect material produced under subpoena, the wife’s counsel handed up a schedule of assets and liabilities and counsel addressed his Honour on the areas of disagreement. That document was not marked as an exhibit and was not reproduced in the appeal book. At this point the matrimonial home had not been sold. The matter concluded with counsel for the husband’s oral submissions at 11.44 am.
On 2 May 2008 an application was made to the Federal Magistrate to re-open the hearing on the basis there had been substantial changes, including issues in respect of both the parenting and property proceedings (transcript, 2 May 2008, p 1).That application was granted and the property proceedings were re-opened on 25 August 2008.
At the time of the re-opening on 25 August 2008 the husband had filed contravention applications, but after negotiations, those applications were dismissed with no order as to costs (transcript, 25 August 2008, p 2).His Honour was advised the parties had reached agreement on a number of issues and signed a document containing proposed orders, which the husband’s counsel undertook to provide, in a clean typed transcript, to the Federal Magistrate’s chambers to be made by consent. His Honour then proceeded to hear further evidence including further cross-examination of the wife. At the conclusion of the evidence the parties’ counsel made oral submissions in respect of the further evidence, and his Honour was advised the matrimonial home and another property had been sold. The Federal Magistrate requested the parties send to him an updated list of agreed assets and liabilities (transcript, 25 August 2008, p 52).
Written submissions were provided to the Federal Magistrate on behalf of the husband on 29 August 2008 (including a schedule of assets and liabilities), and on behalf of the wife on 9 September 2008. Although the appeal book index refers to an agreed schedule of assets and liabilities dated 25 August 2008 that document is not in the appeal book as a separate item, the only schedule being a schedule annexed to the husband’s counsel’s written submissions. That schedule does not include the sale price achieved for the matrimonial home or the NC property. It does include an item for furniture of $20,000.00 as an agreed sum. Also reproduced, as an annexure to the wife’s solicitor’s affidavit sworn 17 September 2009, is an undated list of assets and liabilities which may have been forwarded to the Federal Magistrate. It is not identical to the schedule annexed to the husband’s submissions. We will later refer to the difficulties caused by the lack of an agreed schedule of assets and liabilities.
His Honour delivered his reserved reasons and made orders on 3 July 2009.
On 12 October 2009, after the husband had filed his substantive appeal, the proceedings were again before his Honour when an application was made by the husband for costs of the proceedings, and a dispute about interpretation of the orders was raised. On this occasion the husband appeared in person and the wife was represented by her counsel. The wife’s response filed on 18 September 2009, included (unusually) an application that the Federal Magistrate make an order for security for costs of the appeal rather than that application being filed in the appeal proceedings pursuant to s 94(2D) of the Act.
The Federal Magistrate delivered further reserved reasons, part of which appear in the appeal book, and made orders on 18 December 2009. Relevant to the substantive appeal, his Honour amended the orders made on 3 July 2009 to delete an order which required the payment of the parties’ credit card liabilities from the funds held from the proceeds of sale of the matrimonial home and the NC property. No issue was raised on the substantive appeal that his Honour was functus officio and thus lacked power to make further substantive orders (see Burrell v The Queen (2008) 238 CLR 218) or whether the order was properly made under r 16.05 of the FMC rules (“the slip rule”). His Honour made machinery orders for the payment out from the proceeds of sale sums payable to the Australian Taxation Office for capital gains tax, and to the parties. Those orders were amended under the “slip rule” on 20 January 2009 to correct a typographical error in the sums to be paid to the Australian Taxation Office.
On 12 February 2010 his Honour published a “corrigendum” to his reasons for judgment published on 3 July 2009. The corrigendum comprised a table of “add backs” referred to in paragraph 87 of his Honour’s reasons for judgment.
We were advised that on 12 February 2010 the Federal Magistrate granted a partial stay of his orders, not limited to the hearing and determination of the appeal, requiring the payment to the wife to be stayed “to the extent of $62,258.39”. At our request, we were provided with a copy of the stay order.
Grounds of appeal
The husband’s amended Notice of Appeal contained 30 grounds of appeal a number of which were not proper grounds of appeal. The husband grouped the grounds under challenges to particular orders, and challenges to particular paragraphs of his Honour’s reasons. During the hearing we endeavoured to assist the husband to identify relevant grounds, and to group the grounds directed to particular challenges to the Federal Magistrate’s orders (see Neil v Nott (1994) 121 ALR 148).In these circumstances, we see little utility in reproducing the grounds of appeal in this judgment. Rather we will focus on the challenges identified with the husband during the course of the hearing.
We identified the husband’s challenges as follows:
(a) in respect of the parenting appeal:
asserted error by the Federal Magistrate in
- failing to consider whether he should make an order for sole parental responsibility in the husband’s favour (ground 1);
- determining an equal shared time order was not in the children’s best interests (grounds 2, 3, 8, 14, 16);
- failing to adopt, give sufficient weight to, or accurately record, the Family Report writer’s report and evidence (grounds 4, 5, 13);
- providing that telephone communication be facilitated to a landline telephone number rather than a mobile phone number (grounds 6, 7, 17); and
- making credit findings and factual findings adverse to the husband (grounds 10, 11, 12, 19).
(b) in respect of the property appeal:
asserted error by the Federal Magistrate in
- omitting assets and liabilities from the list of assets and liabilities to be divided between the parties and error in respect of “add-backs”;
- the judgment requiring the issue of the corrigendum (grounds 18, 27, 28, 29, 30);
- the adjustment made under s 75(2) (grounds 20 to 24); and
- failing to make orders which were just and equitable (ground 30).
We will discuss the grounds in the order and under the topics identified above.
The challenge to the parenting orders
Before commencing that discussion we propose to refer to relevant appellate principles. This is an appeal against a discretionary judgment. The limited circumstances in which the Full Court should interfere with a discretionary judgment are well known. In Gronow v Gronow (1979) 144 CLR 513; (1979) FLC 90-716 Stephen J said at 519:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.
In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-5:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. 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.
Asserted error failing to consider whether to make an order for sole parental responsibility in the husband’s favour (ground 1)
The husband asserted that his Honour failed to consider whether a sole parental responsibility order was in the best interests of the children. He asserted that the Federal Magistrate had failed to consider the willingness and capacity of the wife to promote a meaningful relationship between the children and the husband.
(a) The Federal Magistrate’s consideration of equal shared parental responsibility
The Federal Magistrate commenced his reasons noting the parties were unable to agree about parenting arrangements for the children, or how their property should be divided between them.
At paragraph 3 of his reasons, having referred to the wife’s proposals in her Outline of Case document, his Honour said “[s]he seeks no orders about parental responsibility”.
At paragraph 5, the Federal Magistrate turned to the orders which the husband sought in his Outline of Case document filed 7 February 2008 and 18 August 2008. We pause here to note that although the husband was self-represented before us he was represented by counsel at all relevant times throughout the hearing before the Federal Magistrate up to August 2008. His Honour recorded accurately “[w]ith respect to parenting issues he seeks an order for equal shared parental responsibility, although in the alternative he seeks an order for sole parental responsibility”.
At paragraphs 15 and 16, his Honour said:
In this case [the husband] seeks an order that he and [the wife] have equal shared parental responsibility for [O] and [A]. At the commencement of the submissions for [the husband], [the wife] by her counsel, conceded that it was appropriate to make an order for equal shared parental responsibility. That concession was made, notwithstanding the allegations made by each in their evidence, particularly by [the wife] about her inability to effectively communicate with [the husband] about the children. Nonetheless, neither party suggests that it is not in the children’s best interests to apply the presumption. [The husband] did not press his alternative position – namely that he should have sole parental responsibility for the children.
I will make an order for the parents in this case to have equal shared parental responsibility for [O] and [A], largely because the order is one that both parties now concede ([the wife] expressly and [the husband] by implication) is appropriate.
(b) Discussion
Section 61DA was introduced into the Act by the Family Law Amendment (Shared Parental Responsibility) Act 2006 (Cth) (“the amending Act”). Section 61DA provides as follows:
(1) When making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
(2) The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in:
(a) abuse of the child or another child who, at the time, was a member of the parent’s family (or that other person’s family); or
(b) family violence.
(3) When the court is making an interim order, the presumption applies unless the court considers that it would not be appropriate in the circumstances for the presumption to be applied when making that order.
