BARNWELL & KENDRICK - [2020] FamCAFC 283

FAMILY COURT OF AUSTRALIA

BARNWELL & KENDRICK

[2020] FamCAFC 283

FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Relationship spanning at least eight years – Where factual error by the primary judge materially impacted upon the adjustment of s 90SF(3) matters – Where capital gains tax implications of adjustment – Where evidence could have permitted a finding that there was a disparity between the parties’ future earning capacities to some degree – Error of fact – Where the family trust was a financial resource of an unspecified value – Where the wife did not include the items of property in the balance sheet – Where the wife is bound by her conduct at trial: Metwally v University of Wollongong (1985) 60 ALR 68 – Where the wife submits that the dismissal of the application to re-open the proceedings and adduce further evidence was manifestly unjust and caused the final orders to miscarry – Irrelevant principles relating to discretionary decisions – Where the wife was not taken by surprise at the allegation of unpaid commission – Where unfairness not established – Where there is no error by the primary judge in failing to articulate the specific features of contributions made by the wife – Where referring to Stanfordv Stanford (2012) 247 CLR 108 at [42] is a sufficient exposure of reasoning as to why it was just and equitable to make an order – Appeal allowed in part – No order as to costs.

Family Law Act 1975 (Cth) ss 90SF, 90SM, 117(1)

Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Elgin & Elgin (2015) 54 Fam LR 31; [2015] FamCAFC 155
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jarrott & Jarrott [2012] FamCAFC 29
Kendrick & Barnwell [2019] FamCA 603
Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56
Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Walters & Carson [2018] FamCAFC 233

APPELLANT:

Ms Barnwell

RESPONDENT:

Mr Kendrick

FILE NUMBER:

BRC

2650

2016

APPEAL NUMBER:

NOA

2019

DATE DELIVERED:

18 November 2020

PLACE DELIVERED:

Cairns

PLACE HEARD:

Brisbane via video link

JUDGMENT OF:

Strickland, Kent & Tree JJ

HEARING DATES:

2 and 26 June 2020

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

30 September 2019

LOWER COURT MNC:

[2019] FamCA 699

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Richardson SC

SOLICITOR FOR THE APPELLANT:

O’Reilly & Sochacki Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Williams QC

SOLICITOR FOR THE RESPONDENT:

Hirst & Co Solicitors

Orders

The appeal be allowed in part.
Order 3 of the orders made 30 September 2019 be varied by substituting the amount of $775,360 for the amount of $1,049,550.
Otherwise the appeal be dismissed.
All applications for costs be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Barnwell & Kendrick has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NOA 96 of 2019
File Number: BRC 2650 of 2016

Ms Barnwell

Appellant

And

Mr Kendrick

Respondent

REASONS FOR JUDGMENT

Introduction

On 30 September 2019, the primary judge pronounced final orders which divided the parties’ property and superannuation interests, such that Ms Barnwell (“the wife”) received 61 per cent, and Mr Kendrick (“the husband”) received 39 per cent. Although the parties were not married, but rather were in a de facto relationship, for simplicity and readability, it is convenient to do the same as the primary judge and in these reasons to refer to them respectively as “the wife” and “the husband”.
The division arrived at by the primary judge was effected by the parties retaining the real property and superannuation interests in their respective name or possession, and providing for the wife to indemnify the husband in relation to $50,000 owed by him to the Barnwell Family Trust (“the wife’s family trust”) as well as pay him the sum of $1,049,550 within approximately three months.
From these orders the wife now appeals. For the reasons which follow, the appeal must be allowed in part.

Background

The wife is currently 58 years of age, and the husband 53 years of age. They met in 2000, and commenced a relationship a short time later. Although before the primary judge the parties were in dispute about when they began living together in a de facto relationship, the primary judge found that there was no disagreement that the parties had so lived for at least eight years, and it was not necessary to determine its exact length for the purpose of the proceedings (at [2]). That finding was not challenged in this appeal.
When they met, both parties were working for a business located in a northern New South Wales coastal town. The wife was living with her then husband and their two children in Town B, while the husband lived alone in a property he owned in Town A.
The husband later left the business the two were working for and began working in a sales position in another business in a town closer to Town B.
The wife and her former husband separated in 2001, after which she undertook training in Sydney in order to open her own business. In mid-2001, she returned to Town B, and in 2002, commenced to operate E Pty Ltd (“the wife’s business”) which was initially conducted from the former matrimonial home. By this point, the parties had commenced an intimate relationship and were seeing each other weekly. In May 2002, the wife leased an office in Town B, from where the wife’s business thereafter operated. It is uncontentious that, from the time the wife’s business commenced to trade, the husband provided her with cash payments to assist her while her business grew.
In June 2007, the wife’s family trust and the Barnwell Unit Trust (“the wife’s unit trust”) were established, along with the incorporation of E Investments Pty Ltd. In July 2007, the husband commenced employment in the wife’s business, from which he thereafter earned an income by way of commission upon sales. As found by the primary judge, this also coincided with the husband moving in to live with the wife (at [30]).
During the relationship, the wife purchased and sold investment properties. On one occasion she asked the husband to buy a property adjoining a property owned by her, with the intention to subdivide the combined parcel. The husband did so, however the subdivision was never realised.
In December 2015, the husband’s father passed away. Apart from the husband receiving a direct inheritance of 50 head of livestock, the balance of his father’s estate, predominately made up of grazing land in river valley, was passed on to the husband and his three siblings by way of four separate testamentary trusts established by his father’s will and codicil. The relevant trust pertaining to the husband is the Kendrick Family Trust.
In March 2016, the parties separated on a final basis.

The Proceedings, Judgment And Appeal

The husband commenced the property proceedings in March 2016.
The substantive property trial was heard over seven days between April and December 2018. At the conclusion of the trial, his Honour reserved his decision. However, by Application in a Case filed 23 July 2019, whilst judgment remained reserved, the wife sought to re-open the proceedings and adduce further evidence in them. That application was heard by the primary judge on 22 August 2019, and dismissed for reasons given on 28 August 2019: Kendrick & Barnwell [2019] FamCA 603.
In the subsequent 30 September 2019 reasons arising from the property trial, the primary judge found that the net value of the property pool, including superannuation, was $5,483,832 (at [118]). His Honour then assessed the parties’ respective financial and non-financial contributions, finding that the wife’s initial financial contributions “exceeded the husband’s to a significant degree” and “was probably about twice as much” (at [129]).
The primary judge found that the parties’ contributions during the relationship were also unequal, in that the husband’s “fell short of the wife’s contributions” (at [153]). Likewise, the primary judge determined that post separation contributions also favoured the wife (at [154] and [162]). Ultimately his Honour determined that the parties’ contribution based entitlements lay in “a 66/34 percentage split in favour of the wife” (at [164]).
The primary judge then considered what, if any, adjustment should be made by reference to the matters contained in s 90SF(3) of the Family Law Act 1975 (Cth) (“the Act”), and determined that they favoured the husband, such that there should be a five per cent adjustment in his favour (at [181]). The outcome thereby reached was found to be just and equitable (at [186]).
The appeal was initially heard on 2 June 2020 and judgment was reserved. At that hearing submissions were received from each party as to, inter alia, the evidentiary source or sources for the primary judge’s findings (discussed further below) as to the wife’s income from her business. This was relevant to Ground 4 of the appeal challenging the primary judge’s s 90SF(3) adjustment in the husband’s favour. Senior counsel for the wife submitted that the primary judge’s findings as to the wife’s income came from her 2017 income tax return. However, our review revealed that the wife’s 2017 income tax return was not admitted into evidence. We thus sought clarification of the evidence supporting the primary judge’s findings particularly by reference to the single expert accountant’s evidence which appeared to be at odds with the findings. To that end, we caused the Appeal Registrar to write to the parties on 5 June 2020 identifying the aspects about which further submissions were sought.
This had the consequence that senior counsel for the wife resiled from the submissions he had made on this topic on 2 June 2020, and he sought and obtained leave on behalf of the wife (there being no objection from the husband) to file a Further Amended Notice of Appeal containing amendments to Ground 4 and adding two new grounds of appeal. Both parties addressed these amended grounds at the further hearing of the appeal on 26 June 2020. For this purpose, we also gave leave to the wife to re-open the hearing of the appeal and to adduce further evidence comprising the wife’s 2017 income tax return.

