Z & Z - [2005] FamCA 996

[2005] FamCA 996

FAMILY LAW ACT 1975

IN THE FULL COURT OF

THE FAMILY COURT OF AUSTRALIA

AT BRISBANE

Appeal No. NA 77 of 2004

File No. BRF 3336 of 1997

IN THE MATTER OF:

Appellant/Husband

- and -

Respondent/Wife

REASONS FOR JUDGMENT

BEFORE:Finn, Coleman, and Boland JJ
HEARD:26 May 2005

JUDGMENT: 24 October 2005

APPEARANCES:

Mr Lethbridge SC instructed by Primrose Couper Cronin Rudkin Lawyers, 1^st Floor, 35-39 Scarborough Street, Southport QLD 4215 appeared on behalf of the Appellant Husband.
Mr Kirk SC instructed by Lehns Solicitors, 29 Commerce Drive, Robina QLD 4226 appeared on behalf of the Respondent Wife.

APPEAL SUMMARY

MATTER:Z and Z
APPEAL NUMBER: NA 77 of 2004 (BRF 3336 of 1997)
CORAM:Finn, Coleman and Boland JJ
DATE OF HEARING: 26 May 2005

DATE OF JUDGMENT: 24 October 2005

CATCHWORDS:

APPEAL – property – asset pool of parties – post separation liabilities – whether trial Judge erred in disregarding husband’s alleged liability to his former de facto partner – whether the husband’s half interest in a unit should have been included in asset pool – whether relationship of father-in-law and daughter-in-law gave rise to a presumption of advancement in favour of the wife – whether property should have been divided in accordance with terms of settlement signed one year after separation but not finalised by consent orders – assessment of contribution in case of substantial lapse of time between separation and date of hearing particularly when informal agreement between parties – asset by asset approach may be preferable – whether trial Judge entitled to place weight on husband’s non-disclosure at that time – whether trial Judge’s adjustment of 30 per cent for the husband’s post-separation contributions was inadequate – whether trial Judge erred in making a 10 per cent adjustment in favour of the wife for s 75(2) factors – consideration of specific s 75(2) factors under s 79(4)(e) – whether trial Judge should have taken ss 75(2)(j) and (k) into account as relevant factors – avoiding the possibility of “double counting” – whether order giving husband a period of three months to make a cash payment of almost $500,000 to the wife was just and equitable due to husband’s composition of assets, his ability to realise assets and the associated costs including capital gains tax

Biltoft and Biltoft (1995) FLC 92-614

Af Petersens and Af Petersens (1981) FLC 91-095

Townsend and Townsend (1995) FLC 92-569

Prince and Prince (1984) FLC 91-501

Chorn and Hopkins (2004) FLC 93-204

Nelson v Nelson (1995) 194 CLR 538

Calverly and Green (1984) 155 CLR 242

Gronow v Gronow (1979) 144 CLR 513

House v The King (1936) 55 CLR 499

Wirth v Wirth (1956) 98 CLR 228

Black and Kellner (1992) FLC 92-287

Weir and Weir (1993) FLC 92-338

Kannis and Kannis (2003) FLC 93-135

Norbis v Norbis (1986) 161 CLR 513

G and G (1984) FLC 91-582 at 79,697

DJM v JLM (1998) FLC 92-816

B and B (No 2) (2000) FLC 93-031

Mitchell and Mitchell (1995) FLC 92-601

Clauson and Clauson (1995) FLC 92-595

G and G [2001] FamCA 1453

Hirst and Rosen (1982) FLC 91-230

Appeal dismissed.

FINN J:

This is an appeal by the husband against orders made with respect to property settlement by Buckley J on 4 November 2004, whereby his Honour divided the property of the parties, which he found to have a net value of $3,175,179, as to 70 per cent to the husband and 30 per cent to the wife. This division was arrived at on the basis of an assessment of contributions of 80 per cent to 20 per cent in the husband’s favour with a 10 per cent adjustment in the wife’s favour on account of the matters contained in s 75(2) of the Family Law Act 1975.
In their joint judgment, Coleman and Boland JJ have concluded that the appeal should be dismissed. I agree with their conclusion. I also agree generally with their Honours’ reasons for dismissing the appeal, but I wish to add some observations of my own in relation to certain matters.
Apart from making some reference to the factual background to the matters which I will discuss, it is unnecessary for me to set out separately any of the factual background to this case. That background emerges sufficiently from the judgment of Coleman and Boland JJ, particularly from their analysis of the trial Judge’s reasons for judgment.

The trial Judge’s calculation of the net property pool

The first two complaints raised before us on behalf of the appellant husband concerned the trial Judge’s calculation of the net assets of the parties. The first of these complaints was directed to his Honour’s refusal to deduct in his calculation of the parties’ net assets, a liability of $584,850 which the husband alleged he owed to his former de facto partner. The second complaint related to his Honour’s inclusion of the value of a half interest, which was registered in the husband’s name and valued at $100,000, in a unit at Tweed Heads (“the unit”).

