Cook & Langford [2008]

FAMILY LAW - APPEAL – PROPERTY – CONTRIBUTIONS – REASONS - Where husband appealed against orders the wife pay $2 million to the husband and release him from any debt owing to any company controlled by the wife - Where total property pool was over $66 million – Where asserted contribution assessment manifestly unjust – Where parties' cohabitation was of 5 years duration - Where husband bankrupt at commencement of cohabitation - where wife had assets (and interest in a discretionary trust) of approximately $14.5 million at commencement of cohabitation - Whether trial Judge erred in assessing husband’s contribution based entitlement at $1 million – Whether trial Judge failed to give adequate weight to husband’s contributions – Whether adequate reasons given for contribution finding – Where husband’s asserted financial contribution came from employment on the wife’s rural property and to commercial business enterprise - Where trial Judge evaluated the parties’ respective contributions pre-cohabitation, during cohabitation and post-separation – No error in trial Judge’s assessment of husband’s contributions - Whether trial Judge erred in calculating contribution entitlement as a lump sum rather than as a percentage of the total property pool – Trial Judge gave adequate reasons. No error in contribution assessment.

FAMILY COURT OF AUSTRALIA

REPRESENTATION

ORDERS

(1) That the appeal be dismissed.
(2) That the wife’s Notice of Contention be dismissed.
(3) That either party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal by filing such submissions at the Eastern Region Appeal Registry of the Family Court of Australia and serving them on the other party within 21 days of the date hereof.
(4) That the other party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Eastern Region Appeal Registry of the Family Court of Australia and serving them on the other party.
(5) That either party be at liberty to reply to an answer by way of written submissions by filing such reply at the Eastern Region Appeal Registry of the Family Court of Australia and serving it on the other party within a further 7 days.
(6) That each party endorse on the cover sheet of any submissions filed pursuant to Orders 3, 4 and 5, the date upon which a copy of that submission was served on the other party.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Cook & Langford.

Appeal Number: EA 3 of 2007
File Number: SYF 4494 of 2003

Appellant

And

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Mr Cook (“the husband”) and Ms Langford (“the wife”) cohabited for approximately five and a half years. The dispute about a just and equitable division of their net property and financial resources totalling $66,574,187.00 was subject of proceedings under s 79 of the Family Law Act 1975 (Cth) (“the Act”), heard over eight days before Moore J. On 11 December 2006 her Honour made orders that the wife pay to the husband $2 million and release him from any debt owing to any company controlled by the wife. It is from those orders that the husband appeals.
2. The principal focus of the appeal was a challenge to an asserted lack of reasoning by the trial Judge in arriving at her finding that the husband’s contribution based entitlement should be assessed as a monetary sum of
   $1 million. A secondary challenge involved an asserted failure by the trial Judge to give appropriate weight to certain of the husband’s contributions.
3. Although it was asserted by the husband’s senior counsel that her Honour ought to have assessed the husband’s contribution based entitlement as a percentage of the pool of assets, it was acknowledged by him that such a course was not mandatory, and that a trial Judge could, in an appropriate case, make orders for payment of a lump sum.
4. The second significant challenge agitated in the appeal was the assertion that the trial Judge had failed to make an adequate adjustment in the husband’s favour under s 75(2). In particular, it was asserted the trial Judge:

(a) failed to give sufficient weight to the enormous disparity in the parties’ financial positions;

(b) did not give proper weight to uncontested medical evidence relied on by the husband; and

(c) did not have sufficient regard to the standard of living enjoyed by the parties during their cohabitation and marriage.

1. The wife, who did not seek to challenge the trial Judge’s orders, nevertheless sought to agitate matters raised in a Notice of Contention filed in accordance with rule 42.08.5 of the High Court Rules 2004. The matters raised in the Notice of Contention were:
   • that the trial Judge erred in including the value of the wife’s interest in a discretionary trust known as the E Trust (“the trust”) as an asset of the wife at $28,682,236, and treating the sum of $5,000,000 held by the trust as a financial resource. Rather it was asserted the total assets of the trust should have been treated as a financial resource of the wife; and
   • an asserted failure by the trial Judge to find the husband had committed “waste” in reporting to the relevant State environmental protection authority asserted breaches by the wife in the disposal of toxic waste, including asbestos, on rural properties under her control, or that costs and fines incurred by the husband’s asserted actions should be “added back” to the pool.

BACKGROUND

1. Background matters set out by the trial Judge in her reasons were not subject of controversy, although at trial there was a dispute about the date of commencement of cohabitation.
2. The husband was aged 53 years at the date of hearing, and the wife was aged 50 years.
3. The parties met in 1993. From December 1997 until their separation in May 2003 they lived together on one of the wife’s rural properties. They married in October 2000 and were divorced in December 2004.
4. The wife was previously married, and had separated from her former husband in September 1996. The wife and her former husband had three children aged respectively 10, 8 and 6 years at the date of their separation.
5. Following contested property proceedings between the wife and her former husband, the wife retained assets of approximately $14.8 million including
   $5 million held in the trust. At the time of those proceedings the wife gave an undertaking to the Court in the following terms:

I, [the wife], undertake to the Court and to [the wife’s first husband] that, subject only to the children of my marriage to [the wife’s first husband] surviving me, I will not at any time in the future exercise, cause or permit to be exercised any position or power under the Deed dated 11 July 1996 establishing the trust known as the [E] Trust which would have the effect of causing or permitting any distribution to be made to any potential beneficiary other than the said children.

1. In 1996 the wife assumed control of certain companies known as “the Langford Group” which companies had been incorporated many years previously by her father. The companies owned a number of rural properties in New South Wales, and operated commercial businesses. The two businesses conducted by the companies were known as the rural division and the commercial division.
2. Over time changes had occurred both to the structure of the group and its underlying assets, particularly the holding of rural properties.
3. In December 2004 shares in a company, AB Pty Ltd (“AB”) were sold for $45 million. At the date of hearing the trial Judge noted “the adjusted net assets of the group [had] been valued at over $65.6 million” (paragraph 5).
4. The husband and wife met when the husband was living in Adelaide. At that time he was working as in the transportation industry. In 1995 he was declared bankrupt.
5. The husband had been previously married. In 1984 he commenced living in a de facto relationship, and had one child from that relationship who was aged 19 years at the date of the hearing. He separated from his de facto partner in 1993.
6. Following separation from the wife, the husband notified the Environmental Protection Authority (“the EPA”) of asserted breaches by the wife of the relevant environmental protection legislation. The wife paid fines, the costs of remedial repairs, and incurred substantial legal costs in defending prosecutions instigated by the EPA totalling approximately $1.2 million.

GROUNDS OF APPEAL

1. Whilst the husband’s written submissions canvas each of the seven grounds set out in the Notice of Appeal and ground 8 (which ground was added unopposed at the hearing), the grounds argued before us were essentially grouped into three areas. As will become apparent from our discussion below, there was substantial overlap in these areas. The three areas identified were:

(i) asserted lack of reasons for the contribution finding (grounds 1 and 3);

(ii) asserted failure to give appropriate weight to the husband’s contributions to AB and his salary derived from that source (grounds 4 and 5); and

(iii) asserted failure to properly assess s 75(2) factors (grounds 2 and 8), and to make orders which were just and equitable (grounds 6 and 7).