The Appeal

Overview

The grounds of appeal challenge the primary judge’s refusal to re-open the trial, and assert errors of fact, and in the exercise of the discretion, in the judgment arising from the trial.
As it transpired, the additional alleged errors introduced by the Further Amended Notice of Appeal were not contentious, in that the husband conceded that the primary judge erred as contended. He nonetheless argued that they did not impact upon the ultimate outcome, in the form of the percentage division in his favour.
Given the husband’s concession of error, it is therefore convenient to deal with the new grounds of appeal first, being Grounds 4.2.1 and 4.2.2. Although out of sequence, we shall then consider the balance of Ground 4 (and Ground 5), and then turn to the remainder of the grounds of appeal.
Before doing so, it is useful to restate the principles governing appeals from discretionary judgments as articulated by the majority of the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 504–505 as follows:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

Grounds 4.2.1 and 4.2.2

We have already noted that these grounds, which were introduced into the extant Ground 4.2 by the Further Amended Notice of Appeal, were conceded by Queen’s Counsel for the husband. Nonetheless, we are obliged to determine if the errors complained of are established.
To give them context, it is necessary to consider the totality of Ground 4, which provides as follows:
4That his Honour’s discretionary decision miscarried in failing to take into account relevant facts in considering factors relevant to s 90SF(3) [of the Act] in:
4.1That the property that the [wife] would retain was subject to a presently uncrystallised burden of future taxes and realisation costs in a sum equivalent to approximately 10% of the net property of the parties and the [husband’s] property was not the subject of any further burden and further, his Honour failed to take into account the existence of such burden in any manner whatsoever and his determination not to take those matters into account at all constituted both an error of discretion and principle;
4.2That substantially the earning capacity of the [wife] had already been taken into account by being given a substantial capital value as attributed to her business interests as an item of property and that it would be unjust to rely upon the same income, particularly at her age, as a foundation for an adjustment in favour of the [husband] pursuant to s 90SF(3) [of the Act];
Further, his Honour erred:
4.2.1In concluding that the income derived by the [wife] from the business in the 2017 financial year was in the order of $660,000;
4.2.2In failing to take into account that the income of the [wife] distributed to her by the Barnwell Family Trust in the 2017 financial year included capital gains derived from property sales in the sum of $231,410;
4.3That putting aside the income derived by the [wife] as the product of ownership of the business that was taken into account at a capital value, the future earning capacities of the [wife] and the [husband] ought have been concluded as similar;
4.4(Only if Ground 1A is rejected) failing to recognise and take into account significant terms of the instrument establishing the Kendrick Family Trust that are relevant to the [husband’s] ability to control the discretions of the Specific Trustees appointed and consequently the value and significance of the benefits received presently and those which he may direct in the future from that trust.
(As per the original)
At [154] of the reasons, the primary judge found that in 2017 the wife’s business generated income of $662,257. Later, in the context of considering what, if any, adjustment should be made by reference to s 90SM(4) considerations, at [166] his Honour said:
I am satisfied that the wife, who is now 57 years old, is in good health and, at trial, continued to run the business that was generating a very good income that I have already said was around $660,000 in the 2017 financial year…
Later still, at [177] the primary judge further said:
All that said, I do not expect that [the husband] will ever be likely to be earning the amount of income that the wife is earning through the business that she will retain. As [Queen’s Counsel for the husband] submitted, there is likely to be a significant earnings disparity between the husband and the wife in the future.
It is clear that the primary judge was led into error concerning the total amount of $662,257 submitted by the husband’s Queen’s Counsel at trial to be the amount of the wife’s earning capacity from operating her business, for the purpose of the primary judge assessing the s 90SF(3) factors. The submission is erroneous for two primary reasons. First, a significant portion of the income received by the wife’s business, approximately 40 per cent according to the single expert accountant, is derived from the customer list. Included in the schedule of assets submitted to the primary judge by both parties was a capital value for the customer list, capitalised on a future maintainable earnings basis. In other words, that significant proportion of future earnings of the business was already brought into account in the capital value adopted by both parties identifying relevant property interests to be considered by the primary judge.
Secondly, the total figure of $662,257 includes $231,410 in capital gains from asset sales by the wife’s trust, plus $115,737 being the discounted capital gains tax amount distributed from the trust to the wife. In short, $347,147 of the total is referable to capital receipts from asset sales having nothing to do with income derived from the operation of the business.
At the further hearing on 26 June 2020, it was accepted by both senior counsel for the wife and Queen’s Counsel for the husband that, when appropriate adjustments are made for these (and other less significant) factors, the accurate figure attributable to income derived by the wife from sales commissions earned in her business is approximately $240,000 per annum, and not the figure of $662,257 urged upon the primary judge. It follows that the errors the subject of amended Grounds 4.2.1 and 4.2.2 are established, as was appropriately conceded by Queen’s Counsel for the husband.
When the primary judge’s reasons for judgment addressing the s 90SF(3) matters are read as a whole (at [165] to [181]), it is readily apparent that the erroneous findings the primary judge was led into concerning the wife’s earning capacity from her business were the foundation for the adjustment his Honour made in the husband’s favour.

Ground 4.1 and Ground 5

As argued, the challenge advanced under Ground 4.1 significantly overlapped with Ground 5, and thus it is convenient to deal with them jointly.
Ground 5 provides as follows:
5.That his Honour erred in failing to conclude that the monetary adjustment that he proposed to order in favour of the [husband] would inevitably or at least most probably require a sale of properties of the [wife] and/or the need to draw dividends from the company which would be taxed, having regard to her stated desire to retain her home, thus crystallising an obligation to pay significant taxes and realisation costs in which event his Honour ought have:
5.1Provided notice to the [wife] of the likely order and offer her an opportunity to address how it might be satisfied in order that the economic consequences might be taken into account and thereby his Honour’s Orders occasioned a procedural unfairness; or
5.2Made a formulaic order, or invited the parties to draft a formulaic order, which would take into account taxes and realisation costs in respect of such properties as the [wife] may elect to sell to satisfy the Orders, so as to take into account those amounts whilst retaining the integrity of the intended percentage division of the net property of the parties.
(As per the original)

