Adcock & Sealy
[2024] FedCFamC1A 137
•19 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Adcock & Sealy [2024] FedCFamC1A 137
Appeal from: Adcock & Sealy (No 2) [2024] FedCFamC1F 123 Appeal number: NAA 78 of 2024 File number: MLC 6991 of 2022 Judgment of: AUSTIN, KARI & CHRISTIE JJ Date of judgment: 19 August 2024 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellant appeals orders made by the primary judge adjusting property between parties to a de facto relationship – Where the appellant asserts the exercise of discretion fell outside the bounds of what might be considered a reasonable outcome – Where the appellant complains that it was not just and equitable to make orders leaving the appellant with funds which are less than her legal interests –Where factual errors made by the primary judge are of no moment – Where the primary judge has not taken into account irrelevant considerations as asserted by the appellant – Where the appellant asserts inadequate reasons – Where the reasons are comprehensive and enable a clear understanding of the reasoning upon which the decision was made – Where there is no merit in any of the grounds of appeal – Appeal dismissed – Appellant to pay the respondent’s costs in a fixed sum. Legislation: Family Law Act 1975 (Cth) Pts VIII, VIIIAB, ss 90RD, 90SF, 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Sch 3
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Lovell & Lovell (1950) 81 CLR 513; [1950] HCA 52
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
University of Wollongong v Metwally (1985) 158 CLR 447; [1985] HCA 28
Number of paragraphs: 61 Date of hearing: 27 June 2024 Place: Heard in Melbourne, delivered in Newcastle Counsel for the Appellant: Mr Looney KC with Ms Coulton Solicitor for the Appellant: Farrar Gesini Dunn Counsel for the Respondent: Mr Dickson KC with Mr Ryan Solicitor for the Respondent: Westminster Lawyers ORDERS
NAA 78 of 2024
MLC 6991 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS ADCOCK
Appellant
AND: MR SEALY
Respondent
ORDER MADE BY:
AUSTIN, KARI & CHRISTIE JJ
DATE OF ORDER:
19 AUGUST 2024
THE COURT ORDERS THAT:
1.The Amended Notice of Appeal filed 3 June 2024 is dismissed.
2.The appellant is to pay the respondent’s costs fixed in the amount of $22,500.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Adcock & Sealy has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN, KARI & CHRISTIE JJ:
INTRODUCTION
This is an appeal from orders made 6 March 2024 adjusting property between parties to a de facto relationship pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”) by a judge of the Federal Circuit and Family Court of Australia (Division 1).
For the reasons that follow the appeal shall be dismissed.
BACKGROUND
The parties to the litigation were in a relationship from approximately April 2016 until October 2021. The parties were in dispute about the length of the de facto relationship, with the respondent describing the relationship as “unusual”. The parties however agreed the Court had jurisdiction to adjust their interests in property.
At the time of the hearing before the primary judge the appellant was 56 years of age and the respondent was 67 years of age.
Both parties have children from previous relationships. The appellant has two children who were aged 17 and 20 at the time of trial. The respondent has three adult children.
For the vast majority of the relationship the parties did not live together in the same home. Rather, the appellant’s principal place of residence was in Sydney and the respondent’s principal place of residence was in Melbourne. The parties only lived together for a short period between July 2021 and separation in October 2021, in the respondent’s home in Melbourne. They otherwise enjoyed a number of holidays together over the course of the relationship.
It was an agreed position between the parties that the respondent is a man of significant wealth and means, and that during the relationship he provided significant funds to the appellant to and for her benefit and that of her children.
The respondent’s largesse towards the appellant (and her two children) included the provision of housing as follows:
(a)The payment of costs for rental accommodation in Sydney between April 2017 and March 2020;
(b)The purchase of a home in Suburb P purchased as joint tenants in April 2019 for $8,375,000, with funds entirely contributed by the respondent, into which the appellant moved in April 2020 and in which she resided until July 2021 when settlement on the sale of the property was effected; and
(c)The respondent’s home in Suburb C between July 2021 and separation on 10 October 2021.
In the post separation period, ongoing to the present, the appellant has resided in a property at N Street, Suburb B, Victoria (“the [Suburb B] property”). The Suburb B property is held by the parties as joint tenants. It was the respondent’s evidence that the purchase price for the property was $13,500,000 and was funded in part from the proceeds of sale of the Suburb P (which sold for $16,000,000), together with a mortgage in the amount of approximately $4,800,000.
