Zagari & Habib
[2010] FamCAFC 159
•25 August 2010
FAMILY COURT OF AUSTRALIA
| ZAGARI & HABIB | [2010] FamCAFC 159 |
| FAMILY LAW - APPEAL – PROPERTY SETTLEMENT – whether the Federal Magistrate erred in failing to adopt an asset by asset approach – whether the Federal Magistrate erred in including a debt owed by the husband to his de facto partner as a liability of the parties – whether the Federal Magistrate failed to attach sufficient weight to the fact the debt was unlikely to be enforced – whether the Federal Magistrate erred in her assessment of the parties’ contributions – where the Federal Magistrate incorrectly recorded the value of the wife’s superannuation entitlements due to incorrect figures provided by the wife – whether this error warrants appellate intervention – appeal allowed in part on the limited issue of the inclusion of the debt as a liability of the parties – appeal otherwise dismissed. FAMILY LAW - APPEAL – RE-DETERMINATION – amount of the debt deleted from the asset pool – order of the Federal Magistrate varied. |
| Family Law Act 1975 (Cth) s75(2) & s 79 |
| AF Petersens and AF Petersens (1981) FLC 91-095 Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 Biltoft and Biltoft (1995) FLC 92-614 Browne and Green (1999) FLC 92-873 Gronow v Gronow (1979) 144 CLR 513 House v The King (1936) 55 CLR 499 In the marriage of McMahon (1995) FLC 92-606 Kowaliw and Kowaliw (1981) FLC 91-092 Mallet v Mallet (1984) 156 CLR 605 M & M [1998] FamCA 42 Mims & Green and Green (2008) FLC 93-359 Norbis v Norbis (1986) 161 CLR 513 Reynolds and Reynolds (1985) FLC 91-632 Zdravkovic and Zdravkovic (1982) FLC 91-220 |
| APPELLANT: | Ms Zagari |
| RESPONDENT: | Mr Habib |
| FILE NUMBER: | ADC | 5300 | of | 2007 |
| APPEAL NUMBER: | SA | 84 | of | 2009 |
| DATE DELIVERED: | 25 August 2010 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 25 March 2010 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 28 August 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 913 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr McQuade |
| SOLICITOR FOR THE APPELLANT: | Ann Josephson Lawyers |
| SOLICITOR FOR THE RESPONDENT: | In person |
Orders
The Application in an Appeal seeking to adduce further evidence filed by the husband on 14 January 2010 be dismissed.
The appeal be allowed in part.
Order 1 of the orders made by Kelly FM on 28 August 2009 be varied by deleting the sum of SEVENTY-SIX THOUSAND NINE HUNDRED AND THIRTY DOLLARS [$76,930.00] and substituting the sum of FORTY-NINE THOUSAND DOLLARS [$49,000.00].
The appeal otherwise be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Zagari & Habib is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SA 84 of 2009
File Number: ADC 5300 of 2007
| Ms Zagari |
Appellant
And
| Mr Habib |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 25 September 2009 Ms Zagari (“the wife”) appeals against orders made by Kelly FM on 28 August 2009 with respect to property settlement.
Those orders provide:
In full and final settlement of any claim that either party may have against the other in settlement of property:
(1) The wife do pay to the trust account of Christopher Ganzis & Co for and on behalf of the husband within thirty (30) days of the date herein the sum of SEVENTY SIX THOUSAND NINE HUNDRED AND THIRTY DOLLARS ($76,930.00).
(2) The husband retain as his sole property free from any claim by the wife the following:
(a)any motor vehicle in his possession;
(b)any monies standing to his credit in any financial institution;
(c)all furnishings and household effects in his possession;
(d)all his estate and interest both at law and in equity which he may have in any superannuation scheme, retirement benefit, early retirement redundancy benefit or rollover fund;
(e)all his estate and interest both at law and in equity which he may have in any life insurance, insurance or endowment insurance policy;
(f)all other items of property presently in his possession of whatsoever kind and wheresoever situated.
(3) The wife retain as her sole property free from any claim by the husband the following:
(a)the property situate at [S];
(b)any motor vehicle in her possession;
(c)any monies standing to her credit in any financial institution;
(d)all furnishings and household effects in her possession;
(e)all her estate and interest both at law and in equity which she may have in any superannuation scheme, retirement benefit, early retirement redundancy benefit or rollover fund;
(f)all her estate and interest both at law and in equity which she may have in any life insurance, insurance or endowment insurance policy;
(g)all other items of property in her possession of whatsoever kind and wheresoever situated.
(4) The husband do indemnify the wife and keep her forever indemnified with respect to all debts and liabilities in his name, including but not limited to the following:
(a)any debt outstanding to Ms [A];
(b)any debt outstanding to [W] Credit Union;
(c)any other personal loan, credit card and store account debts;
(d)any debt to the Australian Taxation Office, whether in the husband’s sole name or jointly with any other person.
(5) The wife do indemnify the husband keep him forever indemnified with respect to:
(a)all mortgage payments, rates, taxes, levies and other outgoings with respect to the property at [S] aforesaid;
(b)all other debts and liabilities of the wife including personal loans, credit card and store account debts, whether in the wife’s sole name or jointly with any other person.
(6) Each party do all acts and sign all documents as may be necessary to give full effect to the terms of this order.
This appeal is being determined by me as a single judge, following a direction by the Chief Justice pursuant to s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
Mr Habib (“the husband”) seeks that the appeal be dismissed.
Background
At the time of trial the husband was aged 46 years and the wife was aged 41 years.
The parties met in early 2003 and married in October 2003. They did not live together until their marriage.
At the time of their marriage the husband worked full time. He also bought and sold investment properties and he owned three properties at E, H and a property under development at N.
The wife completed her studies during the marriage. She also undertook occasional employment during the marriage.
The wife has a daughter from a previous relationship who was aged 17 years when the parties married. According to the husband, the wife’s daughter lived with the parties during their marriage. The wife maintained her daughter lived with her maternal grandparents.
