Bania & Bania
[2009] FamCAFC 105
•19 June 2009
FAMILY COURT OF AUSTRALIA
| BANIA & BANIA | [2009] FamCAFC 105 |
| FAMILY LAW – APPEAL FROM FAMILY COURT OF AUSTRALIA – CREDIBILITY – Held that trial Judge failed to sufficiently consider impact of inconsistent representations made by husband in proceedings before him. His Honour failed to give adequate reasons for not finding husband’s credibility to have been adversely affected by such representations and their impact upon other evidence. Devries v Australian National Railways Commission (1993) 177 CLR 472; 112 ALR 641; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others (1999) 160 ALR 588; and Fox v Percy (2003) 214 CLR 118; 197 ALR 201 cited. |
| Family Law Act 1975 (Cth) Devries v Australian National Railways Commission (1993) 177 CLR 472; 112 ALR 641 |
| APPELLANT: | MS BANIA |
| RESPONDENT: | MR BANIA |
| FILE NUMBER: | ADF | 1466 | of | 1997 |
| APPEAL NUMBER: | SA | 104 | of | 2008 |
| DATE DELIVERED: | 19 June 2009 |
| PLACE DELIVERED: | Parramatta |
| JUDGMENT OF: | Finn, Coleman & Burr JJ |
| HEARING DATE: | 7 May 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 17 November 2008 |
| LOWER COURT MNC: |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Berman |
| SOLICITOR FOR THE APPELLANT: | Randle & Taylor |
| COUNSEL FOR THE RESPONDENT: | Mr Tredrea |
| SOLICITOR FOR THE RESPONDENT: | Mr David M Davidson |
Orders
That the appeal be allowed.
That the Orders made on 17 November 2008 be set aside.
That the application of the wife filed 30 November 2006 and amended on 16 March 2007 be remitted to a single judge other than Bell J for re-hearing.
That the Court grants to the Appellant Wife a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act1981 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.
That the Court grants to the Respondent Husband a costs certificate pursuant to the provisions of section 6 of the Federal Proceedings (Costs) Act1981 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 Respondent Husband in respect of the costs incurred by the Respondent Husband in relation to the appeal.
That the Court grants to the each party a costs certificate pursuant to the provisions of section 8 of the Federal Proceedings (Costs) Act1981 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 each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
IT IS NOTED that publication of this judgment under the pseudonym Bania & Bania is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SA 104 of 2008
File Number: ADF 1466 of 1997
| MS BANIA |
Appellant
And
| MR BANIA |
Respondent
REASONS FOR JUDGMENT
Introduction
On 12 December 2008 Ms Bania (“the wife”) filed a Notice of Appeal against orders made by Bell J on 17 November 2008 dismissing an application made by her pursuant to section 79A of the Family Law Act 1975 (Cth) (“the Act”). The wife filed an Amended Notice of Appeal on 23 December 2008.
The first respondent to the wife’s appeal, Mr Bania (“the husband”) was previously married to the wife. The second respondent to the wife’s appeal, Ms W, is the husband’s present wife. In her Further Amended Application for Final Orders pursuant to section 79A filed 9 May 2007, the wife named Ms W as a respondent, and sought that a transfer of land at S from the husband to Ms W be set aside pursuant to section 106B of the Act.
The husband resisted the wife’s appeal and sought to maintain the trial Judge’s orders. Ms W did not participate in the appeal.
Background
It is common ground that the pivotal factual issue in the proceedings before Bell J was whether there had been, in relation to orders for property settlement made with the consent of the husband and the wife on 24 April 2001, a miscarriage of justice arising from either the suppression of evidence (including the failure to disclose relevant information) or the giving of false evidence on the part of the husband with respect to a sum of $200 000 provided by the husband’s parents to a company related to the parties.
The wife claimed that the $200 000 had been a loan to the parties and that, subject to its repayment, the husband’s father held the shares issued to him in the company on trust for them.
The husband and his father (who died between the making of the consent orders and the making of the wife’s section 79A application) had maintained that the $200 000 had been provided to the company by the husband’s father by way of purchase price of the shares which were issued to him in the company.
To better appreciate the proceedings before the trial Judge, and the issues raised on appeal, a relatively detailed chronology of relevant events is helpful. We set out hereunder matters which emerge from the trial Judge’s Reasons and the evidence before him. Whilst the significance of some of these events is controversial, the events recorded hereunder are not.
The parties were married in 1970. There is some disagreement as to the date of separation, but a decree of dissolution of marriage was granted in May 1997. For present purposes, nothing turns on the date of the parties’ separation.
In 1986 the wife’s sister and brother-in-law incorporated a company, Z Pty Ltd (referred to as “the first company” in Bell J’s judgment) and were appointed its directors. Each director acquired 40 shares in the company.
In December 1986 the company (Z Pty Ltd) purchased the leasehold estate of the C Hotel. The wife subsequently worked in the C Hotel.
In 1988 the wife’s sister and brother-in-law resigned from their positions as directors of Z Pty Ltd and transferred their shareholdings to the wife (1400 shares) and the parties’ accountant (450 shares). The husband was apparently unable to acquire a shareholding in the company due to his employment as a hotel broker.
In December 1988 a second company, initially known as C Hotel Pty Ltd, but later “ACN # Pty Ltd” (referred to as the “second company” in Bell J’s judgment), was formed to purchase the freehold estate of the hotel. The first company owned half (5 shares) in the second company. The husband’s father and mother received the other five issued shares in the company. The purchase price of the freehold was $830 000. The husband’s parents provided $200 000 to C Hotel Pty Ltd and $630 000 was borrowed from the bank.
