B & B

[2006] FamCA 533

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA
AT BRISBANE No. NA5 of 2006

(No. BRM 5642 of 2003)

BETWEEN:
B

Appellant Husband

AND:
B

Respondent Wife

BEFORE THE HONOURABLE JUSTICE WARNICK

REASONS FOR JUDGMENT

Dates of Hearing: 8 May 2006

Date of Judgment: 22 June 2006

Appearances: The Appellant appeared in person
Mr Cremin of Counsel appeared on behalf of the Respondent Wife

B and B NA5 of 2006 (BRM5642 of 2003)

Heard: 8 May 2006

Delivered: 22 June 2006

APPEAL FROM FEDERAL MAGISTRATES COURT – PROPERTY SETTLEMENT – The parties married in 1975 and separated in 2002 – In 2003, the parties came to an agreement that the wife would transfer her interest in the matrimonial home to the husband, whereupon the husband would refinance the mortgage debt, increasing it to obtain an amount to pay to the wife. The wife made the transfer, and the husband refinanced the debt, however the agreed funds were not paid to the wife – At trial, the wife argued that the difference between the value of the mortgage debt at the date of the trial and the value of the debt at the date of separation should be “added-back” into the asset pool against the husband – The statement of financial circumstances filed by the husband on the first day of the trial indicated the debt at $208,000 – The husband, however, explained to the Federal Magistrate during the trial that the figure of $208,000 only applied if the bank had to foreclose on the debt – The Federal Magistrate, however, used the figure of $208,000 to determine the “add-back” value – The Federal Magistrate failed to explan why she rejected the husband’s explanation, particularly where no other party asserted that the figure of $208,000 was correct – It was not open to the Federal Magistrate to reject the husband’s oral evidence where it was not inherently improbably or unacceptable.

COURTS AND JUDGES – BIAS – The husband alleged that the Federal Magistrate showed bias against the husband as he was treated differently to the wife – According to the husband, he was spoken to by the Federal Magistrate in a manner which he described as sarcastic, angry, domineering and unpleasant – While the Federal Magistrate was clearly annoyed with and, on occasions, dealt abruptly with the husband due to his lack of preparation for trial, an objective observer would not reasonably apprehend bias on the part of the Federal Magistrate – The husband was given ample opportunity to present his case and ultimately did take advantage of the opportunities he was given to say what he wished.

Browne v Dunn (1893) 6 R 67
Gallea v Gallea (1990) NSWLR 263
House v The King (1936) 55 CLR 499
Johnson v Johnson (No 3) (2000) FLC 93-041
Jones v National Coal Board [1957] 2 All ER 155
Levinge v Director of Custodial Services (1987) 9 NSWLR 546
Yuill v Yuill [1945] 1 All ER 183

Appeal allowed. Orders 1, 2 and 3 of the Federal Magistrates Court set aside and substitute orders made.

Introduction

This is another appeal which succeeds because a Federal Magistrate has stumbled in a case shabbily laid out by one or more litigants, and because of the exacting standards applied to the judicial function.
The path along which Federal Magistrates must pick their way in proceedings under the Family Law Act seems in any event often in treacherous shadow as a consequence of attempts to meet that Court’s legislatively declared objectives of streamline and informality. The existence of these goals seems to (understandably) pressure the court to finalisation, even though the state of preparation and presentation of cases falls well short of the optimum.
These remarks are not criticism of either the legislative intent or the efforts of the Federal Magistrates. They are recognition of the unwieldy burden of two legitimate but disparate ends – the delivery of careful, error free, well reasoned and well explained justice, in cheap, quick and informal fashion.
Never is the irony of this combination so stark as when, as here, the party mainly responsible for the confusion resists all suggestions of any responsibility, yet is the beneficiary of the stringent requirements for the discharge of the judicial role. Such is the impartiality, even the magnanimity, of the law.
However, such parties ought also appreciate that, while judicial error may found a successful appeal even though the mistake sprung from a muddle created by the ultimate appellant, that party’s conduct at trial may, in many other instances, mean that no error is found in the particular circumstances arising from that behaviour. This is the justice, even the commonsense, of the law.
The parties married in early 1975 but separated in mid-2002, after more than 27 years cohabitation and the births of their four children. Subsequent to their separation, the wife instituted proceedings for alteration of property interests pursuant to section 79 of the Family Law Act (Cth), 1975. Those proceedings were determined by orders made by Rimmer FM on 15 December 2005. Against some of those orders the husband appeals. There are four grounds of appeal. Two relate to the treatment by the Federal Magistrate of fairly minor issues, the first of these relating to credit card debt and the other, to omission from the pool of assets for division a sum received by the wife for the sale of shares after separation.
One of the remaining grounds alleges bias by the Federal Magistrate against the husband, a ground which, however, was more a complaint that the Federal Magistrate’s conduct of the proceedings produced unfairness to the husband in a number of ways. The Federal Magistrate allegedly cross-examined the husband, intimidated him and prevented him from giving all of the responses and evidence which he wished to put before her.
The ground of appeal which I find clearly meritorious relates to the quantification by the Federal Magistrate of a current mortgage debt, the inclusion of that debt in the asset pool and the inclusion in the asset pool of the difference between the current mortgage debt as determined and the figure at which that debt stood at or about the time of separation, as an “add-back” debited against the husband. In short, I consider that the evidence did not support the inclusion of either figure, in the amounts assessed by the learned Magistrate.
Notwithstanding my conclusion in respect of the ground about the quantification of the current mortgage debt, I think it also necessary to determine the ground raising procedural fairness, for if there is merit in it, I think remission of the property settlement proceedings is unavoidable.
I will also deal with the minor grounds, partly because the subject-matter of them would in any event need to be addressed in any re-exercise of discretion.
I will return to the grounds of appeal after a short summary of the reasons of the Federal Magistrate, and reference to the principles applicable to the appeal, and before considering the question of remission or re-exercise of discretion.