In 2002 the husband borrowed $60,000 from Ms A. This loan was repaid in 2004. The husband and Ms A had a brief relationship prior to the parties’ marriage and were in an intimate relationship at the time of the trial.
In May 2004 the husband borrowed $30,000 from Ms A which he said he used to pay off credit card debts and reduce the mortgage secured over his investment properties.
Between 2003 and 2006 the three properties owned by the husband at the commencement of the marriage were sold.
In 2004 the wife sold two flats she owned in Iran, as well as a flat owned by her mother.
In early 2005 the husband was made redundant from his employment and received a redundancy payment.
In mid 2005 the husband purchased the V Café in Adelaide. The purchase price of $100,000 was to be paid in four instalments of $25,000. The husband claimed at trial that this purchase was a joint decision by the parties, however, the wife maintained that the husband purchased the business without consulting her. The husband borrowed $30,000 from the Commonwealth Bank to make the initial payment. Funds from the sale of the H property were used for the second instalment. The husband borrowed a further $25,000 from Ms A in October 2005 to meet the third instalment. The husband ceased the trading of the business in December 2005 after defaulting on the last repayment. The previous owner of the business “effectively repossessed” the business and remaining stock in January 2006.
In October 2005 the wife purchased a property at S (“S property”). This property was also the source of dispute at trial. The wife says she purchased the property after separation and provided all the funds for the purchase. The husband claimed he lived at the property with the wife for a few months prior to moving to O.
The parties are in disagreement as to the date of their separation. The wife says the parties separated on 1 September 2005. The husband maintains the parties did not finally separate until October 2006.
In early 2006 the husband obtained employment in O, and he moved there to take up this position in April 2006.
The wife subsequently obtained employment at O, where she worked for a brief time before obtaining further employment in L. The wife denied at trial that her employment in O was in any way related to the parties’ marriage. At the time of trial the wife was working on a casual basis.
The husband commenced proceedings in the Federal Magistrates Court on 10 October 2007.
The husband remained living in O until 2008, at which time he resigned from his employment and returned to live in Adelaide. The husband was not employed at the time of trial.
The trial was heard by Kelly FM on 22 and 23 September 2008, continuing on 30 and 31 March 2009. Her Honour delivered her reasons for judgment and made final orders on 28 August 2009, as recorded above at paragraph 2.
Reasons for judgment of the Federal Magistrate
After outlining the background of the matter, the Federal Magistrate, in referring to the evidence before her Honour, commented that neither party had provided proper discovery and that counsel and the Court had been “hampered by the late disclosure of documents and by inadequate or incomplete disclosure of relevant financial records.” The effect of this being that the trial was “significantly longer than it otherwise needed to be”, ultimately being heard over four days.
With respect to the credibility of the parties, the Federal Magistrate found that neither party impressed as a reliable witness and that both had been prepared to make false statements, for example to Centrelink or in order to obtain finance. However, the Federal Magistrate did not consider that either party’s evidence was wholly unreliable.
The first issue addressed by the Federal Magistrate was the date of the parties’ separation, which the parties were in “heated disagreement” about. Her Honour identified that the date of separation was of significance given that the only remaining asset, the S property, was purchased at a time when the wife claimed the parties had separated and her position that the property therefore should not form part of the matrimonial property pool.
As previously mentioned, the wife claimed separation occurred on 1 September 2005. The husband, although acknowledging the parties separated in September 2005 for what he says was only a few days, nominated October 2006 as the date of separation.
Her Honour found that neither party’s evidence regarding the period between September 2005 and October 2006 was entirely reliable, and that the husband’s evidence was generally unreliable as to dates and timelines. Her Honour thus found the wife’s evidence regarding this period was more reliable.
The husband claimed that he moved into the S property with the wife, however her Honour concluded that the evidence of the husband and his father on this topic was generally imprecise and unreliable and she was ultimately not satisfied the husband lived at the S property during this time, preferring the evidence of the wife and her daughter that only they moved into the property in November 2005.
Her Honour then turned to consider whether the parties reconciled after this time. Her Honour referred to evidence that the parties communicated and that the wife travelled to O on at least two or three occasions in 2006.
The Federal Magistrate concluded the marriage ended prior to the wife’s move to O, but was satisfied that there was evidence in favour of an ongoing “marriage-like relationship” in the first six months of 2006, conducted between Adelaide and O. Her Honour ultimately concluded that the parties were likely to have finally ended their marital relationship sometime between May and August 2006.
Her Honour then turned to consider the asset pool. It was the wife’s position before the Federal Magistrate that an asset by asset approach should be adopted given the short duration of the marriage and the degree to which the parties had conducted their finances separately during the marriage. Her Honour however determined that given her findings regarding the likely timeframe of separation and the parties’ evidence, it was more appropriate to adopt a global approach.
By the end of the trial the parties had reached agreement regarding the value of the remaining tangible assets and their superannuation entitlements. Both parties had proposed that the superannuation interests should be treated as a separate pool and her Honour agreed this was appropriate. The parties agreed each would retain their respective superannuation interests.
The Federal Magistrate then turned to determine the remaining issues in dispute regarding the asset pool.
Firstly, her Honour turned to consider the husband’s real estate holdings. In this respect her Honour noted that the husband had lost money on the N property and that although there was uncertainty on the issue because of the paucity of financial records presented by the husband, it may be that the profits from the other properties were lost in the transaction also.
A significant area of contention between the parties was the husband’s alleged debts to Ms A.
To repeat, the husband and Ms A had a brief relationship prior to the parties’ marriage and it was conceded they were in an intimate relationship at the time of the trial. While her Honour placed little weight on the evidence of the husband regarding this financial dealing, her Honour found Ms A to be a reliable witness and was satisfied that she had lent the husband the sum of $60,000, which was subsequently repaid in 2004. The Federal Magistrate found there was no evidence to support the wife’s assertion that the sum was not a loan but an investment in an informal “joint venture” with respect to the N property.
The husband also borrowed further sums from Ms A, namely $30,000 in May 2004 and $25,000 in October 2005. The Federal Magistrate was satisfied the wife had no knowledge of these loans.
