Bokin & Wild
[2022] FedCFamC1A 209
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Bokin & Wild [2022] FedCFamC1A 209
Appeal from: Bokin & Wild [2022] FedCFamC1F 612 Appeal number(s): NAA 205 of 2022 File number(s): WOC 928 of 2020 Judgment of: ALSTERGREN CJ, REES & ALTOBELLI JJ Date of judgment: 13 December 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal against final property orders – Appeal against 60 per cent adjustment for contributions in the wife’s favour and additional five per cent adjustment pursuant to s 90SF(3) of the Family Law Act 1975 (Cth) – Consideration of Robb and Robb contributions – No time limit stipulated in the orders – Decision of the primary judge not plainly wrong – Appeal dismissed – Appellant husband to pay the respondent wife’s costs. Legislation: Family Law Act 1975 (Cth) ss 79, 81, 90SF, 90SM, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.08, 12.17
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Kaljo and Kaljo (1978) FLC 90-445; [1978] FamCA 46
Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27
Kessey and Kessey (1994) FLC 92-495; [1994] FamCA 162
Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
Molier and Van Wyk (1980) FLC 90-911; [1980] FamCA 85
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; [1982] HCA 29
Robb and Robb (1995) FLC 92-555; [1994] FamCA 136
Robinson Helicopter Company Incorporated v McDermott (2016) 331 ALR 550; [2016] HCA 22
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 93 Date of hearing: 23 November 2022 Place: Heard in Sydney, delivered in Melbourne Counsel for the Appellant: Mr Moutasallem Solicitor for the Appellant: Kammoun Sukari Lawyers Counsel for the Respondent: Mr Livingstone Solicitor for the Respondent: Access Law Group ORDERS
NAA 205 of 2022
WOC 928 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR BOKIN
Appellant
AND: MS WILD
Respondent
order made by:
ALSTERGREN CJ , REES & ALTOBELLI JJ
DATE OF ORDER:
13 dECEMBER 2022
THE COURT ORDERS THAT:
1.The Notice of Appeal filed 20 September 2022 be dismissed.
2.The appellant pay the respondent’s costs of the appeal in the sum of $18,500 within 28 days of the date of these orders.
THE COURT NOTES THAT:
A.There is an agreement between the parties that the appellant will not be required to vacate the property at J Street, Suburb L before 31 January 2023 in the event that the appeal is dismissed, notwithstanding the orders made on 30 August 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bokin & Wild has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALSTERGREN CJ, REES & ALTOBELLI JJ:
Introduction
Mr Bokin (“the appellant”) appeals final property settlement orders made on 30 August 2022 by a judge of the Federal Circuit and Family Court of Australia (Division 1) (“the primary judge”) in proceedings against Ms Wild (“the respondent”). The parties were in a de facto relationship of approximately 17–21 years with a property pool of approximately $4.5 million.
The orders provide for an adjustment of the parties’ interests such that the respondent receives 65 per cent and the appellant receives 35 per cent of the net pool of assets.
The respondent resists the appeal.
For the reasons that follow, the appeal will be dismissed.
Background
The appellant was born on “1978” and the respondent on “1978”. The commencement date of their de facto relationship was contentious but ultimately no findings needed to be made in this regard.
The parties had five children who are currently aged between eight and 16. The respondent also has an adult child from a previous relationship who is now 26 years old.
The parties separated for some months in 2016, reconciled and then separated on a final basis on 4 January 2020. Notwithstanding the controversy over the length of the relationship, the primary judge found that it was a long relationship.
The 10 day hearing before the primary judge commenced on 23 May 2022 and concluded on 15 June 2022, and initially involved both parenting and property issues. The parenting proceedings were settled by consent on day five of the hearing. The primary judge assessed contributions in favour of the respondent as to 60 per cent, leaving a differential between the parties of $914,696.75, and then made a s 90SF(3) adjustment in favour of the respondent of five per cent which left the parties with a further differential of $457,348.38. Thus, the overall division was 65:35 in favour of the respondent.
In implementing this division, the primary judge ordered that the respondent keep the property at G Street, Suburb O (“the Suburb O property”) which was occupied by the children and herself. Additionally, the primary judge ordered that the appellant transfer a development site, the property at J Street, Suburb L (“J Street property”) to the respondent, whereupon she would complete the outstanding work, subdivide the town houses, sell them and give effect to the 65:35 split out of the sale proceeds.
Both parties were legally represented throughout the hearing but the appellant represented himself on 15 June 2022 when closing submissions were made. Judgment was reserved on that date and delivered, with orders made, on 30 August 2022.