1. At the commencement of the appeal, senior counsel for the husband sought without opposition to amend Ground 5 of the Notice of Appeal in the following terms:

Failing to have regard or sufficient regard to the evidence of the Wife relevant to the contributions of the Husband to [AB] for the purpose of her Honour’s examination of the evidentiary material relevant to that issue. (Appellant’s submissions filed 20 August 2007 p 6, transcript 12 October 2007 page 36).

1. Leave was also sought unopposed to amend the Notice of Appeal to include an additional ground (as Ground 8) as follows:

Her Honour erred in finding at AB1.68 at para. 164 that what the evidence regarding the condition of the Husband’s back “means” were the limited restrictions to which Her Honour referred or, alternatively, Her Honour was in error or gave inadequate weight to those restrictions in her assessment of their consequences, whether probable or possible, relevant to the Appellant’s income earning capacity. (Appellant’s submissions filed 20 August 2007 p 9)

1. We proposed to examine the grounds under the areas identified above.
2. Both parties asserted, in the event we found merit in the grounds of appeal, we should re-exercise the discretion. Senior counsel for the husband submitted that the parties’ property as found by the trial Judge should be divided as to 91% to the wife and 9% to the husband on the basis the husband should receive 7.5% of the increase in the value of the property from commencement of cohabitation until the hearing, and a further 1.5% adjustment for s 75(2) factors. Senior counsel for the husband argued that 7.5% represented a “rough indicator of what each contributed over the course of the marriage” (Transcript, 12 October 2007, pp 8 and 9)

THE ASSERTED LACK OF REASONS IN RESPECT OF CONTRIBUTION ASSESSMENT

That the learned Trial Judge erred in not providing in her Reasons for Judgment the basis upon which there was a quantative [sic] assessment of $1 million, adjustment of property in favour of her husband. (Ground 1)

That the learned Trial Judge erred in attempting to assess the contributions of the husband in a qualitative and quantitative fashion and not identifying as a result thereof the basis upon which there was a conclusion that the husband’s contributions pursuant to Section 79 were assessed at $1 million. (Ground 3)

1. At the commencement of our discussion of these grounds, it is useful that we record the competing positions of the parties before the trial Judge at the conclusions of the trial.
2. Written submissions were provided by both parties at the conclusion of the hearing. In his submissions the husband asserted that:
   • after the wife’s first property proceedings her financial position “had improved considerably”, and such increase was not a “windfall”, but as a result of assets appreciating with contributions to such appreciation by the husband “not only to the pastoral division but to a lesser extent ....to [AB]”. Further, that the wife had not made any greater contribution than the husband;
   • the appropriate adjustment to reflect the husband’s contributions was 16.8 per cent of the total pool or $10,395,055 representing approximately 20 per cent of the increase in the value of the wife’s assets during the asserted period of cohabitation. (We note here the husband asserted a longer period of cohabitation than 5 and half years as found by the trial Judge. There is however no challenge to that finding); and
   • a further 2.5 per cent adjustment should be made in the husband’s favour “resulting in a final percentage of 19.2% of the pool or $11,877,963”.
3. In stark contrast was the position adopted by the wife. She asserted no weight should be placed on matters the husband asserted were contributions, but rather sought the Court have regard to the husband’s conduct vis-à-vis the EPA as constituting “waste”. Taking into account the sum of $300,000.00 received by the husband as an interim distribution, the character of which was to be determined by the trial Judge, and a sum of $70,000.00 which it was asserted the husband received for spousal maintenance based on false representations, the wife submitted the husband should be responsible for 80 per cent of the costs associated with the EPA prosecutions (being fines, rectification costs and legal costs of $1,212,000.00), and impliedly he should make a payment to the wife by way of adjustment.

The trial judge’s reasons in respect of contribution

1. Before turning to her Honour’s treatment of the parties’ contributions, it is relevant we note that her Honour, after recording some brief details about the parties and their financial circumstances, and explaining the great divergence in the orders sought by the parties, immediately made strong credit findings adverse to the husband concluding “I am satisfied [the husband] is quite unreliable as a witness of truth.” Her Honour said of the husband:

...He also allowed lies to be put to this Court in the course of his application for interim spouse maintenance and he told lies on oath himself. [The husband’s] history suggests he can be charming and plausible, but regrettably it became indisputably apparent in the course of these proceedings that he is also untruthful, deceptive, manipulative, overbearing and in a range of circumstances prepared to place his own interests above integrity. After analysis of all the evidence, I have concluded that in any dispute between [the husband] and any other witness, if it comes down to his word against the other’s, that other evidence is to be preferred. (paragraph 18)

1. There was no challenge to her Honour’s credit findings. Those findings are of significance and form the backdrop to the trial Judge’s assessment of contributions made by the husband.
2. Having analysed, and rejected, the husband’s evidence relating to his assertion that the parties’ cohabitation commenced prior to them taking up residence on one of the wife’s rural properties in 1997, her Honour commenced her recitation of the history of the parties’ relationship, including their contributions, noting the wife’s role in operating both divisions of AB as well as caring for her two younger children with the assistance of a nanny (the older child attending boarding school). Her Honour noted that the wife was assisted by household staff including a housekeeper and gardener, but said “[t]here was little assistance from [the husband] with the shopping and he did not do housework”. (paragraph 31)
3. In paragraphs 34 to 36 of her reasons, her Honour recorded the wife’s evidence about her daily activities, which she accepted, saying “I accept [the wife’s] evidence about these matters. It establishes her as a hard worker with a good deal of experience and knowledge about running the [rural] properties and competently directing both the [rural and commercial] divisions of the enterprise she controls”. (paragraph 36)
4. At paragraph 37 of her reasons the trial Judge chronicled matters relating to the husband’s contentions about his role in AB including the fact that the husband, although not a director of AB, received board papers and attended 22 out of the 48 board meetings held during cohabitation. Her Honour noted from the end of 1998 “arrangements were made for him to receive from [AB] consultancy fees and later a salary”. She also recorded “But, as will be noted shortly, he received considerable benefits over and above the salary” (paragraph 37(a)). Her Honour also noted the establishment of a loan account for the benefit of the husband, that he became a member of the AB Staff Superannuation Plan and retained an entitlement in that fund.
5. Thereafter, her Honour set out the husband’s role in both the pastoral and publishing divisions as follows:
   • (f) As for the [rural] properties, his involvement varied. According to [the wife’s] evidence [#48] between 1999 and early 2003 he provided her with some assistance with mustering, drenching, drafting cattle, driving the tractor and bulldozer, carting water and carting some stock between the various properties. [The husband] would put his efforts much higher than this allows, but discussion about that will follow later.
   • (g) He was instrumental in having [AB] acquire some earthmoving equipment [excavator, bulldozer, scraper] and he undertook certain work with that equipment on the properties. He was also instrumental in having [AB] lease a Kenworth truck and trailer and purchase a trailer and he drove the truck at times to transport stock.
   • (h) Though horses had been acquired over previous years [exhibit 29], from 1999 or thereabouts a cutting horse business was established at [T] and for that purpose horses were selected and a breeding program developed. A stable complex and arenas were constructed, along with suitable fencing and yards. In due course [Mr D] was engaged as the horse trainer/manager and [Ms N] was employed to assist with the care of the horses. [The husband] asserts an involvement in the cutting horse division and at times acquired horses for which [the wife] paid. Though the surrounding circumstances are controversial, at a sale [the husband] and [the wife] attended in the United States in December 1999 five horses were acquired for a price of $300,000 and in 2001 at a show in New South Wales, again in controversial circumstances, [the husband] purchased a horse for which [the wife] paid.
   • (i) [The husband] suggested to [the wife] that she get rid of sheep and only run cattle on the [rural] properties. She ultimately did so [ratified by the Board] in September 2002 by selling all of the sheep at once. He also suggested the sale of two of the [rural properties], which was subsequently done and he suggested the acquisition of a property about which there were some negotiations, though they came to nothing in the end.
   • (j) [The husband] was also involved in various repair and maintenance tasks on the properties. This included renovation of staff cottages, improving water supply and organising the replacement of [a roof] on a cottage at [J, one of the properties]. (paragraph 37 (f) to (j) inclusive)
6. Having recorded details of payments received by the husband from AB and other benefits received, including expenditure met by the wife on his behalf and holiday expenses, her Honour explained at paragraph 39:

