Jackson v Jackson

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

WEDNESDAY, 1 NOVEMBER 2000 JACKSON v JACKSON JUDGMENT 1 STEIN JA: I agree with Rolfe AJA, his reasons and orders save in one respect. I also agree with his Honour's remarks on the question of the possible need for leave to appeal. This should be kept in mind in future appeals under the Property (Relationships) Act 1984. 2 My only departure from the reasons of Rolfe AJA is from his conclusion that the Master's award was 'somewhat generous' (para 34). The Master found that the s 20(1)(b) contributions for parenting and homemaking 'strongly favour' the respondent. The evidence before the Master and his findings on the quality of the appellant's homemaking contribution plainly justified the conclusion. I have no difficulty in this finding translating into the monetary figure of $48,339 mentioned by Rolfe AJA in his judgment. Certainly it was within the discretionary range of the Master. No appellate intervention is justified. 3 GILES JA: I agree with Rolfe AJA.

ROLFE AJA: Introduction 4 By a Statement of Claim issued on 10 October 1997 the appellant, Mr William Edward Jackson, for whom Mr P. Le G. Brereton of Senior Counsel and Mr D.P. Ash of Counsel appeared, sought orders against the respondent, Mrs Grace Makalesi Jackson, for whom Mr C. Watkins of Counsel appeared, for the adjustment of the parties' property interests pursuant to the De Facto Relationships Act 1984, ("the Act"). 5 The respondent defended the proceedings and cross-claimed against the appellant for different adjustment of the parties' property interests and also for damages for assaults upon her during the relationship. Although the causes of action in respect of some assaults were found to be statute barred, she satisfied Master Macready, by whom the matter was heard, that she had causes of action in respect of each of three assaults and he awarded her damages for each totalling $15,000, against which no appeal has been brought. 6 On 26 March 1999, Master Macready ordered that the appellant pay the respondent $155,000, i.e. the sum of $140,000 by way of property adjustment and $15,000 damages for assault, within twenty eight days; and that upon that payment the respondent transfer to him all her right title and interest in one share in Austhold Pty Limited, ("Austhold"), and in a home unit at 3/38 Mitchell Street, North Bondi. The Master made consequential orders for the sale of the home unit and the distribution of the proceeds to satisfy his orders in the event of the appellant's failing to so pay.

1. The quantum of the adjustment in favour of the respondent of their respective interests in the property the subject of the proceedings was unreasonable or plainly unjust. 2. The Master failed to have any or any adequate regard to the contribution of the appellant in the capacity of parent to the welfare of the family constituted by them and the child of the parties. 3. The Master had too great a regard or gave too much weight to the contribution of the respondent as home maker or alternatively allowed too great an adjustment in relation to that contribution having regard to the value of the property the subject of the proceedings and the adjustment made in consequence of the parties' financial contributions. 4. The Master erred in finding that the respondent made a financial contribution of $15,000 to the property of the parties. 7 5. The Master erred in finding that the appellant contributed money to the education of his daughter, and further erred in deducting the amount of such contribution from the available income of the appellant. 8 At the commencement of the appeal Mr Brereton abandoned the fourth and fifth grounds and agreed that the first three amounted to the same complaint, namely that in the exercise of his discretion the Master had made too great an adjustment to the property interests, pursuant to s.20 of the Act, in favour of the respondent. This ground was further refined, the essential submissions being that when one analysed the figures the Master had allowed too much in respect of the respondent's role as a home maker pursuant to s.20(1)(b). It was not in issue that the adjustment decision involved an exercise of discretion. Mr Brereton submitted that that exercise had miscarried because either there had been a failure to give due weight to the financial contributions the appellant had made throughout the relationship, or the amount awarded was so large as to bespeak a wrongful exercise of discretion without the need to identify any specific error: House v The King (1936) 55 CLR 499. 9 In the Notice of Appeal the appellant sought an order that he pay the respondent $80,000, which was to be in addition to the $15,000 for the damages for assault, in lieu of the amount awarded by the Master. Accordingly, on the question of the adjustment of property interests the difference between the parties was $60,000.

