Zader v Zader

[1988] HCATrans 163

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S31 of 1988

B e t w e e n -

JOHN EDWARD ZADER

Applicant

and

CHRISTINE ZADER

Respondent

Application for special

leave to appeal

MASON CJ
BRENNAN J

DEANE J

Zader

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 AUGUST 1988, AT 3.10 PM

Copyright in the High Court of Australia

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MS L. JUDGE: If the Court pleases, in this matter I appear

on behalf of the applicant. (instructed by

L.W. Williams & Associates)

MR P.I. ROSE: If the Court pleases, I appear for the

respondent. (instructed by Landers, O'Reilly

& Co)

MASON CJ:  Yes, Ms Judge.

MS JUDGE: If Your Honours please, this is an application

for special leave to appeal from a decision of

the Full Court of the Family Court of Australia,

handed down on 1 March 1988. On that day the

Full Court considered an appeal from

His Honour Mr Justice Dovey. His Honour had,

prior to that date, considered a property

application between parties pursuant to section 79

of the FAMILY LAW ACT.

The factual circumstances which His Honour

was asked to consider were not unusual factual
circumstances as far as that court was concerned.

The marriage was of a marriage like magy others
that come before the court on a day to day basis.

The parties had cohabited for a period of 12 years,

they had been married for seven of those years,

there were two children of that marriage, who

are now 9 and 11, and at the conclusion of the

marriage the only real asset that the parties

owned was a former matrimonial home which had

an equity of $60,000, the value being about $85,000
and it being subject to a defence forces home
incumbrance in the sum of $25,000.

The husband had been the bread-winner during the course of the marriage and the parties' initial

home at Ashfield had been purchased at the beginning

of the parties' relationship for the sum of about $20,000, $17,000 of which came from a third party

settlement won by the wife.	The result of
His Honour's judgment was to award to the wife,

in effect, the whole of the assets of the parties

of this marriage. The concern of the applicant

arising from Their Honour's judgment and

Their Honour's findings in relation to the judgment of the trial judge is primarily threefold.

The first concern of the applicant is that

the Full Court, in upholding His Honour's judgment
and, in effect, upholding His Honour's failure
to specifically consider the contributions of

the husband to the marriage pursuant to section 79(4)

sanctions what was, in effect, a legal error.

BRENNAN J:  Why cto'you say he specificially refused to

consider or did not consider?

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MS JUDGE:  In my submission, Your Honour, he failed to

consider the contributions of the husband. On

a reading of His Honour's judgment, he makes -
and I think that His Honour's judgment is found

at - - -

BRENNAN J:  The relevant passage is at the bottom of

page 2 and the top of page 3, I think.

MS JUDGE: Yes, thank you. It is the applicant's submission

that His Honour failed to take into account the

contributions of the husband because there is

nothing on the face of his judgment to suggest

that he did so. The Full Court appears to have

taken one phrase referred to by His Honour in

his judgment, that is, the phrase where they

say that the wife made "the lion's share" of

the contribution to the property in question

and have chosen to infer from that that

His Honour did, in fact, consider the contributions

of the husband.

The argument of the applicant is that it was well established and confirmed by ijALLETT V MALLETT.&nd, indeed, again in NORBIS and the

decisions of the Full Court of LEE STEERE V

LEE STEERE and PASTRIKOS V PASTRIKOS, coming

before those decisions, that a judge at first

instance is required to consider and to take

into account the factors referred to in section 79(4).

The question of what weight he gives to those

factors is another matter altogether but in the

applicant's submission it is clear law that a

trial judge is required to go through the exercise

and required by the wording of the statute and

the reference in the statute to 79(4) referring

to the contributions of the parties and then

making an assessment of the respective contributions

of the parties.

What His Honour appears to have done is that His Honour has looked at what he clearly

saw as a primary contribution, that is, a

contribution by the wife to the acquisition of
the original properties of the parties and that

is the only contribution to which His Honour

referred in his judgment and, indeed, in taking
that contribution and choosing to trace it through

in the way he did, he ignored two other principles

which, in our submission,have been well established

by the Full Court of the Family Court, in any

event, and that is, firstly, that an initial
contribution by a party to a marriage generally

can lose force the longer that the marriage progresses,

not purely by reason of the passage of time which
has passed but by reason of the other contributions

of the other party being engrafted upon them.