The husband’s mother died in 1993, at which time her interest in the company passed to the husband’s father.
Property settlement proceedings were initially commenced by the wife in April 1998.
On 10 September 1998 the wife filed an Amended Application for Final orders (Form 7) in which she named the husband’s father as a respondent to the proceedings and sought, inter alia, a declaration that the husband’s father “holds and has always held his shares in [C] Hotel Pty Ltd on trust for the husband and the wife.”
In an affidavit filed 25 January 1999, the husband’s father Dr Bania maintained that he owned the shares in C Hotel Pty Ltd.
On 12 April 2000 the wife filed a Notice of Discontinuance with respect to the orders sought against the husband’s father.
The C Hotel was sold on 4 September 2000. The net proceeds of its sale were ultimately received by the husband’s father.
On 21 December 2000 the wife filed an (Order 30) affidavit in which she stated:-
34.(g) I always understood and was told by the husband that the money from his father was a loan for which we would pay $100/week interest.
(h)i) The husband arranged for 5 shares to be issued in his father’s name for him to hold on trust for the husband and I as security for repayment of the loan. The shares were to be transferred to the husband and I when we repaid the loan of $200,000.
ii) That was agreed to and acknowledged by the husband’s father.
…
vi) … At no time prior to our separation did the husband’s father assert any proprietary right in [C] Hotel Pty Ltd.
vii) The husband and I personally paid the husband’s father the $100/week interest on the loan from its inception until 29th March, 1997 – a total of about $48,000.
On 24 April 2001 final property settlement orders were made by consent by Joske J, which provided:-
1.That in full and final settlement of all claims between the parties for settlement of property and spouse maintenance either in the past present or in the future:
(a)the husband and wife will do all things necessary in their respective capacity as directors and/or shareholders in the companies [Z] Pty. Ltd. and ACN [#] Pty. Ltd. to cause the same to be wound up;
(b)that the husband and wife shall agree upon suitable accountants to carry out the proposed winding up of the said companies but if the parties are not able to so agree then each shall nominate their separate accountant and instruct the same to work co-operatively with the other to effect the proposed winding up with the cost of the accountant or accountants to be borne by the said company in each case;
(c)that the husband and wife shall share equally in the following:
(i)monies payable to the husband from ACN [#] Pty. Ltd. in the sum of $22,000.00 being the credit loan account referred to in paragraph F(1) of the preamble hereto;
(ii)the wife’s redundancy/work related entitlements payment in the sum of $37,000.00 payable to her by [Z] Pty. Ltd. referred to in paragraph F(2) of the preamble hereto;
(iii)monies payable to the husband and wife by [Z] Pty. Ltd. in the sum of $74,013.00 and referred to in paragraph F(4) of the preamble hereto;
(d)that in all other respects the husband and wife shall each be entitled to receive free from claim by the other their credit loan accounts provided always that the husband shall not be called upon to repay his debit loan account [in [Z] Pty. Ltd.] referred to in paragraph F(3) of the preamble hereto;
(e)that following the winding up of the companies namely ACN [#] Pty. Ltd. and [Z] Pty. Ltd. and following the payment out of creditors and respective liabilities relating to the said companies together with payments made to the parties in respect of their loan accounts, any net surplus money properly payable to the husband and/or the wife shall be divided equally between them;
(f)the parties shall use their best endeavors [sic] to forthwith procure interim repayments of their credit loan accounts from ACN [#] Pty. Ltd. and [Z] Pty. Ltd.;
(g)that within seven (7) days of the completion of the winding up of the said [Z] Pty. Ltd. and ACN [#] Pty. Ltd. or upon receipt of any interim repayments of the wife’s credit loan accounts in any sum above $39,000.00 the wife shall cause to be paid to the husband the sum of SEVENTY THOUSAND DOLLARS ($70,000.00):
(h)that contemporaneously with the payment of the settlement sum of $70,000.00 to the husband herein he shall transfer to the wife all of his estate and interest both at law and in equity in the whole of the land comprised and described in Certificate Title Register Book Volume # Folio # being the land and premises situate at [R P];
(i)that the wife shall pay all present and future rates taxes and other like outgoings or arrears incidental to the said property and shall fully indemnify the husband in relation to all such payments;
(j)that the husband and wife shall do all things necessary to forthwith place on the market for sale the [S] shares numbering 1,464 owned by the husband and wife jointly and that the proceeds of the sale of the said shares together with any dividends received shall be forthwith divided equally between the parties;
(k)that henceforth the property in the following:
(i)furniture and effects in the husband’s possession;
(ii)husband’s separate savings and investments;
(iii)husband’s superannuation entitlements;
(iv)any life insurance and/or life assurance of the husband;
(v)any motor vehicle or vehicles in the husband’s possession;
(vi)any other real and/or personal property and/or financial resources of the husband in the husband’s name and/or possession not otherwise specified herein;
shall vest in the husband absolutely free of all further claim or demand or right or entitlement of the wife;
(l)that henceforth the property in the following:
(i)furniture and effects in the wife’s possession;
(ii)wife’s separate savings and investments;
(iii) wife’s superannuation entitlements;
(iv)any life insurance and/or life assurance of the wife;
(v)any motor vehicle or vehicles in the wife’s possession;
(vi)any other real and/or personal property and/or financial resources of the wife in the wife’s name and/or possession not otherwise specified herein
shall vest in the wife absolutely free of all further claim or demand or right or entitlement of the husband;
(m)that the husband and wife will use their best endeavours to do all things necessary to cause [Z] Pty. Ltd. to transfer its interest in the motor vehicle currently in the possession of the wife to her upon repayment by the wife to [Z] Pty. Ltd. of the sum of $11,533.00 being the value of the said motor vehicle in the books of account;