(4) The presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
In this case, not only was there no suggestion that the presumption was rebutted, the Federal Magistrate was, in effect, asked to make the order by consent. That is clear from the following portion of the transcript:
DR KELLIE: - - -written submissions. It’s - basically the father’s position is that, in terms of the children’s issues, clearly it’s the case that shared parental - equal shared parental responsibility ought to be the first ambit that we have. There is no evidence before you to suggest that any alleged domestic violence has been to any extent that would bring it within one of the grounds for rebutting that presumption and there has been no allegation of child abuse. The mother very candidly said that save for the application that she made there had been no domestic violence in the relationship. It would seem, listening to Mr [Z], that he is of- - -
MR LAURIE: Excuse me, your Honour, if it assists my learned friend, we concede equal shared parental responsibility.
DR KELLIE: Thank you.
FEDERAL MAGISTRATE: Thank you. (transcript, 12 February 2008, p 97)
We note at the hearing we drew the husband’s attention to this concession and he agreed there was, in reality, no merit in this challenge. We are satisfied from our examination of the record that ground 1 is without merit.
Asserted error in determining an equal shared time order was not in the children’s best interests (grounds 2, 3, 8, 14, 16)
The thrust of the oral and written submissions made by the husband in support of these grounds was that the Federal Magistrate’s finding that an equal shared time arrangement was not supported by the evidence and was in error.
Further, at paragraph 30 of his written submissions, the husband said “[t]here has not been any reasonable consideration given as to why equal time would not work better than the current arrangement”.
(a) The Federal Magistrate’s consideration of an equal time arrangement
At the commencement of his reasons, the Federal Magistrate noted the competing positions of the parties in respect of living arrangements for the children. The wife sought the Court make orders, subject to the husband living within a 5 km radius of the children’s home, that the children live with her and spend time with the husband each alternate weekend from the conclusion of school on Friday until the commencement of school on Monday morning. She also sought orders for the parents to equally share school holidays and for time on other special occasions.
At paragraph 3 of his reasons, the Federal Magistrate recorded the husband’s proposals which were, provided the parties lived within 25 kms of each other, that the children spend equal time in each parent’s household. His alternative proposal was that the children live with the husband and spend time with the wife each alternate weekend “or as the Court directs”. The Federal Magistrate recorded the husband sought similar orders to those of the wife about school holidays and special occasions.
At paragraph 18 of his reasons, the Federal Magistrate explained that the wife relied on an Outline of Case document filed on 5 February 2008 in which she asserted the orders she proposed would constitute “substantial but not equal time”. The Federal Magistrate set out the matters the wife asserted militated against an equal shared arrangement which were:
· a significant geographical distance between the parties and because the husband did not have permanent suitable accommodation in the S area where the wife lived;
· the inability of the parties to communicate with one another about parenting issues;
· that the parties had significantly different parenting styles; and
· the significant conflict between the parties.
At paragraph 20 of his reasons, the Federal Magistrate recorded the husband’s assertion that the conflict and lack of communication between the parties was as a result of the approach adopted by the wife. His Honour noted:
… He alleges that she has chosen to make communication difficult so that there is less likelihood of the children spending significant time with him.
His Honour went on to explain, in paragraph 21, as a result of the parties’ cross-examination and the submissions made to him, two real issues had emerged, namely, the [lack of] ability of the parties to communicate with each other effectively in relation to matters involving the children, and the practicality of having the children live with the husband for more than the time proposed by the wife.
In paragraphs 23 to 35 of his reasons, the Federal Magistrate made a number of findings critical of both parties and concluded, in paragraph 35, “I approached the evidence of both of the parties with considerable caution”.
In paragraphs 36 and 37, although not identified by reference to s 60CC(2), his Honour considered the primary considerations, and noted that neither party suggested the children should not continue to benefit from a meaningful relationship with each parent. Nor did he find, notwithstanding the poor state of the relationship between the parties, that either child needed to be protected from harm, physical, psychological or otherwise by reason of being subject to or exposed to abuse, neglect or family violence between the parties.
At paragraphs 38 to 53, his Honour appears to have dealt with a number of the additional considerations (s 60CC(3)).
At paragraph 52 of his reasons, his Honour found that the wife had failed to communicate with the husband in relation to issues concerning the children and concluded:
… I am of the firm view that she is clearly of the mind to make communication as difficult as possible because it will further her ends in these proceedings.
At paragraph 53, the Federal Magistrate also made adverse findings about the husband’s behaviour in the proceedings. His Honour said:
I am also of the view that [the husband] has behaved in the way he has behaved because he is of the view that it will further his position in these proceedings and, in particular, the property proceedings.
At paragraph 54, his Honour explained that both parties, in their oral evidence and in the interviews conducted by the Family Consultant, said that the current arrangements put in place by the Court in orders made in July 2007 were working well. His Honour said of these arrangements:
… The children seemed stable and seemed to appreciate them. Those arrangements see the children spending time with their father from after school on Friday to before school on Wednesday morning provided that he lives within 25 kilometres of the mother’s residence…
His Honour went on to explain that the wife thought the husband was not living within 25 kms of her residence and was transporting the children from N (a Brisbane suburb) to school at least on Monday mornings. His Honour rejected that evidence and said he was satisfied the husband had abided by the terms of the interim orders and the children had been on the Sunshine Coast on the evening before each day at school.
His Honour also accepted that the husband would formalise his accommodation arrangements on the Sunshine Coast. (We observe that the submissions made to the Federal Magistrate by the wife’s counsel that an equal shared time arrangement was not reasonably practicable was, in the light of these findings, impliedly rejected by the Federal Magistrate).
At paragraph 56 of his reasons, the Federal Magistrate turned to the evidence of the Family Consultant recording that it was the Consultant’s view that the children “may benefit from an equal shared arrangement”. His Honour went on to say:
… Both parties approached the case on the basis that Mr [Z] was advocating that an equal time arrangement was best for these children. But that is not the way I interpret his report or his cross-examination. In fact the best that Mr [Z] says in his report is that it may suit them. (original emphasis)
His Honour then proceeded, in paragraph 57, to set out an extract of the oral evidence of the Family Consultant when answering questions posed by his Honour. Later, when discussing the ground relating to his Honour’s treatment of the Family Consultant’s evidence, we will return to this aspect of his Honour’s reasons.
At paragraph 58, his Honour said:
In my view, current arrangements are the arrangements which best suit these children. I can see that there would be no particular advantage to these children in adopting the father’s proposal, nor can I see that there is any particular advantage in adopting the mother’s proposal. I do not cast on the parties an onus to demonstrate that there needs to be a reason to move from the current arrangements, but rather, my view is that the current arrangements best meet the needs of these children.
Having rejected, at paragraph 59, the wife’s proposal as not in the children’s best interests, his Honour then said, at paragraphs 60 and 61:
Further, I am satisfied that the father’s proposal of equal time may well bring with it disadvantages for these children. It will bring with it disadvantages in the sense that it will be likely for these parties to remain in dispute. They have demonstrated themselves to be unable to make child-focused decisions when child-focused decisions are called for and both have demonstrated a willingness to put their own interests and their own tactical positions ahead of decisions which are in the best interests of these children.
Moreover, an order for equal time will not answer the difficulties that have arisen for the children in this case – namely the conflict between their parents. I am satisfied that, in the short term at least, the conflict is likely to remain and a more co-operative approach is likely to be necessary.
(b) Discussion
We are satisfied that his Honour, as he was obliged to do under the legislation having determined to make an order for equal shared parental responsibility, as asked, considered whether an equal shared time arrangement was in the children’s best interests and reasonably practicable. As we have earlier observed, we are satisfied his Honour did not find any practical impediment to such an arrangement by reason of the geographical location of the parents or the husband’s housing.
His Honour found that the existing arrangement, notwithstanding the high level of conflict and lack of communication between the parents, had worked well for the children. The Family Consultant confirmed to his Honour that what was important for the children was being able to maintain a relationship with the husband which was a “quality” relationship involving both day to day activities and weekend activities, rather than being measured in a precise period of time.
His Honour, in the broad exercise of his discretion, had regard to all of the evidence before him and determined that a conservative approach, which was based on the certainty of an arrangement which was working well, was in the best interests of the children.