The appeal
The Notice of Appeal filed 20 September 2022 ostensibly contains five grounds of appeal, but each ground of appeal includes sub-grounds which are described as particulars. Each of these grounds and sub-grounds will be considered. In broad terms the appeal relates to findings about contribution, future needs and issues associated with the implementation of the division.
Grounds of appeal
Ground 1
1.That the trial judge erred at [151] in finding that all contributions weigh in the respondent de facto wife’s favour warranting a 60 per cent adjustment for contributions in her favour.
Particulars
(a)The finding of a 60% contributions adjustment in favour of the respondent was plainly wrong, not open and exceeded the reasonable exercise of discretion.
(b)The trial judge’s reasons for the 10% adjustment which resulted in a $914,696.75 differential between the parties were inadequate.
Appellant’s contentions
The appellant submits that the finding of 60:40 in favour of the wife, leaving the parties with a differential of 20 per cent or $914,696.75, was plainly unjust.
The appellant concedes that this cannot be a “weight ground”, and it is not sufficient that the court of appeal would have come to a different decision (Gronow v Gronow (1979) 144 CLR 513 (“Gronow”)). It must be that the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong (Norbis v Norbis (1986) 161 CLR 513 (“Norbis”)). The appellant relies upon House v The King (1936) 55 CLR 499 (“House v The King”) at 505 and submits that “…upon the facts it is unreasonable or plainly unjust, [and thus] 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”.
Further, the appellant contends that the reasons of the primary judge (“the reasons”), with a focus on the evaluative paragraphs from [149]–[152], were inadequate, and thus the commonly cited passage in Steinbrenner & Steinbrenner [2008] FamCAFC 193 (“Steinbrenner”) at [234] applies:
Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective…
Discussion
Notwithstanding the appellant’s submissions to the contrary, Ground 1 is, in reality, a challenge to the weight applied by the primary judge to the myriad of contributions made by each party. The hurdles which such contentions face are well known and acknowledged by the appellant (Gronow at 519; CDJ v VAJ (1998) 197 CLR 172 (“CDJ v VAJ”) at 230–231; Norbis at 517-519).
The question of whether the assessment of contribution was plainly wrong, not open and exceeded the reasonable exercise of discretion must be answered in light of the established principles with respect to the making of an order under s 90SM or s 79 of the Family Law Act 1975 (Cth) (“the Act”). The Court does not adopt a precise, mathematical approach to the exercise of discretion as the various matters taken into account under s 79 are not all capable of precise calculation (Kessey and Kessey (1994) FLC 92-495 at 81,151). Some considerations involve value judgments or are matters of impression (Lovine & Connor (2012) FLC 93-515 at 86,598).
The findings of the primary judge are the result of a detailed and holistic assessment of a myriad of contributions in a long marriage.
At [70] of the reasons, her Honour correctly identified her task in assessing contribution:
70.The Court is required to make an assessment of the nature and quality of the totality of the parties’ contributions throughout the entirety of their relationship, together with their contributions in the period subsequent to their separation: see for example: Dickons & Dickons [2012] FamCAFC 154; Jabour & Jabour (2019) FLC 93-898. See also Dovgan & Dovgan [2021] FamCA 306, which restated the need to holistically assess contributions, and that “all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder” at [347].
The primary judge applied these principles when considering the appellant’s case that he made a superior initial contribution at [71] of the reasons. The identification and discussion of the contributions made by both parties is comprehensive and contained in [72]–[148]. This included findings which favoured the appellant (e.g. in relation to the Kennon claim (Kennon v Kennon (1997) FLC 92-757 (“Kennon”)) at [123] of the reasons).
The evaluation of contributions overall is found at [149]–[152]. The primary judge understood the competing contentions. The key assessment of contribution finding is at [151]:
151.Looking at the myriad of contributions in this long relationship, and in collectively considering the de facto husband’s initial contributions and the use that was made of those two properties, the sizeable interest free loans from Mr C obviating the need to deal with commercial providers and repayment schedules (I again observe I do not count the quantum of loans as they have been repaid or will be, rather, I concentrate on the interest free aspect and not dealing with commercial finance providers and repayment schedules), the provision of $50-60,000 per annum to the de facto wife until her [addiction] took hold, the undertaking of [medical treatment], the involvement of paternal and maternal family members with the care of the children post separation, and the significant financial and homemaker assistance made by Mr C post-separation (and by financial, I include financial support for the de facto husband to secure alternate accommodation in December 2020, and support for the de facto wife’s expenses), together with the other contributions of both parties holistically, all contributions weigh in the de facto wife’s favour warranting a 60 per cent adjustment for contributions in her favour.