(n)that contemporaneously with the transfer of the husband’s interest in the property situate at [R P] in the said State to the wife she shall transfer her 1 ordinary share in [Bania] Investments Pty. Ltd. to the husband and/or his nominee and resign from any office held by her to the intent that she shall have no further interest in the said company;
(o)that henceforth each party is restrained and an injunction is granted restraining them and each of them from pledging the credit of the other;
(p)that each party shall pay their own costs of and incidental to these proceedings but that the transferee in each case shall pay the costs and disbursements of and incidental to any transfer assignment or conveyance necessary to give effect to the terms of this order;
(q)that in default of payment by the wife of the settlement sum in the amount of $70,000.00 as provided for herein the former matrimonial home at [R P] shall be sold at a price and upon such conditions as are agreed between the parties or in default of agreement as shall be fixed by this Honourable Court and from the net proceeds of sale thereof the husband shall receive such amount as shall then be outstanding together with interest thereon calculated at the rate of ten per centum (10%) per annum from the date of default until the date of payment thereof and that the wife shall receive the balance of the said net proceeds of sale;
(r)if either the husband or the wife shall refuse or neglect to execute any document necessary to give effect to the terms hereof within 7 days after the same shall have been tendered to him or her for that purpose then and in such case a Registrar or Deputy Registrar of this Honourable Court upon proof by affidavit of such refusal or neglect is hereby appointed to execute any such document on behalf of either party hereto and if in his opinion it shall be necessary to do to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly;
(s)liberty granted to either party to apply as to consequential orders.
2.This order is an order to which the provisions of s.77A of the Family Law Act applies and that the present and future spousal maintenance for the wife and the husband shall be quantified in the sum of Nil dollars.
On 14 June 2002 orders were made by consent varying the orders of 24 April 2001 pursuant to section 79A. The orders then provided that:-
1.That the order made by the Honourable Justice Joske in these proceedings on 24th April 2001 be varied pursuant to the provisions of Section 79A of the Family Law Act by:-
(a)deleting the existing paragraph 1(a) and (b) and by inserting in lieu thereof the following paragraph:-
(i)“the husband and the wife shall forthwith do all such acts matters and things as shall be necessary to transfer one half of the wife’s share and shareholdings in the company [Z] Pty Ltd to the husband and the husband and the wife shall do all such acts matters and things necessary in their respective capacities as directors or shareholders in the said company [Z] Pty Ltd and in the company ACN [#] Pty Ltd to cause the two companies to be wound up.”
2.That the order made by the Honourable Justice Joske on 24th April 2001 do otherwise stand.
Those variations did not impact materially upon the wife’s section 79A application.
On 11 October 2002 Mr H was appointed as liquidator of both Z Pty Ltd and C Hotel Pty Ltd. The liquidator’s report was provided on 9 January 2003. The liquidator determined that the $200 000 provided by the husband’s parents was “intended to be for one half of the equity” in C Hotel Pty Ltd (and thus was not a loan). Accordingly, distributions were made by the liquidator to Dr Bania.
The husband’s father, Dr Bania, died in December 2003. Dr Bania left his entire estate to the two children of the parties.
On 29 November 2004 the husband commenced proceedings in the Supreme Court of South Australia pursuant to the Inheritance (Family Provision) Act 1972 challenging his father’s will dated 2 May 1985. The husband stated at paragraph 8 of his Statement of Claim:-
8.The plaintiff had a good relationship with the deceased throughout his adult life. The deceased was supportive of the plaintiff. In 1985 with the assistance of the deceased the plaintiff bought the freehold of the [C] Hotel at [C]. The deceased lent the plaintiff $200,000.00. The hotel was subsequently sold at a profit in 2000. The plaintiff returned to the deceased the sum of $600,000.00. At that time the deceased indicated to the plaintiff that one day he would be the beneficiary of these funds. [Emphasis added].
This statement, along with the financial records of the husband’s late father that the wife obtained as a consequence of the liquidation of the companies, (in those records the ownership of shares in C Hotel Pty Ltd was never asserted) gave rise to the wife’s application pursuant to section 79A.
The husband’s challenge to his late father’s will was ultimately settled between the husband and the estate, and a consent order was made in April 2005 which provided for the transfer of a property at N to the husband.
On 30 November 2006 the wife filed an application seeking relief pursuant to section 79A of the Act. The application does not appear in the Appeal Books but nothing turns on that for present purposes.
On 30 November 2006 the wife filed an affidavit in support of her application for relief pursuant to section 79A of the Act. The annexures to such affidavit included the husband’s late father’s financial records to which reference has earlier been made, and other documentation supportive of the wife’s allegations with respect to the provision of funds to C Hotel Pty Ltd by the husband’s late father.
On 16 March 2007 the wife filed an Amended Application for Final Orders. On 9 May 2007 the wife filed a Further Amended Application for Final Orders in which she sought the following orders:-
That this Honourable Court determine, order and declare Pursuant to Section 79A of the Family Law Act that:
1.The Consent Order for property settlement and spousal maintenance dated 24 April 2001 made by this Honourable Court be varied such that in addition to the Orders set out therein there be an Order requiring the husband to pay to the wife the additional sum of $125,873.50 together with interest thereon at a rate to be determined by this Court from 24 April 2001 to the date of payment thereof on the grounds that there has been a miscarriage of justice by reason of fraud, suppression of evidence (including failure to disclose relevant information), the giving of false evidence on the part of the husband in the proceedings or alternatively other circumstances in that the husband failed to disclose to the court that a sum of Two Hundred Thousand Dollars ($200,000.00) provided by his father, Dr [Bania], was provided as a loan and not for the purchase of shares in the company ACN [#] Pty Ltd (“the Company”).
