Agius & Agius
[2010] FamCAFC 143
•12 August 2010
Family Court Of Australia
| AGIUS & AGIUS | [2010] FamCAFC 143 |
| FAMILY LAW - APPEAL – From a property settlement order made by a Federal Magistrate – Controversy as to the amounts to be included in the pool of assets currency FAMILY LAW - APPEAL – Whether the Federal Magistrate made an error of fact and/or law in failing to include amounts retained by the Wife – Where it was not put to the Wife in cross-examination that she had failed to make a full and frank disclosure – Where the Wife gave evidence that the funds were disbursed – Where the Wife was not challenged in relation to her explanation as to what she had done with the funds – Where it was not put to the Wife that the expenditure of the funds was unreasonable – No error established FAMILY LAW - APPEAL – Whether the Federal Magistrate made an error of fact in calculating the payment to the Husband pursuant to the orders in failing to include the liabilities relating to the properties retained by the Husband – Where the order clearly does not reflect the intention of the Federal Magistrate – Where, subject to the slip or accidental omission by the Federal Magistrate, there was no error by his Honour – Where an application pursuant to r 16.05(2)(e) of the Federal Magistrates Court Rules 2001 may be made – No error established FAMILY LAW - APPEAL – Whether the Federal Magistrate’s assessment of the percentage division of the pool of assets available for division between the parties fell outside of the reasonable range of discretion which was just and equitable – Where the Wife received 75 per cent of the net assets and the Husband received 25 per cent – Where very considerable weight had to be given to the initial financial contribution by the Wife – Where there was no children of the marriage – Where the Wife was always in receipt of a significantly greater income from paid employment than the Husband – Where the Federal Magistrate’s assessment fell within the reasonable range of discretion – No error established FAMILY LAW - COSTS – Reserved |
| Child Support (Assessment) Act 1989 (Cth) LexisNexis Butterworths, Halsbury’s Laws of Australia, vol 20 (at 325-3125) |
| Brodie v Brodie (2009) 41 Fam LR 18 Burke and Burke (1981) FLC 91-055 Chorn and Hopkins (2004) FLC 93-204 Hickey and Hickey and the Attorney General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 House v R (1936) 55 CLR 499 Ivanhoe Gold Corporation Ltd v Symonds (1906) 4 CLR 642 King and Kemp (1996) FLC 92-673 M and M [1998] FamCA 42 (unreported, Baker, Kay and Chisholm JJ, 1 May 1998) Mezzacappa and Mezzacappa (1987) FLC 91-853 Pierce and Pierce (1999) FLC 92-844 Re Swire; Mellor v Swire (1885) 30 Ch D 239 Rose and Rose [2003] FamCA 93 Townsend and Townsend (1995) FLC 92-569 |
| APPELLANT: | Mr Agius |
| RESPONDENT: | Ms Agius |
| FILE NUMBER: | MLC | 4447 | of | 2008 |
| APPEAL NUMBER: | SA | 102 | of | 2008 |
| DATE DELIVERED: | 12 August 2010 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bryant CJ, Coleman and O’Ryan JJ |
| HEARING DATE: | 4 May 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 7 November 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 1157 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr P Puckey |
| SOLICITOR FOR THE APPELLANT: | Slater & Gordon |
| THE RESPONDENT: | Self Represented |
Orders
The appeal be dismissed.
It be noted that the Husband may make an application to the Federal Magistrates Court seeking an order that paragraph 6 of the orders made on 7 November 2008 pursuant to s 79 of the Family Law Act 1975 (Cth) be varied by the deletion of the amount “$6,788” and the insertion in lieu thereof of the amount of $30,688.00.
Each party be at liberty to make an application by way of written submissions in respect of costs incurred in relation to the appeal by the Appellant by filing such submissions at the Southern Region Appeal Registry of the Family Court of Australia and serving them on the other party within 28 days of the date hereof.
Each party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Southern Region Appeal Registry of the Family Court of Australia and serving them on the other party.
Each party be at liberty to reply to an answer by way of written submissions by filing such reply at the Southern Region Appeal Registry of the Family Court of Australia and serving it on the other party within a further seven days.
Each party endorse on the cover sheet of any submissions filed pursuant to orders 3, 4 and 5 the date upon which a copy of that submission was served on the other party.
IT IS NOTED that publication of this judgment under the pseudonym Agius & Agius is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 102 of 2008
File Number: MLC 4447 of 2008
| Mr Agius |
Appellant
And
| Ms Agius |
Respondent
Reasons For Judgment
Introduction
This is an appeal by Mr Agius (“the Husband”) against a property settlement order made on 7 November 2008 by Federal Magistrate Burchardt pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The Respondent is Ms Agius (“the Wife”).
The Federal Magistrate found that for the purposes of the proceedings the parties had assets of a net value of $1,073,950.00. At the trial there were controversies as to the amounts to be included in the net assets.
The Federal Magistrate found that having regard to the matters in s 79(4)(a), (b) and (c) of the Act, the contribution based entitlements of the parties, expressed as a percentage of the net assets, was 75 per cent in favour of the Wife and 25 per cent in favour of the Husband. The Federal Magistrate found that there should be no further adjustment to the contribution based entitlements of the parties having regard to the matters in s 75(2) by reason of s 79(4)(e). The Federal Magistrate made no mention of the matters in s 79(4)(d) and (f). The matters in s 79(4)(g) were not relevant.
The Federal Magistrate made the following order:
1. That the wife do forthwith remove at her expense any caveat lodged on her behalf on the title to the [first property located in Victoria].
2. That the husband do all things and sign all such documents as may be required to sell the property known as and situate at [the first property located in Victoria].
3. That the husband be solely responsible for and indemnify the wife against any liability for the payment of Capital Gains Tax on the sale of the said property.
4. That the wife be solely responsible for and indemnify the husband against any liability for the payment of Capital Gains Tax incurred on the sale of either property at [the second property located in Victoria] or [the third property located in Victoria].
5. That each of the parties retain their respective superannuation entitlements.
6. That the wife pay to the husband by no later than 7 December 2008 (“the date”) the sum of $6,788.00 (“the payment”).
7. That contemporaneously with the payment the Husband shall withdraw at his expense any caveat lodged on the title to either of the properties at [the second property located in Victoria] or [the third property located in Victoria].
8. That in the event that the whole of the payment has not been made by the date then:
a.The wife shall elect and advise the husband’s solicitors in writing by no later than 14 December 2008 whether to sell the property at [the second property located in Victoria] or [the third property located in Victoria];
b.The wife shall within a further 7 days do all such things and sign all documents including a real estate agent’s authority necessary to sell altogether out of Court the nominated property;
c.The wife shall do all such things and sign all such documents as may be necessary to sell the nominated property by private sale and if the property has not been sold within 45 days of listing then it shall be sold by auction within a further period of 30 days;
d.The wife shall keep the husband advised of all significant developments regarding the sale of the nominated property through his solicitors in writing and hereby authorises the selling agent and conveyancer or conveyancing solicitor to communicate with and advise the husband’s solicitors regarding the sale;
e.Upon completion of the sale of the nominated property the proceeds of the sale be applied:
i.Firstly to pay all costs, commissions and expenses of the sale;
ii.Secondly so much of the payment as is then outstanding together with interest thereon at the rate prescribed by the Family Law Rules adjusted monthly from the date to the husband;
iii.Thirdly the balance then remaining be paid to the wife.
9. That pending the payment or completion of the sale:
a.The wife have the sole right to occupy [the third property located in Victoria] and that during such right of occupation the wife pay all rates and taxes and like apportionable outgoings of the property as and when they fall due;
b.The husband be entitled to receive all rent paid by tenants of [the first property located in Victoria] and the husband shall pay all rates and taxes and like apportionable outgoings in relation to the property as and when they fall due;
c.The wife be entitled to receive all rent paid by tenants of [the second property located in Victoria] and the wife shall pay all rates and taxes and like apportionable outgoings in relation to the property as and when they fall due;
d.The parties hold their respective interests in the real properties upon trust pursuant to these orders; and
e.Neither party encumber any of the real properties without the consent in writing of the other party.
10. That both parties have liberty to apply in relation to the terms of the sale of the nominated property.
11. That within 7 days of the date of these orders the wife make available for collection by the husband or his nominee the following item;
a.All documents relating to the purchase of [the first property located in Victoria].
12. That unless otherwise specified in these orders and save for the purposes of enforcing any moneys due under these or any subsequent orders:
a.Each party be solely entitled to the exclusion of the other to all other property (including choses in action) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the property at [the third property located in Victoria] being deemed to be in the possession of the wife);
b.Insurance policies remain the sole property of the owner named thereon;
c.Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which the party is entitled pursuant to these orders;
d.Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
13. That the husband retain sole ownership of the [T] Shares and the wife retain sole ownership of the [SM] Shares and that each party take all necessary steps to enable this to take place.
14. All extant applications be otherwise dismissed.
Consistent with the finding that the Wife receive 75 per cent of the net assets and the Husband receive the remaining 25 per cent, the Wife was entitled to $805,462.50 and the Husband was entitled to $268,487.50 being a disparity of $536,975.00. However, the Federal Magistrate made an order that had the consequence that the Wife received an entitlement of $823,387.50 and the Husband received $244,588.00. It will be seen shortly that the Husband complains that consistent with the finding that he receive an entitlement to 25 per cent of $1,073,950.00 the order should have had the effect that he received $268,487.50
In the event that the appeal is successful the Husband seeks that the Wife pay the sum of $240,101.00 to the Husband in lieu of the amount of $6,788.00 in paragraph 6 of the order.
There are no children of the relationship and neither party has any children from previous relationships. The Wife has re-partnered with Mr T and she was due to give birth to her first child in April 2009.
At the hearing of the appeal, and also at the trial before the Federal Magistrate, the Husband was represented by counsel and the Wife was unrepresented. We had the benefit of written submissions from the Husband but no written submissions from the Wife.
Background
For the purposes of the hearing before the Federal Magistrate the Husband swore two affidavits. The first affidavit was sworn on 16 May 2008 and the second was sworn on 18 September 2008. The Wife also swore two affidavits, the first on 27 June 2008 and the second on 22 September 2008.
The Husband was born in 1963 and was aged 45 years at the date of the hearing before the Federal Magistrate. The Wife was born in 1970 and was aged 38 years at the date of the hearing.
The parties first met in 1991 and in 1996 were engaged to marry. The parties were married in 1997. The parties did not cohabit before they were married.
There was a controversy about the date of separation. The Wife contended that the parties separated in 2004 and that she re-partnered in early 2006. The Federal Magistrate said at [80] that the Husband asserted that the separation was in 2007 when he vacated the matrimonial home. The Federal Magistrate found at [84] that the parties separated in 2007. Thus, the Federal Magistrate found that the period of the relationship was approximately 10 years.
We observe that in paragraphs 2 and 28 of his affidavit sworn on 18 September 2008 the Husband contended that the parties separated in October 2006 and thereafter lived separately and apart in the matrimonial home at third property located in Victoria until the Husband ceased residing in the home on 14 August 2007. We also observe that in the written case summary of the Husband, prepared for the purposes of the hearing before the Federal Magistrate, it was contended that the parties separated in October 2006, although they continued to reside “under one roof”. The period of the relationship was approximately nine years.