The gravamen of the complaints made in Grounds 4.1 and 5 is that in order to fund the payment to the husband of a little less than $1,050,000 within three months, the wife may have needed to sell real properties, and if so, there was the prospect of her incurring realisation costs. These costs would include not merely the direct costs of sales, but also capital gains tax.
The primary judge dealt with this issue at [187]–[190] of the reasons as follows:
187. There was no evidence adduced by the wife in her evidence-in-chief as to how, if there was an order made for her to pay a cash amount to the husband, she would meet such an order. During her cross-examination, the wife was offered the opportunity to give evidence about that issue if she wished. I informed her that she did not have to if she did not want to, given that it might reveal advice she may have received about her potential liability. The wife chose not to give that evidence. Accordingly, I do not know whether she will be able to simply borrow the amount that she will now have to find to pay the husband the amount that she will be ordered to pay him, using existing security or whether she will have to sell real property to realise funds to do so.
188. In this respect, there is evidence in the form of opinion from …the single expert accountant who provided a report that includes estimates of notional capital gains tax that would likely be assessed as payable on the sale of the three of the real properties actually owned by the wife. The total would be $257,443. Notional costs of sale was assessed by [the single expert] as likely to be a total of $118,200 on those three properties.
189. All that said though, as I cannot determine whether the wife will be required to sell any or all three of those properties to meet her obligation, or whether she has the capacity to borrow the amount without selling any property, I do not consider it appropriate to take those notional costs of sale and capital gains tax liabilities into account at all in determining the orders to be made. Indeed, though the wife said she did not want to sell the Town B Property 2, that was her position before she knew how much I would be ordering her to pay the husband. As that property would have no capital gains tax liability attaching to it because it has always been her place of residence, she may now choose to sell that property, if property has to be sold.
190. I will take nothing off the total of net property and superannuation interests or the amount that the wife is to be [sic] pay the husband on account of notional costs of sale and capital gains tax liabilities.
Senior counsel for the wife said that he “must concede that on her behalf little assistance was given to the [primary] [j]udge, however the relevant evidence was before him and it was ultimately his duty to make a just and equitable order” (wife’s Summary of Argument filed 27 February 2020, paragraph 18) (footnote omitted).
A significant part of the argument advanced by the wife in support of these grounds relied upon an asserted obligation on the part of the primary judge, in the event that she failed to pay any sum to the husband, to have incorporated default mechanisms in the primary orders, including the sale of specified property, with realisation costs and taxation implications of any sale being taken into account. The alternative argument advanced was that the primary judge ought to have given the wife the opportunity, by relisting the matter for further submissions, to address the prospect of the sale of property, and hence realisation costs associated with that sale.
A useful starting point is to identify that, as the primary judge said in the extract of his reasons cited above, there was indeed some advertence before his Honour to the prospect of sale of properties in the wife’s ownership.
Particularly, in an exchange between the primary judge and the wife during the course of her cross-examination, the following appears:
[HIS HONOUR]: Is there any – you see, … right at the start of the trial, I sort of pointed out that when people take positions like – your position is effectively that I should dismiss his application. He shouldn’t get any more than what he’s – well, he keeps what he has got and doesn’t get anything from you. It’s sort of – it means I don’t find in your favour that way. All right? So what I’m just sort of thinking about at the moment, having regard to what I said before, just, you know, let’s – just assume – assume – and I’m not saying I’ve decided, but you’ve probably got some idea of some of the things I’m thinking about already, but assume I decide you’ve got pay him something, and at the moment, if that’s what I’m thinking, I don’t have any figures in mind. So rest assured of that. But is there property – if I’m going to make an order that you pay him cash and don’t – and then if you don’t pay it, you’ve got to sell property, is there any order of sale that you want? Because if you don’t present that – and maybe that’s something you need to talk about with your lawyers rather than telling me now, because if you don’t present it, you, of course, risk getting an order that you don’t like, if you understand what I mean. And you might not – if your position is that I should make an order that I dismiss his application and I don’t find that, then whatever I find, you’re not going to like it, but you might not like it if I say sell such and such a property before another one. So you might want to think about that and talk to your lawyers about it and whether you decide to present some sort of ---?
[WIFE]: Do you want me to tell you now?
[HIS HONOUR]: No. I think you should talk about it with your lawyers first and see if they maintain ---?
[WIFE]: I have thought about that. Yes
[HIS HONOUR]: See if they maintain advice that your best position is still to argue Stanford, if you understand what that means?
[WIFE]: Which was their advice.
[HIS HONOUR]: Presume you – do know what Stanford is?
[WIFE]: In general terms, but I’m not a lawyer.
[HIS HONOUR]: Yes. Okay. Well, you’ve heard what I’ve said about the argument of the Stanford argument in this case?
[WIFE]: The parts I’ve learned, yes.
[HIS HONOUR]: Yes. Okay. Well, you probably should talk to your lawyers when you’re finishing in the witness box. And before [senior counsel for the wife] makes submissions on your part, you probably should talk to him about those things. All right? And including, you know, what I’ve just said to you about if there’s an order of property that you want sold, and that’s not saying that you have to say to me now, “I – you know, I” – you know, that Mr – you don’t have to tell [senior counsel for the wife] to submit to me that you should pay him $1 million of $500,000 or anything like that. But you could certainly give him instructions that say to – that he can say to me, if I’m against him, that is, if I’m against you, and properties have to be sold, they can be sold in this order. That’s her preference?
[WIFE]: I can do that.
[HIS HONOUR]: Do you understand?
[WIFE]: Yes. Yes. Completely.
[HIS HONOUR]: Yes. Because I’m not about causing unnecessary hurt and pain if it can be possibly avoided. I don’t want to add to it in this case, even though my decision may. It won’t be because I want to inflict hurt. Now, where are we at? You’ve got re-examination?
(Emphasis added)
(Transcript 27 November 2018, p.251 lines 9 to p.252 line 12)
On the basis of this, it was contended by the wife that there was little room left for doubt or concern as to how any implications of sale of property would be accommodated. However, in fact, thereafter no draft orders for the sale of properties in the event of the wife defaulting in paying the ordered sum were proffered. The primary judge dealt with that at [185] of the reasons, as follows:
[Queen’s Counsel for the husband] did not submit that default property sale orders be made to deal with any event of default on the wife’s part. Accordingly, I will not make any such orders. It is not expected that enforcement proceedings will be necessary in this case and the wife will, I am satisfied, be advised of the provisions of the Act relating to enforcement and the imposition of interest on any amount outstanding in the event of default.
The primary judge could also have accurately included in that paragraph that then senior counsel for the wife did not press for any such orders either, notwithstanding the primary judge’s exchange with the wife recited above. We are satisfied therefore that the primary judge was thereafter entitled to assume that orders governing the sale of properties were not an issue requiring his determination, as neither party sought them.
In this regard it must also be said that not only did the wife not propose a form of order which contemplated the sale of identified property, she also never proffered orders which took into account capital gains tax payable upon any sale of property. Indeed in her Amended Response filed 4 December 2018, although the wife’s primary position was that there should be no adjustment of property orders, in the alternative, she contemplated that there should be an order for the payment of $125,000. In that eventuality, whilst the wife did propose orders for the sale of property if she defaulted in making payment, she did not identify what might be sold, nor did she propose that any allowance should be made for capital gains tax upon any sale. Particularly, at paragraphs 5 and 6 of the Amended Response, the orders the wife sought were as follows:
5. That in default of the payment pursuant to order 4(a) hereof, the [wife] do all acts and things and sign all documents necessary to sell assets in such manner as elected by the [wife] until the payment to the [husband] pursuant to Order 4(a) hereof is paid in full.
6. That any and all proceeds received pursuant to Order 5 hereof be paid in the following manner and priority:
(a)Any statutory rates, charges and outgoings payable in respect of the asset;
(b)Payment of the agent’s commission and advertising or other expenses if any, payable on the sale;
(c)Payment of the legal costs and outlays relating to the sale;
(d)Payment to the [husband] in accordance with Order 4(b) hereof; and
(e)Payment of the balance as the [wife] solely may direct.
(As per the original)
Plainly, paragraph 6 did not contemplate that the specified realisation costs should be taken into account in calculating the net pool of assets.
Further, at all times the husband had contended for a 60 per cent adjustment of the parties’ property in his favour, which necessarily must have caused the wife to contemplate how, in the event that outcome ensued, such a division would be met.
In any event, as Queen’s Counsel for the husband identified, it was by no means certain that the wife would have to sell property that would be liable to capital gains tax impositions to meet the ordered payment to the husband. Particularly, as the primary judge contemplated, the wife may have chosen to sell her home, which sale had no tax implications, or further, may have been able to borrow the sum required, there being no doubt that she had made inquiries of financial institutions from time to time when making offers of settlement to the husband (see Transcript 27 November 2018, p.249 line 30 to p.250 line 42) or by recourse to other avenues without tax implications, for instance, requiring payment to her of unpaid present entitlements from the wife’s family trust, upon which tax had already been paid.
Against this background we are not persuaded that, on the particular facts of this case, the authorities which were referred to us of Jarrott & Jarrott [2012] FamCAFC 29 and Elgin & Elgin (2015) 54 Fam LR 31 compelled the primary judge to make orders to cover the eventuality of default, or accommodating tax implications of the sale of any properties. Particularly, absent the parties raising the issue, and more specifically, not taking up the primary judge’s invitation to identify any property that might be sold, on the facts of this case, we are not satisfied that a failure to provide for sale upon default in payment, including taking account of capital gains tax, founds a legitimate complaint of error leading to manifest injustice.
Grounds 4.1 and 5 fail.