The primary judge also identified the differential created by her assessment of contribution of $914,696.75 at [152] of the reasons.
It is noted there is no challenge to any relevant factual finding about assessment of contribution. Rather, the challenge is to the overall finding.
The primary judge found at [86] that the appellant’s initial contribution was $175,000. The respondent’s initial contribution was minimal. The contributions of the appellant and the respondent were assessed at [91]–[98] and there was no finding that the contribution of either party was superior to that of the other. However, the primary judge set out the significant contributions made by the respondent’s father, Mr C (“respondent’s father”) during the course of the relationship. Those contributions were:
(a)The provision of funds to the respondent from 1999 until 2019 (a period of 20 years) agreed to have been between $50,000 and $60,000 per annum. Taking an average of $55,000 per annum, that contribution was of some $1,100,000;
(b)The transfer to the parties of a property at Suburb M for $120,000 less than its value ([93(e)] of the reasons);
(c)The provision of a number of interest-free loans including $100,000, $700,000, $2,200,000 and $830,000 ([93(k)] of the reasons). Although all but the loan for $830,000 was repaid, the parties had the benefit of not paying interest on those substantial amounts and did not have to deal with finance institutions. There was no quantification of the interest which had been saved before the primary judge but her Honour found the contribution to have been of value to the parties ([95] of the reasons) and the finding at [95] of the reasons that there was no evidence that “the parties would have been capable of raising such funds from commercial providers” is unchallenged;
(d)The provision of $30,000 to install a swimming pool ([98(g)] of the reasons); and
(e)Payment of stamp duty ([98(g)] of the reasons).
Thus the respondent’s father’s quantified contributions were some $1,250,000 and his unquantified contributions, particularly the provision of interest free loans, were substantial and in addition to the quantified contributions.
The primary judge’s assessment of contributions as favouring the respondent by 20 per cent or $914,696.75 is readily explained by a proper analysis of the respondent’s father’s contributions.
The requirement on a primary judge to adequately expose the reasoning for a decision is well established in Bennett and Bennett (1991) FLC 92-191 at 78,266 (“Bennett”), where the Full Court adopted the following test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18:
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.
In this case the primary judge’s reasons are adequate. Her Honour’s reasoning is well able to be ascertained. The adequacy of reasons must be determined not just by reference to the evaluative paragraphs at [149]–[152], but the preceding paragraphs at [69]–[148]. Moreover, we are satisfied that the inevitable “leap” from words to the figure of 60 per cent by the primary judge does not invite appellate intervention (Steinbrenner at [234]).
The findings were plainly open. There is no error on this ground.
Ground 2
2.The trial judge erred at [198] in finding that it was just and equitable to make an adjustment of five per cent pursuant to s 90SF(3) in favour of the respondent.
Particulars
(a)The trial judge failed to consider the significance of the $914,696.75 differential before making a s90SF(3) finding. In failing to do so, the trial judge failed to consider a matter that was relevant to s90SF(3)(g) that is the standard of living of the parties and s90SF(3)(b) that is the property and financial resources of both parties.
(b)The trial judge failed to consider the fact that the appellant was expecting a baby with his current partner.
(c)The trial judge erred on facts in failing to find that it was likely that Mr C would leave an inheritance to the respondent.
(d)The trial judge failed to consider a relevant consideration namely, Mr C’s evidence of his intention to distribute funds to his grandchildren and his evidence of a willingness to set up a trust fund for his grandchildren (see [128] of his trial affidavit). Such a consideration would have been relevant to the respondent’s standard of living pursuant to s90SF(3)(g) owing to the assistance she is likely to receive in the funding of the parties’ children’s upbringing, maintenance and education.
(c)The finding was otherwise plainly wrong, not open and exceeded the reasonable exercise of discretion.
(As per the original)
Appellant’s contentions
After assessing contribution as to 60:40 in favour of the respondent, the primary judge made another five per cent adjustment in the respondent’s favour resulting in a further differential of l0 per cent or $457,348.38. When added to the 20 per cent contribution differential, or $914,696.75 already in the respondent’s favour, the practical result was that the respondent exited this lengthy relationship with close to two thirds of the net matrimonial asset pool which exceeded $4.5 million, almost double that of the appellant. It is submitted that the primary judge ought to have taken into account this large differential before considering whether it was just and equitable to make a further s 90SF(3) adjustment. In so doing, it is suggested that the primary judge failed to consider a number of matters.
Discussion
In Ground 2(a) the appellant contends that the primary judge failed to consider the differential, and its significance. Once it is found that the primary judge did in fact consider the differential, this ground becomes a weight ground, with all its attendant challenges.
The primary judge clearly considered this issue at [200] of the reasons.