What has been said thus far does not reflect [the husband’s] evidence about his efforts in both the [rural and commercial] divisions during the years he lived at [T], nor the evidence of the several witnesses running counter to his evidence. A summary of his case about his efforts follows:

(a) When at [H, another property] he would go through the paperwork, budgets and accounts to become aware of what it was costing to run the properties, what the return was, and how [AB] was handling its investment.

(b) He and [the wife] worked together on the properties on average between 10 and 12 hours a day from early morning, they organised and planned each day, they undertook all manner of activities including capital works, stock work, repairs and fencing and together they saw to management responsibilities such as purchasing supplies, staff and budgets. It was a seven day a week operation, save for times when they came to Sydney to see the children, attend social functions, or attend [AB] Board meetings.

(c) As well, he had other input into the [rural] properties. They were very run down when he was [sic] first saw them and improvements were in a poor state; for example, fences needed repair, stock were getting into the adjoining Crown land through the boundary fence, gates were hanging off hinges, staff housing was dilapidated, sheds needed painting, paddocks were run down, and dams had not been cleaned for 30 years. There were also shortcomings in management practices; for example, stock returns were not completed and he insisted sheep be counted at shearing when numbers were found to be ‘hopelessly incorrect’. He set about introducing savings and improvements in a number of areas: he organised, oversighted and involved himself in the construction of new fencing; he persuaded the Board to acquire heavy equipment to clean dams and construct dams, roads, tracks and fence lines; water supply to the homestead and staff quarters was improved; new sheep yards were built at [J]; he oversighted renovation of staff cottages to facilitate the hire and retention of better quality staff and he improved staff retention and conditions; he pointed out to [the wife] that she needed more money to employ better people and he also pointed out to her just what ‘bush custom’ required be provided to staff; he introduced the use of horse floats and motor bikes to work more effectively with stock; he made the decision to breed quarter horses and for that purpose he purchased horses over time from the United States and from New South Wales after careful selection of bloodlines; he oversaw and assisted with the construction of the stable complex and related improvements for the horse business and he engaged and supervised the horse trainer, initially [Mr O] and later [Mr D].

(d) He also took an active and helpful part in [AB] Board meetings, despite having no voting power, by his participation in decision making with [the wife] on topics such as capital expenditure, staffing, building maintenance, new products, book covers, clients, marketing and debtor control. His input was sought not only by [the wife] but also by the chairman [Mr C], the General Manager, [Mr G], and the Financial Controller, [Mr F]. To play his part, he reviewed Board papers when distributed and discussed them with [the wife]. He had extensive involvement on issues such as finance, personnel, capital expenditure, research and development, information technology and future planning. He tried to develop a personal relationship with [AB] staff. He was extensively involved in budgeting and in particular his efforts and analysis reduced the transport budget of [AB] by over $100,000 per year by reason of changes he implemented. He continually brought up Workcover insurance and relayed his concern if an accident should occur [in fact there was a death on the property in January 2003 when the handbrake of a vehicle failed].

1. At the conclusion of this summary, her Honour significantly said:

But there is ample and far more credible evidence from a number of separate sources, including [the wife], showing this to be grossly overstated or exaggerated and giving a more accurate picture of [the husband’s] involvement over these 5 ½ years... (paragraph 40)

1. The trial Judge then conducted a comprehensive analysis of the evidence of witnesses called in the wife’s case which challenged the husband’s evidence about his contributions.
2. Because of its relevance not only to this ground, but to ground 5 (dealing with the husband’s asserted contributions to the commercial division) we record in full her Honour’s summary of the evidence of one of those witnesses, a Mr G. Her Honour found him to be “an impressive witness” and she was satisfied that he “did not give false evidence, to assist [the wife] here or otherwise”. Her Honour had earlier in her reasons recorded that Mr G began work with AB in 1978, was appointed General Manager in February 1999, and was appointed an alternate director in November 2000 and a director in July 2003. He was Managing Director of AB until July 2005 and was retained by the purchaser as its Chief Operating Officer. Her Honour said:

[Mr G] had a deal of experience of [the husband] by reason of his roles and responsibilities at [AB] and his evidence casts quite a different light on [the husband’s] participation in the affairs of [AB]. In his experience [the husband] had no commercial acumen. While [the husband] made suggestions at times, they reflected a lack of understanding of the business [for example about changing the freight structure] and were not adopted. Generally his participation was tolerated because he was married to the owner of the business. Moreover, [the husband] cost the business considerable sums of money through payments and benefits provided to him and through his excessive and unbudgeted expenditure related to the pastoral division. In his experience, it was [the wife] who contributed towards the improvement and growth of the business, in consultation with Board members and staff. [The husband] conducted himself on a number of occasions at Board meetings in an aggressive manner [eg pointing his finger at staff members attending the meeting saying ‘I have taken the time to listen to you and now you listen to me!’ followed by commentary irrelevant to the issue under discussion]. A strategy was developed so as to minimise [the husband’s] aggressive attitude and embarrassment to [the wife]. The challenge to file notes made by [Mr G] between 2000 and 2002 [related mostly to [the husband’s] conduct] was referred to earlier. As indicated there, I accept [Mr G’s] evidence and therefore I accept these notes record various events as he experienced them. They reflect demanding, aggressive and threatening behaviour by [the husband] during June 2001 as well as in June 2002 and in the call he made to [Mr G’s] home in November 2002. (paragraph 40(i))