2.Upon liquidation of the Company the husband’s father was paid a sum of $451,747.00 and not $200,000.00 and accordingly the assets to be divided between the husband and the wife by way of property settlement were reduced by $251,747.00.
3.That the transfer of the whole of the land comprised in Certificate of Title Register Book Volume # Folio # from the First Respondent to the Second Respondent and dated 17 November 2005 be set aside pursuant to Section 106B of the Family Law Act.
4.The husband pay to the wife the costs of and incidental to this Application.
5.Any other Order this Honourable Court may deem fit.
On 29 January 2007 the husband filed a Response to an Application for Final Orders seeking that the wife’s application be dismissed and:-
2.That in the event that the wife’s application is successful, such order pursuant to section 79 of the Family Law Act, 1975 as amended for settlement of property as this Honourable Court shall deem just and equitable.
3.That the wife pay the husband’s costs.
On 24 April 2008 Burr J made the following procedural orders:-
1.That the wife’s application for relief pursuant to Section 79A be determined separately from the issue of property settlement, to the effect that the property settlement proceedings would be heard subsequent to a favourable ruling on the wife’s application.
…
3.That the question of costs be reserved to the Judge determining the Section 79A Application.
On 18 September 2008 the husband filed an affidavit in opposition to the wife’s affidavit in support of her application for relief pursuant to section 79A. In that affidavit, the husband did not deny or otherwise put in issue a number of material allegations of fact made by the wife in her affidavit in support of her application filed on 30 November 2006.
The section 79A application was heard by Bell J on 2 October 2008. The wife was not cross examined at the trial of the proceedings before Bell J. The husband was. No objections were taken to the affidavit evidence of the parties at the trial of the proceedings. His Honour delivered his judgment on 17 November 2008.
The trial Judge’s Reasons for Judgment
Bell J identified that the wife’s claim was that the husband “failed to disclose to the Court the sum of $200,000 provided by his father – was provided as a loan and not for the purchase of the shares in the company.” His Honour identified that the wife sought to invoke the jurisdiction of the court under section 79(1)(a) (presumably this is an error and should be section 79A(1)(a)) to set aside property orders where there is a miscarriage of justice by reason of fraud, suppression of evidence, the giving of false evidence or other circumstances.
The trial Judge stated that the wife did not assert that the husband had given false evidence, but that he had suppressed evidence by failing to give evidence of the fact that the $200 000 advance was a loan and/or suppressed the evidence by failing to disclose relevant information.
His Honour recorded that it was the wife’s submission that this suppression of evidence reduced the net property pool by $251 747.00, and that the wife therefore claimed half of the amount of $251 747.00, plus interest.
The background with respect to what he termed “The Grandfather’s Advance” was outlined by the trial Judge. Throughout his judgment, his Honour referred to the husband’s father as the grandfather. His Honour identified that the “status” of the $200 000 advance was central to the dispute before him.
The trial Judge then outlined the history with respect to the settled property proceedings (at paragraphs 7 to 11). His Honour recorded that Counsel for the husband correctly observed that “the effect of the order was to leave the determination of the entitlements of [the grandfather] in [the second company] to the liquidator of [the second company] (not to be determined by the Court)”.
The effect of the liquidation of the two companies was then considered. His Honour recorded that a liquidator was appointed with respect to both companies on 11 October 2002. His Honour also recorded that the liquidator determined that the $200 000 provided was “intended to be for one half of the equity” in the second company.
The trial Judge then had regard to what he termed the “probate proceedings” in which the statement upon which the wife relied as evidence of suppression of evidence was made. His Honour recorded that the husband’s father died in December 2003, bequeathing his entire estate to the children of the parties, to the exclusion of the husband. As noted above, the husband challenged his father’s will in the Supreme Court, but a settlement of his claim was ultimately reached. His Honour outlined that the wife relied on paragraph 8 of the husband’s Statement of Claim as evidence of the alleged suppression of evidence. We have earlier (paragraph 24) set out the paragraph.
The power of the Court to set aside orders on the basis of a miscarriage of justice was then discussed by the trial Judge. He referred to the decision of Barker v Barker [2007] FamCA 13, before turning to consider the “alleged suppression of evidence” in the case before him. His Honour highlighted that the applicant was required to prove both the existence of a ground (ie suppression of evidence) and that a miscarriage of justice had thereby resulted.
His Honour referred to the decision of Gee J in In the Marriage of Rohde (1984) 10 Fam LR 56, in which suppression of evidence was considered and found it to be “instructive”.
The trial Judge considered that there has been suppression of evidence if a) the evidence was material to the successful issue, b) the evidence was available at the relevant time and c) the successful party failed to adduce the evidence. His Honour stated that “it has not been proved by the applicant that the evidence in question was available to the respondent at the relevant time.”
The trial Judge concluded that the statement of the husband in his Statement of Claim filed in the Supreme Court proceedings could not be said to have been suppressed in the initial property settlement proceedings. His Honour found that it would be “improper” to suggest that it was withheld because the husband was never called as a witness to give evidence in the proceedings as the matter settled. His Honour also noted that the statement did not exist at the time the order for property settlement was made, or later varied.
It was further concluded by the trial Judge that nowhere until the Statement of Claim was filed did the husband contend other than that his father purchased an interest in the company.
