Berry and James
[2010] FamCAFC 58
•26 March 2010
FAMILY COURT OF AUSTRALIA
| BERRY & JAMES | [2010] FamCAFC 58 |
| FAMILY LAW - APPEAL – PROPERTY – SECTION 79A – application to set aside consent orders made in 2005 – where the parties entered into consent orders dividing their property in the proportions of sixty three and thirty seven per cent in favour of the husband – where the wife filed an application in 2007 seeking to have the consent orders set aside – where the wife argued that certain non-disclosures by the husband and her unrepresented status at the time of entering into the consent orders had amounted to a miscarriage of justice - where the wife also submitted that the non-disclosed matters collectively would compel a different outcome between the parties to the one reached in the consent orders - whether the Federal Magistrate erred in finding that certain non-disclosures by the husband did not amount to a miscarriage of justice – where the Full Court agreed with the findings made by the Federal Magistrate - appeal dismissed. |
| Family Law Act 1975 (Cth) ss 79A, 79A(1), 118 Family Law Rules 2004 |
| Clifton & Stuart (1991) FLC 92-194 Gebert & Gebert (1990) FLC 92-137 Harris v Caladine (1991) FLC 92-217 Prior & Prior (2002) FLC 93-105 |
| APPELLANT: | Ms Berry |
| RESPONDENT: | Mr James |
| FILE NUMBER: | ADC | 18 | of | 2007 |
| APPEAL NUMBER: | SA | 89 | of | 2008 |
| DATE DELIVERED: | 26 March 2010 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Finn, Coleman and Strickland JJ |
| HEARING DATE: DATE OF LAST SUBMISSION | 4 May 2009 2 July 2009 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 10 October 2008 |
| LOWER COURT MNC: | [2008] FMCAfam 1099 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Tredrea |
| SOLICITOR FOR THE APPELLANT: | Jo-Anne N Milen & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr McQuade |
| SOLICITOR FOR THE RESPONDENT: | J Richard Croft |
Orders
The appeal be dismissed.
There be no order for costs in relation to the appeal.
IT IS NOTED that publication of this judgment under the pseudonym Berry & James is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SA 89 of 2008
File Number: ADC 18 of 2007
| Ms Berry |
Appellant
And
| Mr James |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by the wife against an order made by Lindsay FM on 10 October 2008 dismissing an application by the wife for an order pursuant to s 79A(1) of the Family Law Act 1975 (Cth) (“the Act”) that property settlement orders made by consent on 16 December 2005 be set aside.
Those property settlement orders had been made pursuant to Rule 10.15 of the Family Law Rules 2004 by a Registrar of the Family Court in chambers on the basis of an application for consent orders which had been signed by the wife and the husband and of minutes of consent orders also signed by both of them.
Relevantly for present purposes, s 79A(1) provides:
79A Setting aside of orders altering property interests
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The basis of the wife’s application before the Federal Magistrate was, and as described by his Honour (in paragraphs 17 and 18 of his reasons for his order dismissing the wife’s application), that the husband had failed to disclose certain relevant matters prior to the making of the consent orders, and that these non-disclosures “coupled with her belief that the husband’s solicitor was acting for the parties jointly” led to a miscarriage of justice. There was also the issue of her lack of representation given that in fact the husband’s solicitor was not acting for her. This circumstance was said to aggravate the miscarriage of justice allegedly arising from the non-disclosures.
In his careful and comprehensive reasons for his order dismissing the wife’s application, his Honour determined that a miscarriage of justice had not occurred. Further, he explained at the conclusion of his reasons that even if he had found a miscarriage of justice, he would not have exercised his discretion in the wife’s favour because of her delay in bringing her application and inaccuracies in her affidavits concerning the role of the husband’s solicitor.
The wife’s case on this appeal varies little from her case before his Honour. But it is, in essence, that given the findings which his Honour made in relation to the alleged non-disclosed matters, he ought to have found a miscarriage of justice, particularly having regard to her self-represented status. The wife also asserts that his Honour ought to also have exercised the residual discretion in her favour and set aside the consent orders.
The uncontroversial factual background
The following history, which would appear to be uncontroversial, is drawn from his Honour’s reasons for judgment.
The husband and wife married in September 1999. During their marriage they acquired a residential property at H in South Australia, and commenced a furniture business together.
They separated in May 2005 at a time when the home on the H property had not been completed.
Initially after separation the wife lived in a bus parked in the garden of that property. She later moved to a local caravan park.
On 22 August 2005 the parties met with a solicitor, Mr C, having had discussions between themselves during the preceding weeks concerning a property settlement.
Mr C subsequently prepared an application for consent orders and minutes of orders which were filed in the Family Court on 25 November 2005. The husband’s signature on both of the documents was witnessed by Mr C and the wife’s signature was witnessed by a Justice of the Peace.
The consent orders were made by a Registrar of the Family Court on 16 December 2005. Settlement pursuant to the orders was effected on 16 January 2006.
On 3 January 2007 the wife, through a solicitor, filed the application seeking to set aside the consent orders made on 16 December 2005. That application was subsequently transferred to the Federal Magistrates Court. It was heard by Lindsay FM on 31 March 2008, and dismissed by him on 10 October 2008.
