Atkins & Hunt
[2020] FamCAFC 252
•9 October 2020
FAMILY COURT OF AUSTRALIA
| ATKINS & HUNT AND ORS | [2020] FamCAFC 252 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Dispute as to husband’s interest in family companies – Where the husband transferred and disposed of part of his shares from a holding company when the wife’s appeal was pending – “Mere puppet” argument – Where the wife orally asserted that the primary judge introduced two elements to the test, namely a first limb being the establishment of a “mere puppet” and a second limb being “that the company does not truly exist as a separate legal entity”– Onus on the wife to establish “mere puppet” case – Where a Ferrcom inference does not have to be drawn and whether it is drawn remains a matter for the primary judge – Challenge to the observational reference made by the primary judge to s 232 and s 254T of the Corporations Act 2001 (Cth) – Likelihood of any respondents seeking to invoke their rights under the Corporations Act 2001 (Cth) – Where issue was not ventilated before the primary judge – Where the primary judge factored in the ability of the husband to control the direction of income into the value of his shares and included a control premium – Inadequate proof of liabilities by the wife as to whether they were devoted to living expenses or legal fees – Where counsel for the wife encouraged the primary judge to “take a more global approach” in relation to such liabilities – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the wife has been wholly unsuccessful and has the capacity to meet an order for costs against the respondents – Costs order in the sum claimed by husband – Wife to pay the costs of the other respondents as agreed or assessed. |
| Corporations Act 2001 (Cth) ss 232, 254T, 254W Family Law Act 1975 (Cth) ss 75, 79, 106B, 117(2A) |
| Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; [1981] HCA 1 Atkins & Hunt and Ors (2017) FLC 93-774; [2017] FamCAFC 79 Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 CDJ & VAJ (1998) 197 CLR 172; [1998] HCA 67 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Cook’s Construction Pty Ltd v Brown and Anor (2004) 49 ACSR 62; [2004] NSWCA 105 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 House v The King (1936) 55 CLR 499; [1936] HCA 40 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 S & M & Ors [2003] FamCA 1387 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48 Yates and Yates (No. 1) (1982) FLC 91-227; [1982] FamCA 2 |
| APPELLANT: | Ms Atkins |
| FIRST RESPONDENT: | Mr Hunt |
| SECOND RESPONDENT: | Mr J Hunt |
| THIRD RESPONDENT: | Mr D Hunt |
| FOURTH RESPONDENT: | N Pty Ltd |
| FIFTH RESPONDENT: | T Pty Ltd |
| SIXTH RESPONDENT: | H Pty Ltd |
| SEVENTH RESPONDENT: | Mr EE Hunt |
| FILE NUMBER: | SYC | 425 | of | 2012 |
| APPEAL NUMBER: | EAA | 10 | of | 2020 |
| DATE DELIVERED: | 9 October 2020 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Sydney (via video link) |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Tree JJ |
| HEARING DATE: | 20 May 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 18 December 2019 |
| LOWER COURT MNC: | [2019] FamCA 977 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Campton SC with Mr Dura |
| SOLICITOR FOR THE APPELLANT: | Mills Oakley |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Eldershaw |
SOLICITOR FOR THE FIRST RESPONDENT: | Sexton Family Law |
| COUNSEL FOR THE SECOND TO SEVENTH RESPONDENTS: | Mr Gray |
| SOLICITOR FOR THE SECOND TO SEVENTH RESPONDENTS: | HWL Ebsworth Solicitors |
Orders
The Further Amended Notice of Appeal filed on 30 April 2020 be dismissed.
The respondent husband’s Notice of Contention filed on 4 February 2020 be dismissed.
Within twenty-eight (28) days, the appellant wife pay the respondent husband’s costs in the sum of $36,431.
In default of agreement, within twenty-eight (28) days of their assessment, the appellant wife pay the assessed party/party costs of the second to seventh respondents.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Atkins & Hunt and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 10 of 2020
File Number: SYC 425 of 2012
| Ms Atkins |
Appellant
And
| Mr Hunt |
First Respondent
For a complete list of parties in Appeal No. EAA 10 of 2020 see Coversheet and Orders page 2.
REASONS FOR JUDGMENT
Introduction
On 18 December 2019, the primary judge made final property settlement orders dividing the parties’ property such that Ms Atkins (“the wife”) received 20 per cent of the net pool, and Mr Hunt (“the husband”) received 80 per cent. That outcome was effected by the husband being required to pay the sum of $964,683 to the wife, but otherwise each party would be entitled to retention of the other assets then in their name, possession or control.
From those orders the wife now appeals. The appeal is resisted by the husband. For the reasons which follow, it must be dismissed.
Background
As at the time of trial, the husband was 84 years of age, and the wife 64 years of age.
In February 2000, the husband and wife commenced their relationship. Both parties had been in previous relationships, with the husband having eight children to two marriages, and the wife having one child to a previous relationship.
The parties met when the wife was working at a business owned by a company associated with the husband. She had been working there for about two years at the time when the parties’ relationship commenced.
In April 2003, the parties married. Ultimately they separated in March 2011 after a relationship of some 11 years.
The wife thereafter commenced property settlement proceedings, which resulted in final property orders being made by a Family Court judge on 4 December 2014. The wife successfully appealed from those orders (Atkins & Hunt and Ors (2017) FLC 93-774 (“first appeal reasons”)) as a result of which the proceedings were remitted for re-trial before another judge of the Family Court.
However whilst that appeal was still pending, on 7 September 2015 the husband converted some shares which he and a company he controlled held in the company which owned his business, and on 15 September 2015, disposed of the majority of those converted shares. The primary judge identified that this disposition was “a focal point” in the re-trial before him (at [67]). That is because the wife contended at the re-trial that immediately prior to the disposition, the corporate structure was the “alter-ego” of the husband, and that the disposition was made to defeat an anticipated order for property settlement in her favour.
The re-trial and the primary judge’s reasons
Central to the re-trial was the value of the husband’s interest in N Pty Ltd. To understand that dispute, it is necessary to recite a little more background to the husband’s business.