The books of account which showed the grandfather as a shareholder who received dividends were referred to by the trial Judge. His Honour concluded that they did not “gel” with the wife’s view, which view his Honour noted was not accepted by the liquidator. He also noted that the wife subsequently resiled from her position by discontinuing her action against the husband’s father.
The trial Judge found that until the Statement of Claim was filed it was the husband’s belief that the money was advanced for the purchase of the shares. His Honour noted this belief was held by the husband and his father, and was accepted by the liquidator, who his Honour stated “was empowered with a quasi-judicial position as and by way of the consent order”.
His Honour stated that the only material which caused any “concern” was the Statement of Claim, which he then set out again in full. It was recorded by his Honour that it was conceded in argument that virtually every allegation in paragraph 8 of the Statement of Claim was wrong, and that the only matter which was correct in the paragraph was that the hotel was sold for a profit.
The trial Judge recorded that there was no evidence that convinced him that the husband was of the belief at the time alleged by the wife that the money had been lent, and that all other evidence “seems to suggest” that, in consideration of the payment of the money, the husband’s father received the five shares in the company.
As he was of the opinion that the husband had not suppressed evidence or given false evidence, the trial Judge concluded that the applicant failed to make out her claim. His Honour did not believe there was any evidence “whatsoever” to support the allegation that there had been a miscarriage of justice.
Having so concluded, the trial Judge however turned to consider “[t]he apparent miscarriage of justice”. His Honour observed that it was not necessary to consider this further ground in light of his findings, but noted that in determining whether a miscarriage of justice has arisen by reason of the alleged suppression of evidence, it is necessary to distinguish between “a miscarriage of justice and the justice or equity of a particular order.” His Honour stated the two are “not necessarily synonymous”.
The trial Judge recorded that while the “justice or equity of the order” may not “resonate” with the applicant, it could not be suggested that “those failings are a result of the conduct of the proceedings in this jurisdiction.” [Original emphasis]. His Honour continued:-
…the technicalities of how the property settlement was to be effected was determined entirely beyond the view of the Court and in fact was essentially deferred to the liquidator in the winding up of the companies. It may be entirely open to the applicant to seek redress in a court of general jurisdiction but such a remark should not be perceived as prejudging any such action should it be pressed. It is entirely a matter for the applicant and her legal counsel.
The wife’s application was thus dismissed.
The Grounds of Appeal
A number of Grounds of Appeal were advanced on behalf of the wife. In differing terms, a number of these grounds were directed to the central issue raised in the appeal. Sensibly in our view, these challenges were agitated together. As is apparent from the trial Judge’s Reasons, the dismissal of the wife’s application arose significantly, if not decisively, by virtue of the trial Judge’s finding that the husband had not “given any false evidence” during the course of the property settlement proceedings which culminated in the consent orders made in April 2001 and varied in June 2002.
It was common ground on the hearing of the appeal that, if the challenge to the trial Judge’s finding that the husband had not given false evidence succeeded, the order dismissing the wife’s application could not survive.
With respect to Counsel for the parties, we agree that it is appropriate to first consider the challenges to the critical finding made by the trial Judge. That issue is perhaps most directly articulated in Ground 1.6 of the wife’s Amended Notice of Appeal.
Ground 1.6 provided that his Honour:-
1.6failed to find that the admitted misstatements of the respondent husband as set out in the Statement of Claim filed in the Supreme Court was potentially supportive of the wife’s allegation that the husband had given false evidence and/or suppressed evidence available at the relevant time.
Although not actually so expressed, as the submissions of Counsel for both parties confirm, pivotal to this ground is a challenge to the trial Judge’s acceptance of the evidence of the husband in relation to the crucial factual issue in the proceedings before him. That in turn involves a challenge to the trial Judge’s conclusion with respect to the credibility of the husband but which was never expressly provided.
Central to the issue of the husband’s credibility was paragraph 8 of the Statement of Claim filed in the Supreme Court on behalf of the husband in the proceedings brought on his behalf against the estate of his late father. Although we have earlier set out the paragraph in full, it is convenient to again do so at this point. The paragraph asserted that:-
8.The plaintiff had a good relationship with the deceased throughout his adult life. The deceased was supportive of the plaintiff. In 1985 with the assistance of the deceased the plaintiff bought the freehold of the [C] Hotel at [C]. The deceased lent the plaintiff $200,000.00. The hotel was subsequently sold at a profit in 2000. The plaintiff returned to the deceased the sum of $600,000.00. At that time the deceased indicated to the plaintiff that one day he would be the beneficiary of these funds. [Emphasis added].
As is not in doubt, the assertion there contained with respect to the sum of $200 000 was inconsistent with the position which the husband had consistently maintained in the Family Court proceedings, and consistent with the position which the wife had maintained in those proceedings. The wife had also maintained that position in her discontinued claim against the husband’s father.
The wife deposed to having settled the proceedings for settlement of property with the husband because, notwithstanding her assertions in relation to the $200 000, she could not prove her allegations at that time. Her case in the section 79A proceedings was that the Statement of Claim and other evidence which only became available to her after the husband’s father’s death provided the proof which she had previously lacked.
Albeit not affirmed by the husband, the contents of the Statement of Claim prepared by his solicitor, was “put forward in accordance with the instructions” given by him to his solicitor.
In his evidence before the trial Judge, the husband suggested that the statements contained in paragraph 8 were untrue. Relevantly for present purposes, in the course of cross-examination of the husband, the following exchanges also occurred:-
MR BERMAN: More than 10 years ago my client made an allegation in her application – in her amended application – which said the moneys provided by the husband’s father were by way of a loan. That’s a summary of it. I don’t repeat it word for word, but that’s a summary of it. Right? Do you remember her making that claim?---I believe she did, yes.