1. Her Honour found that Mr G’s evidence corroborated in many ways the evidence of the wife. She then recorded a number of discrepancies between the husband’s evidence and that of the wife’s witnesses and made findings that:
   • there was inappropriate behaviour by the husband towards staff on the rural properties;
   • the husband was negligent and cruel in dealing with stock;
   • later in the parties’ relationship that the husband was less involved in outside work;
   • the husband’s conduct was threatening to the wife and he exhibited bizarre and paranoid behaviour in the period leading up to separation;
   • although the husband initially had a good relationship with the wife’s children his behaviour caused them to become frightened of him.
2. The trial Judge noted the post separation contributions made by the wife. She also recorded the husband’s receipt of spousal maintenance and an interim payment for his litigation costs.
3. At paragraph 129 her Honour commenced her discussion of the issue of contribution by setting out in summary form s 79(4), and then recorded the submissions of the wife’s senior counsel on two issues about which he asserted there was “considerable ‘judicial debate’”. Her Honour found only the second issue to be relevant, namely, the correct approach to assessing the weight to be attached to “introduced property”.
4. In paragraphs 133 to 146 of her reasons, her Honour undertook an analysis of the authorities dealing with initial contributions under the Act, and also discussed recent decisions of the NSW Court of Appeal dealing with property adjustment on the breakdown of de facto relationships under the provisions of the Property (Relationships) Act 1984 (NSW).
5. Whilst noting that the wife did not make a claim “in the sense discussed in Kennon” (paragraph 150), her Honour explained that she considered that she could not ignore evidence of the husband’s behaviour and that such evidence had to be evaluated against the husband’s assertions about his contributions. Her Honour then (at paragraph 151 and following) made findings about the parties’ respective contributions, evaluating the contributions in three periods:
   • the period from the wife’s separation from her former husband in September 1996 until the parties commenced cohabitation on the wife’s rural property in December 1997;
   • the five and a half year period of cohabitation on the rural property; and
   • the post separation period of approximately three and half years.
6. In respect of the first identified period her Honour found:

...[f]rom then until the move together to [T] in December 1997 there is no evidence to establish anything contributed by [the husband] save that he went through paperwork related to [the wife’s] enterprise which, given her inclusive attitude at the time, was likely to have been seen by her as supportive and no doubt relationships between [the husband] and her children were being established during this period. Otherwise in that period, [the wife] was the contributor, providing money to [the husband] as he required but working both physically and intellectually to direct and further her large business enterprises which were not without their complexity... (paragraph 151)

1. Her Honour identified the significant period requiring evaluation under s 79(4)(a)-(c) was the identified five and a half year period of cohabitation, as she found there was no contribution made by the husband during the post separation period.
2. After referring to her earlier discussion of the husband’s circumstances at the beginning of cohabitation, her Honour explained she had already identified the wife’s contributions, but summarised her findings saying:

...[s]uffice to say in a summary way that she can be seen as a person who worked hard physically and intellectually directing the management and operation of her enterprises, both [rural and commercial], throughout those years, at times under difficult circumstances and increasingly so from 2001 until she brought about the separation in May 2003. There is no question about her abilities and competence in both fields. It was her property that provided everything - their home, income and lifestyle – and she generously provided for [the husband] during those years. During that time she saw to the needs of her own children who were part of the household at various times depending on time spent with their father and at boarding school, a task obviously made more difficult as time progressed, particularly from 2001, by [the husband’s] behaviour in their presence. When his daughter, [I], lived with them in 2001 she paid her private school fees and assisted with transport to and from school and by supervising homework. She also assisted [the husband] with litigation in 2002 about her arrangements by collating material and paying his legal fees. (paragraph 152)

1. The trial Judge then identified the wife’s post separation contributions, including the day to day running of both the pastoral and publishing arms of AB, and referred to the growth in assets during the marriage and post separation. Her Honour then made the following findings:

...[t]here has been growth in the value of her property since [the husband] took up residence at [T] at the end of 1997, in part derived from the [rural] properties but significantly from the sale of the [commercial] division. During that period of growth [the wife] has been integrally involved in oversighting the direction and management of those enterprises. She provided [the husband] with relatively substantial sums in spouse maintenance, in circumstances discussed earlier, and gave him an advance payment of $300,000 which he has dealt with has [sic] he has seen fit. Her contributions as a whole to the currently available property have been enormous. (paragraph 153)

1. Her Honour then turned to her evaluation of the husband’s contributions noting that he remained a bankrupt until 1998 and brought no assets to the relationship.
2. In respect of the second period, the trial Judge accepted that the husband did make a contribution to the rural properties, but concluded that this contribution was “nowhere near what he asserts [it] to be” and went on to expand this finding saying:

...[i]n fact when evidence about his contribution to the [rural] properties is weighed in the balance, there is a consistent thread of failing to adhere to budgets, spending without authority, inflated and wrongheaded notions of what should be done, and poor ability to manage and work alongside staff – all of which stands in stark contrast to the case [the husband] presented about contributing. He did contribute, more so in the earlier stages before 2001, but continuing up to his departure in May 2003. And he may very well have been ‘energetic’ and ‘enthusiastic’ in his approach to aspects of the work involved, as Mr Lloyd consistently put to witnesses. But [the husband’s] contributions fall to be evaluated by the full picture and not just by his own notions alone... (paragraph 156)

1. Her Honour found that the husband was:

...paid a relatively substantial salary for his work and, added to that, he was provided with other benefits such as a vehicle and running costs. Still further, he had additional monies from [the wife] who paid money towards his loan account with [AB], his credit card and other debt he had incurred. (paragraph 156)

1. Thereafter, her Honour analysed the husband’s asserted contribution to the commercial division of AB, but concluded the husband’s evidence of his contribution to this business was “over inflated”. The trial Judge concluded:

...[i]n summary, [the husband] did not demonstrate acumen, he did not particularly understand the intricacies of the business (an example being the transport restructure suggestion which lacked understanding) and, again, he showed his impaired capacity to establish or maintain good relations with staff by exhibiting at times his bullying and overbearing nature, which others were left to deal with as best they could having regard to his unassailable position as the spouse of the owner. (paragraph 157)

1. In assessing the husband’s contributions under s 79(4)(c) her Honour found the husband’s contribution at the beginning of cohabitation was a positive one, but that his performance in this role “deteriorated in time”.
2. The trial Judge summarised her findings about the husband’s contributions at paragraph 160 as follows:

When all considerations are weighed, summarised rather briefly here but discussed in more detail in the course of this judgment, contributions favour [the wife] overwhelmingly. [The husband] did contribute in ways discussed, but the case he presented about contributing in various ways was over inflated and more accurately reflected in the evidence of [the wife] and her witnesses. Nonetheless, the balance of all relevant considerations does call for recognition of his contribution by an assessment in his favour.

1. In her consideration of how the husband’s contributions should be calculated, her Honour noted the “more usual” way of expressing contribution findings as a percentage of total property, but explained that process was “not obligatory, and in a case such as this it hardly serves any useful purpose to do so”. She concluded:

It can be expressed as a monetary sum. As I assess it, this would be recognised by apportioning to [the husband] the sum of $1 million. (paragraph 162)

Counsel’s submissions

1. The argument advanced by senior counsel for the husband was, having regard to the well established rationale for the requirement for a trial Judge to give adequate reasons, that her Honour, having recorded her findings about the parties’ respective contributions, failed to explain the nexus between those findings and her assessment that the husband’s contribution entitlement was worth $1 million. Thus it was asserted the husband was “unable to see the basis for the amount formulated” with the consequence that it “denies him his right to properly exercise his right of appeal” (appellant’s submissions filed 20 August 2007, p 3).
2. The husband’s senior counsel also asserted (by reference to ground 4 ) that her Honour failed to identify the husband’s financial contributions from his salary and loan account during the period of cohabitation, or to afford him any weight for that contribution, which it was asserted by implication to have been used for the benefit of the family. As those grounds have potential impact on the evaluation of contribution made by the trial Judge, it is convenient we interpose our consideration of these grounds at this point.