The parties’ financial positions as recorded in the minutes of consent orders and the application for consent orders
The “acknowledgements of the husband and the wife” which were set out at the commencement of the minutes of consent orders included the following information regarding the financial position of the parties both prior to, and at the time of, the application for consent orders:
·During the marriage the husband had received a redundancy payment of $30,000 from employment engaged in largely prior to the marriage; these moneys were used towards the payment of debts.
·The husband contributed approximately $25,000 from the sale of a house he owned prior to the marriage.
·In July 2005 the wife ceased all involvement in the parties’ furniture business, and transferred her interest in the business to the husband.
·The husband had (at the time of the application for consent orders) a superannuation interest which the parties agreed had a value of approximately $56,000; a significant proportion of the husband’s superannuation interest had accumulated prior to marriage.
·The wife had (also at the time of the application for consent orders) a superannuation interest which the parties agreed had a value of approximately $3,000.
·There were no splitting or flagging orders sought in the consent orders in respect to the superannuation interests of the parties.
It should be noted that both at trial and on appeal, the wife asserted that she had also made pre-marriage contributions of $25,000.
The application for consent orders (as summarised by his Honour in paragraphs 11 to 13 of his reasons) showed the parties as having had the following assets and liabilities at the time of that application:
·The property at H in which each party had a half interest valued at $135,000, equating to a total value of $270,000.
·Furniture, furnishings and effects estimated to be worth $7,500 for each party.
·The furniture business by then owned entirely by the husband and valued at $22,800 (comprising a vehicle worth $10,000 and stock and tools worth $12,800).
·A boat valued at $1,200 in which each party had a half share with $600.
·Two motor vehicles owned by the wife worth in total $11,000.
·The superannuation interests referred to in the acknowledgments in the minutes of consent orders (being $56,083 for the husband and $3,167 for the wife).
·A joint debt of approximately $90,700 to BankSA.
·A joint Mastercard debt of $1,400 each (total $2,800).
·A joint Business Account debt of $9,200 each (total $18,400).
It was common ground at the hearing of the appeal that on the basis of the figures in the application form, the parties’ assets totalled $379,250 and their liabilities $111,900, resulting in a net pool of $267,350.
The terms and effect of the consent orders
As summarised by his Honour (at paragraphs 6 and 7 of his reasons), the consent orders as made by the Registrar provided that:
·The husband was to pay the wife the sum of $80,000 within thirty days, and that in consideration she was to transfer to him her interest in the H property.
·The husband was to indemnify the wife in respect of the house mortgage and three other loans.
·The wife was to transfer her interest in the boat to the husband.
Also in the orders:
·The parties acknowledged that they had divided up their furniture and other personal effects by mutual agreement.
·The transfer of the interest in the furniture business to the husband was confirmed, with the husband accepting liability for the debts of the business.
In the final paragraph of the acknowledgments at the commencement of the minutes of consent orders, the effect of the orders was stated to be a 63/37 per cent division of the parties’ assets (including superannuation) in favour of the husband. It was also common ground before us that the division affected by the orders resulted in the wife receiving property to the value of $97,000 and the husband $170,350.
The wife’s case at trial and on appeal
As earlier mentioned, the wife’s case before the Federal Magistrate, which was rejected by him (and which has now been largely re-agitated before us) was that the husband had failed to disclose certain relevant matters prior to the making of the consent orders, that these non-disclosures coupled with her belief in relation to the position of the husband’s solicitor, and the circumstance that she was in fact unrepresented, had led to a miscarriage of justice.
The matters which his Honour recorded (at paragraph 17 of his reasons) that the wife had claimed before him that the husband had failed to disclose were:
·An appraisal dated 6 June 2007 by Landmark Real Estate of the value of the H property.
·The husband’s expectancy interest in his father’s estate.
·The amount of money the husband could borrow to pay the wife out.
·The existence and value of building materials situated on the property.
·The pre-marital contributions by the wife of $25,000.
It also appears (from a later paragraph in his Honour’s reasons, paragraph 93) that the wife alleged that the husband overstated the debts of the furniture business. Although not specifically referred to in the grounds of appeal, this matter was relied on in the wife’s written submissions in support of the appeal (at paragraph 9.7).
Given the issues raised by the appeal (which as we indicated earlier are little different to those raised at trial), it will be necessary for us to consider his Honour’s findings and conclusions in relation to each of the allegedly undisclosed matters. Before doing so, however, it will be useful to explain briefly the structure and content of his Honour’s reasons for judgment.
The structure and content of the Federal Magistrates’ reasons
His Honour commenced his reasons by referring to the factual background as contained in the acknowledgments at the commencement of the minutes of consent orders, to the financial matters disclosed in the application for the consent orders, and to the provisions of the consent orders.
Then for the purpose of giving “more detailed consideration of the case of the wife as it emerged during the course of the proceedings”, his Honour outlined at considerable length the contents of the affidavit filed by the wife on 22 January in support of her application under s 79A(1) and also of her “trial” affidavit (filed 30 October 2007). His Honour then set out, also at considerable length, the contents of the “trial” affidavits of both the husband (filed 14 September 2007) and his solicitor, Mr C (filed 12 October 2007).
Importantly, his Honour noted (on a number of occasions in his reasons at paragraphs 20, 58 and 71) that Mr C was not required for cross-examination. Also importantly, his Honour noted (at paragraphs 69 and 80 of his reasons) that both the wife and the husband made “significant concessions” under cross-examination.
There was also in evidence before his Honour an affidavit from an adult daughter of the wife which was directed to certain discussions between the husband and the wife in the period prior to the making of the consent orders. The daughter was also not required for cross-examination.