The alleged liability to the husband’s former partner

Before the trial Judge the husband alleged that he was indebted to his former de facto partner, Ms B, in the sum of $584,850, and sought to have that sum taken into account as a liability to be deducted from the asset pool available for division between himself and the wife. For her part, the wife sought that the alleged liability should be ignored.
In his reasons for judgment, his Honour found that on 15 April 2004 Ms B had instituted proceedings in the Supreme Court of Queensland (under Part 19 of the Property Law Act 1974 (Qld)), and that on 6 May 2004 signed minutes of consent orders had been delivered to the Supreme Court registry. Pursuant to those orders, Ms B was to receive property and funds to the value of $584,850.
His Honour recorded in his reasons that no evidence was adduced during the hearing before him (10 to 12 May 2004) “as to whether the orders had been perfected”.
However, the further evidence which we permitted to be adduced at the hearing of the appeal, included an “Order Sheet” from the Supreme Court file which contained the following entry by a Deputy Registrar dated 12 July 2004:
“Consent order refused
Having now read the Family Court submissions I am now aware that the de facto property [settlement] is a live issue in the F.C. proceedings.
There is doubt as to whether the property [settlement] proceedings were commenced within the statutory period
Apply to the Court for order.”
It is thus clear that at the time of the trial, orders had not been made by the Supreme Court to give effect to the minute of orders.
Also included in his Honour’s judgment were the following findings made in the context of a review of the evidence relating to the husband’s alleged liability to Ms B:
·that there were “a significant number of factual inconsistencies between the respective versions provided by the husband and Ms B concerning the history of their relationship”, and that “the calculation as to Ms B’s entitlement was based on an erroneous assumption as to the length of their cohabitation” (– I assume that “the calculation” here referred to is that relied on by Mr H of counsel, who provided the husband with an opinion as to his potential liability to Ms B under Queensland law);
·that there were “a number of anomalies” in the schedule of assets and liabilities which provided the basis for the husband’s negotiations with Ms B (and which was Exhibit 4 before his Honour); included in such anomalies was the fact that the schedule made no provision for the husband’s potential liability to the wife in the Family Law Act proceedings, with the result that Ms B was to receive “a higher sum than that which the husband ought to have reasonably anticipated she was likely to receive”; and
·that the proposed consent orders reflected “an extremely generous award” in Ms B’s favour.
Having made these (and other) findings, his Honour went on to reach the following conclusions concerning this claim by the husband (emphasis added):
“145.It is at the discretion of the Court not to take into account transactions, and therefore liabilities incurred, after separation. Further, property to which both parties have an interest, that is disbursed post-separation, can be added back to the property pool on a notional basis where it is determined that the other party should not bear the liability.
146.In Af Petersens and Af Petersens (1981) FLC 91-095 Nygh J at 76,669 held that in exercising its jurisdiction under section 79, the Court would normally distribute between the parties the net value of their assets after deduction of all debts with some exceptions.
‘Normally the Court will distribute amongst the parties the net value of their assets after deduction of all debts. But this is not invariably the case: the Court will not normally take account of debts incurred after separation and on some occasions has ignored debts, although incurred during the marriage, for which it felt one of the parties should bear exclusive responsibility: Antmann and Antmann (1980) FLC 90-908. Needless to say, a debt due does not diminish the property of the parties until it is paid or execution is levied. Nor, as has been pointed out earlier, is there anything in the decision of the High Court in Ascot Investments Pty. Ltd. v. Harper and Harper to suggest that this Court cannot make an order dividing the assets of the parties because such a division might hamper a third party in his or her chances of recovery of a debt.’
147.This approach was endorsed in Biltoft and Biltoft (1995) FLC 92-614 where the Full Court held that it was appropriate in certain cases not to take into account or to discount the value of an unsecured liability in certain circumstances. It was held that such liabilities could include but are not limited to a liability which is vague or uncertain, is unlikely to be enforced, or that was unreasonably incurred. It is further concluded at 82,125;
‘In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in a deliberate or reckless disregard of the other party’s potential entitlement under s. 79.’
148.Biltoft is also authority for the position that there is no rule of priority as between a creditor claimant and a spouse and as such there is no requirement that the claim by a third party must be considered and dealt with prior to the Court making an order under section 79. The Court was however careful in that case, and subsequent cases, to not ignore the rights of the third party, taking them thoroughly into account and balancing them against the rights of the spouse before making any determination.
149.I have undertaken the same consideration in this case. I find that in the circumstances outlined in detail in these Reasons, that the Husband’s conduct in consenting to the total of the liability owed to Ms [B] was unreasonable. He entered into the proposed Consent Orders with Ms [B], his former defacto, in the knowledge of the application before this Court by his former Wife, and with a complete disregard for the Wife’s reasonable entitlement arising from property settlement.
150.I am unpersuaded by the argument raised by the Husband that he had in his mind that the Wife had received the sum of her entitlement from the settlement in their informal property agreement, made some years earlier. His own actions call this assertion into serious doubt in that he saw fit to include his interest in the matrimonial home, which under the agreement would have seen him transfer his interest entirely to the Wife, in the pool of property to be divided with respect to Ms [B]’s claim.
151.Furthermore, in addition to the above, I am satisfied, for the reasons set out in some considerable detail, that the evidence adduced by the Husband in respect of this issue, is significantly flawed. Not only are there the serious omissions to which I have referred, but no attempt was even made to resolve the major conflict between the Husband and Ms [B] as to when, if ever, they actually cohabited. That conflict may have been resolved by arranging for the Husband’s son Glen to give evidence, who, on the Husband’s evidence, resided with him from early 1995 until February 2003, save for one year when he resided in Toowoomba and returned to the Father’s residence each weekend. That same paucity of evidence meant that it was simply not possible to make any assessment as to a likely reasonable award to be made in favour of Ms [B]. Having given the issue lengthy consideration, I am not satisfied that the Husband has discharged his onus, on the balance of probabilities, to establish any alleged liability to Ms [B].
152.For these Reasons, I do not propose to deduct the Husband’s alleged liability to Ms [B] from the asset pool in these proceedings.”
The husband’s sole ground of appeal directed to this issue of the alleged liability to Ms B is that his Honour “erred in his obligation properly to determine the assets and liabilities of the parties” in that he “erred in law in excluding the husband’s liability to Ms [B] pursuant to the provisions of the Property Law Act 1974 (Qld)”.
In his written submissions in support of this ground, counsel for the husband submitted (at paragraph 1.3) that the statement by the trial Judge at paragraph 145 of his reasons that “it was at the discretion of the Court not to take into account transactions and therefore liabilities incurred after separation” is “as a matter of principle... incorrect.” In support of this submission counsel referred to Biltoft (1995) FLC 92-614, Af Petersens (1981) FLC 91-095 and Townsend (1995) FLC 92-569.
It might well be argued that, notwithstanding that statement by his Honour in paragraph 145 of his judgment, the fact that the alleged liability to Ms B was incurred (or at least largely incurred) after the final separation of the husband and the wife was not a consideration which his Honour ultimately took into account in deciding to disregard the alleged liability in calculating the net asset pool (see paragraph 146 to 152 of his judgment at paragraph 11 above). Nevertheless, I consider it important to say that I do not accept the submission that the trial Judge erred “as a matter of principle” when he observed in paragraph 145 of his judgment that it was “at the discretion of the Court not to take into account transactions and therefore liabilities incurred after separation.”
In making this observation, the trial Judge was clearly relying on the passage which he then went on to quote (in paragraph 146 of his judgment) from Nygh J’s judgment in Af Petersens, and in which Nygh J expressed the view that in determining the net value of the assets available for distribution between the parties in property settlement proceedings “the Court will not normally take account of debts incurred after separation.” Nygh J’s judgment in Af Petersens has been the subject of subsequent Full Court consideration and approval, notably in Prince (1984) FLC 91-501 and Biltoft (supra). While Nygh J’s statement concerning debts incurred after separation was not the subject of specific comment in either of those Full Court decisions, neither was it the subject of any disapproval or disagreement.
Further support for the statement by the trial Judge that it is “at the discretion of the Court not to take into account transactions and therefore liabilities incurred after separation” can be found in the recent decision of the Full Court (Finn, Kay and May JJ) in Chorn and Hopkins (2004) FLC 93-204 (in particular at paragraphs 41 and 58).
In both his oral and written submissions, counsel for the husband challenged the statement made in the second sentence of paragraph 151 of the trial Judge’s reasons which appears to suggest the husband and Ms B may never have actually cohabited. Counsel submitted that there “was no issue... that Ms [B] and the husband in fact cohabited,” and that “on the evidence before the Court, it was for a period of no less than five years.” It was thus submitted that there was a liability arising at law which, even if over-estimated by the husband, should have been recognised at least in a general sense by the trial Judge and, in light of authorities such as Prince and Biltoft, could only be disregarded if it had been recklessly incurred or was unlikely to be enforced.
In Biltoft (at 82,124-82,125), the Full Court (Nicholson CJ, Ellis and Buckley JJ) quoted with clear approval the following passage from the judgment of Evatt CJ in Prince (at 79,076-79,077, emphasis added):
“…the outcome of the wife’s application will depend upon findings made by the Court as to the parties’ assets and liabilities, their contributions and their respective financial resources, means and needs. It would be necessary for the Court to determine so far as is possible the value of the property held by each party. In accordance with the usual practice this would be done by deducting the value of outstanding mortgages, debts, and other liabilities (e.g. Albany and Albany (1980) FLC 90-905, p. 75,717). The Court may have to determine, as between the parties, the existence of a particular liability (Af Petersens and Af Petersens (1981) FLC 91-095).
The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, e.g. tax liabilities (Kelly and Kelly (No. 2) (1981) FLC 91-108 p. 76,801). In some cases the amount of the liability can only be estimated generally (Albany (supra), p. 75,717). The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (supra); Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC 91-085; Kowaliw and Kowaliw (1981) FLC 91-092; Antmann and Antmann (1980) FLC 90-908; Af Petersens (supra)). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC 91-311).
Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect ‘contribute’ to the liability by having that spouse's fair share in the parties’ property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under sec. 79 (Af Petersens (supra)).”
In the present case it is clear from paragraph 147 of the trial Judge’s reasons that he was relying on this passage from Evatt CJ’s judgment in Prince (which the Full Court quoted in Biltoft), and in particular on the reference therein to cases where a Court determines that it should disregard an alleged liability entirely because there are “sufficient uncertainties surrounding that alleged liability.”
It is perhaps unfortunate that his Honour included the statement in paragraph 151 of his reasons which cast doubt on whether the husband and Ms B had “ever... actually cohabited,” given that there was apparently no issue about that fact at the trial. Nevertheless it is clear in my view, given the particular findings of the trial Judge which I set out in paragraph 10 above and which I did not understand to be challenged before us, that there were sufficient uncertainties regarding the potential liability which the husband had to Ms B to support the exercise of discretion whereby his Honour wholly disregarded that liability.

Furthermore, his Honour’s findings in paragraph 149 of his judgment “that the husband’s conduct in consenting to the total of the liability owed to Ms [B] was unreasonable” given his knowledge of the proceedings instituted by the wife and the “complete disregard for the wife’s reasonable entitlement arising from property settlement,” would bring this case into the category of cases referred to by Evatt CJ in Prince, being cases in which “justice and equity” require that a liability incurred by a spouse “in deliberate or reckless disregard of the other party’s potential entitlement” may be “wholly or partly disregarded”.

The unit

It appears common ground that in November 1989 the husband’s father had provided all the monies for the purchase of the unit but that the unit was then registered in the joint names of the husband, the wife, the husband’s father and the husband’s brother. The wife’s quarter share was later transferred to the husband pursuant to certain consent orders made in June 2003.
Before the trial Judge it was the husband’s position that the half interest in the unit then held by the husband (and valued at $100,000) should be excluded from the property pool on the basis apparently that, as at separation, the parties had made no contribution to its acquisition. For her part, the wife sought that the half interest be included in the pool.
His Honour described this dispute between the parties in the following terms:
“43.The question on (sic) issue is whether the property was purchased by the Husband’s father with the intention to benefit his sons and the Wife, such that there is a presumption of advancement, or whether a resulting trust arises by virtue of the Husband’s father having contributed solely to the acquisition of the unit.”
Then after some discussion of various authorities (including Nelson v Nelson (1995) 194 CLR 538 and Calverly and Green (1984) 155 CLR 242), his Honour reached the following conclusion:
“56.The evidence of the Husband’s father suggests that at the time the property was acquired, he did intend to benefit the parties. His statement that he intended to benefit his immediate family and eventually his grandchildren supports the view that there was intended an advancement in favour of the Husband, Wife and brother. Accordingly the half share currently held by the Husband will form part of the property pool. Although I will discuss the issue of contributions later in this judgment, I note that the fact of the Husband’s father’s substantial contribution will be a factor weighed in the Husband’s favour in this exercise.”
Thus his Honour included the value of the half interest in the unit ($100,000) registered in the husband’s name in the pool of property.
The husband in his grounds of appeal complains that his Honour “erred in his obligation properly to determine the assets and liabilities of the parties” and in particular that he “erred in law in holding that the wife was entitled to any equitable share in [the unit] upon its acquisition by the husband’s father... on 24 November 1989.”
A second and alternate ground of appeal was also directed to this issue of the nature of the wife’s interest in the unit. But it will be unnecessary for me to refer further to it.
It appears from the grounds as drafted and also from the submissions put in support of them, that it is only his Honour’s conclusion (in paragraph 56 of his judgment) “that there was an intended advancement” in favour of the wife (as opposed to the husband and his brother) which is the subject of challenge, with it being submitted on behalf of the husband that no presumption of advancement between a father-in-law and a daughter-in-law is known to the law.
However, counsel for the wife made it clear before us that the wife had not contended at the trial that her relationship with her father-in-law was of itself sufficient to give rise to the presumption of advancement in respect of her quarter interest in the unit. Rather, it had been her position at trial that the presumption of advancement in favour of the husband and his brother (which was supported by clear evidence of intention) worked “to rebut any presumption that [the wife], unlike the other co-owners, was to hold the interest on behalf of her father-in-law.”
Similarly before us, counsel for the wife did not seek to uphold any finding of a presumption of advancement between the wife and her father-in-law. Rather the wife’s case before us was that the trial Judge’s findings concerning the relationships of the parties were sufficient to demonstrate that any presumption of a resulting trust in favour of father-in-law was rebutted by the evidence.
Given the position taken by the wife before us, it is unnecessary in my view to consider whether a presumption of advancement in favour of the wife could exist in the circumstances of this case.
But in any event even if it was to be concluded that his Honour had erred in relation to that matter and that such an error warranted interference by this Court, on a re-exercise of the discretion, the value of the husband’s half interest in the unit would now have to be included in the property pool. This is for the reason that the further evidence which we permitted to be adduced before us, reveals that the husband’s father is now deceased and the husband is the sole beneficiary under the will.
Thus, even if the wife’s original quarter interest in the unit was in fact held on a resulting trust for the husband’s father, that interest has now vested in the husband, and would have to be included in the property pool. It is important to bear in mind, however, that as the trial Judge recognised, credit for the contribution to the property pool of the half interest in the unit must go to the husband.

