Phillips & Hansford (No. 2): Appealing the trial judge’s division of the pool of assets

The decision of Phillips & Hansford (No. 2) [2015] FamCAFC 138 concerns an appeal of a property order that the husband argued was unreasonably favourable to the wife and based on an erroneous calculation of their assets. The trial judge ruled that the contributions of the parties to the asset pool were equal. The trial judge then took into account the wife’s mental illness and lower earning capacity when compared to the husband to make an adjustment of 15 per cent in her favour.

The husband submitted that the trial judge made a series of errors when calculating the asset pool. The trial judge had miscalculated an extension of his mortgage and a liability he incurred in order to pay the wife $15,000 as part of an interim property settlement. Also, a further $10,000 payment he made to the wife was mischaracterised as spousal maintenance rather than an interim property settlement. The husband was successful in appealing these errors.

While the trial judge deemed the contributions to the pool of assets to be equal the husband argued that contributions should be ruled to be 10 per cent in his favour. The husband introduced $40,000 into the asset pool initially compared to the wife’s $25,000 and his parents contributed $23,500 more to the asset pool than the wife’s parents had.

The Full Court took all matters into account, particularly the wife’s parents’ provision of whitegoods and holidays over the course of the relationship and ruled that the trial judge’s finding of an equal contribution was not erroneous. In reaching this conclusion they also rejected a claim by the husband that the trial judge had incorrectly calculated his equity in the marital home, which reduced his apparent contribution.

The husband submitted that the adjustment of 15 per cent on account of the wife’s mental health issues and lower earning capacity “was manifestly excessive and plainly unreasonable”. To support this he claims the wife had access to “significant financial resources” in the form of a family trust. He also submitted that he would be moving to Adelaide and faces difficulty finding employment that provides a similar level of income to what he had previously.

The Full Court deemed this percentage adjustment not so large to warrant their intervention. They noted that the property pool was not substantial and so the wife would not be receiving a large sum. They had no evidence to support his claim of the wife having access to financial support from the trust and did not accept that his move to Adelaide would significantly undermine his employability. The husband’s appeal of the adjustment in favour of the wife was dismissed.

The Full Court’s judgment emphasised the difficulties faced by appealing decisions based on disproportionate adjustments. While they acknowledged different judges might adopt different percentages they believed that “the trial judge’s determination falls within the generous ambit of a trial judge’s discretion.” In refusing to adjust the trial judge’s decision the Court partially relied on Stephen J’s judgment in Gronow v Gronow in which he states “it is never enough that an appellate court, left to itself, would have arrived at a different conclusion.”

This decision demonstrates that in order for a division of the pool of assets to be overturned there is a need for the division to be a significant departure from what is considered reasonable.

Boyce Family Law
Family Lawyers Sydney

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