Barbieri & Barbieri
[2025] FedCFamC1A 51
•31 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Barbieri & Barbieri [2025] FedCFamC1A 51
Appeal from: Barbieri & Barbieri (No 2) [2024] FedCFamC1F 686 Appeal number: NAA 322 of 2024 File number: SYC 6804 of 2020 Judgment of: MCCLELLAND DCJ, WILSON & JARRETT JJ Date of judgment: 31 March 2025 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where a 10 per cent s 75(2) adjustment was made in favour of the respondent – Where the appellant contended that he was not afforded procedural fairness to make submissions on the s 75(2) adjustment – Where the parties were afforded the opportunity to make submissions about the relevant issues – Where the appellant contends that the primary judge’s reasons were inadequate – Where the matters taken into account by the primary judge were clearly articulated and sufficiently described – Where the appellant contended that the s 75(2) adjustment was “manifestly excessive” – Where the orders made were not outside of the generous ambit within which reasonable disagreement is possible – Where the appellant contended that the primary judge failed to accord him procedural fairness on the form of the orders made – Where the form of the primary judge’s order was not materially different to the orders sought by the respondent – Where the form of the primary judge’s orders were within the parameters established by the parties’ positions – Appeal dismissed – Written submissions ordered on the question of costs. Legislation: Family Law Act 1975 (Cth) ss 75(2)(o), 79A Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576; [1994] FCA 1074
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
F Hoffmann-La Roche v Secretary of State for Trade and Industry [1975] AC 295
Field & Kingston [2021] FedCFamC1A 66
House v The King (1936) 55 CLR 499; [1936] HCA 40
Lamereaux and Noirnot (2008) FLC 93-364; [2008] FamCAFC 22
McGregor & McGregor (2012) FLC 93-507; [2012] FamCAFC 69
National Companies & Securities Commission v News Corporation Ltd (1984) 156 CLR 296; [1984] HCA 29
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
R v Commonwealth Conciliation and Arbitration Commission; Ex parte The Angliss Group (1969) 122 CLR 546; [1969] HCA 10
Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298; [1989] HCA 13
Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57
Ritter & Ritter [2020] FamCAFC 86
Rollings & Rollings (2009) 230 FLR 396; [2009] FamCAFC 87
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
Russell v Duke of Norfolk [1949] 1 All ER 109
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609; [2007] HCA 26
Trevi& Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Zantiotis v Zantiotis (1993) FLC 92-367; [1993] FamCA 32
Number of paragraphs: 98 Date of hearing: 6 February 2025 Place: Heard in Sydney, delivered in Brisbane Counsel for the Appellant: Mr Coleman SC with Mr Chhabra Solicitor for the Appellant: Russell Kennedy Lawyers NSW Counsel for the Respondent: Mr Sirtes SC Solicitor for the Respondent: Edwards Moloney Family Law ORDERS
NAA 322 of 2024
SYC 6804 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR BARBIERI
Appellant
AND: MS BARBIERI
Respondent
ORDER MADE BY:
MCCLELLAND DCJ, WILSON & JARRETT JJ
DATE OF ORDER:
31 MARCH 2025
THE COURT ORDERS THAT:
1.Appeal NAA 322 of 2024 is dismissed.
2.No later than 4.00 pm on 14 April 2025 the respondent make, file and serve any material and submissions as to costs.
3.No later than 4.00 pm on 28 April 2025 the appellant make, file and serve any material and submissions as to costs.
4.No later than 4.00 pm on 5 May 2025 the respondent make, file and serve any material strictly in reply to any material filed under Order 3 hereof.
5.Otherwise the question of costs be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Barbieri & Barbieri has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ, WILSON & JARRETT JJ:
By his Amended Notice of Appeal filed on 17 January 2025, the appellant husband seeks to appeal an order for property adjustment made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 1 November 2024. The order required the appellant to pay the respondent wife $3,131,398 within 30 days of the date of the order.
In this appeal, the appellant argues that the order should be set aside because:
(a)the primary judge denied him procedural fairness by not seeking submissions from him before deciding to:
(i)adjust the parties’ contribution-based entitlement pursuant to s 75(2)(o) of the Family Law Act 1975 (Cth) in favour of the respondent by 10 per cent of the value of the nett property pool as found by the primary judge; and
(ii)order a cash payment by the appellant to the respondent, in circumstances where the respondent had sought an order for both a cash payment and a superannuation splitting order;
(b)the primary judge’s adjustment to the parties’ contribution-based assessment of 10 per cent in favour of the respondent was “manifestly excessive”; and
(c)the primary judge failed to give adequate reasons for:
(i)the adjustment and why the “amount determined was just and equitable”; and
(ii)his determination that ordering a cash payment “comprised entirely of non-superannuation assets” to be paid within 30 days of the date of the orders was just and equitable between the parties.
During the course of argument before us, senior counsel for the appellant accepted that the ground of appeal asserting that the primary judge’s adjustment to the parties’ contribution-based assessment of 10 per cent in favour of the respondent was “manifestly excessive” (Ground 5(aa) of the Amended Notice of Appeal), was not independently sustainable in the event that none of the other grounds of appeal found favour with us. However, it was not formally abandoned.
For the reasons that follow, the appellant does not make out his grounds of appeal and the appeal must be dismissed.
BACKGROUND
The appellant is presently 68 years old. The respondent is presently 59 years old.