The earlier agreement between the husband and the wife concerning the division of property

Approximately a year after their final separation, the parties had signed terms of settlement in the first half of 1997. However, those terms of settlement were never forwarded to the Court, and thus never became orders. Nevertheless it was the husband’s primary submission to the trial Judge that the parties’ assets should be divided in accordance with their earlier agreement embodied in the terms of settlement.
At the outset of his judgment, his Honour rejected this submission by the husband on the basis that “the husband had failed to discharge his obligation to make a full and frank disclosure of his assets and liabilities to the wife” during the negotiations for, and the preparation of, the terms of settlement.
Before us the husband’s challenge was not so much directed to his Honour’s failure to have regard to the earlier terms of settlement, but rather to assert that the assets or resources which the husband failed to disclose would not have increased the wife’s entitlement at that time. Counsel for the wife endeavoured to persuade us that this was not the case.
But whether or not the husband’s non disclosure would have had any material impact on the wife’s entitlement in 1997, I am satisfied that the trial Judge was entitled to place the weight which he did on the husband’s non disclosure at that time, and also that his Honour’s approach to the earlier agreement was in accord with the authorities to which he referred.

The trial Judge’s assessment of the parties’ contributions

In assessing the parties’ contributions his Honour determined (at paragraph 171 of his judgment) that as at the date of separation (1995) their contributions should be treated as equal. However he then made a 30 per cent adjustment in the husband’s favour on account of what he described as the husband’s “very significant contribution” to “the business and various assets acquired by him” and “achieved subsequent to the parties’ separation.”
On appeal the husband complains that his Honour’s discretion miscarried in determining “that the wife’s contribution entitlement should equate to 20 per cent of the parties’ net assets” and that his Honour’s adjustment of 30 per cent for the husband’s post-separation contributions was inadequate. I am not persuaded that these complaints have substance, particularly having regard to the analysis provided by counsel for the wife of the parties’ financial history before and after separation.
Although in assessing the parties’ contributions, his Honour did distinguish between the parties’ pre-separation and post-separation contributions, he adopted what, in my view, was essentially a global approach to the parties’ contributions to their property. He was certainly entitled to do this and I do not understand it to have been suggested that his approach led to any error on his part.
It is my impression that there are currently coming before the Court a significant number of cases in which the period between the parties’ separation and the hearing of their property settlement proceedings is substantial. The delay seems often to arise, at least in part, because the parties have initially reached some form of informal (or even formal) settlement from which one party later resiles (often for good reason). In these long separation periods, the parties will usually have built up substantial new assets or incurred substantial liabilities. In an endeavour to satisfy the parties that any orders which are eventually made by the Court in these somewhat complicated cases are just and equitable, it can, in my view, be very useful for Judges to assess contributions to property on an asset by asset basis.
In so saying I do not intend any criticism of the trial Judge in this case. Indeed, a relatively clear picture of the history of the parties’ assets is presented in his reasons for judgment. I have made the comment which I have, only because of the opportunity to do so which this case provides, involving as it does, a long separation period, an earlier informal agreement, and the development of significant assets by one party post-separation.

Other matters

As to the husband’s challenge to the trial Judge’s 10 per cent adjustment in favour of the wife on account of the s 75(2) matters and to the form and effect of his Honour’s orders, I have nothing to add to what is said by Coleman and Boland JJ.
The husband has also appealed the costs order made by the trial Judge in favour of the wife on 17 March 2005. The parties will be at liberty to make written submissions in relation to that appeal and to the costs of this appeal following the making of our order dismissing this appeal against the property settlement orders.

COLEMAN AND BOLAND JJ:

Introduction

This is an appeal by the husband in respect of orders made under s 79 of the Family Law Act 1975 (Cth) (“the Act”) by Buckley J on 4 November 2004. The effect of the trial Judge’s orders was to divide the parties’ assets of $3,175,179.00 between them as to 70 per cent (or $2,222,625.30) to the husband and 30 per cent (or $952,553.70) to the wife.
The husband’s appeal raises several discrete areas in which it is asserted the trial Judge was in error. The first area relates to the trial Judge’s finding that the wife was not precluded from pursuing property proceedings by reason of an earlier agreement with the husband, and her entitlement was not limited to assets which she had agreed to accept under the agreement. It was not in dispute before the trial Judge that the husband and wife had, in 1997, executed consent orders which were not lodged with the Court.
The second area of dispute is the identification of, and value attributed to, the parties’ assets and liabilities by the trial Judge. The husband contends a half interest in the unit should not have been included as part of the property available for division between the parties. He further asserts that the trial Judge was in error in failing to include the husband’s alleged debt to his former de facto partner as a liability.
The third identified area relates to the trial Judge’s findings on contribution and weight to be afforded to relevant s 75(2) factors. The husband asserts that the trial Judge erred in assessing the wife’s contributions at 20 per cent, and further erred in making an adjustment in the wife’s favour of 10 per cent for s 75(2) factors. At trial the husband submitted an appropriate adjustment to be made in the wife’s favour was 5 per cent of the net assets as asserted by him.
The final area of dispute centres on the cash adjustment to be paid by the husband to the wife, and the timing of that payment. In summary, the husband submits the period of three months to make the cash payment to the wife was unrealistic given the composition of his assets, his ability to realise assets and the associated costs involved in such realisation. The husband therefore submitted the orders were not “just and equitable”.

New evidence

Before us both parties sought and were granted leave to adduce further evidence. The topics covered in the further evidence adduced on behalf of the wife included:
·evidence of the death of the husband’s father, and the devising of his estate to the husband; and
·evidence concerning the status of proceedings in the Supreme Court of Queensland including the rejection of an application for making of consent orders between the husband and his former de facto spouse under the Property Law Act 1974 (Qld).
The further evidence adduced on behalf of the husband set out the attempts made by the husband’s solicitors to have orders made under the Property Law Act.

Amended grounds of appeal

At the commencement of the hearing, we granted leave to the husband to rely on an Amended Notice of Grounds of Appeal filed on 18 May 2005. The grounds in that Notice are as follows:
“1.That the learned trial judge erred in his obligation properly to determine the assets and liabilities of the parties, in particular in that:
1.1 He erred in law in excluding the husband’s liability to Ms [B] pursuant to the provisions of the Property Law Act 1974 (Qld); and further,
1.2 He erred in law in holding that the wife was entitled to any equitable share in the…[unit] upon its acquisition by the husband’s father…on 24 November 1989.
1.3 Further, and in the alternate to Ground 1.2, in the event that it was open to the wife to take an interest in…[the unit] by way of advancement, the learned trial judge wrongly rejected relevant evidence of the intentions of [the husband’s father] in paragraph 15 of his Affidavit (AB-1, 61), which evidence, if admitted, may have led the trial judge to a different conclusion than he did reach on the issue of advancement.” (sic)
2.That by reason of the errors referred to in Ground 1, the learned trial judge was unable properly to assess the relevant matters affecting the parties pursuant to s.79(4) of the Family Law Act (“the Act”).
3.That the learned trial judge erred in failing to have any proper or sufficient regard to the settlement agreed between the husband and the wife in late 1996, and documented and executed by them in 1997, and by reason of that matter, his discretion manifestly miscarried.
4.That further the learned trial judge erred in the circumstances of this case in finding that the husband’s errors in disclosure in 1996 / 1997 were reason to disregard the settlement referred to in Ground 3, and for that reason his discretion manifestly miscarried.
5.That the learned trial judge erred in determining that the wife’s contribution-based entitlement should be assessed in the amount equal to 20% of the parties’ net assets and in so doing his discretion manifestly miscarried.
6.That having found that the wife’s contribution entitlement should equate to 20% of the parties net assets, the learned trial judge erred in making a further adjustment of 10% or any further adjustment at all in favour of the wife pursuant to s.75(2) and by reason of that adjustment, his discretion manifestly miscarried.
7.That the learned trial judge erred in the exercise of his obligations pursuant to s.79(2) in making an order which was on its face not just and equitable having regard to the facts of the case.
8.That the learned trial judge erred in failing to have any or any sufficient regard to the reasonable realisation time needed by the husband to meet the orders made by him and further the likely costs of that realisation. In particular, his Honour failed to have any regard to:
8.1 The CGT implications of the sale of the assets of [the company] and their ease of negotiation and realisability;
8.2 The limitation upon the speedy realisation of any real estate owned by the husband having regard to the disparate interests held by others in the relevant property;
8.3 The fact that the disparate interests in real estate meant that it was not at the husband’s instigation alone available to fund borrowings.
9.That the learned trial judge erred in law having regard to the matters referred to in Ground 8 in that he failed to have any regard to the substantial advantage which would potentially flow to the wife in the event that the husband experienced significant difficulties in realising property and/or borrowing funds to meet the orders made in favour of the wife.
10.The learned trial Judge erred in awarding costs in favour of the wife of and incidental to the proceedings (Order made 17 March, 2005).”