Before the primary judge:
(a)The appellant sought to retain the Suburb B property and Motor Vehicle 1, with the respondent to make payments to affect the discharge of the mortgage registered over the Suburb B property. In the alternative she proposed that she retain the Suburb B property and Motor Vehicle 1, that she discharge the mortgage registered over the Suburb B property and that she make a payment to the respondent in the amount of $2,000,000.
(b)The respondent sought to retain the Suburb B property (indemnifying the applicant with respect to the mortgages registered over the property), Motor Vehicle 1 to be transferred to the appellant, and that the parties otherwise retain their separate assets and resources without any further adjustment between them.
THE REASONS OF THE PRIMARY JUDGE
Before discussing the reasons of the primary judge, it is necessary to identify that the reasons are a manifestation of the manner in which the parties advanced their respective cases during the final hearing, particularly when regard is had to the final submissions that were made; both written and oral. In that regard:
(a)While the appellant contended that the parties were in a de facto relationship for approximately five and a half years, senior counsel for the respondent invited the primary judge not to make any finding about the length of the de facto relationship. The primary judge acceded to this submission and did not make any findings in this regard nor a declaration pursuant to s 90RD of the Act. Instead, the primary judge recorded the parties’ agreement that the Court had jurisdiction to deal with the matter (at [2]).
(b)Senior counsel for each of the parties submitted that the primary judge did not need to make a precise finding about the value of the pool of property held by the parties, each variously submitting that it was between $70,000,000 and $90,000,000. The primary judge found the asset pool to be “in line with the amounts contended for by the respondent and they are about $80 million net” (at [40]), without specifically itemising in a schedule each item of property.
(c)Senior counsel for each of the parties submitted that the primary judge ought not approach the division of property on a percentage basis (both when considering contributions made by the parties with respect to the acquisition, conservation and improvement of any property pursuant to s 90SM(4)(a)–(c), or with respect to any adjustment pursuant to s 90SF of the Act); albeit that senior counsel for the appellant submitted that in considering the justice and equity of any outcome there ought be cross-checking against what it represented as a percentage of the asset pool (Transcript 1 November 2023, p. 27 lines 20–29).
Of significance, the primary judge made a finding that where the evidence of the appellant and the respondent was in conflict, the evidence of the respondent was to be preferred (at [30]).
When considering the respective financial and non-financial contributions of each the appellant and the respondent, the primary judge ultimately concluded that the appellant did not make “any substantial contribution either financially or non-financially to the acquisition of assets during this short relationship” (at [68]).
In coming to this ultimate finding, the primary judge made a number of preliminary findings as to the contributions of each of the parties. In particular the primary judge was satisfied that:
(a)The appellant received a total sum of $2,800,000 paid in instalments between 12 December 2016 and December 2017 by way of property settlement from two former partners, which she did not disclose to the respondent. In relation to those funds, and contrary to the finding sought by the appellant, the primary judge found the appellant had “wasted” the vast majority of these funds (at [47]), and that they had not been contributed to the relationship.
(b)The appellant had received payments from the respondent totalling $3,700,000 both during the relationship and in the post separation period, which included:
(i)payments from the respondent in the amount of $2,377,300 (at [42]), which in part were applied to the payment of private school fees for the appellant’s two children in the amount of $327,386.50 (at [43]), and health expenses for the appellant to attend a health clinic in Country S in the amount of $125,000 (at [44]);
(ii)funds utilised by the appellant through use of the respondent’s credit card in the amount of $280,000 (at [48]); and
(iii)rental income from the Suburb P property in the amount of $70,000 (at [48]).
(c)The appellant’s non-financial contributions were limited to those of homemaker (at [57]) and to providing “support and comfort” to the respondent when holidaying with him and being in a relationship with him (at [67]).
(d)The primary judge specifically rejected the appellant’s contentions that she had made contributions by contributing to the profit realised upon the sale of the Suburb P property in the amount of $7,625,000 (at [56]), providing emotional support to the respondent to encourage him to cease consumption of illicit drugs (at [58]), and that she had improved the respondent’s wardrobe (at [61]).