The ground also contends there was a failure to consider s 90SF(3)(g) regarding the standard of living of the parties. At [179] the primary judge records that no submission was made about this consideration and nothing turns on it. It is not permissible for the appellant to now raise an issue before this Court that was not raised before the primary judge (Metwally v University of Wollongong (1985) 60 ALR 68 (“Metwally”) at 71.
The ground further contends there was a failure to consider s 90SF(3)(b) regarding the property and resources of both parties. This was considered at [163]–[175] of the reasons although, arguably, these paragraphs focused on income, and not the property and resources of the parties. It is obvious, however, that having regard to the findings of the primary judge preceding her Honour’s ultimate conclusion at [200] about a five per cent adjustment and its differential impact, her Honour was conscious of the property and resources of both parties, and indeed expressly referred to the J Street property. Our conclusion is strengthened by reference to [199] where the primary judge refers to “the real impact in money terms which is ultimately the critical issue” –– which is only possible by having regard to the property and resources of both parties.
In Ground 2(b) the appellant contends that the primary judge failed to consider the fact that the appellant was expecting a baby with his current partner. The primary judge was aware of this both from the cross-examination of the appellant and from the closing submissions that the appellant personally made. The primary judge does not explicitly deal with this in the reasons, but it is well-established that her Honour does not need to “mention every fact or argument relied on by the losing party as relevant to an issue” (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62]).
Presumably the appellant was contending that this was a consideration arising under s 90SF(3) in his favour. It was not explicitly articulated in his case, but arguably a forthcoming child may be relevant under sub-paragraphs (d)(ii) and (e). At [177] of the reasons, the primary judge notes that no express submission was made about the relevance of these paragraphs. Once again, it is not permissible for the appellant to now raise an issue before this Court that was not raised before the primary judge (Metwally at 71).
Further, and notwithstanding our finding in [34] above, we note that the significance of any omission by the primary judge to take this into consideration must take into account the findings made about the appellant’s financial circumstances, including those of his partner. The primary judge had reservations about the appellant’s capacity to work and disclosure of his true financial circumstances (e.g. [158]–[161], [163]–[168], [170]–[171] and [185]). Without this evidence the primary judge was not in a position to assess whether, and if so to what extent, a forthcoming baby would become a consideration under s 90SF(3).
At Ground 2(c) the appellant contends that there was a factual error in failing to find that the respondent’s father would leave an inheritance to the respondent. The relevant findings are at [172]–[174]. The finding was open on the evidence. The primary judge was clearly impressed with this witness. There is nothing “glaringly improbable” about this finding (Robinson Helicopter Company Incorporated v McDermott (2016) 331 ALR 550 at [43]).
Ground 2(d) is related to Ground 2(c) and contends that the primary judge failed to consider a relevant consideration, namely the respondent’s father’s evidence of his intention to distribute funds to his grandchildren, and his willingness to set up a trust fund for his grandchildren. The appellant contends that this was relevant to the respondent’s standard of living, and s 90SF(3)(g). Once again, the relevant findings are found at [172]–[174] of the reasons. [173] is particularly pertinent:
173.Mr C has terminal cancer, but having watched him give evidence, there is no doubt he has capacity. He was an impressive witness. When asked about his succession plans in cross-examination, he said he had no intention of doing succession planning “at all. The reason being I have been diagnosed with terminal cancer and the last thing I want to talk about is after I’m dead”. He also said that he was not sure about doing a will in the future, but if he did, given the distributions he had made to his adult children during his lifetime, his priorities would be his wife and grandchildren.
At paragraph 128 of the respondent’s father’s affidavit filed 29 April 2022, he says that he “could” set up a trust fund for all of his grandchildren, not that he would. This evidence needs to be read in conjunction with paragraph 107 where the respondent’s father states, “My priority will be to ensure that Ms D and our grandchildren are provided for, as I have provided financial support to each of my children during their lives…” (emphasis added). This at least implies that he will not be providing further assistance to the respondent. Moreover, he deposes to not having undertaken any estate planning. He does say he has a priority to ensure that his grandchildren are provided for. All of this evidence was before the primary judge. At [174] of the reasons, the primary judge records that she does not take into account the prospect of any inheritance as a financial resource which the respondent might or might not receive in the future.
Once again, a difficulty for the appellant is that at [179] the primary judge correctly records that no submission was made about s 90SF(3)(g) thus precluding the present argument. In any event, her Honour did consider this in a general sense.
Ground 2(c) (presumably this is a typographical error which should read 2(e)) asserts that the finding was otherwise plainly wrong, not open and exceeded the reasonable exercise of discretion. The Court disagrees, for the reasons set out above.