The primary judge made no finding about when the parties commenced their relationship. He noted that there was a dispute about when they commenced cohabitation (the appellant contending for a date in 1998 and the respondent for a date in 1997). He accepted the respondent’s case and found that cohabitation commenced in 1997. They married in 1998, separated on a final basis in January 2018 and divorced by order made in 2020. The appellant has since remarried. The respondent has not re-partnered.
Following their separation, the appellant commenced an application for property adjustment. Despite some complaint by the respondent about the nature and quality of the appellant’s financial disclosure during that proceeding, it was finalised by consent orders made on 16 September 2022.
Critical to the respondent’s decision to settle that application was the value of two real estate units at Suburb D held by the appellant. The parties’ settlement negotiations were conducted on the basis that the appellant would retain the Suburb D units and he would make a cash payment to the respondent. At the time of the negotiations, the valuation evidence in respect of these units was outdated, as both parties knew. However, even before the negotiations had commenced, the appellant was investigating selling the Suburb D units. To that end, in September 2021, he obtained a market appraisal indicating that the units might sell for a much higher value than that which was being used by the parties in their negotiations. He did not disclose that appraisal to the respondent.
On the very day the consent orders were sent to the Court for consideration, the appellant executed a sales agency agreement that identified that the Suburb D units had a much higher value than that assumed for the purposes of the parties’ negotiations. Soon after the consent orders were made, the appellant sold the properties for a sum much greater than the value ascribed to it by the parties in the settled application.
Upon learning of this, the respondent commenced the application from which this appeal emanates. In it, she sought orders that the September 2022 consent orders be set aside pursuant to s 79A(1)(a) of the Act and in their stead there be orders dividing what she contended was the nett value of the parties’ assets, equally between the parties. She asserted that there had been a miscarriage of justice by reason of fraud, the failure to disclose relevant information and the giving of false evidence by the appellant sufficient to justify relief pursuant to s 79A(1)(a) of the Act. The appellant sought the dismissal of the respondent’s initiating application.
The application was tried over five hearing days in mid-2024. The primary judge delivered reasons and orders on 1 November 2024.
THE PRIMARY JUDGE’S REASONS
The primary judge’s reasons were largely concerned with resolving the respondent’s s 79A application.
At [103] of his reasons, the primary judge found that by no later than late March or early April 2022, and without disclosing his intention to the respondent, the appellant had set upon a path to sell the Suburb D units. He found that the appellant was proposing to sell the units in line with the market appraisal he had obtained for them in September 2021. According to the primary judge, it was an egregious and deliberate failure on the appellant’s part to not disclose his intention.
However, the primary judge rejected the respondent’s contentions that the appellant had engaged in fraud or had given false evidence in the earlier proceedings (at [118] and [127] respectively). Nonetheless, his Honour found that the appellant failed in his obligation of disclosure and that the respondent established that the appellant had suppressed evidence that he was otherwise required to disclose (at [121] and [128]). His Honour found s 79A(1)(a) to be engaged (at [121]).
At [133] of his reasons, the primary judge again expressed his satisfaction that there had been a miscarriage of justice by reason of the appellant’s failure to disclose relevant information and documents. He found that by reason of the appellant’s deliberate non-disclosure, the respondent’s consent to the September 2022 orders was not a fully informed consent. He found that the order was “unjustly obtained”.
The primary judge then considered whether the orders should be set aside and, at [139], expressed his satisfaction that the appellant’s non-disclosure led the court to make orders which were substantially different to those that it might have made but for the non-disclosure. His Honour determined to set the September 2022 consent orders aside.
There is no challenge to any of the facts found or conclusions reached by the primary judge about this aspect of the case.
From [141] of his reasons, the primary judge set about determining what property adjustment orders should be made in lieu of the September 2022 consent orders. He expressed his satisfaction that it was just and equitable that an order be made adjusting the property interests of the parties given the circumstances of the case.
The primary judge recorded the parties’ disagreement about their available assets by reference to a balance sheet (Exhibit 97). The disputed items included two parcels of real property purchased by the appellant using funds withdrawn by him from his superannuation interests after the September 2022 consent orders had been made. Whilst the appellant met the whole of the purchase price for each of those properties from those funds – described by the primary judge at [194] as over $2 million – he and his current spouse were registered as joint proprietors of each property. The respondent sought the inclusion on the balance sheet of the whole value of the properties, not just the amount that reflected the appellant’s legal title. The primary judge declined to include the entire value but said:
151I am satisfied that the better approach is to have regard to the fact that the husband’s superannuation has diminished by $1,969,216 by the acquisitions in his current spouse’s name and have regard to that in the consideration of the matters under s 75(2). The balance sheet will reflect the husband’s legal interest.
His Honour took a similar approach to a motor vehicle purchased by the appellant for his current spouse (at [154]).
The primary judge then dealt with other expenditure each party contended ought to be added-back to the balance sheet. The appellant contended that two amounts should be added-back – one to his credit and the other to the respondent’s. His Honour rejected those arguments (at [156] and [157]). The respondent contended that an amount incurred by way of fees and interest on her litigation funding loan should also be included, but the primary judge rejected that argument too (at [165]). These findings, which are not challenged, have no bearing on this appeal and nothing further need be said about them.