When turning to the consideration of relevant factors pursuant to s 90SF of the Act, the primary judge ultimately concluded that it would be appropriate to make an adjustment taking into account “the income, property and financial resources of each of the parties and the physical and mental capacity of each of the parties for appropriate gainful employment” (at [90]).
Taking up the invitation mutually entreated by the parties, the primary judge thereafter made the leap from words to numbers and concluded that it would be just and equitable for:
(a)The respondent to make a payment to the appellant in the amount of $750,000;
(b)The appellant to transfer her interest in the Suburb B property to the respondent, subject to indemnifying her in relation to the mortgage;
(c)The appellant to retain Motor Vehicle 1 worth $30,000; and
(d)The parties to each otherwise retain those assets in their respective names and/or possession.
The orders made on 6 March 2024 which are the subject of this appeal are:
1.The Amended Initiating Application of the applicant filed 12 October 2023 be dismissed.
2.The applicant forthwith do all acts and things necessary to transfer (“the transfer") to the respondent, at his expense, all of her right, title and interest in the real property situate at and known as [N Street, Suburb B] (“[N Street]”).
3.Within 60 days from the date of this order, being 5 May 2024, the applicant vacate [N Street].
4.Contemporaneously with the transfer the respondent indemnify the applicant with respect to all liabilities encumbering [N Street] as and when they fall due.
5.Within 60 days from the date of this order, being 5 May 2024, the respondent pay the applicant the sum of $750,000.
The appellant did not seek to disturb orders made by the primary judge which saw her retain Motor Vehicle 1 (Order 6), nor vesting orders (Orders 7–8).
THE APPEAL
On 3 April 2024 the appellant filed a Notice of Appeal, which contained 13 separate grounds of appeal.
The remedial relief sought by the appellant was that the appellate court re-exercise discretion and make orders the same as the alternate position she had advanced before the primary judge, namely; that the appellant have sole use and occupation of the Suburb B property on the condition that she make a payment to the respondent in the amount of $2,000,000, and that she otherwise pay any monies owing pursuant to the mortgage registered over the Suburb B property. In the alternative, the appellant sought that the Suburb B property be sold and, after the payment of agents’ fees, commissions and the mortgages registered over the Suburb B property, the respondent receive the sum of $2,000,000 and the appellant receive the balance of the proceeds of sale.
On 3 June 2024 the appellant filed an Amended Notice of Appeal. By that document the appellant abandoned all of the grounds originally pleaded by her and substituted them with four new grounds. While we shall turn to each ground separately, they can be summarised as:
(a)Errors of fact (Ground 1);
(b)Inadequate reasons (Ground 2);
(c)Taking into account irrelevant considerations (Ground 3); and
(d)A contention that the decision was plainly wrong (Ground 4).
The remedial relief sought by the appellant pursuant to her Amended Notice of Appeal was that the proceedings be remitted for hearing before another judge.
On 15 April 2024, the appellant filed an Application in a Proceeding before the primary judge in which she sought a stay of Orders 2–5 made by the primary judge on 6 March 2024 (“the stay application”). The application was amended on 24 April 2024.
On 30 April 2024, the primary judge heard the stay application. The application was dismissed by orders made on 1 May 2024.
On 3 May 2024, the appellant filed a Notice of Appeal in relation to the stay application (“the stay appeal”).
The stay appeal was listed for hearing at the same time as the substantive appeal.
Ultimately, however, at the hearing of the appeal, the stay appeal was dismissed by consent (with an order for costs made in favour of the respondent in the amount of $7,500), in circumstances where it would have been otiose to hear that appeal as it was an agreed position that:
(a)The respondent has complied with Order 5 and made payment to the appellant in the amount of $750,000;
(b)The appellant remains living in the Suburb B property; and
(c)The respondent has filed an application to enforce the orders of 6 March 2024 which has been adjourned for further consideration before a Judicial Registrar to a date in November 2024; a date we anticipated would be after the disposition of this appeal.
THE GROUNDS OF APPEAL
At the hearing of the appeal, senior counsel for the appellant submitted that the strongest ground of appeal was Ground 4. It is therefore convenient to deal with this ground first.