The Federal Magistrate recorded that the husband had been repaying the loans at a rate of $500 a month since mid 2006, and her Honour thus expected that the outstanding balance of the loans would have been approximately $49,000 at the time of trial. Her Honour acknowledged, however, that these repayments “must be assessed in light of the ongoing relationship between the husband and Ms [A], which they both acknowledge has recommenced as an intimate relationship.”
The Federal Magistrate was satisfied that “the financial arrangements between Ms [A] and [the husband] are totally flexible” and that Ms A was unlikely to seek enforcement of the loans “given her past behaviour and the nature of her ongoing relationship with the husband”. However, her Honour was nonetheless satisfied that the loans were a debt that arose during the marriage and that the balance outstanding was approximately $49,000.
Turning to consider the other issues in dispute with respect to determination of the asset pool, the Federal Magistrate rejected that funds provided to the husband by his father were a loan and that “at best” the funds could be seen as a contribution by the husband’s father to the husband’s financial affairs.
With respect to the husband’s alleged credit card debts, her Honour agreed with the position of the husband that he did not seek to include this as a matrimonial debt given the absence of documentation.
The next issue addressed by the Federal Magistrate was the debts the wife claimed she owed to members of her family. Her Honour accepted that the wife had received extensive financial assistance from family members, but rejected any suggestion that this financial support was provided by way of loan/s with the expectation of repayment.
The final issue of dispute regarding the asset pool was the husband’s C shares. Neither party had sought to include the shares as a matrimonial asset. However her Honour took a different view, concluding that as the entitlement to the share allocation arose through the husband’s employment which commenced prior to separation, the shares should be included in the asset pool.
The Federal Magistrate ultimately determined that the asset pool consisted of assets to the value of $236,842 (largely consisting of the equity in the S property which was agreed at $164,000) and liabilities of $49,000 (consisting solely of the estimate of the debt outstanding to Ms A). The net asset pool was thus $187,842. Relevantly for the purposes of this appeal (specifically ground 13), her Honour recorded that the wife held superannuation entitlements of approximately $64,800 and the husband of approximately $40,300.
Having determined the value of the asset pool, the Federal Magistrate proceeded to consider the parties’ respective contributions. With respect to contributions at the commencement of the marriage, her Honour found that the husband made a greater financial continuation, but that “at the end of the day the weight to be attached to that contribution is affected by the use made by the parties of the contribution during the marriage.”
Her Honour said she was unable to make specific findings with respect to many of the parties’ claimed contributions on the available evidence, but identified there were a number of events during the marriage that were relevant to the consideration of the parties’ contributions.
Firstly, in relation to whether the wife’s daughter lived with the parties, her Honour preferred the evidence of the wife that her daughter was not a regular member of the parties’ household during the marriage.
With respect to the purchase of the V Café, in dispute was whether the purchase was a joint decision or whether the husband proceeded with the purchase without consulting the wife. Her Honour was “inclined to accept” the wife’s evidence that she was not actively involved in the decision to purchase the café, however found that the business was certainly established during the marriage and rejected the argument that the husband should bear the losses from the business alone.
The final issue to which her Honour had regard in relation to assessing the parties’ contributions during the marriage was the contributions made to the S property. Her Honour repeated that she was satisfied that the husband did not move into the property. Her Honour concluded, however, that the wife was only able to obtain a loan for the property based on her claim that she was earning an income of $70,000 through the café. Her Honour also noted that the husband witnessed the wife’s signature on the mortgage documents.
The Federal Magistrate found it was unclear to what extent the purchase was a joint enterprise, however her Honour considered that the real issue was the parties’ financial contributions to the property. Her Honour found that the wife contributed the deposit for the property from the sale of her property in Iran, and not the husband.
The Federal Magistrate found that she was “unable to rely fully on either party’s evidence” as to the husband contributing or not to the S property household by way of cash contributions from the café. Her Honour said this (at [100]):
It may be that the husband provided some financial assistance to the wife from time to time, given the fluctuating nature of their marital relationship, but I have no way of quantifying this. I take into account that the business was not trading well and presumably his capacity to give cash to the wife was limited.
Her Honour was not satisfied that the husband contributed to the renovations to the property as claimed by the husband, but found there had been a significant contribution by the wife’s extended family in subsequently renovating the property, and assisting with ongoing expenses.
In relation to the parties’ post separation contributions, the Federal Magistrate was satisfied that the wife has made a significant contribution to the S property and therefore the remaining asset pool. Her Honour rejected an argument by the husband that the wife had made a negative contribution due to her failure to obtain rental income from the property whilst living elsewhere.
The Federal Magistrate also found that the husband made a significant post separation contribution through his C shares and that he had also been repaying the debt to Ms A and a personal loan.
The Federal Magistrate was, however, somewhat critical of the actions of the parties following separation, finding that they both continued to conduct their affairs without feeling any need to advise the other party. This was evidenced by the husband unilaterally selling his shares and the wife refinancing the property without consulting the husband.
In reaching her conclusion regarding contributions, the Federal Magistrate was satisfied that both the husband and the wife made significant contributions during the short marriage. While the husband made a greater financial contribution at the commencement and by way of the higher income he earned during the marriage, her Honour considered the weight to be attached to that was limited given the husband suffered a loss on his property dealings and that his contributions were not reflected in the existing pool.
On the other hand, although the Federal Magistrate assessed the wife’s direct financial contributions as being more modest, they were directly traceable to the S property.
The Federal Magistrate was ultimately satisfied that while the parties’ contributions during the marriage were of a different nature, they should be treated as equal. Her Honour concluded though that the wife had made a greater contribution since separation and accordingly assessed the wife’s overall contribution as 57% and the husband’s as 43%.
In considering the s 75(2) factors, the Federal Magistrate had regard to, inter alia, the short duration of the marriage and her Honour’s finding that both parties were able to provide for their own support in the future. Her Honour also had regard to the fact that while the husband would earn a higher income, the wife would be “retaining a larger superannuation entitlement”. The Federal Magistrate concluded that no further adjustment was appropriate.