Yes, and she made that claim effectively in every affidavit that she filed in the Family Court proceedings?---Right.
You agree with that, don’t you?---She has done that, yes.
I can take you to the parts of your affidavit, but your counsel, with respect, has very properly included at least some of those parts in the case outline document –but you asserted a position to the contrary, did you not?---Yes.
“What the wife was saying about the manner in which my father provided money was wrong.” That’s what your case is. He didn’t provide a loan; he bought shares?---That’s correct.
When you looked at this document, as you’ve indicated to his Honour that you have---?---Mm.
---this statement of claim, paragraph 8 – it must have been very obvious to you that a statement that appears in paragraph 8 – “The deceased lent the plaintiff $200,000” – was exactly what your wife had been complaining about, or had been alleging, for about eight years. Did that thought occur to you?---No, because I know that he purchased half the share in the [C] Hotel. That was the idea of it.
Don’t worry about what you know?---Right.
I’m now asking you to consider paragraph 8 and I want you to look at paragraph 8---?---Yes.
---and I want you to look at the sentence: “The deceased lent the plaintiff $200,000”. Simple words; simple statement?---It’s loosely said, yes.
What do you say now, it was loosely said?---Yes, well, “loan; provided the money”.
Did it not even occur to you at the time that you read this document ---?---I didn’t.
---that that was something that was pretty much the same as your wife had been alleging?---No. If I’d taken a lot of notice I most probably would have had that crossed out and changed.
Counsel for the wife emphasized the reality that the husband’s assertions with respect to the $200 000 in his Statement of Claim were made in circumstances where the transactions involving those monies had been controversial for some years in legal proceedings between himself and the wife, and in the discontinued proceedings between the wife and his late father. It was, correctly in our view, submitted that the husband could not have been unaware of the importance of the issue. The husband’s own evidence almost acknowledged that reality. It was thus submitted that the significance of the husband’s willingness to allow that representation to be made was greater than otherwise might have been the case.
On behalf of the wife it was submitted that, in the circumstances, the trial Judge could not, without providing reasons for doing so, accept the husband’s evidence in relation to the $200 000 transaction. It was further submitted that the trial Judge failed to give any reasons for not rejecting the husband’s version of events in the light of the inconsistent representations made on his behalf in the Statement of Claim, and had erred by not referring to it.
It was further submitted on behalf of the wife that the trial Judge’s failure to refer to these matters in the context of the husband’s credibility was the more significant by reason of other evidence before him. Reliance was placed upon the unchallenged evidence of the wife in her affidavit in support of her application. Relevant in that context was the evidence of the wife that:-
11.Shortly after the meeting [which occurred in late 1988] between the husband and the husband’s father a family meeting was held at which I was present along with the husband, the husband’s father and the husband’s mother. It was agreed that the husband and I would be liable for paying the sum of $100.00 per week by way of interest in respect of the loan of $200,000.00 until the loan was repaid or demanded by them which would not occur prior to the husband’s father retiring.
Reliance was also placed upon the unchallenged evidence of the wife that:-
17.The husband’s father showed no interest in the hotel and always made it clear that he had no interest in the hotel. At no time did he sign any guarantee documents in relation to the liabilities of the Company to its financiers notwithstanding the fact that he was a director. In December 1988 the husband’s father did not sign a guarantee in relation to the loan from the National Australia Bank. In 1992 the National Australia Bank which had funded the purchase of the freehold of the hotel demanded that the liability of the company to it be reduced. The husband and I sold our family home at [W] of which we were the owners to reduce the debt. The husband’s father was approached but refused to help. In 1995 the liability to the National Australia Bank was refinanced by Adelaide Bank Limited. Exhibited hereto and marked with the letters “SEB2” is a copy of the Guarantee and Indemnity with Bank Limited which was not signed by the husband’s father. He rarely visited the hotel. I estimate that he visited the hotel perhaps five times over the course of 12 to 13 years. I recall that he was approached on a number of occasions to sign documents as a director but refused to do so.
The annexure therein referred to records the husband and wife and Z Pty Ltd as guarantors for debts of C Hotel Pty Ltd to a limit of $569 000.
Reliance was also placed upon the unchallenged evidence of the wife that:-
20.The Company and [Z] were wound up voluntarily pursuant to the Court Order and ultimately the husband’s father was paid the total sum of $451,747.00 (not including interest which was paid on the sum of $200,000.00 at the rate of $100.00 per week from the date of commencement of the loan until about the time proceedings in the Family Court commenced. Whilst it was not paid weekly it was paid regularly in lump sums so that it was always brought up to date. It was paid by either the husband or myself in cash from our wages and it was marked on a calendar. The husband’s father would continually remind me or the husband to make the repayments). I maintain he should have only received a sum of $200,000.00.
The wife deposed in her affidavit that:-
25.Following the death of the husband’s father my children obtained his personal financial records. Included in his financial records were the husband’s father’s tax returns for the period 1989 to 2000 inclusive which recorded the loan to the Company. Exhibited hereto and marked “SEB5” is a copy of the balance sheets contained in the tax returns which show a loan to [C] Hotel Pty Ltd.
The documents referred to and styled “Dr. Bania Balance Sheet” consistently, and without exception, recorded the indebtedness of C Hotel Pty Ltd to Dr Bania, in the sum of $200 000 (or $203 000 in some years). More significantly for present purposes, under the heading “Assets”, on no occasion did Dr Bania refer to a shareholding in C Hotel Pty Ltd, or anything else which might reasonably be thought to represent such shareholding.