Ground 4.3

At the heart of this ground is the complaint that by including the management business conducted by the wife’s business as an asset in the balance sheet, the primary judge’s subsequent conclusion that the wife’s earning capacity was greater than the husband’s, comprised a species of “double counting.”
As to this, there can be no doubt that the primary judge did adopt the value attributed to the wife’s business by the single expert valuer. The single expert’s valuation was arrived at by capitalising the gross income of the customer list managed by the wife’s business. Further, it is correct to say that the primary judge had regard to the income from the wife’s business at [177] as set out at [26] of these reasons.
This claim requires scrutiny of the valuation of the single expert valuer. The single expert valuer did not adopt a valuation methodology based upon the future maintainable earnings of both the sales and management component of the wife’s business, and capitalising that sum to reach a value. Rather, the single expert valuer:
a)identified that in valuing a customer list, the “accepted methodology … is to apply an appropriate multiple to the annual management commission earned from these activities”;
b)identified that over the last two full financial years for which information was available, the total estimated gross management fees of $505,114 should have a multiple of 2.6 applied to them, resulting in a value of the customer list of $1.313 million;
c)
formed the view that, absent the income from the customer list business, the sales business did not have “sufficient profits to capitalise for the purposes of a calculation of future maintainable earnings.” On that basis he concluded that the sales agency side of the business did not “have any material value above the assets associated with the generation of this income.”

(Affidavit of single expert valuer filed 19 March 2018)
However, somewhat curiously, the preponderance of income of the wife’s business has always been from sales commissions. Thus, in the financial year ending 30 June 2014, sales commissions were $717,235, whereas income attributable to the management business was only $315,384; in 2015 the respective figures were $858,435, and $567,349; in 2016 they were $741,903 and $604,469, and in 2017 the sums were $770,324 and $600,180. That said, it needs to be emphasised that the figures for the management income recited above were not in fact those adopted by the single expert valuer, but rather, because they included recovery of disbursements and letting fees and the like, the single expert valuer adopted, for his calculations in relation to the years 2016 and 2017, lower figures of respectively $494,374 and $515,853. Nevertheless the unchallenged evidence of the single expert valuer at paragraph 7.3.8 of his report includes the conclusion that “Management Fees consistently account for approximately 40% of total income.”
It is also useful to compare the net profits of the wife’s business for the relevant years. In the financial year ending 30 June 2014, net profit was $244,657, in 2015 it was $425,283, in 2016 it was $448,691 and in 2017 the figure was $312,690. Plainly, a significant portion of the net profit necessarily was derived from sales commissions, and not just management fees.
Against this background, the submissions made in advance of this contention by the wife in her Summary of Argument filed 27 February 2020, are by no means unquestionable. Particularly the wife argued:
22. What this demonstrates is that the overwhelming proportion of the [wife’s] future income stream is the direct product of the customer list which in turn has been the subject of a capital valuation derived from a multiple of its earnings…
23. If one puts aside the [wife’s] income derived from the customer list, it leaves the parties in circumstances that are not dissimilar…
As we explored with both counsel during the further hearing of the appeal, the wife’s business, on the evidence, earns about 60 per cent of its income from commission on sales, which, for example annualising the 2018 half year earnings, adding them to the 2017 earnings, and dividing the total by two, sees earnings attributable to sales of about $240,000 per annum.
The evidence at trial as to the husband’s earnings was that he was then only in receipt of rental income of (gross) $540 per week, or $28,080 per annum. Whilst he retained capacity to earn income from employment as a salesman, it was unclear what income might thereby be derived.
Therefore, whilst there was potential for the primary judge to some degree “double count” the wife’s earning capacity, ultimately what this ground claims is that the primary judge erred by not concluding that the parties’ earning capacities were similar.
Plainly the evidence permitted a finding that there was a disparity between the parties’ future earning capacities to some degree; it certainly did not compel a conclusion of similarity, as Ground 4.3 asserts.
Ground 4.3 is not established.

Ground 4.4

As shall shortly be seen, Ground 1A must fail, and therefore it is necessary to consider Ground 4.4, which relates to the alleged capacity of the husband to direct funds, both presently and in the future, from the Kendrick Family Trust to himself. We will deal with the substance of this complaint when dealing with Ground 1A, but for the purposes of this ground, we only need say that we are not satisfied that this was a matter that was raised before the primary judge, and we are not satisfied that it is a pure question of law, such that it therefore can now be raised for the first time on appeal. In any event, the primary judge recognised that the trust was a financial resource of an unspecified value to the husband, and we are not persuaded that there was any error as alleged in Ground 4.4.