Summary of the Federal Magistrate’s reasons for judgment

Under the heading “Background”, her Honour recorded that cohabitation had commenced upon the parties’ marriage in January 1975. The four children of the marriage were born respectively in 1981, 1982, 1988 and 1990. The oldest child, “A”, suffers from Autism Spectrum Disorder and Kalmans Syndrome from which the third child, “D”, also suffers. A, who was 24 years of age at trial, had lived with the father since the separation of the parties. D had lived with each of his parents at various times since separation and each contended that he would live with them in the future. The second child, “M”, was independent of her parents. “E”, the youngest child, 15 years of age at trial and in high school, was living with the father at trial and had been for some time beforehand.
In the first paragraph of her reasons, Rimmer FM had said:
“1. …The parties both appear in person, and as a result of the preparation of their cases and the manner in which the trial was conducted, in many respects, the evidence before me was lacking and the parties often descended into personal argument rather than proper examination of the essential facts. This made the determination of this matter extremely difficult.”
Her Honour identified the principal issues raised in the proceedings before her as follows:
“6. …
(a)Whether the husband gave full and frank disclosure;
(b)If he did not do so, the consequences of his failure to fully disclose whether the husband has wasted the parties' assets by taking further substantial borrowings, failing to explain what has happened with those borrowings, and not paying the mortgage secured on the home at all since 2003;
(c)If the Court finds that he did and has failed to make adequate disclosure of this to the wife in the Court, the consequences of this in terms of calculation of the net asset pool available for division at the trial and assessment of the parties' respective contributions pursuant to s.79(4);
(d)What contributions were made by the parties during the marriage and since separation, particularly taking into account the question of the husband's inheritance from his father late in their marriage, and the significant dispute about whether a negative contribution had been made by the husband both through his waste of assets and application of the Canon (sic) principle in favour of the wife.
(e)What adjustment if any should be made pursuant to s.75(2), particularly given the ongoing needs of two of the adult children of the parties who have significant disabilities and need support all of their lives, and the need to provide for the youngest child, [E], who was born in 1990 and is now 15 years of age;
(f)Finally, what party is likely to provide for the care of these children, given the conflicting evidence of each of them about this.”
The trial Magistrate further said:
“13. …There were significant difficulties in relation to obtaining proper disclosure on the part of the wife from the husband. The husband did not comply with directions made by the Court to provide his affidavit of evidence-in-chief, nor his updated financial statement by the date it was due on 26 September 2005. This, given what I will outline further in these reasons, must be a significant consideration in relation to the findings that I will make.”
Shortly after, the Federal Magistrate turned to “The law”, referring herself to the approach to the determination of an application under section 79, as established by several well known cases. She then turned to the cases dealing with “The duty to make full and frank disclosure of one’s financial position.…”. During the course of this consideration the learned Magistrate referred to K & K [2002] FamCA 1150 (unreported) at paragraph 51, where the Full court said:
“Whether the non disclosure is wilful or accidental, is as a result of misfeasance or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out, it might readily conclude that the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might otherwise be seen as disadvantaged by the lack of complete candour. This is the course the trial judge adopted. It was a course clearly open to him, and one that does not merit appellant interference.”
And the Federal Magistrate then said:
“22. There is in this matter a significant issue as to the husband's failure to disclose. It is relevant that I set out at this point in the judgment the background facts in relation to how this arises.…”
Her Honour then recorded findings that the parties had (around early 2003) come to an agreement that the wife would transfer her interest in the matrimonial home to the husband. He would then refinance the mortgage debt, increasing it to obtain $45,000 to pay to the wife. The wife did transfer her interest in the home to the husband and he did borrow further funds after discharging the existing debt, but he did not pay those funds to the wife.
Her Honour then set out that, to re-pay the loan existing at separation, plus costs of refinancing and to pay out MasterCard debts of some $10,000, the husband required $123,000. With the $45,000 to pay out the wife, this amounted to $168,000. He obtained a loan which enabled him to draw up to $180,000. Her Honour said, however, that:
“27. What has happened in relation to this matter is that it is clear from the husband's evidence given to the Court on the day of the hearing by way of him filing by leave an updated financial statement, that the amount which is now outstanding he says is $208,000.
28. Therefore the indebtedness of the parties, just following their separation in about early 2003 appears from the bank records to have been about $123,000. It has now increased to $208,000, an increase of $85,000, in a period of some two years.
29. The husband also revealed other matters to the [bank] when he filled in his application for a loan. He revealed to the bank that he had $38,000 worth of shares. He does not provide any proper evidence to the wife or the Court of what has been done with those shares. And he does not provide any proper evidence to the wife or to the Court as to bank records which would establish very clearly how and when the increase in the indebtedness from approximately $123,000 up to $208,000 has in fact occurred.”
Touching further on the issues of nondisclosure, her Honour said:
“30. The loan as I said is in the husband's sole name. He is the only person legally entitled to obtain those documents from the [bank]. It has always been in his power to obtain those records, and in fact he gave no explanation as to why he wouldn't have those records in any event, given that he is the person to whom statements would be sent by the bank at various intervals.
31.    There are a number of important considerations which arise in determining this matter. The history of this matter is set out very clearly from the orders which were made in relation to disclosure. After the wife had instituted these proceedings, the matter came before the Court on 8 November 2004 for a directions hearing. A detailed Order was made on that day by the Court requiring both of the parties to disclose to each other a list of specified documents in annexure A to that Order, at least 21 days prior to the date which was scheduled for their conciliation conference, and that was on 17 December 2005 (sic). There is no doubt that the husband failed to provide all of those relevant documents to the wife.
32.    The matter then came before the Court again on 7 February 2004 (sic), and on that day the parties were both ordered to provide those same relevant documents as listed in the order to each other within 21 days. It is also clear that the husband again failed to do so.
33.    On 14 March 2005, the Court carefully constructed detailed orders and made detailed orders requiring the husband to provide very precise documents by way of disclosure and discovery to the wife within 14 days of the date of those orders. The husband again came before the Court on 5 May 2005 and revealed that he had failed to comply with those Orders.
34.    On 5 May 2005, the Court then granted the husband a further extension of time in which to provide the above mentioned disclosure to the wife, and that date was until 19 May 2005. It is clear that from the evidence at the trial that again and up until the hearing on 24 October 2005 the husband had without reasonable grounds refused to comply with all of the Orders made for discovery and disclosure.
…
36.    As was pointed out in [K & K], to which I have referred above, the duty to disclose in Family Law property proceedings is absolute. Where the Court is satisfied that the whole truth has not come out because of a party's failure to provide those documents which they have available and can readily provide to the Court and the other party to put to rest any question in respect of those issues, and that party does not disclose those documents, then the Court should not be shy of making findings in favour of the innocent party, because to do otherwise would provide a charter for a party to, by their neglect of their absolute duty to disclose, perpetrate a fraud on the other party and the Court.
37.    In this matter it is clear, as I have said, if the husband wished to establish to the Court that he had used those funds in a particular way and for particular reasons, then all he had to do was comply with the Court Orders. He had to provide disclosure of all the relevant bank statements and documents he had in his possession, outlining how he had expended the moneys.
38.    If he wished to avail himself of the benefit of the Court's findings that those moneys had been reasonably expended by him on living expenses, such as as referred to in more recent decisions of the Full Court, including decisions such as Pearce & Pearce, Chaun & Hopkins & Zylisky (sic), then all he had to do was to provide all those detailed documents to the wife and to the Court and provide as he was required to do by 26 September 2005 an affidavit setting out his evidence-in-chief about those matters.
39.    There was nothing standing in the way of the husband providing that evidence to the other side and the Court. His failure to do so can lead to only one inference, and that is that he had something to hide by so doing. And that by revealing the documentary source documents he would reveal the fact that the case that he tried to mount finally in the witness box and by submissions was not in fact that truth.
40.    I am satisfied that given the husband's total lack of disclosure, the only available finding to be made is that he has used the amounts obtained by those additional borrowings for his own use in some unspecified manner, and he has by so doing depleted the asset pool substantially.”
Her Honour then moved to determine the assets, liabilities and financial resources of the parties at the date of hearing. She listed assets totalling $334,300, by far the greatest asset being the former matrimonial home, at $230,000. The second largest “asset” was the “addback of the amount wasted by the husband extending the debt on the mortgage on the matrimonial home” at $85,000. Liabilities were listed by her Honour at $211,300 which comprised the mortgage on the former matrimonial home at $208,000 and overdue rates.
The learned Magistrate deduced net assets to be $123,000.
FM Rimmer then moved to explain her conclusions on the issue of “add-backs”. She firstly addressed the post-separation increase in the mortgage debt, ie. the inclusion of the debt at $208,000 rather than at some other figure.
She referred to documents subpoenaed by the wife from the bank, which showed the amounts borrowed and to the husband’s financial circumstances filed in May of 2005, which showed an indebtedness of some $166,000. She also referred to the husband’s financial statement filed on the day of hearing, which indicated the debt at $208,000. Her Honour noted that the wife was taken by surprise by this major increase in the indebtedness in the space of 5 months. Her Honour then said:
“49. … He did not produce at the hearing any bank statements or documents from the [bank] to establish firstly whether the balance outstanding is in fact $208,000, and secondly, if it was how that had come about, and what he had done with the additional funds, or why the mortgage debt had spiked so dramatically in such a short period of time. To say that this was critical evidence for him to put before the Court is a huge understatement.”
Her Honour then addressed the husband’s attempts to explain the increase from $123,000 to $166,000 (which her Honour - at that point, at least - miscalculated at $53,000, rather than $43,000) and described the husband’s evidence as “…rambling and contradictory evidence”.

The Federal Magistrate then discussed the evidence of the husband about his failure to earn income since shortly after the separation, the absence of medical evidence to support claims about depression, and his claims that he had been unable to meet THE interest on the bank debt. She mentioned again that he had produced no documents in respect of the bank debt, nor evidence to support differences in valuations that he ascribed at different times to his RM shares and tools and trade equipment. Her Honour then said:
“67. Given all of the above and the principles laid down in the Full Court in the decisions I have referred to, clearly there is no other finding which the Court has open to it to make other than the fact that the husband is the person who must bear the consequences of depleting and wasting the asset pool by $85,000.
68. The overall effect of the husband's actions is that as I have said, the net equity in that home is now somewhere in the order of $18,000 to $22,000, and there is no evidence of any corresponding increase in the asset position of the husband himself or the parties jointly. The Court is simply left with no explanation about where those moneys have been expended. The wife is left with no explanation about where those moneys have been expended.
69. …The financial consequence of these losses have been, in short, disastrous, and are properly categorised as waste. It would be manifestly unfair to require the wife to share the financial losses any more than she will have to by simple reason of the fact that there is not likely to be sufficient net assets now to fully realise her share.”
The learned Magistrate then turned to the assessment of contributions. She said that she could not find on the evidence that the parties contributed other than relatively equally up to the time of separation except in relation to an inheritance received late in the marriage by the husband from his father’s estate amounting to about $80,000. This had been used to reduce the mortgage. Her Honour also accepted that the husband had made a slightly greater contribution to the welfare of the family since separation, essentially by way of the greater care of the children of the parties.
Her Honour said:
“93. However, I am satisfied that the wife's non-financial contribution and financial contributions throughout the marriage are not as significant as those of the husband. The orders that I propose to make will not have any affect on the parties earning capacity.…
94. I have had regard to all of the contributions within the meaning of s.79(4)(a), (b) and (c), from the date of cohabitation to the date of hearing, and other factors to which I have made reference expressed as a percentage of the net value of their assets. And these factors favour the husband 65 per cent compared to the wife's 35 per cent.”
Her Honour then turned to consider section 75(2) factors. The primary factors considered by her Honour related to the future care of the children, though her Honour also assessed the parties’ overall financial positions and their earning capacities. The learned Magistrate made an adjustment in the husband’s favour of 12.5%, resulting in division overall of 77.5% to the husband and 22.5% to the wife.
Her Honour then turned to the manner of giving effect to this percentage distribution and said:
“105. Overall, this will mean that the wife must receive assets with a net value of $27,616. She will do this by having the former matrimonial home transferred to her sole name, giving her equity in that property of between $18,000 to $22,000, her superannuation of $5000, her furniture and jewellery of $2500. I have taken into account that she will need to sort out the issues of indebtedness with the [bank] and she will become responsible for the outstanding rates on the home.
106. I have made an Order for the transfer of the matrimonial home to the wife, because I consider that in this case it is the only way that she will receive the benefits that she is entitled to receive. She will be able to negotiate with the bank to see if she is able to take over the mortgage debt, or if she is not, will be in a position to properly maintain the property so it can be sold to its advantage. There is just enough equity in that home to provide her with her entitlement, taking into account other assets she has, being her jewellery, furniture, and superannuation […].
107. There is also substantial evidence before the Court to satisfy the Court that from separation until the hearing the husband had not properly maintained the home as well as he should have. He has not paid the mortgage and he has not paid the rates. In fact, he maintains to the Court that the bank has only given him a three month stay of execution in terms of exercising its power of sale. I am satisfied that if he remains in possession of this one remaining valuable asset, its net equity will be depleted even further.
…
109. I accept that the wife is likely to be a little short on these figures by the sum of approximately $1400 due to the need to diminish her net interest in the home by the unpaid rates, but unfortunately in this very difficult matter, I find that this is the only way to provide a just and equitable result. All that can be hoped is that she is able to improve the property sufficiently to make up this loss.
110. The husband will retain his shares, his utility, the Honda Civic and his […] superannuation, together with any furniture and tools that he has. As I have said, he has already had the benefit of substantial unexplained amounts of up to $85,000, but possibly more, given that he has not properly disclosed what he has done with his shares and building tools, and this gives him an entitlement to which he is entitled, of 77.5 per cent.”

Principles applicable to the appeal

In House v The King (1936) 55 CLR 499, at pp 504‑505, Dixon, Evatt and McTeirnan 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 the allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some of the 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 orders, 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 discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

The Grounds of Appeal

Ground 2

As is the position at least with the other major ground (ground 1), ground 2 is a composition; of particulars appropriate to a ground of appeal, but also of submission and assertion, in some instances possibly even going beyond what was provided to the Federal Magistrate. However, as the complaint made by the husband in the ground emerges from it, it is here set out in full:
“2. The figures used to calculate the distribution of the assets were incorrect. The figure of $208,000.00 was not correct and I advised Federal Magistrate Rimmer of this verbally several times at trial on 24 October 2005. The figure of $208,000.00 was what the bank quoted if they had to foreclose and included their legal and other costs including a debt for the former marital MasterCard and a personal loan. I tried to explain this at trial but this was not accepted. The total amount owing was substantially lower than this. The cross examination of me by Federal Magistrate Rimmer was so sever, and unexpected, that I became completely frozen and shell shocked and was unable to express myself or explain myself. There was much more information I could have given had I not felt under attack and been unable to defend myself. In fact, the mortgage over the property was approximately $175,700.00 at the date of the trial. This makes a significant change to the asset pool to be divided. Ms Rimmer calculated an addback of $85,000.00 which is in well in excess of the true amount and disadvantages me.”
As seen at paragraph 27 of her reasons earlier quoted, the learned Magistrate assessed the amount of the current bank debt for inclusion in the asset table at $208,000 – as stated in the husband’s statement of financial circumstances filed on the day of the hearing.
One might well think that in those circumstances, the husband could not complain. However, there was other evidence on point. The Federal Magistrate gave the husband the opportunity of presenting his case by oral evidence. During that rather tortuous process, the husband came to the question of the agreement that the parties had reached post-separation and he said:
“In the documentation she says I raised $180,000.00. I didn’t, I raised $160,000.00 and the bank documentation I believe shows a credit availability of $180,000.00, but in fact the loan was limited to $160,000.00, loan only $45,000.00 for the payout that she originally agreed to. And the money has stayed there in the bank and interest used it up.”
There follows some discussion addressing the question of why the husband had not informed the bank that the $45,000 was no longer needed, during which the Federal Magistrate said:
“Well, what did you do with the money [Mr B], $45,000.00 is a lot of money?”
The husband said:
“The money itself – I didn’t draw it out and squander it or use it, it just go used up, in truth. I also was getting no assistance from her with the kids, and she was constantly harassing me about things and I was finding it difficult to get and keep work. At times she agreed to pick up the children and do things, she wouldn’t do that, I had to leave the child to go and do it, and then I got sacked from that many jobs.”
The Federal Magistrate then said:
“Okay, Now, that’s another question I have to ask you. You talked before about the mortgage – you only talked 45,000, there was about 115, 113 or 118. So that on my calculations means that it went up to around about 160-165,000?---160 limited?
Okay, Now, that mortgage stands as I look at your financial statement this morning, with a balance of somewhere around about 203, is that right?---208, well, that’s if the bank – due to my---
…
Now, could you tell me, $208,000 less $160,000 means that $48,000 on top of the 45 that we’ve already talked about, seems to have gone somewhere. Could you tell me why it has risen in that way by such - - -?---I’m confused, sorry. You said the 40,000 on top of the 45?
Okay. Well, we’ll just go until you understand it. Your mortgage, just say we take it at the highest figure, I don’t know exactly what it was, but you’ve mentioned two figures. So 118,000 when you separated, when you then went to do the deal with [the wife] about settling to pay her 45,000 you borrowed a further 45,000, you’ve told me you’ve used that on ordinary living expenses because you weren’t working, and paying interest on the loan, et cetera. Now, on my calculation that took it up to about 160,000. But today, looking at your financial statement, you put in part K paragraph 46 that your home mortgage is now $208,000?---Okay, can explain that.
So that’s another $48,000 that has gone onto that mortgage over and above the 45?-0—That was probably not the right way to describe that, but I didn’t see any other way to mention it in that form. The mortgage is 160,000, and with the interest and various charges the bank has put on for going over the overdraft, it’s about 177 or so $178,000.
So interest and charges takes it up to about 100 and sorry, what did you say?---About 178, I believe. Each month the interest is approximately $1500. And the bank – we’ve got a joint MasterCard, we had two joint MasterCards and a Coles/Myer card, and I paid out the Commonwealth Bank MasterCard just after [the wife] left me. I paid out the Myer card just after, so that’s a total of $7000 I paid out on joint MasterCard expenses.”
There was then an exchange endeavouring to clarify one or two matters, before the learned Magistrate further said:
“Okay, but I’m worried about why since 2003 the mortgage has risen from 160,000 to 208,000?---No, I’m trying to get to that. The mortgage, the MasterCard from [the bank] was $6000 when [the wife] left, and I’ve been trying to get it down and I’d run out of money and I couldn’t keep it down and it’d get back up to six. The bank decided to close on that, and they took it to court and got an order to put a lien against the property and they hit me with bills of about 12 or $1500 for legals for that, and liened it against the house and the – well, I’m not sure what you call it, the Magistrates Court apparently approved that. And I had a small car loan and vandals stole the car and wrecked it and I couldn’t afford to fix it, and I couldn’t – I could no longer support that loan too, and they did the same thing with that.”
The learned Magistrate then turned to the topic of what efforts the husband had made to approach the bank, at the time that he struck difficulties, to avoid bank action and the concomitant expenses which increased the bank debt. After further exchanges, the learned Magistrate again returned to the question of the explanation for the increase in the bank debt and identification of its current amount. This immediately led to a series of questions about why the husband did not have bank statements and other documents and the questions were from time to time interspersed with some comments bearing upon what the monies which comprised the indebtedness to the bank were spent on. There was what might be described as a “tooing and froing” between the Federal Magistrate and the husband.
Following that, the wife cross-examined the husband. During that cross-examination the husband acknowledged that he had drawn on the loan to cover child expenses. The wife then questioned the husband about the entry in his financial statement filed 19 May 2005, that he owed $166,000 to the bank, to which the husband answered “That would probably be right” and the wife then came to the entry of $208,000 as the bank debt, in the statement of Financial Circumstances filed on the day of the trial. The Federal Magistrate interpolated:
“FEDERAL MAGISTRATE: What is the balance now owing on the loan?---For the foreclosure figure, had they gone ahead with foreclosure, that’s including their mortgage – sorry, the auction costs - - -
What is the balance now due and owing under the loan?---The balance due right now, I haven’t got it in front of me, but it would be about 176, plus they’ve put two liens on it, for the total amount of $13,000.
[Mr B], I’m a bit confused. You financial statement that you just handed in this morning does not seem to have an amount of $176,000 on said property?---No it hasn’t.
You actually had it as $208,000, is that correct?---It matches the figure you got from the bank the other day as a pay out figure.
[Mr B], I’m still very confused, I’m sorry?---I’m sorry, I answered the question.
Can you answer yes or no please?---I did answer – I’ll do it again, Sorry, the aggregate amount required by the bank to foreclose comes to approximately 208,000, including the auction costs and other associated costs.
Excuse me, [Mr B], I do not have those documents that you are speaking of in front of me - - -
FEDERAL MAGISTRATE: He isn’t speaking of any document. He’s speaking of – he’s answering a question. And he is saying to you that the amount that he has put in his financial statement of $208,000 is inclusive of the bank’s estimate of the costs associated with them foreclosing on the property, which includes their legal costs of foreclosure, their auction costs associated with foreclosure. So when he is saying to you is not from any document, he is saying that that is the amount that he has been told by the bank would be required to be paid to the bank if they took foreclosure action.
[THE WIFE]: Thank you, your Honour. Am I to believe that this has been a verbal amount they told you, or did you receive anything in writing from the bank as to those costs, [Mr B]?---I’d have to say verbal, but partly in writing. And also you stated exactly the same amount from that bank, or did you refuse to name the document - - -
FEDERAL MAGISTRATE: Just don’t – talking about what she might have done, you’re being asked the questions, [Mr B]?---Well - - -
From your own knowledge?---Verbal and partly in writing. By that I mean they’ve given me the two sums of the amounts and then they said the approximate figure to foreclose. And they were hoping I could trade out of trouble and not have to foreclose. So that was why they gave me an extension, they just wanted it sorted out.
…
FEDERAL MAGISTRATE: He says that he has received a document form the bank which tells him about the amounts outstanding, that’s 176 plus the 13 and these tow liens that we haven’t explored yet. But verbally the bank has said on top of that, it would rise to $208,000 if there was a cost of foreclosure, that is the costs, legal costs and auction costs.
[THE WIFE]: Thank you, your Honour.
FEDERAL MAGISTRATE: That’s correct, isn’t it, [Mr B]?---That’s correct, absolutely.”
Then, during the husband’s address, the following exchange occurred:
“FEDERAL MAGISTRATE: The mortgage, the 115,000 that increased by 45, followed then in May with 167,000, and now between May and October, has leapt up to – I think you say 177,000
[THE HUSBAND]: Yes, Well, as I said, more than half of that is interest.…”
The Federal Magistrate made the point that she had no evidence to show to what the increase was due, but she then referred to the question of the total debt owing and said:
“Okay, and we’ve got 177,000 that’s got to be paid to [the bank] on the mortgage debt.”
After some further exchanges dealing with a credit card debt, the Federal Magistrate summarised saying:
“It’s got to be one or the other, that’s all. So we’ve got the 177 mortgage debt to the [bank], and you say a credit card debt that’s risen again to $6,000.”
To this proposition the husband answered, “That’s right, yes.”.
During the wife’s address the wife came to the matter of the increase in the mortgage debt. The learned Magistrate said:
“He has now put it as $208,000, because I think he said --- about 177 plus some 13,000. And my calculation takes that to 190.”
Later, the wife, speaking of the prospect of selling the house and the equity that might be achieved, said:
“I’m trying to understand with all the costs of auction and etcetera, it would be up to 208,000.”
To which the Federal Magistrate said:
“The bank’s not going to be foreclosing, because you’re saying its got to be sold quickly, so we avoid the bank foreclosing.…Bank foreclosure costs a lot of money.…Well, I think he said 177 and 13 has to be paid out, so I think that takes us to about 190, and then you’ll have your costs of sale.”
In my view, it is clear that, while the husband had inserted the amount of the mortgage debt in his statement of financial circumstances (filed on the day of hearing) at $208,000, he had explained that that was not the actual current amount owing to the bank. As seen, at the end of the trial, the learned Magistrate thought that amount to be about $190,000.
The issue of the amount owing on the mortgage was one that had a double impact on the asset table, because of the inclusion of the amount, firstly in the liabilities and secondly through the “add back” of an amount as a notional asset, being the difference between the mortgage debt at hearing and the mortgage debt immediately after separation, when monies were borrowed to refinance and pay out credit card debts.

The question essentially is whether, in the circumstances before her, the Federal Magistrate was entitled to use the figure of $208,000. As seen, in paragraph 27 of her reasons, Rimmer FM said:
“27. …it is clear from the husband’s evidence given to the Court on the day of the hearing by way of him filing by leave an updated financial statement, that the amount which is now outstanding he says is $208,000.”
However, her Honour does not there expressly say that she inserted the $208,000 because it was an admission against interest. Moreover, had she done so, it would have been incumbent upon her to explain why she rejected the husband’s explanation, which was not contested before her, of the derivation of the amount of $208,000.
The husband was the only witness to give evidence about the figure of $208,000. Nowhere in her reasons did her Honour refer to the oral evidence given by the husband about the mortgage debt. It may have been open to her Honour to reject that evidence if it was inherently improbable, or was unacceptable for some other cogent reason, but as seen her Honour did not take that approach.
However, while the only reason clearly given for inclusion of the figure of $208,000 is that that was the figure the husband had included in his statement of financial circumstances, arguably other reasons for inclusion of that figure might be implied in her Honour’s discussions: of the poor quality of the husband’s evidence about the increase in the mortgage debt since the separation; about the lack of documentation relating to the debt; about his other failures to disclose; and from her Honour’s review of the authorities which supported an approach to the development of an asset table which, if it could not be formulated on precise evidence, might be formulated in a way that avoided any imprecision affecting the interests of the “innocent” party. However, none of these matters, in the face of the husband’s evidence, go to the genesis of the figure of $208,000.
Moreover, while the husband was certainly imprecise about the amount of the bank debt, his unchallenged evidence was that it would only be $208,000 if the bank foreclosed. But nowhere in her Honour’s reasons does she suggest that prospective foreclosure was the basis upon which she inserted the sum of $208,000 in the asset table.
While the authorities that Rimmer FM quoted support an approach which, in the face of default by one party avoids unfairness to the “innocent” party, they do not support a “punitive” approach. I do not suggest that the learned Magistrate had that intention, but the result has something of that character.
As seen, the learned Magistrate chose not to exclude the husband from giving evidence in chief, despite his non-compliance with Court orders. Once she had given the husband that opportunity, she was obliged to treat his evidence following the usual rules, including the rule in Browne v Dunn (1893) 6 R 67 at 76-77. (See also McHugh JA (as he then was) in Levinge v Director of Custodial Services (1987) 9 NSWLR 546 at 560), where he said:
“The rule in Browne v Dunn (1893) 6 R 67 at 76-77 prevents a Court from refusing to act on or disbelieving evidence which has not been the subject of cross-examination. However, one exception to the rule in Browne v Dunn is the case where the evidence is inherently improbably: cf Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 at 371.”
Moreover, in a position where the evidence about the actual mortgage debt was unclear, the course of including the mortgage debt at a set figure was not the only course open to the Federal Magistrate. The orders formulated by Rimmer FM provided for the wife to refinance the existing debt or for the property to be sold. In either case, the debt would be quantified. By the insertion of a formula in the orders, the “net asset pool” could have been determined following either of the two events and provisions for necessary adjustment between the parties made.
It follows from the foregoing discussion, that ground 2 must succeed.

Ground 1

This ground reads:
“1. Federal Magistrate Rimmer showed bias against me.
a.Bias – The transcripts will show that I have been treated differently to [the wife]. The manner in which I was spoken to on many occasions was sarcastic, angry, domineering and unpleasant. This was rarely the case with [the wife]. I advised Federal Magistrate Rimmer on a number of occasions, in writing and orally that [the wife], while purporting to act for herself, was in fact being advised and assisted by her boyfriend/partner solicitors [Mr C] of [CKB]. Federal Magistrate Rimmer refused to take this into consideration. [The wife] had a very great advantage over me in preparation of documents, even knowing which document to use and the Court proceedings in general. Federal Magistrate Rimmer often criticized me for the quality of my paperwork. I don’t deny that my paperwork was poor but I was completely overwhelmed by the number of documents being served on me by [the wife] and had no idea what I was supposed to do. I have no legal knowledge and had no legal assistance while [the wife] had full legal assistance while pretending to act for herself. I was also ill during the proceedings, with thyroid dysfunction, including growths on the thyroid, largely expanded corroited artery which I notified Federal Magistrate Rimmer of, including faxing a medical certificate to her. I was completely unable to manage the Court process. Also, on several occasions I did not receive copies of the Orders from the Court. I don’t know why they did not post out copies to me, but it happened on several occasions. I had to go to the Court on one occasion to obtain a copy. I actually missed a Court hearing date because I had not received the Order and didn’t know that I was supposed to appear on that date.
b.During the trial Ms Rimmer invited me to give oral evidence. She then proceeded to cross examine me in such a manner as to advantage the Applicant. This cross examination was so severe and unexpected that I was unable to function. I froze and went completely blank and was unable to defend myself or to give the information that I was trying to give. This cross examination also lead the Applicant in her cross examination of me and left me at a distinct disadvantage.
c.Ms Rimmer made reference in her Reasons for Judgement to my making sworn statements at the trial without producing evidence to support it. In fact it was Ms Rimmer who invited me to make an oral submission and at no time did she say I had to have evidence to support it. As I was not expecting to make an oral submission I had not prepared any documentation for it.
d.Ms Rimmer refers to my lack of financial documentation in her Reasons for Judgement. I advised Ms Rimmer that my house had been entered and most bank documents and other important documents had been removed. It is my belief that this was done by the Applicant. I advised her that I was a pensioner and could not afford the [bank’s] costs to replace them. The costs were $65.00 per hour plus $10.00 per statement. Ms Rimmer refused to accept this and reissued orders to rediscover these documents which I did not have in my possession. The applicant subpoenaed the bank only asking for the loan document with a copy of my CRAA report. When I said to Ms Rimmer that the Applicant didn’t produce all the statements in the subpoena she stated that, being a pensioner, she would find the costs prohibitive. This demonstrates that she treated me differently to the Applicant.
e.During the whole court process I felt bullied and intimidated by Ms Rimmer because of her attitude towards me and the difference in her treatment of me.”
In Gallea v Gallea (1990) 19 NSWLR 263 at 281, Kirby ACJ (as he then was) developed a number of guidelines for consideration of the consequences of excessive intervention by a trial Judge. Among those guidelines was:
“4. The decision on whether the point of unfairness has been reached must be made in the context of the whole trial and in the light of the number, length, terms and circumstances of the interventions. It is important to draw a distinction between intervention which suggests that an opinion has been finally reached which could not be altered by further evidence or argument and one which is provisional, put forward to test the evidence and to invite further persuasion: see In the Marriage of Lonard (1976) 26 FLR 1 at 10-11; 11 ALR 618 at 626 (FFC); see discussion [1976] ACLD DT 630; cf Ex parte Prentice; Re Hornby (1969) 90 WN (Pt 1) (NSW) 427; [1970] 1 NSWR 654.”
I have examined the entire transcript.
In considering the conduct of the trial, I regard it as critical to bear in mind that the husband presented for trial, to all intents and purposes, totally unprepared and in default of various orders that he prepare his case in the usual fashion. The learned Magistrate decided (on the face of it, leniently and much to the advantage of the husband) to give him an opportunity to present his case.
At almost the outset of the hearing the Federal Magistrate said:
“So, [Mr B], I now need to know what you want me to rely upon in your case today.”
The husband responded:
“I don’t really think I know, Your Honour. I have no idea what I’m doing.”
When the husband entered the witness box the learned Magistrate confirmed with him that (in his case) there were two affidavits filed on 5 November (presumably 2004) and then a statement of financial circumstances filed on the day of trial. She then said:
“…before you came into the witness box I indicated that you might like to give some oral evidence in chief to respond to some of the matters that seem to be arising in your cross examine questions? So I’m going to give you an opportunity now to do that. Have you brought a copy of [the wife’s] material to the witness box with you?”
The husband then embarked on a rather long dissertation about matters relating to his lack of employment post-separation and after that seemed to be completed, the Federal Magistrate said:
“Okay. Now, on any other topic that [the wife] has raised? You see, you haven’t filed what we normally have, and that is an affidavit of evidence in chief, so is there any topic that she’s raised in relation to the proceedings that you want to tell me about?”
In the exchange that followed the learned Magistrate also said:
“…I’m now giving you this very last opportunity, and it is your last, [Mr B], to tell me what your case is about. You don’t agree with what [the wife] says, I know, but you’ve got to tell me what your case is about?”
The husband commenced to speak of a further matter, but was interrupted by her Honour, who remarked that he was giving very general evidence. Her Honour further said:
“…you’ve not given me any evidence about what you did throughout the marriage, what contributions you made.…This again, and this is the last time I’ll say it, this is the last opportunity that I will give you to put your version of the case to me. And in a proper way, in a way that I can understand, not just attacking your wife’s case, but telling me what your case is about. What did you do in the marriage, what did you contribute?”
Passages of the husband’s evidence (earlier quoted when considering ground 1, as to the origins, constitution and amount of the bank debt) show that when the husband seemed unable to address relevant matters unassisted, after the learned Magistrate had given him a number of chances to do so, she embarked upon questioning, which at least initially, was obviously for the purpose of eliciting relevant information from him.
In these circumstances, descriptions in cases such as Jones v National Coal Board [1957] 2 All ER 155, of the manner in which a judge ought conduct a trial, do not have ready application, addressed as they are to trials in which the parties are represented by advocates. Proceedings for alteration of property interests also differ from many civil proceedings in which a particular cause of action is pleaded, based upon assertion of material facts of a predictable nature. In family law proceedings there are no pleadings and the facts, beyond those necessary to found jurisdiction, may be extensive, varied and unpredictable. It is difficult for litigants in person to understand the breadth of matters that ought be addressed. Judicial direction is often required.
To return to discussion of the conduct of the trial, at the outset of the hearing, Rimmer FM spent considerable time explaining to the parties the matters relevant to the determination of property settlement. She also explained at some length the course that the trial would take and the role that each party might play in that process.
However, there are also passages which I regard as demonstrating Rimmer FM’s annoyance and impatience with the husband.
During discussion about the wife’s witnesses, what they might say and what the husband might cross-examine about, the Federal Magistrate said:
“Look, [Mr B], let’s get this very clear, its 10 past 11, I’m being told there’s five witnesses as well as [the wife], OK, I’m not going to be sitting there while you go um and ah, you’re going to have a clear idea of what you’re cross-examining these witnesses about and what your questions are going to be, because we’re not wasting any time. And if you don’t come up with your questions, they’re just going to be excused from the witness box on the basis that you haven’t properly prepared your cross-examination. OK? This is a court of law…”
Then, during the husband’s cross-examination of the wife, the Federal Magistrate from time to time gave the husband directions about his questioning. I see nothing inappropriate about that, however, from time to time, she also castigated him. An example is in relation to a document produced by the husband which he said he found “just yesterday”. The Federal Magistrate said:
“FEDERAL MAGISTRATE: Well then, you didn’t make a proper and thorough and diligent search, [Mr B], if you are able to find it. And that is the obligation upon you, if it’s in your power and possession and your custody, you are obliged to disclose it. Please do not ask any questions about that document because it is a real complaint that [the wife’s] made against you that you have failed to make proper disclosure. It is not appropriate therefore that you have failed to make proper disclosure. It is not appropriate therefore for you to come to the trial and start putting documents to her that you have had in your possession but which you have failed to disclose. I have made a ruling on it, [Mr B], you move on please. That’s the way the law works, we don’t take people by ambush.
[THE HUSBAND]: I understand your point, your Honour, I didn’t know I had it until last night.
FEDERAL MAGISTRATE: Well, that’s your problem, you should have looked better. You certainly knew you had an overwhelming obligation to disclose, because I’ve pointed it out to you about three times in this Court room during the course of these proceedings.
[THE HUSBAND]: I don’t believe there’s actually any point my being here.
FEDERAL MAGISTRATE: Well, just get on with asking your questions, [Mr B], I won’t have any dummy spitting in my Court. I’m making proper rulings based on the history of this matter and the fact that you’ve had orders made against you for disclosure, the fact that the cornerstone to family law proceedings, as I have explained on numerous occasions, is the proper full and frank disclosure between two parties of everything that they’ve got. It is simply not good enough to come on the day of the trial and say, “I found them last night, your Honour”, okay?
So I’ve made a ruling on it, don’t dummy spit, just get on with proving your case. There’s a lot more to this than a few shares, I can tell you.”
At one point the husband endeavoured to explain to her Honour the point of his cross-examination. He said:
“See, the thing is I’m probably trying to establish here, your Honour, is that she doesn’t have as much knowledge of what we’re looking at as she claims.
FEDERAL MAGISTRATE: Well, just get on with it, [Mr B]. In your submissions you draw all this together, as I’ve told you. But we don’t waste time now making the point. This is cross-examination.”
As seen earlier, when the husband commenced his evidence, he presented as having difficulty knowing what matters to address and in my view the learned Magistrate made substantial efforts to assist him. However, as the husband’s evidence proceeded her Honour drifted into questions more in the style of cross-examination. One question commenced:
“[Mr B], are you seriously telling me…”
and exchanges occurred such as:
“Yes, [Mr B], so do a lot of people who come into this Court room, but they don’t seem to be expending off their mortgage the amount of money that has gone down in this case, I must say?”
When the husband was cross-examined by the wife, the learned Magistrate was active, in directions to the wife and in herself asking questions of the husband. In particular, the Federal Magistrate became involved in endeavouring to elicit the explanations, if any, offered by the husband for his use of monies drawn from the bank and the growth for other reasons of the bank debt. At one point, speaking about house rental he had been paying, the husband said:
“It was high, yes. Well, I mean, there was other extenuating circumstances which you probably wont let me mention.”
This drew the response from Rimmer FM:
“Well, she asked you to explain so don’t give me that I won’t let you mention --- [Mr B]?”
to which the husband responded:
“Well, I’m trying – I’m sorry, but I do have difficulty getting my point across.”
But apart from such exchanges between Rimmer FM and the husband, in looking at the trial overall, it is also appropriate to note that from time to time, the Federal Magistrate also firmly directed the wife, when she was under cross-examination, in relation to appropriate answers to questions.
This ground raises a number of issues:
(a)     whether bias against the husband is demonstrated;
(b)     whether viewed objectively, the husband was prevented from saying what he wished to say;
(c)     whether the degree of involvement of Rimmer FM in questions and directions to the parties, in particular the husband, meant that she had her “…vision clouded by the dust of conflict.” (Yuill v Yuill [1945] 1 All ER 183 at 189);
(d)     whether objectively there is a real danger (see Gallea v Gallea, supra) that the trial was unfair;

(a)whether bias against the husband is demonstrated

In my view, though the Federal Magistrate was clearly annoyed with and on occasions dealt brusquely with the husband, bearing in mind the default of the husband in preparation for trial, his apparent incapacity to present his case without direction and the importance of identifying the expenditure and origin of monies comprising the increase in the mortgage debt post separation, a “fair-minded lay observer” would not reasonably apprehend that, because of her intervention, the Federal Magistrate “might not bring an impartial and unprejudiced mind to the resolution of” the matters in dispute (see Johnson v Johnson (No. 3) (2000) FLC 93-041 at 87,631-87,632 paragraph 11).

(b)whether viewed objectively, the husband was prevented from saying what he wished to say.

As seen, the husband’s evidence about the critical issue of the growth in the mortgage debt and expenditure of any monies borrowed, certainly lacked precision. However, I do not consider that that was because he did not ultimately take advantage of the opportunities he was given to say what he wished. For example, though at times he was interrupted during responses, this was generally for the purpose of clarifying some point made as part of a lengthy discourse, or for directing the husband to address the particular question asked.

In any event, it seems to me that, in respect of any point upon which he was interrupted, there was a later opportunity to further address it. An example is the following passage of the husband’s evidence:
“Anyway, to continue answering your other question, interest chewed into a lot of that, I did some building repairs on the house, necessary repairs. I haven’t actually finished. I’ve got stuff I’m doing to it. I also had to cover the children’s costs. And regardless of what’s been put in documentation, I had [D] with me most of the time and I had to cover his costs. And I just didn’t have enough money coming in to do it. And one of the jobs I will have had for a building contract, I lost it because someone contacted them and said my funds have been frozen, and that was a real estate agent in [S].”
This, like many other passages of the husband’s evidence, was a lengthy and uninterrupted recitation.
I repeat that I consider the husband, with a great deal of assistance from the Federal Magistrate, received a fulsome opportunity of which he appeared to take advantage, to present his case.

(c)Whether the degree of involvement of Rimmer FM in questions and directions to the parties in particular, the husband, meant that she had her “…vision clouded by the dust of conflict.” (Yuill v Yuill [1945] 1 AllER 183 at 189).

Between paragraphs 52 and 67 of her reasons the Federal Magistrate addressed the critical issue as outlined above. She referred to the husband’s evidence as “rambling and contradictory”, observations that I am satisfied were open to her. She recorded in general terms how he had said he used the money represented by the increase in mortgage debt. She addressed what he had said of his inability to work. She noted the absence of cogent evidence about what had happened to certain shares and other property. She considered the pension income available to the husband to assist with the care of the children.
While I clearly consider that the learned Magistrate’s “vision” in relation to the matter dealt with in ground 1 “clouded”, I do not see other examples.

(d) whether objectively there is a real danger (see Gallea v Gallea, supra) that the trial was unfair.

In the circumstances, I consider there is no real risk that the trial was unfair. Irrespective of how the husband felt, he in fact had and took advantage of, a fulsome opportunity to say what he wished to say. That does not mean that his case could not have been much better presented. That he did not do so was not a result of the conduct of the trial.
In my view, there is no merit in this ground.

Ground 3

“3. In her Reasons for Judgment Ms Rimmer, in paragraph 88, states that the wife had received $9,534.00 in February 2005 form the sale of her [RM] shares and “that she has retained the benefit of those shares, and I have not added that back into the matrimonial pool”. Ms Rimmer included my [RM] shares, which I have not sold, into the matrimonial pool at the value of $5,400.00. This is discriminatory and shows bias.”

There was a clear point of distinction between the parties in relation to RM shares. The husband held his at the date of trial and they were properly included in the pool of assets for division. The wife did not hold hers. While for various reasons, assets once held but not in existence at trial may be added back in whole or in part to an asset pool, the husband does not say why that ought to have occurred in this case in respect of the proceeds of the shares sold by the wife. Moreover, it is not the case that her Honour ignored the fact of the sale of the shares. Indeed, when considering “s 79(4) contributions and other factors”, her Honour said:
“88. I further take into account that the wife has sold the [RM] shares, and received $9534 in February 2005 and that she has retained the benefit of those shares, and I have not added that back into the matrimonial pool.”
The trial Magistrate treated the husband identically when she said, two paragraphs later:
“90. …He has had the benefit of disposal of approximately $3,000 in shares.…”
There is no merit in this ground.