It is to be remembered that the wife’s contention had always been that, subject to repaying to Dr Bania the sum of $200 000, she and the husband beneficially owned the shares in C Hotel Pty Ltd which were issued to Dr Bania. Whilst not conclusive of the issue, Dr Bania’s failure, from 1989 to 2000 to include in his “assets” those shares, notwithstanding that he included his loan to C Hotel Pty Ltd, was capable of being corroborative of the wife’s assertions. The liquidator’s report, upon which the trial Judge placed some reliance, was prepared in the absence of Dr Bania’s personal balance sheets.
It was thus submitted that the combination of the unchallenged, and in a number of respects, corroborated evidence of the wife on the one hand, and the defects in the evidence of the husband, precluded the trial Judge from accepting the husband’s version of the $200 000 transaction, or precluding him from doing so without saying why he did.
It was submitted on behalf of the wife that the liquidator’s report did not change that state of affairs given the nature of the investigations which led to the liquidator’s conclusions, the basis of those conclusions, and the reality that the liquidator was, perhaps unsurprisingly in the circumstances, never provided with Dr Bania’s private balance sheets.
It was submitted on behalf of the husband that:-
9.Pursuant to the Orders, the Hotel company was wound up. The wife received distributions from the proceeds of the winding up, in accordance with the terms of the Orders.
On behalf of the husband it was also submitted that:-
17.Further, the explicit finding at para [27] that the husband has not given any false evidence was made after the primary judge had the benefit of hearing oral evidence from the husband, subject to cross-examination, and observing the husband as a witness.
It was further submitted that:-
27.The husband was found by the primary judge – at para [26] – [27] of the primary judgment – not to have given any false evidence. The primary judge was however aware of the husband’s position in relation to the $200,000 advanced by Dr [Bania] towards the purchase of the [C] Hotel in the Family Court proceedings, and the apparent inconsistency in relation to that matter in paragraph 8 of the husband’s Statement of Claim in the Inheritance Act proceedings. The primary judge took this into account and heard the husband given oral evidence, and be tested in cross-examination on the topic.
On behalf of the husband it was asserted that:-
28.The trial judge’s finding in relation to the credibility of the husband is not lightly to be set aside, and not to be set aside by an appellate court even if the appellate court “thinks that the probabilities of the case are against –even strongly against – that finding of fact.” See: Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479.
It was thus submitted on behalf of the husband that:-
29.The husband submits that the primary judge’s finding as to his credibility was a matter for the primary judge. There is no material either before the Court at first instance, or upon appeal, justifying the setting aside of this finding.
As Counsel for the husband has, in our view correctly, submitted, appellate intervention with respect to credibility findings is not readily or lightly enlivened. In Devries v Australian National Railways Commission (1993) 177 CLR 472; 112 ALR 641, Brennan, Gaudron and McHugh JJ said (at CLR 479; ALR 646):-
If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his [or her] advantage” [SS Hontestroom v SS Sagaporack [1927] AC 37 at 47] or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”. [Brunskill (1985) 62 ALR at 57].
See also State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others (1999) 160 ALR 588 and Fox v Percy (2003) 214 CLR 118; 197 ALR 201.
It is apparent that, as submitted on the husband’s behalf, the trial Judge accepted the husband’s evidence in relation to the disputed $200 000 transaction. Implicit in so doing was his rejection of the challenge to the husband’s credibility.
The trial Judge’s reasoning in relation to the issue is to be found in the following passage of his judgment:-
27.Consequently, since I am of the opinion that the husband has not suppressed any evidence, nor do I believe he has given any false evidence, that the applicant has failed in her application. I do not believe that there is any evidence whatsoever to support an allegation that there has been a miscarriage of justice. I do not in the circumstances deem it necessary to consider whether I should exercise my discretion to enable the matter to proceed any further.
As was fairly conceded on behalf of the husband, nowhere else in his Honour’s Reasons was the issue of the husband’s credibility expressly or impliedly considered. Although the trial Judge referred extensively to the question of whether the representations made on behalf of the husband in the Statement of Claim were evidence of the truth of those matters, and concluded that they were not, nowhere in his Reasons did his Honour consider the impact upon the husband’s credibility of his having made representations inconsistent with his repeatedly sworn version of events, or allowed those representations to be made on his behalf.
We agree with Counsel for the wife that the husband could not reasonably have been unaware of the significance of this topic. In reality, it had been a live issue in the proceedings for settlement of property between the husband and the wife and had given rise to proceedings by the wife against the husband’s father. It is inconceivable that the husband could have inadvertently made the representations appearing in paragraph 8 of the Statement of Claim. Nor could he have inadvertently allowed them to be made on his behalf.
In the circumstances, it was incumbent upon the trial Judge to explain why he did not regard the credibility of the husband as having been adversely influenced by his willingness to make the representations, or allow them to be made on his behalf. The representations were material to the husband’s credibility and, in the absence of reasons for not so regarding them, damaging to the husband’s credibility.
Nothing emerging from the husband’s explanation of the circumstances in which the representations came to be made provided a ready or adequate explanation either for the inconsistent representations, or the trial Judge’s failure to refer to them in his judgment.
We agree with the submission of Counsel for the wife that it was also necessary for the trial Judge to consider the impact of the other evidence on the husband’s credibility in the light of the representations appearing in paragraph 8 of the husband’s Statement of Claim.
As we have noted earlier, the wife gave unchallenged evidence in support of her contrary version of the disputed $200 000 transaction. In some material respects, as the evidence to which we have referred confirms, those allegations were corroborated. They were further corroborated by the matters emerging from Dr Bania’s private balance sheets to which we have referred. They were not contradicted by anything appearing in or emerging from the liquidator’s report.