In 1967, the husband commenced to operate a business in Suburb U. It developed over the succeeding years, apparently focusing upon the sale of new units, and ultimately holding franchises for a number of brands.
In September 1973, N Pty Ltd was established. At that time, the husband was married to his first wife and both were shareholders in N Pty Ltd, which became the owner of the business. At [82] of the primary judge’s reasons for judgment his Honour recorded:
… At a time when death duties were payable in New South Wales, [N Pty Ltd] was a bespoke vehicle by which the husband carried on his business. This provided him with patriarchal control and the ability to plan for succession.
The basis for that comment lies in the structure of N Pty Ltd, the constitution of which established eight classes of shares, respectively A to H. Under N Pty Ltd’s constitution the holders of A class shares were not entitled to dividends, or to a division of surplus assets if the company were to be wound up. However the holders of A class shares had the exclusive control of the company, as the other classes of shares did not entitle the holders to any management rights, but only to dividends as may be declared from time to time in respect of the class of share held by them, and to the distribution pari passu of any surplus assets in the event of winding up.
In May 1986, another company, T Pty Ltd was registered. It came to own five A class and 10 B class shares in N Pty Ltd. The husband owned 99 per cent of the shares in T Pty Ltd.
The primary judge found at [77] of the reasons as follows:
At a time shortly before 15 September 2015, the husband owned five A Class shares and ten C Class shares in [N Pty Ltd]. [T Pty Ltd], in which the husband had a 99 per cent interest, owned the other five A Class shares and 10 B Class shares in [N Pty Ltd]. The other shareholdings in [N Pty Ltd] were held by the husband’s eight children as follows:
[Mr DD]10 C Class
[Mr EE Hunt] 10 C Class
[Mr J Hunt]10 C Class
[Ms FF]10 D Class
[Ms GG]10 E Class
[Mr D Hunt] 10 F Class
[Ms HH]10 G Class
[Mr JJ]10 H Class
Thereafter, as found by the primary judge, the following occurred:
97. On 7 September 2015, [N Pty Ltd] resolved to divide each A Class share by 100 creating 500 A Class shares in the hands of the husband and 500 A Class shares in the hands of [T Pty Ltd].
98. By deeds dated 7 September 2015 and transfers dated 15 September [2015], the husband disposed of all 500 of the A Class shares held by [T Pty Ltd] and 400 of the A Class shares that he held himself in the following manner:
a)400 A Class shares from the husband to [Mr J Hunt] (2nd respondent);
b)250 A Class shares from [T Pty Ltd] to [Mr D Hunt] (3rd respondent); and
c)250 A Class shares from [T Pty Ltd] to [Mr EE Hunt] (7th respondent).
By doing so, the husband gave up the control of the voting rights in [N Pty Ltd].
99. The consideration paid to the husband and [T Pty Ltd] was $100 for each A Class share and the husband and [T Pty Ltd] received an amount of $90,000 in total. In respect to how the price of these shares was set, the husband gave evidence at paragraph 75 of his trial affidavit which was objected to by the wife on the basis of form and hearsay. The majority of that evidence was not read and whilst senior counsel for the husband was given leave to adduce oral evidence about those transactions, that opportunity was not taken up by him. Further, [Mr D Hunt], in his affidavit filed 12 September 2019, did not adduce any evidence as to the method (if any) by which the price was set. [Mr J Hunt] and [Mr EE Hunt] did not give evidence.
100. Indeed, as submissions by counsel for the wife point out, neither the husband nor any of the 2nd to 7th respondents adduced any evidence of any special meeting held by the directors and shareholders to discuss the transfer of or the passing of, any special resolution associated with the disposition of the shares.
101. The husband did not inform the wife that he was undertaking the transfers nor did he immediately provide the wife with documents in relation to the transfers.
102. The husband retained 100 A Class shares (10 per cent of the A Class shares) in [N Pty Ltd].
103. As a result, the husband held, and still holds, 100 A Class shares and 10 C Class shares in [N Pty Ltd]. The husband maintained and still retains a 99 per cent interest in [T Pty Ltd]. [T Pty Ltd] no longer holds any A Class shares but holds 10 B Class shares in [N Pty Ltd].
As we have indicated, at trial the primary argument of the wife was that, up until the transfers of 15 September 2015, “[N Pty Ltd] was a ‘mere puppet’ of the husband and that its corporate veil should be pierced” (at [113]). As we shall consider in greater detail shortly, the primary judge rejected that contention (at [135]).
The further argument of the wife was that “the husband’s control of [N Pty Ltd] means that its full value should still be ascribed to him on the balance sheet” (at [136]). Before the primary judge, there was conflicting evidence given as to the value of the husband’s shares by two valuers, Ms BBB and Ms AAA. As we shall shortly discuss, ultimately the primary judge preferred the evidence of Ms BBB and concluded that, as at 30 June 2018, had the 15 September 2015 dispositions not taken place, the value of the husband’s direct and indirect shareholding in N Pty Ltd was $5,993,000 (at [173]). That was as distinct from the agreed value of N Pty Ltd as at 30 June 2018, being $24,930,000.
His Honour then turned to consider the wife’s claim for relief under s 106B of the Family Law Act 1975 (Cth) (“the Act”). That claim had necessitated the joinder to the proceedings of three of the husband’s children who were beneficiaries of the 15 September 2015 share transfers, together with N Pty Ltd, T Pty Ltd, and another company (“the other respondents”). The other respondents were represented separately from the husband, both in the trial before the primary judge, and in the appeal before us.
Ultimately the primary judge concluded that the wife had established that the husband’s intentions in disposing of his shares in September 2015 was substantially influenced by an intention to defeat an anticipated claim by her (at [187]). Further, his Honour concluded that the second limb of s 106B(1) was satisfied “because the dispositions, irrespective of an intention, are likely to defeat an anticipated order” (at [196]).