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The second principle that Their Honour

appear to have overlooked is the very strong

reluctance on the part of the Full Court and,

fruits of ·a marriage. It is an extremely unusual situation when that occurs. In our submission, the effect of His Honour's judgment

indeed, judges sitting at first instance in the the

is that he has failed to consider in any way

whatsoever the way in which the husband has
contributed to this marriage and the property

of the parties to the marriage.

He has failed to mention or consider the

fact that the husband was the primary bread-winrier

· during the course of the marriage although

Their Honours do not dispute that there was evidence of that.

DEANE J: Was there any evidence, Ms Judge, of the husband

having contributed anything to the purchase price

of this property apart from the contributions

made in relation to the mortgage of the original

property?

MS JUDGE:  No.

The evidence was that the majority of the

purchase price of the Moorebank property which
the parties owned at separation came from the

sale of the previous property -

DEANE J: That is the ASHFIELD property?

MS JUDGE:  No, a property at Casuala. The parties owned

three properties during the course of their marriage.

They owned the property at Ashfield, that property

was sold in about 1981, a property was purchased

at Casuala and that property was sold in 1984

and the Moorebank property was purchased.

DEANE J: It is common ground that the Ashfield property

was the wife's, is that right?

MS JUDGE:  Yes, I do not think there is any issue that

the Ashfield property was purchased in the wife's

name. No. There was evidence by the husband

that he paid part of the mortgage on the property.

However, there was evidence to the effect that

some of the proceeds of sale from Casuala were

used to discharge a loan and that, in fact, the

parties had had two major loans during the course

of the marriage, a credit union loan through

the husband's armed forces credit union in the

sum of $15,000 and the mortgage which was on

the Moorebank property at the date of separation
and, indeed, at hearing, which was a defence

forces home loan.

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DEANE J: And what was the evidence about the mortgage

on the Ashfield property? Was there one?

MS JUDGE:	Yes, there was an amount borrowed.
DEANE J:	How much?
MS JUDGE:	I think the wife's evidence, and I do not think

it was substantially disputed by the husband

at trial, was that the property had been purchased

for about $20,000.

DEANE J: $21,000, I understand.

MS JUDGE:  I think she gives two lots of evidence in relation

to that. On one occasion she says 20, the other

occasion she says 21, and she had received $17,000

from a verdict and that the balance was by way of

mortgage. She did concede in one of her affidavits

that she could recall being out of work for a
period of time early in the relationship but
she could not remember whether the husband paid

the mortgage so that is the only evidence that

there was a mortgage on that property.·

BRENNAN J:  Then when that was sold the proceeds were put

into the second property, is that right?

MS JUDGE:	Yes, that is right, Your Honour.
BRENNAN J:	And was that all that was paid in by way of purchase price, the balance being met by mortgage?
MS JUDGE:	Yes, the balance - around about the time of the

purchase of the Casuala property a loan was taken
out with the husband's army credit union and

that loan was partially used towards the purchase,

I think, of the second property and partly used, in the marriage.

BRENNAN J: And then when Casuala was sold, was it used

for the purchase of the Moorebank property?

MS JUDGE:  Some of the Casuala proceeds were used to pay

out what was left of the personal loan of $15,000

and part was put into an account. There is some

issue-as to what happened to moneys that were

placed in the accounts and then the bulk of it

was used towards the purchase of the property

at Moorebank which was purchased with the assistance

of a mortage from the defence service homes.

You see, the Casuala property was sold in 1981

for $71,750 and at that time the $15,000 loan was
dsicharged and there is also some evidence by

the wife of some money moving into bank accounts

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which was- subsequently used by the parties.

The property at Moorebank was purchased for $71,000

and $25,000 of that purchase price was the defence

services homes loan.

DEANE J:	But what could be put against you would be, would
it not, that the wife went into marriage with
the property at Ashfield with a mortgage of $4000,
she goes out of the marriage with the property at Moorebank with a mortgage of $25,000 and the two properties are worth roughly the same.
MS JUDGE:	With respect, Your Honour, that, in my submission,

would not work against us for this reason, that

it is well established that, in my submission,

there is a decision of His Honour Mr Justice Baker,

(1981) FLC, which in effect says that the parties

bear the benefit and the burden of a marriage.

