Husband Opposes Final Property Settlement Orders
Mayhew & Fairweather [2022] FedCFamC1A 53 (12 April 2022)
The husband appealed from final property settlement orders. He asserts that the primary judge erred in taking into account the husband’s defective disclosure when assessing contributions. The Court, in determining whether to grant the appeal, assessed the adequacy of reasons.
Facts:
Mr Mayhew (“the husband”) appeals from final property settlement orders made in the Family Court of Australia (as it then was titled) on 20 August 2021. Those orders provided that the parties’ property interests, including superannuation, be divided such that 60 per cent was received by Ms Fairweather (“the wife”) and 40 per cent by the husband. The wife opposes the appeal. The parties commenced cohabitation in 1990, married in May 1992, and separated at some point between February 2014 and October 2016.
At trial, the parties were able to agree on the items and values of their property, and the joint balance sheet appears at [11] of the primary judge’s reasons for judgment. What the parties could not agree upon was the extent of their respective contributions to the property pool and any adjustment to their entitlements pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). The husband asserts that his Honour erred in weighing each of the parties’ introduced capital on a mathematical basis, without any regard for when it was contributed, nor how the parties used those capital sums and in doing so he was wrong in law and that the primary Judge failed to weigh (or properly weigh) the Husband’s significantly greater contributions and in failing to do so fell into error.
Furthermore, he asserts that the primary Judge failed to weigh (or properly weigh) the Husband’s significantly greater contributions and in failing to do so fell into error; that His Honour erred in failing to give adequate Reasons for his finding that is was “just and equitable” that there be orders for a 60% division of the assets in favour of the Wife; that His Honour erred in the manner in which he approached and determined an adjustment in favour of the Wife should be made; that His Honour erred in the manner in which he approached the treatment of the capitalised value of the husband’s pension and in addition erred in assessing the wife’s Section 75(2) adjustment arising from the husband’s pension; and that His Honour erred in failing to make orders that were just and equitable by making orders that occasioned a 20% differential between the percentage figure that the husband was to receive as compared to the wife.
Issue:
Whether or not the appeal should be granted.
Applicable law:
Family Law Act 1975 (Cth) s 79 - provides that the defective disclosure must relate to a direct or indirect, financial or non-financial, contribution “to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them”.
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 - provides that whilst we do not say that could never be the case, (for example, if the non-disclosure related to financial contributions to property) here where the pool was agreed, we cannot see it, and as the primary judge did not explain how the defective disclosure related to contributions, we cannot ascertain the reasoning upon which the decision is based.
Analysis:
Notwithstanding not being satisfied as to “[the husband’s] version of the property”, the primary judge considered that the appropriate way to deal with the defective disclosure was to reflect it in an unspecified way (save that it was disadvantageous to the husband) in the assessment of the parties’ contributions to the agreed pool. The primary judge did not explain how the defective disclosure related to contributions. Here, since the notional capital value of the husband’s pension was agreed, no evidence was presented as to what had been taken into account in reaching that value. It seems inconceivable that the quantum of the income stream was not expressly taken into account in arriving at its notional capital value, and its assurance likely was reflected in the capitalisation rate applied to the income stream, and hence it was already valued by reference to that feature.
Absent the matters taken into account in the valuation of the pension being known by the primary judge, how his Honour could have been satisfied that some aspect or quality of the pension had not already been taken into account in arriving at its notional value, is completely unclear. To thus use both the income stream and its assurance as the justification, even in part, for an adjustment of 2.5 per cent – in this case reflective of about $384,000 – is to “double dip” and thus to err.
Conclusion:
The Court allowed the appeal. The orders of the Family Court of Australia made 20 August 2021 is set aside. The proceedings are remitted for hearing before a judge of the Federal Circuit and Family Court of Australia (Division 1) other than the primary judge. Within 28 days, the respondent pays the appellant’s costs in the sum of $20,000.