In October 1994 the Wife, with financial assistance from her father, Mr C, purchased the second property in Victoria for $152,000.00. The Wife gave evidence in her affidavit sworn on 22 September 2008 that she purchased this property at auction and to pay the cost obtained a loan from the Bank of Melbourne and a personal loan from her father.
Mr C swore an affidavit on 17 July 2008 which is attached to the Wife’s affidavit sworn on 22 September 2008. Mr C gave evidence that he lent $79,359.00 to the Wife to assist with payment of the cost of purchase of the second property in Victoria which amount included $10,000.00 for maintenance and $389.00 for rates. Mr C annexed to his affidavit a copy of a number of handwritten loan agreements made between himself and the Wife. There is a loan agreement dated 7 October 1995 which records an advance of $70,000.00 by Mr C to the Wife to enable her to purchase the second property in Victoria.
On 1 April 1995 the Wife won a Tattslotto prize of $450,449.47. On 15 April 1996 the Wife received her Tattslotto winnings. The Federal Magistrate at [9] accepted the evidence of the Wife as to the amount that she won and the time at which she won it.
In his first affidavit the Husband contended that the Wife won $500,000.00 by way of a Tattslotto win. During the hearing before the Federal Magistrate it was conceded that the Wife received $450,449.47 (Transcript, 23 September 2008,
p 15).In 1996 or early 1997 the Wife purchased a third property in Victoria for $153,000.00: (see Exhibit R2, Transcript, 23 September 2008, pp 14 to 15). In her affidavit sworn on 22 September 2008 the Wife gave evidence at paragraph 15 that in order to pay for the purchase of this property she applied part of her Tattslotto win and also obtained a personal loan from her father.
Mr C gave evidence that he lent $70,966.00 to the Wife for the purchase of the third property in Victoria which included amounts of $12,390.00 for furniture and $14,350.00 for maintenance. Attached to the affidavit of Mr C is a copy of a loan agreement dated 10 October 1997 which records that Mr C lent $42,000.00 to the Wife to assist with the purchase of the third property in Victoria. Thus, the Wife may have applied approximately $111,000.00 from her Tattslotto win to pay the cost ($153,000.00 less $42,000.00).
After the parties were married in April 1997 they lived in the third property in Victoria. The Federal Magistrate said at [10] that the property “appears” to be unencumbered.
At the commencement of the marriage in April 1997 the Wife had significant assets. However, the Husband had no significant assets.
We observe that the Wife had the second property in Victoria, the third property in Victoria and also the proceeds of her Tattslotto win and this was conceded by the Husband’s counsel during the
cross-examination of the Husband by the Wife (Transcript, 23 September 2008, pp 11 to 15).The Wife gave evidence that throughout the relationship she was in full-time paid employment. This was corroborated by the Husband who in paragraph 23 of his affidavit sworn on 18 September 2008 said that during “most” of the marriage the Wife was engaged in paid employment with a Home Living Store and became the “manager of different outlets”. The Wife in her affidavit sworn on 22 September 2008 denied that she became the manager of different outlets and said that she was the Office/Administration Manager at the Home Living Store in Melbourne.
In her affidavit sworn on 27 June 2008 the Wife gave evidence on pages 12 and 13 of her paid employment. In her affidavit the Wife also gave detailed evidence at paragraph 25 on pages 3, 4, 5, 6, 7. 8 and 9, of the paid employment of the Husband. The Wife also gave evidence of the net salary earnings of the Husband from 1994 to 2007 and that he had average net earnings over a period of 16 years from 12 July 1993 to 30 June 2007 of $8,216.68 per annum.
In 2000 the parties purchased the first property in Victoria for an undisclosed price. The title to this property was in the sole name of the Husband. In his affidavit sworn on 18 September 2008 the Husband deposed at paragraph 18 that this property was acquired in his sole name “for tax reasons”.
In her affidavit sworn on 22 September 2008 the Wife gave evidence at paragraph 18 that in order to pay for the costs of purchase of the first property in Victoria she applied her Tattslotto funds, wages from employment and a loan from her father. The Federal Magistrate observed at [12] that the Husband admitted that the funds to pay for the acquisition of this property came from the Tattslotto funds of the Wife: (Transcript, 23 September 2008, p 19).
Mr C gave evidence that he lent $52,520.00 to the Wife to assist with payment of the costs of the purchase the first property in Victoria which included $2,350.00 for maintenance. Attached to the affidavit of Mr C is a copy of a loan agreement dated 15 August 2000 which records that Mr C lent $46,000.00 to the Wife to assist with the purchase of the first property in Victoria.
The Federal Magistrate concluded at [13] that the funds to pay for the costs of purchase of the three properties in Victoria “all emanated from the wife one way or the other and I infer were predominantly from her Tattslotto winnings”. The Wife gave evidence in paragraph 19 of her affidavit sworn on 27 June 2009 that her parents lent her funds to assist with the purchase of the three properties.
We observe that Mr C also gave evidence that he paid a total of $46,644.50 for the engagement and wedding of the parties and also lent a total of $33,990.00 to the Wife to assist with the costs associated with the purchase of three motor vehicles. In his affidavit sworn on 18 September 2008 the Husband deposed at paragraph 16 that the Wife “paid for our wedding which cost approximately $30,000.00 and for our honeymoon”.
The Federal Magistrate observed at [81] that the Wife claimed that the parties separated in 2004 “because that is the date at which they ceased living together as husband and wife”. At [82] his Honour observed that the Wife admitted in her affidavit evidence to “various extramarital affairs she had had in 2004 and 2005” including one with her current partner. His Honour was referring to what the Wife deposed at paragraph 28 of her affidavit sworn on 22 September 2008. Also, the Federal Magistrate noted that the Wife claimed that on New Year’s Day in 2006 she “re-partnered with [her current partner] in a rather formal way”.
On 24 May 2007 an amount of $67,564.21 was withdrawn from a joint bank account of the parties. The Federal Magistrate made a finding at [29] that the Wife withdrew “some $67,000” but that there is “simply no evidence as to what has been done with it”.
On 14 August 2007 an intervention order was made in the Magistrates’ Court of Victoria against the Husband as the defendant pursuant to the Crimes (Family Violence) Act 1987 (Vic). As we have already observed there was a controversy as to the date of the parties’ separation and that the Federal Magistrate wrongly found that the parties’ separated when the Husband vacated the former matrimonial home in August 2007 following the intervention order made against the Husband for the benefit of the Wife.
The proceedings were commenced on behalf of the Husband when an application was filed in May 2008.
In her affidavit sworn on 22 September 2008, the Wife contended at paragraph 12 that since separation she had fallen into debt in relation to personal loans, rates, medical bills, living costs, legal fees and maintenance and damage to the three properties in Victoria. The Wife contended that she had not received any rent from the second property in Victoria since 3 April 2008 and that at the time of the valuation of this property in September 2008 she had a bill for $25,000.00 for the costs of repairs to the property.
We observe that on 1 July 2008 the following orders were made:
THE COURT ORDERS BY CONSENT THAT:
1. The matter be adjourned to this Court for final hearing on 23 September 2008 at 10.00 am, with an estimated hearing time of two days.
2. Pursuant to Rule 10.05 of the Federal Magistrates Court Rules 2001, the parties attend a Conciliation Conference with a Registrar of the Federal Magistrates Court of Australia at the Melbourne Registry on 30 July 2008 at 9.15 am.
3. Pursuant to Rule 13.04 of the Federal Magistrates Court Rules 2001, orders are made by consent in accordance with the attached minutes of proposed orders signed by the parties and placed on the Court file.
THE COURT DIRECTS THAT:
4. The solicitors for the Applicant file three clean typed copies of these orders within 7 days.
ORDERS PROPOSED BY CONSENT [attached minutes as referred to in order 3]
1. The parties and their legal representatives attend a Conciliation Conference at 9.15 am on 30 July 2008.
2. The matter is listed for Final Hearing commencing at 10.00 am on 23 September 2008.
3. Within 14 days of the date of these Orders the parties complete informal discovery by providing to the other’s solicitor copies of all relevant documents requested by them in writing, including but not limited to:
(a)Income tax Returns and Assessment Notices;
(b)Statements for all bank accounts held in their name or for their benefit either solely or jointly with any other person;
(c)Superannuation Statements;
(d)Records evidencing the acquisition and/or disposal of assets, bank deposits and financial resources during the marriage and since separation;
(e)Records evidencing any debts alleged to be owing to third parties.
4. No less than 7 days prior to the Conciliation Conference each party do all things required to jointly obtain sworn valuations of the real properties at:
[the third property in Victoria];
[the first property in Victoria]; and
[the second property in Victoria].
5. Each party pay one half of the costs of the valuer to be agreed between the parties’ solicitors.
6. Each party file and serve all material to be relied upon no later than 21 days prior to the Final Hearing date.
7. The interim application of the Husband filed 19 May 2008 is dismissed but with liberty to the Husband to reinstate such application following discovery.
8. Certify for Counsel.
In her affidavit sworn on 22 September 2008 the Wife also deposed that she had not received any rent from the first property in Victoria since 19 August 2008 and that again there were maintenance costs of an estimated $1,776.00.
On 10 September 2008 the matter was listed for a Conciliation Conference before a Registrar. The Registrar noted that the conference did not proceed “to completion”.
As we have already observed, affidavits were sworn by the Husband in May 2008 and September 2008 and the Wife swore affidavits in June 2008 and September 2008. The hearing before the Federal Magistrate was on 23 and 24 September 2008. On 7 November 2008 the Federal Magistrate pronounced judgment and delivered reasons for judgment. The Notice of Appeal was filed on 4 December 2008
The Reasons Of The Trial Judge
At the commencement of his reasons the Federal Magistrate said:
2. It should be noted at the outset that the way in which the parties have conducted their case and the unfortunately very inadequate nature of the evidence given by all witnesses called presents the Court with a most formidable forensic challenge.
3. These difficulties were in no way lessened by the fact that the Respondent wife was self-represented. With leave of the Court, she was permitted to have her current partner [Mr T] sit with her at the bar table and act as a McKenzie Friend. Understandably, the wife’s presentation of her case was made more difficult by her lack of legal training and experience.
4. It should also be noted that while it is well-established, and only common courtesy, that any Court should be slow to make findings about parties and/or witnesses that may be disparaging of or hurtful to them, this is, very regrettably, a case where that will be unavoidable. Unfortunately, the way in which the parties presented their case makes adverse findings inescapable.
The Federal Magistrate said at [5]: “In order that the usual four-stage methodology can be understood, it is necessary first to deal with the facts presented by the parties” and thereafter set out at [6] to [46] what he identified as “[t]he facts of the case”. The reference by the Federal Magistrate to a “four stage methodology” was a reference to the approach to the determination of an application pursuant to s 79 of the Act suggested by the Full Court in Hickey and Hickey and the Attorney General for the Commonwealth of Australia (2003) FLC 93-143.
The Federal Magistrate at [6] to [13] briefly set out the background which we have described above.
The Federal Magistrate then identified an issue raised by the Wife:
15. The wife’s material is in substantial degree directed to making a series of very serious allegations of violence, including multiple rape, by the husband. During the currency of the proceeding, the wife was not slow in her evidence to assert that these matters would be the subject of further criminal proceedings. The husband has at all times denied any such conduct.