None of these sub-grounds in Ground 2 has any merit.
Ground 3
3.The trial judge at [190]-[192] erred in its consideration pursuant to s90SF(3)(r) of the appellant’s Robb & Robb contributions claim.
Particulars
(a)At [191] the trial judge found that the contributions of the appellant to the respondent’s child Ms B were balanced out by Mr C giving his daughter $50-$60,000 a year and providing property in which they lived until 2005 when the parties acquired their home at an undervalue.
(b)In doing so, the trial judge impermissibly double counted those contributions of the respondent.
(c)Failing to make an adjustment in favour of the appellant on account of his Robb & Robb contributions was otherwise plainly wrong, not open and exceeded the reasonable exercise of discretion.
Appellant’s contentions
At trial the appellant raised a Robb & Robb (Robb and Robb (1995) FLC 92-555 (“Robb & Robb”)) contribution claim owing to his assistance with the care of Ms B the respondent's first child from an earlier relationship (“Ms B”). This ground again challenges the five per cent s 90SF(3) adjustment.
The relevant finding is at [191] of the reasons:
191.I accept that the de facto husband provided emotional support for Ms B and that he considered her part of the family, together with the de facto husband. I have no doubt he wanted her to have a beautiful bedroom and for them all to live in “a really safe and comfortable environment”. I accept that the de facto husband was the sole earner of income sourced outside the family, but the de facto wife started receiving $50-60,000 per annum from her father Mr C in or around 1999. The care and support provided by the de facto husband to Ms B is balanced out by Mr C giving his daughter $50-60,000 a year and providing a property in which they lived until 2005 when the parties acquired that home at an undervalue.
The appellant submits that the primary judge made a contribution finding in light of the factors referred to in [191], and impermissibly double counted those matters. Having accepted that the evidentiary foundation for a Robb & Robb contribution claim was made out, it follows that it was not open to the primary judge to find that any contribution by the appellant to Ms B was completely balanced out by factors that resulted in such a significant contributions assessment.
Discussion
The Robb & Robb claim was not foreshadowed in the appellant’s case outline document filed 22 May 2022. The appellant made submissions in person about this aspect of his case but at no point quantified his claim. The high-point of his evidence seems to be at paragraph 6 of his affidavit filed on 20 May 2022 (“his trial affidavit”) where he says “I have always considered, treated and supported [Ms B] both emotionally and financially as my own child”.
In closing submissions the appellant submitted that he should receive 60 per cent based on his contribution, and five per cent “…for future needs due to my, you know, injuries and potential incapacity to work in the near future” (Transcript 15 June 2022, p.104 lines 2–3).
The primary judge considered the generous financial provision made by the respondent’s father in assessing the myriad of contributions made in a long relationship at [151] of the reasons. Other relevant findings in this regard are found at [93(e)] and [98(g)] of the reasons.
Not only did the appellant fail to quantify his purported Robb & Robb claim, he expressly renounced it as a s 90SF(3) consideration.
In so far as the appellant contends that the primary judge double counted the contributions of the respondent’s father in his provision of financial support for the family by also taking that fact into account in her Honour’s consideration of this issue, we reject that submission. The evidence of the respondent’s father’s contributions is relevant to negate the appellant’s contention, as we understood his argument, that he provided financial support for Ms B.
If the appellant sought to pursue a claim based on Robb & Robb it was incumbent upon him to adduce evidence which was sufficient for the primary judge to assess and weigh that claim. He did not.
This ground of appeal is not established.
Ground 4
4.The trial judge at [208] erred in basing the sale orders of the Suburb L Townhouses (that is orders 2-5) on the orders proposed by the wife.
Particulars
(a)The trial judge failed to take into account the costs associated with securing the sub-division and the evidence of the respondent’s impecuniosity.
(b)The trial judge failed to take into account the respondent’s evidence at [745] of her trial affidavit that she cannot expect to receive further financial assistance from her father in the future.
(c)The trial judge failed to give consideration to the respondent’s ability complete the subdivision of the townhouses.
(d)The trial judge failed to consider the inability of the appellant to access any significant matrimonial property until the respondent sold the townhouses.
(e)The trial judge failed to consider s 81 of the Family Law Act which states that a Court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
(f)Orders 2-5 were plainly unjust or unreasonable in that they did not impose any timeframe on the respondent or any mechanism to account or share rent of the townhouses pending their sale.
(g)The reasons for making orders 2 to 5 were inadequate.
(h)The conclusion was otherwise plainly wrong, not open and exceeded the reasonable exercise of discretion.