Turning to address how the asset pool was to be divided between the parties, her Honour outlined that the value of the debt due to Ms A should be paid to the husband, with an indemnity to be provided to the wife. The result of her Honour’s determination was that the wife was to make a payment to the husband of $76,930 (including the amount of $49,000 to pay the debt to Ms A).
Finally, her Honour considered whether the outcome was just and equitable. In this regard, her Honour noted that each party would retain their superannuation interests, which “reflects a modest benefit in the wife’s favour” and that both parties had the capacity to provide for their long term financial security.
The Federal Magistrate also noted that while the wife was retaining more of the tangible assets, the debt to Ms A, while genuine, was “unlikely to be enforced in the longer term, given her relationship with the husband”.
The Federal Magistrate was satisfied that the outcome was just and equitable.
Relevant legal principles
This is an appeal against an exercise of discretion by the Federal Magistrate. The principles applicable to an appeal from a discretionary judgment are well settled.
The limitation of an appellate court hearing an appeal from a discretionary judgment was discussed by Kitto J in Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 where his Honour said at 627:
… the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong.
In House v The King (1936) 55 CLR 499, Dixon, Evatt and McTiernan JJ said at 504:
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.
In Gronow v Gronow (1979) 144 CLR 513 Stephen J stated at 519:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight.
Similarly, in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345, Asquith LJ said:
It is, of course, not enough for the wife to establish that this court might, or would, have made a different order. We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.
Application to adduce further evidence
On 14 January 2010 husband filed an Application in a Case seeking to adduce further evidence.
At the hearing of the appeal the husband advised that he no longer wished to pursue his application. This application can therefore be formally dismissed.
Grounds of Appeal
On 14 January 2010 the wife filed a document entitled “Amended Grounds of Appeal” in which she outlined the following grounds of appeal on which she relied at the hearing:
1. The orders of the learned Federal Magistrate, having regard to the totality of the evidence, was [sic] so unreasonable and manifestly unjust, that it may be properly inferred that there has been a failure to properly exercise the discretion reposed in her Honour.
2. That the orders made by the learned Federal Magistrate were not just and equitable in that the orders fell outside of the reasonably generous ambit of discretion.
3. That the learned Federal Magistrate erred at law or alternatively in the exercise of her discretion in failing to adopt an “asset by asset” approach in her identification of the asset pool and in her assessment of the parties’ contributions.
4. That the learned Federal Magistrate erred at law or alternatively in the exercise of her discretion in taking into account the husband’s debt to his defacto partner Ms. [A].
5. The learned Federal Magistrate failed to attach adequate or sufficient weight to the fact that “the debt” to Ms [A] was unlikely to be enforced.
6. The learned Federal Magistrate failed to attach adequate or sufficient weight to the financial contributions of the wife made to the purchase of the [S] property and to the renovations thereon performed thereafter.
7. That the learned Federal Magistrate erred at law or alternatively in the exercise of her discretion in giving too much weight to the husband’s continuing repayments to Ms [A] and to his personal loan as “an ongoing post separation contribution” made by him.
8. That the learned Federal Magistrate erred at law or alternatively in the exercise of her discretion in giving too much weight to the husband’s “endeavouring to repay the debts remaining from his failed business” in her assessment of her parties’ contributions
9. Her Honour erred as a matter of law or alternatively in the exercise of her discretion in that the evaluation of the contributions as to 57% to the wife was manifestly inadequate and outside or a proper exercise of Her Honour’s discretion.
10. Her Honour’s finding as to the husband’s overall contributions of 43% was not supported by the evidence and was against the weight of the evidence.
11. Her Honour erred in the exercise of her discretion in finding that the parties’ contributions during the marriage were equal.
12. Her Honour’s finding that the parties’ contributions during the marriage were equal was not supported by the evidence and was against the weight of the evidence.
13. Her Honour in finding that the Wife held superannuation entitlements worth approximately $64,800.00 made an error of fact.
14. Her Honour’s finding as to the Wife’s superannuation entitlements was not supported by the evidence and was against the weight of the evidence.
The wife sought the following orders in her Notice of Appeal:
1. That the wife retain as her sole property the house and land situated at [S] in the State of South Australia.
2. That each party otherwise retain all other assets currently within their respective possession or control.
3. That each party do indemnify the other and keep the other indemnified in relation to all debts in their sole name.
4. That the husband do discharge at his expense the caveat registered over the [S] property.
5. That the Respondent husband pay the Appellant’s costs.
At the hearing of the appeal the wife was represented by counsel. The husband was unrepresented. The husband currently resides in Queensland and was permitted to appear at the hearing by way of telephone link.
Discussion
I will leave grounds 1 and 2 for the moment given that they are general grounds of appeal which rely on the more specific grounds of appeal for their success.
Ground 3
By this ground of appeal, the wife asserts the Federal Magistrate erred in failing to adopt an asset by asset approach in this case.
At paragraph 38 of the Federal Magistrate’s reasons for judgment, her Honour explained that she considered it was more appropriate in this case to adopt a global approach to the asset pool given her “finding about the likely timeframe for the separation and [her] findings generally regarding each party’s evidence.”
In Norbis v Norbis (1986) 161 CLR 513 Mason and Deane JJ said at 523:
For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an ‘asset-by-asset’ basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.
…
As a matter of construction of sec. 79 Nygh J. is right in saying that the section imposes no obligation on the Family Court to pursue in relation to this issue either the global approach or the asset-by-asset approach to the exclusion of the other. We do not understand the Full Court in the present case to suggest otherwise. What the Full Court asserts is that the global approach is the only ‘realistic’, that is, convenient, means of arriving at the entitlements of the parties. Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases…
It has not been suggested that there is any fundamental difference between the two competing approaches which we have considered, in the sense that one will yield more just and equitable entitlements than the other. The general preference which has been expressed from the global approach is not by reason of any notion that it is the only approach authorised by the Act, but by reasons of considerations of convenience. Accordingly, quite apart from the fact that its status as a prescribed approach is that of a guideline and not that of a principle of law, the application of the asset-by-asset approach does not of itself amount to an error of law.