Relevantly, the respondent contended that an amount exceeding $2.8 million should be added-back and credited to the appellant’s side of the ledger. This amount comprised cash withdrawals from the appellant’s bank accounts, amounts expended by him on travel for himself and his current spouse, monies spent by the appellant on the child of his current spouse, monies remitted to his current spouse’s parents in another country, gambling losses (some of which pre-dated the marriage and some post-dated separation) and sums paid by the appellant towards his current wife’s legal fees. Of these amounts, the primary judge said:
161The question becomes whether the expenditure incurred by the husband was in all the circumstances reasonable. In relation to gambling losses, some of the amounts relate to pre-separation expenditure dating back to 2016. The husband conceded that he lost monies gambling. Had the money not been gambled, it would have formed part of the parties’ assets. The husband conceded in his affidavit that in one year his loss percentage was 60 percent. An examination of the husband’s expenditure on holidays for himself and his current spouse reveals expenditure vastly in excess of that spent by the wife post separation on travel. In addition, the husband expended a large sum in support of his stepchild, paid his current spouse’s legal fees and contributed monies to his current spouse’s family overseas totalling in excess of $150,000 as well as substantial cash drawings by the husband. I am not satisfied even within the confines of these parties’ wealth that the expenditure of the husband as identified by the wife could be categorised as reasonable as against the evidence such as it was of significantly more modest expenditure by the wife.
(Emphasis added)
Despite this, the primary judge rejected the respondent’s submission that these amounts should be treated as add-backs and said:
164Consistent with the above, I am not satisfied that the appropriate way to deal with this expenditure is to add back these amounts. The approach consistent with authority is to have regard to it under s 75(2).
Next, the primary judge considered the parties’ liabilities. He dealt with an issue concerning the appellant’s credit card debt and then considered an unquantified liability for capital gains tax arising from the sale of a certain property in Queensland by the appellant after the September 2022 consent orders were made. The primary judge determined that having regard to the imprecise evidence about its likely quantum, that liability would also be taken up pursuant to s 75(2) of the Act (at [168]).
Turning to contributions, the primary judge recorded his finding that the appellant had significant assets at the time of the parties’ marriage and that his initial contribution exceeded that of the respondent. The primary judge was satisfied that the appellant’s initial contribution provided a foundation for the wealth of the parties but that during the relationship, both parties made a “substantial contribution in their respective spheres” (at [181]).
After considering the parties’ post separation contributions and the parties’ contentions about an appropriate assessment overall – the respondent contended that contributions should be assessed as equal and the appellant contended they should be assessed in the range between 55 to 60 per cent in his favour – the primary judge assessed contributions at 52 per cent to 48 per cent in the appellant’s favour (at [189]). There is no challenge to this assessment.
Of significance to this appeal are the primary judge’s remarks about what he described as “Section 75(2)”. The primary judge recorded:
190The wife did not contend for any adjustment under s 75(2). That said, the argument was made as against a significantly different balance sheet which brought to account as against the husband the total value for the [Suburb W] property, the total of the deposit paid for the [Town Y] property, the trade in of the husband’s [motor vehicle] and significant expenditure by the husband that were asserted to be dealt with by way of addbacks.
191The husband also said that there should be no adjustment under s 75(2).
After rejecting any adjustment to the contribution-based assessment by reason of any disparity as to health, income, earning capacity, age or by reason of an obligation to support a new spouse, the primary judge said:
194The contribution finding favours the husband and is a factor to consider in the s 75(2) analysis. The other matters that call for consideration is the expenditure by the husband of over $2,000,000 to acquire real estate and a car in his current spouse’s name. It is proper and consistent with authority to recognise this diminution in the available property of the parties under s 75(2). I am also satisfied that relative to the wife, the husband’s expenditure referred to earlier vastly exceeded that of the wife and that it was not reasonable and calls for an adjustment in favour of the wife. This expenditure included monies spent on his current spouse, on holidays and travel, gambling and cash withdrawals. I also recognise that there will be capital gains tax payable on the sale of the [Suburb KK] property to be borne by the husband. Taking all of these matters into account, I am satisfied that it is appropriate that there be an adjustment in favour of the wife. I assess that in percentage terms at 10 percent.
The primary judge recorded that the effect of his assessments was that the respondent would receive 58 per cent of the parties’ nett property as he had found it to be and the appellant the balance (at [195]).
His Honour then concluded his reasons with the following paragraphs. We have set them out in full because they are brief and are the focus of some of the appellant’s complaints in this appeal:
195Accordingly, I am satisfied that the assets of the parties should be divided in the proportions as to 58 percent to the wife and 42 percent to the husband.
196The total pool of assets is $22,219,896. To give effect to a 58 percent division would see the wife receiving property having a value of $12,887,539.
197The wife has property having a total value of $9,756,141. Having regard to the Balance Sheet of the parties, a 58 percent distribution of the parties’ assets to the wife, considering the property that the wife has, would require the husband to make a payment to her of $3,131,398.
198Having regard to the above matters, I am satisfied that such a division and payment constitutes a just and equitable determination.
199The husband’s senior counsel made no submissions as to how any amount should be paid to the wife in the event the Court made orders pursuant to s 79. The wife sought a payment in part by way of cash and in part by way of superannuation splitting order but in a larger amount.
200I propose to make an order that the husband pay the funds to the wife by way of cash payment. There is no reason why, given the funds he holds in the bank and his other resources, such payment should not be made within 30 days.
201I will make orders accordingly.
THE GROUNDS OF APPEAL
Initially, the appellant pursued five grounds of appeal. By his Amended Notice of Appeal, he abandoned three grounds and presses only two (oddly, both numbered 5). The first numbered ground 5 has three sub-grounds and the second numbered ground 5 has two sub-grounds. As we have already recorded, during the hearing before us Ground 5(aa) was abandoned in spirit, if not formally.
Procedural Fairness
Both sub-grounds numbered 5(a) allege a failure to afford the appellant procedural fairness, although in different respects. It is necessary to deal with these grounds first (Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [117]; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]).