Asserted failure by the trial Judge to take into account the husband's contributions of his salary and to [AB]

That upon the learned Trial Judge rejecting the submission made on behalf of the Respondent that the Appellant had not made a full and frank disclosure, Her Honour erred in not taking into account the direct financial contribution made by the husband from consultancy and salaries of $723,230.00 expended by the husband between 1998 and 2003. (Ground 4)

Failing to have regard or sufficient regard to the evidence of the Wife relevant to the contributions of the Husband to [AB] for the purpose of her Honour’s examination of the evidentiary material relevant to that issue. (Ground 5)

1. Little argument was addressed to us in respect of ground 4. We will consider this challenge to the trial Judge’s orders later in our discussion of the trial Judge’s contribution analysis and findings.
2. In the course of oral argument before us, senior counsel for the husband primarily focused his submissions on the asserted failure of the trial Judge to adequately discuss and evaluate the husband’s contributions to AB. Senior counsel acknowledged, after the amendment made to ground 5, that if we found no merit in this challenge the husband’s other asserted contributions to AB would not be pursued in this appeal. Although the amended ground was framed on its face to encompass the husband’s contributions to both the rural and commercial arms of AB, senior counsel for the husband made it clear in his oral submissions, that the ground was confined to the husband’s contributions to the commercial arm by the husband’s attendance at Board meetings (transcript 12 October 2007 at p 27 and 28).
3. It was asserted on the husband’s behalf that the findings by the trial Judge of the husband’s contribution to the board of AB were “no more than the bare fact of his attendance at 22 of the 48 or 44 meetings”. (transcript 12 October 2007 at 28)
4. The evidence on which the husband’s senior counsel sought to rely was not the evidence in chief of the husband, but “concessions” made by the wife in cross examination. The wife’s cross examination included the following “concessions” relevant to AB commercial division, as distinct from her concessions in respect of the pastoral division.

[MR LLOYD:] And he was willing and wanting to be part of the team that was effectively running [AB], notwithstanding that it may have been an honorary position?

[THE WIFE:]---Yes.

He actively participated at those Board meetings by putting in his two bob’s worth as we say?---As time went on, yes, he did, sir.

He built confidence, did he, over time to speak up?---Yes.

In the initial stages he was a little bit quieter?---Yes, sir.

Because he was learning the ropes?---Yes, sir.

...

As time went by from your observation and from discussions you had with him he began to your knowledge to understand the various divisions within [AB]?---Yes.

(Transcript 31 May 2006 at p 42, lines 20-31 and 47-49)

...

MR LLOYD: He was a fast learner on the issues of raising and producing cattle, wasn’t he?---Yes.

He became a fast learner, didn’t he, because of his inquisitive nature of the business, didn’t he?---He read a lot, sir.

(Transcript 31 May 2006 at p 43, lines 42-46)

...

[MR LLOYD:] All right. When you went to these Board meetings as time went by did you believe he was consciously wanting to participate positively in those meetings?---Yes.

Some of his ideas you agreed with?---Some, yes.

...

[MR LLOYD:] [The husband] would attend as many Board meetings as he could or were reasonable to attend given his obligations on [T] and elsewhere?---Initially, yes.

(Transcript 31 May 2006 at p 44, lines 5-9 and 38-39)

...

[MR LLOYD:] You listened to him because you found his suggestions mainly to be sensible?---Most of the time, yes.

(Transcript 31 May 2006 at p 45, lines 1-2)

...

[MR LLOYD:] Do you have a recollection of [the husband] saying, “Look, it could be potentially dangerous. We had better have, as a group, an occupational health and safety plan in place”?---I don’t recall specifics, sir, but [the husband] definitely did speak about OH and S policies.

(Transcript 31 May 2006 at p 81, lines 11-14)

1. Senior counsel for the husband in support of the complaint contained in ground 5 that the trial Judge failed to have regard, or sufficient regard, to the evidence of the wife concerning the husband’s contributions to AB relied on the judgment of Hayne J in Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 at paragraphs 130-131 where his Honour said as follows:

In the present case, however, reference to the “sufficiency” of the primary judge’s reasons is not to be understood as seeking to invoke only those principles. Rather, because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue.

The primary judge’s reasons stated his conclusion that the evidence of Dr [K] was to be accepted and preferred to that of other evidence but disclosed no reasoning supporting that conclusion...

1. We consider the asserted failure by the trial Judge to make findings about the wife’s concessions must be assessed in the context of her Honour’s overall judgment. In so doing we are conscious that her Honour was not required to give over-zealous assessment of the parties’ contributions or evidence of those contributions (see Norbis v Norbis [1986] HCA 17; (1985-1986) 161 CLR 513 at 523-524 per Mason and Deane JJ; see also the observations of Mahoney JA in Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd which we later cite).
2. None of the passages of transcript to which we have been directed in our view demonstrate any significant contribution by the husband to the commercial division of AB which was not subject of some consideration by her Honour.
3. Further, the trial Judge accepted and preferred the evidence of Mr G, rather than the husband’s evidence of his contributions to AB (which asserted contributions her Honour carefully chronicled at paragraph 39(d) and which we have set out earlier in these reasons). Mr G’s evidence, being that of a long standing employee and later an experienced director, was that the husband had no commercial acumen, and that it was the wife who contributed to the improvement and growth of the business.
4. Whilst not extensively argued before us in his oral submissions, senior counsel for the husband asserted that the trial Judge had failed in her reasons to take into account the husband’s earnings received from the companies during the course of the marriage, and that absent a finding of “waste”, the contribution assessment was flawed as it ignored the husband’s contribution of his income. He submitted that her Honour should have, absent findings of non disclosure, drawn the inference that the husband’s earnings were applied for family purposes.
5. There is no dispute that the wife’s case was predicated on the basis that the husband had failed to make a full, frank and proper disclosure of his financial affairs. Whilst the trial Judge found the evidence did not satisfy the requisite evidentiary standard, what this experienced trial Judge did was to assess all of the relevant contributions, and then ascribe a monetary amount to those contributions.
6. We do not agree that her Honour, having found the evidence before her did meet the requisite standard for her to positively find a lack of full and frank disclosure by the husband, was bound to infer his income was used for family purposes. Her Honour dealt extensively with the evidence about the husband’s income during the marriage noting that he paid child support and some education costs for his daughter, purchased a motor vehicle for a [Ms P] for $20,000.00, and also recorded his unsatisfactory response to questions directed to the use of his income. In these circumstances, we conclude that it would have been unsafe for her Honour to draw an inference that the husband’s income was applied for family purposes.
7. We discern no error in her Honour’s approach to and weight afforded to the husband’s contribution to the commercial arm of AB or from his earnings, and accordingly do not find grounds 4 and 5 established.
8. We return then to the principal challenge raised on the husband’s behalf of an asserted lack of reasons to support the finding that $1 million was a proper sum to recognise the husband’s contributions.
9. The requirement to give adequate reasons is not in doubt. In Bennett & Bennett (1991) FLC 92-191 the Full Court considered that the test as to the adequacy of reasons propounded by Gray J in the passage appearing hereunder was a useful one and one which applies to discretionary judgments. The Court observed at 78,266:

In Sun Alliance Insurance Ltd v Massoud (1989) VR 8, the Full Court of the Supreme Court of Victoria, consisting of Fullagar, Gray and Tadgell JJ, followed the principles established by the New South Wales Court of Appeal. Gray J, who delivered the principal judgment, said, at 18:

“The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:-

(a) the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.