While other judicial officers may have found an equal shared time regime was appropriate that is not the test. We are satisfied there was no error of discretion by the Federal Magistrate adopting the approach he did. Accordingly, we find these grounds are without merit.
Asserted error in failing to adopt, give sufficient weight to or accurately record the Family Consultant’s report and evidence (grounds 4, 5, 13)
We have already referred to parts of the Federal Magistrate’s reasons which deal with the evidence of the Family Consultant.
Mr Z, psychologist, was appointed as the Family Consultant in this matter. He provided a report to the Court dated 27 August 2007.
At paragraph 104 of his report, the Family Consultant said:
A one week-on, one week-off arrangement may suit the needs of [A] and [O]: Their parents have homes in close proximity and the change-overs appear to preclude the parents from overt conflict. The children have the opportunity to continue to have a quality relationship with each parent, as they have had in the past. I also predict that when property matters and the commensurate difficulties are resolved, these two parents will better demonstrate their capacity as parents who have the interests of their children primarily in mind. That is, with the property matters resolved, there will be much less to disagree about. Fortunately, [the husband] and [the wife] currently appear to generally agree on matters involving the children (except for [O]’s schooling) and each now have their interests in mind. I support a one week-on / one week-off, shared care arrangement for [O] and [A], based on the information I currently have available to me. I also recommend that the children be given the opportunity to speak with each of their parents on the telephone each alternate day. Children of their ages benefit more from frequent telephone communication than that which is less frequent. This will also assist them in maintaining their already good relationships with each parent.
There is no suggestion that his Honour’s quote from the first sentence of the paragraph was anything but accurate.
In his reasons for judgment, the Federal Magistrate set out a portion of the cross-examination where he, the Federal Magistrate, asked questions of the Family Consultant.
During his cross-examination by the wife’s counsel, the Family Consultant gave the following evidence:
Well, I’ll ask you to assume that since your report things, if anything - well, things certainly haven’t got better and that the state of play as at today and the evidence given by both the parties was that for, whatever reason, and for whomever’s fault, that there is simply no effective communication between the parties?---Yes. Well, that’s making a shared care arrangement look like it would be, you know, left at bare pages for the children, well basically left practically impossible.
…
But we would want to see that improvement and it would seem on the facts of this case there hasn't been an improvement certainly to the present time, but one would want to see that type of communication and cooperation before implementing such an equal time arrangement?---Yes, or at least, you know, some potential for it. (transcript, 12 February 2008, pp 91-92)
Later during his cross-examination by counsel for the husband, the Family Consultant gave the following evidence which was extracted, in part, in his Honour’s reasons:
In terms of the scenario that my learned friend put before you in the fact possibly of the conflict escalating, you indicated that there would be some issues that you would have concern with that might cause you to change your view. If in fact the conflict has not escalated, it’s the same level of conflict, would you remain with your view as expressed in your report, that the shared care can work and particularly is more likely to once the Court determines the property matters?---Well, I mean, the only answer I can give that is yes, because what you're saying to me is that, you know, all things being equal and things being as they were when I made my assessment and presented my opinion so, yes, I couldn't change my mind because I had no information to.
…
FEDERAL MAGISTRATE: Thank you. Mr [Z], I have a couple of questions to ask you. In your report your recommendation was the week about arrangement?---Yes.
Presently, as I understand it, the children are with their father from after school Friday to before school on a Wednesday each alternate week and with the mother the rest of the time?---Yes.
That seems to be about two overnights short of what you’re recommending?---Yes.
Is there a qualitative difference between the two for these children?---No. Look, I'd be interested in other settings whether or not the current arrangement is working. If it’s working, given the history of conflict between these parties and what has been talked to me about today by counsel for the father, if the current arrangement is working there would (indistinct) by leaving it the way it is. The difference - well, a difference really – it’s not necessarily difficult enough to get through - be worried too much about if it is working but obviously such differences can mean (indistinct) dispute between parents, I also understand that.
Yes. I’m more interested in whether there’s a qualitative difference for these children. I understand your answer. The mother’s proposal in these proceedings is that the children live with her and spend time with the father from after school Friday until before school Monday each alternate weekend if he is staying up in [S], and we'll assume for the 5 [sic] minute that he’s doing that, together with some time over the holidays, you know, half of the holiday period. Am I right in saying there’s a qualitative difference between that and what you’re recommending?---Yes, that’s right.
What does that difference mean for these children in this case?---It would – if the father’s spending more time with the children and being able to spend it with them during the week, it would mean that he and the children would have access to the different aspects of each other’s lives, the day to day lives of the children as they - you know, as they move through education, you know, and all of the extra curricular activities that go with that. Perhaps the father would have the opportunity to be involved with other parents in the community who have children involved in his own children’s lives and other small things, the day to day of just managing a household together. Those sorts of things often, you know, speak - I think this has all been understood that they add to the breadth and the depth of a relationship that a person would have with his or her children. (transcript, 12 February 2008, pp 95-96)
It must be remembered that ultimately it was the Federal Magistrate’s task to determine what was in the best interests of the children and although a Family Consultant’s report and recommendations, if any, will generally be afforded significant weight they are not determinative of the outcome (see Hall & Hall (1979) FLC 90-713).
As we have earlier observed, while other judicial officers might have considered a “week about” shared time regime to be in the children’s best interests and reasonably practicable, that is not the test.
We discern no appealable error in the manner in which his Honour assessed and weighed the Family Consultant’s evidence in reaching his ultimate determination that a substantial and significant time regime for these children was more appropriate than a week about shared regime.
Asserted error in providing that telephone communication be facilitated to a landline telephone number rather than a mobile phone number (grounds 6, 7, 17)
The husband asserted that the Federal Magistrate was in error in making an order that telephone communication by him with the children should occur on Thursday between 6.30 pm and 7.00 pm and that the telephone communication should be to the wife’s landline telephone.
There is no dispute that in her Outline of Case document the wife sought, in her proposed orders at 2.8, that the husband communicate with the children by telephone each Wednesday evening with the husband to initiate the call between 6.00 pm and 6.30 pm to the mobile phone the husband had purchased for the children.
Before us, counsel for the wife conceded that there was no disagreement on this issue and we suggested the parties should agree to an order to be made by consent varying the day of telephone contact, and that it be to the children’s mobile telephone. Notwithstanding the apparent sense of that proposal and given the concession made by her counsel, the wife’s consent was not forthcoming.
However, the question for us to determine is whether or not there was appealable error by his Honour in making this order. His Honour made a number of findings about the ongoing conflict between the parties and their inability to make child-focussed decisions.
At paragraph 62, his Honour opined, based on his findings that it was, in his view, best for the children that the current regime continue. The earlier order in respect of telephone communication was an interim order made on 21 June 2007 which provided (in Order 5) for the husband to have telephone communication with the children on Sunday between 6.30 pm and 7.00 pm. The order was silent as to whether that communication should occur to the wife’s landline or to the mobile telephone the husband had provided to the children.
Our examination of the transcript (transcript, 25 August 2008, pp 8-9) discloses the difficulties which had occurred by reason of the telephone used being a mobile telephone. While his Honour does not explicitly discuss why he determined the call should be to a landline we are conscious that a judicial officer hearing a parenting dispute is not required to address every aspect of the evidence raised (see A v J (1995) FLC 92-619 at 82,232; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378)
It is extremely regrettable that the parties were not able to reach a sensible agreement about this matter. However, we are not satisfied the issue warrants interference by us, and we would not uphold the appeal on the basis of this ground.
Asserted error in making credit findings and factual findings adverse to the husband (grounds 10, 11, 12, 19)
There is no dispute that the Federal Magistrate was highly critical of aspects of the evidence of each of the parties, and he made adverse credit findings about each of them.
The husband sought to cavil with a number of those findings.
In Fox & Percy (2003) 214 CLR 118 Gleeson CJ, Gummow and Kirby JJ, having referred to the majority decision of the High Court in Warren & Coombes (1979) 142 CLR 531 said at paragraphs 26 and 27:
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal…
The findings of fact made by the Federal Magistrate were well open to him on the evidence and he had the advantage of seeing the parties and assessing their demeanour.
We accept when there has been a lengthy delay from the hearing of the evidence and delivery of reasons for judgment those reasons will be scrutinised with greater care (see Rollings & Rollings (2009) 230 FLR 396; Sea Containers v ICT Pty Ltd (2006) NSW CA 327; M & M (2006) 36 Fam LR 97; Monie v Commonwealth of Australia [2005] NSWCA 25)) but the delay does not necessarily equate to appealable error.