On that basis, the primary judge resolved to “determine the s 79 application as if the dispositions had not been made by entering the value of the shares that have been disposed of onto the balance sheet” (at [197]). Pursuant to that determination, the primary judge included a figure of $3,017,000 as being the value of the husband’s shares in N Pty Ltd (at [211]). His Honour attributed a further value of $2,976,000 for the husband’s T Pty Ltd shareholding (at [211]).
The primary judge then set about assessing the parties’ respective contribution based entitlement, and in doing so, considered the parties’ initial financial contributions, financial and non-financial contributions during their relationship, and post separation contributions. Ultimately his Honour concluded that that entitlement heavily favoured the husband, and determined that the appropriate percentage split was 90/10 in the husband’s favour (at [249]).
His Honour then proceeded to address the relevant s 75(2) considerations, and determined that the wife should receive an adjustment of 10 per cent on account of the s 79(4)(d)–(g) considerations (at [263]). His Honour considered whether or not the contemplated 80/20 split of the assets achieved a just and equitable outcome, and determined that it did (at [267]).
After allowing for a partial property settlement made on 15 June 2012, the further property settlement made pursuant to the orders consequent upon the first trial on 4 December 2014, and the value of assets otherwise to be retained by the wife, his Honour determined that a further payment of $964,683 was the appropriate means of achieving a just and equitable outcome (at [266]–[267]). However, in order to secure certainty of payment to the wife, his Honour made an order pursuant to s 106B(1) of the Act that, if the husband did not pay the wife the monies due under the orders within two months, then the 15 September 2015 share transfers should be set aside.
The Appeal
Overview
As argued, the appeal extends to five grounds (Ground 3 having been abandoned – husband’s Summary of Argument filed 30 April 2020, p.12). The first two grounds assert, in substance, that the primary judge erred by failing to find that N Pty Ltd was the alter ego of the husband, and in rejecting the evidence of the valuer called by the wife. The fourth and fifth grounds challenge the primary judge’s determinations as to the wife’s contribution based entitlement, and the s 75(2) adjustment. Finally by Ground 6, it is said that the primary judge erred by including seven items of the wife’s personal debts in the balance sheet, for the purposes of determining the net pool of assets.
At the outset, it is useful to restate that appellate intervention in relation to the exercise of a judicial discretion is highly constrained, as discussed in House v The King (1936) 55 CLR 499 at 504–505 (“House v The King”), where Dixon, Evatt and McTiernan JJ said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred…
Later, in Norbis v Norbis (1986) 161 CLR 513 at 540 Brennan J said:
The “generous ambit within which reasonable disagreement is possible” is wide indeed when there are a number of factors to be taken into account and the comparative weight to be attributed to those factors is not clearly indicated by uniform standards and values of the community. The generous ambit of reasonable disagreement marks the area of immunity from appellate interference…
Ground 1
The first ground of appeal asserts as follows:
The learned trial Judge erred in failing to find that the companies, [N Pty Ltd] and [T Pty Ltd], are the alter ego of the Husband including as a consequence of:
a.erroneously constructing and applying the test that he formulated in paragraph 116;
b.falling into error in the path he followed in the evaluation of the evidence adduced by the parties and the failure of the Respondents to call evidence that was peculiarly available to them and to draw appropriate inferences arising from that failure; and
c.erring in concluding that on the facts before him that the provisions of the Corporations Act 2001 (Cth) would operate contrary to such a conclusion.
At [116]–[118], the primary judge said as follows:
116. Turning to the test the wife needs to meet, the wife bears the onus of establishing that [N Pty Ltd] was the “mere puppet” of the husband and that the company does not truly exist as a separate legal entity. It does not seem genuinely disputed that as at September 2015, the husband had control of [N Pty Ltd], given the rights that he had under [N Pty Ltd’s] Constitution arising from his A Class shares. Counsel for the wife makes the submission that it would be a rare situation where a finding was made of “mere puppet” without the person against whom that finding was made having control of the company. I don’t accept that legal control of a company is necessarily the hallmark of a situation where a “mere puppet” finding would be made. A person could install directors and shareholders in a company who were entirely willing to do the bidding of that person, so even though that person didn’t have legal control of the company, the company was, in fact, their “mere puppet”.
117.The wife argues in this case, however, that the husband went beyond merely exercising his ordinary legal rights in accordance with the law, including [N Pty Ltd’s] Constitution and that he was the real controller of [N Pty Ltd].
118.The wife submits that as the owner of the A Class shares, the husband had complete control of what decisions [N Pty Ltd] made. Some of the decisions cited by the wife were the sale of shares to [Mr J Hunt] in 2011, decisions made in respect of real estate transactions and the changes to the number and ownership of A Class shares in 2015. Whilst the wife contends that control is a crucial element in her alter-ego argument, she concedes that there must be more and makes the following assertions, some of which are controversial:
(a)[N Pty Ltd] was incorporated by the Husband and his former wife, in 1973. At that time the Husband and [the husband’s first wife] held 1 A Class share each and the remaining shares were unsubscribed. Accordingly, [N Pty Ltd] was incorporated solely for the Husband and [the husband’s first wife] benefit. Once [the husband’s first wife’s] A Class shares were transferred to the Husband (and [T Pty Ltd]), the Husband had the sole benefit of [N Pty Ltd].
(b)At the relevant times prior to 15 September 2015, the Husband held all of the A Class shares (personally and through [T Pty Ltd]).
(c)[N Pty Ltd] is a company in which, at the relevant times, only members of the [Hunt] family have been shareholders and directors.
(d)The Husband and/or [the husband’s first wife] allocated B to H Class shares (non-voting shares) to their children and relatives (and themselves) such that dividends could be paid within the family.
(e)The Husband received, either personally or through [T Pty Ltd], approximately 70% of the dividends from [N Pty Ltd] since 2001; the balance of the dividends can be categorised as “gifts” for his children and relatives.
(f)Even following the Husband’s divestment of 90% of the A Class shares in [N Pty Ltd], the Husband continued to receive approximately 70% of the dividends. That is clear evidence that in circumstances where on the face of it the Husband had lost control of the decisions of [N Pty Ltd], he otherwise retained control of how dividends were paid to shareholders of [N Pty Ltd].