16. This sort of material, while clearly vividly expressed, is of course almost completely irrelevant to the issues that the Court is required to determine. What it does show, however, is the very considerable personal hostility and spite that quite clearly still obtains between the two primary parties.
The Federal Magistrate then at [17] described an issue raised by the Husband namely that: “The evidence traversed in some detail what are said by the husband to be substantial cash resources allegedly in the hands of the wife”.
In his affidavit sworn on 16 May 2008 the Husband contended at paragraph 13 that there were two bank accounts in the joint names of the parties, with the Commonwealth Bank of Australia (“Commonwealth Bank”). The Husband contended that the first bank account was a cash management trust account in which he believed there was a balance of approximately $66,000.00. The Husband contended that in May 2007 the Wife removed approximately $67,000.00 (amount stated in the affidavit is $6,700.00 only) from this account. The Husband contended that the second account with the Commonwealth Bank had a balance of approximately $14,200.00.
In his affidavit sworn on 16 May 2008 the Husband contended at paragraph 14 that the Wife had a separate term deposit account in her sole name with the Commonwealth Bank and that he believed that the balance of the account was approximately $212,000.00. The Husband contended that the Wife removed the money and placed it in a bank account in her sole name.
In his affidavit sworn on 18 September 2008 the Husband contended in paragraph 10 that the assets for distribution included $67,564.00 in a Commonwealth Bank cash management trust account and $212,000.00 in a Commonwealth Bank term deposit account.
In her affidavit sworn on 27 June 2008 the Wife contended at paragraph 15 that there were no longer any joint bank accounts and that the accounts had been closed. In relation to the term deposit account, the Wife contended at paragraph 16 that she no longer held a term deposit account. The Wife said that the funds were applied to fund her living expenses and also towards rectifying considerable damage done to the matrimonial home caused by the Husband during his occupation as a result of faulty renovations he conducted and as well as “wilful damage” he caused to the property. The Wife went on to say: “I will provide full details and particulars of the damage done and the costs incurred to rectify the damage upon request, and prior to the trial of this matter. I understand that any funds which were in existence as at the date of separation will be taken into consideration in the valuation of the asset pool for division”. We observe that in her affidavit sworn on 22 September 2008 the Wife stated at paragraph 12 that she sought an order that the Husband be responsible for all payments of amount for damages and maintenance to the three properties in Victoria.
The Federal Magistrate at [18] observed that the evidence of both parties about these monies, “as was their evidence generally”, was in his view “thoroughly unsatisfactory”.
The Federal Magistrate at [19] said that the Husband’s evidence “was essentially that he thought that the wife had substantial amounts of money over which he had no control and in respect of which he could advance in effect no real information”. At [20] the Federal Magistrate said that, “[t]he wife’s evidence was that she had no such moneys and that she knew nothing about it”.
The Federal Magistrate then at [21] referred to Exhibits A2 and A3 which were “extracts from bank accounts apparently previously held by one or other of the parties”. The Husband submitted that these exhibits showed that as recently as 2007 the Wife had “very substantial sums at her disposal”.
The Federal Magistrate said at [22] that Exhibit A2 was a record of a joint account held by the parties with details from July 2005 until July 2007 and it disclosed “that an amount of $67,564.21 was held in that account as recently as
1 April 2007 but was then fully withdrawn”. As noted earlier, this amount was withdrawn on 24 May 2007.We observe that Exhibit A2 was produced by the Husband during his
cross-examination. This was in circumstances where the Wife contended that the Husband had failed to provide disclosure (Transcript, 23 September 2008, pp 6 to 7).We have considered Exhibit A2 and it is a copy of a statement of an account in the joint names of the parties with Colonial First State Investments Ltd. The statement records transactions on the account between 1 July 2005 and 24 May 2007. The first entry was a credit balance of $37,518.69. Thereafter, there were deposits made, including reinvestment of income, and on 24 May 2007 the closing balance of $68,107.26 was withdrawn from the account.
The Federal Magistrate then said at [23]: “The wife’s denials that that money had anything to do with her were given in a fashion that I found entirely unbelievable, and, while I found the husband’s evidence no better, all the evidence suggests that the wife had control over the parties’ finances”.
The Federal Magistrate then at [24] referred to a contention of the Wife being that the Husband “was essentially a feckless do‑nothing who spent all his time at home trying to compose popular music tunes which were designed to advance a completely ridiculous and misconceived endeavour to become a successful composer on his part”. The Federal Magistrate said at [25] that the Husband's “affidavit material, at least in part, confirms this sort of activity”.
The Federal Magistrate then at [26] observed that “the vast majority of the funds controlled by the parties was sourced from the wife” and that he had “no doubt that [the Wife] wore the trousers in the relationship”. At [27] his Honour observed that the Wife “presented as a shrill, domineering and spiteful individual”. He observed that: “Whatever the truth or otherwise of [the Wife’s] assertions of criminal conduct on the part of the husband [the Wife] controlled the finances” and that this was “notwithstanding her allegations that her current mental health is poor”. The Federal Magistrate at [28] observed that there was no medical evidence to substantiate the Wife’s “assertions of poor mental health”.
The Federal Magistrate then at [29] returned to Exhibit A2 and found that the amount of $67,000.00 was withdrawn by the Wife and that “[t]here [was] simply no evidence as to what has been done with it”. His Honour was also of the view that “it [was] hard to avoid the impression that [the Wife] has been less than frank”.
The Federal Magistrate, however, proceeded to deal with three possible areas of disbursement by the Wife of the funds. The first expense that the Federal Magistrate appeared to accept was at [30] being “considerable disbursements” for solicitors, while the second expense was the cost of repairs for the second property in Victoria which had been “unoccupied for a substantial period of time”.
The third category of disbursement which the Federal Magistrate referred at [31] related to “issues to do with the state of the former matrimonial home which the wife alleges the husband damaged”. This is the third property in Victoria.
The Federal Magistrate at [32] briefly interpolated and referred to the Wife’s affidavit in which she suggested that there were a number of repairs that would be necessary to the various properties as a result of the Husband’s misconduct. His Honour observed at [32] that “nothing in that material foreshadowed the extraordinary claims made without notice during the running of the trial that the husband had caused a quarter of a million dollars worth of damage to the wife’s properties, and that the same should be taken into consideration as a debt in these proceedings”. His Honour observed at [33] that if the Wife were to pursue those claims, the hearing would need to be adjourned with the likelihood of the Wife having to pay the costs of the adjournment. His Honour observed that he “gave [the Wife] some time to consider the matter with the assistance of Mr T, following which she announced that she did not wish to proceed with those claims”.
The Federal Magistrate then observed:
34. The fact that a party will raise in a completely unannounced way an enormous claim for loss and damage and then almost immediately abandon it when faced with the prospect of paying what in the relative scheme of things would be a trivial amount of costs thrown away, in my view gives rise to an inference that the claim was always wildly and grotesquely exaggerated.
35. I am not in a position to and do not find that the properties require anything more than normal maintenance.
36. I note that a property report prepared in August 2008, which is an agreed report, describes the investment unit as being in average condition, with the same assessment of the [second property in Victoria] and the same again for the former matrimonial home.
The Federal Magistrate then dealt with the dispute about the funds held by the Wife in a term deposit account. His Honour at [37] referred to Exhibit A3 which he described as a “reconstruction of account number [987654321]”. His Honour said that it disclosed “a term deposit in the sum of $108,000.00 paid out on 17 January 2002”. He also said that it disclosed “details from another account, [123456789], in an amount of $116,873.00, in an account that appears to have closed on 14 March 2003”. He also said at [38] that it disclosed “an extract from account [789456123], being an account that appears to have closed on 14 June 2007 with $223,919.76 in it”.
We observe that Exhibit A3 is a copy of a facsimile dated 30 July 2008 from a branch of the Commonwealth Bank to another branch of the bank. Exhibit A3 purports to provide transaction histories for several term deposit accounts in the name of the Husband. We also observe that Exhibit A3 refers to term deposits in 2002 and the closure of an account on 14 July 2006 when an amount of $223,919.76 was withdrawn.
The Federal Magistrate at [39] said: “Extrapolating all of this together, counsel for the husband submitted that there was well in excess of $200,000.00 … in the hands of the wife”. The Federal Magistrate at [40] and [41] said the difficulty he had with the submission was that the letter from the Commonwealth Bank that disclosed “these extracts” was under the heading: “Term deposit transaction histories: [Mr Agius]”, being the name of Husband not the Wife. The Federal Magistrate at [42] said that it was “not a satisfactory state of affairs” and that “[t]he amounts with which these extracts are concerned are substantial and make a real difference to the size of the pool in this proceeding”. The Federal Magistrate at [43] observed that “the wife has roundly disclaimed any knowledge of these sums. She said in the most petulant way that these amounts and accounts were nothing to do with her”. It will be seen shortly that during the hearing before the Federal Magistrate the Wife appeared to readily admit that she received the funds and that they were disbursed by her.
The Federal Magistrate then said:
44. I am not in a position to say that any of the moneys that were undoubtedly in these accounts until last year are or are not in the possession of either of these parties. While I repeat that the clear impression I got is that financial control over the parties’ affairs rested predominantly with the wife, I am not prepared, on the basis of subpoenaed material which the bank itself acknowledges is incomplete and which is wholly in the name of the husband, to find that those sums or any of them are in the possession of the wife.
45. By way of contrast, however, it was not put to the husband that he has any of these sums in his possession either and I am not prepared to find that it is more probable than otherwise that he does.
46. I am simply not able to make any finding about the amounts of money disclosed by exhibits A2 and A3 and I have no alternative but to exclude them from the pool.
In cross-examination, the Husband contended that he had bank statements to prove that there was an amount of $212,000 (Transcript, 23 September 2008,
p 6). We observe that Exhibit A3 was also produced by the Husband during his cross-examination (Transcript, 23 September 2008, pp 7 to 8).
The Husband, in answer to a question by the Federal Magistrate, said that the funds shown in Exhibit A3 came from the Tattslotto win of the Wife (Transcript, 23 September 2008, p 9). The Husband in cross-examination also admitted that during the relationship the Wife used to invest a part of her salary in bank term deposits (Transcript, 23 September 2008, p 10).
The Federal Magistrate then dealt with at paragraphs [47] to [72] what he described as “[t]he pool”. His Honour first listed at [48] the three properties in Victoria and their value being the third property in Victoria at $370,000.00; the first property in Victoria at $250,000.00 and the second property in Victoria at $405,000.00.
The Federal Magistrate then dealt with two motor vehicles. His Honour found at [49] that the Wife obtained the benefit of a motor vehicle registered A and that an insurer paid out the sum of $10,150.00.
There was a controversy as to the other motor vehicle registered B. The Federal Magistrate said:
50. A fairly substantial amount of time was taken in respect of another vehicle registered [B]. That vehicle was originally registered in the name of the husband’s mother, but his case was that the vehicle has in fact been sold by the wife to a third party, either directly or through an agent.