Ground 1A

This ground asserts:
1A.That his Honour erred in principle in failing to conclude that the [husband’s] interest in the Kendrick Family Trust constituted pursuant to the terms of the will of the [husband’s] late father constituted a valuable property interest of the [husband’s] for the purposes of the [Act] and erred in failing to take into account the value of the property of the Kendrick Family Trust and erred in concluding that the trust constituted a financial resource of the [husband] rather than a property interest.
The primary judge dealt with the husband’s interest in the trust in the course of considering the parties’ respective financial contributions to the pool of assets. At [85]–[91] his Honour said as follows:
The husband’s inheritance
85. In December 2015, the husband’s father sadly passed away. His wife had already pre-deceased him. The husband inherited 50 head of livestock from his father. The remainder of the estate, principally good grazing land in the fertile river valley just out of Town K, was bequeathed to the husband and his three siblings through four separate testamentary trusts established in the deceased father’s last Will that had been executed by him in late 2009. Each of the four testamentary trusts is a discretionary family trust. The husband and his brother, the commercial lawyer, are joint trustees and appointors of the husband’s trust, as is the brother with each of their sisters in respect of each of their trusts. The husband has no ability to remove his brother as a trustee and appointor.
86. The primary beneficiaries of the trust are any children and grandchildren of the husband. The secondary beneficiaries are the husband, his spouse, if he has one, and a long list of other extended family members.
87. Later, in June 2017, after the husband and the wife had separated, the husband and his three siblings established a company in which they are all directors, with the shares being held equally by their four discretionary trusts. He and his three siblings then transferred all of the assets of the estate they had inherited (apart from the land) to the company. The four trusts entered into a lease with the company in respect of the land. The husband sold the livestock he had inherited to the company for just over $50,000.
88. The properties are run as a small livestock farming enterprise by the company. All the members of the husband’s extended family get pleasure out of the farm. Since separation from the wife, the husband has principally lived in one of the cottages on this farm.
89. For the husband it was submitted that he “has no expectation of being able to realise/control the trust assets” and that “he can have no reasonable expectation of any future distributions”. Reliance was placed on the evidence of the husband’s brother. It was abundantly clear that the husband’s deceased father wanted the property to stay in the ownership of the family, to be enjoyed by as many members of the family who are currently living as possible, as well as future generations. As such, it was submitted for the husband that his interest in this trust is neither property nor a financial resource. I accept that it is not property, most particularly because he does not solely control the trust, either at law or in fact. Having seen and heard the husband’s brother give evidence, I am satisfied that the husband would not control his brother to the extent of getting him to do exactly what he asked of him in respect of distributions of income and/or capital of the trust. I am satisfied that the husband’s brother would act in accordance with what he understood their deceased father’s wishes were and what was in the interests of the entire extended family.
90. That is not to say that he would not, along with his sisters, consider providing financial assistance to the husband in the future if he ever needed it. He effectively conceded as much under cross-examination. The husband is already permitted to live on the property in return for which he cares for it and the livestock, and he is a beneficiary of the trust, which he jointly controls with his brother. As Queen’s Counsel for the husband acknowledged, the plurality of the High Court in their judgment in Hall vHall (2016) FLC 93-709 at 81,455 [54] said in terms of the meaning of “financial resource” in the context of s 75(2)(b) of the Act (the equivalent of s 90SF(3)(b)):
… it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
91. Accordingly, I do consider that the husband has a financial resource in his interest in the trust that owns a quarter of the property. Though that quarter interest was given a value by the single expert of $740,636, I cannot find the husband’s financial resource has that value. I do not find that he has a reasonable expectation that the trust would necessarily sell its interest in the land, even to his three siblings’ or their trusts, and then distribute all of the sale proceeds as capital distributions to him alone, though it is not a complete impossibility. I am unable to attribute an actual value to the financial resource in these circumstances, but I do not accept that it is worth nothing to him. Its existence is something that I will have to take into account in determining property adjustment orders that are just and equitable.
(As per the original)

In her Balance Sheet filed 19 March 2018 and Case Outline filed 9 April 2018, the wife contended that the husband’s interest in the trust was an asset. That was not the position adopted by the husband, who contended that it was neither an asset nor a financial resource.
However, by the time of submissions, the wife’s position appears to have changed. That is because in her then senior counsel’s oral submissions on 5 December 2018, he said as follows:
[COUNSEL FOR THE WIFE]: And, also, let’s not forget that [the husband] has available to him the financial resource of the family trust. We accept that that can’t be considered an asset because it’s not something that [the husband] can control. He can’t cause his brother to change his mind and sell it…
…
[COUNSEL FOR THE WIFE]: [The husband’s brother] did give evidence that he was being unreasonable to say it was a never sell proposition, and the second concession I rely upon is the fact that…
…
[COUNSEL FOR THE WIFE]: --- he allowed for the fact that there could be an interfamily buyout. If someone – one of their siblings was in desperate need of money, they may buy out their share. And there was an expression that was coined in the course of the cross-examination of a sale event. So it’s possible to be sold, and it’s a financial resource that is available to [the husband]…
(Emphasis added)
(Transcript 5 December 2018 p.120 line 26 to p.121 line 22)
The basis upon which the wife now contends that the husband’s interest in the trust should be treated as property, is by reference to a construction of the relevant trust terms, which was not undertaken below by the primary judge.
The trust was established pursuant to the husband’s father’s will dated 12 October 1999, and a codicil dated 7 February 2006. Under that will and codicil, the following prevailed:
a)Four separate testamentary trusts were established for the husband and his three siblings (codicil clause 1 inserting a new clause 6 into the will);
b)In respect of the Kendrick Family Trust, the “principal” is the husband. The husband and his brother are jointly the “specific trustees”;
c)Upon the death of the principal, the remaining specific trustee must exercise all discretions powers and rights so far as possible in accordance with the last will of the principal at the time of the principal’s death “save any directional wish that changes the definition of beneficiaries” (codicil clause 1(c) inserting a new clause 22.3).
The pathway by which senior counsel for the wife contended that the husband could cause the trust assets to vest in him, was either:
a)That if the husband pre-deceased his brother, then if in his will, the husband were to direct the corpus of the Kendrick Family Trust to be transferred to a beneficiary, then the remaining specific trustee would be obliged to comply with that direction (codicil clause 1(c) inserting new clause 22.3); or
b)If the brother were to pre-decease the husband, then as both principal and specific trustee, he could act in a way so as to cause the estate to vest in him, or at his direction in another beneficiary.
Both of those contentions concede that the interest in the trust is not presently vested property in the husband, although the wife contends that they are nonetheless property rights of the kind recognised by the High Court in Kennon v Spry (2008) 238 CLR 366.
It is unnecessary to determine that latter point on this appeal, because it is immediately apparent that, even if that argument is correct, what the wife is now contending is that there ought to have been included in the balance sheet an item of property which was never contended for at trial. Therefore, not only did the wife at trial ultimately expressly concede that the husband’s interest in the trust was not an asset, but only a financial resource, but further, she did not contend that the items of property which she now says should be in the balance sheet ought to have been included. Parties are bound by their conduct at trial: Metwally v University of Wollongong (1985) 60 ALR 68.
Further, unsurprisingly there was no evidence as to the value of the husband’s rights; rather before us, a somewhat simplistic valuation exercise was undertaken, in which the total value of the real and other properties owned by the four trusts were apportioned equally between them, and the capital value thereby arrived at attributed to the Kendrick Family Trust. There was no part of that calculation which would allow any present value of the husband’s rights to be determined.
To repeat, we are not satisfied that, as ultimately argued by the wife, the matter which she raises for the first time in this appeal is purely a question of law such that it may be introduced for the first time on appeal.
It follows that Ground 1A therefore must fail.