Assuming for the moment that the parties had

never sold Ashfield and that they had remained

at Ashfield - - -

DEANE J:	I was not suggesting it was conclusive against
you, I was just suggesting it was sometfiing that might be put·against;you.
MS JUDGE:	The husband, Your Honour, would not cavil with

the fact that the wife's initial contribution

to the Ashfield property was a contribution that

His Honour should have taken into account and

that he should have given some weight to. That

is not the problem that the husband has with

either His Honour's judgment or the judgment

of the Full Court. The problem that the husband

has with His Honour's judgment and the maintaining

of the Full Court by that judgment is that

His Honour gave limited reasons and made no reference

whatsoever to any other contributions other than

the contribution by the wife to the Ashfield

property.

He did not mention, at any place in his

judgment, in my submission, that the husband

had contributed to the marriage and the family

and I think that the Full Court acknowledge

early in their judgment that there is really

no issue that there was some evidence of contributions

by the husband. In doing that, the Full Court

have, in effect, gone behind, in my submission,

His Honour's judgment and have said, "Well, he

does not really say that he took those matters

into account but he must have and it is regretable

that he didn't say so but nevertheless we uphold
the judgment."

The important point of law which the applicant

says this case rests upon is the legal duty which

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is conveyed by a reading of the statute incorporating

section 79 upon a judge at first instance to

refer to the contributions of the parties pursuant

to section 79. That, in the applicant's submission,

is an exercise which is fundamental to the hearing

of a property application. The considering of those factors is not optional, it is, in fact, essential and, indeed, although what weight later

on His Honour might give to those various factors

or how he chooses to weigh up those factors may

be more a question for weight and a situation

in which a court might be reluctant to apply

rule of law - - -

MASON CJ:  But section 79(4) does not require the judge

to actually refer to them, does it? It requires

him to take them into account.

MS JUDGE:  That is correct, Your Honour.

MASON CJ: Normally one would expect a judge to take them

into account in his expressed reasons in an overt

and more specific way than the trial judge did

in the present case but, after all, the -ultimate

question is: did he take them into acc6unt?

And one would have thought that the requirement

is so fundamental that a judge in the Family that were made by the husband which were placed

readily in evidence before it.

MS JUDGE:  One would have hoped that that would he the

case, Your Honour, but the unfortunate thing

is that the result, in my submission, is such an unusual one - and I go as far as to submit such an unreasonable result in the sense of being

outside the area of discretion, the result that

you would normally expect from a judge's

exercise of his discretion - - -

DEANE J:	But you cannot say that, Ms Judge, unless you
challenge the factual finding in lines 2 to 4
His Honour is correct the case is an unusual on page 3 because if that factual finding of
one where the wife contributed practically
100 per cent of the funds towards buying the family home. Why, if that is so, do we not
start with the assumption, "Well, both would
have contributed during the marriage in different
ways but if the wife contributed almost 100 per
prima facie she should have it. 11  cent of the funds towards ~buying the property
MS JUDGE:	With respect, Your Honour, that is the finding
that the husband would challenge for these reasons.

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DEANE J: Then if you are coming here to mount a case

based on a challenge to the trial judge's primary

finding of fact, should not that be, your starting

point?

MS JUDGE:  Your Honour, when His Honour says that the wife

contributed practically 100 per cent of the funds,

I assume that His Honour is: saying that the

wife made a direct financial contribution to the property which is the last property that

the parties own: at the date 'Of separation.

That finding in itself, in my submission, indicates

that His Honour failed to take into account any

contributions of another kind by the husband.

As Your Honour is well aware, financial

contributions are not the only contributions

that a court is required to take into account

and if His Honour says that because the wife

paid for the bulk of the Ashfield property initially,

which was purchased in 1971, she contributed

the whole of the purchase price, apart from

the mortgage to the property in 1984, then he

has clearly ignored the non-financial Gontributions

and the financial contributions that were made

by the husband between those two points, because

if the property at Ashfield had remained intact

until 1984 the husband would have made contributions

to the family as a bread-winner and a home-maker

and parent and made a contribution by paying

off the various loans that the parties had and made

a contribution by doing work on the house as

there was evidence of.

DEANE J:	But surely it is pretty obvious that what His Honour has done is said, "The wife paid all
the money to buy the house, true it is the husband
has made all the ordinary contributions and so
has the wife and they tend to balance one another 11
o·  So you go back and you see who pa id for
t  thing.