51. The wife’s evidence about this aspect of the proceeding was utterly unsatisfactory. If anyone wishes to confirm my impression, they have only to read the transcript. Her answers were evasive, unresponsive and unbelievable. It is clear that she had physical possession of this vehicle and it is clear that it has now been sold. It was certainly not sold by the husband and it should be taken into consideration at a value of $6,000.00, this being the husband’s estimate. The wife did not directly contradict that evidence (she merely deposed her partner had offered to buy it for $3,000.00).
The Federal Magistrate then dealt with T and SM shares and said:
52. It is common cause that the parties own [T] shares and [SM] shares. Those were given estimates by the husband of $5,500.00 and $7,500.00 respectively. It is not possible to say what they are presently worth, given the volatility of the share market.
53. Each party sought in effect to sign over their interest to the other.
54. I propose to order that the husband keep the [T] shares and the wife keep the [SM] shares. Given bank prospects at present times, it is more probable to me than otherwise that the value of these shares is now likely to be about the same.
The Federal Magistrate then discussed furniture and chattels and said:
55. So far as furniture and chattels are concerned, there is really little evidence that gives rise to any capacity on the Court’s part to value the chattels that the parties have retained. All I can say is that it seems reasonably clear that the wife has retained the majority of the possessions in the former matrimonial home. It is not possible to put a precise value on them.
56. Part of the husband’s claim was for orders for the return to him of very specific items set out in his case summary.
57. Having heard the evidence, I am satisfied that all of those chattels have already been returned to him with the exception of the papers for the contract and purchase of [the first property in Victoria].
58. Notwithstanding that it is her case that that property should remain in the possession of the husband and that she disavows any further interest in it, the wife before the Court adamantly refused to concede that those documents should be forwarded to the husband.
The Federal Magistrate then at [60] dealt with an issue in relation to capital gains tax on the first property in Victoria and accepted that the Husband wanted to sell the property and there would be capital gains tax payable of $21,200.00. The Federal Magistrate said that: “It is a matter properly to be brought into consideration”.
The Federal Magistrate then at [61] dealt with superannuation interests and noted the Wife’s superannuation interest to be worth almost $45,000.00 and the Husband’s interest to be worth $11,700.00. The Federal Magistrate observed at [62] that “[n]either party has sought a splitting order”.
The Federal Magistrate then turned to consider loans alleged by the Wife to have been advanced to her by her father. The Federal Magistrate observed at [64] that copies of loan agreements were annexed to the Wife’s affidavit. We have already observed that copies of loan agreements were attached to the affidavit of the Wife’s father. The Federal Magistrate observed at [65] that the Wife’s evidence “was that she would have to repay these sums now that her marriage was breaking up”.
As we have observed, the Wife’s father Mr C gave evidence and he was cross-examined. The Federal Magistrate observed at [66] that “[u]nlike the other witnesses in the case, [Mr C] made a favourable impression upon me as a witness of truth”. His Honour also said:
67. However, his evidence was essentially to the effect that the moneys were advanced and were really not repayable and that the loan documents were only really executed as a kind of belt and braces backstop. It was clear from his evidence that the loans were being sought to be repaid now only because of the break-up of the marriage.
68. If it were necessary for me to make findings about the true state of these alleged loans, I would have no hesitation in finding that they were in truth unconditional gifts which the father never intended to have repaid. The execution of the purported loan documentation was simply a kind of insurance policy against unforeseen events, intended to grant some capacity on the wife's father's part to protect his interests if they occurred. I have no doubt that whatever she may herself choose to do, the wife will not be forced by her father to repay the advances that he made.
69. All of this is, however, in the ultimate of no moment. It is quite clear that even if these documents were in truth loan agreements, they disclose no term as to repayment. As such, they fall squarely within the ambit of the decision of Fullagar J in Ogilvie v Adams [1981] VR 1041.
70. In that case, Fullagar J established that where a loan is advanced with nothing said as to repayment, it is therefore repayable as at the time the loan itself is advanced. For the purposes of the Limitations Act, time runs from the advance of the moneys.
71. As counsel for the husband correctly submitted, all these loans are clearly statute-barred. They do not represent any legally enforceable obligation.
72. For that reason, in my view they do not fall to be taken into consideration in establishing the size of the property pool.
In summary, the Federal Magistrate accepted that the funds were provided by the Wife’s father but that they should not be treated as repayable and allowance made for them in the list of net assets as liabilities.
The Federal Magistrate then at [73] to [90] dealt with “Contribution” and commenced by observing at [73] that “the wife always made far more money than the husband”. At [74] his Honour said: “One aspect of the wife’s evidence I do accept, because it is in part admitted by the husband, (he spent a lot of time on his musical endeavours), and in part because I thought he was an utterly unsatisfactory witness, is that he earned very, very little” (emphasis added). As to the “musical endeavours” his Honour was referring to what the Husband deposed at paragraph 27 of his affidavit sworn on 18 September 2008.
In relation to the paid employment history of the Husband, the Federal Magistrate said at [75]: “The husband’s work history was intermittent and unsatisfactory, notwithstanding that as the wife asserts he has qualifications in a number of areas, albeit that they are relatively unskilled and low-paying (crowd control and the like)”. His Honour said at [76] that he did not accept “the husband’s weak-kneed complaints about his inability to work because of the abstraction of the … car”. His Honour was referring to evidence the Husband gave in paragraphs 8 and 28 of his affidavit sworn on 16 May 2008 and paragraphs 43 and 44 of his affidavit sworn on 18 September 2008 that he was unable to maintain his previous employment as a sales representative because the Wife retained the vehicle. His Honour described the Husband’s evidence as “unconvincing, flimsy, and unsatisfactory”. His Honour also found at [77] that the Husband has “been work-shy and will continue to remain so” and that “[t]his is a factor to be further considered under the s.75(2) factors of the [Act]”.
The Federal Magistrate then proceeded to deal with what he described at [79] as a “distasteful aspect of the proceeding”, namely, the date of separation. As we have already observed, the Federal Magistrate observed at [80] that the Husband asserted that “separation took place in 2007” and at [81] that the Wife contended that it “took place in 2004”. His Honour found at [84] that the separation took place in 2007 when the parties ceased to reside together. We repeat that, in our view, the Federal Magistrate was in error in relation to the date of separation because he did not refer to the evidence of the Husband that the parties separated in October 2006.
The Federal Magistrate appears to have then considered the impact of the significant contribution by the Wife of the assets she had at the commencement of the relationship because he said:
85. Notwithstanding this was a marriage of some 10 or more years, however, I do not think that the submissions of counsel for the husband that the length of the relationship had substantially eroded the initial contribution by the wife’s Tattslotto winnings should be accepted. It is true of course as in the case of In the Marriage of Bremner (1995) FLC 92-560 (“Bremner”) and In the Marriage of Pierce (1998) FLC 92-844 (“Pierce”) that, to quote the original judgment of Fogarty J in In the Marriage of Money (1994) FLC 92-485 at page 81,054,:
“That an initial contribution by one party may be “eroded” to a greater or lesser extent by the late contributions of the other party even though those later contributions do not necessarily at any particular point outstrip those of the other party.” (Italics in original)
86. That is an observation adopted by the Full Court in Bremner and repeated in Pierce.
87. It is obviously binding on me.
88. Nonetheless the observation requires some qualification. Justice Fogarty and the Full Court said no more than that an initial contribution may be eroded. It is not a universal rule that this is so. Self-evidently each case falls to be considered on its own facts. (emphasis in original)
In our view, the Federal Magistrate misquoted what was said by the Full Court in Pierce and Pierce (1999) FLC 92-844 and, in particular, at paragraph 28. In Pierce the Full Court was at pains to point out that it is not a matter of “erosion” of “initial contribution” but of the weight to be attached to such a contribution. In any event, the Federal Magistrate concluded:
89. Here the facts are stark. All of the initial contribution of any moment came from the wife and none from the husband. Not only did the husband’s earnings not exceed those of the wife at any given point, they were always substantially less because of his work shy and feckless behaviour. That is so even if one takes into account the small inheritance he says he received.
90. It would be wholly inappropriate to hold the contributions of the parties as being anything like even. In my view, the wife contributed far more, even giving full allowance for the reasonable lengthy period of the marriage and the consortium of the relationship during it. In my view the wife’s contributions can and should be assessed as being 75 per cent to the husband’s 25 per cent.
The Federal Magistrate then set out at [91] to [104] what he described as “[s]ection 75(2) factors”. At the outset his Honour said at [91]: “Here the evidence is far from clear”.
The first matter the Federal Magistrate dealt with appears to have been the income of the Husband and the capacity of the Husband for appropriate gainful employment: see s 75(2)(b) of the Act. The Federal Magistrate said:
92. As I find, the husband’s future employment prospects are not great not least because he is not a person much given to doing work. His income will be low but that is largely of his own making.
93. The husband will continue no doubt to receive assistance from his mother with whom he presently lives.
The Federal Magistrate then dealt with the state of health of each of the parties and perhaps whether either party had the care or control of a child of the marriage; the commitments of each of the parties that are necessary to enable a party to support a child and child support under the Child Support (Assessment) Act 1989 (Cth): see s 75(2)(a), (c) and (d)(ii) and s 79(4)(g) of the Act. The Federal Magistrate said at [94]: “The husband’s health is of no moment and there are no children in respect of whom he will be required to meet child support payments”. We observe that at [6] the Federal Magistrate said that the Husband “is in generally good health”.
As to the Wife the Federal Magistrate said:
95. The wife’s health position is less clear. Although there is no formal medical evidence before the Court as to her state of health, and indeed her assertions that she was receiving assistance from a VOCAT team and the like must be approached with considerable caution, as a matter of simple observation she impressed as being a person under considerable strain.
96. She is about to become the mother of her first child in the early part of next year and will plainly not be able to work for some considerable time.
We observe that at [6] the Federal Magistrate said that the Wife “is in generally good health” and at [28] that “[n]o medical evidence has been called to substantiate the wife’s assertions of poor mental health”.
The Federal Magistrate then appears to have turned to consider the financial resources of the Wife and perhaps the financial circumstances of her cohabitation with Mr T: see s 75(2)(b) and (m) of the Act. The Federal Magistrate said:
97. Against this, however, she has considerable financial support from her present partner [Mr T].
98. At this point, it is necessary to deal with Mr [T’s] evidence. Perhaps it suffices to say that the less said about Mr [T’s] evidence, the better. Mr [T’s] behaviour in Court was thoroughly unsatisfactory. As a McKenzie Friend he sought to intervene inappropriately in the proceedings by way of interruptions. On one occasion he sought to act as advocate. This was so even though I had made it clear to him that he was not entitled to do so.
99. It is clear from the evidence, albeit that Mr [T] was a most unimpressive witness whose evidence was given in a most unpersuasive way, that he has not worked for some years. Yet he is still able to give Ms [Agius] in excess of $900.00 net per week.
100. It is clear from the evidence that Mr [T’s] family is extremely wealthy. He said that he has a choice of cars available to him from his family at any one time. He is able always to obtain a car when he needs it and it is one of a number of luxury cars that the family owns.
101. Given the state of the evidence overall, I have no doubt that Mr [T] has ample funds available to him and there is no reason to suppose that he will not continue to provide for Ms [Agius] and their child at least into the foreseeable future.
102. The wife sought to raise in the course of her submissions an assertion that Mr [T] is likely to be incarcerated following Court proceedings in the latter part of this year following what was asserted to be a charge of attempted murder, as I understand it, of her own father.