Both parties accept that it was incumbent upon the primary judge to afford both parties procedural fairness. They also agree that a failure to properly afford procedural fairness will only sound in relief where that failure is material to the outcome of the case (Stead v State Government Insurance Commission (1986) 161 CLR 141; Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82; SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609).
Just what will be required in a particular case to afford a party procedural fairness will vary according to the facts of the case. The content of the requirement to provide procedural fairness is not fixed (Russell v Duke of Norfolk [1949] 1 All ER 109 at 118; applied in R v Commonwealth Conciliation and Arbitration Commission; Ex parte The Angliss Group (1969) 122 CLR 546 at 552 and National Companies & Securities Commission v News Corporation Ltd (1984) 156 CLR 296 at 311–312).
Thus, the task presented by these two grounds of appeal is to first identify the content of the requirement for procedural fairness having regard to the appellant’s grounds of appeal and the facts of the case. Next, is to identify if that requirement was not met; and lastly, if that requirement is not met, to determine whether that failure to afford procedural fairness to the appellant was material to the outcome of the case.
The First Ground 5(a)
This ground complains that the primary judge erred by making an adjustment pursuant to s 75(2) of the Act in that he denied the appellant procedural fairness by:
…making such adjustment in circumstances where the case was conducted, as his Honour recognised, on the basis that the respondent “did not contend for any adjustment under s 75(2)” and, notwithstanding that fact, the appellant was not afforded the opportunity to be heard in opposition to the adjustment which the primary judge awarded in his Honour’s judgment;
Put shortly, the appellant can only succeed on this ground if we are satisfied that in the circumstances of the case, the content of the duty to afford the appellant procedural fairness required the primary judge to inform the appellant that he was considering making an adjustment to the parties’ contribution-based entitlement for one or other of the matters set out in s 75(2) of the Act.
The respondent’s primary position was clearly that in the event that the primary judge accepted her arguments about the construction of the balance sheet, he should assess the parties’ contributions as equal and make no adjustment for matters arsing under s 75(2) of the Act. However, she had an alternative position, articulated in both her Outline of Case Document (Final Hearing) filed on 2 August 2024 (at [73]) and her outline of closing submissions relied upon at the conclusion of the trial (at [92]), that if the add-backs for which she contended were not accepted by the Court, there should be an adjustment under s 75(2)(o) to take up those matters.
The appellant’s case is that no submissions were addressed to the respondent’s alternative case because she sought no adjustment to the parties’ contribution-based entitlements for any matters arising under s 75(2) and she did not nominate any particular adjustment in respect of her alternative position. In those circumstances, the appellant argues that he was entitled to expect that the primary judge would make no adjustment under s 75(2) and before he did so, he would raise what he was proposing with the appellant so he might make submissions about it.
We disagree. The appellant’s expectations are without foundation and we think that his Honour was not so obliged for the following reasons.
First, the appellant does not contend that the primary judge did not afford him the opportunity to make submissions about matters that might be relevant pursuant to s 75(2) of the Act. Indeed, as we set out below, the material before us demonstrates that both parties were given opportunities for that and they each took them. Indeed, at the conclusion of the trial, the primary judge expressly invited submissions about that issue from senior counsel for the appellant (Transcript 23 August 2024, p.397 lines 1–9):
HIS HONOUR: All right. And as to an adjustment under section 75(2)?
[SENIOR COUNSEL FOR THE APPELLANT]: We don’t make a submission in that regard, your Honour.
HIS HONOUR: I beg your pardon?
[SENIOR COUNSEL FOR THE APPELLANT]: We don’t submit there should be an adjustment, with regard to all circumstances.
This was not a submission by senior counsel for the appellant that no submission was made because the respondent was not seeking a relevant adjustment. It was a positive submission that there should be no adjustment.
Second, whilst it was the respondent’s primary case that, having regard to the balance sheet as she contended it should be found, no adjustment for s 75(2) matters was appropriate, her clearly articulated position was that in the event that her contentions about addbacks were rejected, those matters should be taken up under s 75(2)(o) of the Act.
At page 13 of the respondent’s Outline of Case Document (Final Hearing) filed on 2 August 2024, under the heading “Addbacks”, she said: “The Applicant Wife contends that there should be addbacks – or alternatively, these matters should be dealt with under section 75(2)(o)”. Thereafter, she identified the addbacks for which she contended totalling about $3.4 million. However, no amount for any proposed adjustment to take up these matters was identified.
We are not persuaded that the fact that the draft orders attached to the respondent’s outline sought an order for the equal division of the parties’ assets “as found by the court” detracts from the respondent’s alternative position, or should be construed as an abandonment of her alternative argument that an adjustment to the parties’ contribution-based entitlement might be appropriate to take up matters otherwise rejected as informing the composition of the balance sheet. It would be artificial to read the draft order devoid of the context supplied by the primary position set out in the balance of the respondent’s Outline of Case.
Nor are we persuaded that the submissions of junior counsel for the respondent to the primary judge to the effect that the respondent did not seek any adjustment under s 75(2) (Transcript 6 August 2024, p.377 lines 1–10) represents an abandonment of her alternative claim. This submission was made in the context of the applicant’s primary position as to the balance sheet and the contribution findings to be made by the primary judge on the basis of that proposed balance sheet.