Ground 1

Ground 1 asserts as follows:
That his Honour’s discretionary decision in dismissing the [wife’s] application to re-open the proceedings and adduce further evidence was manifestly unjust and caused his final Orders to miscarry.
The basis upon which the wife sought to re-open was that, after the hearing had concluded, the husband had sold an item of property for $1,500,000, which, in the balance sheet, had an agreed value of $1,175,000. She therefore sought to have included in the balance sheet the sale price, rather than the agreed value. For his part, the husband opposed that on the basis that, allowing for capital gains tax, in fact the net difference between the agreed value and the amount he would receive was only $43,414. In response, the wife contended that different scenarios for capital gains tax might prevail, in which event the amount that the husband received would be a difference greater than $43,414.
Also, in resisting the wife’s application to re-open, the husband argued that, in effect, it would be unfair to add any realised increase in value of the sold property into the balance sheet, without revisiting the valuations of the other real properties in the pool.
At [12]–[16] of his 22 August 2019 reasons, the primary judge said as follows:
12. The wife does not just seek to re-open and adduce the evidence of the sale of the husband’s property. She also wants leave to adduce evidence of the costs of the sale of the property and the calculation of the CGT payable by the husband limited to the evidence he has already given in the proceedings about what he represented to the ATO was his place of residence – that is, as calculated by the wife’s accountant. The wife proposes further hearing time for cross-examination of the accountant that might be considered necessary by the husband. Additionally, the Court was told that if the Court is minded, then further valuations of all the properties could be obtained and adduced into evidence.
13. Procedural fairness would probably now require, if I was to allow the evidence to be adduced, evidence of the husband’s accountant’s calculations of the CGT to be adduced along with evidence of the basis of the instructions given to him in calculating it and evidence of the letter written to the ATO by him for the husband last year. Further provision for cross-examination of that accountant would probably also need to be made. Potentially, considerably more of the Court’s time would be required to be allocated to this matter and that would not be available for months to come, given the current state of the Court’s list.
14. In determining not to grant the re-opening the wife seeks, I give particular consideration to the fact that this matter has been before the Court since 2016 and that the trial took place over two distinct periods of time separated by around eight months in time last year and has now, regrettably, been reserved for nearly nine months. I am aware, from what I observed of the parties giving evidence at the trial and sitting through the balance of the trial, of the impact upon them of this dispute. I am conscious of the amount of money each of them has spent on the litigation to this time. I am conscious that the interests of justice, in so far as these two parties are concerned, but also in so far as the hundreds of other litigants who are awaiting judgments and trials in this Court are concerned, are best served by finality of this litigation as soon as practicable.
15. I accept that there may have been some misapprehension by the wife’s accountant of the position being represented by the husband to the ATO in respect of how he may be able to deal with the subject property in respect of his capacity to claim main residence exemption in respect of the assessment of his CGT liability. I am not persuaded that the net outcome of the sale of this property will not be negligible in the end. Therefore, I am not convinced that admission of the new evidence is so “material” that it would make such a difference to the outcome that the interests of justice demand it be admitted in a re-opened trial. I also accept the merit of the position expressed by Applegarth J in EB v CT (No. 2) in respect of an application to re-open a trial in de facto property adjustment proceedings sometime after judgment is reserved to adduce evidence of a change in value of one property as opposed to fresh evidence of value of all the property of the parties as being “wrong”. I am not persuaded that the interests of justice in this case would be best served by re-opening the trial and requiring fresh evidence of valuation of all of the parties’ interests in property to be adduced. I will not be ordering that.
16. Accordingly, I dismiss the wife’s Application in a Case.
The husband contends that the wife’s argument in support of this ground of appeal does not engage with the relevant principles relating to discretionary decisions espoused in cases such as House v The King, so as to demonstrate any warrant for appellate intervention. Particularly he said that the primary judge did not take into account irrelevant matters, mistake facts, or commit an error of law.
We accept that argument is correct. Further, we are not persuaded that the primary judge’s decision was unreasonable, plainly unjust, or in the words of Kirby J in CDJ v VAJ (1998) 197 CLR 172 at 231, “plainly wrong.” It therefore follows that, no error of the kind required to be established having been demonstrated by the wife, this ground must fail.

Ground 2

Ground 2 asserts:
2.That his Honour’s discretionary decision miscarried by failing to take into account relevant facts namely:
2.1In assessing the contributions of the parties he failed to take into account that throughout the nine years of cohabitation the [wife] had provided accommodation to the [husband] and had solely met all costs relevant to the property; and
2.2In assessing the contributions of the parties his Honour failed to take into account the indirect contribution of the [wife], as a consequence of the matters stated in 2.1, to the opportunity to the [husband] to rent or otherwise obtain financial benefit from the home he owned and no longer occupied.
The primary judge dealt with initial financial contributions at [127]–[129], and thereafter, under the heading “[o]ther contribution matters” dealt with contributions which the parties made after commencement of cohabitation, including, relevant to this ground, at [131] and [135] as follows:
131. I am satisfied that in those years, though they were not cohabitating as such, they spent a lot of time together, and the husband did give the wife financial support from time to time. I have already found that he advanced a total of $35,000 by way [sic] a number of smaller lump sum payments to her over those years, but I am also satisfied that he would give her cash amounts out of his wallet from time to time as she needed it. Those are not quantifiable. He would also buy food such as meat and fish for the household when he would go there, as well as taking beer and wine there. I am also satisfied that he did some physical work around her property, including yard maintenance work, from time to time during the years before he moved in to live with her at the property. However, the husband conceded that the wife paid all the utility bills in connection with her property, including her telephone and internet connection bills, as well as rates bills.
…
135. After the former couple began actually living together, and then working together in the same business, I am prepared to accept that their contributions outside the business and financial sphere, across the other aspects of their relationship, became relatively equal. Around the property, the husband would more consistently maintain the large yard, whilst the wife did most of the internal house cleaning, but with assistance from the husband. The wife did most, though not all of their cooking, with the husband cooking breakfasts and barbeque dinners a couple of times each week. They gave each other the company, mutual affection and support that most couples do. I am satisfied that this continued, though the level of their emotional and practical support for each other gradually diminished towards the end of their cohabitation, until their separation in or around the beginning of 2016. Their actual cohabitation lasted nearly nine years in total.
It is correct to say that in neither of those two paragraphs did his Honour specifically advert to the provision of free accommodation to the husband by the wife, or the fact that thereby the husband had an opportunity to obtain income from rental of whichever property he would otherwise have been occupying.
Although the husband contended that the matter referred to in Ground 2.2 was not raised at trial, at paragraph 23 of the wife’s Outline of Final Submissions filed 5 December 2018 before the primary judge, she did say as follows:
There is evidence of contributions by the wife to the husband’s assets of Town B Property 1 and Town A Property. The most significant contribution is by the fact that the husband lived rent free in the home of the wife for 9 years which enabled him to rent out not just one, but both of his other properties. The extent to which the husband benefited from this cannot be said with certainty due to the unreliability of his tax returns.
It is plain that the primary judge was aware of the fact that the husband had been living in the wife’s accommodation without payment, but beyond that fact, the evidence did not permit any gauging of the value of that contribution in a monetary sense. That is scarcely surprising, considering that the value of living in the wife’s home, with her and her two children, would be a very difficult matter to assess, and further, the husband’s unchallenged evidence in his trial affidavit was that his Town B Property 1 rental property had always run at a net loss (husband’s affidavit filed 19 March 2018, paragraph 152), and it appears that a similar situation prevailed in relation to the Town A property (see Transcript 18 April 2018, p.365 to p.366).
Further, the husband’s trial affidavit identified that, in any event, in relation to Town B Property 1, the wife’s business was the property manager, and therefore derived management fees from its rental.
As Queen’s Counsel for the husband correctly contended, the assessment of contributions “is not a mathematical exercise”: Walters & Carson [2018] FamCAFC 233 at [103] citing Lovine & Connor (2012) FLC 93-515 at [40]–[42]. Further, the mere non-advertence to particular features of a relevant contribution, which is nonetheless recognised as a matter of fact, would not warrant appellate intervention: Dickons v Dickons (2012) 50 Fam LR 244.
We are not persuaded that the primary judge erred in a way of the kind identified in House v The King, by failing to articulate the specific features of contributions made by the wife in this respect. This ground is without merit.

Ground 3

This ground asserts as follows:
3.That his Honour’s discretionary decision miscarried as a consequence that on the facts determined by his Honour the result embodied in his Honour’s Order was manifestly unjust, particularly in determining that there should be any adjustment in favour of the [husband] to the [husband’s] contribution based entitlement as a consequence of the factors addressed in s 90SF(3) of the [Act].
The wife did not press this ground separately to Ground 4, and we do not propose to address it separately either.