Wilson and Dawson JJ also said in the case at 532-534:
If the parties' interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of the property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case. It is true, as Nygh J. pointed out, that where this is done, at the end of the exercise a calculation of the overall proportions in which the total property has been divided may serve as a useful check to ensure that the result is not disproportionate as a whole.
To say as much is to say no more than that the legislation confers a discretion upon the court which, provided the required matters are taken into account, does not dictate the employment of any particular method in the formulation of an appropriate order for the alteration of property interests. The matters which are to be taken into account will sometimes require the division of the assets, or some of them, upon the basis of their individual values, but in other cases no more than an overall division will be required. In some cases either approach may be adopted in part or in whole.
In In the marriage of McMahon (1995) FLC 92-606, to which counsel for the wife referred, the Full Court (Nicholson CJ, Ellis and Buckley JJ) discussed when an asset by asset approach may be appropriate. At 82,043:
In our view, the particular circumstances of this case made an asset-by-asset approach preferable to a global approach.
The short duration of and the unhappy nature of the marriage, coupled with the parties' strict division of assets and their method of dealing with them lent itself to an asset-by-asset approach, particularly where they had separately identified another group of assets as joint.
We are conscious of the remarks of Mason CJ and Deane J in Norbis v Norbis (1986) FLC 91-712 at p 75,168; (1985-1986) 161 CLR 513 at 523, where their Honours indicated that in most cases the global approach is more convenient.
However, it should be remembered that they stressed that they were not to be understood as denying the legitimacy of the trial Judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets.
…
One of the reasons why their Honours expressed a preference for the global approach is because it is natural to assess the contribution by a spouse as a homemaker and parent, either by reference to the whole of the parties' property, or to some part of that property as distinct from individual assets.
However, this is not a case where the homemaker and parent contribution looms large and, having regard to the parties' agreement that it should be regarded as equal for the period of the marriage, this presented no obstacle to the adoption of the asset-by-asset approach in this case.
We consider that this is a case which falls conveniently into the class of cases referred to by Wilson and Dawson JJ in Norbis at FLC pp 75,173-75,174; CLR 532-3, when they said:—
If the parties' interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case.
It was submitted that all of the criteria referred to by the Full Court in McMahon are met here, namely, a short marriage, separate finances and separate ventures. Counsel for the wife highlighted that the parties had kept, and intended to keep, their finances separate during the marriage. Both parties engaged in investment activities, for example buying properties, and it was submitted that each were involved in different activities without reference to or input from the other party. The parties also neither opened a joint bank account nor acquired any joint assets during the marriage. On one occasion when the husband sought financial assistance from the wife, the parties were careful that this be at arm’s length and it was clearly defined that the monies advanced by the wife were to be repaid.
Counsel for the wife also submitted that there was no significant home maker or parent contribution to be taken into account here. There were no children of the marriage, the wife variously studied and worked, and the husband worked.
In all of these circumstances counsel for the wife submitted that this was an obvious case for the application of an asset by asset approach.
It is to be noted, however, that the decision of McMahon does not stand for a general principle that the asset by asset approach is to be adopted in cases where, for example, the duration of the marriage was short, but that in the particular circumstances of that case, an asset by asset approach was appropriate.
As was made clear by the High Court in Norbis, the approach to be adopted when considering the asset pool available for division will be dependent on the circumstances of the particular case. Generally, however, the global approach is to be preferred.
In this case, the Federal Magistrate clearly considered which approach was to be adopted and concluded that due to findings her Honour had made regarding the date of the parties’ separation and generally regarding the parties’ evidence, a global approach was more appropriate. This was a matter clearly within her Honour’s broad discretion and the adoption of a global approach to the asset pool was open to her Honour. No error in how her Honour exercised her discretion has been established, and I am not satisfied that there is merit in this ground of appeal.
Grounds 4 and 5
Grounds 4 and 5 both relate to the Federal Magistrate’s findings regarding and treatment of the husband’s debt to Ms A. In issue were two loans advanced to the husband by Ms A; $30,000 in May 2004 and $25,000 in October 2005.
The Federal Magistrate found that the wife had no knowledge of Ms A’s loans to the husband (Appeal Book 26 at [54]). Her Honour also noted that the husband’s repayments with respect to these loans had to be assessed in light of the husband’s relationship with Ms A (Appeal Book 26 at [56]). The Federal Magistrate was satisfied that the husband’s financial arrangements with Ms A were “totally flexible” and that Ms A was unlikely to seek enforcement of the loans (Appeal Book 26 at [57]).
Despite such findings, however, the Federal Magistrate included the debt, which her Honour determined had an outstanding balance of $49,000, as a liability of the parties. The amount of the debt was to be paid to the husband, with an indemnity provided to the wife.
In considering whether to make an adjustment on account of s 75(2) factors, the Federal Magistrate also commented that “[w]hether Ms [A] will require ongoing repayment is a matter that is open to question, in my view.” (Appeal Book 39 at [115])
In determining whether the outcome in this case was just and equitable, her Honour again had regard to the fact the while the debt to Ms A was genuine, it was unlikely to be enforced. (Appeal Book 41 at [120])
There are two aspects to the wife’s argument that the Federal Magistrate erred in including the loans as debts of the marriage. Firstly, it was submitted that the loans should not have been included as the wife had no knowledge of them and in effect the husband used the funds for his own purposes. The second aspect of the wife’s argument focussed on the Federal Magistrate’s finding that the debt was never likely to be enforced.
With respect to the loan of $30,000 in May 2004, counsel for the wife referred to the husband’s evidence that he expended $10,000 of the funds to pay off a credit card debt and $20,000 to reduce a mortgage over the property he owned at H [Affidavit of the husband at Appeal Book 147 para 28; Transcript Appeal Book 403]. Counsel for the wife submitted that these payments were never supported by documentary evidence, however.