At the commencement of the hearing the Court raised whether, the amount in issue prima facie being $60,000, leave to appeal was required. This, apparently, was a matter to which the Registrar had adverted at an earlier stage and submissions had been made to him as a result of which he appears to have been satisfied that the case did not require the granting of leave. The Court decided, after some argument on this question by Mr Brereton and in circumstances where Mr Watkins was not in a position to argue the point no doubt because he thought it had been resolved by the Registrar's decision, that it would hear the merits of the appeal and, if it became necessary thereafter, decide whether the appellant could only pursue the appeal pursuant to the granting of leave. 10

The following matters were either agreed or not in issue:- (a) The appellant was born on 5 February 1941 and was aged 58 years at the date of the hearing. The respondent, who is of Fijian descent but is now an Australian citizen, was born on 4 November 1951 and was aged 47 years at the date of the hearing. (b) The parties met in June 1983 in Fiji and a relationship formed between them in consequence of which a son, Damien Francis Valentine Jackson, was born on 29 July 1984. (c) The respondent and Damien were given approval to migrate to Australia in December 1986. (d) They arrived on 22 December 1986 and, thereafter, the appellant, the respondent and Damien lived together in rented accommodation at Bondi. (e) The parties lived together in a de facto relationship from December 1986 to 18 June 1997. (f) In early 1987 the appellant, who has skills as a mechanical engineer, commenced work with Australian Skilled Engineering and, in the early part of that year, the respondent began employment with the National Australia Bank as a bank officer at its Double Bay Branch. (g) On 17 October 1991, the appellant and the respondent purchased in their joint names the home unit at North Bondi for $165,000. (h) This purchase was financed by a bank loan from National Australia Bank of $120,000, which was obtained at a discount rate due to the respondent's employment. There was no evidence of the extent or value of that discount. Stamp duty, legal costs and loan fees totalled $6,395 were paid by the parties, thus giving them an initial equity of $51,395. (i) After the purchase the respondent's salary was deposited to pay off the mortgage and the appellant met the parties' other expenses. (j) Towards the end of 1992 Austhold was incorporated and used for the purposes of the appellant's making available his services to various employers. There were two issued shares, one being held by each of the parties. The respondent continued to be employed by the Bank and was employed by Austhold to do book work. (k) The relationship ceased on or about 18 June 1997 after a further assault by the appellant on that date. As a result the respondent and Damien left the home unit. She is living in rented accommodation and the appellant, who has remained in the home unit, is meeting all the outgoings including the repayment of the mortgage. He has not paid any amount to the respondent for residing in the property of which she is joint owner since she left. (l) On 9 July 1997, the respondent cashed a term deposit of $15,000, which was in the joint names of the parties, and used the funds to discharge credit card and other debts. (m) On 21 August 1997, the appellant withdrew $4,198.57 from a pass book account in the respondent's name, which was held in trust for Damien, as reimbursement for expenditure relating to Damien. The withdrawal form was signed by the respondent. (n) During the relationship the appellant, in addition to assaulting the respondent, consistently abused her with vulgar language. 11 The Assessment To Be Made

Section 20(1) of the Act provides relevantly:- "(1) On an application by a de facto partner for an order under this Part to adjust interests with respect to the property of the de facto partners or either of them, a court may make such order adjusting the interests of the partners in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the de facto partners to the acquisition, conservation or improvement of any of the property of the partners or either of them or to the financial resources of the partners or either of them, and (b) the contributions, including any contributions made in the capacity of home maker or parent, made by either of the de facto partners to the welfare of the other de facto partner or to the welfare of the family constituted by the partners and one or more of the following, namely: (i) a child of the partners, 12 (ii) …" 13 In determining any adjustment of property rights in accordance with this section, the Court must have regard to the specific contributions to which reference is made in reaching a result which seems to it "just and equitable": Evans v Marmont (1997) 42 NSWLR 70. Some contributions can readily be equated to cash or the value of property. Others, particularly in relation to home making and parenting, are subject to other and more subjective considerations, an evaluation of which, especially in a case such as the present, may well be influenced by the impression each party makes on the initial tribunal of fact; an impression which cannot be recaptured by a Court of Appeal through the reading of the evidence.

