Family Law

On 1 December 2006, the Full Court of the Family Court of Australia released its judgment in CCD v AGMD, [2006] FamCA 1291. The case involved an appeal by the husband against orders for property settlement made by Carmody J on 11 April 2006. The orders were amended pursuant to the slip rule on 9 October 2006.

The overall effect of Carmody J’s orders was to award the wife property to the value of 15% of the net value of the parties’ property, which was found to have been $3,459,636. The award was made in circumstances where the husband and wife, aged 78 and 52 respectively at the time of the trial, had cohabited for a period of five years with no children being born of their marriage.

The husband alleged that the trial judge erred by:

• applying incorrect principles or values to the alteration of property interests between spouses on marriage breakdown;
• including four paragraphs in the judgment (regarding adjustment factors) which were coincidentally similar to four paragraphs in another judgment by his Honour delivered one year earlier.

1. Did the trial judge identify and apply incorrect principles or values?

In considering the application of s 79 of the Family Law Act 1975 (Cth), the trial judge embarked upon an expansive discussion of societal and moral values and principles relating to the alteration of property interests between spouses on marriage breakdown. The husband alleged that a number of the trial judge’s statements were inconsistent with established principles and with the provisions of the Act. Carmody J made statements regarding:

• the danger of undervaluing the contribution of home-makers, and the importance of assessing the quality with which a role (such as home-maker) had been performed
• theoretical questions as to how societal values should be defined and whether trial judges were bound by the values approved in cases decided by superior courts;
• the roles of intention, contribution, reliance, compensation and need as justification for the power to adjust property interests; and
• the necessity of providing compensation for lost income and earning capacity, loss of standard of living and future financial support.

The Full Court found that Carmody J’s statements regarding societal and moral values affected his application of s 79 to the facts of the case. The Full Court expressed doubt that “…intention and compensation are factors which ought influence alteration of property interests.” In particular, the Full Court found that the “concept of compensation for income lost during a marriage (of itself) and compensation for a loss of living standard (of itself) are not factors which ought influence the outcome of a property settlement”.

2. What was the effect of the trial judge importing paragraphs from his own earlier judgment into his reasons for judgment in the present case?

In his discussion of adjustment factors, the Carmody J appeared to import four paragraphs from his own earlier judgment in an unrelated case. The husband alleged that the trial judge erred by adopting verbatim several paragraphs of an earlier decision including facts, arguments and findings relevant to the previous case but which did not pertain to the case at hand. The Full Court found that the trial judge’s discussion within these paragraphs did not directly address the evidence in the case before him. The Full Court agreed with the husband that the trial judge’s written reasons failed to provide a discernible path to the result and did not thereby demonstrate that justice had been done.

3. Re-exercise of discretion

The Full Court re-exercised the discretion that had been vested in the trial judge and reached its own conclusions of a just and equitable alteration of property interests. The Full Court found that it was appropriate for the wife to retain approximately what she already had as an appropriate recognition of the parties’ contributions having regard to:

• the increase in the wife’s assets;
• the pursuit by the parties of leisure activities (particularly travel) funded by the husband;
• the enormous disparity in initial contributions;
• the fairly short period of cohabitation; and
• the absence of children

The Full Court considered the factors in s 75(2) of the Act, and found that the disparity in the financial circumstances, including both assets and income, required some adjustment. The Full Court found that the wife was entitled to 8.36% of the asset pool and ordered accordingly.