Ground 4 – The decision was plainly wrong
The type of error alleged by this ground is only capable of being implied by reason of an appellant being unable to identify any other form of frank legal, factual or discretionary error which vitiates the discretionary judgment (House v The King (1936) 55 CLR 499 at 504–505). Such an error is commonly contended as a last resort and it seldom succeeds because of the generous ambit of discretion afforded by the statute (Gronow v Gronow (1979) 144 CLR 513 at 519–520; Norbis v Norbis (1986) 161 CLR 513 (“Norbis”). Relevantly, such an error may be inferred from the incongruence between the result and the underlying evidence, as synthesised with applicable legal principles. In the upshot, it can be contended the decision really amounts to a failure to properly exercise the discretion entrusted to the Court (Lovell & Lovell (1950) 81 CLR 513 at 519).
The gravamen of the appellant’s complaint under this ground is that the exercise of discretion fell outside the bounds of what might have been considered a reasonable outcome.
The appellant contended that the starting point for consideration of any just and equitable outcome in adjusting the parties’ interests in property (presumably after taking into account the findings and assessment of those factors prescribed by s 90SF and s 90SM(4)) was to consider the parties’ “legal” interests in the Suburb B property as joint tenants, and that had this been done the primary judge could not have concluded it was just and equitable to make the orders that were made leaving the appellant with funds that amounted to a value which was less than her legal interest in the Suburb B property.
We do not accept this submission, as it is demonstrably wrong. The legislative intent and the focus of Pts VIII and VIIIAB of the Act is the alteration of the parties’ interests in property where it is just and equitable to so do (see Stanford v Stanford (2012) 247 CLR 108 (at [35]–[42]).
Here the primary judge considered and discussed those matters mandated by the statute (ss 90SM and 90SF(3)) before exercising discretion and making orders adjusting the parties’ interests in property.
In those circumstances, although we accept that minds might differ as to what a just and equitable outcome ought be, as identified by Brennan J in Norbis at 539:
The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference.
None of the appellant’s submissions satisfied us that the result was unreasonable or plainly unjust. Accordingly, there is no merit in this ground.
Ground 1 – Errors of fact
Under this ground the appellant contends two errors by the primary judge:
(a)Firstly, a failure to make a finding the appellant made a contribution by virtue of her receipt of settlement funds from her former partners, which she argued had she not received would have resulted in the respondent paying more to support her (at [49]); and
(b)Secondly, the finding that the appellant had the capacity to obtain appropriate employment (at [92]).
We do not however agree that the primary judge was in error in the first respect. Rather, we consider that the rejection of the appellant’s contention was entirely open on the evidence when regard is had to other findings made by the primary judge (which are not the subject of challenge).
The rejection of the appellant’s contention was properly made because:
(a)The appellant’s own evidence was that her spending was problematic (as discussed later in these reasons at [44]).
(b)The primary judge was satisfied that the appellant had dissipated the entirety of the settlement funds she had received over a relatively short period of time.
(c)The primary judge was satisfied that the respondent had funded the private school fees for the appellant’s children.
(d)The primary judge inferred (we consider properly) that the settlement funds received by the appellant were not applied to the relationship.
(e)The primary judge also inferred (again, we consider properly) that had the respondent been aware of the settlement funds received by the appellant, it could be assumed that he would have “stepped in” to bring the spending to an end at an earlier point (at [49]).
Moreover, we consider that the contention in any event is perverse. Had it been accepted, it would only have served to support a conclusion that the respondent had made even greater financial contributions than those which were ultimately found by the primary judge.
In relation to the second limb of this ground, the finding about the appellant’s capacity for employment, it is difficult to reconcile the appellant’s contention that this was erroneous against the appellant’s own evidence that one of the reasons that she wished to retain the Suburb B property was because she wanted to operate a wellness centre business from it; a contention which she continued to advance before us in the appeal.
For all of these reasons, there is no merit in this ground.
Ground 3 – Taking into account irrelevant considerations and failing to take into account a relevant consideration
The appellant alleges three irrelevant considerations were taken into consideration by the primary judge as follows:
(a)That the respondent had been “generous” throughout the relationship in financially supporting the appellant and her daughters (at [91]);
(b)That the appellant’s expenditure was “irresponsible and problematic” (at [79]) and “profligate” (at [84]); and
(c)That the respondent was “not happy” that the appellant had accessed his bank accounts without his knowledge and had wasted money in pursuit of her lifestyle (at [86]).