Having referred to a number of authorities in relation to the law concerning a finding of miscarriage of justice for the purpose of s 79A(1) and the exercise of the discretion under that sub-section, his Honour made his findings in relation to the matters which the wife claimed the husband had not disclosed, and reached his conclusion that no miscarriage of justice had occurred.
In the course of making those findings and arriving at that conclusion, his Honour discussed the wife’s unrepresented status, as well as her motivations for agreeing to the arrangements contained in the consent orders.
Finally, his Honour explained why even if he had found a miscarriage of justice, he would not have exercised the ultimate discretion under s 79A(1) in the wife’s favour – those reasons being her delay in bringing the s 79A application and her inaccurate account of the role of the solicitor, Mr C.
It will also be useful before considering his Honour’s findings and conclusion in relation to the allegedly undisclosed matters, if we make some reference to his conclusions regarding the wife’s unrepresented status at the time of the consent orders and her motivations for entering into the agreement offered by the husband, as these matters have some relevance to his conclusions in relation to certain of the allegedly undisclosed matters.
The position in relation to the wife’s legal representation at the time of the consent orders
In his reasons his Honour recorded in detail what the wife had said in her first affidavit and then in her “trial” affidavit regarding her dealings with the solicitor, Mr C. His Honour also recorded what Mr C had said in his affidavit. We will not here repeat any of that material. But we note, as his Honour emphasised in his reasons, that the wife did not seek to cross-examine Mr C and thus Mr C’s version of events, being essentially that he had made it clear to the wife prior to the filing of the application for consent orders that he did not act for her, had to be accepted. Further, we also note, as his Honour also emphasised in his reasons, that the wife conceded under cross-examination that in a telephone call in October (2005) Mr C had told her that he was not acting for her and that she should obtain her own legal advice.
It is instructive to refer to the following paragraphs from his Honour’s reasons in which he referred to the wife’s failure to cross-examine Mr C and her concessions when she was cross-examined, and also to note that there was no challenge in the appeal to anything said by his Honour in these paragraphs:
98.I have no doubt that [the wife] was under some significant emotional stress at the time of the separation of the parties and especially with her having to live in a caravan, and she was negotiating with the husband and dealing with his solicitor without the benefit of legal advice herself; but the account she gave in the two trial affidavits really amounted to a contention that she was misled by [Mr C] as to his not acting for her and only acting for the husband. It was a position that she abandoned altogether in her cross‑examination. [Mr C’s] affidavit is quite unambiguous as to these matters and it was received without challenge. I note that one passage in his affidavit goes to his general practice only, rather than the specific facts of this case, but the wife’s contentions are clearly challenged by his account in other parts of the document, and she chose not to cross-examine him.
99.Moreover, she made concession in her cross‑examination as to [Mr C] explicitly having put the position to her in a telephone call in October that he only acted for the husband, and her awareness at that time that she had the opportunity of obtaining independent legal advice.
It is also important to note having regard to the wife’s ground of appeal which is directed to her self-represented status (and to which we will later return), that in his reasons his Honour approached the wife’s application to set aside the consent orders on the basis that she had been unrepresented when those orders were made, and that he considered that this was a significant matter, as he observed in paragraph 107 of his reasons:
107.The position of the wife with respect to this issue necessarily had changed by the end of the trial and I accept that, notwithstanding her not cross‑examining [Mr C] and her concession as to him having advised her of her right to obtain independent legal advice, the fact that she is not represented and the husband is represented throughout the proceedings, still has significance…
The findings in relation to the wife’s motives for entering into the consent orders
Another important aspect of the background to his Honour’s conclusion that there was ultimately no miscarriage of justice, is to be found in his findings and conclusions in relation to the wife’s motives for entering into the consent orders. Again none of these findings or conclusions are challenged on the appeal.
In the course of his outline of the wife’s trial affidavit, his Honour referred (at paragraphs 30, 33, 34 and 47) to the wife’s evidence in that affidavit to the effect:
·that having commenced negotiations with the husband regarding a property settlement she decided to accept $100,000 from the husband provided he agreed to her having certain household items;
·however prior to the meeting with Mr C on 22 August 2005, she agreed to accept the sum of $80,000 offered by the husband (as confirmed in a handwritten note from the husband dated 16 August 2005 which was in evidence before Lindsay FM);
·that the husband had offered to make up the difference to $100,000 by “doing up a caravan she intended to purchase”;
·that she was not aware that her collateral agreement with the husband about the performance of the work relating to the caravan was not binding upon him.
In relation to the last mentioned matter, the minutes of consent orders made no reference to any obligation on the part of the husband to do work on the wife’s caravan.
Later in his reasons (at paragraph 74) his Honour noted the affidavit evidence of the wife’s daughter to the effect that the husband had offered to do work on the caravan for the wife, and that the daughter understood him to have made the offer “to make up for the fact that he could not pay the $100,000 which my mother wanted.”
His Honour then went on to record (in paragraph 75) that the wife had “insisted in her oral evidence that the husband agreed not only to perform the work but to buy the materials in relation to the work needed in relation to the caravan.” However, his Honour then noted:
76.… that the issue of the collateral agreement as to the caravan is not mentioned at all in the affidavit of the wife that was filed at the time of the institution of the proceedings, but is mentioned for the first time in the trial affidavit.