The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.”

1. The decision of the New South Wales Court of Appeal in Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 386 is also relevant. There Mahoney JA considered the function to be served by the giving of reasons. His Honour said the function included the fact that reasons may be necessary to enable a party to exercise his or her right of appeal, and that the requirement should be seen as an incident of the judicial process. Further, his Honour noted limits to the function:

Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemize, for example, in the assessment of damages for tort, each of the factual matters to which he has had regard ... Nor is a judge required to make an explicit finding on each disputed piece of evidence. It will be sufficient, if the inference as to what is found is appropriately clear.

He concluded:

But, subject to matters such as these, the basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it.

1. Before us senior counsel for the husband submitted that if the husband’s entitlement had been expressed in percentage terms, the percentage would have reflected some overall assessment by the trial Judge of the worth of the husband’s contributions, but fairly conceded the sum awarded by the trial Judge could be converted to a percentage.
2. As we recorded at the commencement of these reasons, senior counsel for the husband also conceded that whilst assessing contribution by “percentage entitlements” is the method generally employed by trial Judges, nothing in
   s 79(4) itself, or the authorities, mandates such a course, and in an appropriate case a monetary sum may be awarded. He suggested that the reasoning underpinning such a sum could, in an appropriate case, be based on a calculation of lost earnings due to circumstances arising as a result of the marriage. In short, a compensatory award calculated on a basis more akin to the calculation of special damages up to the date of hearing in a common law claim. However, he readily conceded such a calculation or basis for reasons was more appropriate to the exercise of discretion under s 75(2) than the evaluation of contribution.
3. In Norbis, after discussing the “global” and “asset by asset” approaches to the evaluation of assets under s 79, Wilson and Dawson JJ said at 533 to 534:

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.

1. We are conscious for parties, and those advising them, that decisions made under s 79 demonstrate, within a reasonable ambit of discretion of a trial Judge, certainty and predictability of outcome, (see for example, the discussion by Professor Parkinson in ‘Property Division – Developing Order out of Chaos’ (Paper presented at the 10th Australian Family Lawyers’ Conference, Tahiti, 8-13 June 2007); and his earlier paper “Quantifying the Homemaker Contribution in Family Property Law” (2003) Federal Law Review 1 at p 6-7; McLay & McLay (1996) FLC 92-667 at 82,901).
2. However, as Finn J explained in another unusual case, (Farmer & Bramley [2000] FamCA 1615; (2000) FLC 93-060) (and approved by Nicholson CJ and Buckley J in Figgins & Figgins [2002] FamCA 688; (2002) FLC 93-122 at paragraphs 74-75) where the trial Judge awarded the sum of $750,000.00 to a wife under s 79 for both contribution and s 75(2) factors:

As to the specific complaint that his Honour’s reasons do not reveal how he arrived at the figure of $750,000, it has to be said, that it is not generally possible in the exercise of the discretion under s 79 to say or to ascertain why a particular award is ultimately arrived at. Given that awards under
s 79 are virtually never calculated with mathematical precision, no amount of enumeration of, or indeed of evaluation of, contributions, or of the
s 75(2) matters, or indeed of any of the matters listed in s 79(4), can ever explain exactly why a particular figure, or more usually a percentage, is eventually arrived at (other than that it is within the recognised “range”)... (paragraph 49)

1. We do not accept there is any requirement under the legislation, or derived from the case law, which imposed on the trial Judge a requirement to assess or “compensate” the husband’s contributions by reference to objective data such as comparative wages or business earnings foregone in determining the appropriate monetary sum. Rather, what her Honour was required to do in the present case was to assess and make findings about the nature of the husband’s contributions compared and contrasted with those of the wife, and only in the light of that assessment to adjust the parties’ respective assets if necessary to achieve justice and equity between them. It was open to her Honour if she found no or minimal contributions by the husband to make no adjustment to the parties’ respective assets (see Bushby & Bushby (1988) FLC 91-919).
2. In this most unusual case the trial Judge in her reasons:
   • carefully set out the conflicting evidence about the parties’ contributions;
   • found the initial contributions and post separation contributions were made solely by the wife;
   • found that the wife made the significant contributions throughout the parties’ cohabitation;
   • found that the husband had made contributions, but those contributions were not as substantial and significant as asserted by the husband who was not a witness of credit;
   • found that the husband received benefits including generous salary and consultancy fees, payment of expenses and provision of holidays during cohabitation;
   • had regard to the length of the cohabitation; and
   • determined such contributions as the husband had made by
     • - physical work on the rural properties
     • - some assistance with the wife’s children in the first three years of the marriage
     • - attendance at board meetings

were appropriately recognised by a payment to him of $1 million.

1. We do not discern that her Honour failed to take into account any relevant factor, that she gave inappropriate weight to any particular factor, or that her evaluation of the readily identifiable limited contributions of the husband at
   $1 million was outside the reasonable ambit of her discretion. In the circumstances of this case, it was well open to find it was inappropriate and/or artificial to attempt to evaluate the actual contributions of the husband as a percentage of the large pool of assets which were sourced exclusively from the wife’s sole pre-marriage assets, maintained and improved significantly by her during the marriage, and substantially increased post separation as a result of the sale, engineered by the wife, of AB to another corporate enterprise.
2. We do not accept there was an absence of reasoning which makes it impossible for the husband to know why her Honour evaluated his contribution based entitlement at $1 million (rather than some other sum such as the $11 million for which he contended at trial or the 7.5 per cent for which he contends on a re-exercise of the discretion). Put simply, her Honour did not accept the husband’s evidence of his asserted contributions, and evaluated the husband’s total contributions at a significant monetary sum (which other judicial officers may have described as a generous award) to recognise his limited non financial contributions and contributions to the welfare of the family over a five and a half year relationship. In summary, we are satisfied that the award in this case was not beyond the range about which there could be reasonable disagreement.