It was submitted that the borrowing was not for any purpose related to the marriage, but for the commercial interests of the husband. So far as any payment was made with respect to the H property, it was submitted that that property was an investment property purchased by the husband prior to the parties’ marriage and maintained by him during the marriage until September 2005. The wife was never involved in the purchase of the property and had no interest in the same.
With respect to the second loan of $25,000 in October 2005, it was submitted that this loan falls within the period between when the wife states the parties separated in September 2005 and when she moved in to the S property in November 2005. It was highlighted that her Honour made a clear finding that the husband did not move into that property, and that the husband in fact conceded that the parties separated on 1 September, although only for a few days.
Counsel for the wife contended that in any event the loan came either late in the time the parties were living together or indeed after they had separated. Again it was emphasised that the wife had no knowledge of the loan and had no input into how the monies were applied. The wife says that she was not involved in either the purchase of the business or its operation.
Counsel for the wife also highlighted that the husband ceased trading in the café in December 2005 and that in such circumstances it could be said that it was unwise for the husband to have borrowed further funds when the business was not doing well, effectively “throwing good money after bad.”
Here the wife was mounting an argument before me that the husband was reckless in both purchasing the business at a time when his finances were in a parlous state and then borrowing further money, namely from Ms A, when the business was not performing well, and thus, on the authority of Kowaliw and Kowaliw (1981) FLC 91-092 and Browne and Green (1999) FLC 92-873, the husband should be solely responsible for the losses incurred and specifically the debt due to Ms A. I observe that although it was put to the Federal Magistrate that the husband should be responsible entirely for the debt due to Ms A that was not on the basis of any reckless action on his part, but because the wife had no involvement in the purchase or the operation of the business or in the obtaining of the loans. In any event, her Honour (at [89]) addressed this issue on the basis of whether the principles of Kowaliw and Kowaliw and Browne and Green applied, rejecting the submission that the husband should bear the losses arising from the business alone, and commenting that there was “no suggestion that [the husband] acted ‘recklessly, negligently or wantonly’”. It has not been established to me that her Honour erred in making this finding.
The second limb to the wife’s argument relates to the finding that the loans were unlikely to be enforced. In this regard, it was submitted that her Honour’s finding that there was a lack of intention to enforce the loans meant the loans should not have been taken into account and that her Honour thus erred at law and her Honour’s exercise of discretion miscarried.
It was highlighted by counsel for the wife that the Federal Magistrate’s orders in fact place no obligation on the husband to repay the debt, and that it is entirely open to the husband to not repay Ms A but rather retain the $49,000.
Counsel for the wife referred to a number of authorities where the likelihood of enforcement of a debt is discussed. In Zdravkovic and Zdravkovic (1982) FLC 91-220 the Full Court (Pawley SJ, Strauss and Treyvaud JJ) said at 77,205:
We are, however, of opinion that in an appropriate case, as part of the adjustment of the financial rights of the parties, the Court may in proceedings under sec. 79 order the discharge of a debt to a third person, whether such person is an intervener or not. Once it is clear and beyond doubt that a debt is owing to a third person and that all the probabilities are that it will be enforced unless it is discharged by payment, then the Court is not precluded from ordering its discharge by the parties or one of them as a condition or as part of the overall readjustment of the parties' financial rights, if such a course is convenient or just. (Emphasis added)
In Reynolds and Reynolds (1985) FLC 91-632 the Full Court (Asche and Barblett SJJ, Murray J) said at 80,110:
It is for the Family Court to determine for the purpose of a property settlement, the nature or significance of any alleged obligation of a party. This has been commented on in a number of authorities Antmann and Antmann ; Af Petersens and Af Petersens ; Menz and Menz . The most recent discussion on this matter is by Chief Judge Evatt in Prince and Prince at p. 79,076 where she considers how the court can deal with liabilities. With respect, we adopt those remarks. Her Honour at p. 79,077 cites three examples: first, where it may be appropriate, either to discount a debt or disregard it, say where a liability cannot be precisely determined; second, where the liability is unlikely to be enforced; third, where the liability was improperly incurred, for example, to prejudice a claim under sec. 79.
In Biltoft and Biltoft (1995) FLC 92-614 the Full Court (Nicholson CJ, Ellis and Buckley JJ) said at 82,124:
A general practice has developed over the years that, in relation to applications pursuant to the provisions of s. 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities.
The Full Court continued, however at 82,127:
Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.
…
Thus, although there is a general rule as set out in Prince and Prince (supra) and Rowell and Rowell (supra), the rule is not absolute, is not prescribed by the statute and there are a number of well recognised exceptions to some of which we have already referred. There is no requirement that the rights of an unsecured creditor or a claim by a third party must be considered and dealt with prior to the Court making an order under s. 79, nor is there a rule of priority as between a creditor claimant and a spouse. Those rights, however, cannot be ignored. They must be recognised, taken into account and balanced against the rights of the spouse.
Similarly in AF Petersens and AF Petersens (1981) FLC 91-095 Nygh J said at 76,669:
It is fairly common in this Court to meet a situation where a parent has made a loan to a child which is in all respects legally enforceable, but which is not in fact enforced and would not really be expected to be enforced. It is no doubt an ‘obligation’' but if the obligation is not likely to have to be met, it should not be taken into account.
It was thus submitted that it needs to be established that the loans are likely to be enforced before they can be taken into account. The wife submits that this requirement has not been satisfied in this case, and in fact the Federal Magistrate made a direct finding to the contrary. It was also highly relevant and not in dispute at trial that the husband was in an intimate relationship with Ms A, thus lessening the prospects of repayment of the loans being enforced.
The husband submitted that despite the wife’s claims that she played no part in the café, the wife recorded in the loan documents for the purchase of the S property that she worked at the café. The husband also says that he witnessed the memorandum of mortgage and did not object to the wife asserting that she worked at the café.
The husband also maintained, contrary to the findings of the Federal Magistrate, that the debt to Ms A does have to be repaid. The husband said he is happy for the money to be paid directly to Ms A rather than himself and that he has no interest in keeping the debt outstanding forever.