A little later his Honour recorded:
79. The wife said in cross‑examination that at the time she executed the documents in the presence of the JP, she told the JP that she did not think she was getting a fair deal, but that she decided to go ahead with the deal in any event because of the mental stress associated with the process.
Towards the conclusion of his reasons, and after having determined that there had been no miscarriage of justice caused by the allegedly undisclosed matters, his Honour returned to the issue of the alleged agreement regarding the caravan and to the wife’s motives for accepting the agreement offered by the husband, saying:
119.I think that the key to the events of the period August to December 2005 is the wife’s impatience to obtain the settlement sum that had been agreed upon. I think that coloured her attitude towards all matters relating to the transaction, from the point at which a value was fixed for the transfer of her interest to her willingness to accept ambiguous assurances from the husband about work to be performed in relation to the caravan she was about to purchase, to her dealings with [Mr C] and her failure to obtain independent legal advice even after he told her that she was entitled to it.
120.I should note at this point that I did not understand the caravan kitchen point to be pressed as a ground upon which a miscarriage of justice could be established at the conclusion of the trial. I think that was a proper concession for the wife to make. I am unable to determine on the evidence whether the husband in fact agreed to both carry out the work and purchase the materials (as the wife claimed) or whether he agreed only to perform the work (as he claimed). His account was not inconsistent with the account given by the wife’s daughter in her affidavit. I do not accept that the wife at any stage of these events considered that she was in a position to hold the husband to such an informal arrangement.
Again his Honour’s conclusions in the paragraphs just set out were not challenged before us. We note in particular that his Honour’s understanding that the caravan “point” was not pressed by the wife in support of the miscarriage of justice claim, was not challenged. We have only referred to these matters relating to the caravan because of the background they provide to his Honour’s conclusions regarding the allegedly non-disclosed matters. It is to those matters that we now turn, as they, together with the issue of the wife’s self-represented status, constitute the substance of the complaints raised in her appeal (being the subject of the first three of her four grounds of appeal).
The alleged non-disclosures by the husband
Although his Honour (in paragraph 91 of his reasons) described the valuation of the H property as “the key issue in the case”, he dealt first in his reasons with the other matters which were the subject of alleged non-disclosures by the wife. It is fair to say that the valuation issue was also one of the main issues, if not the main issue, agitated before us in support of the wife’s appeal. However, we will deal first with the other issues, as did his Honour.
The husband’s interest in his father’s estate
His Honour recorded (at paragraph 44 of his reasons) that in her trial affidavit, the wife “complained about the husband’s failure to disclose his interest in the estate of his late father.” His Honour also recorded (at paragraph 83) that one of the concessions made by the husband under cross-examination was that he had not told his solicitor, [Mr C] (presumably for purposes of preparing the application for consent orders) that he had an expectancy from his father’s estate. That expectancy was constituted by an interest with siblings in a home owned by his deceased father, but now subject to a life estate in his mother.
His Honour’s conclusion regarding this non-disclosure was that it was “inconsequential.” His Honour’s reasons for this conclusion were as follows:
92.I think the issue of the nondisclosure to [Mr C] and hence the absence from the documents of any reference to the husband’s expectancy to participate in the estate of his father upon his mother’s decease, is inconsequential. The wife was aware of the will and of course was aware of the husband’s father’s death. I readily infer that it was not referred to by the husband because it was something that he thought inconsequential and that the wife did not raise it because she thought the same.
No ground of appeal, nor submission put in support of the appeal, appears to challenge any finding of fact made by his Honour in paragraph 92. Nor is there any challenge to his Honour’s conclusion that the admitted non-disclosure of the expectancy to the solicitor (and hence from the consent order application) was “inconsequential.”
His Honour’s finding that this non-disclosure was “inconsequential” must therefore stand.
The overstated business debts
The next claim by the wife dealt with by his Honour was the alleged overstatement by the husband of the debts of his business. His Honour disposed of this issue in the following way:
93.I think the husband knew that the extent of the business debt was overstated in the application document at $18,400, a significantly higher sum than he includes in his handwritten proposal of 16 August 2005. It is difficult to be precise about the matter because I did not hear specific evidence as to the size of the debt at that time, but I suspect it is inflated in the application document. Having made that finding, I do [sic] think that much turns upon it. Whatever the state of indebtedness of the business, the husband was accepting responsibility for the debt.
94.I heard evidence that the business records of the business were not put into order until some time into the following calendar year (2007) [sic]. It seems clear enough that the parties had reached an agreement antecedent to the court orders in respect of the husband keeping the business and keeping the debt, and the wife I find would have accepted that position whatever the state of indebtedness of the parties in respect of the business.
As we observed earlier in paragraph 24, no ground of appeal appeared to be directed to this matter. Nevertheless, some reliance was placed on it in submissions in support of the appeal.
Any liability will, of course, have an impact on the calculation of the value of the property to be divided between the parties. Thus, an overstated liability may well work an injustice to the party who is not asserting or assuming responsibility for the liability. However, it is clear from paragraphs 93 and 94 of his reasons that his Honour was not prepared to attach any significance to the husband’s overstated business liabilities because the husband was bearing responsibility for those liabilities, and perhaps more importantly, because he had formed the view on the evidence as a whole that the wife was prepared to accept the arrangement proposed by the husband whatever the state of the parties’ liabilities. We are not persuaded that this conclusion concerning the wife’s attitude was not open to his Honour. Once that conclusion was reached, we have difficulty in seeing how the overstatement of the business liabilities could have constituted a miscarriage of justice.