THE SECTION 75(2) CHALLENGE

1. The husband’s senior counsel articulated the challenge to the trial Judge’s adjustment to the husband under s 75(2), that is, a further payment of $1 million, retention of $300,000.00 already received by the husband, and indemnification by the wife in respect of his loan account to AB of $172,398.00, as one principally directed to the asserted failure by the trial Judge to give sufficient weight to relevant factors, particularly the husband’s asserted restricted earning capacity due to a back injury. It was submitted that the adjustment made under s 75(2), particularly given the wife’s financial position, did not result in orders in the husband’s favour which were just and equitable.
2. In contending for a greater s 75(2) adjustment, the husband’s senior counsel submitted the trial Judge had, in the exercise of her discretion, failed to give sufficient weight to the enormous disparity between the parties’ respective financial positions, the uncertainties about the husband’s future employment and employability, and the standard of living enjoyed by the parties during the marriage.
3. Senior counsel for the husband, in his written submissions in reply, submitted that oral submissions made by the wife’s senior counsel at the hearing of the appeal (which submissions referred to medical evidence relied on in the spousal maintenance proceedings, and husband’s own evidence) each involved an infraction of the rule in Browne v Dunn (1894) 6 R 67. The husband’s senior counsel submitted that the wife’s senior counsel had made a forensic decision not to cross-examine the husband on the history contained in Dr V’s report, which could not therefore be subject of challenge.

Conduct of the case before the trial Judge

1. The trial Judge was provided with substantial written submissions by the parties. However the material supporting a s 75(2) adjustment in the husband’s favour was brief. It was submitted on the husband’s behalf that there should be a 2.5 per cent adjustment in his favour. That adjustment was said to be based on the following factors:
   • (a) the enormity of the Wife’s wealth and infrastructure compared to that of the Husband;
   • (b) the health of the Husband having regard to the uncontested evidence of Dr V.
   • (c) the loss of his salary of $240,000 per annum is a figure fixed by the Wife when fixing her own salary of $260,000.
   • (d) the fringe benefits of a home, motor vehicles, credit card access, substantial cash sums (see Wife’s concession transcript 31 May 2006 page 11 lines 40 and following) and loan account access.

(Applicant’s outline of submissions filed 17 July 2006, p 24)

1. The husband’s evidence about his employment at time of trial emerged in the course of his oral evidence, and in particular in answer to questions posed by the trial Judge. The following evidence was given by the husband:

...

[HER HONOUR:]You refer to your occupation as being “owner-operator transport” and you’ve heard me discuss with Mr Lloyd and he tendered the trust deed for the [Cook] Family Trust, and interpreting your financial statement you’ve got “Income: [Cook] Pastoral Co Pty Ltd as trustee”?

[THE HUSBAND:] ---Yes, ma’am.

You know what I’m talking about?---Yes.

And your average weekly income you’ve put at $1110?---Yes, ma’am.

From what I hear of your evidence you’ve acquired a truck, Kenworth truck?---Correct.

Two trailers and a dolly?---Correct.

And you’re operating that out of [a Queensland town], are you?---Correct.

Tell me about that. I don’t understand whether you’re driving the truck yourself, whether you’ve got drivers involved, whether it’s doing long hauls interstate, it’s doing local transport. What’s it doing?---Doing local work carting grain around the [...] area. There’s a driver in the truck at the moment and I’ve got a driver working for me part-time. When I can drive it I can with my back and he drives it the other time and works for [Company X]. We contract for [Company X] as a company. (Transcript 01/06/06 p 8, lines 17-39)

...

[HER HONOUR:] This driver that you’ve got, is that a full-time driver is it?---Part-time. He works on a property in the [...] district, ma’am, and I just grab him when I need him. His father owns a property there.

Do I gather when you need him is when you’re not able to drive for one reason or another?---That’s it.

So you sort of share the driving?---Yes, I do.

(Transcript 01/06/06, p 9, lines 1-8)

...

[HER HONOUR:] What did you think you’d be able to earn from going into this debt and buying this truck?---Well, we worked it out that once – without all the interruptions of the Court and everything like that, that I’d probably be able to earn about – somewhere about 2 to 3 thousand dollars in my salary for me a week after all the debts were paid.

After all the bills, the bank and the insurance and the driver and the lot?---Yes, ma’am, yes, and hopefully if I can get my back repaired I’ll be – well, to a bit better stage I’ll be able to do more driving, but we’ll see.

But the 2 to 3 thousand dollars per week that you estimate you’ll be able to earn before tax but after expenses from this truck?---Yes, ma’am.

Is into the future, when this case is over and your attention can go to your business, that’s what you think you’ll be able to earn?---Yes, ma’am.

But that includes paying a driver?---Yes, it does.

So this 1100 per week is just early days - - -?---Yes.

- - - figure and you think you can get more money from your work?---Well, I hope to, your Honour, yes.

(Transcript 01/06/06 p 11 lines 19-40)

The trial Judge’s reasons for judgment in respect of s 75(2)

1. In her Honour’s discussion of relevant matters under s 75(2) commencing at paragraph 162 of her reasons, she noted that the disparity in the parties’ wealth was one factor identified by the husband’s counsel at trial as requiring adjustment in his favour.
2. At paragraph 164, the trial Judge recorded the husband’s reliance on expert medical evidence of Dr V, an orthopaedic surgeon. Thereafter her Honour set out in summary form the content of Dr V’s report which predominantly comprised the doctor’s recording of the husband’s history of back pain, and its impact on his capacity to work. Significantly, her Honour noted “...[b]ut nothing is said in the report of any impact on [the husband] or, more particularly, the consequences for his capacity to work in some field or other including in the business he has established in [a Queensland town] ” (paragraph 164).
3. At this point in her reasons, the trial Judge commented that the husband had not, in giving his history of his involvement with the wife’s enterprises, said anything about a bad back.
4. Later in paragraph 164, her Honour referred to a reference to the husband’s lower back pain in a report of a Dr L. Her Honour concluded her discussion of the relevant unchallenged medical evidence with the following comments.

... I think it open to observe that a back history appears not to have influenced [the husband] in his decision to incur a relatively significant debt to buy a truck and related equipment so as to establish himself in a business which he contemplates operating into the future. So perhaps in the final analysis what the evidence means is that to the extent he has some back trouble he will have to take care about sudden movement, not stand in one spot for to [sic] long, and restrict his walking, but he will not be unduly hampered in running his business which he sees as providing him with income in the future. (paragraph 164)

1. Her Honour then discussed the husband’s own evidence about the trucking business established by him post separation, and made a finding that the marriage had not diminished his earning capacity, or his ability to earn income as a truck driver.
2. Having discussed the husband’s relationship with a woman with whom he had contact from 2002, the trial Judge dismissed as of any particular relevance the financial effect such a relationship could have on the husband finding “it was not a factor of any moment [against the husband]....in the final analysis” (paragraph 166). Her Honour concluded her discussion of relevant factors under s 75(2) by explaining the disparity between the parties’ wealth was a factor “which calls for some adjustment of their contribution assessments” noting “[w]hat that is leads to discussion of a just and equitable outcome” (paragraph 167).
3. Her Honour went on to explain (in paragraph 168) that the husband’s decision to relocate to a Queensland town and establish a business there post separation should be supported by “adjusting the contribution assessment”. Her Honour concluded:

In short, I envisage [the wife] paying [the husband] $2 million and leaving him with the $300,000 already paid as well as releasing him from his debt to [AB] of $172,398. Added together, this would give him over $2.472 million received from her.