I do not consider that there is merit in the first aspect of the wife’s submissions. The Federal Magistrate was faced with unsatisfactory and unreliable evidence as to various topics including the relationship of the parties and their respective contributions. Indeed, she said this in paragraph 86:
There are numerous unanswered questions that arise for both parties from the financial records. I am unable to make any specific findings on many of the parties’ claimed contributions on the evidence before me.
Thus her Honour was left to do the best she could in the circumstances. Putting aside for the moment the enforceability issue it was appropriate for her Honour to include the loans as liabilities to be taken into account given that there was no dispute that the loans were made, and for her Honour to then make any adjustments in the context of assessing the respective contributions of the parties. Just because the husband did not consult the wife about obtaining the loans and how the funds were to be applied does not result necessarily in the exclusion of the loans as liabilities to be taken into account, and particularly when they were obtained prior to the final separation of the parties. As was said by the Full Court in M & M [1998] FamCA 42 at 2.10:
It is well settled that save in exceptional circumstances a trial Judge should deal with the property as at the date of the hearing and make adjustments taking into account the various matters set out under s.79.
This applies equally to liabilities.
However, with the second aspect of the wife’s submissions I do consider that there is merit in the argument. Her Honour found, quite properly on the evidence, that it is unlikely that the debt would be enforced, and on that basis I consider that her Honour erred in including them in the asset pool. It was also an error on her Honour’s part to frame the order in the way that she did. Despite the assurances of the husband that he would in fact repay Ms A, as submitted by counsel for the wife, there was no obligation on the husband to repay the debt and he effectively could “pocket” the funds. The indemnity provided to the wife provides no protection from the husband benefitting from these funds.
I am therefore satisfied that her Honour erred in including the debt as a liability of the parties.
Grounds 6 to 12
Grounds 6 to 12 all relate to issues of contribution as assessed by her Honour.
The Federal Magistrate, in summary, found that the husband had made a greater financial contribution through the assets he owned at the commencement of the marriage and the income he earned during the marriage, but that his initial contribution was not reflected in the existing asset pool. Her Honour also found that while the wife’s direct financial contribution was more modest, it was directly traceable to the acquisition of the S property. The Federal Magistrate was satisfied that the parties’ contributions during the marriage should be treated as equal, but that the wife had made a greater contribution since separation, resulting in her overall contribution being assessed at 57%.
Grounds 11 and 12 assert that the Federal Magistrate erred in finding the parties’ contributions during the marriage were equal and that this finding was not supported by the evidence and was against the weight of the evidence. It was contended that the Federal Magistrate gave too little weight to the support provided by the wife to the household and too much weight to the support provided by the husband. For example, it was submitted that her Honour made findings that both parties had contributed their income for the benefit of the family and that from February 2005 to May 2005 the wife was the sole breadwinner. It was also submitted that whilst the husband was in employment, a large part of his income was diverted to his property investments, reducing the amount available to support the household. Counsel for the wife further contended that the money available for the husband to support the household was also reduced during the time the husband owned the café.
Grounds 6 and 9 assert that the division of 57% in the wife’s favour does not adequately recognise the wife’s contribution, in particular to the purchase of, and renovations to, the S property. It was submitted that when one looks at the list of the parties’ assets (at [72] of the judgment), the equity in the wife’s property at S represents more than 69% of the gross asset pool. It was submitted that this equity in the home is attributable to renovations carried out to the property by the wife and her family following separation. Counsel for the wife reiterated that her Honour found the husband made no contribution to the purchase of the property or its renovation. The wife met all mortgage repayments, with assistance from her family. In light of the equity in the property and the contribution by or on behalf of the wife to acquiring and improving this property, it was submitted that capping the contributions of the wife at 57% undervalued her contribution significantly. Counsel for the wife submitted that if a global approach was adopted that the wife’s contribution should have been assessed at at least 69%, even without regard to the wife’s contributions to the welfare of the family and to the other assets she had retained.
The wife also submitted that given her Honour’s findings as to the date of separation it was “unclear” from her judgment whether the renovations to the S property were regarded by her as contributions made during the marriage or post-separation. However, I reject this submission. Her Honour made it clear in her judgment (at [105]) that she was treating these contributions as being made post-separation.
Reference was also made to the fact that the wife provided the deposit for the property from the proceeds of sale of her property in Iran. It must be noted, however, in this regard, that the Federal Magistrate found that the wife was only able to preserve the proceeds of sale of her property in Iran due to the financial support of the husband. Likewise, her Honour found the wife’s capacity to repay her credit card or personal loan was due to the husband’s financial support in meeting the parties’ other expenses. (at [84])
In grounds 7 and 8 it is complained that the Federal Magistrate erred at law or in the exercise of her discretion in giving too much weight to the husband’s repayments to Ms A and his personal loan as an ongoing post separation contribution and to his endeavours to repay the debts arising from his failed business.
By ground 10 the wife asserts that the Federal Magistrate erred in assessing the husband’s contributions at 43%.
The discretion of a judicial officer in determining property settlement proceedings is very wide. Gibbs CJ in Mallet v Mallet (1984) 156 CLR 605 said at 608:
The Act does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved — those things are left to the Court’s discretion, which must, of course, be exercised judicially... It is necessary for the Court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all the circumstances of the particular case.
Also in Mallet Wilson J said at 634:
There is no doubt, of course, that a decision made pursuant to s. 79 of the Act calls for the exercise of discretion… It follows that, consistently with established principle, an appellate court is not entitled to substitute its own decision for that which is the subject of appeal merely because it prefers a different result or even merely because it thinks that a different result would be more just and equitable. Before it intervenes, it must be satisfied that the decision is clearly wrong.
To repeat, in Bellenden (formerly Satterthwaite) v Satterthwaite it was said:
We are here concerned with a judicial discretion, and it is of the essence of such a discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.
In Norbis v Norbis Brennan J said at 540:
The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.