Third, there is no suggestion that either party was prevented from addressing the respondent’s alternative position we have just identified. Matters arising under s 75(2), and specifically s 75(2)(o) of the Act, were addressed:
(a)by the appellant in oral closing submissions:
(i)in relation to the appellant’s inordinate spending on travel (Transcript 23 August 2024, p.384 lines 1–14). In this respect, the appellant’s senior counsel drew attention to the appellant’s contention that one way of dealing with this expenditure was to treat funds expended by both parties following the September 2022 consent orders as an interim distribution on the balance sheet;
(ii)in relation to the potential capital gains tax payable on the sale of the Suburb KK property (Transcript 23 August 2024, p.390 lines 5–20); and
(iii)in relation to work the appellant said he did to project manage and supervise certain renovations of the Suburb D units (Transcript 23 August 2024, p.396 lines 7–12);
(b)by the respondent in her written closing submissions (Exhibit 50):
(i)at paragraph 70, where she suggests that there should be a “hedge” against the risk that the appellant has successfully concealed further assets or income;
(ii)at paragraph 92, where she suggests that the Court would have regard to the “notional assets under section 75(2)(o) of the Act, and/or and in determining what order is just and equitable in all the circumstances under s 79(2)”;
(iii)at paragraphs 93 to 96, where, after referring to Trevi & Trevi (2018) FLC 93-858 at [30], she suggested that it was both just and equitable that certain expenditure by the appellant “be brought to account in the Court’s exercise of its discretion”; and
(c)by the respondent in oral closing submissions in relation to the potential capital gains tax payable of the sale of the Suburb KK property (Transcript 23 August 2024, p.379 to p.380).
Given that each of the parties submitted that the primary judge might take certain matters into account pursuant to s 75(2)(o) in the event that he did not accede to one or other of the parties’ primary arguments, it cannot seriously be contended that:
(a)either party, let alone the appellant, was deprived of an opportunity to make submissions about those matters; and
(b)there was no prospect of the primary judge doing just as the parties suggested he might and taking these matters into account.
Fourth, the primary judge raised with the parties the prospect of taking up the value of various of the add-backs and the contingent capital gains tax liability (Transcript 23 August 2024, pp. 379–380, 384, 390 and 396).
Thus, we consider that to the extent that the duty to provide procedural fairness required the primary judge to raise with the parties that the amounts we have identified above might be taken up, not on the balance sheet, but as matters for consideration under s 75(2) of the Act, the primary judge plainly discharged that duty.
However, notwithstanding this, it was no part of the primary judge’s role to cajole the parties’ counsel into making submissions about matters that were clearly raised in the course of the trial. His Honour’s only obligation was to afford the parties an opportunity to make submissions about the relevant issues. What each party chose to make of the opportunity was a matter entirely for them. In Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298 at 305, Gaudron J (with whom Dawson J agreed) said:
As was pointed out by Deane J in Sullivan v. Department of Transport (1978) 20 ALR 323 at 343, procedural fairness requires only that a party be given “a reasonable opportunity to present his case” and not that the tribunal ensure “that a party takes the best advantage of the opportunity to which he is entitled”. And it is always relevant to inquire whether the party or his legal representative should reasonably have apprehended that the issue was or might become a live issue: see Re Building Workers’ Industrial Union of Australia; Ex parte Gallagher (1988) 62 ALJR 81 at 84; 76 ALR 353 at 358.
(Emphasis in original)
Having been given the opportunity to make submissions about how the various addbacks contended for by each party should be dealt with, neither party sought an adjustment under s 75(2) to the contribution-based assessment derived by the primary judge. That is because each was seemingly content to confine their submissions to their primary position based upon the balance sheet as they contended it should be constructed. Neither addressed the outcome of the proceedings (or how it might be derived from an application of s 79(4) of the Act) in the event that the primary judge did not accept either of the parties’ primary argument about the makeup of the balance sheet.
Even though the parties did not address such an outcome, we consider it beyond argument that the appellant and his legal representatives should reasonably have apprehended that the question of a possible adjustment under s 75(2) of the Act was a live issue. Whilst the respondent contended that certain expenditure by the appellant should be included on the balance sheet, the appellant opposed that course. As the parties’ submissions to the primary judge recognise, in the event that the respondent’s argument was rejected, that expenditure (or at least that much of it which was uncontentious) needed to be taken into consideration in some way so as to derive a just and equitable order.
Finally, whilst the appellant relies upon the Full Court’s decision in Ritter & Ritter [2020] FamCAFC 86 at [50]–[52] (citing Kirby J in Allesch v Maunz (2000) 203 CLR 172 at [35]– 36]), the reliance is misplaced. Relevantly, what the Full Court said there was:
51 Natural justice requires that anything relied upon by a court in reaching its decision be made known to the parties to the proceedings prior to the making of the decision, so that parties may oppose reliance upon it, produce evidence in relation to it and/or make submissions about it. Reliance upon material which does not emerge in that manner amounts to appealable error.
Examples of this type of failure to afford a party procedural fairness can be seen in cases such as Zantiotis v Zantiotis (1993) FLC 92-367 (where the primary judge took into account a person’s demeanour without informing counsel of the inferences she intended to draw as a result), Lamereaux and Noirnot (2008) FLC 93-364 (where the primary judge relied upon expert evidence given in other proceedings without affording the parties an opportunity to be heard in relation to same), and McGregor & McGregor (2012) FLC 93-507 (in which the primary judge took account of academic literature in supporting his findings of alienation without giving the parties an opportunity to reply).