MS JUDGE:	With respect, Your Honour, that does not appear
to be what His Honour has done. What His Honour
has chosen to do is to take a part of the wife's evidence where she traces through the purchases
and sales of the various properties and she says,
"I regarded these properties as mine because of my initial contribution to the Ashfield property."
and then he has chosen to reach a finding on
that basis that the wife contributed funds to
the extent of 100 per cent.  But that, Your Honour,
is not what the evidence, in my submission, revealed
and that, and the concern so far as the applicant
is concerned, is that that sort of reasoning
and that sort of approach flies in the face,

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if you like, of decisions of this Court, such
as MALLET V MALLET and NORBIS V NORBIS, and the
concern about reasoning like that in His Honour's

judgment being upheld by the judgment of the

Full Family Court is that that court, of course,

is the appeal jurisdiction which judges at first

instance look to for guidance in the exercise of

their discretion.

MASON CJ: But the members of that court have made it perfectly

clear that they expect a higher degree of specificity

in findings than one finds in the present case,

so that the ultimate decision in the case is

no indication to judges of the Family Court that

they should depart from the requisite and regular

form of uniformity and particularity in finding.

MS JUDGE:  Your Honour, the difficulty with that is this,

that not all judges may see it quite that way.

MASON CJ:  They should see it that way if they read the

judgments of the Full Court.

MS JUDGE:  The difficulty is, Your Honour, that this judgment,

in my submission, the judgment of the Full Court
in this case could be read as running against,

as relaxing, the judgments of the Full Court

and that is the difficulty with this judgment.

PASTRIKOS said quite clearly that a judge who

is exercising his jurisdiction under section 79
is required to go through the dual exercise of

considering factors under section 79 and then

considering the factors under section 75.

MASON CJ:	I think you have made that point, Ms Judge.
MS JUDGE:	Thank you, Your Honour.  And that, of course,

was confirmed by the various judgments in this

Court in MALLET V MALLET and in that judgment,

at page 608, His Honour Chief Justice Gibbs said -

he refers to the fact that the court has had

a very wide discretion conferred upon it but

refers to the fact also that there are some broad

principles which the court is required to give

effect and, he says, half-way down the page:

First, the court must consider the extent
to which either party has in the past

contributed to the acquisition, conservation

or improvement of the property - - -

BRENNAN J: Ms Judge, are you not faced with this difficulty

that there are two problems, as I think the

Chief Justice pointed out some time ago, that

one question is what the judge must do as an

intellectual exercise. He must give consideration

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to the section 79 matters and he must do the

balancing exercise. In this case, because the

judgment is so sparse in particularity, you want

to make the leap, do you not, of saying that

His Honour did not in fact do that exercise?

Unless you can make that leap, it seems to me

that you do not get a question of principle involved.

And then you have another problem, and that is that at the end of the day you have a finding from His Honour as to where the lion's share came

from; and then you have His Honour's consideration

of section 75. And at the end of both of those

exercises, His Honour says, "I think the appropriate
order is so and so." How do you convert all

of that into a special leave question of principle?

MS JUDGE:  Your Honour, the question is really the adequacy

of His Honour's judgment and His Honour's reasons.

BRENNAN J:	His expressions of reasons?
MS JUDGE:	His expressions of reasons. In other words,

has His Honour sufficiently carried out his

obligations under section 79(4) in giving the

reasons in the way he has or has he erred. Is

he specifically obliged to enumerate to some

extent, at least, so as to convey to another

judge and to the parties involved that he has taken all of those matters into account. And

that goes to the question of His Honour's reasons.

BRENNAN J: That raises another two questions, does it

not? One is whether the absence of reasons is sufficient to allow you to make the submission

that His Honour did not give the consideration

'Which he is bound to give. The second is, assuming

that they do not go to that extent, so that you

cannot demonstrate any error in the consideration

which His Honour gave to it, you are able none

the less to raise an argument that though a judge

performs his function entirely appropriately,

if he fails to express i4 his order is none the

less open to challenge?

MS JUDGE:  I will address the first matter to Your Honour

in this way: in the matter of PUBLIC SERVICE

BOARD V OSMOND, 159 CLR 656, the High Court

had the opportunity to consider the decision

of PETIT V DUNKLEY, which was a decision of the

New South Wales Court of Appeal, and the effect

of that decision, in my submission, was that

a failure - and that case, of course, involved a failure by a trial judge to give any reasons

whatsoever in relation to his judgment. But

the effect of that decision was that a failure
to give reasons can, in itself, be an error of

law which is sufficient to enable an appellate

court to upset the judgment.