(g)The Husband undertook transactions on behalf of [N Pty Ltd] at his whim including the transfer of property to and from the Husband’s superannuation company, [F Pty Ltd]. The 4 transactions raised during the Husband’s cross-examination are simply examples of that.
(h)The Husband gave clear and unambiguous answers during his cross-examination to the effect that he made all of the decisions on behalf of [N Pty Ltd].
(i)The Husband had a loan account with [N Pty Ltd] which, from at least July 2013 to June 2018, he used to pay his personal expenses including:
(i) legal and accounting fees in respect of these proceedings;
(ii) legal fees in relation to other proceedings;
(iii) Foxtel bills; and
(iv) golf club membership fees.
(j)The fact that other persons were involved in the implementation of decisions (i.e. [Mr D Hunt] in his capacity as a director of [N Pty Ltd]) is not material to whether or not a company is the alter ego of a person. In fact, it is commonplace in circumstances of alter ego that, for example, a Wife is placed in the position of director but in reality the Husband controls the company behind the scenes. As much was submitted by counsel for the 2nd to 7th respondents
(k)[Mr D Hunt’s] involvement in [N Pty Ltd] can be simply explained as follows:
(i)Article 80 of [N Pty Ltd’s] Constitution states that there must not be less than 2 directors. At the time of incorporation, the 2 directors of [N Pty Ltd] were the Husband and [the husband’s first wife], the Husband’s former wife. Following the Husband’s separation from [the husband’s first wife], a directorial void was created. Accordingly, it was necessary for the Husband to appoint another director. Evidently he chose to appoint [Mr D Hunt].
(ii)The fact that [Mr D Hunt] was legally required (by reason of his appointment as director) to attend board meetings and sign resolutions and transfers in order for the Husband’s wishes to be formally implemented takes nothing away from the alter ego argument
(l)Taking advice from accountants and valuers before making the decision to transfer properties worth several hundreds of thousands of dollars is not an impediment to a finding that [N Pty Ltd] was the alter ego of the Husband. It is commonplace for an individual person to take advice from experts in respect of how they deal with their personal assets. It makes no difference that [N Pty Ltd] is inserted into the situation.
(m)At no stage did the Husband, nor [Mr D Hunt], give evidence that there was any form of consultation process when it came to making the decisions referred to above. At its highest, the evidence of [Mr D Hunt] was that he was aware of the decisions that the Husband had made and attended where it is asserted the proposed transaction was discussed. The Minute of Meetings annexed to the Affidavit of [Mr D Hunt] nor those contained within Exhibit 57 (tab 1) support the submissions advanced on behalf of the 2nd to 7th respondents.
In the wife’s Summary of Argument, counsel for the wife contend that the primary judge “constructed a test without principled basis” (at paragraph 28). Particularly, those submissions argued that in [116], the primary judge concluded that “recognition of the alleged puppet as a separate legal entity comprise[d] a factor disqualifying success against a puppet or alter ego conclusion” (paragraph 26).
We do not accept that is what the primary judge did. Nowhere in the primary reasons for judgment does his Honour suggest that a separate legal entity could never be a puppet or alter ego, and certainly that is not what the first sentence of [116] says. The later sentence in [116] “I don’t accept that legal control of a company is necessarily the hallmark of a situation where a ‘mere puppet’ finding would be made” is not expressed as an exclusionary test, but is an observation, and indeed, one which accords with authority.
Much of the modern jurisprudence relevant to this issue has its genesis in the judgment of Gibbs J in Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354–355, where his Honour said:
… if a company is completely controlled by one party to a marriage, so that in reality an order against the company is an order against the party, the fact that in form the order appears to affect the rights of the company may not necessarily invalidate it.
Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it…
In the first appeal reasons at [27]–[30], Bryant CJ and Murphy J said:
27.Before answering that first central question with respect to the “alter ego” argument, it is first necessary to address what is embraced by that term.
28.As has been seen, it is contended on behalf of the wife that its relevant origins can be seen in the well-known passage of Gibbs J’s judgment in Ascot Investments. However, his Honour does not, it should be noted, use the expression “alter ego”; his Honour refers instead to “companies that are mere puppets of a party to the marriage”. In doing so, his Honour draws a distinction between the case before that court and a case where “… [it] might have been different if it had been proved that the directors had refused to register a transfer [of shares] for the sole reason that the husband had asked them not to do so”.
29.By reason of their individual memoranda, articles and shareholdings corporations can embrace widely differing measures of control by an individual shareholder. As senior counsel for the second to sixth respondents pointed out by reference to a statement of Lord Reid, if the separate legal personality of a corporation is to be recognised and respected, the expression “alter ego” is not without considerable ambiguity.
30.The expression as used in argument by senior counsel for the wife is synonymous with “lifting the corporate veil” – that is, ignoring the separate legal personality of the corporation. Senior counsel for the second to sixth respondents contends that the doctrine (assuming that it can be described properly as “alter ego”) does not devolve from the indicia of control by a shareholder; corporations where considerable control is vested in a particular shareholder do not per se forego their separate personality. Rather, the concept refers to the company having no existence and direction separate from that of the relevant shareholder; hence the use by Gibbs J of the “mere puppet” metaphor.
(Emphasis in original) (Footnotes omitted)
It appears as though the wife, both before the primary judge and in this appeal, focussed on the capacity of the husband to control N Pty Ltd as demonstrating that the company and the controller should be treated as one and the same. However that argument must be rejected, for, as the passage at [30] of the first appeal reasons cited above establishes, something more than mere control is required (see also S & M & Ors [2003] FamCA 1387 at [98]; Yates and Yates (No. 1) (1982) FLC 91-227 at 77,232).
In oral argument before us, counsel for the wife advanced a somewhat different complaint to that raised in her Summary of Argument, in relation to the test propounded by the primary judge in the first sentence of [116]. What they orally asserted was that his Honour there introduced two elements to the test, namely a first limb being the establishment of a “mere puppet” and a second limb being “that the company does not truly exist as a separate legal entity”.