103. There is no satisfactory evidence before me as to that matter and I am quite unable to give it any particular force.
The Federal Magistrate then made a finding in relation to his consideration of the matters in s 75(2) of the Act when he said at [104]: “The evidence about the future needs of both these parties was inadequate and unsatisfactory and I am not able to make any findings such that I think any adjustment should be made to the position of the parties pursuant to s.75(2)”.
In the result, the Federal Magistrate made no adjustment to the contribution based entitlements of the parties, expressed as a percentage of the net assets of the parties, having regard to the matters in s 79(4)(d), (e) and (f) of the Act. Section 79(4)(g) was not relevant.
The Federal Magistrate under a heading “Just and Equitable” at [105] set out the “pool of available assets” namely:
Assets
[The third property in Victoria] $370,000.00
[The first property in Victoria] $250,000.00
[The second property in Victoria] $405,000.00
… vehicle [A] $10,150.00
… vehicle [B] $6,000.00
Wife’s superannuation $45,000.00
Husband’s superannuation $11,700.00
TOTAL $1,097,850.00
Liabilities
Rates and Body Corporate Fees (Rounded to) $2,700.00
Anticipated CGT liability of husband $21,200.00
TOTAL $23,900.00
which the Federal Magistrate said “leaves a total pool available for distribution of $1,073,950.00”, ($1,097,850.00 less $23,900.00).
The Federal Magistrate said at [107] that he “excluded the estimated income tax liability claimed by the husband. He has not satisfied me that such a sum is indeed owing”.
The Federal Magistrate then purported to set out the effect of what he proposed to order when he said:
108. The 25 per cent share of the husband would be $268,488.00 (rounded off). That sum is within a very close range of the $261,700.00 that is constituted by the [first property] and the husband’s superannuation.
109. In my view, the wife should pay to the husband the sum of $6,788.00 which, in addition to his superannuation and the [first property in Victoria] does indeed represent a just and equitable disposition of the property interests of the parties, bearing in mind the matters I have set out in these reasons for judgment.
We observe that 25 per cent of $1,073,950.00 is $268,487.50. The order of the Federal Magistrate provided that the Husband would receive the following:
Assets$
·The first property in Victoria 250,000.00
·Superannuation interest 11,700.00
·Payment by Wife 6,788.00
Total$268,488.00
Liabilities
·Rates and Body Corporate Fees 2,700.00
·Anticipated CGT liability 21,200.00
Total($23,900.00)
Balance$244,588.00
In the result, the effect of the order of the Federal Magistrate was that the Husband would receive $244,588.00 whereas the Federal Magistrate had found that the Husband should receive an entitlement of $268,487.50 being a difference of $23,899.50. The amount of $23,899.50 is reflected in the failure of the Federal Magistrate, when making the order, to make an allowance for the payment by the Husband of the amounts of $2,700.00 for rates and body corporate fees and $21,200.00 for capital gains tax on the sale of the first property in Victoria.
Grounds Of Appeal
The grounds of appeal are:
1. The Federal Magistrate made an error of fact and/or law in failing to include in the pool of assets available for division between the parties the sums of $67,564 and $223,919 retained by the Wife.
2. The Federal Magistrate made an error of fact in calculating the payment to the Husband pursuant to the Orders in failing to include the liabilities of $2,700 and $21,200 relating to the property retained by the Husband.
3. The Federal Magistrate’s assessment of the percentage division of the pool of assets available for division between the parties fell outside of the reasonable range of discretion which was just and equitable.
As we have observed, in the event that the Husband’s appeal is successful, he seeks that the Wife pay him the sum of $240,101.00.
Relevant Principles
There is a strong presumption in favour of the correctness of the decision appealed from and the decision will be affirmed unless we are satisfied that it is plainly wrong, the decision not being a proper exercise of judicial discretion. The presumption, however, may be overcome if it is established that there has been an error as a result of acting upon a wrong principle, consideration has been given to an extraneous or irrelevant matter, there has been a failure to give sufficient weight to relevant matters or undue weight has been given to them or a mistake has been made as to the facts. Further, the nature of the error of reasoning may not be discoverable but if upon the facts the result is unreasonable or plainly unjust it may be inferred that in some way there has been a failure properly to exercise the judicial discretion: see House v R (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ.
Discussion
Ground One
The Husband complains that the Federal Magistrate made an error of fact and/or law in failing to include in the pool of assets available for division between the parties the sums of $67,564.00 and $223,919.00 retained by the Wife. This ground relates to the amounts identified in Exhibits A2 and A3. The Husband submitted that the Federal Magistrate was in error in not including in the list of net assets the amount of $291,483.00, being the total of the sums retained by the Wife from two bank accounts remaining post separation.
In her affidavit sworn on 27 June 2008 the Wife gave evidence at paragraph 15 that “any joint bank accounts held” had “been closed”. The Wife gave evidence at paragraph 16 that she no longer held a term deposit account with the Commonwealth Bank or any other financial institution. The Wife also deposed at paragraph 16 that the funds to which the Husband had referred had been “applied to fund my living expenses and also towards rectifying considerable damage to the home caused by the Husband during his occupation as a result of faulty renovations he conducted, as well as wilful damage he caused”.
The Wife further deposed at paragraph 16 of her affidavit sworn on 27 June 2008 that she “will provide full details and particulars of the damage done and the costs incurred to rectify the damage upon request, and prior to the trial of this matter. I understand that any funds which were in existence as at the date of separation will be taken into consideration in the valuation of the asset pool for division”. It was submitted on behalf of the Husband that his case proceeded at all times on the basis that the funds referred to would be added back in determining the available asset pool for division.
On behalf of the Husband it was submitted that the Federal Magistrate appears to have completely disregarded the affidavit evidence of the parties about the sums of money “and [focused] only on the viva-voce evidence”.
It was submitted on behalf of the Husband that in cross-examination of the Wife on the issue, she acknowledged the two accounts and their respective balances on closure, acknowledged that she retained the monies from each account and acknowledged that those were the funds she had referred to in her affidavit as having been spent by her. It was submitted that findings as to the amount the Wife had retained from the bank accounts following separation should have been the end of the matter. It was submitted that it had been the Wife’s case as stated in paragraph 16 of her affidavit sworn on 27 June 2008 that the amounts retained by her from the bank accounts should be taken into account in “the valuation of the asset pool for division”. It was submitted that “the Husband's case had proceeded upon that footing at all times as well”.
It was also submitted on behalf of the Husband that the “Wife’s claim that she had spent the funds remained a potentially relevant matter” and reference was made to the decisions of the Full Court in Chorn and Hopkins (2004) FLC 93-204 per Full Court (Finn, Kay and May JJ) which “summarised a number of earlier Full Court authorities on the issue of notional inclusions in the asset pool”. Reference was also made to the decisions of the Full Court in Townsend and Townsend (1995) FLC 92-569 per Full Court (Nicholson CJ with whom Fogarty and Jordan JJ agreed) and M and M [1998] FamCA 42 (unreported, Baker, Kay and Chisholm JJ, 1 May 1998)
On behalf of the Husband it was submitted that the Wife, notwithstanding the statement in her affidavit to the effect that the monies should be considered in valuing the asset pool available for division, undertook to provide, prior to the trial, full details and particulars of how the money had been spent by her. It was submitted that had such evidence been led, it may have been open to the Federal Magistrate to make some adjustment to the amount retained by the Wife to account for any amount reasonably applied to necessary living expenses. It was submitted that the Wife did not take this course. It was submitted that in fact the Wife failed to produce any banking records whatsoever to demonstrate how she had applied the funds despite her undertaking in her affidavit to do so and her duty of disclosure pursuant to the Act and the Family Law Rules 2004 (“the Rules”).
Before proceeding we observe, as we will shortly explain, that the submissions did not attempt to draw any distinction between the amounts revealed in Exhibits A2 and A3 and also that the Wife gave written and oral evidence as to what happened to the funds.
It was submitted on behalf of the Husband that the Wife’s case was that the monies had been spent on repairs and/or renovations to the properties she was to retain. We observe that the Wife gave evidence to this effect. It was also submitted on behalf of the Husband that the Federal Magistrate dealt with this aspect of the evidence at [29] through to [36]. It was submitted that:
It is first to be noted from [[33]] that the Wife announced at trial that she no longer wanted to proceed with that claim. Secondly, [at [34] the Federal Magistrate] records the inference reasonably open to the Federal Magistrate as a result of that concession. Third, the Federal Magistrate nevertheless went on at [[35] and [36]] to observe that there was simply no evidence to support the Wife's claims and in respect of each property some evidence inconsistent with those claims.
It was submitted on behalf of the Husband that:
15 Even allowing for the Wife’s self-represented status at trial and ignoring for the moment that it was not her case, there is no reasonable basis upon which to infer that the Wife may have had need to spend the monies from the accounts upon necessary living expenses. Until July 2007 she was in full time employment and from at least as early as January 2007 she was in a relationship with Mr [T]. Paragraphs 97 to 101 of the Judgement [Appeal Book page 28] record the Federal Magistrate’s findings that the Wife derives very significant financial support from Mr [T].
16. There was therefore, no reasonable basis upon the evidence or at law on which the Federal Magistrate could reach the decision to exclude from the pool available for division the very substantial sum of funds removed by the Wife from the bank accounts.
Conclusion – Ground 1
We observe that no submission was made on behalf of the Husband to the effect that the Wife failed to make full and substantive disclosure of her financial affairs at the time of the hearing. It was not submitted on behalf of the Husband that he contended that some or all of the Wife’s property was hidden and she failed to adequately disclose its current whereabouts and thus although currently unascertained or unascertainable, amounts should be notionally included in the list of net assets to reflect the existence of the assets: see Mezzacappa and Mezzacappa (1987) FLC 91–853 per Full Court (Joske, Strauss and Mullane JJ). In Mezzacappa the Full Court said at 76,449: “The fact that the husband had hidden the money and refused to disclose its whereabouts did not make the funds unascertained or unascertainable”.
In this case, relying on Chorn and Hopkins, Townsend and M and M, the contention of the Husband was that the amounts should be notionally included in the list of net assets as they represented a “premature distribution of matrimonial assets”: see Townsend.
Given the submission on behalf of the Husband that the Federal Magistrate disregarded the affidavit evidence of the parties about the sums of money and focused only on “the viva-voce evidence”, it becomes necessary to consider what happened during the hearing before the Federal Magistrate.
We observe that in the appeal books we do not have the whole transcript of the hearing. We only have transcript of the hearing during the afternoon of 23 September 2008. For example, as we do not have the transcript of the hearing on the morning of 23 September 2008 we do not know what, if anything, was said by the Federal Magistrate about the failure by both parties to comply with the orders of 1 July 2008 in relation to the filing of affidavits or whether the affidavits were accepted into evidence. As well, we do not have the transcript of the further hearing on 24 September 2008 and thus we do not know what final submissions, if any, were put to the Federal Magistrate. The absence of some of the transcript of the hearing before the Federal Magistrate was referred to in discussion before us (Transcript, 4 May 2009, p 16).
We have already observed that the documents that became Exhibits A2 and A3 were produced and tendered by the Husband during his cross-examination. (Transcript, 23 September 2008, pp 7 and 8).