We are satisfied in this case that his Honour, who had the advantage of seeing the parties cross-examined before him in distinct phases of the litigation and made findings about a number of specific incidents, had an advantage not enjoyed by us. We find these grounds have no merit.
Before leaving the challenge to the parenting orders we note that in his oral and written submissions the husband raised as an issue that the Federal Magistrate had failed to make orders in accordance with the written document signed by the parties, a copy of which his counsel had reduced to a typed transcript and forwarded to the Federal Magistrate. That document together with correspondence from both parties’ solicitors is included in the appeal book.
Our examination of the record indicates that the wife’s counsel did advise the Federal Magistrate that agreement had been reached in respect of school holidays (transcript, 25 August 2008, p 2). While the typewritten document signed by the parties has a number of handwritten alternations and deletions, it appears to us that the following was agreed: “School holidays from Sep/Oct 2008 onwards to be shared on a weekly basis Friday to Friday”. The wife’s counsel however wrote to the Federal Magistrate on 21 October 2008 withdrawing the wife’s consent to this agreed order, on the basis that it was not to apply during the long Christmas vacation.
It is unfortunate that the proposed orders were not pursued at the time of the asserted agreement. It is apparent to us, however, that the proposed handwritten order is potentially ambiguous. It is not clear whether it was to relate to mid term and Christmas holidays, or only to the former. That ambiguity is however, irrelevant – the consent to the proposed order, and the other orders, was withdrawn by the wife, and no appealable error can be attributed to the Federal Magistrate in respect of the school holiday provisions he ordered, or failure to make the balance of the proposed orders.
We take this opportunity to note the unsatisfactory practice adopted by the parties’ legal representatives during the period the judgment was reserved of writing directly to the Federal Magistrate on matters which were not agreed. The correspondence post dated the application for re-opening in May 2008, and the hearing of that application. It was material which should have been put before the Federal Magistrate on affidavit or the subject of further application to re-open.
Conclusion parenting appeal
As is apparent from our discussion, none of the grounds asserting error by the Federal Magistrate in respect of the parenting orders were established. The appeal insofar as it deals with the parenting orders is without merit.
The property appeal
In the amended grounds of appeal (ground 18) the husband made the general assertion that the Federal Magistrate had left assets out of the agreed list of assets and liabilities. In his oral submissions the husband focussed on the parties’ furniture, and failure to include his credit card debt and a liability for cost of a cubby-house constructed for the children. He asserted part of his credit card liability arose from his purchase of a car which was included in the list as an asset.
The Federal Magistrate’s reasons identifying the net assets and liabilities of the parties
The assets and liabilities as found by the Federal Magistrate were set out by him at paragraph 69 of his reasons as follows:
Proceeds of sale of [the matrimonial home] $160,205.78 Proceeds of sale [the NC property] $43,226.01 [Car] $17,450.00 [Car] $23,900.00 Distribution from proceeds of [the matrimonial property] (W) $5,000.00 Distribution from proceeds of [the matrimonial property] (H) $5,000.00 Jt [bank] Account $440.00 Joint [bank] account $8,429.88 [D] Pty Ltd [bank account] $12,230.14 trailer $800.00 Legal expenses (H) $29,715.00 Legal expenses (W) $44,610.86 $351,007.67 Superannuation: Wife $5,600.00 Husband $8,000.00 $364,607.67
At paragraph 70, his Honour explained that the asset pool had changed between the conclusion of the hearing and the reopening of the case. His Honour recorded, at paragraphs 70 and 71, the following:
… At the conclusion of the reopening, both parties informed me that the asset pool was largely agreed, save for perhaps one outstanding issue. No written document setting out the agreed pool was available but it was to be provided to my Associate with any written submissions that either party considered appropriate shortly after the reopened hearing. Written submissions were provided by each party. [The husband’s] submissions contained a schedule of the assets and liabilities and his position in respect of each asset and liability was noted in the schedule.
Since then, [the husband’s] solicitors have written on three occasions providing an update with respect to the property pool – the parties’ remaining two real properties have been sold and some tax liabilities have crystallised and arrangements made for payment. The first letter is dated 7 November, 2008, the second 11 December, 2008 and the last 7 April, 2009. All three letters were copied to [the wife’s] solicitors and none were the subject of disagreement or objection. I intend to act upon the content of the letters for the purpose of defining the asset pool. The letters will form additional exhibits in these proceedings.
We pause to note that although his Honour referred to the correspondence being a matter of agreement, in the letter written by the husband’s then solicitors on 7 April 2009 to the Federal Magistrate the following was noted:
We confirm that an attempt was made to agree a joint letter containing these details to be sent to you but we have not received any confirmation from the solicitors instructed by [the wife] that this can be agreed and hence this letter is sent by ourselves alone. We confirm that a copy has been sent to those instructed by [the wife].
The matter of what the parties asserted about assets and liabilities is further confused by his Honour’s observations at paragraph 81 and as we will later explain, his Honour’s reasons published on 18 December 2009. There his Honour said:
For completeness sake, I record that at the conclusion of the first hearing dates in this matter, the parties handed up a schedule of assets and liabilities some of the items were agreed and some were not. That schedule differed from the schedule set out in [the husband’s] written submissions filed on 29 August, 2008 in a number of respects. Some of the differences are explained by asset sales. Others because of the expenditure of funds by the parties. In particular, I note that in the first schedule, both parties agreed upon the inclusion of items representing the balance of funds taken by each of them from bank accounts post separation. There was dispute about the amounts to be included, but no dispute as to the items. No such items appear in the second schedule nor are they the subject of the disputes dealt with in the parties’ written submissions filed following the reopening.
At paragraph 73, his Honour recorded that, following receipt of written submissions, four issues had been identified as remaining in dispute which his Honour then set out as follows:
a)The value of the wife’s motor vehicle registered in her mother’s name;
b)The value of the trailer in the possession of the husband;
c)The value of chattels retained by the wife from the franchise;
d)The existence of a liability to [Mr D] for the construction of a cubby house for the children.
It is unnecessary that we discuss the wife’s motor vehicle, the trailer or chattels retained by the wife from the franchise as they are not in issue in the substantive appeal.
At paragraph 79, his Honour dealt with the issue of the liability in respect of the cubby-house as follows:
Finally, I do not accept that $777.00 is owed to [Mr D] for the construction of a cubby house for the children. Although [the wife’s] written submissions assert that she has sworn to the debt, no reference was made to her evidence about it, and I cannot find any evidence by her concerning the debt.
Before us, the husband asserted he had incurred the liability for the cubby-house but he would accept its inclusion as a liability at $375.00 being the amount claimed in his Financial Statement dated 7 February 2008 (transcript, 1 June 2010, 47).
Paragraph 3 of the wife’s written submissions (noted in the appeal book as “Applicant’s submission – rec’d by email 9.9.08”) discloses the following:
3. There is no evidence before the Court to dispute the wife’s evidence (nor was she cross-examined) that there is an amount owing to a mutual family friend for the construction of a cubby house on the former matrimonial home. Her evidence should be accepted.
The only evidence as to the quantum of the liability claimed was that recorded in the husband’s Financial Statement at $375.00. The asserted debt did not appear in the wife’s Financial Statement.
We accept that there is an error in paragraph 79 of the Federal Magistrate’s reasons where his Honour records that the wife has sworn to the debt. However, we are satisfied that the error is not of sufficient magnitude for us to intervene given the husband’s concession that the amount in issue was $375.00.
His Honour’s reasons contain no discussion about how the parties’ furniture should be treated, and no item relating to furniture appears in the list of assets and liabilities set out in paragraph 69 of the Federal Magistrate’s reasons.
At the end of the evidence in February 2008 the husband’s counsel made submissions about the parties’ assets and liabilities. The following exchange occurred:
FEDERAL MAGISTRATE: Right, okay. I see the furniture order has been crossed out?
DR KELLIE: Yes, your Honour, the parties, as I understand it, because of the evidence that some of the furniture may no longer exist, the husband believes that there is no furniture to sell and he would prefer a 10,000 split of the estimated value and I understand that the wife would contend against that but I am not certain on that particular issue, your Honour.