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The reasoning behind that judgment, as it

was referred to - and it was referred to in THE

PUBLIC SERVICE BOARD V OSMOND and not disapproved -

is that without reasons it is impossible for

an appellate court to know why the judge below
has reached the decision which he has. In other

words, the judgment is the vehicle by which an

appellate court can look at the fact situation

and look at the result and determine whether

or not proper principles of law and fact have

been applied.

MASON CJ:  I think we are aware of that, Ms Judge.

MS JUDGE: I appreciate that, Your Honour. In this case,

in my submission, what His Honour has done is

that he has in fact, in effect, partially failed

to give reasons. He has given inadequate reasons

and that, in itself, in my submission, would

have been an error of law sufficient to upset

his judgment at first instance. And, indeed, I think that the fact that such an inadequacy

of reasons can constitute such an error was recognized

by His Honour Mr Justice Fogarty in tha·Full

Court when he heard this matter.

It is our submission that the exercise under

section 79 is so fundamental to justice and

equity being done in a property application pursuant

to section 79 that a trial judge is obliged

to show, on the face of his judgment, that he

has given consideration to the factors that he

is required to give consideration to. And the

extent to which a trial judge is required to give
consideration to factors under 79(4) and the
extent to which a trial judge is required to
enumerate matters under section 79(4) is, in
our submission, an important point of law and
is a point of law sufficient to justify the granting

of special leave for these reasons - - -

MASON CJ:

I thought you had already given us the reasons.

There is no need to restate them.

MS JUDGE:  Your Honour, I was only going to say this, that

this is an exercise which the Family Court is

required to go through every day. Every day

they are hearing property applications, in some
cases there is more property involved than in

other cases, however, it is essential that justice

be seen to be done in a case like this, in my

submission, and the only way that single judges

can obtain guidance as to how a particular matter

should be approached is from the judgments of their brother judges and the judgments of the

appellate courts and that the exercise under

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79(4) is so fundamental, in my submission, that

there is a need for this Court, in its appellate

jurisdiction, to make clear to the Full Court

of Family Court and the litigants affected by

the decisions of the Family Court exactly what

their obligations are under this very important
statute.

And that, in our submission, is the important area so far as this appeal is concerned and, as I

have said to Your Honours, the difficulty is

that for Mr Zader it has very significant results

because the decision has, in effect, deprived

him of the whole of the fruits of his marriage.

That is an unusual situation.

MASON CJ:  I think you have made that point on a number

of occasions already, Ms Judge.

MS JUDGE:  Thank you, Your Honour. Your Honours, it will

also be our submission that the other fundamental

question is probably the question that has been

canvassed here today and that is whether a failure

by a trial judge to enumerate in his judgments

the specific matters under section 79(4) are

in fact an error of law sufficient to warrant

a review of that judgment. In other words, it

goes to all of those cases that lay down appellate

principles against discretionary judgment.

The Full Court, in this case, approached

the matter on the basis that they were considering
not whether His Honour had, in fact, considered

any contributions by the husband, they approached

it on the basis that they were considering what

weight - they were assuming that His Honour had
given consideration and they approached it on
the basis that they were asked to consider what

weight would be given to those contributions.

And they said that there was nothing in the judgment

that they could find was an error of law or an

error of fact as referred to in the judgments

of HOUSE V R and GRONOW V GRONOW and the other

classic cases in this area.

MASON CJ:  But Ms Judge, have we not really covered the

ground and covered it exhaustively already?

MS JUDGE:  Yes, thank you, Your Honour. Your Honour, so

far as the application for special leave to appeal

is concerned, that is fundamentally the basis

of the applicant's submission that he ought to

be granted special leave to appeal, that the

question is so fundamental as to require guidance

from this jurisdiction to the Full Court of the

Family Court in relation to their obligations.

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Unless there is anything further, I have

nothing further to put to Your Honours.	Thank
you.

MASON CJ:  Thank you, Ms Judge. The Court need not trouble

you, Mr Rose. The Court is not persuaded that

there was any error in principle in the decision

of the Full Court of the Family Court, nor is

the Court persuaded that the judgment and order

made by the primary judge was incorrect. For

those reasons, the application for special leave

to appeal is refused.

MS JUDGE: If the Court pleases.

MR ROSE:  If Your Honours please, I am instructed to seek

costs. However, I have to inform Your Honours

that my client is legally aided.

MASON CJ:  The application for costs is refused.

MR ROSE: If Your Honours please.

MS JUDGE: If the Court pleases.

AT 3.45 PM THE MATTER WAS ADJOURNED SINE DIE

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