The husband’s capacity to borrow
His Honour recorded (in paragraph 35 of his reasons) that the wife had said in her trial affidavit “that the husband, contrary to what he told her, was able to borrow more than $80,000 from the bank and that she would not have accepted the $80,000 if she had known that.” (We have referred earlier at paragraphs 37 to 43 to the wife’s evidence, and to his Honour’s conclusion, regarding her acceptance of the husband’s offer of a payment of $80,000, and the motives for her acceptance.)
His Honour referred again to this matter later in his reasons when he said:
95. The wife complains that she would not have entered into the orders if she had known that the husband was able to borrow more than $80,000…
96. Having heard the evidence of the parties, I find that the husband was approaching the question of negotiations with the wife in the middle part of 2005 in a hard and sometimes cynical way. I think that he suggested that he was unable to borrow more than $80,000 as a way of encouraging the wife to accept that sum. On the other hand, I cannot exclude as a possibility the fact that $80,000 may have been all the money that could be made available to the wife having regard to the other debts that he needed to service and his obligations in respect of the business.
It will thus be seen that his Honour was unable to determine whether or not the husband could have borrowed a greater overall amount such that he could have paid the wife more than the $80,000 which he offered to her. In these circumstances, he could not then have gone on to determine there had been a non-disclosure of a capacity to borrow more than $80,000, which could constitute, or contribute to, a miscarriage of justice.
We are not persuaded that his Honour was in error in not determining this issue.
We note, however, that his Honour made it clear in the following paragraphs of his reasons that he did not consider that the husband’s capacity to borrow more than $80,000 was an important issue for the wife at the time when the consent orders were negotiated:
97. Again, however, determinative of this aspect of the matter is the fact that I do not find that the wife attached as much significance to the matter as she claims to have done. I was not impressed with the wife as a witness. I do not think her problems in giving evidence arose from any intention on her part to be deliberately untruthful, but she played fast and loose with her recollection of matters and generally gave evidence (whether in the form of the two affidavits or at trial) as a response to her assessment of what answer would best suit the circumstances. There was a disturbing casualness about her approach to evidence as to matters of fact.
…
100. I do not accept that she only entered into the consent arrangements because the husband indicated an incapacity to borrow more than $80,000. She may have been able to negotiate a higher figure or she may not have, but she was willing to accept the $80,000 as the settlement figure throughout the period August to January. She was prepared to accept the sum of $80,000 in respect of her transfer of her interest in the home to the husband.
The failure to include the building materials in the application for consent orders
His Honour recorded in his reasons (at paragraph 31) that in her trial affidavit the wife had estimated that the costs of materials purchased to complete the H property but not yet used, to be between thirty to forty thousand dollars. Later when recording the concessions made by the wife under cross-examination, he referred (at paragraph 72) to the wife’s agreement “that the value assigned (thirty to forty thousand dollars) to the building materials left at the former matrimonial home, was inaccurate.” His Honour’s conclusion about this matter was then as follows:
101.It is true that the application document does not contain any reference to the building materials at the home. We have the concession of the wife in her oral evidence that she grossly overestimated the value of the materials. The husband’s estimate of their being worth $5000 was not seriously challenged. Both of the parties plainly knew that the materials were at the home. Nothing turns on this.
The wife’s complaint on appeal regarding this matter appears from her summary of argument (at paragraph 9.5) to be that in paragraph 101 of his reasons, his Honour can be read as finding that there was in the application for consent orders a non-disclosure of the building materials, and that some amount should have been included on account of those materials when determining the true value of the parties’ assets and thus the justice and equity of the division of those assets.
Such an argument, in our view overlooks the important finding by his Honour in paragraph 101, that both parties “plainly knew that the materials were at the home.” This finding was not challenged by the wife before us. Nor could it be given the wife’s affidavit evidence and subsequent oral evidence regarding the building materials.
In our view, his Honour was correct in saying that nothing turned on this matter and, again in our view, nothing can turn on it before us.
The wife’s alleged initial financial contributions
As his Honour recorded (at paragraph 24 of his reasons) the wife contended in her first affidavit that she had contributed approximately $25,000 to the purchase of a property at O at an earlier stage of the marriage. The application for consent orders contained no reference to this alleged contribution.
His Honour then later recorded in his reasons (at paragraph 78) that at trial the evidence of the wife was “… that she had a bank account with a sum of approximately $17,000 at the commencement of the marriage and that those funds were utilised to pay for most of the expenses relating to the wedding.”
Although his Honour considered this matter “more troubling”, it is clear from the following paragraphs of his reasons that he ultimately concluded that this matter also did not of itself amount to, nor did it contribute to, a miscarriage of justice:
102.The failure to refer in the documents to any contribution by the wife at the outset of the marriage to the purchase of the first home at O, is more troubling. We do not know the extent to which the inclusion of that fact (or at least as to the wife having contributed a cash amount of $17,000) would have impacted upon the decision of the Registrar of the Family Court to regard the orders as just and equitable (for that is what the Registrar must be taken to have found in the light of the obligations cast upon the Court by s.79(2) - see also Harris v Caladine (1991) FLC 92-217).
103.It is in the interference with the integrity of the judicial process which is emphasised in the cases… That is the gravamen of the exercise involved in determining whether a miscarriage of justice has occurred.