MR LAURIE: Your Honour, we'd have to let the furniture fall into the – each person keeps their own assets general order. You get very very little for second hand furniture and you've got to replace it at significant cost. The parties have got furniture, they should keep their furniture.
FEDERAL MAGISTRATE: Yes.
DR KELLIE: Thank you, your Honour, I don't think I can take it any further. (transcript, 18 February 2008, p 115)
Notwithstanding the earlier discussion with his Honour, in the list of assets and liabilities annexed to the written submissions filed on behalf of the husband on 29 August 2008, Item K showed furniture $20,000.00 agreed. No doubt relying on the earlier concession of the husband’s counsel, in her written submissions, the wife did not address the issue of furniture.
We are satisfied from the extract of the transcript we have set out that the situation about the furniture was far from clear. Further, there was no admissible evidence which established the value of furniture retained or sold. While the confusion caused by the failure to have marked the schedules provided as exhibits is regrettable, given the unsatisfactory nature of the evidence, and the submissions of counsel, we are satisfied his Honour was entitled to have disregarded furniture in the assets and liabilities, and we find no appealable error in this respect.
The dispute about the Federal Magistrate’s treatment of “add-backs” and the corrigendum issue
The husband asserted that his Honour was in error in failing to include in his reasons for judgment important material on add-backs. There is no dispute that on 12 February 2010 his Honour published a document which he described as “Corrigendum to Reasons for Judgment delivered on 3 July, 2009” as follows:
After the words “the following matters:” in paragraph 87 on page 25 insert:
Add Backs (Wastage : Kowali)[sic]
Attributed to Husband’s usage
Attributed to Wife’s usage
… 11 Costs new keys (wastage by wife) $125.00 12 Costs of damage to husband’s computer whilst in possession of wife (para 39 Affidavit of husband) $2,000.00 13 Costs of replacement of husband’s passports & citizenship papers $628.00 14 Cost of replacement of husband’s tools (para 38 Affidavit of husband) $1,000.00 … 16 Family tax benefit for 2005 received by wife (para 46 Affidavit of husband) $3,467.00 17 Income tax for 2005 received by wife $1,020.00 18 & 19 Family expenses claimed by wife appear excessive when children in her care for 186 days & miscellaneous expenses claimed by wife unsupported in evidence $22,158.00 20 Car expenses claimed by wife unsupported in evidence $2,387.00 21 Furniture replacement claimed by wife unsupported in evidence $5,500.00 … 23 Interest on home loan following husband’s exclusion $7,317.66 24 Joint expenses claimed by wife unsupported in evidence $4,053.94 25 Costs of re-copying Husband’s documents for purpose of disclosure $855.00 26 Costs of valuations required by wife $720.00
We were unable to identify from the appeal book any schedule of assets and liabilities which included item numbers. As we have earlier noted, the appeal book index does not record any schedule of assets and liabilities marked as an exhibit. The list of assets and liabilities appearing in the judgment does not contain item numbers, nor does the schedule annexed to the husband’s written submissions dated 29 August 2008. We will discuss the corrigendum issue later in these reasons.
Federal Magistrate’s treatment of “add-backs”
Unusually, given the preferred approach to determining an application under s 79, his Honour dealt with notional assets which the parties sought should be added back to the pool of assets and liabilities at paragraphs 83 to 87 of his reasons for judgment, after he had set out his findings in respect of the assets and liabilities.
His Honour commenced his discussion noting that the husband argued “that considerable expenditure” undertaken by the wife should be taken into account as “add-backs”. His Honour then explained that in none of the assets and liabilities schedules handed to him “have the amounts contended for been included as assets”.
His Honour rejected the husband’s claim that “Items 25 and 26” should be “added back” on the basis that they were disbursements incurred in the course of the proceedings.
At paragraph 90, his Honour rejected “Items 18-21 and 24” (the wife’s expenditure) as those items, which were not identified in his reasons, did not fall within the recognised categories where an “add-back” may be made.
At paragraph 91, his Honour explained why he rejected the husband’s claim for “Item 23” following his exclusion from the matrimonial home. His Honour rejected this claim on the following bases:
· the husband was excluded from the home by a court of competent jurisdiction;
· interest could be more properly taken into account in his assessment contribution; and
· additional interest had been incurred because the wife drew down on the loan but this also could be taken into account in the assessment contribution.
At paragraph 92, his Honour rejected the husband’s claim for “Items 16 and 17” received by the wife to be “added-back”. His Honour said:
… They are amounts received by [the wife], as I understand the claim, post – separation and according to a legislative entitlement. They do not fall within the categories set out above.
At paragraph 93 of his reasons, the Federal Magistrate explained why he rejected the husband’s claims for “Items 11-14”, namely, that they did not fall “within the categories of cases where funds will be ‘added back’ to the pool”. His Honour explained in the alternative, why he would reject the claims:
… there is simply no probative evidence that would support the quantum of [the husband’s] claims. He does not seek to qualify himself to give the opinion evidence that he does about the value of the replacement items.
The corrigendum
The Federal Magistrate took two actions after he had delivered reserved written reasons and made final parenting and property orders on 3 July 2009.
First his Honour, by orders made on 18 December 2009 and amended under the slip rule on 20 January 2010, deleted from his orders of 3 July 2009 Order 14(d). That order provided for the payment out from the net proceeds of sale of the parties’ real property their respective credit card liabilities.
After referring to an agreed schedule of assets and liabilities sent to his chambers on 29 August 2008, in paragraph 47 of his reasons delivered on 18 December 2009, his Honour, at paragraphs 51 and 52, said:
The reference to payment of the parties’ credit cards is clearly an error. There was no agreement between the parties that those liabilities, whatever they might be should be included in the pool of assets and liabilities. It was not suggested that the inclusion of those liabilities was an issue between the parties or needed any consideration by me.
In the circumstances, pursuant to FMCR 16.05(2)(e) I will issue an amended order deleting the reference to the credit card payments. It was not intended by me that the parties’ credit cards should be paid out of the funds held by [the husband’s] former solicitors before each party received their share of the proceeds.
We discern no error by the Federal Magistrate in deleting order 14(d) as the order made did not reflect his Honour’s reasons and was an accidental slip or error (see the reasons of Spigelman J in Newmont Yandal Operations Pty Ltd v J Aron Corp and Goldman Sachs Group Inc (2007) 70 NSWLR 411 discussed in Sangara & Hamwood (2007) 39 Fam LR 237).
The second step taken by the Federal Magistrate was to publish his corrigendum to his reasons on 12 February 2010.
We were not referred by either party to any authorities dealing with permissible amendments to a previously published judgment by way of corrigendum. The word “corrigendum” is defined in the Macquarie Concise Dictionary as follows:
1.an error to be corrected, especially an error in print.
2.a list of corrections of errors in a book, etc.
Rule 16.05(1) and (2) of the FMC rules provide as follows:
(1) The Court may vary or set aside its judgment or order before it has been entered.
(2) The Court may vary or set aside its judgment or order after it has been entered if:
(a) the order is made in the absence of a party; or
(b) the order is obtained by fraud; or
(c) the order is interlocutory; or
(d) the order is an injunction or for the appointment of a receiver; or
(e) the order does not reflect the intention of the Court; or
(f) the party in whose favour the order is made consents.
…
“Judgment” is not defined in the rules or the dictionary to the rules. Although judgment is not defined in the Act, it is included in the definition of “decree” in s 4 as follows:
"decree" means decree, judgment or order and includes:
(a) an order dismissing an application; or
(b) a refusal to make a decree or order.
The difference between the expression “reasons for judgment” and the words “judgment”, “decree” or “orders” was explored by the Full Court in Rollings & Rollings, paragraphs 49 to 50 (see also “Amending Final Judgments and Orders”, John Tarrant, (Federation Press 2010) at p 147-148).
The practice of a judicial officer in settling or editing of ex tempore reasons even if extensive, subject to the well recognised constraints that the substance of the reasons is not changed, is not in doubt (see Bar Mordecai v Rotman [2000] NSWCA 123 per Sheller, Stein and Giles JJ).