Relevant background

The trial Judge recorded facts relevant to the parties at the commencement of his judgment. Those facts are not in dispute.
The husband was born in June 1952 and was 52 years at the date of trial. The wife was born in May 1952 and was also 52 years.
We set out other relevant background material recorded by the trial Judge:
“4.The parties were married…[in] March 1975.
5.There are two children of the marriage, [G], born…[in] August 1978 and [S], born…[in] November 1979, both are over the age of 18 and independent.
6.The parties separated…[in] February 1994, when the Husband left the matrimonial home. At that stage, the boys were aged 16 and 15 years. There were two short periods of reconciliation, the first towards the end of 1994 and the second towards the end of 1995. A Decree Absolute was granted [in]…October 2002.
7.The Wife commenced these proceedings by an application filed on 16 October 2002.
8.Approximately one year after the parties separated, they entered into an agreement for the division of property. The Wife signed the ‘Terms of Settlement’ on 10 January 1997. Those Terms of Settlement were not filed and the Wife re-signed that document on 23 May 1997.”

Trial Judge’s judgment

At the commencement of his reasons for judgment the trial Judge noted that the wife sought, by way of property settlement and maintenance, an order that she receive 60 per cent of the net assets and financial resources of the parties together with spousal maintenance. His Honour also recorded that the husband in his Response sought orders that the wife receive a property in the Gold Coast area (“the matrimonial home”).
Having set out a short factual history relevant to the parties the trial Judge noted the husband’s primary submission “that the parties’ assets should be divided in accordance with the Consent Orders entered into between the parties”. The trial Judge recorded the husband’s submission that “the Wife should be estopped from resiling from that agreement, which was relied upon by the parties”.
The trial Judge referred to authorities relevant to agreements between parties which have not been formalised by the making of orders namely Woodcock and Woodcock (1997) FLC 92-739 and Fogarty and Kemm [2003] FamCA 612. Having reviewed the principles espoused in those decisions, the trial Judge said “[i]n my view, the Wife is clearly entitled to proceed with her applications for maintenance and alteration of property interests pursuant to ss74 and 79 of the Family Law Act”.

The trial Judge further recorded his finding that the husband had failed to make a full, frank and complete “disclosure of his assets and liabilities to the Wife during both the negotiation and preparation of the three sets of Minute of Orders and accompanying Forms 12A – Applications for Consent Orders”. His Honour concluded the husband’s primary submission was unsustainable given his finding.
The trial Judge noted the husband’s concession in cross examination that he had failed to inform the wife of his interest in a private superannuation fund. The trial Judge recorded the “employer contribution to the Husband’s superannuation fund as at 30 June 1995 was $65,000.00 and as at 30 June 1996 was a further $201,00.00 [sic]”.
The trial Judge recorded the husband’s concession that his then solicitors had advised the wife’s solicitors in 1995 that the husband’s superannuation fund with the AMP had an estimated balance of $26,000, and that this information was incorrect.
His Honour also recorded the husband’s concession that, at the time of the preparation of a second set of proposed Minutes of Consent Order, he had not informed the wife “that he, as trustee for a Unit Trust, had purchased business premises in…Brisbane on 28 January 1997 for the sum of $500,000.00”. His Honour said “I note that his then solicitor, Mr [W], signed the Memorandum of Transfer on the Husband’s behalf on 20 January 1997”.
The trial Judge also recorded the husband’s concession he had not informed the wife of the purchase by himself and his then de facto partner, Ms B, of a property in the Gold Coast area (“the second property”) on 15 March 2002, nor had he included details of this property in the Form 12A which accompanied the third set of Minutes of Order.
The trial Judge concluded:
“For these reasons, I am satisfied that this is not a case where it would be appropriate in the interests of justice and equity, to rely on the date on which the parties’ executed the first set of Consent Orders referred to earlier in these Reasons as the appropriate date for determining the property in issue between the parties.”
Having identified the relevant legal principles to be applied in a case for alteration of property interests under s 79, the trial Judge then dealt with assets subject of dispute between the parties.
The trial Judge made findings in relation to the value of the matrimonial home and the second property. There is no challenge to his Honour’s findings in respect of these two properties.
The trial Judge thereafter considered the parties’ contentions about the unit. His Honour noted the wife’s evidence that the husband’s father had, on 17 July 1990, told her and the husband that he intended to buy the unit and that the owners would be himself, the husband and wife, and the husband’s brother. His Honour noted that the husband’s father provided all of the purchase monies for the unit which was registered in the joint names of the husband, the wife, the husband’s father and the husband’s brother.
Having recorded the husband’s submission that the unit should be excluded from the property pool, the trial Judge went on to examine the evidence given by the wife’s father, who was the original owner of the unit, that the unit was purchased by the husband’s father from the wife’s parents in November 1989 for $95,000.
The trial Judge noted:
“On 26 June 2003, Guest J made consent orders whereby the Wife’s interest in the property was transferred to the Husband. Order number 3 of those orders provided that the issue of whether the property ought be included as part of the property of the parties for the purposes of the property settlement proceedings be determined by the Trial [sic] Judge notwithstanding the orders made herein.”
The trial Judge recorded the issue to be determined by him was whether the property was purchased by the husband’s father:
“with the intention to benefit his sons and the Wife, such that there is a presumption of advancement, or whether a resulting trust arises by virtue of the Husband’s father having contributed solely to the acquisition of the unit.”
The trial Judge thereafter set out relevant legal principles applicable to a resulting trust, and discussed the principles espoused in Nelson v Nelson (1995) 184 CLR 538. The trial Judge then considered the law relative to the presumption of advancement in the light of the observations of the High Court in Calverley v Green (1984) 155 CLR 242. He also noted the submissions made on behalf of the wife, that the husband’s father intended to benefit her, and referred to Gosper and Gosper (1987) FLC 91-818, Kessey and Kessey (1994) FLC 92-495 and Pellegrino v Pellegrino (1997) FLC 92-789. His Honour said:
“That submission does not touch on the question whether the property is held on trust for the Husband’s father, or whether each party holds a one-quarter interest in the property, as per the legal title. If it is assumed that it was a gift (ie raising the presumption of advancement) then the property will form part of the asset pool, and it is only then that the question of contribution arises. In this case, 50% of the property (ie the Husband’s and Wife’s shares, as per the legal title) would form part of the property pool, were it considered to have been a gift.”
Having regard to the husband’s position that the 50 per cent interest did not form part of the property pool, the trial Judge said it was necessary for him to consider whether the presumption of advancement had been rebutted. The trial Judge found that:
“In the present case, the purchase of the property in the joint names of the parties, the Husband’s father and his brother can be presumed to have been for their benefit, given the relationships are such as could lead to such a presumption of advancement. The Husband’s father has given evidence that such was not intended at the time the property was purchased.”
The trial Judge then set out the unchallenged evidence of the husband’s father as follows:
“13. The reason I recorded the unit into the names of myself, [Ri], [Ro] and [T] was that I intended to keep the unit within my immediate family. I did not have a Will in 1989 and at that time I was not aware that I could record the unit in my name and make provision for my family in a Will.
14. At the time the unit was purchased [Ri] and [Ro] had been married for over fourteen (14) years. I considered that their marriage was very stable and that by placing their name on the title of the unit I would be keeping the unit in my family so that my grandchildren would also benefit once I passed away. Shortly after settlement I sent $10,000.00 to [Ri] and [Ro] to enable them to furnish the unit.”
The trial Judge concluded the husband’s father’s evidence suggested at the time of the purchase he intended to benefit the parties. His Honour said:
“His statement that he intended to benefit his immediate family and eventually his grandchildren supports the view that there was intended an advancement in favour of the Husband, Wife and brother. Accordingly the half share currently held by the Husband will form part of the property pool.”
He then recorded that the contribution of the 50 per cent interest in the unit was a contribution to be weighed in the husband’s favour.
The trial Judge then dealt with another unit at Tweed Heads (“the second unit”). The trial Judge recorded that the husband’s father lived in the second unit at the date of the trial. He further recorded the husband’s assertion that, as the property was owned wholly by the husband’s father, it should not be brought into account in determining the parties’ property available for division.
The trial Judge noted the property was purchased jointly by the husband and his father, both contributing equally to the purchase price. The trial Judge recorded the husband’s assertion that, whilst he had contributed $120,000 to the purchase price, he asserted a debt to his father of $105,000 at the time of the purchase.
The trial Judge observed each of the financial statements relied on by the husband, a loan application, and the schedule to the consent orders, were documents in which the husband disclosed his interest in the second unit. The trial Judge noted that an affidavit filed by the husband’s father was silent as to the arrangements pertaining to the second unit.
The trial Judge found he was unable to accept the evidence of the husband unless it was corroborated, and concluded that he held the interest in the second unit free from any trust involving his father. His Honour therefore included a one half interest in the property at a value agreed between the parties.
The trial Judge then turned to consider another property in the Gold Coast area (“the third property”). The trial Judge noted this property was held by the husband and Ms B in the proportion of 99 per cent to the husband and one per cent to Ms B.
The trial Judge thereafter considered other items of property owned by the parties, and discussed the valuation of the husband’s interest in his superannuation fund by the experts retained by the parties. He concluded “the above documents clearly record the valuation methodology relied upon by each of them and identify the relatively few points of difference so far as their respective valuations are concerned”.
The trial Judge then turned to the appropriate value to be attributed to a business operated by the husband (“the company”). His Honour noted that the husband’s valuer “considered that the only basis on which the Husband could assess its value would be to sell the company assets which would result in the winding up of the company and the distribution of the sale proceeds”. The trial Judge noted the valuer’s opinion that “this option would create an income tax liability on the profit when distributed to the shareholders”. The sum calculated by the husband’s expert accountant was noted to be $280,324.
The trial Judge then considered the expert evidence from the wife’s accountant. He noted the wife’s accountant valued the company “as a group concern and not at liquidated values after allowing for tax in the hands of the shareholders”.
The trial Judge accepted the approach adopted by the wife’s accountant as detailed in the accountant’s reasons in the joint report.
The trial Judge concluded:
“Neither party seeks an Order for the sale of the Husband’s shares in the company. Furthermore, I am not satisfied on the evidence before me that any such sale is inevitable or would probably occur in the near future. Nor was the company acquired solely as an investment with a view to its ultimate sale for profit (Rosati and Rosati (1998) FLC 92-804).”
The trial Judge thereafter considered the appropriate treatment of the sum of $57,000 which the husband owed to his superannuation fund. The trial Judge included the debt as a liability to be taken into account between the parties. There is no challenge to his Honour’s finding in this regard.
The trial Judge then dealt with other property which the parties’ case summary documents and submissions disclosed to be in dispute. The trial Judge disregarded loans asserted by the wife to be owing to her son and to her father, and declined to include those alleged debts into the list of the parties’ liabilities.
The trial Judge then dealt with the question of the husband’s alleged liability to Ms B. He recorded that the husband alleged an indebtedness of $584,850.
His Honour noted on 6 May 2004 the husband entered into an agreement with Ms B in settlement of proceedings instituted by her in the Supreme Court of Queensland on 15 April 2004. His Honour said “[n]o evidence was adduced during the hearing before me as to whether the Orders had been perfected”.
The trial Judge noted the contention of the wife that the alleged liability should be ignored in the proceedings between the parties.
The trial Judge set out the assets to be received by Ms B pursuant to the proposed orders, and the husband’s agreement to pay her $8,000 per month until the sum due was paid in full. The trial Judge said, in addition to the payments to be made to Ms B pursuant to the proposed orders, she also retained an interest in a property having a value of $244,000, her car valued at $7,500 and her interest in the Z Superannuation Fund valued at $52,608.
His Honour summarised an opinion the husband obtained from barrister, Mr H, as to his potential liability to Ms B pursuant to the provisions of the Property Law Act.
The trial Judge found a number of factual inconsistencies between the evidence of the husband and the evidence of Ms B about the history of their relationship.
The trial Judge found a discrepancy in the husband’s evidence about the length of his relationship with Ms B, and noted concessions made by him during cross examination, including a concession that the total period of the cohabitation with Ms B “could only have been ‘at best’ five years”. The trial Judge concluded “[a]ccordingly, I am satisfied that the calculation as to Ms [B]’s entitlement was based on an erroneous assumption as to the length of their cohabitation”.
The trial Judge set out a number of matters relative to Ms B’s cross examination including her denial that she and the husband had separated for one year during the course of their relationship, or that she and the husband had ever cohabited at the unit.
The trial Judge noted that at the time she met the husband, Ms B owned property which she had purchased in 1989 for $82,000, the deposit of $10,000 being borrowed from her father, and repaid when she sold the property to the husband and his superannuation fund in April 2003 for $265,000. Ms B used these sale proceeds to purchase a property in the Gold Coast area for a price of $330,000. The trial Judge recorded that Ms B had borrowed $86,000 from the National Bank of Australia to assist with this purchase.
The trial Judge further recorded that the husband and Ms B had purchased two properties, namely the third property in April 1999 for a purchase price of $140,000, and the second property for a purchase price of $460,000. He noted that Ms B did not make a financial contribution to the purchase of either of the properties, or repayment of the mortgage, except that her salary was banked to the line of credit used by herself and the husband.
The trial Judge found a number of discrepancies in the values contained in the list of assets and liabilities used as a basis for the negotiations with Ms B.
The trial Judge also recorded that Ms B was represented by Mr W in the Supreme Court proceedings. Mr W was the husband’s solicitor during the period the husband and wife signed the consent orders. Through his superannuation fund, the husband and Mr W were recorded as owning a commercial building in the Gold Coast area in equal shares at the date of the trial.
His Honour noted the husband had instituted proceedings in the Supreme Court of Queensland on 27 November 2003 against Mr W seeking damages for breach of contract, or for negligence, in the sum of $1,500,000 “arising out of the failure to lodge the Terms of Settlement agreed upon by the Husband and Wife with the Family Court of Australia”.
Mr W was also noted to have acted for Ms B on the sale of another property in the Gold Coast area (“the fourth property”). The trial Judge said:
“At the same time, the Husband consulted Mr [W] seeking advice in respect of a document entitled Consumer Guarantee…During the course of that consultation, with Mr [W] on 4 April 2003, he [the husband] signed the Certificate from the Guarantor’s Solicitor.”
At the time of executing the guarantee the husband was represented in these proceedings by another solicitor.
The trial Judge then made findings about the evidence before him concerning the alleged debt to Ms B. His Honour found that the schedule of assets and liabilities supplied to the barrister for an opinion about the husband and Ms B’s entitlements included the husband’s half interest in the matrimonial home as an asset. The husband had agreed to transfer this interest to the wife in the 1997 agreement. He also noted that notwithstanding the husband and Ms B’s notice of the family law proceedings and the wife’s claim, the husband made no provision for his potential liability to the wife. The trial Judge found:
“The Husband was unable to explain either of these apparent anomalies during the course of his cross-examination. The exclusion of the Husband’s potential liability to the Wife from the above schedule and the Husband’s inability to explain such a significant default can only be described as bizarre in the particular circumstances of this case.”
His Honour said:
·the failure to make provision for the wife resulted in Ms B receiving a higher sum than she could reasonably have anticipated to receive;
·the treatment of the third property was contrary to the husband and Ms B’s legal ownership and was erroneously apportioned equally to them;
·the husband’s interest in the Z Superannuation Fund was treated as an asset, not a financial resource, contrary to the relevant provision of the Property Law Act; and
·the husband resolved the matter contrary to advice received from Mr H of counsel.
The trial Judge concluded:
“Although I am aware that all of the evidence relevant to the action between the Husband and Ms [B] has not been placed before me, I am satisfied that the proposed Consent Orders reflect an extremely generous award in her favour.”
The trial Judge then discussed the appropriate treatment by the Court of transactions, including liabilities incurred after separation, as well as the “adding back” to the property pool assets distributed prematurely. His Honour referred to the principles set out in Af Petersens and Af Petersens (1981) FLC 91-095 and in Biltoft and Biltoft (1995) FLC 92-614. He said:
“Biltoft is also authority for the position that there is no rule of priority as between a creditor claimant and a spouse and as such there is no requirement that the claim by a third party must be considered and dealt with prior to the Court making an order under section 79. The Court was however careful in that case, and subsequent cases, to not ignore the rights of the third party, taking them thoroughly into account and balancing them against the rights of the spouse before making any determination.”
The trial Judge applied the relevant principles to the facts before him and concluded:
“the Husband’s conduct in consenting to the total of the liability owed to Ms [B] was unreasonable. He entered into the proposed Consent Orders with Ms [B], his former defacto, in the knowledge of the application before this Court by his former Wife, and with a complete disregard for the Wife’s reasonable entitlement arising from property settlement.”
The trial Judge rejected the argument, advanced by the husband, that he had relied on the sum to be received by the wife in the informal property agreement. The trial Judge said:
“His own actions call this assertion into serious doubt in that he saw fit to include his interest in the matrimonial home, which under the agreement would have seen him transfer his interest entirely to the Wife, in the pool of property to be divided with respect to Ms [B]’s claim.”
The trial Judge found the husband’s evidence on the issue of Ms B’s claim to be “significantly flawed”. Having reviewed the evidence about the husband and Ms B’s cohabitation he said:
“That same paucity of evidence meant that it was simply not possible to make any assessment as to a likely reasonable award to be made in favour of Ms [B]…I am not satisfied that the Husband has discharged his onus, on the balance of probabilities, to establish any alleged liability to Ms [B].”
Having found the net value of the assets in dispute between the parties was the sum of $3,175,179, the trial Judge then assessed the parties’ contributions over their long term marriage. His Honour set out their acquisition of various properties and obtaining of borrowings, including the obtaining of finance secured by a second mortgage over the matrimonial home to assist with the purchase of the husband’s interest in the company.