Appellant’s contentions
The thrust of Ground 4 is that Orders 2–5 of the orders made by the primary judge could not be just and equitable in the absence of evidence demonstrating that the respondent could complete the works required to the J Street property and any timeframe within which the appellant could expect to receive his property settlement. Further, it was submitted that the orders left the appellant entirely at the mercy of the respondent. Unless and until the J Street property was subdivided and sold, the appellant had no access to any of the wealth set out in the balance sheet except the S Pty Ltd business found to be worth $20,000 and a Motor Vehicle 2 which was entirely encumbered. The orders required the appellant to vacate the J Street property and find alternate accommodation.
Discussion
The ground of appeal focuses on [208] of the reasons:
[208]I will base my sale orders on those orders proposed by the de facto wife. However, I will require the de facto wife to provide the de facto husband monthly reports on the steps she has taken with respect to the subdivision and readiness for sale and costs she has incurred, as well as her progress towards selling the townhouses. I make those additional orders because the de facto husband has an interest in J Street, the sale process and the outcome. I have also added that any outstanding rates, including the debt to TT Council for unpaid rates of $20,929.16, are included in the clause “payment of the usual conveyancing adjustments”. I do so for the sake of clarity.
Other relevant paragraphs explain the orders made. For example at [34]–[35] of the reasons, the primary judge finds that the appellant transferred this property to Ms Dunphy believing she could secure finance (but ultimately she could not) and without notice to the respondent. In cross-examination, the appellant only reluctantly conceded that he should have at least told the respondent’s father, who had provided a loan of $830,000 in respect of this property, of the transfer to Ms Dunphy. Consent orders were made on 31 May 2022, requiring the property to be transferred back into the appellant’s name ([38] of the reasons). By the time of closing submissions on 15 June 2022, however, the transfer had still not been effected.
At [204] of the reasons, the primary judge recognised the appellant’s desire to retain the J Street property, to finish the works, and then sell some, if not all three of the townhouses, at a higher price than contemplated by the valuer. Her Honour noted, however, that only he would benefit from any upward or downward movement in the value of the property, which is directly contrary to the order ultimately made.
At [205] the primary judge noted the respondent’s desire to keep the J Street property, prepare it for sale including finishing the subdivision, but on the basis that both parties would proportionately share any upward or downward movement in the value of the property.
Thus, both parties wanted the J Street property, ultimately for the purposes of sale. The only way that the acknowledged debt to the respondent’s father could be paid was through the sale of property. At [206] of the reasons, the primary judge stated “It was common ground that the parties do not have the capacity to borrow from a third party lender”.
This finding was reflective of the incapacity of both parties to refinance the debt to the respondent’s father. However, when the reasons for judgment are read as a whole, the finding extends to the seeming incapacity of both parties to fund the cost of subdivision.
According to their respective financial statements, neither party had financial capacity to do very much at all. Counsel for the appellant correctly points out that in the respondent’s evidence (paragraph 746 of her affidavit filed on 11 May 2022 (“her trial affidavit”)) she deposed to having no expectation to receive further financial assistance from her father in the future. This is consistent with the findings of the primary judge on whether the respondent’s father is a financial resource to her at [174] of the reasons.
In effect, the appellant’s complaint is that he should have been able to complete the work required to subdivide the townhouses on the J Street property. However, his financial statement filed 8 May 2022 discloses a weekly income of $750, savings of $200, a tax debt of $126,681, and an estimated credit card debt of $10,300. That evidence hardly inspired confidence in his ability to complete the subdivision. Moreover, the primary judge had evidence before her which plainly made her Honour sceptical about the appellant’s evidence regarding his health (e.g. [158]–[161]), his earning capacity (e.g. [164]–[168], [198]) and the true state of his financial circumstances (e.g. [170]–[171]).
Another important relevant finding is at [207] of the reasons in relation to the J Street property. The primary judge had no confidence that the appellant would ready the property for sale in a timely fashion because at the time of closing submissions he had still taken no steps to have the property transferred from Ms Dunphy to him as required by the orders made 31 May 2022.
Grounds 4(a)–(c) all assert judicial failure to take into account or consider various matters relating to effectuating the subdivision including its cost and who should be responsible.
The appellant refers to the valuation evidence of the J Street property. On page 5 of Annexure “FR” to her trial affidavit, the respondent annexes a page of the valuation report of the J Street property containing two relevant pieces of evidence. Firstly, under the heading “Observations” the valuer states “All three townhouses are near fully finished and tenanted…”. Therefore, whatever further work needed to be done, it did not prevent the townhouses from being occupied and rented out. Moreover, under the heading “Necessary Repairs”, and referring to work that needed to be done to the townhouses, the valuer states “A budget allowance of ~$50,000 to $75,000 be allowed to complete same on a professional basis.” The amount in question is relatively modest having regard to the size of the asset pool.