With the additional $2 million, how he dealt with it would be [the husband’s] decision. But it would certainly pay the debt he has for the residence and chattels acquired from [Z] and from there he could make the decision about organisation of his finances by retaining a house of that obvious substance or buying a residence for a lesser sum and investing the balance available. He might also pay the debt raised to establish the business or alternatively pay other debt he has incurred. As well, he has the various chattels presently in his possession such as jewellery and furniture and his superannuation. (paragraphs 169 and 170)

1. We were referred by the wife’s senior counsel to earlier paragraphs in her Honour’s reasons, where she discussed the evidence before her about the husband’s health at the time of his application for spousal maintenance. At paragraph 78 her Honour noted:

Apparently his uncertain health led to query about his ability to drive the motor vehicle he had been provided, but he met that with a short report dated 3 November from a general practitioner he had consulted in [a Queensland town], Dr [Q] [exhibit 11] which showed no abnormality in his health and supported a submission about his fitness to drive.

1. Her Honour then discussed the discrepancies in the husband’s medical and general history given to a psychologist, Dr U, for the purposes of a Local Court hearing and the husband’s attendance on another psychologist Dr A. Her Honour dismissed Dr U’s report as not having any probative value because of the husband’s “presentation to [Dr U] was a manipulative deception based on elaborate fabrication to gain an advantage, not only in the spouse maintenance proceedings in this court but [sic] in the criminal proceedings...”

DISCUSSION

1. Before us the husband’s counsel very properly conceded that the thrust of the challenge to the s 75(2) adjustment was one directed principally to the exercise of discretion by the trial Judge (see House v The King [1936] HCA 40; (1936) 55 CLR 499).
2. Whilst the expert medical evidence of Dr V was not included in the appeal book, we were provided with a copy of his affidavit sworn 23 May 2006 which annexed his reported dated 6 April, 2006 and a radiological report of Dr E of a CT Guided Facet block of the husband’s lumbar 4/5 facet joints conducted on 28 March 2006.
3. In his report, Dr V, after noting the husband to be in general good health when he saw him on 27 March 2006, then set out the husband’s reported history of low back pain. Dr V thereafter referred to the results of a CT scan, the date of which is not identified, showing a “marked loss of disc height at L5/S1. At L4/5 there is gas in the facet joints”. Dr V noted he recommended the husband have facet blocks at L4/5, and the annexed radiological report, about which there is no comment, indicates the husband underwent the facet block the following day. Dr V’s report contained no prognosis or assessment of the impact of the husband’s reported low back pain, or the radiological findings in the CT scan of marked loss of disc height. This lack of prognosis or assessment was referred by the trial Judge in her discussion of the husband’s health and his capacity for employment.
4. Senior counsel for the husband submitted that the trial Judge should have had regard to the inability of the husband to compete in the open labour market by reason of his back injury and cited Wade v Allsop (1976) 10 ALR 352 to support the proposition that he should receive an adjustment to compensate for that lack of ability. We see a number of flaws in this argument. First, the adjustment under s 75(2) is not generally akin to the exercise of assessment of general damages at common law, but requires consideration and balancing of the relevant factors enumerated in the section. Secondly, the husband did not adduce evidence in support of loss of earnings claim which would have permitted the type of assessment conducted in common law personal injuries cases. Thirdly, as we further discuss below, the medical evidence relied on by the husband was deficient, and finally the husband’s evidence of his work history on the rural properties which he asserted in support of his contribution argument is at odds with a submission now made of incapacity.
5. The trial Judge’s reasons disclose that she carefully examined all of the relevant medical evidence before her about the husband’s health, and that her Honour contrasted the history given by the husband to Dr V, and the husband’s lack of affidavit evidence about his back injury. She also took into account, as she was clearly entitled to do, the husband’s oral evidence of his work history at the time of the trial, and his expectation of his ability to work and generate income in the future.
6. We are satisfied that the trial Judge did not err in the exercise of her discretion, having regard to all of the evidence before her, in failing to make a significant adjustment in the husband’s favour on the basis that his back condition would restrict his employment opportunities in the open market.
7. Further it appears to us, having regard to the limited content of the report of Dr V and the rejection by the trial Judge of any probative weight to be afforded to Dr U’s report, that it is unnecessary for us to consider the submissions made by the wife’s senior counsel about conflicting earlier evidence which we set out in paragraph 89, or the asserted infraction of the rule in Browne v Dunn, other than to note there was limited cross-examination of the husband on the history given to Dr V (Transcript, 31 May 2006 at 61-62).
8. Whilst the husband’s written submissions articulated the need for her Honour to take into account the loss of benefits to be received by the husband (impliedly directed to s 75(2)(g)), we are not satisfied, given the quantum of the adjustment made under s 75(2) in the husband’s favour by the trial Judge that any additional sum was required for this factor.

THE JUST AND EQUITABLE CHALLENGE

1. The final challenges raised in the Notice of Appeal assert (in ground 6) that the assessment by the trial Judge of an adjustment of property of $1 million in favour of the husband for his contribution based entitlement, and (in ground 7) the further adjustment of $1 million in favour of the husband for s 75(2) factors was, in each case, “manifestly unjust and inequitable”.
2. Section 79(1) provides that in property proceedings the Court may make such order as it considers appropriate altering the interests of the parties to a marriage to the property of either or them. Section 79(2) mandates that the Court shall not make an order under the section unless it is satisfied in all the circumstances it is just and equitable to make the order.
3. In this case it was the wife’s position, in effect, that no order should be made altering the interests of the parties in their respective property, but that the husband repay to the wife part of the costs associated with the EPA prosecutions. The trial Judge in her reasons rejected the position advanced by the wife. Her Honour found the husband had made some contributions, although not extensive as claimed by him, during the marriage and that the husband’s limited contributions should be recognised by a contribution based award, adjusted under s 75(2), so that he had an entitlement to assets of $2,472,000.00 received or to be received from the wife.
4. We have found no error by the trial Judge in the unusual circumstances of this case in evaluating the husband’s contributions, or making the adjustment under s 75(2). Her Honour considered the husband’s overall position in the light of the orders she proposed, noting that the husband had the ability to either retain the substantial home he had contracted to purchase free from debt, or to purchase a less expensive home and invest the balance of funds, or to extinguish the debt on the business acquired by him as well as other debt including his legal expenses. Her Honour also noted the husband retained jewellery, furniture and his superannuation.
5. We discern no error by the trial Judge in the exercise of her discretion in the alteration of property interests ordered under s 79, or in her determination that the orders to be made were just and equitable. Accordingly we are satisfied there is no merit in the grounds challenging the s 75(2) adjustment, or the justice and equity of the orders made by the trial Judge.

THE NOTICE OF CONTENTION

1. In the light of our determination that the husband’s appeal should be dismissed, it is not necessary that we examine the matters asserted in the wife’s Notice of Contention, those matters being relied on to support the orders made by the trial Judge.

COSTS

1. At the conclusion of the hearing before us we sought submissions from the parties as to costs of the appeal. Senior Counsel for the wife submitted that if the appeal was dismissed that the husband should pay the wife’s costs. In light of that submission, senior counsel for the husband reserved the right to provide submissions on costs of the appeal until after delivery of our reasons for judgment. We propose therefore to provide a time-table for the filing of written submissions in respect of costs of the appeal.
   

I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: