Baker & Darzi
[2014] FamCAFC 17
FAMILY COURT OF AUSTRALIA
| BAKER & DARZI AND ANOR | [2014] FamCAFC 17 |
| FAMILY LAW – APPEAL – PROPERTY – ALTERATION OF PROPERTY INTERESTS – Where it was submitted by the appellant wife that the trial judge erred by determining that she was not seeking to have paid to her more than $100,000 – Where the Full Court found the trial judge had so erred. FAMILY LAW – APPEAL – Re-exercise of discretion – where neither party sought to adduce further evidence for the purpose of the re-exercise of the trial judge’s decision – On findings of fact, assessment of assets and contributions of the parties by the trial judge – where the wife receives a further amount of $285,125 and the wife has already received $100,000 of that amount – where costs certificate to issue to the wife. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981(Cth) |
| APPELLANT: | Ms Baker |
| FIRST RESPONDENT: | Mr Darzi |
| SECOND RESPONDENT: | Ms Darzi |
| FILE NUMBER: | PTW | 5453 | of | 2008 |
| APPEAL NUMBER: | WA | 8 | of | 2013 |
| DATE DELIVERED: | 14 February 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Strickland, Ainslie-Wallace & Crisford JJ |
| HEARING DATE: | 30 October 2013 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 20 February 2013 |
| LOWER COURT MNC: | [2013] FCWA 16 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Rod Hooper SC |
| SOLICITOR FOR THE APPELLANT: | Dwyer Durack |
| FIRST RESPONDENT: | In person |
| THE SECOND RESPONDENT: | No appearance |
Orders
Extend time for the filing of the wife’s summary of argument nunc pro tunc.
Grant leave to the wife to amend the grounds of appeal in terms as appear in the summary of argument.
Grant leave to the wife to add further documents to be considered on the appeal in the form of appeal book volume 10.
Appeal against order 1 of Walters J made on 20 February 2013 be allowed.
Set aside order 1 of Walters J made 20 February 2013 and in lieu thereof order:
(a)Husband and Ms Darzi jointly or severally pay to the wife the sum of $285,125 within 28 days of the date of these orders.
(b) Note, of that sum, the wife has already received $100,000.
That the Court grants to the appellant wife a costs certificate pursuant to section 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by the appellant wife in relation to the appeal.
IT IS ALSO NOTED that publication of this judgment by this Court under the pseudonym Baker & Darzi and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 8 of 2013
File Number: PTW 5453 of 2008
| Ms Baker |
Appellant
and
| Mr Darzi |
First Respondent
and
Ms Darzi
Second Respondent
REASONS FOR JUDGMENT
Ms Baker (“the wife”) appeals against an order made by Walters J on 20 February 2013 in property proceedings with Mr Darzi (“the husband”) and his mother, Ms Darzi (“the husband’s mother”).
The order from which the wife appeals is in the following terms:
1. The husband and the wife must forthwith sign all documents (“the Payment Documents”) and do all such acts and things as shall be necessary to cause the sum of $100,000 currently held in trust pursuant to paragraph 3 of the orders of 19 September 2012 (varying paragraph 5 of the orders of 13 August 2012) to be paid to the wife, together with all interest accrued thereupon.
By her amended notice of appeal two grounds of appeal are raised by the wife, namely:
1. The learned Trial Judge made a finding contrary to the evidence and wrong in law when he determined that the Appellant had modified her claim and did not seek to have paid to her more than a further $100,000.
2. Consequently, the learned Trial Judge fell into appellable [sic] error when, having found that the Appellant was entitled to receive 65% of what the learned Trial Judge determined to be the relevant net assets of the parties, but instead awarded her a further $100,000 or an effective settlement of in the region of 50%.
The husband’s mother, while a party to the proceedings before the trial judge, having been joined by order of Martin J on 20 April 2011, did not appear on the appeal, and nor did she file any documents in the appeal. The husband filed no documents in the appeal, but sought and was given leave to make oral submissions on the appeal. The husband opposed the appeal.
We note that the wife’s appeal makes no challenge to any findings of fact made by his Honour, to his articulation of the law or to his conclusions about the contributions of the parties and each of them pursuant to s 79(4) and s 75(2) of the Family Law Act (Cth) 1975 (“the Act”).
Applications in an appeal
When the hearing commenced, counsel for the wife made three applications; to extend the time in which to file the summary of argument on behalf of the wife; to amend the grounds of appeal as set out in that summary of argument; and to add further documents to the appeal books, contained in a further appeal book volume.
None of these applications was opposed and leave was granted in all respects. We indicated that we would make the necessary formal orders at the time of delivery of this judgment.
Background
The proceedings at first instance had a long and convoluted history, having been commenced before Martin J and concluded by Walters J after the death of Martin J.
The parties began to live together in 2001, married in 2002 and separated on 14 October 2008. There are three children of the relationship, the eldest born in 2003, the youngest, in 2008. All three live with the wife.
Given the narrow scope of the appeal and that it does not challenge any of his Honour’s findings of fact, it is not necessary to traverse in detail his Honour’s outline of the history of the parties’ relationship nor the acquisition of various properties.
Property A
At the time of commencing to live together, the husband owned a property in Suburb A (“Property A”) which he had purchased in January 1999 for $730,000 and which became the parties’ home. When the parties began living together it was subject to a mortgage of $468,000. The husband asserted at trial that when he purchased the property his parents lent him money to complete the purchase. Just how much money was advanced in this way was far from clear on the evidence before his Honour.
After the parties separated, in October 2009 the husband sold Property A and from the proceeds of $2,100,000, paid $409,800 to his parents, ostensibly in repayment to them of the loan advanced in 1999. The wife maintained that no money was owing to the husband’s parents and sought the repayment of that money. She said at trial that any money that may have been advanced to the husband by his parents had been repaid by 2001 and argued that the repayment was a sham to defeat her interests.
After setting out the husband’s contention that the amount of $409,800 paid to his parents reflected an original loan of $157,971 together with interest over ten years capitalised pursuant to an agreement with his parents in the sum of $251,829, his Honour found at [304] that no such agreement ever existed. His Honour further concluded that neither the asserted loan nor associated interest ever existed [306].
His Honour found:
307. It follows from the findings that I have made regarding the non-existence of a formal (or informal) “loan” between the husband and his parents that I do not accept that any interest payments were ever agreed upon; nor do I consider that the imposition of interest justified or appropriate. …
His Honour continued and found that the husband’s purpose in making the payment to his parents was to defeat the wife’s anticipated claims.
His Honour thus included the money paid to the husband’s parents in the pool of property available for distribution between the parties [342].
Property C
Also at the date of cohabitation, the husband had an interest with his parents (and later with his mother, following the death of his father in 2010) in a property at Suburb C (“Property C”). The registered proprietors were the husband’s parents as to one half as joint tenants, and the husband as to one half as tenant in common [16(c)]. This property had been purchased in August 1985 for $69,000 and was encumbered by a mortgage of $29,000. It seems that the property was a house that had been divided into two separate units. The units were rented separately and the husband received the rental on one and his parents received the rental on the other unit.
On 20 April 2011 Martin J restrained all parties from disposing of or encumbering or otherwise dealing with Property C [115].
On 16 April 2012 Martin J ordered that the wife receive $490,000 by way of partial property settlement. Her Honour further made orders for the payment to the wife of lump sum amounts of child support [135].
Her Honour’s orders permitted the husband to encumber his interest in Property C to give effect to the ordered payments to the wife but he was otherwise restrained from selling or otherwise dealing or encumbering it. Her Honour further ordered that, in the event that the husband did not wish to retain that property or in the event that the ordered payments were not made, the husband and the husband’s mother were to effect the sale of Property C and of the proceeds, one half was to be paid to the husband’s mother and from his share of the proceeds, the husband was to pay the sums ordered to the wife [135].
Ultimately Property C was sold, and the ordered payments were made from the proceeds of sale.
Chattels claimed by the wife
A further issue in the trial was the wife’s claim that she receive certain of the parties’ chattels. Despite several orders being made in an attempt to effect a division of those items none was successful in having the husband deliver the ordered chattels to the wife or otherwise make them available to her.
In August 2012 the wife filed an application in a case seeking an order that, instead of the return of the chattels to her, she be paid $100,000.
On 13 August 2012 Martin J ordered that $100,000 from the sale of Property C be placed in trust to abide the determination of the wife’s application for payment in lieu of receipt of the chattels.
The Trial Judge’s reasons
His Honour, as he was required to do, identified the property of the parties and each of them and resolved disputes as to the interests in or the value of property in order to come to a conclusion as to the composition of the property pool. He found that the value of net property of the parties available for division between them amounted to $1,230,754 [339].
In determining the property of the parties, his Honour considered the asserted loan to the husband’s parents which the husband said was repaid by the payment to them of $409,800 from the sale of Property A.
After setting out the husband’s contention that that amount reflected an original loan of $157,971 together with interest over 10 years capitalised pursuant to an agreement with his parents in the sum of $251,829, his Honour found at [304] that no such agreement ever existed. His Honour further concluded that the asserted loan never existed [306]. As to any alleged interest his Honour said this:
307.It follows from the findings that I have made regarding the non-existence of a formal (or informal) “loan” between the husband and his parents that I do not accept that any interest payments were ever agreed upon; nor do I consider that the imposition of interest is either justified or appropriate. …
His Honour continued and found that the husband’s purpose in making the payment to his parents was to defeat the wife’s anticipated claims.
His Honour thus included the money paid to the husband’s parents in the pool of property available for division between the parties [342].
Turning to the contributions of the parties, his Honour concluded that the parties’ contributions up to the date of separation required a division of property as to 57.5 per cent to the husband and 42.5 per cent to the wife. Taking account of the circumstances that occurred after separation, his Honour determined that the contributions of the parties should be assessed at 57.5 per cent / 42.5 per cent in favour of the wife.
After considering the matters to which s 75(2) refers, the trial judge determined that the property should be divided as to 65 per cent to the wife and 35 per cent to the husband.
His Honour said:
417. If the wife is entitled to 65 per cent of the property pool, then she is entitled to property to the value of $799,990. The net value of property currently in her possession or control (including the amount of $490,000 that she received by way of partial property settlement) is $514,865.
418. In the present case, the s 75(2) adjustment equates to $92,307 (being 7.5 per cent of $1,230,754). I am satisfied that such an adjustment is proper. Indeed, I am also satisfied that the adjustment is proper when regard is had to the differential between the wife’s overall entitlement (being 65 per cent) and the husband’s overall entitlement (being 35 per cent), which differential equates to 30 per cent of the property pool (or $369,226).
419. To a large extent, however, the precise figures set out above are irrelevant. As was made clear at the directions hearing on
2 November 2012, the wife does not seek to have paid to her more than the $100,000 currently held in trust. Thus, if the wife is awarded the whole of the $100,000 currently held in trust, the total net value of the property contained in the property schedule that is retained by the wife amounts to $614,865, or almost exactly 50% of the total pool. This amount is well below what I have concluded is a just and equitable result from the wife’s point of view – but it is what she is prepared to accept.
The Appeal
It is his Honour’s conclusion at [419], that the wife “was prepared to accept” payment to her of the $100,000 in satisfaction of her application for property settlement, which it is argued is an error by the trial judge.
We accept that in coming to this conclusion his Honour erred in that this finding misapprehends the wife’s application before him.
It is instructive in this regard to consider the wife’s applications as filed, and which were before his Honour, as well as to trace the course the matter took after the death of Martin J.
As the trial judge indicated, the wife had amended her application for final orders several times [83].
By her Amended Application for Final Orders filed 18 November 2009 she sought:
a. As and by way of property settlement, the Husband transfer to the Wife such monies and property as will accord to the Wife 65% of the net matrimonial asset pool.
b. Pursuant to s90AE, the Second and Third Respondent [sic] pay to the wife the sum of $409,800 paid by the Husband to the Second and Third Respondent upon the sale of the former matrimonial home...
By later amendment on 17 May 2010 the wife sought a transfer to her of the property in Property C free of encumbrance, and payment to her of the balance of the money in a Commonwealth Bank account. She maintained her claim to the return to her of the $409,800 paid to the husband’s parents. Orders seeking a departure from child support assessment were also sought.
A further amended application was filed in June 2010 in which the wife sought orders for spousal maintenance and particular orders in respect of some watches in the husband’s possession.
At [177] the trial judge observed that the wife’s case before Martin J was reflected in her amended application filed 17 May 2010 together with a claim for spousal maintenance made in her affidavit of June 2010.
After the death of Martin J, the matter came before Crisford J on 19 September 2012. Her Honour made orders in relation to the sale of Property C and in particular:
3. … From the settlement of the sale of the property at [Property C], from the one half share to be paid to the Third Party, the sum of $100,000 be held in trust by the settlement agent, pending hearing of the Applicant’s Form 2 application filed on 8 August 2012.
This was in effect the same order as was made by Martin J on 13 August 2012
During the course of that hearing before Crisford J, in the discussion between her Honour and the wife, several matters were raised including the wife’s desire that the $100,000 continue to be held pending the determination of her application.
On 2 November 2012, Chief Judge Thackray held a directions hearing in relation to this matter.
The wife said to Chief Judge Thackray:
[THE WIFE]: ... In consideration of Martin J’s partial property settlement that she made on 16 April of this year and in consideration of my reamended form 1 that was filed on 17 May 2010, in my mind the application 1A(i) has been dealt with.
(The order sought in 1A(i) was the transfer to the wife of Property C)
After some further discussion the wife said:
[THE WIFE]: ….Yes, I do appreciate it’s very complex and difficult for everybody as the case has run for such a long time. Effectively, your Honour, in regards to that 1A(i) that property has been sold ---
…
However, the sham loan that---
…
That matter hasn’t been dealt with and there’s still a live issue before the court.
…
[THE WIFE]: So in my mind, your Honour, the issue of the sham loan has not been either set aside or dealt with by the court.
HIS HONOUR: Do you say that the evidence relating to that has been completed or is there still something---
[THE WIFE]: Yes, your Honour, I do, but the parties were subpoenaed to give evidence and to provide documents evidencing their claims, however, nothing was put to the court at trial. I would say to the court that is them saying that they have no case to argue. The other issue, your Honour, that hasn’t’ been dealt with that was a live issue at trial was the matter of costs.
(Transcript 2/11/12 page 2 line 42 to page 5 line 10)
The wife further mentioned to Chief Judge Thackray that the contravention applications filed by her had not been determined.
Later his Honour said:
HIS HONOUR: Taking it one step further, your expectation was that when she completed her reasons, at the time she gave her reasons, she would have dealt with this part of the proceedings.
[THE WIFE]: Exactly your Honour
HIS HONOUR: Okay. Is there anything else apart from the completion of the claim, however it’s described in relation to [the husband’s] family and the issue of costs – is there anything else that you consider remains outstanding.
(Transcript 2/11/12 page 8 line 28)
The wife indicated to his Honour that the issue of the $100,000 then held on trust was still outstanding.
His Honour said, and the husband agreed that Martin J had not dealt with the issue regarding money that might be owed to or by his mother. (Transcript 2/11/12 page 21 line 33)
Finally at the directions hearing before Chief Judge Thackray, the wife clarified that the $100,000 then held in trust was directly referable to the chattels that had not been provided to her. (Transcript 2/11/12 page 28 line 45)
Returning to the reasons of the trial judge; his Honour referred to the directions hearing before Chief Judge Thackray and identified his task in completing the hearing as follows:
167. It was apparent from the exchanges between the Court and the parties during the directions hearing that the following issues remained in dispute:
(a) broad issues regarding delivery up of chattels and the whereabouts of chattels;
(b) the fate of the $100,000 currently held in trust; and
(c) the wife’s contravention application or applications.
We are satisfied that in both the paragraphs quoted above ([417], [418] and [419]) and at [167] his Honour misapprehended the issues before him that required resolution and fell into error. Nothing said by the wife in the directions hearing before Chief Judge Thackray or in any document presented to the court had she limited or moderated her application for property orders to accept the $100,000 in satisfaction of her claims.
The appeal will thus succeed.
Disposition of the appeal
During oral argument counsel for the wife submitted that this was an appropriate matter in which the Full Court would re-exercise the discretion of the trial judge and make orders in the matter rather than remitting the matter for rehearing.
In the event that the Full Court was persuaded to re-exercise the trial judge’s discretion, the wife did not wish to put any further, updating evidence before the court. The husband did not wish to put further evidence to the court and did not oppose the re-exercise of the discretion if the appeal was successful.
There being no challenge to the trial judge’s findings or conclusions, the task of this court in re-exercising the discretion is relatively simple and in all of the circumstances of this matter, it is appropriate that we re-exercise the trial judge’s discretion rather than remitting the matter for further hearing.
We adopt his Honour’s assessment of the value of the parties’ assets being $1,230,754 and his Honour’s assessment of the value of the parties’ contributions leading to a division of those assets as to 65 per cent to the wife (the wife should receive $799,990 that is 65 per cent of $1,230,754).
This figure includes the $100,000 held in trust and which by the orders of the trial judge was to be paid to the wife. We were informed that this sum has been paid to the wife.
Taking into account his Honour’s findings as to the sums paid to the wife up to the hearing before the trial judge, namely $514,865, there is a further amount of $285,125 to be paid to the wife, noting of course that of that amount $100,000 has already been received by her.
Having found that his Honour erred, Order 1 of the trial judge should be set aside and we will order instead that the wife receive the sum of $285,125. That sum should be paid by the husband and the husband’s mother either jointly or severally but again noting that of that amount, $100,000 has already been received by the wife.
The order we propose casts an obligation of payment of the ordered sum on both the husband and the husband’s mother, either jointly or severally. We are of the view that it is appropriate that each be liable for the payment not only because the husband’s mother was a party to the proceedings but because consistent with his Honour’s unchallenged findings, she received $409,800 from the husband to which she was not entitled.
Costs
As is usual, we sought submissions on the question of costs at the conclusion of the oral argument. Counsel for the wife sought the issue of a costs certificate in the event that the appeal succeeded on a question of law. The husband, conceded that he had not incurred any legal costs in relation to the appeal and did not then seek a costs certificate.
This is an appropriate matter in which to grant a costs certificate and we will make that order in favour of the wife. We will order that the husband and the husband’s mother each bear his or her own costs of the appeal.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 14 February 2014.
Associate:
Date: 14 February 2014