However, this is not a case where the primary judge has relied upon some material not known to the parties. There is no suggestion that the primary judge took into account some material or thing that was not in evidence. The gravamen of the appellant’s argument is that the primary judge did not expose his thinking to the parties before his judgment so as to enable the appellant to forestall his Honour’s decision. The primary judge was not obliged to do that: Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591, applying Lord Diplock’s statement in F Hoffmann-La Roche v Secretary of State for Trade and Industry [1975] AC 295 at 369:
... the rules of natural justice do not require the decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he reaches a final decision. If that were a rule of natural justice only the most talkative of judges would satisfy it and trial by jury would be abolished.
In our view, in the circumstances of this case, the content of the duty to afford the appellant procedural fairness did not extend to an obligation on the part of the primary judge to explain to the parties that he was considering making an adjustment to the parties’ contribution-based entitlement under s 75(2)(o) and invite submissions as to the quantum of any adjustment that might be made. The parties well knew that his Honour was obliged by the Act to consider that matter as part of the exercise of making a just and equitable property adjustment order and the prospect of him doing so was clearly raised in the course of the trial.
The appellant argues that whilst the respondent’s written submissions at the conclusion of the trial raised the prospect of some matters being considered pursuant to s 75(2)(o), “she did not advance any position about what an appropriate adjustment may be in terms of a percentage. Accordingly, the Husband’s evidence and case were, primarily, put in opposition to the Wife’s contention that these items should be added back into the pool, and not in response to any specifically proposed 75(2)(o) adjustment” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 21). However, we cannot accept this argument because the appellant’s case and his evidence were closed by the time the respondent made the submissions that are the subject of this argument. Even if the respondent had addressed her alternative claim in more detail in closing submissions, subject to an application to re-open his case (which we venture to suggest would not enjoy much prospect of success), the appellant had led all of his evidence he thought was appropriate for his case.
This ground of appeal fails.
The Second Ground 5(a)
The second respect in which the appellant contends the primary judge failed to accord him procedural fairness concerns the form of the adjustment order made. He contends that the primary judge should have warned him that the form of order that he was contemplating was a cash payment only, rather than a superannuation splitting order. Primarily, the issue is whether the content of the duty to provide the appellant with procedural fairness required the primary judge to do as the appellant now contends. We do not consider that it does.
Relevantly, the content of the duty of procedural fairness was recently described in Field & Kingston [2021] FedCFamC1A 66 the Full Court (Tree, Gill and Hartnett JJ) as follows:
21Although a judge is not bound by the proposals of the parties (U v U (2002) 211 CLR 238 at [80]), orders materially different to those sought by them ought not be made without first affording the opportunity to make submissions (Bolitho and Cohen (2005) FLC 93-224 at [85]; Lenova & Lenova (2011) FLC 93-467 at [55]; Robertson & Sento [2009] FamCAFC 49 at [138])…
Irrespective of whether the Court is considering parenting orders or property adjustment orders (or orders made in connection with enforcement as was the case in Field & Kingston), there is little difference in approach because both are exercises in discretionary decision making.
The order made by the primary judge was not materially different to that sought by the respondent. The orders she sought were a combination of a cash payment and a superannuation payment. The appellant made no proposal other than that the respondent’s application be dismissed. The order made was for a cash payment, albeit in a larger amount than that sought by the respondent. But we consider that to be of no moment because the order was well within the range of outcomes identified by the parties’ respective positions.
Further, if the appellant’s contention was correct, it would necessarily have required the primary judge to inform the appellant of the amount of the proposed order, something which he was not entitled to be told at that point in the trial. We reach this conclusion because the appellant well knew that the respondent was seeking a payment in cash in some amount, and so was demonstrably on notice that the primary judge might make an order for such a payment.
In any event, if we are wrong about that, the omission of the primary judge to inform the appellant that he was considering making an order for a cash payment in the sum he did, for the reasons that follow, was not material to the outcome of the case.
On the respondent’s best case, she would have received an adjustment of property in the order of $3,840,417 ($13,596,558 (being 50 per cent of $27,193,115 (the pool contended for by her)), less $9,756,141 (being the value of the property of which she was seized). Of that, the orders she proposed would see $1,305,742 paid as cash, and the balance of $2,534,675 as a superannuation splitting order.
It can be seen that the result achieved by the respondent (a payment to her of $3,131,398), in monetary terms, was within the parameters of the dispute fixed by the orders sought by the parties. Having regard to the cash reserves of the appellant ($3,480,439 in bank accounts and shareholdings) as found by the primary judge, the respondent’s entitlement could be satisfied from those reserves.
The appellant argues that upon implementation of the primary judge’s orders, the appellant’s non-superannuation funds would, in effect, be exhausted. He argues that taken in conjunction with the appellant’s evidence about his usual expenditure, “it is plain that the [appellant’s] excess of expenses over income would see him need to sell assets to meet his living expenses” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 56).
The appellant argues that given that the respondent sought orders for both a cash payment and a superannuation splitting order, he was not afforded the opportunity to give “responsive evidence about the practical consequences of an Order which saw the settlement sum paid entirely in cash” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 57). He argues that such evidence would have necessarily included “the interplay between [a certain Westpac bank account] and [a certain Westpac loan account] and the effect of exhausting the funds in [that bank account]” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 57). Further, he argues that he did not have the opportunity to obtain advice or adduce expert evidence with respect to the possible taxation consequences of an order which saw the settlement sum paid in cash, or the burden on him arising from the flow on effect of selling assets in his name or within his superannuation funds to make payment of the settlement sum or his living expenses (Appellant’s Summary of Argument filed 17 January 2025, paragraph 59).