That argument must also be rejected. Firstly, we are not satisfied that his Honour’s use of the word “and” in the first sentence of [116] to link those two concepts was intended to disjoin them, but rather that there was a slight infelicity of language, in that either his Honour meant to say “and therefore”, or the use of “such” or “in” might have been a better choice of word than “and”.
Secondly, his Honour’s subsequent application of the test confirms that he did not in fact apply a two limb test (see particularly at [135]), but rather he used the concepts of “mere puppet” and “does not truly exist as a separate legal entity” interchangeably, and as referring to the same thing.
We therefore reject that the primary judge erred in the way contended in Ground 1(a).
Turning then to the assertion that an inference adverse to the husband and other respondents should have been drawn from their failure to lead certain evidence, it is convenient to commence by reviewing the primary judge’s dealing with this issue. Particularly at [131] his Honour said as follows:
The respondents submit that [118](j) points away from [N Pty Ltd] being the alter-ego of the husband and that it is material that other persons were involved in the decisions of the company. The more fundamental point, however, is that the wife has not established that [Mr D Hunt] simply did everything that his father wanted him to do, although neither of them gave any example of a circumstance where the husband wanted the company to do something and [Mr D Hunt] resisted it.
Mr D Hunt, one of the husband’s sons, had, with his father, been a director of N Pty Ltd for some years prior to September 2015. He was a witness in the proceedings, but gave no admissible evidence as to directors’ decision-making in N Pty Ltd.
The wife contends that there was a switching evidential onus which passed from her to the husband and the other respondents, in relation to the “mere puppet” argument, in part informed by “the principle that a judge must evaluate evidence having regard to the capacity of a party to adduce it” (wife’s Summary of Argument filed 30 April 2020, paragraph 20) (footnote omitted).
At paragraphs 21–23 of the wife’s Summary of Argument, counsel for the wife further contended as follows:
21. For the [wife] to achieve that which his Honour posits would be impossible. She clearly was in no position to give evidence directly as to, for example, discussions between the [husband] and [Mr D Hunt]. More to the point, the failure to adduce evidence from the [husband] and [Mr D Hunt] on the topic when the Wife had adduced enough to properly agitate the issue, should have seen him draw, or at least give consideration to, a Ferrcom inference.
22. At no stage during the course of the proceedings did the [husband] adduce evidence from either [Mr J Hunt] and/or [Mr EE Hunt]. The same inference ought to have been drawn by the learned trial Judge as submitted in the preceding paragraph.
23. These matters are of significance in relation to the trial Judge’s resolution of fact as to whether [N Pty Ltd] was prior to the controversial transfers the puppet or alter ego of the [husband]. The fundamental point that his Honour identified at Reasons [131] against the [wife] related to her contended failure to meet a perceived obligation to adduce evidence that on no rational basis could it be expected that she had the capacity to give. She had however, raised enough of a case on the issue that the evidentiary onus should have been recognised as having shifted to the [husband and the other respondents] who failed entirely to address the issue.
(Emphasis in original) (Footnote omitted)
A so-called Ferrcom inference (that term being derived from the case of Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418–419 (“Ferrcom”)) may be drawn adverse to a party who fails to lead evidence-in-chief from a witness from whom it would ordinarily be expected to lead such evidence. It is an extension of the principle established by Jones v Dunkel (1959) 101 CLR 298 (“Jones v Dunkel”) that an adverse inference may be drawn against a party if they fail to call a witness who would ordinarily be expected to be called by them.
It is well established that the inference cannot be used to remedy a complete evidentiary void. Thus in Jones v Dunkel itself, Menzies J at 311 said:
… [T]he fact that Mr. Hegedus has not been called does not absolve the plaintiff from adducing some evidence of the facts. The onus is upon her to prove the facts but very slight evidence pointing to their existence may be treated as sufficient to justify you in holding that they do exist.
Later in Cook’s Construction Pty Ltd v Brown and Anor (2004) 49 ACSR 62 Young CJ said at [34]:
… Indeed, not only does counsel say that her Honour did not properly apply Jones & Dunkel, he says that she should have applied it in the appellant’s favour. He said as the respondents did not give any evidence other than the formal evidence to show the insolvency, the payments and the state of the company accounts, and the respondents did not call any witnesses from DML or from the Gladstone office of the appellant, the judge should have drawn the appropriate inference in the appellant’s favour. This submission overlooks, with respect, the fact that the onus was on the appellant to prove and there was no obligation on the respondents at all to go into evidence to boost the appellant’s case in any way whatsoever. There was no foundation for what I might call the reverse Jones & Dunkel submission.
Likewise, here the wife bore the onus and was obliged to call some evidence, even slight, to support the proposition for which she contends, that is that the directors did everything the husband told them to do. The fact that the husband did not call evidence does not alleviate her from discharging the onus so far as she could.
This applies with equal force in relation to the Ferrcom inference for which the wife contends.
In any event, a Ferrcom inference does not have to be drawn. Whether it is drawn remains a matter exquisitely for the trial judge’s discretion.
Plainly enough, the primary judge did not draw any inference adverse to the respondents from either the failure to call witnesses, or the failure to lead evidence-in-chief from such witnesses they called, for instance, as to the history of directors’ decision- making in N Pty Ltd. Therefore, practically, the primary judge declined to draw the inferences the wife invited his Honour to. Absent some error of the kind identified in House v The King, that exercise of the discretion is unimpeachable. In any event, even if it were established, any such error would not, as this ground asserts, compel the inference to be drawn.
We are not satisfied that the evidential burden ever shifted from the wife to the other parties in relation to the “mere puppet” argument. Further, we are unpersuaded that any error is established by the failure of the primary judge to draw a Ferrcom inference.