The appellant also refers to his evidence in paragraph 43 of his trial affidavit where he deposes:
It will cost another $400,000 to complete the units. Ms Dunphy and I am waiting until this matter has been determined in order to complete the work, as I do not have the funds to do so.
Counsel for the appellant quite correctly acknowledged this paragraph was objected to, but was unable to identify the ruling on the objection. The respondent’s list of objections filed on 27 May 2022 indicate that the objection was based on opinion and conclusion. The evidence of the appellant’s opinion was inadmissible. The evidence of the valuer was more reliable. The appellant’s statement “…as I do not have the funds to do so” is an admission against interest in the present context.
In closing submissions at the trial, the appellant in person made statements about the subdivision of the J Street property but this was not, of course, evidence and the primary judge was entitled to ignore it and did so (Transcript 15 June 2022, p.74 lines 19–26).
In reality the only evidence before the primary judge about the costs associated with effectuating the subdivision was the relatively modest amount of $75,000 referred to by the valuer. The primary judge was conscious of the respondent’s poor financial circumstances and the lack of likelihood that the respondent’s father would provide further financial assistance in the future. The primary judge was sceptical about the appellant’s financial circumstances. On the evidence before the Court, it was not possible for the primary judge to find that either the appellant or respondent had the financial or other wherewithal to effectuate the subdivision of the J Street property. It is clear from the history of their long relationship that they were previously involved in the development and subdivision of properties. The decision made by the primary judge was ultimately informed by other reasons, the main one being articulated at [207] of the reasons regarding her Honour’s lack of trust in the appellant to effectuate the subdivision in a timely fashion. The primary judge was entitled to frame the orders as she did in terms of who had the responsibility, after appropriately taking into account all of the evidence including costs, financial and other capacity of the parties. Grounds 4(a)–(c) are not established.
Ground 4(d) complains the primary judge failed to consider that the effect of the orders excluded the appellant from accessing any significant matrimonial property until the respondent has sold the townhouses on the J Street property. We disagree. The consideration is implicit in the reasons of the primary judge. In any event, the effect on the respondent is precisely the same — neither party will access any “significant matrimonial property” other than what they already have until the sale of the J Street property.
Ground 4(e) asserts a failure to consider s 81 of the Act in that the orders postpone the final determination of the financial relationship between the parties. We do not accept this contention. The duty created by s 81 is to, “as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them” (emphasis added). The section does not mandate the ending of financial relationships at all costs. The orders are, having regard to the facts of the case including the financial circumstances of the parties, consistent with s 81. Having regard to the findings made by the primary judge, even if the responsibility for the sale of the J Street property had been allocated to the appellant, a delay would have been inevitable.
Ground 4(f) raises issues about the open-ended and descriptive nature of the orders made by the primary judge in terms of a timeframe. These orders are almost identical to the orders proposed by the respondent. Order 2 provides a timeframe for the transfer of the property from the appellant to the respondent. Order 3 requires the respondent to undertake all necessary steps to subdivide and ready for sale the townhouses, but provides no timeframe. Order 4 provides that “thereafter” the respondent do all things to cause the townhouses to be sold. The appellant contends that, because of this, the orders are plainly unjust or unreasonable. It may not only delay the receipt by him of his entitlement under the orders, but is likely to lead to further litigation.
There was no admissible evidence before the primary judge about what, exactly, would be involved in undertaking all necessary steps to subdivide and make ready for sale the townhouses on the J Street property.
Both parties could have, and should have, adduced evidence in admissible form to enable the primary judge to make the requisite findings about what was required to subdivide and make ready for sale the townhouses. Neither party did so. The appellant now contends that the order made was plainly unjust or unreasonable. The appellant’s failure to adduce the relevant evidence caused the issue of which he now complains. He is bound by the case he ran before the primary judge, including his omissions.
The absence of time stipulations in Orders 3 and 4 is nonetheless unfortunate. In our view, and consistent with contract law, those time stipulations are to be implied, and the obligations imposed on the respondent must be performed in a reasonable time (Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 per Gibbs CJ at 543).
In any event our view is that Orders 3 and 4 are machinery or consequential provisions for the implementation of Orders 2, 5 and 6, and thus any ambiguity may be determined by the primary judge on application to her Honour. To this extent, Orders 3 and 4 do not alter the substantive effect of Order 2, but merely spell out its implementation and application in circumstances not covered in express terms but nonetheless consistent with the original intent (Kaljo and Kaljo (1978) FLC 90-445 at 77,274-77,275; Molier and Van Wyk (1980) FLC 90-911 at 75,773).