Beazley JA, with whom Powell JA and Sperling J agreed, in Todorovic v Moussa (2001) 53 NSWLR 463 discussed the ability of a judge to change reasons after delivery. At paragraph 43, having set out an extract of an article by Gleeson CJ “Revising Transcripts of Summing Up” (1997) 9 Judicial Officers Bulletin and an extract of a paper published by Kirby J (Ex-tempore Judgments – Reasons on the Run (1995) 25 WALR 213), her Honour said:
The rule of practice is usually referred to in the context of ex tempore judgments. However, I do not believe it to be so confined.
Later, at paragraph 46, her Honour explained:
… In a civil action, I would consider that the appropriate test in determining whether an alteration to a judgment is permissible is whether the change is one of substance in fact and not the higher test stated by Owen J in the case of a criminal trial.
At paragraph 48 her Honour said:
Again, I am of the opinion that the same rule applies to the case of a reserved judgment.
Although her Honour’s statement is not qualified to limit it to reserved written reasons, the reasons for judgment in question in the appeal were described as “delivered orally some six weeks after the conclusion of the evidence”. It must also be remembered that her Honour’s comments and the cases to which she referred were ones where reliance was placed, not on a statutory provision, but on the inherent power of a superior court of unlimited jurisdiction. We are conscious of the discussion of the High Court on the implied powers of the Family Court of Australia (see DJL v Central Authority (1997) 201 CLR 226 at 247-248). Those comments are equally applicable to the Federal Magistrates Court, another federal court created by statute.
Beazley JA also referred at paragraph 50 to the limitations discussed by Kirby J in Palmer v Clarke (1989) 10 NSWLR 158 on the need for strict compliance with a statute, there being no provision in the District Court Act 1973 (NSW) or the rules other than the slip rule then in force to permit revision of judgments by a judge of an inferior court. Her Honour went on to note:
Although there is no direct authority on point and no express power in the District Court Act or District Court Rules conferring the right to revise judgments, it would be strange if there was such a rule in relation to ex tempore judgments and none in respect of reserved judgements given orally, where the same infelicities of expression and the like may easily occur. Accordingly, I am of the view that there is a power to revise a judge's reasons for decision, within the parameters I have discussed, implied within the statutory provisions which govern the delivery of judgments in the District Court. As to the existence of implied powers of statutorily governed tribunals: see Director of Public Prosecutions v Shirvanian (1998) 44 NSWLR 129.
In Talbot-Price v Jacobs [2008] NSWCA 189 the NSW Court of Appeal per Ipp JA rejected as permissible an addendum to a judgment made one week after delivery of the reasons for judgment where the addendum was found to be “of substance”.
As presently advised, we are satisfied in this case the r 16.05 of the FMC rules should not be construed as permitting an amendment to the reasons for judgment as distinct from an amendment of a judgment as understood in the context of the definition in s 4 of the Act. The issue here is whether an alteration to the reasons for judgment made by the “corrigendum” could fall within the understanding of corrigendum, having regard to its dictionary definition and the general usage of a corrigendum in judgments of superior courts. Alternatively, was the corrigendum in fact an addendum judgment and, if so, did it add matters of substance to the judgment? This raises a further question - is it possible to revise a reserved written judgment in a court created by statute? We did not have the benefit of argument on these topics, and as we will now explain it is unnecessary, for the purposes of this appeal, we determine the issue.
At paragraph 87, his Honour said:
In the event that I am wrong about that, I will record the claims that [the husband] argues for and give reasons as to why I would not allow them as individual “add back” items to the property pool in this case. He claims “add backs” in respect of the following matters:
Nothing further was included in the paragraph.
We are satisfied from that paragraph it is likely, by reason of oversight, a table such as set in the corrigendum was not included. The table contains no matter of substance. It purports to set out items the husband claimed should be “added back” to the pool of assets. The husband did not dispute any item published by way of the “corrigendum” did not accurately reflect the items which he agitated at trial should be included in the list of assets and liabilities to be divided between the parties. While we doubt the insertion of a table such as the one under discussion could constitute a “corrigendum” as it did not correct an error of print, it did not alter the substance of the written reasons. Of greater relevance, however, is the fact that the husband did not take issue with any item recorded in the schedule as not reflecting his claims before the Federal Magistrate.
Treatment of the add-backs
Taking into account the schedule set out in the judgment of 12 February 2010, we discern no error by the Federal Magistrate in determining the expenses incurred for the litigation (Items 25 and 26) were not expenses, in the circumstances of this case, to be added-back.
Insofar as his Honour rejected the claim (Item 23) for interest on the borrowing secured on the matrimonial home, we are satisfied the approach adopted by the Federal Magistrate was correct.
Although the husband asserted that the income tax [refund] (Items 16 and 17) received by the wife was referable to tax paid prior to the separation, and made a similar submission about the family tax benefit on the evidence which was before the Federal Magistrate, we would not interfere with his Honour’s exercise of discretion in relation to these two items. In rejecting this claim we note the Federal Magistrate explained that the parties had used joint funds after separation to maintain the children when the husband had not paid child support. The funds used would have included the income tax and family benefit payments received by the wife.
Finally, we are satisfied that his Honour was correct in rejecting the so called damage or wastage items (Items 11-14) given there was no admissible evidence of the quantum of the loss occasioned by the damage asserted to have been incurred.
We think it important to note that the total sum at issue in respect of Items 11-14 was a claim for $3,628.00. We adopt the remarks made by Bryant CJ and Boland J in Essex & Essex [2009] FamCAFC 236 at paragraph 30:
Questions of how a trial Judge should deal with so called “add backs”, and/or premature distribution of assets, regularly arise in cases under s 79 and are often the subject of grounds of appeal. Often the amounts are minor when compared to the overall property in issue and the time taken and costs involved to agitate the claims both at first instance and on appeal, lack proportionality. Trial Judges are correct to deal with such claims robustly in the broad exercise of their discretion under s 79.
In summary, we discern no appealable error in respect of claimed omissions from the list of assets and liabilities as found by the Federal Magistrate, or his Honour’s treatment of the “add-backs”.
Asserted error by the Federal Magistrate in the adjustment made under s 75(2) and that the orders were not just and equitable
The husband agitated his complaint about the adjustment made under s 75(2) in the wife’s favour on the basis that the factual findings made by the Federal Magistrate underpinning his s 75(2) adjustment were not supported by the evidence and/or that the adjustment made in the wife’s favour was manifestly excessive.
His Honour dealt with the s 75(2) adjustment he made at paragraphs 113 to 119 of his reasons for judgment.
His Honour noted that both parties had an earning capacity which they had exercised since what he described as “the first trial”. At paragraph 114, his Honour found:
… [The wife] has a modest income earning capacity. I am not satisfied that she is well qualified to [work in the finance industry], as the husband suggests. While she has had some training in that respect and the parties had a […] franchise for a short period of time, I am not satisfied that she has any particular earning capacity in that respect.
At paragraph 115, his Honour made the following findings about the husband’s earning capacity:
The husband [has a] trade and he has recommenced earning an income as a home handyman. I am satisfied that his earning capacity is somewhere in the order of $35,000 to $40,000 a year, although his property development activities in the past will probably mean that he is able to earn a better income than that. Just how much greater I am unable to say.
At paragraph 116, his Honour referred to the parenting orders he intended to make and, at paragraph 117, recorded that the husband had not to date paid any child support or made any financial contribution from income to the support of the children “although they have been supported through the capital of the parties”. His Honour went on to say:
… It is difficult to make a finding about [the husband’s] attitude towards the payment of child support, although I tend to think that the timely provision of child support in an amount commensurate with the children’s needs will be problematic for [the wife]. There are likely to be disputes between these parties for some time yet.
At paragraph 118, his Honour found that the wife would have greater call on her financial resources because of the greater care she would provide for the children which would not be met by child support.
His Honour’s conclusions in relation to the adjustment to be made under s 75(2) are set out in paragraph 119 as follows:
Having regard to the disparity in earning capacity and having regard to the fact that more of the childcare responsibilities will fall to [the wife], in my view, it is appropriate to make an adjustment under s.75(2) in [the wife’s] favour. In my view, that adjustment ought to be 15 per cent, which is of this property pool about $54,700 or something akin to one and a quarter year’s gross earnings for [the husband] based on an income of $40,000 per annum. In my view, that adjustment is appropriate.
Discussion
The Federal Magistrate took into account the respective earning capacity of each party. While the husband is critical of the Federal Magistrate’s findings in paragraph 115 about his earning capacity, we discern no error in those findings which were well open to the Federal Magistrate on the evidence.
