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Comparable Cases

The use of comparable cases in Property Settlement decisions

The use of comparable cases in property settlement decisions

The decision of Anson & Meek [2017] FamCAFC 257 discusses the use of comparable cases by trial Judges in property settlement decisions and the extent to which they can and should be used.

The Full Court of the Family Court of Australia in the decision of Anson & Meek [2017] FamCAFC 257 constituted by Murphy, Aldridge and Cleary JJ, considered an appeal from property settlement Orders made by Judge Hughes in the Federal Circuit Court of Australia.

At first instance the trial Judge made Orders that effectively resulted in the husband receiving 60% of the asset pool and the wife receiving 40%.

The husband appealed the Orders challenging the learned trial Judge’s findings in respect of contributions amongst other matters. Further, he argued that the trial Judge’s assessment was outside an “acceptable range” particularly having regard to the short period of cohabitation of the parties, and the overwhelming financial contributions made by the husband.

Murphy J upheld the appeal finding that the trial Judge failed to take into account factors which were relevant to her assessment of contributions. He also found that what had been decided in earlier cases, in particular by Full Courts, was a highly relevant matter which required consideration by the trial Judge and that her failing to undertake that analysis resulted in an inadequacy in the reasons.

Aldridge and Cleary JJ agreed with the Reasons for Decision of Murphy J with the exception of his discussion and findings in respect of an “acceptable range”. They found that her Honour’s approach to comparable cases was not an error of principle and that there is no obligation on a trial Judge to consider comparable cases.

Background

The parties were married in April 2008 and they separated in March 2013. There were no children of the marriage however the parties did undertake IVF and had failed pregnancies which caused great distress.

The husband moved to East Asia for his employment in early 2007 and the Wife followed after the parties were married. They subsequently moved to Melbourne in 2009 again for the husband’s employment.

In mid-2007, the husband purchased a farming property for just over $1million. He paid $400,000 from savings and the balance was by way of a loan. The property was registered in his sole name. This property formed a significant percentage of the asset pool in Australia and the contributions in respect to this property were a central issue in this appeal.

At the time of the trial the husband owned assets in Australia as well as assets in another country (“country 2”). It was not controversial that the husband had kept his assets in each country completely separate. The Judge adopted a two pool approach with the assets in country 2 in a separate pool to the assets in Australia.

Her Honour also found that the parties superannuation interests should not be the subject of splitting orders and should be “disregarded”.

Although these two issues were not the subject of appeal Murphy J made comments, with which Aldridge and Cleary JJ agreed, in summary as follows:

  1. With respect to the two pools approach, distinctions in property based on a particular nature or characteristics can be important in assessing the question posed by section 79(2) as well as to the assessment made under section 79(4).   The latter was the reason apparent for the distinction in this case and the trial Judge ought to have referenced same.
  2. With respect to her Honour’s finding that the superannuation interests of the parties should be “disregarded”, Murphy J cited from the decision of Zaruba & Zaruba in which the Full Court stated at paragraph 31 of that decision:

“Thus, the nature of a particular interest or interests in property and when and how it was acquired, utilised, improved or preserved may be very relevant to each or all of three central questions: should a s 79 order be made at all; whether contributions should be assessed “globally” or “asset by asset” or by reference to two or more “pools”; and, what is the nature and extent of each party’s contributions. However, there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest.”

The husband’s assets in Australia were attributed a net value of $1,918,416 of which the farming property comprised $1,860,000. The wife’s assets totaled $126,941. The husband’s assets in country 2 were attributed a net value of $1,761,018. The parties’ superannuation interests were $223,468 for the husband and $205,480 for the wife.

At the commencement of cohabitation the wife had non-superannuation assets of $37,000 and the husband had non-superannuation assets in excess of $1million. The husband held 96.5% of the property of the parties at the commencement of cohabitation. The nature of the parties’ interests in property did not change during the parties’ five year cohabitation.

Her Honour’s findings

Her Honour found that the parties contributions made during the relationship were equal however the husband made significantly greater initial contributions. She found contributions were 80% to the husband and 20% to the wife.

She stated that the husband’s counsel submitted division of Australian assets on contributions should be 95% in favour of the husband and 5% in favour of the wife. She found this to be a grossly inadequate recognition of the wife’s contributions. She referred to the farming property having increased in value by $790,000 during the parties’ marriage from $1,070,000 to $1,860,000.

Failing to take into account relevant considerations

On appeal, the gravamen of the argument on behalf of the husband was that her Honour’s discretion was guided by irrelevant considerations or alternatively, that the increase in value of the faming property was the sole factor guiding her Honour’s discretion such that her Honour failed to take account of other relevant considerations.

Murphy J, with whom Aldrige and Cleary JJ agreed, found that her Honour considered only one matter, the equal contributions of the parties during the relationship, and that her Honour failed to take into account other relevant considerations in this respect. The joint expert opined that almost all of the value of the farm was attributable to the per hectare value of the land and almost none to improvements on the land. The husband’s capital permitted entry into the market whose forces permitted the increase in value. There was no evidence that any specific contributions by the parties impacted upon the increase in value of the farm.   Her Honour failed to take into account these considerations in making her assessment in respect of contributions.

Her Honour also was found to have failed to take into account contributions made by the parties during the two and a half year post-separation period which in the context of a marriage of this duration were very relevant.

An “acceptable range”

Her Honour found a 20% adjustment should be made in favour of the wife under section 75(2) bringing the wife’s total entitlement from 20% to 40%.

The husband argued on appeal that her Honour’s findings in respect of both contributions and section 75(2) factors were outside an “acceptable range”, particularly having regard to the short period of cohabitation and the overwhelming financial contributions of the husband.