The Wife annexed to her affidavit sworn on 22 September 2008 a significant number of documents which were marked as “CA12”. The documents comprise quotations, statements, invoices and reports from M Pty Ltd, Construction and Property Maintenance Services. The documents appear at pages 200 to 259 of appeal book, volume 2. We also observe that there are similar documents at pages 279 to 293 of appeal book, volume 2. The documents primarily relate to work undertaken at the third property in Victoria and the second property in Victoria. We observe that one of the documents relates to work at the first property in Victoria.
During the cross-examination of the Husband by the Wife, the Wife attempted to put questions to the Husband in relation to repair work that was undertaken to the three properties in Victoria. The Wife during discussion with the Federal Magistrate said that she would “like to submit” annexure CA12 of her affidavit which she contended “shows all the damages that I’ve had to incur and pay for” (Transcript, 23 September 2008, p 22).
We observe that in the absence of knowing what was said during the hearing on the morning of 23 September 2008 annexure CA12 may have already been admitted into evidence and the Wife did not have to separately tender the documents.
In any event, counsel for the Husband then objected “to any part of the affidavit material of the Wife which is not in the appropriate sworn form and I think it’s this part in particular that is very relevant under this heading” (Transcript, 23 September 2008, pp 22 to 23).
Counsel for the Husband referred to annexure CA12 and there was then the following exchange (Transcript, 23 September 2008, p 23):
MR PUCKEY … some of those things are in the form of quotes and some of them are in the form of statements. Some of them are in the form of invoices another is in the form of an inspection report; I think there are a couple of inspection reports. If any of those documents is a copy of a paid invoice, I don’t have an objection because obviously there [sic] a business record”.
HIS HONOUR: They’re admissible
[The Wife]: Yes it is
MR PUCKEY: But if - to the extent that any of those documents purport to be evidence of repairs that were necessary or required or attributable in some way to my client, I object to that evidence being relied upon. (emphasis added)
During discussion before the Federal Magistrate the Wife made clear that there were only two quotations included in annexure CA12 that related to work that had not yet been carried out but that in relation to the invoices she had paid the amounts disclosed (Transcript, 23 September 2008, p 23).
We have looked at the documents that are included in annexure CA12 and we observe that there are 40 invoices commencing with invoice no. 12345 dated 18 August 2007 and concluding with invoice no. 54321 dated 30 June 2008 for a total of $254,090.38.
At the hearing there was then the following discussion (Transcript, 23 September 2008, pp 23 to 25):
HIS HONOUR: Well it seems to me in the light of where we went before Mr Puckey that I’m entitled subject to cross-examination to accept that the invoices may have been paid by the witness, she’ll give her evidence in due course no doubt.
MR PUCKEY: What I think needs to happen because otherwise I can make no attempt to assess it, is that I think the witness needs to identify and put to my client which of those invoices were paid.
[THE WIFE]: All of those invoices were paid, your Honour.
MR PUCKEY: …so that my client can respond to them.
HIS HONOUR: Well it’s put that they were all paid and I take it that they’re all said to be maintenance work at the property, I’ll say now it’s never going to be practical as a matter of any great precision to work out what, if any of that, additionally might be as it were the alleged direct responsibility of your client. It seems to me to be a forensic exercise beyond power almost and beyond my capacity. Because in the face of competing assertions well that invoice reflects damage that he did, it’s going to be an impossible forensic task. But on the other hand if it’s said, as I think is the case, that these are moneys owing or that had been paid that should be apportioned that’s an exercise that’s within the court’s capacity, isn’t it?
MR PUCKEY: Yes it is, so my objection was limited to …
HIS HONOUR: Well I’d be proceeding on that footing frankly, I don’t – I’ve made it plain this is a property dispute and not a dispute that’s essentially concerned with the unfortunate history of the interpersonal relationship between the parties.
[THE WIFE]: Your Honour, I just want to let them know obviously there is a dispute with the cash moneys that was applied obviously to rectify these major damages that – over the last two years have eroded my properties therefore substantiating why the properties were valued so low and where the moneys went which is in my eyes is a negative contribution.
MR PUCKEY: Your Honour, just so that I can remove any confusion, the substance of my objection goes really to the documents headed “report details” that appear to be inspections of the damage.
HIS HONOUR: Well I’m only really concerned with the invoices, Mr Puckey so I sought of – I think I’ve made it clear I’ve upheld your objection in that regard.
MR PUCKEY: Yes, thank you.
HIS HONOUR: Because all the other documents would really be just hearsay and they’d have no probative force.
MR PUCKEY: Correct. (emphasis added)
In our view, notwithstanding that the Federal Magistrate did not articulate precisely what objection made by counsel for the Husband he upheld, it is apparent that he was of the view that the documents could not be relied upon to support the contention of the Wife that the work undertaken and paid for, described in the invoices, was in consequence of the conduct of the Husband. However, the documents were admitted for the purposes of establishing that monies were paid by the Wife for work done to the properties and the Wife relied on this evidence to also establish what happened to the monies in the controversial bank accounts. During discussion before us it was conceded by counsel for the Husband that the Federal Magistrate admitted into evidence the invoices that were part of annexure CA12 (Transcript, 4 May 2009, pp 17, 18, 19, 20 and 28). For example, at one point counsel for the Husband informed us “[h]is Honour upheld part of my objection but allowed the invoices in” (Transcript, 4 May 2009, p 25)
We observe that there was then some discussion about damage as a result of an electrical fault and there was the following brief discussion (Transcript, 23 September 2008, pp 25 to 26):
[THE WIFE]: Your Honour, I don’t know when I can put to the court some photos of damages?
HIS HONOUR: Well you can give your own evidence in due course.
[THE WIFE]: Okay.
HIS HONOUR: This is the opportunity for you to ask questions.
[THE WIFE] Okay. So, your Honour, basically that’s all I’ve got to say but I just would like to say that obviously I have made an overwhelming contribution.
HIS HONOUR: That’s a matter you’ll deal with in your final submissions Ms [Agius].
[THE WIFE]: Thank you.
HIS HONOUR: You’re getting a bit ahead of yourself here, thank you. Any matters of re-examination Mr Puckey?
The Wife commenced her evidence at 2.42pm on 23 September 2008 (Transcript, 23 September 2008, p 35). There was then the following discussion with the Wife in answer to questions by the Federal Magistrate which verified the truth of what was in her two affidavits (Transcript, 23 September 2008,
p 35):Thank you. Are there any other matters you’d like to add now before Mr Puckey starts to ask you questions? --- Just on the fact that obviously I’ve incurred a lot of expenses now with regards to damages and repairs to the property and those invoices have been paid as per the statement shown, so I believe that they should taken into account as a negative contribution and that they form quite a large substantial and also too, there’s evidence with photos that we’ve bought in. So when it’s time I can put them in.
Well the time is now if there’s anything you want me to look at? --- Yes there is.
Where are the photographs that you referred to? Oh for goodness sake. You’ll need to show these to Mr Puckey
MR PUCKEY: Well I think there’s one other problem, your Honour, and that is that they haven’t been put to my client and should have been and --- ? --- Well we haven’t been put to anything either.
MR PUCKEY --- plenty of opportunity to, in the affidavit, annex and detail any of these sorts of allegations, I don’t know what they say or show?
HIS HONOUR: I’ll stand the matter down for five minutes so you can have a quick look and see if that assists you in any way Mr Puckey.
Again, we observe that the discussion related to the conduct of the Husband.
The transcript records that the matter was adjourned at 2.44pm and resumed at 2.53pm and upon resumption there was the following discussion (Transcript, 23 September 2008, p 36):
HIS HONOUR: Thank you. Mr Puckey, are you any the wiser?
MR PUCKEY: No, I’m in a somewhat difficult position. The situation is there are two folders. I’ve leafed through them; they are almost entirely photographs, two per page. I’m told and I wouldn’t dispute that there are 3,500 photographs.
The Federal Magistrate then asked the Wife (Transcript, 23 September 2008, p 36):
How much is the total value of the invoices that you’ve appended to your affidavit, broadly speaking? --- I would say probably close to nearly $289,000.
$289,000 worth or repairs? --- I’ve got an exact figure of what was spent $250,387.67.
…
HIS HONOUR: It’s over $250,000? --- $250,387.67 that is for [the third property in Victoria]
The Wife complained about difficulties that had been experienced with respect to discovery by the Husband to which the Federal Magistrate said: “That has got nothing to do with documents that you paid? --- No”. The Federal Magistrate then said: “You see if you’re talking about sums like $250,000 you’ve reached the point where you’re raising a very significant subset of the proceedings, its almost twenty per cent on one view, the value of the pool, twenty five per cent. Mr Puckey, am I right, I haven’t seen this as an issue at all in the proceedings up until today?” Counsel for the Husband replied: “No that’s right. There’s a reference in the wife’s first affidavit” (Transcript, 23 September 2008, p 37).
The Federal Magistrate then referred to paragraph 19 of the Wife’s affidavit sworn on 27 June 2008 in which she deposed that she had “incurred significant financial liabilities as a result of repairs to damages intentionally caused by the Husband to the [third property in Victoria] and [the second property in Victoria]” (Transcript, 23 September 2008, p 37).
We have already observed that in paragraph 16 of her affidavit sworn on 27 June 2008 the Wife deposed that in relation to the term deposit account, she no longer held a term deposit account and that the funds were applied to fund her living expenses and also towards rectifying considerable damage caused by the Husband to the matrimonial home. In summary, the Wife had given notice that there was an issue and that she incurred “significant financial liabilities”.
We are not going to repeat all of what the Federal Magistrate said, however, in our view, it is apparent that he had formed the view that if the Wife wished to press the admission into evidence of the photographs then the probabilities were that the hearing would be adjourned and that she would have to pay costs. For example, there was the following exchange (Transcript, 23 September 2008, pp 37 to 39):
HIS HONOUR: But none of that’s really, apart from the rangehood issue being put to your client.
MR PUCKEY: That’s so and indeed there was correspondence which I’ll tender in due course requesting that the wife disclose her case or particularise her case in that regard immediately.
HIS HONOUR: So the first we get about this detail effectively in the affidavit filed yesterday?
MR PUCKEY: Correct and these photographs of course 15 minutes ago.
HIS HONOUR: Right I don’t see how I can really admit – I’m not talking to you now as a witness Ms [Agius] I’m talking to you as a person who is representing herself as an applicant. I’m not prepared to allow a great trench of photographs to be put on in this late way and indeed we’re reaching the point where if we’re talking figures of a quarter of a million dollars, in respect of repairs, in circumstances where the people who effected the repairs are apparently not to be called. It hasn’t been put to the witness in any – to Mr [Agius] in any detail at all apart from the rangehood issue, that his behaviour has somehow caused a quarter of a million dollars to be expended, I’m not minded to allow this evidence in. It’s not really satisfactory, you can’t just bounce people on the day before trial with a huge issue like this? --- But we’ve gone to great lengths with the solicitors to try and effect ---.
Yes but you see that’s all well and good, but the material relating to repairs is exclusively within your care and control. It seems to be there are only two ways forward if you wish to press this issue and you’re entitled, subject to Mr Puckey --- ? --- Well obviously it’s a cost that I’ve had to incur and that is, you know what I mean.