As earlier identified, it was an agreed position between the parties that the respondent had been “generous” towards the applicant. The appellant acknowledged this throughout her evidence on various occasions (see Transcript 30 October 2023, p.24 line 35, p.28 line 4 and p.51 line 27). Whilst we accept that the term “generous” is relative, given the use of this adjective to describe the respondent by the appellant herself, there can be no error in the primary judge having adopted the appellant’s own words in the reasons.
Similarly, and whilst we agree that the adjectives used by the primary judge to describe the appellant’s expenditure were colourful, we do not accept that they are indicative of anything other than the primary judge summarising the appellant’s oral evidence and the words used by her to describe her spending. Examples of the phrases used by the appellant to describe her spending during her oral evidence included:
(a)“I have a spending problem, and I admit to that” (Transcript 30 October 2023, p.7 lines 5–6);
(b)“looking respectively [sic], I’m horrified at what I’ve spent” (Transcript 30 October 2023, p.31 line 2);
(c)“overspending and being irresponsible with money” (Transcript 30 October 2023, p.95 lines 26–28);
(d)“problem with spending and [own] up to that (Transcript 31 October 2023, p.143 lines 7–10); and
(e)“it’s not a good habit” (Transcript 31 October 2023, p.146 lines 30–32).
The primary judge’s observation that the respondent was “not happy” about the appellant accessing his bank accounts and her wasteful spending, was indicative of the fact that whether or not the respondent gave the appellant permission to do so was a fact in issue in the proceedings. That the primary judge made a finding against the position advanced by the appellant, was nothing more than a resolution of the controversy as to whether or not the appellant had permission to access the respondent’s bank accounts.
In addition, and taken collectively, we do not consider that these matters were irrelevant considerations, when it is understood that the appellant contended in her outline of case that she had made a direct financial contribution to the relationship through her injection of the funds received from her former partners.
The appellant also alleges that the primary judge failed to take into account a relevant consideration, being, that the appellant was a co-borrower in respect of the mortgage registered over the Suburb B property.
The first difficulty with this alleged error, which is fatal, is that the appellant did not contend before the primary judge that she had made a contribution by virtue of her being a co-borrower to the mortgage registered over the property.
The submission is also problematic, because it was not part of the appellant’s case that she had either made a financial contribution to the mortgage, nor that she had provided assets as security for the borrowings which resulted in the mortgage being advanced.
We therefore find no merit in both aspects of this ground, and it fails.
Ground 2 – Inadequate reasons
As we have earlier identified, the reasons of the primary judge are reflective of the manner in which the parties prosecuted the proceedings and the submissions made.
The appellant, having chosen to run the case in the manner in which she did before the primary judge, cannot now complain, and she is bound by the manner in which her case was conducted (University of Wollongong v Metwally (1985) 158 CLR 447).
Against that backdrop and taking into account the manner in which the primary judge comprehensively considered the contentions put by each party within the statutory framework of considerations both as to contributions and s 90SF(3) factors, we consider that the reasons enable a clear understanding of the reasoning upon which the decision was made (per Bennett and Bennett (1991) FLC 92-191 at 78, 266 and Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [58]–[59]).
In addition, the quantification of the appellant’s entitlements at $750,000 is nothing more than the primary judge making the “leap” from words to numbers as occurs in every case where the court is being asked to adjust the parties’ interests in property (Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]).
In light of the same, this ground also fails.
DISPOSITION OF THE APPEAL
As we have found no merit in each ground of appeal, it follows that the appeal will be dismissed.
COSTS
The respondent filed a Cost Schedule on 20 June 2024, calculating indemnity costs at almost $80,000 and costs in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) in an amount of almost $50,000.
At the hearing of the appeal senior counsel for the respondent submitted that costs assessed on a party:party basis for both this appeal and the stay appeal were $30,000; with the parties agreeing that a rough apportionment of costs between the two appeals was 75/25 respectively.
As earlier identified, the appellant consented to an order for costs in the amount of $7,500 in relation to the stay appeal when it was dismissed by orders made at the hearing of the appeal on 27 June 2024.
The appellant agreed that in the event that this appeal was successful, then a costs order ought be made in the amount sought by the respondent.
We shall therefore make an order that the appellant pay the respondent’s costs fixed in the amount of $22,500.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, Kari & Christie. Associate:
Dated: 19 August 2024
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