By Alexandra Moles, Partner and Rachael Murray, Partner

Judicial discretion is well guarded by courts of appeal, particularly in property matters before the Full Court of the Family Court of Australia, where the line between mathematical analysis and holistic, qualitative assessments are blurred. In the recent case of Roverati & Roverati [2021] FamCAFC 89, both parties made submissions regarding their dissatisfaction with the trial judge’s exercise of discretion, and the resulting judgment of the Full Court served as a warning to trial judges who produce brief and inadequate reasons following lengthy delays.

The matter concerned a marriage of 33 years with a property pool valued at approximately $1.3 million, including inheritances the Husband received from the passing of his Father, valued at approximately $404,000 when received (approximately 30% of the asset pool) and the Wife received from the passing of her parents, valued at approximately $50,000 when received. The income generated from the property inherited by the Wife was distributed solely to the children, whereas the Husband’s inheritance was transferred to a family trust, the income from which was used for household expenses. In judgment, delivered 16 months after closing submissions, his Honour stated that: “Throughout their marriage, the parties each received a significant inheritance from their parents’ estates, which was placed in various trust entities.” Other than this statement, the trial judge did not include in his reasons how the respective inheritance contributions were treated and his Honours reasons were rather succinct, concluding that pool should be apportioned equally, despite the disparity in financial contributions. Further, there was also disagreement at trial about the determination of the pool and whether the Husband’s legal fees in the order of approximately $37,000 should be notionally added back to the pool, to which his Honour’s judgment only addressed in a limited way when excluding it from the pool.

The Wife took issue with His Honour’s determination that the fees not be notionally added back, whilst the Husband took issue with His Honour’s discretion to equally apportion the pool, despite the contributions reflecting otherwise. At the heart of both of the parties’ contentions was the trial judge’s sparse judgment and limited reasoning in support of his findings.

The Wife’s notice of contention was quickly disposed of on appeal without dissent, due to the significant confusion between the parties, the trial judge and the Full Court regarding the actual amount of the Husband’s legal fees and from what account the fees were paid. Based on this confusion, the Full Court refused to overturn the trial judge’s decision that because the fees were, in his Honour’s view, paid from a working account of a Trust which the Husband was the sole appointor, trustee and beneficiary of, the fees would not be notionally added back to the pool.

The Husband’s grounds of appeal turned on whether the trial judge gave adequate reasons to support the decision that the assets be apportioned equally, despite the significant differences in the financial contributions of the parties. The majority of the Full Court (Austin J dissenting) held that the trial judge did not explain how the contributions, particularly the Husband’s inheritance which formed such a large part of the pool, did not result in a weighting in the Husband’s favour. Strickland and Ryan JJ were of the view that despite the assessment of contributions being a holistic exercise, the trial judge did not mention inheritances whatsoever, nor how the inheritances were applied, which was a pivotal aspect of the Husband’s case. On this basis, their Honours were satisfied that it was open to the court to re-exercise their discretion and as such held that the Husband’s inheritance was too significant to not result in a 55/45 split to the Husband. In dissent, Austin J affirmed the primary judge’s discretion and his Honour’s “succinct” reasons. Austin J highlighted that equal apportionment fell between parties’ stated positions at trial in which the Husband sought 60% and the Wife sought 55%, the length of the marriage and the Wife’s superior capital, employment and non-financial contributions.

The majority judgment serves as a warning to trial judges and may stand in good stead for practitioners who receive insufficient reasons in a climate where the courts are under consistent pressure to turn out judgments. Whilst the threshold for appealing decisions based on judicial discretion is high, and appealing decisions based on insufficient reasoning likely even higher, parties should not be discouraged from seeking appropriate reasons where the key elements of their case have been overlooked in their entirety.