The trial Judge noted that, contrary to the husband’s assertion to the wife that he would pay the mortgage, he had informed her on 7 August 1998 he had ceased making mortgage payments. The trial Judge noted that from 10 August 1998 to 5 July 2001 the wife met the mortgage payments.
The trial Judge set out the history of the parties’ respective employment during the marriage noting that the wife had, for a number of years, worked as a cashier in a supermarket. His Honour recorded the husband’s employment as a technician with Telecom and his employment with the company, which commenced in 1990. His Honour noted the husband’s purchase of an interest in the company in 1991 and his sole acquisition of the company in 1998. The trial Judge also recorded the wife’s evidence that the husband had worked long hours resulting in her assuming primary responsibility for the care of the children. The trial Judge noted that the wife had had the use of the matrimonial home since separation.
The trial Judge set out his conclusions on the parties’ respective contributions as follows:
“Based on my findings, as set out in these Reasons, I have assessed the contribution based entitlements as at the date of the parties’ separation as being equal. However, the Husband has made a significantly superior contribution to the assets in dispute between the time of the separation and the final hearing of this matter. I don’t propose to reiterate the extensive findings which I have made in respect of the Wife’s contribution to the former matrimonial home and the Husband’s contribution to the business and the various assets which have been acquired by him. The Husband’s very significant contribution in respect of these assets has been achieved subsequent to the parties’ separation. In my view, in all the circumstances of this case, the contribution based entitlements should be assessed as to 80% to the Husband and 20% to the Wife.”
The trial Judge thereafter considered the relevant s 75(2) factors. His Honour set out the wife’s income of $404 per week, and said that notwithstanding the husband’s submission that the capacity of the business to generate a substantial income was limited, significant payments had been made by the husband. His Honour also recorded the financial circumstances of the wife’s cohabitation with Mr D and noted his earnings at $356.89 per week.
The trial Judge set out his conclusions in respect of s 75(2) factors and said:
“The more significant factors referred to in s75(2), in the particular circumstances of this matter, in my opinion, are the significantly greater income of the Husband, the vastly superior earning capacity of the Husband, the greater property interests including superannuation of the Husband and the greater financial resources of the Husband. Balancing those matters, and taking into account the matters referred to in paragraphs (d), (f) and (g) of s79(4), the Wife is entitled to a further adjustment of 10%.”
The trial Judge thereafter considered the effect of his orders and found that they would result in a just and equitable outcome with the wife receiving a total entitlement of $952,533.70 including a payment by the husband to her of $492,856.70.
The trial Judge dismissed the wife’s application for spousal maintenance.

