Trial Judge Erred in his Approach to the Parties’ Informal Property Agreement

 

In the recent case of Maine [2016] FamCAFC 270 (22 December 2016), the wife appealed in the Full Court of the Family Court (Ryan, Murphy, and Kent JJ) against Judge Vasta’s order that the parties’ assets be divided as to 65% to the wife and 35% to the husband. The wife argued that no property order should be made as the parties had been separated for 11 years and had reached an informal agreement that the jointly owned home was transferred to her 5 years after separation. The husband argued that the wife was to pay him $80, 000 in exchange for the transfer of the house.

The Full Court stated that there is no evidentiary foundation for the finding that the informal agreement was meant to be a final agreement between the parties. Additionally, it was found that there was no evidentiary foundation that if the wife had paid the $80,000, the husband would not have brought these proceedings.

The Full Court explained that at first instance, the Court referred to the case of Bevan & Bevan [2014] FamCAFC 19 and stated that a final agreement would have resulted necessarily in dismissal of an application. It was noted, however, that the judge at first instance was wrong as Bevan does not suggest any such thing.

In Woodland & Todd [2005] FamCA 161 the Full Court stated that where parties enter into agreement concerning property and one party commences proceedings under section 79 of the Family Law Act (dealing how to go about dividing up property in the event of a marriage breakdown), the court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing. The provisions of the earlier agreement will be given effect if it is just and equitable pursuant to s 79 at the time of the hearing.

It was held that in order to fully determine s 79 applications, it will be necessary to consider the value of the parties assets; their various contributions, and what might have been an appropriate adjustment to the contribution applying section 75(2) of the Act. A consideration of these matters will be necessary in order to assess if the agreement was just and equitable at the time. If the agreement was considered to be just and equitable, then the Court must consider what order should be made by reference to s 79(4) (dealing with what considerations the Court should take into account in determining an alteration of property interests). In respect to the latter, his Honour was obliged to consider the respective contributions of the parties over the entire relationship.

The wife argued that her contributions were made more arduous by reason of family violence perpetrated by the husband. His Honour referred to the case of Kennon and stated that family violence, as defined within the Act, occurred. There was, however, no evidence to illustrate how such conduct has made the contributions by the wife more arduous.

The Full Court considered the finding made at first instance erroneous on the basis that it ignored direct evidence given by the wife in her affidavit not challenged substantively in cross-examination. In the affidavit, the wife gave evidence that family violence had made the household tasks and care of the children more difficult. In addition, the wife’s detailed evidence included the history of the husband’s drunken violence and abuse over a period of about 20 years.

According to the Full Court, a judge is not required to mention every fact or argument relied on by the losing party as relevant to an issue. A party is entitled, however, to know how and why direct evidence adduced by them pertaining directly to an important issue under consideration has been rejected. The parties have been deprived of an explanation as to why direct evidence by the wife as to how her contributions were made more arduous by family violence.

The Full Court found that the court at first instance was required to follow the established principles by reference to the Full Court decision in Kennon, which required of the Court findings in respect of evidence that addressed the impact that the violence had upon the wife’s contributions pursuant to s 79(4) (c).

The Full Court allowed the appeal and the case remitted for re-hearing by another judge.

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