He suggests that:
The materiality of the denial of procedural fairness is such that the Order (if it stands) will see considerable liabilities arise for him from the sale of shares and other assets to meet the payment of the settlement sum and his ongoing living expenses. These consequences were not known to the Court at the time of trial, and will fall squarely on the [appellant].
Given the disproportionate burden of this Order on the [appellant], it is submitted that the denial of an opportunity to adduce evidence in reply and make submissions regarding the form of Orders is serious and justifies the Court setting aside the Primary Judge’s orders.
(Appellant’s Summary of Argument filed 17 January 2025, paragraphs 60–61)
However, we do not accept these submissions for the following reasons.
First, at issue is the opportunity to give evidence and make submissions about the form of order that was to be made in the event that the primary judge thought that an adjustment order was appropriate. The appellant plainly had that opportunity. He was on notice of the orders sought by the respondent. The orders sought by him were simply that the respondent’s application be dismissed. To the extent that the appellant suggests that it was incumbent upon his Honour to draw to counsel’s attention that he might find the case in the way contended for by the respondent and that would mean that some orders for property adjustment might be made, so as to alert the appellant to the desirability of making submissions about the form of order, we reject the suggestion. The decision to take up the opportunity to make submissions about the form of any adjustive order, was a matter entirely for the appellant and his advisors.
Second, it could not have been lost on the appellant, or those that advised him, that if the respondent succeeded in the way for which she contended (a cash payment of about $1.3 million), the appellant had no means of paying that without accessing the Westpac account, selling his shareholdings or drawing upon his superannuation interests. Thus, matters such as the connection between the Westpac account and the Westpac loan, the effect of depleting the funds in that account and the costs and taxation implication of selling shareholdings or accessing his superannuation interests were always relevant. The fact that the appellant chose to lead no or limited evidence or make any submissions about these issues was a matter entirely for him. His approach can only be explained by an unshakable, but unjustified confidence in his own case.
Third, the fact that the respondent secured an order for a cash payment greater than that sought by her does not alter the position. Even on the respondent’s case “as pled” (in the words of the appellant’s senior counsel), the burden of any property adjustment order was always going to fall upon the appellant. He would have to engage in share or asset sales to fund an order for a cash payment at the level sought by the respondent unless he drew all of the funds from the Westpac account which, on his arguments on appeal, was likely to be problematical.
We accept the submission of the respondent that this complaint seeks to distract and deflect what is in truth a problem of the appellant’s making and seeks to mischaracterise it as an error by the primary judge.
This ground of appeal has no merit.
ADEQUACY OF REASONS
Both grounds numbered 5(b) contend that the primary judge’s reasons were inadequate. In respect of each of these grounds, the statement of principle in Bennett and Bennett (1991) FLC 92-191 at 78,266, adopting the test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18 sets the legal framework for their consideration:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:–
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
The First Ground 5(b)
The parties both referred us to what fell from the Full Court in Rollings & Rollings (2009) 230 FLR 396 as follows:
60As to what should be contained in reasons in Beale Meagher JA at 443-44 said that there are “three fundamental elements of a statement of reasons”. First, refer to the relevant evidence. Second, “set out any material findings of fact and any conclusions or ultimate findings of fact reached”. Third, in relation to the critical disputed issues of fact and law “provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found”. Meagher JA then at 444 observed that the “reasons or the process of reasoning should be understandable and preferably logical as well”. Importantly, if there is a right of appeal then the reasons should be sufficient to enable an appellate court to determine the precise findings of fact and law upon which the judgment is based: Pettitt v Dunkley and McCarroll v Fitzmaurice [1979] 2 NSWLR 100.
61There are however some limits on the extent of the duty to give reasons. In Tatmar Pastoral Mahoney JA at 385 said that the duty of a primary judge to state reasons for a decision “does not exist in respect of every matter, of fact or of law, which was or might have been raised in the proceeding. It is not the duty of the judge to decide every matter which is raised in argument”. His Honour also at 386 said: “Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemize … each of the factual matters to which he has had regard [or] … make an explicit finding on each disputed piece of evidence”. However, his Honour made clear that despite the above, it is of course necessary that the essential grounds upon which the decision rests should be articulated so that it is clear to an appeal court the reasoning upon which the decision is based: see also at 280 per McHugh JA and Yorta v State of Victoria (2001) 110 FCR 244 at 295 [203] per Branson and Katz JJ.
(Emphasis added)
The appellant does not take issue with the primary judge’s reasons insofar as they explain what matters his Honour took into consideration pursuant to s 75(2)(o) of the Act. However, the appellant contends that his Honour does not explain the material findings of fact with respect to items 49 to 56 of the balance sheet (Exhibit 50) which he said he took into consideration under s 75(2)(o) of the Act. Those items largely concerned spending by the appellant on various matters including gambling and travel. Having regard to the parties’ submissions and the documentary evidence before the primary judge, it can be said that some of the claimed expenditure was not controversial in terms of its amount. There was some argument that suggested the total identified by the respondent as the appellant’s travel expenses covered expenditure other than travel and the sum of the amounts for gambling had not been proved, but beyond that, we can discern no serious issue taken by the appellant with the quantum of the amounts claimed by the respondent for these items.
The appellant argues that the primary judge does not explicitly articulate how the matters taken into account for the purposes of s 75(2)(o) “cumulate to 10%” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 43). This was the primary focus of the submissions made by senior counsel for the appellant on the hearing of the appeal.