Ground 4(f) fails.
Ground 4(g) complains of inadequacy of reasons for making the orders in question. We disagree. The paragraphs we have referred to in our discussion of Ground 4 reveals adequate reasoning for the purposes of Bennett. This ground fails.
Ground 4(h) contends that the conclusion was otherwise plainly wrong, not open, and exceeded the reasonable exercise of discretion. We disagree. On any objective appraisal of the evidence before the primary judge, the order was substantively appropriate, and any procedural ambiguity can be determined by the primary judge on application to her Honour. This ground fails.
Ground 4 fails in its entirety.
Ground 5
5.The trial judge erred at [207] in failing to find that the Suburb O Property should be sold.
Particulars
(a)Based on the matrimonial asset pool as found by the trial judge at [68], the property represented 69.4% of the asset pool.
(b)The trial judge failed to take into account the respondent’s impecuniosity.
(c)The trial judge failed to take into account the respondent’s evidence at [745] of her trial affidavit that she cannot expect to receive further financial assistance from her father in the future.
Appellant’s contentions
This ground pleads that the primary judge erred in ordering the respondent keep the Suburb O property in circumstances where it would be inconsistent with the 65:35 split the primary judge ordered. Based on the balance sheet set out at [68] of the reasons (which included the caveat of the value of the J Street property being the value of the un-subdivided units) the value of the Suburb O property was $3,175,000. The property was unencumbered. It alone represented 69.4 per cent of the net matrimonial asset pool.
The appellant submits that the primary judge’s explanation at [210] that there be an adjustment between the parties if either party in fact received assets greater than their percentage entitlement failed to recognise the respondent’s evidence at trial about her impecuniosity, and thus practical inability to do so.
Discussion
The submissions made do not point to any specific error by the primary judge such as acting upon wrong principle, taking irrelevant matters into account, failing to take relevant factors into account, or mistaking the facts. The particulars provided shed little light into the precise nature of this ground of appeal and are, in any event, misconceived.
The Suburb O property retained by the respondent has a balance sheet value which represents 69.4 per cent of a matrimonial pool premised on the J Street property only having a value of $2,200,000. The submission proceeds on the assumption that the respondent will need to make an adjustive payment to the appellant, but that remains a hypothetical at this stage. The primary judge was plainly aware of the respondent’s financial circumstances.
The effect of the order is clear. If the J Street property sells for no more than the value of $2,200,000 which was its agreed present value at trial, the respondent will be required to make a payment to the appellant which might require her to sell the Suburb O property. That is the consequence of the position for which both parties advocated before the primary judge.
In substance this appeal ground is yet another contention by the appellant that the order is “unreasonable or plainly unjust” in order to show that “although the nature of the error may not be discoverable … a substantial wrong has in fact occurred” (House v The King at 505) or, put another way, that the outcome was “plainly wrong” (CDJ v VAJ at [186]). Further, Hayne, Kiefel and Bell JJ state in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [76]:
Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.
There is no such deficiency in the decision of the primary judge in this respect (or in any respect). The submission requires more than simply persuading the judges of the court of appeal that they may have “taken a different course” if they had been in the position of the primary judge (House v The King at 505). In any event, on the facts of this case, the appellate court would not have taken a different course.
This ground of appeal has no merit.
Respondent’s Notice of Contention
In light of this Court’s findings there is no need to consider the Notice of Contention.
Outcome
The appeal is dismissed.
Costs
The schedule of costs sought on behalf of the respondent discloses solicitor’s fees of $8,460.34 and counsel’s fees of $12,571.08, totalling $21,031.42. By way of comparison, the appellant’s schedule discloses solicitor’s and counsel’s fees of $22,222.01, excluding disbursements relating to the transcript and filing fee for the notice of appeal. In each case the fees were calculated in accordance with the scale.
The only basis on which a costs order could be made in this case is pursuant to s 117(2A)(e) of the Act i.e. that the appellant was wholly unsuccessful in the appeal.
In our opinion that is a sufficient basis for making an order in this case. Rule 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) empowers the Court to make an order for costs in a specific amount.
The appellant submitted there was duplication of costs in the respondent’s schedule of costs in relation to an Application in a Proceeding where an order was made against the appellant. In view of this we reduce the amount of the respondent’s costs by $2,500. We are satisfied that the sum of $18,500 is fair, reasonable and proportionate for the respondent’s party/party costs pursuant to r 12.08 of the Rules and so that sum is fixed in the order.
I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of Chief Justice Alstergren, and Justices Rees and Altobelli. Associate:
Dated: 13 December 2022
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