We accept that the Federal Magistrate in his reasons did not discuss the wife’s qualifications as a paraprofessional or that she had been employed by professionals on a trial basis for three months after separation. However, we do not discern any error in his findings about the wife’s income earning capacity. It was not in dispute the wife had not participated in the external workforce for some years, and that she had not completed the training in the finance industry and had negligible experience as a franchisee.
The husband did not dispute the Federal Magistrate’s findings in paragraph 117 of his reasons about the lack of payment of child support by the husband, but the Federal Magistrate did record that the children had been supported from the parties’ capital. This implies his Honour accepted that both parties had contributed to the costs of the children.
Before us, the husband agitated his complaint that the adjustment resulted in a differential between the parties’ entitlements of $94,798.00 or 26 per cent of the net assets (including superannuation) of $364,607.67 (paragraph 69, reasons). This, he submitted, was manifestly excessive with the overall result being that the orders were not just and equitable. We think this submission is well founded, particularly, as we will shortly discuss, the wife asserted the adjusted asset pool was $347,522.00 (transcript, 1 June 2010, p 89).
The discussion of the Full Court (Barblett DCJ, Fogarty and Mushin JJ) in Clauson & Clauson (1995) FLC 92-595 is apposite. Their Honours said at 81,911:
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.
We accept that his Honour did refer to the percentage dollar equivalent of 15 per cent ($54,700.00), and although his Honour, at paragraph 121, set out in monetary terms what each party would receive he failed to consider whether that distribution resulted in orders which were just and equitable. This requirement is discussed in the recent Full Court decision of Teal & Teal [2010] FamCAFC 120, at paragraphs 69 to 71, as follows:
It must be remembered that s 79(2) is expressed in negative terms:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
By implication however s 79(2) requires if the Court is to make an order under s 79(1) altering the interests of the parties to the marriage in property, such an order must be just and equitable. This legislative imperative is often described as the requirement that a judicial officer “stand back” and look at the reality of the percentage division at which she or he has arrived. That requirement requires consideration of the actual assets to be retained by each party, and may include consideration of the effect when one party is to retain the greater proportion of his or her entitlement in superannuation of the nature, form and characteristics of the superannuation. It is also relevant when assets included for division are “notional” assets or “add backs”, including paid legal fees, or when a business which requires retention of business premises or re-financing is to be retained as part of one party’s entitlement (see Loude & Loude [2009] FamCAFC 52).
It will often require consideration of whether the percentage adjustment arrived at after assessment of contributions under s 79(4)(a)–(c), and adjustment for relevant factors under s 79(4)(d)–(g) when applied to the actual assets and liabilities requires the making of an order slightly outside the precise percentage arrived at as a result of the statutory imperatives. This exercise has particular relevance when a judicial officer is dealing with modest assets, and/or where the parties’ respective earning capacities are minimal or non-existent. Considerations such as we have just described applied in Phillips & Phillips (2002) FLC 93-104, where justice and equity required an order which enabled the wife to retain the matrimonial home rather than the home being sold in accordance with a strict percentage adjustment.
We are satisfied that the Federal Magistrate’s assessment under s 75(2) which had the effect of the wife receiving approximately one third of the total assets more than the husband was plainly wrong and appealable error is established.
Redetermination or remission for rehearing
At the conclusion of the hearing before us, both parties urged that in the event we found appealable error, we should re-determine the matter, particularly having regard to the modest nature of the parties’ assets, and the expense and delay involved in a rehearing. Neither party sought to adduce updating evidence (see Allesch v Maunz (2000) 203 CLR 172).
While we were advised at the hearing of the appeal that neither party wished to adduce further evidence in respect of assets and liabilities, the evidence before us was unsatisfactory. The husband asserted we should adopt the table of assets and liabilities set out in the Federal Magistrate’s reasons of 3 July 2009, namely, we should find the total net assets and liabilities to be $364,607.67 (transcript, 1 June 2010, p 82) subject to the pool being adjusted by $20,000.00 for furniture and $10,000.00 to reflect his credit card debt. The wife’s counsel submitted that we should find the total net assets and liabilities to be $347,522.43 as appearing at pages 33 and 34 of the supplementary appeal book.
We perceived some difficulty in endeavouring to recreate the adjusted list of assets and liabilities. As we have earlier noted, the appeal book does not contain the schedule of assets handed up to the Federal Magistrate on 18 February 2008. We take this opportunity to observe that in a number of appeals coming before us that documents tendered during the course of a hearing have not been marked as exhibits with consequent difficulties being experienced on the hearing of the appeal. The status, if any, to be afforded to such documents is frequently raised at the settling of the appeal book index and if such documents are not included in the appeal book this often raises difficulties for the Full Court or a judge exercising the appellate jurisdiction of the Court hearing the appeal. In this case the difficulty caused by not marking as an exhibit the various schedules of assets and liabilities “handed up” or sent to his Honour is acute. It also made it impossible to reconcile the table sought to be included in the “corrigendum” with any document in the appeal book. We have been unable to locate any document in the appeal book which corresponds with the documents referred to by Ms Belinda Ann Henry, solicitor for the wife in paragraph 4 of her affidavit sworn 17 September 2009. In paragraph 4 Ms Henry testified:
The assets and liabilities as adopted by Federal Magistrate Jarrett at paragraph 69 page 21 of his Reasons for Judgement were those agreed by the parties and an agreed pool was emailed to the Associate to Federal Magistrate after the Trial. Annexed hereto and marked with the letter “BH3” is a true copy of the agreed asset pool sent to the Associate to Federal Magistrate Jarrett. (original emphasis)
As we earlier observed “BH3” is undated. It is not included in the appeal book index. No copy of an email forwarding the document to the Federal Magistrate appears in the appeal book, and the schedule does not correspond in all respects with the husband’s list of assets and liabilities forwarded with his written submissions and which is included in the appeal book. It included, as does the husband’s schedule, the real property at agreed values and not actual realised values.
It is also clear to us from the supplementary appeal book that the table for which the wife contends at page 34 of the supplementary appeal book is inaccurate as the D Pty Ltd bank account recorded in the schedule contains a typographical error. It is shown at $12,213.14. The correct figure appearing in the Federal Magistrate’s reasons is $12,230.14.
Another difficulty is the letter addressed to the Federal Magistrate from the husband’s former solicitors dated 7 April 2009 which the Federal Magistrate regarded as an exhibit for him, although not a document forwarded to him by consent.
While his Honour deducted from the account held in the name of D Pty Ltd the BAS debt and adopted the bank balance of $8,429.88, he did not include the capital gains tax in the table.
We note that on 18 December 2009 (amended under the slip rule) the Federal Magistrate ordered, inter alia:
(4)Pursuant to FMCR 16.05(2)(e) amend the record of order made on 3 July, 2009 so as to delete paragraph 14(d) thereof.
(5)The amount presently held by Connor Hunter solicitors be paid out as follows:
(a)Payment to the Australian Taxation Office in credit of the Capital Gains Tax for [the husband] - $9,687.57;
(b)Payment to the Australian Taxation Office in credit of the Capital Gains Tax for [the wife] - $9,687.57;
(c)Cheque payable to Piper Craig Henry Lawyers on behalf of [the wife] $137,408.39;
(d)(subject to any claims by Connor Hunter upon those funds) Cheque payable to [the husband] $38,938.15.
We further note that the sum actually distributed as a result of the orders of 18 December 2009 as amended by the slip rule, and the order of 12 February 2010 on the stay application do not reconcile with the amounts asserted by the husband to be retained in the trust account. The husband asserts the proceeds of sale total $203,431.79. As a result of the Federal Magistrate’s order the following sums were paid out:
For capital gains tax ($9,687.57 x 2) = $19,375.14
To the wife $137,408.39 - 62,258.39 = $75,150.00
To the husband = $38,938.15
Total paid out $133,463.29
Thus, at least at 12 February 2010, using the husband’s figures, the sum of $69,968 remained in the trust account, not $62,258.40 (a difference of $7,710.11) as contemplated in the Federal Magistrate’s orders and included in error the sum the wife sought for security for costs ($10,000) which application was dismissed ($205,721.68 (updated trust account figure) – $203,431.79 + $7,710.11 = $10,000).