Well in that case the next inevitable conclusion would be that Mr Puckey will apply for an adjournment and he’s in a position of considerable strength in that regard and there will obviously then be an application at any costs thrown away by reason of the adjournment be paid by you. …
…
… I’ll make it quite plain how the matter lies. I’m not minded to allow the case to proceed involving these assertions of a quarter of a million dollars worth of repairs allegedly responsible to Mr [Agius] without an adjournment and I’ll make that quite plain now. So it either proceeds with an adjournment on that footing or you decide that you don’t wish to press this issue as an adjustment factor at all. There’s no halfway house about it and I don’t think it’s fair to you sitting in the witness box to ask you to make that decision on the run. I’ll adjourn to a quarter past three and I’d like you to let me know how you see it then? --- Thank you.
The Federal Magistrate then adjourned the hearing to enable the Wife to consider her position.
When the hearing resumed there was the following exchange between the Federal Magistrate and the Wife (Transcript, 23 September 2008, pp 39 to 40):
HIS HONOUR: Ms [Agius] you’ve had an opportunity to consider your position, but which way would you prefer to proceed? --- I’m happy to withdraw it, obviously having said that I’m going to obviously reassess obviously where – when obviously we’re talking about what the final asset pool is and yes I’m happy to ---
You could perhaps consider your position as to how it affects that issue overnight? --- Yes
But you understand that this course of action means that with the exception of the issue you cross-examined about, namely the rangehood and fire that was said to have flown from that, your monetary claims to readjust the pool by reference to the asserted bills that you’ve spent ceases to be an issue in the case. It’s an important matter but you understand that’s the effect of what been put? --- Well the money has been sent [sic], the invoices have been paid so you know there’s no two ways about it, all I can say is that I can substantiate where it’s been done and ---
Well you see it’s a little difficult for me and probably for Mr Puckey too in this sense --- ? --- Well then I’ll just look it over.
--- in part you say I’ve spent these moneys to get the properties up to speed and in large part as you understand it, you say its because of the conduct of Mr [Agius]. Ultimately if that issue is to be pressed and I then indicated you can if you so desire, then obviously there would have to be an adjournment. By the same token if you decide and you might decide, well whether I spent the money or not I may or may not ever be able to prove that its entirely his fault? --- That’s right, well I mean.
That’s a forensic decision for you? --- I mean that’s something that I can look at civilly as well. I mean you know there’s other avenues that ---
I see --- ? --- doesn’t mean that it ends there. There’s a civil argument there.
But do I understand you correctly to say that you do not know [sic] wish to press that aspect of your case in this proceeding? --- Yes.
Okay, very well. Well I think that takes care of your objections Mr Puckey?
MR PUCKEY: Yes, your Honour.
In our view, when consideration is given to what was said during the hearing on 23 September 2008, which we have identified in the extracts from the transcript referred to above, it is clear that the Husband had no objection to the invoices that were attached to the affidavit of the Wife of 22 September 2008 as part of annexure CA12. The first objection, however, arose when the Wife sought to rely on the documents to support her contention that the funds were disbursed because of the conduct of the Husband. The second objection arose when the Wife sought to tender a bundle of photographs in order to support her contention that the repairs were undertaken as a result of damage caused by the Husband. In discussion before us counsel for the Husband conceded that the “bombshell was the photographs” which were relevant to “the contention of waste” being what we will shortly describe as the second issue (Transcript, 4 May 2009, p 27).
It is clear to us that there was a distinction between two issues. The first issue was whether or not the Wife had paid funds for the cost of repairs for the three properties in Victoria. The second issue was whether or not such repairs were necessary to be undertaken as a result of the conduct of the Husband. In discussion before us the second issue was described as a “negative contribution” by the Husband and also “the waste issue” (Transcript, 4 May 2009, pp 19, 23). The objections by counsel for the Husband related to the second issue and it was those objections which were upheld by the Federal Magistrate. The first issue, however, remained and it was relevant to the disbursement of the funds in the bank accounts as opposed to whether there should be an adjustment to the entitlement of the Wife by reason of the conduct of the Husband. We observe that it was also conceded before us by counsel for the Husband that there were two different issues (Transcript, 4 May 2009, pp 20 and 23).
Again, we observe that at no point during the hearing did the Federal Magistrate articulate an order or ruling in relation to the objection by counsel for the Husband. For example, the Federal Magistrate did not say that he rejected or admitted into evidence annexure CA12 to the Wife’s affidavit. However, the Federal Magistrate did not accept into evidence the folders of photographs. In our view, this confirms that what the Federal Magistrate did was uphold the objection in relation to the second issue.
The Wife was then cross-examined about the amounts disclosed in Exhibits A2 and A3 and also what she said in paragraphs 15 and 16 of her affidavit sworn on 27 June 2008. The Wife admitted that there was an amount of $67,000.00 in an account with the Commonwealth Bank. The Wife said, and it was not disputed, that it was her “salary savings” (Transcript, 23 September 2008, pp 50 to 51).
The Wife was cross-examined in relation to what was disclosed in Exhibit A3 and the following was put (Transcript, 23 September 2008, pp 51 to 52):
All right. The second account – sorry that’s one of the accounts that you say you’ve now closed and spent on the various renovations and things like that? --- Correct.
MR PUCKEY: Yes, okay. Can I, your Honour, please have Exhibit A3.
…
Right, now are you saying you are completely unaware that there was two hundred odd thousand dollars as at July 06 that you had to your name? --- No. What I’m saying is that this document that you’re getting me to look at doesn’t state anywhere that it belongs to Ms [Agius].
But you’re not denying that you had the money at the time, you’re just saying that it didn’t come from my client it came from you, is that right? --- Well that’s correct. I mean I had.
It’s your money? --- Yes that’s right.
Not his? --- Yes.
Yes and you don’t argue with the amount, that sounds about right? --- As of 2006?
Yes? --- Yes I can’t – well as I said I mean yes the amount is fine but as I said I still don’t understand how they’re applying that this relates to me, where does it?
I’m asking you, you can recall it you’ve just told us right? --- Yes well obviously I’ve spent $250,000 on damages.
Ok, so you had the $200,000 and you’ve applied – that’s the other account that you refer to in your material when you say I’ve now closed that account because I’ve spent the money on the repairs. Is that right? --- Yes
That was the source of the funds that you used to spend the $200,000 that you’ve referred to? --- Yes. (emphasis added)
No further questions were put to the Wife in relation to the amounts disclosed in Exhibits A2 and or A3 or about the disbursement of the funds in the accounts by the Wife.
In summary, in our view, consideration of the evidence at the trial demonstrates a number of matters. First, it was not put to the Wife in cross-examination that she had failed to make a full and frank disclosure of the amounts shown in Exhibits A2 and/or A3 and that such funds, although not disclosed, still existed in some form. Second, the Wife gave evidence that the amounts shown in Exhibits A2 and/or A3 were disbursed. Third, the Wife was not challenged in relation to her explanation as to what she had done with the funds shown in Exhibits A2 and/or A3. The Wife gave unchallenged evidence that she spent the money disclosed in Exhibit A3 on repairs. Fourth, it was not put to the Wife that the expenditure by the Wife of the funds shown in Exhibits A2 and/or A3 was unreasonable. This is understandable because if it had been put to the Wife then it would probably have entitled the Wife to give the evidence that was objected to, namely, that it was because of the conduct of the Husband and perhaps then seek to tender the folders of photographs. This was conceded by counsel for the Husband during the hearing before us. (Transcript, 4 May 2009, p 14)
In the result we reject ground 1. We accept that the Federal Magistrate has not expressed his consideration of the evidence very clearly and has perhaps in some respects misrepresented the evidence, particularly the evidence of the Wife. However this is not the complaint. The complaint is about the finding that the funds shown in Exhibits A2 and/or A3 or any portion thereof were not notionally included in the list of net assets. Given the acceptance by the Federal Magistrate that the Wife spent some of the funds on legal costs and living expenses and the admission into evidence of the invoices and the evidence of the Wife that the funds were also spent in payment of the amounts disclosed in the invoices, the Federal Magistrate could not safely conclude that any of the amounts should be notionally included in the list of net assets. In our view, when consideration is given to the evidence, both in the affidavits and during the hearing, it was well within the discretion of the Federal Magistrate to exclude such amounts.
As to the contention that the amounts shown in exhibits A2 and A3 should have been notionally included in the list of net assets because of what the Wife said in paragraph 16 of her affidavit sworn on 27 June 2008, we reject this argument. First, we do not construe what the Wife said in paragraph 16 as an admission that the amounts should be notionally included in the list of net assets. Second, even if it was an admission, it is clear from both the written and oral evidence of the Wife before the Federal Magistrate that she resiled from any admission she had made in paragraph 16 of her affidavit. The Wife made clear that she had spent the funds and they no longer existed.
Ground 2
The Husband complains that the Federal Magistrate made an error of fact in calculating the payment to the Husband pursuant to the order by failing to include the liabilities of $2,700.00 and $21,200.00 relating to the first property in Victoria ts retained by the Husband.
It was submitted on behalf of the Husband that findings as to the pool of available assets are set out at [105] of the reasons for judgment and included in the liabilities are the rates and body corporate fees of $2,700.00 and the capital gains tax liability of the Husband of $21,200.00. It was submitted that both these liabilities related to the property to be retained by the Husband.
It was submitted on behalf of the Husband that the Federal Magistrate at [108] calculated the value of the division of the pool and decided the entitlement of the Husband at $268,488.00 being 25 per cent of $1,073,950.00 (rounded off). His Honour then allocated to the Husband his superannuation interest of $11,700.00 and the first property in Victoria at a value of $250,000.00. Thus, the Husband had assets of a gross value of $261,700.00. To achieve an entitlement of $268,488.00 required an adjusting payment to the Husband of $6,788.00 ($268,488.00 - $261,700.00 = $6,788.00). However, the first property in Victoria carried with it the liabilities of $2,700.00 and $21,200.00 for the Husband to bear. It was submitted that the adjusting payment required was therefore $30,688.00 ($2,700.00 + $21,200.00 + $6,788.00 = $30,688.00).
It was submitted that whilst it is not necessary to justify decisions in property cases by reference to precise mathematical calculations, a fundamental and significant mathematical error constitutes appealable error: see Burke and Burke (1981) FLC 91-055 at 76,452 per Full Court (Baker J with whom Asche and Ellis SJJ agreed). It was submitted that in King and Kemp (1996) FLC 92-673 at 83,010 the Full Court (Baker, Lindenmayer and Bulbeck JJ) corrected a $10,000.00 mathematical error even in circumstances where all grounds of appeal relied upon by the appellant had failed. It was submitted that the error in the present case is of a significant proportion and should be corrected.
Conclusion – Ground 2
We accept that it is not necessary for a trial judge to justify his or her decision in a property settlement case by reference to precise mathematical calculations. If a trial judge takes a very broad approach to the figures which were before him or her then an appellant must show that there has been a fundamental and significant error before it can be said that the trial judge’s discretion has been wrongly exercised.
As we have observed, the effect of the order of the Federal Magistrate was that the Husband would receive $244,588.00 whereas the Federal Magistrate found that the Husband should receive an entitlement of $268,487.50 being a difference of $23,899.50.