To the extent that, as argued by the wife, it was sought to expand the ambit of this ground to assert a lack of exposure of reasoning by the primary judge, as to why the inference was not drawn, not only does the ground not properly raise such complaint, but in any event, we are satisfied that, reading the reasons as a whole, there is sufficient exposure of reasoning so as ascertain the basis of the primary judge’s decision (Bennett and Bennett (1991) FLC 92-191 at 78,266).
Ground 1(b) is not established.
The final particular of Ground 1 relates to an alleged inappropriate application of s 254T of the Corporations Act 2001 (Cth) (“Corporations Act”).
At [86]–[90], his Honour said as follows:
86. Counsel for the wife relied upon statements made by Strauss J in Ashton & Ashton (1986) FLC 91-777 about the position of a trustee of a discretionary trust who has real de facto legal and beneficial ownership of the assets in the trust. Counsel for the wife submits that Clause 10 puts the non-A Class shareholders into a similar position as a beneficiary of a discretionary trust who have no interest or entitlement other than the due administration of the trust (Kennon v Spry (2008) 238 CLR 366).
87. The respondents argue that statements made about the controller of a discretionary trust do not translate to the controller of a company because of the provisions of the [Corporations Act].
88. For example, s 254T of the Corporations Act provides that a company “must not pay a dividend unless … the payment of the dividend is fair and reasonable to the company’s shareholders as a whole”. Section 232 of the Corporations Act provides relief to minority shareholders if a company acts in a way which is “contrary to the interests of the members as a whole” or “oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members…”
89. The operations of those sections have effect in conjunction with the constitution of an individual company. Clauses 10 and 11 of [N Pty Ltd’s] Constitution give non-A Class shareholders very different rights.
90. Clause 10, coupled with the Corporations Act, gives non-A Class shareholders no interest in or entitlement to dividend distributions unless the directors of the company resolve to make those distributions to that member, subject to the provision that dividend distribution needs to be fair and reasonable. It was not suggested that the history of the past distributions of dividends in [N Pty Ltd] were not fair and reasonable. That history of dividend distribution demonstrates that individual members were not entitled to expect pari passu distribution of dividends.
As can be seen, the context of the reference to s 254T of the Corporations Act was an analysis of whether or not the non A class shareholders in N Pty Ltd were analogous to beneficiaries under a discretionary trust. The reference to s 254T of the Corporations Act was made in the course of discussing a point of difference, ie, there were statutory provisions in the Corporations Act which gave the non A class shareholders some protections and rights, which did not apply to beneficiaries of a discretionary trust. As such his Honour’s reference to s 254T of the Corporations Act (and indeed s 232) was only a passing observation in the process of reasoning to the ultimate conclusion, namely that N Pty Ltd was not a mere puppet of the husband. That section was only relevant to the extent it imposed a possible legal constraint upon the unequal distribution of dividends, which went well beyond a simple right of beneficiaries to insist upon due administration of a trust.
There was no error committed by the primary judge’s reference to, and conclusions in relation to the operation of s 254T of the Corporations Act. This aspect of the ground therefore is not established.
Turning then to Ground 1 overall, it was well open to the primary judge to find that the relevant companies were not the alter ego of the husband. Such a conclusion is an issue of fact (see first appeal reasons at [198] per May J). There was facts upon which such a finding could be soundly based. The primary judge’s conclusion in this respect was not “glaringly improbable” or “contrary to incontrovertible evidence” (Fox v Percy (2003) 214 CLR 118 at [29]; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [99]).
Therefore, the first ground of appeal fails.
Ground 2
The second ground of appeal asserts as follows:
That the learned trial Judge erred in failing to accept the evidence of [Ms AAA] in determining the value of the Husband’s interest in [N Pty Ltd] and erred in concluding that a proper application of the [Corporations Act] would operate to preclude the validity of fundamental assumptions relevant to her valuation and in any event erred in failing to consider and make findings as to the likelihood of any Respondent seeking relief pursuant to the [Corporations Act] in the event that the Husband exercised his powers as posited by [Ms AAA].
It will be seen that there are three distinct aspects to this complaint. The first asserts an error in relation to the effect of unspecified provisions of the Corporations Act; the second relates to an alleged failure to make findings as to the likelihood of the other respondents ever seeking relief pursuant to those provisions, albeit later identified in the wife’s Summary of Argument; and the third then contends, on the basis of those two errors, that there was an error in failing to accept the evidence of the wife’s valuer.
To understand this ground, a little more background is necessary. Ms AAA, for the wife, opined that the non A class shares in N Pty Ltd were of no value, because of the absence of any right to dividends, and because if N Pty Ltd were wound up, prior to then, any surplus assets could be distributed to A class shareholders, albeit via their non A class shares, and thus thwart the rights under N Pty Ltd’s constitution for non A class shareholders to have surplus assets distributed pari passu. The primary judge declined to accept her evidence that was based upon that reasoning.
As to the dividends issue generally, at [164(g)] his Honour said:
There are legal responsibilities and duties of directors and majority shareholders pursuant to [Corporations Act], including sections 180, 181 and 254T that may limit the “A” class shareholders and directors from accessing the retained profits of [N Pty Ltd] for themselves, on an unfettered basis, as is the basis of the conclusions in [Ms AAA] Reports;
I accept that proposition, however, it may be far more difficult for minority shareholders to challenge annual dividend distributions when the company anticipates continuing to trade in the short to medium term given the provisions of Clause 10 of [N Pty Ltd] Constitution.
His Honour then proceeded at [165] to address the prospect of the assets of N Pty Ltd being stripped by distribution of dividends prior to liquidation, as follows:
I find that it is not a tenable position to accept an expert opinion that asserts that the non-A Class shares do not have any value. The strongest reason for that is that I accept the proposition that to adopt a strategy of liquidating the assets of the company and distributing them by way of dividends to A Class shareholders prior to a winding up could be the subject of a successful challenge under the Corporations Act by the non-A Class shareholders. Consequently, I am not able to accept the valuation of the husband’s shares as asserted by [Ms AAA].
In support of this ground of appeal, the wife says that the operation of s 254W(2) of the Corporations Act ought also to have been considered by the primary judge, in addition to s 254T, which was seemingly the provision his Honour had in mind when referring to the Corporations Act at [165].