Regrettably, although the trial Judge clearly preferred the husband’s version of the disputed $200 000 transaction to that of the wife, he did not in his Reasons for Judgment consider either the unchallenged evidence of the wife in relation to the topic, or the corroboration for it emerging from the documentary evidence which we have earlier identified.
In our view, the trial Judge’s failure to give any reasons for preferring, as clearly he did, the husband’s version of the disputed $200 000 transaction to the wife’s unchallenged version of the transaction constitutes appealable error. With respect to his Honour, in the absence of convincing reasons for preferring the evidence of the husband to that of the wife in the circumstances of this case, the finding that the husband had not “given any false evidence” cannot stand. This challenge is thus made out.
Both Counsel appearing before us, sensibly in our view, acknowledged that the critical issue in the proceedings before the trial Judge had been whether, as the wife contended, the parties were, subject to repaying the husband’s father $200 000, the beneficial owners of the shareholding in C Hotel Pty Ltd, or whether the shares in the C Hotel Pty Ltd, became and remained the property of the husband’s late father. The trial Judge’s conclusion with respect to the disputed $200 000 transaction, which was pivotal to the proceedings before him, having been successfully challenged, it is probably unnecessary to deal in detail with any of the other challenges raised on behalf of the wife.
It was, sensibly in our view, conceded on behalf of the husband that nothing contained in or emerging from the liquidator’s report could oust the jurisdiction of the Court pursuant to section 79A if the jurisdiction were otherwise properly enlivened. However, it remains to consider whether the liquidator’s report, or the trial Judge’s findings with respect to it, could lead us to a different conclusion to that which we have recorded above.
To the extent that the trial Judge may, but did not necessarily conclude that the consent orders reposed in the liquidator the determination of the ultimate entitlements of the parties, we do not accept that such an objective was able to be achieved. Even if it were, as the terms of the liquidator’s report make clear, the liquidator adopted a “commercial view” to the disputed $200 000 transaction that did not derogate from the trial Judge’s obligation to consider the evidence before him, and to provide adequate reasons for his findings with respect to it. Moreover, as we understand the terms of the liquidator’s report, the liquidator did not entirely support the version of the disputed transaction advanced by any of the interested parties.
As we have earlier observed, the liquidator did not have the benefit of Dr Bania’s private balance sheet. Nor did the liquidator have the benefit of hearing cross-examination of the husband, or receiving the unchallenged evidence of the wife, which was corroborated in a number of respects.
In the circumstances, the conclusions reached by the liquidator could not in our view provide an independent basis of support for the trial Judge’s conclusion that the husband had not given false evidence in relation to the disputed $200 000 transaction. Nor could they operate to cure the inadequacy in the trial Judge’s Reasons for finding that the husband had not given false evidence in the original property settlement proceedings.
It was submitted on behalf of the husband that if the Court rejected the crucial finding made by the trial Judge, so doing removed the basis for any findings with respect to the disputed transaction, thereby necessitating a rehearing of the proceedings. This was particularly so if, as we propose, the challenge to the adequacy of the trial Judge’s Reasons was accepted.
On behalf of the wife it was submitted that the damage to the husband’s credibility arising from the representations in his Statement of Claim, combined with the unchallenged, and in some material respects corroborated evidence of the wife, rendered erroneous the trial Judge’s failure to accept the wife’s version of the disputed transaction. We observe that the assertion on behalf of the wife that the trial Judge erred in failing to make a finding with respect to the disputed transaction in the terms asserted by the wife was not expressly or impliedly raised by any ground appearing in the wife’s Amended Notice of Appeal. Nor was that contention advanced in any of the written outline of argument provided on behalf of the wife.
As was submitted on behalf of the wife, the wife’s version of the disputed $200 000 transaction was unchallenged, and corroborated in a number of material respects. In the absence of further explanation, it is difficult to see how the evidence of the husband could be accepted without qualification. Having regard to the state of the evidence before the trial Judge, preferring the husband’s version of the disputed transaction would be problematic.
As the wife was not cross-examined, the absence of any opportunity for this Court to see and hear her give evidence cannot assume significance. The same is not true however of the husband, who was cross-examined before the trial Judge. Regrettably, the failure of the trial Judge to provide reasons with respect to the matters to which we have referred denies us the ability to reach any conclusion, beyond that which we have earlier expressed, in relation to the competing versions of the disputed $200 000 transaction. It is not insignificant in this context that we have upheld a challenge to an affirmative finding that the husband had not given false evidence. It would be difficult for an appellate Court to find that he had given false evidence in the absence of findings or reasons of the kind we have earlier identified as lacking in the trial Judge’s judgment. We are not comfortable finding that the wife’s version of the disputed transaction had to be preferred to that of the husband. The reality that allowing the wife’s appeal means that a trial Judge will hear further evidence, which is likely to be controversial, and require credit findings, reinforces our conclusion that we ought not attempt to re-exercise the trial Judge’s discretion in relation to the threshold issue which has given rise to the present appeal.
Neither before the trial Judge nor this Court was it asserted on behalf of the husband that the impact on the asset pool of an additional $200 000 could not have produced a different outcome to that embodied in the consent orders. In those circumstances, there is no basis for not remitting the matter for rehearing. In fairness, we do not understand Counsel for the husband to suggest otherwise in any event.
Costs
It was agreed that costs certificates with respect to the appeal and the rehearing should issue to both parties if the wife’s appeal was allowed. We agree that such a course is appropriate.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 19 June 2009
0
4
4