We are satisfied that an error was made by the Federal Magistrate and that, in the circumstances of this case, the amount of $23,899.50 is not an insignificant sum. We accept that the mistake made by the Federal Magistrate could not be described as a minor mathematical error.
The mathematical error in this case highlights the importance of the suggested practice of setting out in reasons for judgment the effect of the proposed order in terms of what each party will receive pursuant to the order. This enables a reconciliation to be made with the findings as to the net assets of the parties. It enables confirmation that effect is given to the findings as to the entitlement of each party. Further, it makes it easier to understand what has been done.
Ground 3
The Husband contended that the Federal Magistrate’s assessment of the percentage division of the pool of assets available for division between the parties fell outside of the reasonable range of discretion of what was just and equitable.
It was submitted on behalf of the Husband that the Federal Magistrate assessed the contribution based entitlements of the parties at 75 per cent to the Wife and 25 per cent to the Husband “and declined to make any s.75(2) adjustment”.
It was submitted on behalf of the Husband that the contribution based assessment in favour of the Wife was excessive. It was submitted that there was no dispute that the Wife had made the greater initial contributions of capital, by virtue of her Tattslotto win prior to the marriage. It was submitted that the Federal Magistrate appears to have relied upon this fact and the greater earnings of the Wife during the course of the marriage, to arrive at the percentage assessment in favour of the Wife. It was submitted that given the relationship spanned some 10 years in duration, that “excessive weight was given to these matters in the circumstances and the Federal Magistrate appears to have had no regard whatsoever to the indirect and non-financial contributions of the Husband recounted in his Affidavit material”.
It was also submitted on behalf of the Husband that it “was inappropriate to make no adjustment pursuant to s.75(2)” of the Act. It was submitted that whilst neither party was in paid employment at the time of the trial, “the Wife’s employment history and earning capacity clearly and significantly outstripped that of the Husband”. It was submitted that the Wife also “had the significant financial support of her partner”.
It was submitted that on behalf of the Husband: “Finally, based upon the 75/25 division of capital between the parties (on the Federal Magistrate’s contribution-based assessment) [the Wife] had three times the capital of the Husband, including two pieces of real estate. None of these factors appear to have been taken into account by the Federal Magistrate”.
It was submitted on behalf of the Husband that “the failure of the Federal Magistrate to take into account all relevant matters in this case requires a review of his determination. Further, upon the facts of the case, the result embodied in the orders is plainly unjust and falls outside of the reasonable range of the relevant discretion”.
It was submitted on behalf of the Husband that the “problems inherent in the Federal Magistrate’s exercise of the discretion are compounded significantly by the errors in calculation of the pool of assets available for division”. It was submitted that the “funds retained by the Wife from the accounts totalled $291,483.00. The pool found by the Federal Magistrate totalled $1,073,950.00. The funds left out of the analysis equate to 27 per cent of the pool found. Such a sum is clearly relevant to an assessment of both contribution and s.75(2) factors”.
It was submitted on behalf of the Husband that in Brodie v Brodie (2009) 41 Fam LR 18 the “trial judge made significant errors in the calculation of the pool of assets available for division, which led the Full Court to the conclusion that the percentage assessments of both contribution and s.75(2) factors were unsafe – see paragraph 87 in relation to contribution and paragraph 104 in relation to s.75(2)”.
It was submitted on behalf of the Husband that in the present case the failure to take into account relevant matters in assessing both contribution and factors in
s 75(2) of the Act and the errors in the calculation of the pool invite a re-exercise of the discretion by us.
Conclusion – Ground 3
The Federal Magistrate found that the parties had net assets of $1,073,950.00. We have already found that it was within his Honour’s discretion to exclude the amounts recorded in Exhibits A2 and A3.
At the commencement of the relationship in April 1997 the Wife owned the second property in Victoria, which she purchased for $152,000.00 and the third property in Victoria, which she purchased for $153,000.00. The Wife also had the balance of the proceeds of her Tattslotto win of $450,449.00. The Wife, therefore, had real property of a value of approximately $305,000.00 and perhaps $339,449.00 of the proceeds of her Tattslotto win. As we have observed, the Wife applied approximately $111,000.00 from her Tattslotto win to pay for the cost of purchase of the third property in Victoria. ($450,449.00 less $111,000.00 = $339,449.00). This is a total of approximately $644,449.00.
The Federal Magistrate found that at the time of the trial the second property in Victoria property had a value of $405,000.00 and the third property in Victoria a value of $370,000.00. At the time of the trial the real estate the Wife had in 1997 had a value of $775,000.00. In other words, the current value of this real property represented approximately 72 per cent of the current net assets. Further, the property at the second property in Victoria had a value of $250,000.00 and the Husband made no financial contribution to this property.
In our view, it is therefore self-evident that consistently with what was said by the Full Court in Pierce, very considerable weight had to be given to the initial financial contribution by the Wife. For example, for discussion purposes, we observe that $644,449.00 is approximately 60 per cent of $1,073,950.00 and as we have observed $775,000.00 is 75 per cent. The Federal Magistrate made a finding that the Husband’s entitlement was 25 per cent of $1,073,950.00.
However, there were other significant contributions made by the Wife during the relationship. There were no children of the relationship. The duration of the relationship was about nine years. During the relationship the Wife was always in receipt of a significantly greater income from paid employment than the Husband. As we have observed above, it was submitted on behalf of the Husband that “the Wife’s employment history and earning capacity clearly and significantly outstripped that of the Husband” (emphasis added). Further, the unchallenged evidence of the Wife and her father was that the Wife received significant financial assistance from her parents. The total of the amounts disclosed in a schedule attached to the affidavit of Mr C is $299,857.50.
In those circumstances, in our view, notwithstanding that when considering the matters in s 75(2) of the Act the Federal Magistrate did not discuss the effect of his finding as to the contribution based entitlement of the Wife, the outcome was well within the range of discretion. In our view, the Federal Magistrate’s assessment of the percentage division of the pool of assets available for division between the parties fell generously within the reasonable range of discretion of what was a just and equitable outcome. We therefore reject ground 3.
In passing, we note that during the hearing before us, counsel for the Husband in discussion suggested that insofar as it was necessary he would seek leave to amend the grounds of appeal to identify discrete complaints of error by the Federal Magistrate in relation to his treatment of the matters in s 75(2) of the Act that we have described above. However, no application was made and in any event, if such an application had been made we would have rejected it on the basis that it should have been adequately articulated in the grounds of appeal prior to the commencement of the hearing before us. Further, in our view, for reasons we have given even if such complaints had been articulated and argued the result was still well within the range of discretion (Transcript, 4 May 2009,
p 41).
Conclusion
The Federal Magistrate intended to make orders that would have the following effect:
Wife
Assets
The third property in Victoria $370,000.00
The second property in Victoria $405,000.00
Vehicle A $10,150.00
Vehicle B $6,000.00
Superannuation $45,000.00
TOTAL $836,150.00
Less payment to Husband ($30,688.00)
Balance $805,462.00
Husband
Assets
The first property in Victoria $250,000.00
Superannuation $11,700.00
Payment by Wife $30,688.00
TOTAL $292,388.00
Liabilities
Rates and Body Corporate Fees (Rounded to) $2,700.00
Anticipated CGT liability of husband $21,200.00
TOTAL ($23,900.00)
Balance $268,488.00
The Wife was to receive 75 per cent or $805,462.00 (rounded off) and the Husband to receive 25 per cent or $268,488.00 (rounded off). The Wife has to pay an amount of $30,688.00 to the Husband. In other words, the amount of $6,788.00 at paragraph 6 of the order of the Federal Magistrate should be substituted by the amount of $30,688.00.
For reasons we have given, we are satisfied that the mathematical error made by the Federal Magistrate disadvantaged the Husband by $23,899.50 and that this error should be rectified.
There are three possible ways that the error may be rectified, namely, by appeal, by application for rectification of the judgement or perhaps by application pursuant to s 79A of the Act: see Rose and Rose [2003] FamCA 93 (10 February 2003) per Kay J at paragraph 49.
As to the second approach to correction of the error, r 16.05(2)(e) of the Federal Magistrates Court Rules 2001 provides that the Court may vary or set aside its judgment or order after it has been entered if the order does not reflect the intention of the Court. In the dictionary to the Federal Magistrates Court Rules, Court means the Federal Magistrates Court.
There is an inherent jurisdiction in a court to rectify a judgment after it has been entered where it does not correctly reflect the judge’s intention as at the time it was pronounced: Re Swire; Mellor v Swire (1885) 30 Ch D 239 at 246 per Lindley LJ; Ivanhoe Gold Corporation Ltd v Symonds (1906) 4 CLR 642 per Griffith CJ.
In all jurisdictions, the rules of court usually confer a power on the court to amend judgments and orders by reason of an accidental slip or omission: see for example r 17.02 of the Rules. Such rules are often referred to as the “slip rule” and reflect the inherent jurisdiction of a court at any time to correct an error in a decree or order arising from a slip or accidental omission.
In this case, it is very clear that there was a slip or accidental omission in the paragraph of the property settlement order that provided for a payment of money by the Wife to the Husband. The order clearly does not reflect the intention of the Federal Magistrate.
In this case, we are of the view that, subject to the slip or accidental omission by the Federal Magistrate, there was no error by his Honour and the appeal should be dismissed. The question that then arises is whether we should exercise the power conferred on the Federal Magistrates Court by r 16.05(2)(e) of the Federal Magistrates Court Rules or an application be made by the Husband to his Honour. This raises for consideration whether we have this power by reason of
s 94AAA(6) of the Act which provides that on an appeal to the Family Court from a decree of the Federal Magistrates Court “the Family Court may affirm, reverse or vary the decree or decision the subject of the appeal and may make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re‑hearing on such terms and conditions, if any, as it considers appropriate”. This issue was not addressed in discussion before us. In those circumstances, we are of the view that the matter should be dealt with by the Federal Magistrates Court.We also observe that r 16.05(2)(f) of the Federal Magistrates Court Rules provides that the Court may vary or set aside its judgment or order after it has been entered if “the party in whose favour the order is made consents”. In very brief discussion before us about the error, the Wife did not admit that there was an error and simply sought to agitate issues with respect to the impost of Capital Gains Tax on properties she retained.
In LexisNexis Butterworths, Halsbury’s Laws of Australia, vol 20 [at 325-3125] it is said:
A mistake or error will not be treated as accidental if the amendment of the judgment which is sought requires the exercise of an independent discretion or if it is a matter upon which a real difference of opinion might exist or if the variation sought to be made is not obvious or easily to be found, requiring argument and deliberation. (citations omitted)
In this case, the amendment does not require the exercise of an independent discretion. It is not a matter upon which a real difference of opinion might exist. The variation sought to be made is obvious or easily to be found and does not require argument and deliberation. Thus, the error should be easily resolved.
Costs
At the conclusion of the hearing before us there was a brief discussion about costs. We are of the view that we did not have comprehensive submissions such as to enable us to consider costs. We therefore propose to make directions in relation to the filing of submissions, if any, in relation to any application for costs.
I certify that the preceding one hundred and seventy-six (176) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court Bryant CJ, Coleman & O’Ryan JJ.
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