104.The husband did not accept that sum as having been introduced by the wife in cross‑examination, and the wife’s evidence on the topic was less than compelling. She had to concede that the amount of cash involved was $17,000 and then that it was not all put towards the purchase of the house, but a significant proportion of it was spent on the wedding. Overall, and despite some misgiving about the possible significance of the matter to the just and equitable exercise, I am not satisfied that there is enough evidence to persuade me that the wife, even if legally advised, would have sought to introduce that material into the application for consent orders.
105.I am not satisfied of that because I am not satisfied that she necessarily did introduce that sum of money. Even if the figure were introduced into the document, it would still be in the context of each of the parties asking for the parties [sic] to make an order by consent, and it has to be thought unlikely in those circumstances that the Registrar would have declined to make the order even if the reference to a sum of money contributed by the wife were made in it.
It can be seen from these paragraphs that the reason why his Honour was ultimately not satisfied that the issue of the wife’s alleged initial contribution could not of itself constitute, nor contribute to a miscarriage of justice, was the unsatisfactory state of the evidence regarding the issue. Nothing was put to us in support of the appeal which would persuade us that his Honour was wrong in his assessment of the evidence in relation to this matter, and that we should therefore interfere with his order on account of this matter – albeit he had described it as a “troubling” matter.
The appraisal of the value of the H property
One of the principal matters on which counsel for the wife focused in his submissions in support of the appeal, was the appraisal of the value of the H property (at $350,000) obtained by the husband in June 2005 and not disclosed to the wife prior to the making of the consent orders. It will be recalled that the value for the property shown in the application for the orders was $270,000.
In paragraph 23 of his reasons, his Honour summarised what the wife had said about this matter in her affidavit filed on 22 January 2007 in support of her application to set aside the consent orders in the following way:
(g)An appraisal had been obtained by the husband of the value of the [H] property and that that appraisal was used to calculate [the wife’s] entitlement pursuant to the settlement.
(h)She had subsequently been informed by another agent engaged by the husband that the property was worth considerably more than the first appraisal he had obtained in the amount of $270,000 and that it was worth $350,000.
His Honour summarised what the husband said about the matter in his trial affidavit (filed 14 September 2007) in the following way:
53.He said that during his negotiations with the wife he had no idea what the home was worth, so he arranged for Mr [G] of Landmark Real Estate to give him an appraisal. He was provided with that appraisal on 7 June 2005. In his trial affidavit he said that in the appraisal Mr [G] “expressed the view that if the property was completed, it should sell in the early to mid 300,000s”.
54.He acknowledges that the wife had obtained the appraisal from Mr [T] of the Professionals Real Estate company and that his estimate of the worth of the home in its then state of completion was between $280,000 and $290,000.
55.He says that value of $270,000 was fixed by the husband and wife as the value of the property by making an allowance of $10,000 for expenses relating to sale (the property was not then sold, of course).
56.The husband says that at the time of the transaction between he and the wife, the property was in an incomplete state.
His Honour recorded what the wife said in her trial affidavit (filed 30 October 2007):
28.At the time of separation, the home itself was incomplete. Certainly [sic] building materials, such as floor and wall tiles and the like, were situate [sic] at the property.
29.The trial affidavit indicated that the appraisal of the property from the Professionals Real Estate agency (Mr [T]) was actually arranged by the wife. It is dated 11 July 2005 and it is addressed to her. It opines that the home in its “current state of completion would be worth between $280,000 and $290,000”. It further opined that when completed it would be worth approximately $345,000, and it estimated the costs of completion to be between 50 and 60 thousand dollars.
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31.She estimated the costs of the materials purchased to complete the property, but not yet used, to be between 30 and 40 thousand dollars.
32.Her trial affidavit reaffirms that she has subsequently learned of the appraisal by Mr [G] that the home was worth approximately $350,000.
It will be seen (and as his Honour later pointed out in paragraphs 29 and 116 of his reasons) that in her second affidavit the wife corrected the statement in her first affidavit that it was the husband who had obtained the appraisal of $280,000 to $290,000. Her second affidavit confirmed that it was she who had obtained that appraisal.
It will assist in an understanding of this matter, including his Honour’s conclusion, if we set out the relevant parts of the appraisals of the value of the property obtained by the parties.
The first appraisal obtained by, and addressed to, the husband from Landmark Real Estate is dated 6 June 2005. In it the “Property” is described as follows:
This home is an unfinished project and would be ideally suited for the person(s)/couple who wants to have class and add their own personal touch.
Then under the heading “Expected Sale Price” the following appears:
Dependant [sic] upon market conditions at time of sale indications show your property should sell in the early to mid $300,000’s price range and may even better due to the position being in a much sought after location and close to the beach offering sea-views from the upper floor.
The appraisal obtained by, and addressed to, the wife from Professionals Real Estate (and on which the parties apparently based their property settlement negations) is dated 11 July 2005. It contains a list of the work required to be done to complete construction, and also a list of the materials on site yet to be used. The appraisal then states (emphasis in original):
It is my opinion that this home in its current state of completion would be worth between $280,000-$290,000.
Summary: As this home is not completed it is extremely difficult to submit an accurate appraisal.
My opinion is based on what I believe a realistic market price for this home would be if it was completed, less the cost to complete. When completed this home should make around $345,000 and my estimate to complete is around $50,000-$60,000.