Ground 4

“4. CRAA report showed there was a Bank of Qld MasterCard with a limit of $6,000.00 and a Commonwealth bank MasterCard with a limit of $4,000.00. She mistakenly claimed that these had been paid out and then redrawn.”

The relevant finding of the Federal Magistrate was:
“25. At that time the existing loan, plus costs to refinance, together with a further $10,000 which was borrowed to pay out his existing Bank of Queensland Mastercard and the Commonwealth Bank Mastercard, meant that he required about $123,000 to complete that part of the transaction. He also required the $45,000 to pay out the wife, and therefore he sought to borrow from the bank a sum around about $180,000.”
In his evidence-in-chief, the husband said:
“…we had two joint Mastercards and a Coles/Myer card, and I paid out the Commonwealth Bank Mastercard just after [the wife] left me. I paid out the Myer Card just after, so that’s a total of $7,000 I paid out on joint Mastercard expenses…And we still had a Bank of Qld Mastercard which was drawn.”
A little later he said:
“- the Mastercard from Bank of Qld was $6,000 when [the wife] left, and I’ve been trying to get it down and I’d run out of money and I couldn’t keep it down and it would get back up to $6,000. The bank decided to close on that, and they took it to Court and got an order to put a lien against the property…” (emphasis added)
Later, when he was being cross-examined by the wife, the question of credit cards in existence at separation was revisited. The husband referred to a MasterCard from the Commonwealth Bank and was asked how much was owing on that. He said:
“$4,000. And the Mastercard from the Bank of Qld $6,000 and the Myer Card had a $5,500 on it, I think it was drawn to $2,000 at the time.”

The wife later put to the husband:
“When you took this loan out, [Mr B], it was to pay out the old joint overdraft account, which had a debt value of 115,000 and it also is stated that you had Mastercard the Bank of Qld limit of $6,000, but that the loan would include the payment of $4,500. This is on another document that I’d like to show you. And a Mastercard Commonwealth Bank of Australia, limit $4,000. And out of the loan they paid it out to $3,000. If you could.”
Bank documents were then tendered and became exhibit 2.
However, the husband protested that the bank documents did not show what the borrowed monies were actually applied to. The learned Magistrate did not discuss in her reasons her interpretation of exhibit 2. I do not see the documents in that exhibit as conclusive or even of assistance.
In his address, the husband said:
“Both Mastercards were still current and I paid out the Commonwealth Bank one and I paid out the Myer Card. The Bank of Qld is still drawn – the Bank of Qld Mastercard is still drawn with over $6,000, but it has drawn at $6,000, I paid money into it, but it – you know, it still got up there. That is still current. The Myer Card still exists, but I paid it to a zero balance, kept it that way for more than 12 months.”
It seems to me that the question of whether both MasterCards were paid out of borrowings after separation was contentious. I take the husband to have contended that he paid (an unidentified sum) off the Bank of Queensland MasterCard, but not from a direct borrowing.
The Federal Magistrate found otherwise. Her basis is not explained. It was a relatively minor point. Perhaps arguably, she need not have given reasons, but for present purposes, I assume that she should have.
However, given that the Federal Magistrate was only addressing the issue in an attempt to explain the increase in the mortgage debt and the use to which borrowings were put, had she decided the other way, the unexplained borrowing, and the add-back against the husband, would have been greater. In other words, the finding did not disadvantage him.
Accordingly, I see no merit in this ground.

Re-exercise or remission for rehearing

In the circumstances, I consider that I am in a position to re-exercise the discretion formerly vested in the Federal Magistrate, as the only matter to be directly addressed is the error constituted by the use of the $208,000 as the amount of the mortgage debt, both as a liability and as the upper parameter used in calculating the “add-back” against the husband.
Further evidence was put before me in respect of any re-exercise. Significantly, bank statements show that the mortgage debt was about $175,695 at trial and about $180,379.95 at the date of the orders appealed.
Outstanding rates of $4,704.49 as at 31 March 2006 are evidenced.
I was also given orders made by Rimmer FM on 21 March 2006 and the reasons for those orders. The orders are:
“1. That the property orders made on 15 December 2005 be stayed upon the Husband fully meeting the following terms and conditions:
(a)That the husband within seven (7) days of today’s date pay to the [bank] the sum sufficient to reduce the amount owing by him to the [bank] on line of credit account number […] to the sum of $180,379.95.
(b)That the husband pay on the last day of each calendar month until judgment is delivered by the Full Court of the Family Court with respect to his outstanding appeal in this matter a sum sufficient to ensure the balance on the line of credit account number […] he owes to the [bank] remains at the sum of $180,379.95.
(c)That the husband pay within seven (7) days any rates which have been levied on the former matrimonial home […] by the relevant City or shire Council between 12 January 2006 and 21 March 2006 and pay all such rates as and when they fall due pending judgment being delivered by the Full Court of the Family Court of Australia on his pending appeal.
2. In the event that the husband fails to meet the conditions set out in Orders 1 (a), (b) and (c) then the Orders of 15 December 2005 are to again take full force and effect from the date of such event occurring.”
It will be noted that the orders required the mortgage debt to be maintained at approximately its 15 December 2005 level.
I do not consider that I should revisit the learned Magistrate’s conclusions in relation to the amount of contributions, the calculation and composition of the asset pool (except to adjust the mortgage debt and correspondingly, the add-back of monies expended by the husband) or her assessment of section 75(2) factors. While the wife might argue that the assessment of contributions and of section 75(2) factors should or could be different, I see no reason, when what is shown is only a mathematical error, to revisit those assessments, unless the extent of the error was such as to call for reconsideration of either contributions or, more likely, section 75(2) factors. I do not think that is the case here.
Accordingly, I approach determination of the terms of proper orders as follows.
The asset table, adjusted only for mortgage debt (and the effect of that on the “add-back”) at date of orders (approximately) is:

Assets at the date of hearing	$
FMH	230,000
RM Shares (H)	5,400
Nissan Ute (H)	2,000
Furniture and jewellery in the possession of the wife	2,500
Furniture in the possession of the husband	2,500
Wife's superannuation at separation	5,000
Husband's super	1,500
Honda Civic	400
Addback of the amount wasted by the husband extending the debt on the mortgage on the matrimonial home(180,380-123,000)	57,380
Total Gross Assets	306,680
Liabilities at the date of hearing
Mortgage on the FMH	180,380
Rates o/s on FMH	3,300
Total Liabilities	183,680
Net Asset Pool	123,000

The wife is to receive 22.5% of the net assets, namely $27,616. However, whereas the transfer of the former matrimonial home to her on the calculations of the Federal Magistrate gave her an equity of only $18,000 to $22,000 (and she had other assets amounting to $7,500) on the adjusted figures she would receive an equity of nearly $50,000. She would need to pay the husband over $20,000.
These figures throw up considerations different to those before the Federal Magistrate and I will hear the parties on the final form of orders.
I certify that the preceding 114 paragraphs
are a true copy of the Reasons for Judgment
herein of the Honourable Justice Warnick.
………………………………….
Associate
Date: 22 June 2006

[2006] FamCA 533

22 June 2006

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Family Law

Civil Procedure

Evidence

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Appeal

Procedural Fairness

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Statutory Construction