Notwithstanding these deficiencies we have decided we should re-determine the matter and adopt a somewhat broad brush approach. Our reason for so determining is the delay from the commencement of these proceedings, the need for the parties to have finality, and particularly to introduce some proportionality with the amount in issue and the costs and time involved in a rehearing.
We see no reason to depart from the findings made by the Federal Magistrate in respect of matters the husband sought to be “added back” to the pool, and accordingly we reject any further adjustment to the list of assets and liabilities to include any “add back”. We are not prepared, given the state of the evidence, to add back to the pool $10,000.00 in respect of the husband’s credit card liability, nor would we include $20,000.00 asserted to be the value of furniture. Ultimately, as we have explained, the husband’s counsel did not object to the proposition that $10,000.00 could be attributed to each party for furniture in their possession. We are further fortified in this view as there was simply no admissible evidence before the trial Judge of items asserted to have been sold, or their realisable value on sale. There was no relevant evidence about the purchase of the husband’s motor vehicle or the source of payment for that vehicle, or any payment made from the proceeds of sale to reduce the husband’s credit card debt although he conceded the credit card liability had, at some stage after February 2008, been discharged in its entirety (transcript, 1 June 2010, p 67-69)
We propose to adopt the list of assets and liabilities set out in the Federal Magistrate’s reasons, but also including the CGT amounts as liabilities. We accept that the sum retained as the proceeds of sale will not be the precise sum in the table, given the effluxion of time and consequent interest earned on that sum. It may also be the case that taxation liabilities have been paid in accordance with Order 14(a). We again set out the relevant table:
ASSETS Proceeds of sale of the matrimonial home J 160,205.78 Proceeds of sale of the NC property J 43,226.01 Wife’s car W 17,450.00 Husband’s car H 23,900.00 Wife’s distribution from the matrimonial home W 5,000.00 Husband’s distribution from the matrimonial home H 5,000.00 Joint Bank Account W 440.00 Joint Bank Account W 8,429.88 D Pty Ltd Bank Account H 12,230.14 Trailer H 800.00 Husband’s legal expenses H 29,715.00 Wife’s legal expenses W 44,610.86 Wife’s superannuation W 5,600.00 Husband’s superannuation H 8,000.00 Total Assets 364,607.67 LIABILITIES Husband’s Capital Gains Tax Liability H 9,687.57 Wife’s Capital Gains Tax Liability W 9,687.57 Total Liabilities 19,375.14 TOTAL ASSETS AND LIABILITIES 345,232.53
Contribution assessment
No challenge was made to the Federal Magistrate’s assessment of the parties’ respective contribution based entitlement. We agree with the Federal Magistrate’s conclusions that the parties’ contributions during their 17 year marriage and up to the date of separation were equal. Each obviously worked very hard in their respective spheres. Post separation the Federal Magistrate found their contributions were not equal. We agree with his Honour that in the post separation period the husband, in contrast to the wife, preserved the parties’ asset base. We would not depart from the Federal Magistrate’s adjustment of 4 per cent in favour of the husband resulting in the parties’ contribution based entitlements being 52 per cent to the husband and 48 per cent to the wife.
Consideration of relevant matters under s 75(2)
We turn now to the appropriate adjustment to be made under s 75(2). The parties are each relatively young and in good health. The wife is now aged 39 years and the husband is aged 46 years. Both have workforce skills and a modest earning capacity.
As a result of our contribution assessment the husband has an entitlement to assets of $179,521 and the wife has an entitlement to assets of $165,712.
While the parenting orders provide for the husband to spend substantial and significant periods of time with the children, we accept the wife has the children in her care for nine days in each fortnight during school terms, and as a consequence the costs of the children are likely to be greater in her household. This factor requires some adjustment in her favour.
Both parties will retain their modest superannuation entitlements which have been treated as property. We see no reason for any adjustment to be made under s 75(2)(f).
The parties have only modest assets, but should be able to have, in the circumstances, a reasonable standard of living.
The marriage was of 17 years duration. The wife was only aged 18 years at the date of marriage, and we accept that she left the paid workforce at the time of the birth of the elder child. We consider the marriage has had some effect on the wife’s earning capacity and warrants an adjustment in her favour.
The husband is living in a de facto relationship and has the benefit of sharing expenses with his new partner. While the wife is in a new relationship she was not living with her new partner at the date of the hearing. We do not consider any significant adjustment is warranted under s 75(2)(m).
There was no up to date evidence before us in respect of child support. We accept that the husband will have an obligation to pay child support pursuant to the Child Support (Assessment) Act 1989 (Cth).
Overall, we are satisfied there should be a modest adjustment in the adjusted pool of assets in favour of the wife. Having regard to the need for the wife to re-establish herself in the workforce and her greater care of the children we think an adjustment of 5 per cent or $17,261.63 should be made in her favour.
This adjustment will result in a differential between the parties overall entitlements of $20, 714.
Are the orders just and equitable?
The husband will retain or have received assets of approximately $162,259.29 but subject to the payments provided in Order 14(a) and (b) of the Federal Magistrate’s orders of 3 July 2009, 47 per cent of the net assets and liabilities made up as follows:
HUSBAND WILL RETAIN From sale of properties by order of 18 December 2009 38,938.15 From sale of properties for CGT 9,687.57 Husband’s car 23,900.00 Husband’s distribution from the matrimonial home 5,000.00 D Pty Ltd Bank Account 12,230.14 Trailer 800.00 Husband’s legal expenses 29,715.00 Husband’s superannuation 8,000.00 Total Assets 128,270.86 LIABILITIES Husband’s Capital Gains Tax Liability 9,687.57 Total Liabilities 9,687.57 TOTAL ASSETS AND LIABILITIES 118,583.29 *Adjustment from Trust Account 43,676.00 Husband’s entitlement 162,259.29
The wife will retain or have received assets of approximately $182,973.24 but subject to the payments provided in Orders 14(a) and (b) of the Federal Magistrate’s orders of 3 July 2009, 53 per cent of the net assets and liabilities made up as follows:
WIFE WILL RETAIN From sale of properties by order of 18 December 2009 75,150.00 From sale of properties for CGT 9,687.57 Wife’s car 17,450.00 Wife’s distribution from the matrimonial home 5,000.00 Joint Bank Account 440.00 Joint Bank Account 8,429.88 Wife’s legal expenses 44,610.86 Wife’s superannuation 5,600.00 Total Assets 166,368.31 LIABILITIES Wife’s Capital Gains Tax Liability 9,687.57 Total Liabilities 9,687.57 TOTAL ASSETS AND LIABILITIES 156,680.74 *Adjustment from Trust Account 26,292.50 Wife’s entitlement 182,973.24
*Note - on the basis $69,968.50 remains in the trust account
Overall, we are satisfied this represents a just and equitable distribution of their property at the end of their marriage of 17 year’s duration.
We propose to vary the orders of the Federal Magistrate to provide that the parties each receive an cash adjustment in their favour from the proceeds of the sale of the properties, after payment of any taxation debt arising in respect of the Wynona Family Superannuation Fund or the Wynona Family Trust but requiring the parties to substitute into our table of assets and liabilities at paragraph 190 the actual sum of the proceeds of sale and any tax debt paid from that sum.
Costs
At the conclusion of the appeal we sought submissions from each of the parties in respect of costs. The husband sought, in the event the appeal was allowed, that the wife should pay his costs of and incidental to the appeal. Although we have allowed the appeal in part the husband has not been wholly successful as we have found no appealable error in respect of the parenting orders. We are conscious too that the husband was self represented before us so that his expenditure for the appeal which would be recovered on an assessment would be limited. We are not satisfied that circumstances are established which warrant departure from s 117(1) of the Act. Accordingly each party will pay their own costs of and incidental to the appeal.
The costs appeal
At the commencement of these reasons, we indicated during the hearing of the appeal we would provide a timetable for the filing of written submissions, and deal with the costs appeal without the necessity for a further appearance by the parties. We are now aware that one of the members of this bench will retire early in 2011. In those circumstances, we will still make provision for the costs appeal to be subject of written submissions, but that appeal will be determined by a differently constituted Full Court.
I certify that the preceding two hundred and seven (207) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Faulks DCJ, Boland & Benjamin JJ) on 28 January 2011.
Associate:
Date: 28 January 2011
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