It will be immediately apparent that it is unclear whether the appraisal obtained by the husband of a value “in the early to mid $300,000’s price range” is the value of the home in its uncompleted or completed state.
In his conclusions about this issue his Honour said:
109.… the wife’s unrepresented status is something that must be taken into account in a consideration of the issue of the nondisclosure of the June 2005 real estate appraisal.
110.The first thing to be noted about it is that it is not a valuation. It is an informal assessment by a real estate agent of the value of the property. The value attributed to the property might be inflated for a variety of reasons, including the author’s desire to obtain the listing of the property for sale. Nevertheless, it is an expression of an opinion of the value of the property from someone whose trade it is to sell such properties, so the husband would not have sought the opinion from the agent concerned unless he proposed to give it some weight.
111.… If the husband was acting openly and honestly, he would have revealed the document to the wife. I think his concealing the document is consistent with the fact that he was dealing with these matters in a much more hard‑headed way than the wife was in the period following separation.
112.The husband sought to downplay the significance of the valuation by suggesting that the value attributed of approximately $350,000 to the property was one that was given upon the basis that such would be the value if all building work was complete. To that extent, it would have been consistent with the report that was obtained by the wife and upon which the parties relied in negotiating the settlement figure; but the report does not express itself in those terms despite the husband in his affidavit claiming that it did. At trial his explanation was that this was something that was put to him by the agent at the time he inspected the property for the purposes of the appraisal.
113.It would have been preferable if the husband had called the agent to give that evidence. I do not think I should attach too much weight to the fact that the husband was not challenged upon that statement in cross‑examination. What remedy does the wife have in reality if the husband raises that for the first time in the witness box?
114.It certainly means I cannot infer that the reason the agent was not called was that his evidence would not have assisted the husband, but that does not mean I am obliged to accept the evidence, and I do not. I am uncertain as to whether the agent qualified his appraisal of the value of the property in the way the husband claimed.
115.On the other hand, of course, I do not know that there is evidence that the June valuation may be an accurate one. In fact the evidence in the form of exhibit 3, which was a BankSA valuation carried out at the time of the processing of the husband’s loan application in December 2005, indicated a value of only $287,000. A valuation through that same institution in September 2007 put the value at $330,000, so some significant uncertainty is attached to whether or not the parties would ultimately have given any weight to that appraisal even if the husband had disclosed it.
116.We had the position of the wife claiming in her first affidavit that the Professionals valuation, the one they did rely upon, was procured by the husband. It was procured by her. The husband may or may not have thought that a fair value to attribute to property. He may have thought that the valuation he obtained in June was a more realistic one. It is possible that the agent did tell him that it was a valuation that was subject to the property being completed. There is a great deal of uncertainty that attends the significance of the matter.
117.It is not a case of the wife relying upon a value of the property that is being promoted by the husband.
118.Having carefully considered the evidence, I do not think that the withholding of the June 2005 appraisal amounts to a miscarriage of justice. For the reasons discussed above, too much uncertainty attends the significance of the document to the wife’s decision-making and hence to the judicial process.
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122.I note that s.79A(1)(a) specifically describes a failure to disclose relevant information as a suppression of evidence. The husband failed to disclose his June 2005 valuation, but I am not prepared to find that there has been a miscarriage of justice by reason of that circumstance.
It is true, as was submitted before us on behalf of the wife, that his Honour went so far in paragraph 111 of his reasons to find not just that the husband had not disclosed to the wife the appraisal which he had obtained in June, but that he had concealed the document from the wife. This finding obviously reflects badly on the husband.
However, we agree with his Honour’s conclusion in paragraph 118 that the “withholding” or concealing of the June appraisal by the husband does not amount to a miscarriage of justice. As his Honour said “too much uncertainty attends the significance of the document to the wife’s decision-making and hence to the judicial process.” It has not been demonstrated that this finding was not reasonably open to his Honour.
We also draw attention to the fact that on one interpretation of the appraisal obtained by the husband (being, that on completion the home would be worth “early to mid $300,000’s”), that appraisal would not be materially different from the appraisal obtained by the wife, in so far as it was directed to the completed home. This consideration, together with the uncertainties indentified by his Honour, must defeat any claim that a miscarriage of justice has occurred, or in the words of the wife’s written submissions, “compel a substantially different outcome as between the parties” both as to the quantum of the net asset pool and the division agreed by them.
Conclusion in relation to non-disclosed matters and to the wife’s unrepresented status
It will be seen from what we have said so far and for the reasons given, that we consider that there is no substance in the wife’s appeal so far as it is directed to his Honour’s conclusion that the various matters not disclosed by the husband could (either alone or in combination) constitute a miscarriage of justice, or compel a conclusion that a different outcome should have been reached in the interests of justice from that embodied in the consent orders.
It is, however, necessary in this context that we consider the wife’s ground of appeal which is directed to her lack of legal representation.
We have earlier (at paragraph 36) set out paragraph 107 of his Honour’s reasons, in which he concluded that notwithstanding the wife’s concession that Mr C had advised her of her right to obtain independent legal advice, nevertheless her lack of representation in circumstances where the husband was represented had significance. His Honour went on in paragraph 108 to say that he was not persuaded that this fact elevated the allegedly non-disclosed matters (other than the appraisal matter) “to a level which would see them characterised as indicative of a miscarriage of justice.” His Honour then said in paragraph 109 that “the wife’s unrepresented status is something that must be taken into account in a consideration of the issue of the nondisclosure of the June 2005 real estate appraisal.”