Ground 6

This ground asserts:
6.That his Honour erred in principle in finding that at the end of the 2016 financial year that the [husband] had left in the business unpaid commissions of $184,509 and in accepting the approach contended by [s]enior [c]ounsel for the [husband] he denied the [wife] procedural fairness and natural justice.
The genesis of this ground lies in [66]–[68] which are as follows:
66. Though the husband’s Queen’s Counsel proved that some of the calculations of the husband’s commissions that were provided by the staffer from the business were apparently incorrect, the husband did not vigorously argue in the proceedings before me that he was actually still owed more money in unpaid commissions. He made absolutely no attempt at asserting that he was still owed a specific amount and that he should be paid it. His own acquiescence with how he was being paid by the business and with what he was paid on separation from the business, combined with his own lack of any record keeping notwithstanding his practice of leaving commissions in the accounts for some time before being paid them, makes it nigh impossible to determine exactly how much he may not have been paid from his commission entitlements in the end. Indeed, no such position was urged upon the Court.
67. Nevertheless, Queen’s Counsel for the husband produced a table in his written submissions that demonstrates, by reference to the documentary evidence that was adduced, that the husband’s taxable income paid to him by the business from the 2008 financial year to the 2016 financial year totalled $767,825 but that the commissions that were recorded that he had earned or been entitled to in the same period totalled $952,334. That is a difference of $184,509 that was, at least at the end of the 2016 financial year, left in the business. The evidence is that he was paid about $54,000 as “unpaid commissions” upon his exit later in 2016. That clearly was not all that he had actually been entitled to.
68. In the circumstances, I accept that he made contributions to the financial success of the business by leaving commissions owed to him sitting in the accounts of the business for longer than they would otherwise have been there, if he had been paid them immediately his entitlement to be paid the total commission had accrued. I also accept that a large amount of the commission that he left in the business accounts was never actually paid to him, even in the tumultuous circumstances of his exit from the business, when some amount was paid to him. Additionally, the share of the commissions that his sales earned that was retained by the business is also something that I consider, particularly when comparing the wife’s taxable income with the husband’s from year to year during those years. Her income clearly reflected earnings of the business overall, including commissions earned by the husband’s sales, and not just her own commissions earned through sales.
It is significant to understand the context of this part of the primary judge’s reasons. Whilst they appear under the discrete heading “[t]he husband’s commissions,” that appears to be part of the primary judge’s overall consideration of the parties’ contributions to the property pool. Ultimately, the primary judge at [164] determined that the appropriate percentage division was 66/34 in favour of the wife. There is, inevitably, no direct explanation by the primary judge as to the impact of the unpaid commission on that percentage based division. In the context of a net property pool of a little less than $5.5 million, the effect of the husband, over some years, leaving an indeterminate sum by way of unpaid commissions in the wife’s business is nigh incalculable. Indeed it is difficult to see, even if having regard to the unpaid commission comprised error, that it was a material contributor to the ultimate property division.

That said, the argument advanced by the wife was that the way in which the calculation of that sum came to be ultimately made, was unfair to her, in that:
a)The husband had never directly raised such a claim in his affidavit;
b)There was no cross-examination of the witness who gave evidence about the reconciliations of the wife’s business accounts (the wife’s accountant) as to this topic;
c)The wife was not cross-examined by reference to these matters, other than in relation to a couple of isolated issues;
d)The figure was only produced for the first time by then Queen’s Counsel for the husband during the course of his submissions.
However we are not satisfied that there is any merit to these arguments. Particularly, it appears as though the issue first became live during cross-examination of the husband, when perhaps unexpectedly, in response to a question from then senior counsel for the wife, the following exchange occurred:
[COUNSEL FOR THE WIFE]: Now, I want to – so you’re – you’re well aware that you have received all the commission that you are entitled to from your work at the E Pty Ltd?
[HUSBAND]: No.
[COUNSEL FOR THE WIFE]: And when you say that [the wife] said to you, “The accountant said, ‘If you’re going to put money back into the business, it’s more tax effective to just leave it in the business’.” Are you suggesting that your commissions are still in the business?
[HUSBAND]: That statement is reference to the money that should have been paid out at the time. It was retained in the business.
(Transcript 16 April 2018, p.107 lines 36–44)
Further, the evidence permitted the comparison which then Queen’s Counsel for the husband undertook during submissions, in that it was simply contrasting the tabulation undertaken by the wife’s accountant, with the tax returns of the husband that had been tendered into evidence.
Given that the primary judge’s reasons ultimately concluded that it was impossible to determine what amounts were unpaid, we are not satisfied that there was any unfairness in the process which led to that conclusion, or in the conclusion itself. Further, there was evidence from the wife that she had retained monies of the husband’s which she described as having “minded his money for him” (Transcript 27 November 2018, p.213 and p.219 line 34), and in any event, there was a concession to that effect by then senior counsel for the wife on 26 November 2018 (Transcript 26 November 2018, p.63 line 45).
It therefore cannot be said that the wife was truly taken by surprise by the allegation that there were unpaid commissions which had been kept by her, albeit their ultimate asserted quantification may have not been foreshadowed. Of itself that does not establish unfairness.
Ground 6 fails.

Ground 7

Ground 7 asserts as follows:
That his Honour’s discretionary decision miscarried by reason of an error in principle in failing to provide adequate reasons in addressing and determining the case advanced by the [wife] the he should find that it is not just and equitable, in the sense directed by s 90SM(3) [of the Act] to make an order adjusting interest in the property of the parties.
The test for the adequacy of reasons has been articulated in a number of cases. In Bennett and Bennett (1991) FLC 92-191 at 78,266, the Full Court adopted the test propounded by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 as follows:
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 primary judge dealt with the issue of whether it was just and equitable to make any division of property as follows (at [6]):
As for whether it is just and equitable to make property adjustment orders at all, I consider that is relatively easy to determine in the circumstances of this particular matter. The husband seeks quite extensive property adjustment orders. There is no doubt that he considers them necessary to do justice and equity between him and the wife. Whilst the wife’s position initially appeared to be one of arguing that no orders should be made at all, at the conclusion of the trial she asked for orders that have her paying the husband $125,000 – a sum she “concedes” she “owes” him. Whilst it is probably unfair to characterise that as a concession from the wife that property adjustment orders must be made to do justice and equity as between them, when for her it might simply be argued that would be an order requiring her to repay him money she agrees she owes the husband, I consider that property adjustment orders between the parties will be necessary to do justice and equity between them in all the circumstances of this case. Consideration of the factual circumstances of this matter in the light of what was said in paragraph [42] of the judgment of the plurality of the High Court in its decision in Stanford v Stanford (2012) 247 CLR 108 [“Stanford”] satisfies me of that.
The passage in Stanford at [42] referred to by the primary judge reads:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
As is plain from the alternative proposal identified by the wife at trial, she herself contemplated the prospect of paying monies to the husband, albeit perhaps by way of repayment of debt.
In a case such as this, where the parties had consensually concluded a relatively typical relationship spanning at least eight years, the necessity to determine whether it was just and equitable to embark upon a division of property interests at all did not loom large for the primary judge’s consideration. The parties had lived together in the same house during their de facto relationship, the husband had made monies available to the wife’s business, and had not taken commissions which he was entitled to. The wife’s business managed at least one of the husband’s rental properties. They had both purchased adjoining properties with a view to subdividing them for their mutual benefit.
Additionally, the parties had each supported the other in non-financial ways during the course of their relationship, including, importantly, the husband supporting the endeavour of establishing the wife’s business.
The convenient shorthand adopted by the primary judge of referring to Stanford at [42] is, in this case, a sufficient exposure of reasoning as to why it was just and equitable to make an order, in that it enables the reasoning behind that decision to be ascertained.
There is no merit in this ground of appeal.