A sound foundation for the commencement of the exercise required by s.20 is, in my opinion, a consideration of the contributions, to which a financial value can reasonably be attributed. However, even in undertaking this exercise there is, of necessity, some degree of imprecision. The figures to which I shall refer are, of necessity, in some instances approximations, albeit reasonably close ones. 14 The Financial Position At The Commencement Of The Relationship 15 The Master found that at the commencement of the relationship the appellant had savings of approximately $50,000 and plant and machinery the value of which he estimated at $35,000. The plant and machinery was later assigned to Austhold. The appellant also had a motor vehicle, the value of which did not appear in evidence. None of these matters was in issue.

The Master found that the respondent's only asset of any substance at that time was her entitlement to payment from a provident fund in Fiji. Whilst there was no documentary evidence to support the amount, which she alleged to be $15,000, the appellant conceded that she had some entitlement, but denied it was "anything like $15,000" or that it was used, as she suggested, for the purchase of the home unit in 1991. The Master found the amount was $15,000 and, as I have noted, this is no longer challenged. 16 Thus, at the commencement of the relationship, the appellant and the respondent respectively brought to it contributions valued at about $85,000 and $15,000. 17 The Master found that the appellant made an initial contribution to the home unit of $42,395, and that the respondent made an initial contribution to it of $9,000. He also found that she contributed $6,000 to the acquisition of two cars. 18 Throughout the relationship each party was engaged in gainful employment. The only evidence of earnings before the Master was that during the period of the relationship the appellant derived pre-tax income of approximately $345,000 and the respondent earned pre-tax income of approximately $212,000. He accepted, and so much was not ultimately in issue, that from the appellant's earnings he paid $25,000 in respect of his daughter's school fees, she not being a child who, on the evidence, lived with the parties. This reduced the income contributed by him to approximately $320,000. The respondent's earnings were credited to the overdraft account and the parties lived on those of the appellant. The Master did not consider that this made any difference, rightly in my view, as there was a pooling of their earnings to pay all household, including mortgage, costs and expenses. 19 Each party acquired one share in Austhold which, on the evidence, the Master valued at $1. This was not in issue and the amount is insignificant. 20 An attempt was made by the respondent on appeal to attack the quantum of the appellant's income and the extent of the mortgage repayments. It was submitted that the appellant's income would have been less than the amount the Master found and, therefore, closer to the respondent's because the higher income would have attracted more tax. It was also submitted that there was no evidence to show how much of the mortgage payments were attributable to principal and how much to interest. Each submission must, in my view, be rejected. There was no attempt to attack these matters before the Master; it is not necessarily so that a higher income will attract more tax, particularly where it is being derived by the provision of services through a company; and the relevance of the amount attributable to principal and interest, if there be any, was not sought to be explained.

Whilst there was some argument before the Master about superannuation to which each party was entitled, it was agreed on the hearing of the appeal that such entitlements "evened themselves out". Accordingly, they require no further consideration. 21 The Position At The Conclusion Of The Relationship

The Master found that at the conclusion of the relationship the parties had a joint interest in the home unit, which was agreed to have a "present value", i.e. at the date of the hearing before him, of $310,000. It was accepted that this was the correct figure to which the Master and this Court should have regard. The parties agreed that at the date the relationship concluded $65,573.55 remained owing to the bank under the mortgage and, at the date of the hearing, that amount had been reduced to $55,583 from which the Master deduced that there was an equity in the property at the date of the hearing of $254,417. It was not suggested, for the reasons to which I have referred, that the appellant was entitled to any credit for paying off the further $10,000: (paragraph 8(k) above). 22 An Overview Of The Position Thus Far 23 It will appear, from what I have said, that there were not substantial issues between the parties on a number of points. This, of course, is reflected also in the very limited nature of the appeal, as ultimately propounded.