The relevant law

This is an appeal against a discretionary order. The circumstances in which the Full Court should interfere with a discretionary judgment are well known. In Gronow v Gronow(1979) 144 CLR 513 Stephen J said at 519-520:
“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 504-505:
“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 discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

Treatment of grounds of appeal

Counsel for the husband argued the appeal under the areas of dispute identified by us at the commencement of our judgment. We find it is convenient to adopt the same approach in dealing with the grounds of appeal.

The liability to Ms B

The parties’ submissions

Counsel for the husband, attacked the trial Judge’s finding at paragraph 145 of his Honour’s reasons for judgment where he said:
“It is at the discretion of the Court not to take into account transactions, and therefore liabilities incurred, after separation. Further, property to which both parties have an interest, that is disbursed post-separation, can be added back to the property pool on a notional basis where it is determined that the other party should not bear the liability.”
Counsel for the husband at paragraph 1.3 of his written submissions said “[i]t is respectfully submitted that that statement, as a matter of principle, is incorrect”. He referred to the Full Court decisions in Biltoft; Af Petersens and Townsend and Townsend (1995) FLC 92-569. He further referred to the trial Judge’s findings about the settlement between the husband and Ms B, and the evidence relating to their cohabitation. Counsel for the husband submitted “that the trial judge’s (sic) conclusion that he was not satisfied that the husband had discharged an onus on the balance of probabilities to establish any liability to Ms [B] is wrong”. Before us counsel for the husband submitted that, although it was a matter for the husband if he was generous to Ms B, his generosity was not a basis to disregard the liability. He submitted that the liability to Ms B was not incurred recklessly as her rights arose at law, nor did the trial Judge find that the liability would not be called upon, rather he submitted what the trial Judge found was an over estimate of the liability.
In his written submissions counsel for the wife, noted, notwithstanding the assertion made in ground 1.1 that the husband had a liability to Ms B pursuant to the Property Law Act, that the Supreme Court had refused on 6 May 2004 and 12 July 2004 to make the consent orders proposed by the husband and Ms B. Counsel for the wife noted there was no evidence before the trial Judge any order had been made by the Supreme Court. He submitted “[w]hat Ms [B] had was a cause of action under the PLA but whether she had any entitlement and the Husband had any liability was (and is) purely speculative”. Counsel for the wife adopted a submission made by senior counsel who appeared for the wife at the trial that Ms B’s entitlement was unlikely to be “greater than about 20 percent of the pool”.Thus he submitted Ms B would be required to make a payment to the husband. Counsel for the wife submitted:
“The Trial [sic] Judge was clearly correct to recognise that in certain circumstances he was entitled to disregard a purported liability (Prince (1984) FLC 91-510 @ 79076-7) and to find as he did…that the Husband failed to establish ‘any alleged liability to Ms [B]’.”

Discussion

In evidence before the trial Judge was a memorandum of advice prepared by Mr H of counsel. Mr H opined, on the evidence briefed to him, that Ms B would be likely to obtain a verdict in her favour in the Supreme Court equal to approximately 30 per cent of her assets and those of the husband. Mr H noted that Ms B retained assets to the value of 27.3 per cent so that the husband would need to make a cash adjustment in her favour of $52,894. However, the list of assets and liabilities used by Mr H included the husband’s interest in the matrimonial home and made no allowance for any entitlement of the wife in these proceedings.
The husband had, prior to seeking advice from Mr H, filed a Statement of Claim in the Supreme Court of Queensland against his former solicitor Mr W in which he claimed damages in the sum of $1,500,000 on the basis that he “may be ordered to pay or to transfer to the wife a sum which exceeds that which he would have been obliged to pay to the wife if the proposed orders had been made by the Family Court in or about January 1997 in the sum of $1,500,000”.
The trial Judge noted that when Mr H provided his memorandum of advice he treated the husband’s interest in the Z Superannuation Fund as an asset, not a financial resource, notwithstanding the definition provisions of “financial resource” in the Property Law Act.
In Prince and Prince (1984) FLC 91-508 at 79,076-79,077 the Full Court said:
“The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (supra); Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party’s potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC ¶91-085; Kowaliw and Kowaliw (1981) FLC ¶91-092; Antmann and Antmann (1980) FLC ¶90-908; Af Petersens (supra)). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC ¶91-311).”
This passage was referred to in Biltoft and set out in part in the trial Judge’s judgment at paragraph 147.
The further evidence, admitted after leave granted by us, disclosed that the Supreme Court of Queensland declined to make orders between the husband and Ms B on 6 May 2004 and on 12 July 2004. A court file note signed by the Deputy Registrar dated 12 July 2004 states:
“Consent Order Refused
Having now read the Family Court submissions I am now aware that the de factor property s’ment is a live issue in the F.C. proceedings. There is doubt as to whether the property s’ment proceedings were commenced within the statutory period. Apply to the Court for order.”
Before us, counsel for the wife submitted that the husband bore the onus of proof in respect of his liability to Ms B. We accept that submission.
The trial Judge’s judgment discloses a careful review of the evidence before him about the alleged liability of the husband to Ms B.
The trial Judge found:
·there was no evidence before him as to whether the Supreme Court orders had been perfected;
·the terms of the proposed orders provided for Ms B to receive funds and property to the value of $584,850;
·in addition to the “entitlement” under the proposed orders Ms B retained property to a value of $304,108;
·factual inconsistencies about the length of the husband and Ms B’s cohabitation, which included a period of separation for one year;
·at commencement of cohabitation with the husband, Ms B owned the fourth property which had an equity of approximately $70,000;
·during the husband and Ms B’s relationship they purchased the third and second properties. Ms B made no financial contribution to either property;
·anomalies in the list of assets used by the husband as the basis of his negotiations with Ms B; and
·in cross examination the husband conceded the company was valued at $400,000 and his superannuation was less than as finally assessed by his valuer. Mortgage balances asserted by the husband were incorrect.
Whilst the trial Judge did not, sensibly given the evidence before him, make any specific findings about the effect of or nature of the husband’s relationship with his former solicitor, his Honour set out facts relevant to the husband and Mr W’s business and professional relationship.
The trial Judge also noted that Ms B was represented by Mr W, the husband’s former solicitor and a person with whom, through his superannuation fund, the husband owned a commercial building.
The trial Judge also noted notwithstanding the Supreme Court negligence case against Mr W which we referred to above, that in April 2003 the husband consulted Mr W to provide advice about a consumer guarantee.

Conclusions

We have already set out the trial Judge’s detailed findings about the entitlement proposed to be received by Ms B, and the factors leading to his conclusion that the proposed settlement orders “reflected an extremely generous award”.
We are satisfied in this case the trial Judge was not in error in failing to include the alleged liability to Ms B when calculating the parties’ assets and liabilities available for division. The trial Judge’s finding that the husband’s evidence about this issue was significantly flawed was open to him on the evidence. No orders had been made at the date of the trial, and by the time of the hearing before us, it appears Ms B’s claim was, prima facie, statute barred. The advice provided by Mr H was based on inaccurate financial information and, significantly, failed to take into account any liability of the husband to the wife in these proceedings.
In our view the Full Court in Prince did not rigidly categorise the circumstances in which a liability must be disregarded but rather said such a result could be reached when the court found a liability incurred in deliberate or reckless disregard of the other party’s potential entitlement under s 79.
We are satisfied the trial Judge’s findings, a number of which we have particularised above, provided a proper basis for him, in the exercise of his discretion, to find the husband had not, on the balance of probabilities, established the debt in the quantum asserted to Ms B. In these circumstances, and having regard to other assets retained by Ms B, we find it was open to the trial Judge, in the exercise of his discretion, to exclude the alleged debt. Accordingly, we find no merit in the grounds directed to this aspect of his Honour’s judgment.

The unit

The parties’ submissions

It is submitted on behalf of the husband that the trial Judge erred in law in finding the presumption of advancement existed between the wife and her father in law.
Counsel for the wife did not dispute that assertion, and noted it was not advanced as part of the wife’s case before the trial Judge.
The written submissions provided by the wife’s counsel at the trial were as follows:
“The wife does not contend that her relationship with her father in law was at the time of the acquisition of the unit of itself sufficient to give rise to a presumption advancement in her favour. It is however the wife’s contention that such a presumption does arise in favour of the husband and his brother.”

Relevant law

The law relevant to the presumption of advancement is well settled and applies only to a limited range of relationships. The presumption was explained by Gibbs CJ in Calverley at 247 as arising “when a husband makes a purchase in the name of his wife, or a father in the name of his child or other person to whom he stands loco parentis.” The presumption also applies between a mother and child (Nelson) and to a purchase by a man in the name of his fiancée (Wirth v Wirth (1956) 98 CLR 228).
The doctrine of presumption of advancement has been subject of judicial criticism. It is noted in Dal Pont G E, Chalmers D R C and Maxton J K, Equity and Trusts: Commentary and Materials (Sydney: Lawbook Co, 2004, 3^rd ed) at 623 “that although Australian courts have applied the presumptions of resulting trust and advancement since the earliest times, they are the subject of ever increasing judicial scrutiny”. The operation of the presumption was questioned by the High Court in both Calverley and Nelson, but Deane J in the former at 266 noted that the presumption was “too well entrenched…to be simply discarded by judicial decision”.
It is well settled law that the presumption of advancement could arise between the husband’s father and the husband and his brother, subject to rebuttal by contrary intention. An extension of the presumption to a daughter in law is not within the category of relationships recognised by the law.
We accept that the doctrine of presumption of advancement is one which could properly, on the existing state of the law, be applied to the husband and his brother. We agree with counsel for the husband and counsel for the wife that the presumption should not be extended to the wife. To do so would be contrary to recent judicial consideration of the doctrine which seeks to limit its applicability rather than to extend categories of relationships to which it could apply.