More recently in Mims & Green and Green (2008) FLC 93-359 it was said at 82,365:
As Brennan J explained in Norbis (supra), the “range” in this case was reasonably wide. Others may have reached a conclusion more favourable to the husband than did the trial Judge. Others may have been less generously disposed. This does not mean that the trial Judge was in error. Nothing to which we have been referred persuades us that the trial Judge failed to either properly assess the husband’s initial contribution or to give him appropriate credit for it. Her Honour’s conclusion was “within the range”.
Her Honour thus had a wide discretion. In order to warrant appellate intervention, it must be established that there has been an error in the exercise of this discretion. It is not enough that another judge may have come to a different conclusion.
Her Honour’s findings were within the generous ambit of her discretion and were open to her. Although not expressly explaining why she determined an assessment of the contributions at 57%/43% in the wife’s favour to be appropriate, her Honour explained she considered that the husband’s greater initial contribution and contribution during the marriage were offset by the wife’s direct financial contribution of the S property such that their contributions during the marriage were equal. The Federal Magistrate considered the wife’s contribution since separation to have been greater, clearly by virtue of the increase in the equity in the S property as a result of the extensive renovation work undertaken by the wife and her relatives on her behalf, and as a result of the payment by the wife of all expenses and mortgage repayments. It is this contribution, although not expressly stated, that her Honour obviously considered warranted an adjustment of 7% in the wife’s favour. No appealable error has been demonstrated in her Honour’s assessment of the parties’ contributions and ultimate determination that the asset pool be divided 57% in the wife’s favour. It has not been shown that this determination fell outside the generous ambit of discretion. There is thus no merit in any of the grounds of appeal challenging the Federal Magistrate’s findings with respect to contribution.
Grounds 13 and 14
Grounds 13 and 14 can also be effectively dealt with together, both relating to the wife’s superannuation entitlements as found by the Federal Magistrate.
At paragraph 73 of the reasons for judgment the Federal Magistrate recorded that the wife held superannuation entitlements of $64,800.
It was submitted by counsel for the wife that this figure was a typographical error in the wife’s Case outline which was not picked up and that this error was repeated in the closing submissions (at Appeal Book 77). The figure should in fact be $6,480. In the wife’s Financial Statement filed on 13 August 2008 (at Appeal Book 202) the wife deposed to have superannuation interests estimated at $5,000. In the wife’s more recent Financial Statement filed on 27 March 2009 (at Appeal Book 354) she deposed to have a superannuation interest estimated at $6,000.
Counsel for the wife conceded that while it could be said that the husband should not have to bear the brunt of a mistake made by counsel for the wife, conversely, the husband should not be permitted to benefit from such a mistake.
It was submitted that while the figure of $64,800 was agreed, the husband should have been aware, given that the wife had only worked for a short period during the marriage, that this figure was an error. Yet the husband sought to take advantage of this error, and not correct it.
It was submitted that the error affected her Honour’s judgment significantly, in particular that there was no proper consideration of the s 75(2) factors as a result. Counsel for the wife put forward that if a global approach was adopted, a 5% adjustment in the wife’s favour was justified on account of these factors.
In reply, the husband submitted it was the wife and her legal representative’s responsibility to ensure the information provided to the court was not misleading. The husband maintains he had no knowledge of the error, nor did his lawyer pick up the error at trial.
Returning to her Honour’s reasons for judgment, at paragraph 116 her Honour, in considering whether to make an adjustment for s 75(2) factors took into account that the “wife will be retaining a larger superannuation entitlement”. In considering whether the outcome was just and equitable pursuant to s 79(2) her Honour also had regard, inter alia, to the fact that the parties were to retain their own superannuation which “reflects a modest benefit in the wife’s favour”.
The figure attributed to the wife’s superannuation interest is clearly an error. It is an error her Honour was led into due to the mistake contained in the wife’s documents and repeated in submissions by counsel. However, in my view it is an error of no consequence. The value of the superannuation interest of the wife was merely one factor taken into account by the Federal Magistrate when considering the s 75(2) factors and whether to make any further adjustment on account of these factors. While the error may have impacted on this consideration, the effect of the incorrect superannuation figure alone is not sufficient to warrant appellate intervention. There were a number of factors the Federal Magistrate had regard to in determining that it was not appropriate to make a further adjustment, including the length of the marriage and the capacity of the parties to undertake employment. It has not been established that if the correct superannuation figure was recorded that this would have affected her Honour’s assessment. I do not consider there is merit in either of these grounds sufficient to warrant appellate intervention.
Grounds 1 and 2
These are general grounds of appeal asserting that the Federal Magistrate’s orders were so unreasonable and unjust that it could be inferred there had been a failure to properly exercise her Honour’s discretion and that the orders fell outside the reasonably generous ambit of discretion. Given the discussion and findings with respect to the wife’s other grounds of appeal, which particularise the nature of the wife’s complaint here, it is not necessary to separately consider these grounds.
Conclusion
As outlined in the reasons above, I consider there is merit in grounds 4 and 5 with respect to her Honour’s inclusion of the husband’s debt to Ms A. There is no merit in any other ground of appeal. I therefore propose to allow the appeal on the limited issue of the debt but otherwise dismiss the appeal.
Whether the matter is to be remitted
Counsel for the wife submitted that if the appeal was allowed, there was sufficient evidence to permit me to re-exercise the discretion rather than remit the matter for rehearing. The husband ultimately agreed with this submission.
To repeat though, the only issue in which I have found merit relates to the inclusion of the debt to Ms A. In these circumstances, correcting the Federal Magistrate’s error entails deleting the amount of the debt from the asset pool. It was not contended by counsel for the wife or by the husband that the removal of the debt would require any need to reconsider the assessment of the parties’ contributions, the s 75(2) factors, or the justice and equity of the orders, and thus it is unnecessary to re-exercise the discretion. The deletion of the debt has the effect of increasing the net asset pool to $236,842. On this figure, the wife would be entitled to $134,999.94 and the husband $101,842.06, resulting in a payment by the wife to the husband of $49,000 (rounded to the nearest dollar) in lieu of the sum of $76,930 as ordered by her Honour.
I certify that the preceding one hundred and thirty-seven [137] paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 25 August 2010.
Associate
Date 25 August 2010
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