The financial contributions to the relationship were:- Appellant: Cash $ 50,000 . 00 Plant and Equipment $ 35,000 . 00 Earnings $ 320,000 . 00

Total $ 405,000 . 00 Respondent: Provident Fund $ 15,000 . 00 Earnings $ 212,000 . 00 $ 227,000 . 00 24 Thus of the financial contributions of $632,000, the appellant provided sixty four per cent and the respondent thirty six per cent. 25 At the end of the relationship the parties jointly owned the equity in the home unit of $254,417 of which sixty four per cent and thirty six per cent are, respectively, $162,827 and $91,590. Thus, on these figures, the respondent had a prima facie entitlement to $91,590. In my opinion, subject to the matters set out in the next paragraph, the respondent was entitled to have that amount included in any property adjustment. 26 In addition, Mr Brereton submitted that the respondent had taken the term deposit of $15,000, which was jointly owned by the parties. On the other hand the appellant had the money from Damien's trust account, albeit undoubtedly with the consent of the respondent, of approximately $4,200. The difference between $7,500, being the appellant's interest in the term deposit of $15,000, and $4,200, is $3,300 which, in the overall figuring, is not of any great significance.

The appropriateness of the adjustment of $140,000 can be considered in this way. The parties have an asset of $254,417 to which, on the figures to which I have referred, the appellant had contributed sixty four per cent and the respondent thirty six per cent. The percentages of $254,417 are, on the basis of a payment of $140,000 to the respondent, fifty five per cent in her favour, and forty five per cent in favour of the appellant. The appellant's share, based on financial contributions, had been reduced and the respondent's share had been increased by nineteen per cent of $254,417, i.e. by $48,339. This was because of the Master's assessment of the respondent's home making and parenting roles. Thus the $140,000 is, basically, the sum of $91,590 to which, in my opinion the respondent was clearly entitled, and $48,339 for her contribution to home making and parenting. In essence it was the latter figure which Mr Brereton attacked on the bases to which I have referred. 27 The Respondent's Role As A Home Maker

There are a number of matters, which strongly favoured the respondent's role as a home maker and her parenting capacities, which the Master said was "at the heart of one of the major disputes in this case". He found:-

(a) that the greater burden of time with Damien fell on the respondent; (b) that more often, as the appellant conceded, the parenting for Damien fell on the respondent; (c) that the parenting and home making contributions "strongly favour" the respondent; and (d) where there was a conflict of evidence the Master, generally, was satisfied that the respondent should be accepted. 28 All of these matters were relevant to determining what, in respect of these contributions, was just and equitable. 29 These matters, as the Master recognised, had to be considered in the light of the appellant's misconduct towards her (and to some extent towards Damien) by way of assaults and foul language; and the fact that whilst performing the home making and parenting roles the respondent was not only working full time at the Bank, but also performing some work for Austhold. 30 The impact that the evidence on these issues will make on the tribunal of fact will differ from case to case. In each case the Master must make an assessment of all the elements which contribute to those roles including the work done, the needs to which attention is paid and the creation of an amicable family "ambience". The extent to which this contribution is to be measured in financial terms will depend, in my opinion, very much on the impression each party makes on the tribunal of fact. In this case, the Master was satisfied that the respondent performed all these functions to a greater extent than the appellant and he was, in my opinion, entitled to consider this in the context of the very difficult and, to a large extent anti-social, way in which the appellant acted towards her. Further, the relationship was for eleven years, a period which, in my view, is not insignificant. 31 Mr Brereton accepted the general principle that because home making involves not only physical work, but also the creation of an appropriate ambience "and such like things", aggressive conduct of the type in which the appellant engaged may be seen as relevant to the amount to be awarded. In this case it was clearly presented to the Master as being very relevant. 32 The question, therefore, is whether, in allowing the respondent some $48,339 for this component, the Master erred. Mr Brereton submitted that the Master failed to take into account the income earned by the appellant. I would reject this submission on the basis that he clearly had regard to all income earned by both parties over the whole period and, as I have said, it is a relevant matter that in addition to undertaking the home making and parenting tasks the respondent was engaged in full time employment throughout. Nextly, he submitted, that the allowance was so high that there was some undisclosed error. 33 I consider that the Master's award in this regard was somewhat generous. The question is whether it was beyond the bounds of the legitimate exercise of his discretion. After very careful consideration, and whilst readily acknowledging its generosity, I have concluded that it is a figure which, in all the circumstances, the Master was entitled to reach, and that it is not one calling for appellate interference. He had the advantage of assessing the parties and the impact of their evidence and, in so doing, deciding where, within the range, he would fix the contribution.