Discussion

In consent orders made by Guest J the wife transferred her interest in the unit to the husband. The further evidence adduced before us disclosed that the husband was the sole beneficiary of the will of his late father who died on 24 December 2004. The terms of the husband’s father’s will put it beyond doubt that the husband has, as a result of the bequest, received ownership of the whole of the second unit increasing his assets from those before the trial Judge by an extra $210,220. It is now beyond dispute that the husband holds a 75 per cent interest in the unit.
Regardless of the trial Judge’s findings about the presumption of advancement, his Honour clearly noted the husband’s father’s contribution was a factor which he took into account in the husband’s favour.

Conclusion

We are satisfied, having regard to the trial Judge’s acknowledgment that the 50 per cent interest in the unit was taken into account by him as a contribution on behalf of the husband, and the husband’s present interest in the unit, that the inclusion of the unit in the list of the parties’ assets has not resulted in a miscarriage of the exercise of the trial Judge’s discretion, notwithstanding the erroneous finding in respect of a presumption of advancement between the husband’s father and the wife. We are fortified in this finding having regard to the small quantum of the wife’s interest relative to the overall asset pool.

The 1997 proposed consent orders

The parties’ submissions

It was not contended on behalf of the husband that the wife was estopped from commencing proceedings under s 79 because two sets of consent orders, executed by her in 1997, were not lodged with the Court. Rather, the thrust of the husband’s submission is that the trial Judge did not give sufficient weight to the agreement between the parties at that time, particularly having regard to their assets at the date of separation.
The nub of the submission made on behalf of the wife was, contrary to the husband’s assertion that she was to receive “the substance of the parties’ property except the superannuation”, that in fact “[t]he husband hid from the wife property with a value greater than that what [sic] she received”. It was asserted that the husband would have retained:
i.the unit (50 per cent interest);
ii.the company (valued in 1997 at $660,000);
iii.the superannuation fund (net assets $250,000 plus); and
iv.an earning capacity of substantial proportions.
Before us, counsel for the wife criticised the husband’s reliance on ground 4 of the Amended Grounds of Appeal which referred to an error on behalf of the trial Judge “in finding that the husband’s errors in disclosure in 1996 / 1997 were reason to disregard the settlement”, in light of the credit findings made by the trial Judge. Counsel for the wife said it was inappropriate to describe the husband’s conduct as “errors in disclosure”.

Discussion

The trial Judge at the outset of his judgment dealt with the husband’s submission that the assets should be divided in accordance with the consent orders signed in 1997.
On 12 March 1996 the husband disclosed in a letter from his then solicitors to the wife’s solicitors that his interest in the company at the date of separation was approximately $150,000, and that the unit was held in trust for his father. Earlier correspondence from the husband’s solicitor to the wife’s solicitor dated 1 September 1995 disclosed the husband had a superannuation fund with an estimated balance of $26,000 with AMP.
Mr H of counsel in his Memorandum of Advice noted that the husband acquired the interests of the other two directors of the company in 1997 for a total purchase price of $440,000.
The husband before us sought to rely on a valuation by his expert accountant of his interest in the company as at April 1997, excluding a debt owed to the company by him of $52,880, at $75,000. This valuation was one carried out on a net asset backing basis. He submitted this was less than the value the husband disclosed to the wife of $150,000.
There was no dispute that the husband failed to disclose to the wife his interest in his superannuation fund which as at 30 June 1996 had assets of $255,635, or the purchase of the business premises acquired through a unit trust.

Conclusions

The law in relation to non-disclosure is well known and subject of decided authority (see Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Kannis and Kannis (2003) FLC 93-135). There is no challenge to his Honour’s findings about the lack of full and frank disclosure by the husband to the wife in 1997.
The trial Judge, having carefully examined each of the areas of non disclosure by the husband, concluded that it would not be in the interests of justice and equity to rely on the date the parties’ first executed consent orders “as the appropriate date for determining the property in issue between the parties”.
We accept the submissions of the wife’s counsel about the nature and value of the assets and financial resources retained by the husband after separation including the value of $660,000 agreed between the directors of the company of that entity in 1997.
We discern no error of principle by the trial Judge in the manner in which he dealt with the issue of the 1997 consent orders signed by the husband and wife, or that the trial Judge had regard to any irrelevant matter or failed to take into account any relevant matter in his finding that an order in the wife’s favour under s 79 based on the 1997 proposed orders would not be just and equitable. We agree with counsel for the wife’s submission that the husband’s actions were not “errors in disclosure”, rather we are satisfied the trial Judge’s findings about a failure to make a full, frank and complete disclosure by the husband were well open on the evidence before him.

The contribution ground

The parties’ submissions

The husband challenged the findings of the trial Judge in assessing the wife’s overall contribution entitlement at 20 per cent, having found that the parties’ contributions to the date of separation were equal. It was asserted on behalf of the husband that following separation all of the assets, except the matrimonial home, had been under the care and control of the husband, and other than the increase in value in the matrimonial home, “there was no significant discernable contribution by the wife to it post-separation”. Counsel for the husband in his written submissions compared and contrasted this situation to the substantial contribution by the husband to the remaining assets and the assets acquired by the husband after separation, and submitted that the trial Judge’s adjustment of 30 per cent in the husband’s favour to reflect post separation contribution was, “in the circumstances of this case, inadequate”.
Counsel for the wife noted that the parties’ cohabitation was of 19 years duration followed by two short periods of reconciliation. He also noted that by the time of separation the husband had been able to contribute from the earnings of the company a sum in excess of $200,000 to his superannuation fund. He also referred to the wife’s financial difficulties in particular maintaining the mortgage over the matrimonial home from April 1998 and supporting the parties’ younger child for several years and the older child until 1996. It was submitted on the wife’s behalf that the 80 per cent contribution weighting to the husband “is in these circumstances generous to the husband and certainly not an improper exercise of the Trial [sic] Judge’s discretion”.

Discussion

The parties’ marriage was of long term duration. The trial Judge carefully recorded the contributions of each of the parties from the commencement of their cohabitation when the parties had little by way of assets of significance. There was no challenge to the trial Judge’s finding that “the Husband was able to gain skills, training and opportunity which enabled him to develop his business and to acquire and earn income”. It was conceded by the husband that the wife was the primary caretaker of the two children of the marriage. Further, the husband accepted that he worked for long hours during the marriage including his work for the company.

Conclusions

The assessment and comparison of contributions, both financial and non financial and the translation of that weighing and comparison is not and cannot generally be a strictly mathematical task, particularly in a marriage of long duration (see Norbis v Norbis (1986) 161 CLR 513 at 521-523 and G and G (1984) FLC 91-582 at 79,697).
There was no serious challenge to the trial Judge’s exercise of the discretion when he assessed the parties’ contributions to the date of separation as being equal. The evidence demonstrated that the company became very profitable at about the time of separation, and that by 1997 the husband had acquired substantial superannuation interests and purchased his co-director’s interest in the company for $440,000. The husband’s skills and his initial interest in the company acquired during the marriage provided the foundation from which the husband was able to acquire his post separation assets and make substantial contributions to his superannuation fund. The trial Judge gave significant weight to the disparity in the parties’ contributions post separation. That assessment saw the husband’s entitlement, on a contributions basis, as 80 per cent of the parties’ assets or $2,540,143. The wife’s entitlement was $635,035. We are satisfied his Honour did not take into account any extraneous matter or fail to take into account any relevant matter and that the post separation contribution finding of the trial Judge reflected the significant disparity of post separation contributions by each of the parties. We conclude that his Honour’s assessment of contribution was within the reasonable ambit of his discretion. Accordingly, we find no merit in ground 5.

Section 75(2) ground

It is asserted on behalf of the husband that the trial Judge’s discretion manifestly miscarried in his assessment of relevant factors under s 75(2) when he assessed a further adjustment of 10 per cent should be made in favour of the wife.
At trial the husband’s then counsel submitted the appropriate adjustment to be made in the wife’s favour for relevant factors under s 75(2) was 5 per cent. In his written submissions counsel for the husband submitted that the adjustment in the wife’s favour resulted in “a cash payment in excess of $310,000”. It was asserted that the trial Judge gave inappropriate weight to the husband’s superior earning capacity and greater asset pool. It was also asserted that the trial Judge “appears to have taken into account two irrelevant factors, namely those factors pursuant to s.75(2)(j) and (k)”.
Counsel for the wife submitted that:
“the indirect contributions by the Wife to the business and the Husband’s earning capacity, such are (contrary to the Husband’s Outline) properly brought to account under s.75(2) whether it be under (j), (k) or (o) (see cases such as B & B No. 2 (2000) FLC 93-031 @ 87,505, Clauson (1995) FLC 92-595 @ 81,910)”.
Counsel for the wife referred to the significant disparity in the wealth and earning capacity of the parties.