The wife’s ground of appeal (Ground 4) which is directed to her self-represented status, asserts that his Honour erred in failing to find in paragraphs 107 to 108 of his reasons that the wife’s lack of legal representation in the circumstances of the case amounted to a miscarriage of justice within the meaning of s 79A(1)(a). The ground further asserts that, in particular, his Honour:
4.1Failed to make any finding or assessment as to whether the Wife’s lack of legal representation, in the circumstances of this case, led her to enter into an agreement which was patently against her interests11 [sic], and therefore failed to take into account a relevant consideration in relation to this issue; and
4.2Place undue focus, at para [109], upon the Husband’s non-disclosure of the June 2005 real estate appraisal in assessing the significance of the Wife’s unrepresented status, and therefore took into account an irrelevant (or largely irrelevant) consideration in relation to this issue.
Notwithstanding the terms of the ground of appeal in question, it was acknowledged in the submissions of counsel for the wife that mere lack of legal representation cannot, of itself, constitute a miscarriage of justice. (See Gebert & Gebert (1990) FLC 92-137; Clifton & Stuart (1991) FLC 92-194; Prior & Prior (2002) FLC 93-105.) Some other factor is, or factors are, required. According to the terms of the ground, such factors in this case would be that the agreement was patently against the unrepresented party’s interest, and an “undue focus” on the June 2005 appraisal.
We do not understand what is intended by the reference in the ground to the “undue focus” on the June 2005 appraisal, and the supporting submissions did not assist in this regard. We can only say that we cannot identify any flaw in his Honour’s discussion of, and conclusion in relation to, the appraisal issue (which we have set out at paragraph 76 above).
As to the suggestion that the consent orders were “patently” against the wife’s interests, we are not satisfied that was necessarily so. But in any event, as his Honour recorded in paragraph 79 of his reasons, the wife said in cross-examination that she told the Justice of the Peace before whom she executed the consent order documents, that “she did not think she was getting a fair deal, but she decided to go ahead with the deal in any event because of the mental stress associated with the process.”
In the wife’s submissions in support of the appeal, and apparently in an endeavour to establish that her lack of legal representation did in the circumstances of the case amount to a miscarriage of justice, reliance was placed on the reasonableness of the wife’s belief that Mr C was acting for both parties, and on factors which would establish such reasonableness. Such matters cannot assist the wife in the face of her concession under cross-examination that Mr C had told her in October 2005 that he was not acting for her and that she should obtain her own legal advice.
The appeal therefore cannot succeed on the basis of the matters raised by the wife relating to her unrepresented position. (Again see Gebert & Gebert (1990) FLC 92-137 at 77,937).
The residual discretion under s 79A(1)
None of the wife’s grounds of appeal appear to be specifically directed to his Honour’s observations at the conclusion of his reasons that even had he found a miscarriage of justice, there would have been “significant difficulties for the wife in terms of an exercise of a discretion in her favour.” Nevertheless, the written submissions of the wife’s counsel can be read as directed to this matter, in that they assert that (assuming, of course, that a miscarriage of justice had been found) the discretion should have been exercised in her favour because of the difference in the percentage division for each party; the alleged undervalue of the asset pool by virtue of the non-disclosed matters; and in addition the “continued” non-disclosures of the husband in relation to appraisals and valuations of the property and his interest in his deceased father’s estate.
Given that no ground of appeal appears to be directed to this matter and given also our conclusion that there is no substance in the grounds directed to the Federal Magistrate’s conclusion that there had been no miscarriage of justice, it is probably strictly unnecessary that we refer to the residual discretion issue.
Nevertheless we consider that we should set out his Honour’s reasons for concluding that he would not have exercised the discretion in the wife’s favour, and also that we should say that we agree with his Honour regarding these matters:
123.… She waited twelve months to bring the application. She allowed the transaction to be completed notwithstanding the evidence about the husband’s repudiation of the agreement (as she says she understood it) in relation to the caravan. That included settling upon the transaction in January of 2006.
124.Her willingness in the earlier stage of the proceedings (namely her affidavits) to promote an entirely inaccurate account of [Mr C’s] conduct in the matter would also have told if the matter had reached that stage.
Overall conclusion in relation to the appeal
The appeal will therefore be dismissed.
Costs of the appeal
At the conclusion of the hearing of the appeal, we received submissions on behalf of both parties in relation to the costs of the appeal depending on its outcome.
In the event that the appeal was to be dismissed (as it will be) the respondent husband sought an order for costs in his favour on the basis that the wife would have been wholly unsuccessful, and of his poor financial position.
The wife would resist a costs order on the basis of the husband’s non-disclosures which had given rise to the appeal. She also relied on her poor financial position.
Some weeks after the hearing of the appeal, the Appeal Registrar was informed that the husband’s solicitor wished to put further material before us concerning the wife’s financial position. On 2 July 2009 the solicitor for the husband filed an affidavit attaching correspondence between himself and the wife’s solicitor concerning each party’s ownership, in the wife’s case, of real property and in the husband’s case, of a scrap metal business. We have been prepared to receive and consider that correspondence.
We have not, however, been persuaded that in this case there should be any departure from the general rule in s 117(1) of the Act that each party should pay their own costs of proceedings under the Act. Accordingly, there will be no order for costs in relation to the appeal.
I certify that the preceding ninety seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 26 March 2010
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