As argued, the two relevant provisions of the Corporations Act which the wife relied upon were s 254T and s 254W(2). They provide as follows:
254T Circumstances in which a dividend may be paid
(1)A company must not pay a dividend unless:
(a)the company's assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
(b)the payment of the dividend is fair and reasonable to the company's shareholders as a whole; and
(c)the payment of the dividend does not materially prejudice the company's ability to pay its creditors.
Note 1: As an example, the payment of a dividend would materially prejudice the company's ability to pay its creditors if the company would become insolvent as a result of the payment.
Note 2: For a director's duty to prevent insolvent trading on payment of dividends, see section 588G.
(2)Assets and liabilities are to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time (even if the standard does not otherwise apply to the financial year of some or all of the companies concerned).
…
254W Dividend rights
Shares in public companies
(1) …
…
Shares in proprietary companies (replaceable rule–see section 135)
(2)Subject to the terms on which shares in a proprietary company are on issue, the directors may pay dividends as they see fit.
…
It is plainly correct to say that the primary judge made no reference to s 254W(2) of the Corporations Act in the reasons for judgment, however before us, counsel for the wife conceded it was not raised before the primary judge in answer to the respondents’ submissions on s 254T. However counsel contended that it could now be raised for the first time on appeal, as it was not a matter which could have been addressed by evidence led by the respondents (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; Water Board v Moustakas (1988) 180 CLR 491 at 497).
It is not necessary to determine whether, in the context of this ground of appeal, that proposition is correct. That is because the interplay between s 254T and s 254W of the Corporations Act in a particular case may be a complex issue, and in any event the primary judge only adverted to the potential for a legal challenge, rather than concluding that success was inevitable.
Of course oppression is not necessarily restricted to breaches of specific behavioural norms enacted under the Corporations Act such as s 254T or s 254W. Indeed, s 232 contemplates broad notions of conduct that may comprise oppression, such as conduct “contrary to the interests of members as a whole” (s 232(d) of the Corporations Act) or “oppressive to, unfairly prejudicial to, or unfairly discriminatory against” members (s 232(e)). There is no reason to think that s 232 would be unavailable to non A class shareholders to impugn any strategy of wholly stripping the company of its assets by dividend distribution to A class shareholders (via their non A class shares) prior to N Pty Ltd being wound up.
We are not persuaded that the primary judge made an error by failing to refer to, or consider, s 254W(2) of the Corporations Act. It follows that we are not persuaded that the primary judge erred by concluding that the Corporations Act undermined the validity of a fundamental assumption underpinning the opinion of the wife’s valuer.
The second aspect of complaint is that the primary judge failed to make any conclusion as to the likelihood of any respondent in fact seeking to invoke their rights under the Corporations Act. However, again, this is not an argument that was advanced at trial. It is now said that there should be a Jones v Dunkel or Ferrcom inference raised against the respondents, given the failure of any of the other respondents to call witnesses or to give evidence-in-chief on this issue, however again it was not a contention ventilated before the primary judge, nor was it even remotely suggested in the wife’s Points of Claim, so as to put the respondents on any form of notice in relation to their asserted unwillingness to litigate. Further, not all non A class shareholders were parties to the primary proceedings.
We are not satisfied that the circumstances of this case saw an opportunity for such inferences to be drawn. In any event, we accept the submission of counsel for the other respondents that the prospects of whether proceedings would be brought was not relevant to an assessment of the legitimacy of the expert’s opinion (other respondents’ Summary of Argument filed 13 May 2020, paragraph 55).
Finally, we repeat our earlier observations referable to the first ground of appeal as to the primary judge’s decision whether or not to draw an adverse inference being discretionary in nature, and even if successfully challenged, that would not necessarily result in the inference being drawn.
Turning to the ground in totality, absent any specific error of the kind contended for by the wife, there is no reason to conclude that the primary judge’s preference for the evidence of the valuer called by the husband was otherwise erroneous.
The second ground of appeal fails.
Ground 4
The fourth ground of appeal asserts as follows:
That the learned trial Judge erred in the exercise of his discretion in finding that the Wife’s contributions should be assessed at 10%.
As we have already indicated, the primary judge reviewed the parties’ initial contributions, financial and non-financial contributions during the relationship, and post separation contributions, before concluding that a 90/10 division was appropriate.
Paragraph 49 of the wife’s Summary of Argument simply asserts:
The primary judge’s conclusion as to assessment of contributions, on the facts determined by him was manifestly unjust. Implicitly his Honour failed to bring to account the same limitations to the extent to of the [husband’s] interest in [N Pty Ltd] at the commencement of the relationship as he determined were to be recognised at the hearing.
Beyond this bald assertion, there was little, if any, elaboration in either the written or oral submissions of the wife as to how the judge erred. Particularly in relation to the “implicit” failure, such elaboration was required.
Whilst we may have selected a different percentage entitlement to that determined by the primary judge, House v The King mandates that we cannot merely substitute our opinion for that of the primary judge, unless it is unreasonable, plainly unjust, or in the words of Kirby J in CDJ & VAJ (1998) 197 CLR 172 at 231 “plainly wrong”. We are not so persuaded. This ground therefore fails.
Ground 5
The fifth ground of appeal asserts as follows:
That the learned trial Judge erred in the exercise of his discretion in finding that an appropriate adjustment in favour of the Wife for relevant section 75(2) factors was 10% and in particular failed to take into account the full range of benefits the Husband receives from [N Pty Ltd], [T Pty Ltd] and [H Pty Ltd] and erred on the facts in determining that, having regard to both the valuation methodology and the facts, it would constitute double counting to have regard to the future income stream from [N Pty Ltd] having included the value of the shares in determining the property of the parties.