Discussion

The trial Judge found the wife had earnings of $404 net per week. By contrast he found that notwithstanding the husband’s assertions about his income that he “had an extraordinary capacity to reduce his mortgage indebtedness in very short periods of time”. He also noted the agreement to pay Ms B payments at the rate of $8,000 per month. In a loan application made to the National Australia Bank (Exhibit 8) the husband disclosed a monthly income of $11,335.25 and expenditure of $2,601.33 leaving available funds of $8,733.92.
It is clear from paragraph 182 of the trial Judge’s reasons for judgment that the adjustment he made in the wife’s favour was principally based on the husband’s greater income, superior earning capacity, greater property interests and superannuation and the greater financial resources of the husband.
The trial Judge under ss 75(2)(j) and (k) noted indirect contributions made by the wife towards the husband’s business finding that his skills and training were achieved during the marriage. He also took into account the financial circumstances of the wife’s de facto relationship.
Subsections 75(2)(j) and (k) provide as follows:
“(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration”
Subsection 79(4)(e) obliges the Court when making an order under s 79 to take into account “the matters referred to in subsection 75(2) so far as they are relevant”. The subsection does not specify any particular subsections of s 75(2).
The different functions of s 75(2) have been subject of judicial discussion. In DJM v JLM (1998) FLC 92-816 at 85,268 Baker, Kay and Morgan JJ said:
“Section 75(2) was originally enacted to serve at least three functions. It was primarily the source of matters to be considered when deciding spousal maintenance and child maintenance matters, and by operation of s 79(4), applications for alteration of property interests. Many of its subsections make sense only in the context of one of those three applications and not the others.
…
[Since] the provisions relating to child maintenance were removed from Part VIII of the Act and placed in Part VII…[m]any of its subparagraphs are much more appropriate to maintenance cases than to the consideration of property applications.
…
Subparagraphs (h) and (k) are concerned with the earning capacity of the person who is making a claim for either maintenance or alteration of property interests [our emphasis] in their favour. The matters dealt with by sub-par (j) can more properly be considered under the provisions of s 79(4)(a), (b) and (c) than they can under s 79(4)(e).”
In B and B (No 2) (2000) FLC 93-031 Nicholson CJ, Ellis and Joske JJ considered an appeal ground which was, so far as is relevant to our discussion, in the following terms:
“2. His Honour was in error:-
2.1 in concluding that the only significant factor relevant to s 75(2) was the considerable difference in earning capacity between the parties [¶108];
2.2 in failing to take into account or give sufficient weight to the circumstance that one of the most significant facts in the case was the Respondent (husband)'s earning capacity, which capacity had been developed during the marriage and to which the Appellant (wife) had made substantial contributions;
2.3 in concluding that on account of the s 75(2) factors, the share of the Appellant (wife) should be increased only by 15% to 55% [¶¶ [sic] 41,109].”
In their discussion the Full Court at 87,504 noted and adopted as appropriate to adjustment under s 75(2) the findings of an earlier Full Court in Mitchell and Mitchell (1995) FLC 92-601 and in particular at 81,999 as follows:
“Returning to the case in hand, it is important to recognize and give realistic effect to the circumstance that the acquisition and development by the husband of his professional skills (and thus his present high earning capacity) occurred during the marriage whilst at the same time the wife sacrificed her professional skills to care for the family. These are matters to which paras (j) and (k) of s 75(2) are directed.”
We note, however that the remarks in Mitchell were made in the context of consideration of an application for spousal maintenance.
In B and B (No 2), when considering matters relevant to the re-exercise of the discretion, their Honours said:
“77.The trial Judge identified the relevant matters referred to in s 75(2), with the exception of the matter referred to in s 75(2)(j), namely the extent to which the wife contributed to the husband's earning capacity. In our view, the evidence demonstrates that the wife made a significant contribution to the husband's earning capacity and accordingly, we would attach considerable weight to it. We would also attach significant weight to the disparity in the earning capacity of the parties, at least for the next six years. The husband is making a substantial financial contribution to the support of the children and it is not suggested that he will not continue to do so. We also attach not insignificant weight to the amount each party will receive as a result of their respective contribution based entitlements.”
In his oral submissions, counsel for the wife referred us to the earlier Full Court decision in Clauson and Clauson (1995) FLC 92-595. However, the relevant s 75(2) factors identified in Clauson by the Full Court were noted to be the “enormous disparity in the income and income earning capacities of the parties coupled with the circumstance that the wife is the custodian of four children aged between 3 and 8”. It appears to us that their Honours’ comments were primarily directed to ss 75(2)(b) and (c) rather than ss 75(2)(j) or (k).
Counsel for the wife also referred us to G and G [2001] FamCA 1453 at paragraph 276. Our reading of this paragraph also appears to be directed to s 75(2)(b).
In Hirst and Rosen (1982) FLC 91-230 at 77,249 Nygh J considered the applicability of s 75(2)(k) to s 79 and said:
“I am assuming without deciding for the purpose of the present case that para (k) has become relevant in the present proceedings through the operation of s 79(4)(d) although para (k) speaks of ‘the party whose maintenance is under consideration’, and in this case it must be admitted that the wife cannot maintain any claim under s 72 for maintenance”.
The inclusion of the words “whose maintenance is under consideration” in ss 75(2)(j) and (k), prima facie, indicates the subsections relevance to spousal maintenance applications. However s 79(4)(e) does not limit consideration in proceedings under s 79 to any specific s 75(2) factors. The criterion to be applied under s 79(4)(e) is that the matters in s 75(2) must be relevant. It is necessary that assessment of contribution exercise under ss 79 (4)(a),(b) and (c) is not confused with the word “contributed” in s 75 (2)(j), the latter requiring the consideration of a contribution to a financial resource. We accept caution is required to avoid the possibility of “double counting” of an indirect non financial contribution by a spouse as homemaker and parent to the development of a business, and, in addition, making an adjustment relying on s 75(2)(j). However, it follows from our discussion that we do not accept counsel for the husband’s submission that ss 75(2)(j) and (k) were irrelevant factors which the trial Judge should not have taken into account. In this case the trial Judge did not “double count”. His assessment of factors under s 75(2) was directed to relevant matters under ss 75(2)(j) and (k). It was relevant in the circumstances of this case for the trial Judge to have regard to the wife’s contribution to the husband’s earning capacity acquired during the course of a lengthy marriage.

Conclusions

It is apparent from a reading of the trial Judge’s reasons for judgment that the significant factors he took into account in making an adjustment in the wife’s favour under s 75(2) were “the significantly greater income of the Husband, the vastly superior earning capacity of the Husband, the greater property interests including superannuation of the Husband and the greater financial resources of the Husband”. The husband at trial recognised there should be an adjustment in the wife’s favour under s 75(2) and contended that such an adjustment should be 5 per cent. We are satisfied that the 10 per cent adjustment found by the trial Judge to be appropriate was one within the reasonable ambit of his discretion. Accordingly, we are satisfied that this ground is not made out.

Were the orders “just and equitable”?

The parties’ submissions

Counsel for the husband in his written submissions noted that an examination of the parties’ assets and liabilities disclosed that none of the real estate interests held by the husband were solely owned by him, and that with the exception of the second property, “all of the properties were affected by CGT”.
Counsel for the husband further submitted that, without the agreement of his relatives or Ms B, the husband was unable to realise any real estate with the exception of the fourth property. He noted that this property was subject to capital gains tax (“CGT”) and also owned as to 25 per cent by the husband’s superannuation fund. Counsel for the husband submitted it was unrealistic for the trial Judge to provide for the husband to pay an amount of almost $500,000 within three months.
Before us, counsel for the husband submitted that, as almost all of the husband’s assets were investment assets, CGT would be applicable on any sale. He submitted any CGT incurred on any asset realised should be met by the parties in proportion to their entitlements.
In his written outline of submissions, counsel for the wife noted that in the husband’s original Notice of Appeal filed on 30 November 2004 he sought six months to make the payment to the wife. He submitted “it is incongruous that a person with $2.2 M in net assets, a high income and negligible borrowings could not raise $492,000 without selling property”. He noted the submission in relation to the trial Judge’s alleged failure to have regard to CGT implications “of the sale of the assets of [the company]”.

In his oral submissions counsel for the wife referred us to the financial statements of the company which disclosed “cash at bank of $355,005”. Counsel for the wife further pointed out that there were no CGT calculations before the trial Judge. He said the issue before the trial Judge was, in valuing the company on a net asset backing basis, whether or not income tax payable on the realisation of the company’s assets should be taken into account. He submitted we should also have regard to the trial Judge’s finding, which is not challenged, that he was “not satisfied on the evidence…that any such sale is inevitable or would probably occur in the near future”.

Discussion

The effect of the trial Judge’s orders was to leave the husband with the entitlement to property to a value of $2,222,625.30. No evidence about the incidence or likely incidence of a liability for CGT was raised before the trial Judge.
We discern, particularly having regard to the husband’s original Notice of Appeal, that the main thrust of the husband’s complaint about the trial Judge’s orders was the period of time provided in the orders for payment to the wife. Having regard to the assets to be retained by the husband, including his retention of his interest in the company, the cash at bank disclosed in the company’s financial statements, as well as the husband’s substantial income and capacity to borrow, we are satisfied that the orders of the trial Judge which provided for payment within three months of $492,856.70 to the wife, and transfer of the husband’s interest in the matrimonial home, were just and equitable. Accordingly, we are satisfied grounds 8 and 9 have not been established.

Costs

Both parties agreed that the question of costs including the costs referred to in ground 10, should be dealt with by submissions following the determination of this appeal.
Since preparing our reasons we have had the opportunity of reading Finn J’s judgment in draft form. We agree entirely with the reasons expressed by Finn J in her judgment.

ORDERS

The appeal is dismissed.
The parties are at liberty to file written submissions with regard to any appeal against any costs order made by the trial Judge and to the costs of the appeal in accordance with the following timetable:
(a)on behalf of the appellant husband within twenty one days of the date hereof;
(b)on behalf of the respondent wife in response thereto within twenty one days thereafter; and
(c)on behalf of the appellant husband in reply thereto within seven days thereafter.

I certify that the preceding 194 paragraphs
are a true copy of the reasons
for judgment delivered by
this Honourable Full Court.

Associate