The matter can be tested in another way. If, as the appellant contended, the proper amount payable to the respondent was $80,000, the percentage of $80,000 to $254,417 is approximately thirty two per cent. An award of this amount would, in my opinion, be plainly unjust as being some $11,950 below the amount to which she is entitled on the basis of her financial contributions. There is no justification to reduce the value of those contributions, in addition to which an amount must be added for the home making and parenting contributions. Having regard to their recognised significance in this case and the circumstances to which I have referred, the Master was fully justified in increasing the thirty six per cent or $91,590 quite substantially. Viewed also in this way, I do not consider that it has been established that the figure to which the Master came was excessive, such as to demand the intervention of this Court. Accordingly, I consider the appeal should be dismissed with costs. 34 Leave To Appeal Section 101(1)(r) of the Supreme Court Act 1970 provides:- "(1) Subject to this and any other Act and subject to the rules, an appeal shall lie to the Court of Appeal from: … (r) a final judgment or order in proceedings of the Court, other than an appeal: (i) that involves a matter at issue amounting to or of the value of $100,000 or more, or 35 (ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more." 36 I have referred to the fact that the Court raised with counsel, at the outset, the question whether leave was required. 37 The parties were asked to consider whether, on a proper understanding of the matter in issue on the appeal the amount in issue was only $60,000, being the difference between the amount awarded by the Master and the amount the appellant was prepared to pay. Mr Brereton submitted that this was not so because if the appellant failed to pay the amount ordered, the order for the sale of the property affected his proprietary interest in the home unit, the value of which exceeded $100,000. I am far from satisfied that this answers the question whether leave is needed. Mr Watkins, no doubt for the reasons to which I have referred, was not in a position to argue the matter. 38 Mr Brereton further submitted that if the Court was of the view that leave to appeal was necessary, this was a proper case in which it should be granted having regard to what he discerned as the errors in the Master's reasons. 39 I have also referred to the fact that the Registrar drew attention to this point and, apparently, satisfied himself that the case was not one in which it was necessary for leave to be sought. 40 In my opinion careful consideration needs to be given to whether leave to appeal should be granted in cases where, at least prima facie, the amount at issue or involved in any claim, demand or question, does not exceed $100,000. That is particularly so in cases where relatively small amounts, although no doubt of high significance to the parties to the litigation, are in issue and the costs involved in running a full appeal are high. 41 The issue raised as to whether leave is necessary requires an examination of authorities such as Oertel v Crocker (1947) 75 CLR 261 and Ballas v The Theophilos (No 1) (1957) 97 CLR 186. I would not wish to come to any final conclusion on this point without the benefit of full argument. However, if I may say so with respect, it seems to me that it is necessary for the point to be determined by this Court at some stage. It is quite wrong for appeals to come forward and proceed as appeal as of right when there is a reasonably strong argument that no more than $100,000 is involved, such that leave is required. Unless a strong stance is taken on this point the Court hears appeals as of right, where no such entitlement exists.

In the present case it is neither necessary nor desirable to resolve the point. First, if leave was not necessary, I am of the view that the appeal should be dismissed. Second, the Court has not had the advantage of full argument. However, as I have said, it would be appropriate, in my opinion, for the Registrar to refer to the Court for consideration any further appeals where the Registrar is concerned, for the reasons he was in this case, whether leave to appeal is necessary. 42 Proposed Orders The orders I propose are that the appeal be dismissed with costs.

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