In considering this argument Muprhy J referred to two Full Court decisions in respect of comparable cases namely, Rodgers & Rodgers (No 2) (2016) FLC 93-712, and Wallis & Manning (2017) FLC 93-759), and stated at paragraph 99:

“The point sought to be made in the two decisions of the Full Court from which I have earlier quoted is that “‘what has been done in other (more or less) comparable cases’ – with consistency as its aim” can be, and very frequently should be, a relevant consideration in the exercise of discretion, particularly in respect of contributions, because a consistency in the jurisprudence should be one of a number of factors relevant to what is just and equitable.”

He went on to state at paragraph 111 onwards:

  1. “In reiterating what was said by the Full Court in both Rodgers and in Wallis, I seek to emphasise that no error can be asserted by reason of her Honour failing to determine the case or its component assessments by reference to comparable cases cited to her. However, what has been decided in those earlier cases, in particular by Full Courts, is in my view a highly relevant matter which required consideration by her Honour…
  2. I am unable to see where her Honour gave any explicit reasons for rejecting what was submitted to her as matters of genuine comparability.
  • Failure to undertake that analysis is, in my respectful view, a failure to take account of relevant considerations in the exercise of discretion and manifests an inadequacy in the reasons.”

 

Murphy J allowed the appeal.

Comparable cases

Aldrige and Cleary JJ agreed with Murphy J’s reasons up to paragraph 93, at which point Murphy J commenced his discussion and findings in respect of the argument that her Honour’s findings in respect of contributions and section 75(2) factors were outside an “acceptable range”.

Aldrige and Cleary JJ referred to the earlier Full Court of the Family Court of Australia decision of Wallis & Manning (supra) in which their Honours Thackray, Ainslie-Wallace and Murphy JJ) stated at paragraph 63 onwards:

  • “To the extent that any or all of those cases stand for the propositions that comparable cases cannot or should not be used by trial judges in seeking to promote consistency in results in arriving at just and equitable assessments or suggest that the Full Court cannot or should not have reference to comparable cases in determining if a trial assessment is “plainly wrong” or are otherwise “unhelpful” within that process, we respectfully disagree and would hold to the contrary…

 

  1. …While recognising the fact that no two cases are precisely the same, we are of the view that comparable cases can, and perhaps should far more often, be used so as to inform, relevantly, the assessment of contributions within s 79.
  2. The word “comparable” is used advisedly. The search is not for “some sort of tariff let alone an appropriate upper and lower end of the range of orders which may be made”. Nor is it a search for the “right” or “correct” result: the very wide discretion inherent in s 79 is antithetical to both. The search is for comparability – for “what has been done in other (more or less) comparable cases” – with consistency as its aim.”

Aldridge and Cleary JJ went on to consider a number of authorities including civil personal injury cases which eschewed the use of comparable verdicts as well as sentencing decisions.

In respect of Wallis & Manning (supra) and the use of comparable cases their Honours made the following comments at paragraph 149 onwards:

  1. “These passages indicate that the point of looking at comparable sentencing cases is to seek consistency in the proper application of principle and not to achieve some kind of numerical or mathematical equivalence.
  • Thus, if the point of Wallis was that comparable cases could be looked at so as to derive a consistency in the application of principle then we would agree. However, their Honours did not say so or identify how the use of comparable cases would lead to consistency. As we have already observed, if the aim of consistency is consistency of results, then we would suggest that this aim focuses on mathematical equivalence – in reality to set some kind of norm or range, which, of course, was expressly eschewed in Wallis and the authorities upon which it relies.
  1. In our opinion, the fact that two different judges acting upon the same evidence may properly reach different conclusions greatly diminishes the value of comparable cases. This is especially so in this jurisdiction where there is almost an infinite variation in the rich factual detail that attend both parenting and property cases. The concern is amplified when the Court is proffered just a selection of cases said to be comparable as opposed to an analysis of all cases that could be said to be comparable.

  1. To the extent that Wallis permits a judge to have regard to comparable cases for a purpose other than to achieve consistency in the application of principle, we will simply repeat that this is merely the impermissible setting of a norm or range by another name.

  1. …As we have observed, all the authorities to which we must have regard, including Wallis (to the extent it does), indicate that the search is for consistency in the application of principle and not for mere equivalence; yet the focus on the facts, undertaken in the pursuit of consistency, seems very much to us to be a search for some underlying norm or range. In other words, it seems to us that, respectfully, the search for consistency that Murphy J suggests that the primary judge erred by not undertaking was in reality just such a search for some underlying norm or range.

Despite their Honours difference of opinion to Murphy J with respect to the use of comparable cases, their Honours found that the circumstances of this case could not have justified a result of 40% to the wife of the Australia assets, even on the basis of the generous section 75(2) adjustment made in her favour. They stated at paragraph 183:

  1. Quite simply, the result is disproportionate to the facts. This is even more so if, as indeed appears to have been the case, the post separation financial contributions in fact favoured the husband.”
  2. In other words, we consider that the award made was so unreasonable that we can infer that the discretion has miscarried and that there has been an error in the application of principle.”

They allowed the appeal.

Conclusion

The decision of Anson & Meek raises the concern that in circumstances where there is no consistency in respect of outcome but rather solely a consistency of principles to be applied, how is it possible to advise clients with any certainty with respect to their likely entitlement if their matter were to proceed to a trial. And further, is it in the interests of justice if it is more difficult to advise a party with respect to their entitlement and will this inevitably lead to increased litigation. The competing consideration is clearly the necessity to ensure that the particular circumstances of each individual case are given the appropriate weight.

Dianne Caruso, Associate

E: Dianne.caruso@kimwilson.com.au

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