The primary judge’s reasons show that he brought to consideration the sum of $1,969,216 (at [151]) being half of the amount withdrawn by the appellant from his superannuation interest to fund the purchase of property with his current spouse. That amount was about 8.8 per cent of the parties’ nett assets and superannuation as found by the primary judge. At [194], his Honour said this amount was over $2 million including a car purchased in the appellant’s current spouses’ name. His Honour then said, in a passage we have already replicated, but include again for convenience:
194I am also satisfied that relative to the wife, the husband’s expenditure referred to earlier vastly exceeded that of the wife and that it was not reasonable and calls for an adjustment in favour of the wife. This expenditure included monies spent on his current spouse, on holidays and travel, gambling and cash withdrawals. I also recognise that there will be capital gains tax payable on the sale of the [Suburb KK] property to be borne by the husband. Taking all of these matters into account, I am satisfied that it is appropriate that there be an adjustment in favour of the wife. I assess that in percentage terms at 10 percent.
It can be seen from this passage that the primary judge has identified and taken into account matters which weigh in the appellant’s favour and in the respondent’s favour. This is all considered against the primary judge’s assessment of the parties’ contributions and the fact that it favoured the appellant.
The argument made by senior counsel for the appellant tended to suggest that there should be some mathematical way of equating the matters identified by his Honour with the differential that resulted from his adjustment. But given the imprecision that existed within the evidence about certain matters such as the capital gains tax liability and the travel expenses (as pointed out by the appellant), even if the approach advocated was appropriate, and we do not think that it is, it could not be undertaken in this case.
The primary judge found the pool to be $22,219,896. 10 per cent of that is $2,221,989. To the extent that the appellant argues that some mathematical precision should be brought to the exercise, it is plain from the evidence that the non-controversial quantum of the appellant’s expenditure (including his superannuation withdrawal) well exceeded this amount.
The primary judge’s reasons set out his Honour’s reasoning in a clear, brief form, in a manner commensurate with the submissions made to him by the parties about those issues. The matters taken into account by the primary judge that informed the adjustment applied to his assessment of the parties’ contribution-based entitlements are clearly articulated. To paraphrase [234] from Steinbrenner & Steinbrenner [2008] FamCAFC 193, given that the evaluation of the effect of relevant matters arising under s 75(2) inevitably moves from qualitative evaluation to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective. In this Court’s view, this is not such a case.
Further, in respect of the 10 per cent adjustment for matters arising under s 75(2)(o) of the Act, as identified by the primary judge, the appellant argues that the primary judge’s reasons do not explain “why such an amount is just and equitable given the size of the matrimonial pool” (Appellant’s Summary of Argument filed 17 January 2025, paragraph 43, emphasis in original). But, in our view, the primary judge’s reasons do not have to provide such an explanation because it is the property adjustment order that must be just and equitable, rather than the individual assessments and adjustments made to derive such an order. We do not think that it follows, as seems to be suggested, that a just and equitable order can only be derived from assessments and determination along the way that can each be said to be “just and equitable”.
The ground of appeal has no merit.
The Second Ground 5(b)
Neither does the complaint about the inadequacy of the primary judge’s reasons for the orders that he made have any merit.
This ground proceeds from a false premise, namely that the primary judge ordered a cash payment “entirely of non-superannuation assets”. The relevant order simply requires payment of a certain sum. How the appellant funds that payment is entirely a matter for him. The evidence demonstrated that the appellant had the ability to access his superannuation interests for his own purposes. There is nothing to suggest that the appellant could not do the same to fund the payment ordered in the respondent’s favour.
The primary judge was not bound by the parties’ proposals and the order, which we consider was otherwise just and equitable, was within the parameters established by the parties’ positions. As the respondent suggests in her submissions, really the complaint here is that the primary judge did not explain why he did not make a superannuation splitting order in addition to (or perhaps instead of) the order for the cash payment.
The adequacy of reasons is to be assessed in the context of issues joined in the proceedings. The appellant made no submissions about the form of order that should be made if an adjustment order was found to be just and equitable. In those circumstances, the primary judge’s judgment sufficiently describe his reasons for ordering a payment to the respondent within thirty days of the orders.
This ground of appeal should be rejected.
Manifestly Excessive
Ground 5(aa) of the Amended Notice of Appeal contends that “The adjustment awarded is manifestly excessive”. This is a reference to the adjustment made by the primary judge to the parties’ contribution-based entitlements. As we have said, this ground was abandoned in spirit, although not formally.
It is, in truth, a complaint that the primary judge’s discretion miscarried. But, absent some error in the primary judge’s reasoning, the Full Court can intervene only if the order made is not just and equitable (Norbis v Norbis (1986) 161 CLR 513 at 539). The appellant’s argument does not seek to establish that the primary judge acted upon a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some material consideration. In those circumstances, unless the appellant establishes that the orders made are plainly unjust or unreasonable, no occasion to review them appeal arises (House v The King (1936) 55 CLR 499 at 504–505).
We accept the respondent’s submissions that having regard to the amount by which the parties’ property was reduced by the uncontroversial expenditure made by the appellant (on real property in his current spouse’s name and on the other expenditure identified by the primary judge), the orders made by the primary judge cannot be said to be outside of the “generous ambit within which reasonable disagreement is possible” (Norbis at 540).
This ground of appeal has no merit.
DISPOSITION
The appeal must be dismissed.
COSTS
Rather than deal with the question of costs at the hearing of the appeal, the parties asked that we make directions about the orderly delivery of submissions on costs that might take into account the outcome of the appeal. We have done as asked.
I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Wilson and Jarrett. Associate:
Dated: 31 March 2025
22
1