Outcome

Grounds 4.2.1 and 4.2.2 succeed. The appeal must therefore be allowed in part.
Unsurprisingly, in that event, both parties urged that we re-exercise the discretion to divide their property, by reference to undisturbed findings by the primary judge, augmented by our own findings in relation to any matters which we disturbed.
As to that, the only disturbance we have made relates to the five per cent adjustment referable to s 90SF(3) of the Act. It is therefore possible to assess the appropriate adjustment – if any – which should be made in light of the issues which the appeal succeeded on, being here, the parties’ respective earning capacities.
It is pertinent to recite the undisturbed findings of the primary judge referable to s 90SM(3) considerations as follows:
166.I am satisfied that the wife, who is now 57 years old, is in good health and, at trial, continued to run the business... At trial, she had not formed a relationship with any person that she would describe as a new partner. She continued to live in her Town B property.
167. The husband is almost 52 years old now but put a case to the Court that his health has not been good since the separation. In particular, it was asserted that his mental health has not been good.
168. It is the case that the husband began seeing a psychologist in June 2016, soon after the separation and continued to see him regularly and consistently up until the start of the trial.
169. According to that psychologist, the husband was suffering the combined depressive emotional effects of the death of his father in late 2015, the loss of his relationship with the wife after their separation in early 2016, and the loss of his livelihood and involvement in the business later in that same year. In addition to that, he has had the emotional stress of being involved in hard-fought, expensive litigation in this Court.
170. Queen’s Counsel, in his written submissions, pointed to the psychologist’s opinion stated in his first of two reports, that the husband “will have great difficulty obtaining and maintaining future employment due to his negative experience during the process of exiting” the business that he and the wife operated together. [Queen’s Counsel for the husband] placed substantial reliance upon that, in submitting that I should conclude that his mental health issues will cause him that great difficulty.
171. All these stressful matters that have contributed to the husband’s mental health difficulties, I am satisfied, overlay a pre-existing dependence upon alcohol that is likely to have been of some relevance to the development of his symptoms. However, in cross-examination, the psychologist conceded that he had not really addressed the issue of the husband’s alcohol dependency with him as much as the evidence suggested he should have. He even apologised for that. In my judgment, that detracted significantly from the value of the psychologist’s opinions.
172. The husband’s actual experience post-separation was not as negative as such an opinion would, on its face, suggest. The husband gave evidence that in the first part of 2017 he was offered a position as a sales agent with a Town A business that he intended to commence in July 2017. He said he negotiated a very favourable commission arrangement and was ready to start. He said that he then became aware that the principals sold the business to an employee and he did not take up the employment. He adduced email evidence of his communications with those third parties. Interestingly, the last email from the third party still included an invitation for him to join her in her business, working in sales. The husband did not take up a position, though, and, with respect to him, that decision was, in my judgment, not very adequately explained.
173. After separation, the husband went to live, principally, in a home on the farm that his late parents had owned and which is now owned through the trust structures I have already discussed. Around the middle of 2016, he met a man who had a property in that same area with whom he fairly quickly entered into a relatively informal business relationship. Essentially, pursuant to an informal agreement, he has been advising and assisting this property owner with respect to a subdivisional development application and the sale of the blocks of land after they are physically and lawfully created as individual blocks. The other man, who gave evidence speaking very positively of the husband’s capacities, stressed that he is committed to the deal they have done and intends to pay the husband a commission of 4.4% on the sale of the blocks achieved through the development. The evidence satisfied me that work was giving the husband some purpose and satisfaction, despite the stress and depression he was clearly experiencing.
174. Indeed, the husband spoke of an intention to develop his own business from his home “focusing on small project rural developments and the subsequent sale of those properties” just as he was doing with the third party at the time of the trial and just as he had done with the big project he had taken with him into the business when he started working with the wife.
175. I am satisfied that the husband has been depressed in the few years since separation, and that it does give him some emotional impairment. However, I am not convinced that this will cause him the “great difficulty in obtaining and maintaining future employment” in the industry that is submitted by his Queen’s Counsel I should find.
176. The evidence was that he was able to give up drinking for several months in the immediate aftermath of the separation. If he were to obtain some expert assistance in dealing with his drinking at the same time as he is obtaining psychological counselling, I consider that he could expect to be able to earn an income in the industry in the future, particularly once these proceedings are concluded, and he receives some further funds pursuant to a property adjustment order. As I have pointed out, he said he had intentions of starting his own business, but if he does not, I consider that he could expect to go into sales with another agency in the area.
177. All that said, I do not expect that he will ever be likely to be earning the amount of income that the wife is earning through the business that she will retain…
178. Included in the matters to consider at this stage is “the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party”. It is not the husband’s maintenance that is under consideration though, rather the question of whether there needs to be any further adjustment to the contributions based evaluation to arrive at a just and equitable position.
179.Unlike the partner who stays at home running a household and raising children, freeing up the other partner to earn income and pursue a career, who comes out of a broken relationship with little earning capacity compared to the partner who has never forsaken their career, I do not consider it can be said that the husband in this case has contributed in the same indirect though significant way to the earning capacity of the wife whilst at the same time sacrificing his own. Neither is he left with the care of children that will impede his future earning capacity.
180. Additionally, the husband does have that financial resource that is available to him in the future in the form of the discretionary trust and the apparent benefit of the use of the property owned by that trust and the other three family trusts of his siblings.
As those reasons make plain, there was no clearly demonstrated post-separation earning capacity for the husband, beyond his rental income of $540 per week, and the primary judge was plainly mindful of his extant alcohol abuse and psychological travails. To the extent there was any material as to the husband’s future plans, it was that he thought he might set himself up in the consultancy business, or, if he did not, the primary judge thought he would likely seek employment as a sales consultant.
For her part, the wife points to the fact that her unchallenged evidence at trial was that she intended to retire in two years. Of course, that evidence was given in the context of her primary proposal that there be no property adjustment in favour of the husband. One would think that, necessarily, an order requiring a sizeable payment to the husband may impact on those plans, and the lack of challenge to that evidence therefore assumes less significance. Even if she still nonetheless planned to retire, it speaks not of her residual earning capacity if she were to do so, even accepting that her present earnings are derived from her ownership of the business.
Further, as senior counsel for the husband contended, the wife may choose to retire, but nonetheless retain her business by employing a manager. It is also conceivable that she would continue to engage in investments in the business, as she has successfully done in the past.
In addition to the question of disparity in earning capacities, there is also the capital disparity – to the extent of $1,754,828 – between the parties in their undisturbed contribution based entitlements. Accepting that the purpose of s 90SF(3) is not to achieve financial equality, nonetheless, the capital disparity is relevant.
Finally there is merit in the notion that the husband, during the parties’ relationship, contributed to the wife’s current earning capacity, by his involvement in the establishment of the wife’s business, including by contributing and leaving funds in it, and by his work in the sales side of the business. That said, as the primary judge noted, that contribution did not adversely impact upon his own career or earning capacity.
We are satisfied that weighing the s 90SF(3) factors does not tell in favour of any further adjustment in favour of the husband.
Further, we are satisfied that a division of the parties’ property of 66 per cent to the wife, and 34 per cent to the husband, effects a just and equitable outcome. Particularly, it not only properly reflects the s 90SM considerations, but on a practical level, sees both parties with a sufficient capital base to enable appropriate housing, some security in retirement, and affords them some reserves to meet any unforeseen vicissitudes.

Costs

Although the wife has been successful in the appeal in part, it was only by reference to matters raised by the Court after the appeal judgment had been first reserved. Once those matters were raised by the wife in her Further Amended Notice of Appeal, they were, in effect, conceded by the husband.
In those circumstances, we are not persuaded that the general rule as to costs provided by s 117(1) of the Act is displaced, and therefore there will be no order as to costs. The appeal having succeeded on an error of fact, no occasion for the issuing of any certificates arises.

I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Kent & Tree JJ) delivered on 18 November 2020.

Associate:

Date: 18 November 2020