The first of the two particularised complaints raised by this ground, namely, that there was a failure to have regard to the “full range” of entitlements or benefits which the husband receives from the corporate structure surrounding the business, was but faintly pressed before us. It may be shortly dealt with. Leaving aside the extremely vague term “full range” which the ground deploys, it nonetheless was completely unclear on the evidence what “benefits” the then 84 year old husband may in the future obtain from the three nominated companies, it being the future to which s 75(2) of the Act, in this context, necessarily enjoins consideration. There is no merit to this aspect of the ground.
The second complaint is that the primary judge erred in concluding that it would be “double counting” to have regard to future income from the husband’s shareholding, given that the value of that shareholding had already been taken into account.
Relevant to this challenge are [253]–[254] in which his Honour said:
253. The husband’s income, excluding dividend payments, is in the sum of $4,631 per week which he receives from his salary and director’s fees, as well as rental income he receives from assets held by his superannuation fund.
254. The history of the husband’s receipt of dividend distributions has already been discussed. His sons now control the board upon which he still sits. The full value of [N Pty Ltd], including the income stream from profits it might have provided to the husband if not for his disposal of the A Class shares has been placed on the balance sheet (items 3 and 4). That value acknowledges the control the husband had over [N Pty Ltd] prior to his disposal of the shares in September 2015. It would be double counting to take into account the potential future income stream the husband has available to him from the very profitable activities of [N Pty Ltd] and I do not have regard to any potential dividend stream the husband might have from his shares in [N Pty Ltd] as a s 79(4)(d)-(g) consideration.
At its heart, the wife’s argument advanced under this ground appears to be that, having determined the value of the husband’s interests in N Pty Ltd and associated companies, his Honour ought to have taken into account the potential future income stream which the husband stood to derive from those shareholdings. Plainly his Honour expressly did not do so.
The wife says that it was permissible to take into account that income stream, given that capitalisation of future earnings was not the basis for the valuations accepted by the primary judge, which rather were undertaken on a net asset backing basis.
However, correctly, counsel for the husband identified that the valuation of the husband’s shareholding that was preferred by the primary judge “included a 30% control premium which accounted for the [husband’s] ability to direct income” (husband’s Summary of Argument filed 13 May 2020, paragraph 39).
Therefore, having factored in the ability of the husband to control the direction of income into the value of his shares, to then take into account that income stream would have involved a species of double counting, and the primary judge was correct to so conclude. No error is thereby established.
We are not otherwise satisfied that the primary judge’s conclusion in relation to s 75(2) considerations is erroneous.
The fifth ground of appeal fails.
Ground 6
The sixth ground of appeal asserts as follows:
That the learned trial Judge erred in failing to find that the Wife’s personal debts, being items 26 to 32 on the Balance Sheet, should be included on the Balance Sheet for the purposes of the matrimonial pool of assets.
The particular items were addressed by the primary judge at [230]–[234], as follows:
230.Items 26 to 29 are loans that the wife had entered into with family and friends. The wife gave evidence at paragraph 173 of her trial affidavit that these loans were entered into to meet her living expenses. However, at item 50 of her Financial Statement filed 7 August 2018, she gives evidence in respect of items 26 to 29 at note K50 that “The amounts borrowed were applied to meet my legal fees”. The loans for legal fees should not be placed upon the balance sheet and due to the inconsistency in the wife’s evidence, I am unable to place these items on the balance sheet.
231.The wife also asserts that she owes a [Dr EEE] $1,650 (item 30 – although I am unable to locate any evidence about this); [Dr CC] $5,000 (item 31) and that she is in arrears in respect of council and water rates in the sum of $4,523 (item 32). In respect of those debts, senior counsel for the husband argued that they should be excluded for the same reason that the wife’s credit card debts should not be placed upon the balance sheet, namely, and absent any evidence to the contrary, those loans were entered into during a period that the wife was receiving spousal maintenance from the husband.
232.The wife was not receiving spousal maintenance from the husband from between July 2015 and March 2017, a period of approximately 20 months. It doesn’t appear that the debts at items 30 to 32 were incurred at that time.
233.Counsel for the wife argued that these items should be placed on the balance sheet in circumstances where the husband’s loan accounts with [N Pty Ltd] and [H Pty Ltd] (items 16 and 17) have been included and are made up of his own living expenses, tax obligations and spousal maintenance payments. However, apart from the issue determined in the wife’s favour in respect of item 16, these amounts are agreed.
234.I have insufficient evidence, absent agreement, to place these debts of the wife at items 30 to 32 on the balance sheet, in circumstances where these debts may have been incurred in a period where the wife was receiving spousal maintenance.
The husband identifies that there was inconsistent evidence given by the wife in relation to items 26 to 29, and particularly whether those items were devoted to living expenses or legal fees. We accept that is correct. As to the other items, it was cogently argued by the husband that there was inadequate proof of the currency and nature of those liabilities in the evidence before the primary judge. In any event, at trial, counsel for the wife encouraged the primary judge to “take a more global approach” in relation to such liabilities (Transcript 21 November 2019, p.252 lines 5–21). Parties are generally bound by the way they conduct their cases at trial (Metwally v University of Wollongong (1985) 60 ALR 68).
We are not satisfied that the sixth ground of appeal is established.
Outcome
No ground of appeal is established. It therefore follows that the appeal fails and must be dismissed.
Notice of Contention
The husband did not press his Notice of Contention filed 4 February 2020. It will therefore be dismissed.
Costs
In the event that the appeal was dismissed, all respondents sought orders for their costs.
The wife has been wholly unsuccessful, and we are satisfied that she has the capacity to meet an order for costs against the respondents. Weighing the factors listed in s 117(2A) of the Act persuades us that this is an appropriate case for such an order.
No dispute was made in relation to the quantification of the husband’s costs. There will therefore be an order for costs in the sums claimed by him.
However the schedule of costs of the other respondents (claiming approximately $67,000) was conceded not to have been drawn on a party/party basis, but rather scale fees were applied to all work performed. The only available course therefore is to make an order for the wife to pay the costs of the other respondents as assessed, in default of agreement.
I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace & Tree JJ) delivered on 9 October 2020.
Associate:
Date: 9 October 2020
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