Bulow & Bulow
[2022] FedCFamC1A 19
•18 February 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Bulow & Bulow [2022] FedCFamC1A 19
Appeal from: Bulow & Bulow (No 3) [2021] FCCA 314
Bulow & Bulow (No 4) [2021] FCCA 1175
Appeal number(s): SOA 16 of 2021
SOA 40 of 2021File number(s): ADC 1674 of 2014 Judgment of: ALDRIDGE, WATTS & TREE JJ Date of judgment: 18 February 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from superannuation splitting orders that equally split the parties’ superannuation interests – Where the husband did not make an appearance at the trial hearing – Apprehension of bias – Procedural fairness – Adequacy of reasons – Assessment of contributions – No error established – Appeal dismissed – No order as to costs.
FAMILY LAW – APPEAL – PRACTICE AND PROCEDURE – Appeal against the refusal of the stay of the primary judge’s orders – Appeal futile – Appeal dismissed.
FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the husband sought to adduce a number of affidavits which were not said to be relied on in proceedings – Mere filing of an affidavit does not make it evidence – Application dismissed.
Legislation: Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth) ss 79, 90XT
Family Law (Superannuation) Regulations 2001 (Cth)
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Bulow & Bulow (2019) FLC 93-885; [2019] FamCAFC 3
Bulow & Bulow [2020] FamCAFC 120
Charisteas v Charisteas (2021) 95 ALJR 824; [2021] HCA 29
Kioa v West (1985) 159 CLR 550; [1985] HCA 81
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
Number of paragraphs: 73 Date of hearing: 8 November 2021 Place: Adelaide (via video link), delivered in Sydney The Appellant: Self-represented litigant The Respondent: Self-represented litigant ORDERS
SOA 16 of 2021
SOA 40 of 2021
ADC 1674 of 2014FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR BULOW
Appellant
AND: MS BULOW
Respondent
ORDER MADE BY:
ALDRIDGE, WATTS & TREE JJ
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERED ON 8 NOVEMBER 2021 THAT:
Appeal No. SOA 40 of 2021
1.The Application in an Appeal filed on 9 July 2021 is dismissed.
2.Appeal No. SOA 40 of 2021 is dismissed.
THE COURT FURTHER ORDERS THAT:
Appeal No. SOA 16 of 2021
1.The Application in an Appeal filed on 27 October 2021 in Appeal No. SOA 16 of 2021 is dismissed.
2.Appeal No. SOA 16 of 2021 is dismissed.
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).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bulow & Bulow has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, WATTS & TREE JJ:
APPEAL NO. SOA 16 OF 2021
Introduction
This is an appeal from superannuation splitting orders made by a judge of the Federal Circuit Court of Australia (as it was then known) on 15 March 2021 and amended on 12 April 2021.
The orders came about in a slightly unusual way. On 21 November 2017, the primary judge made a suite of property orders in proceedings between Ms Bulow (“the wife”) and Mr Bulow (“the husband”). In short, the non-superannuation property was divided so that the wife received 60 per cent and the husband 40 per cent. Superannuation splitting orders were made so the superannuation interests were divided equally.
The husband appealed successfully. On 18 January 2019, the Full Court set aside the superannuation orders and an order dividing the proceeds of sale of the matrimonial home (Orders 2 and 1(a) made on 21 November 2017 respectively), but not the orders concerning the other property (Bulow & Bulow (2019) FLC 93-885).
The Full Court remitted the matter for rehearing. In respect of Order 2, this was because the primary judge had failed to take into account the nature, form and characteristics of the relevant funds, even though the parties had not favoured the Court with such evidence. The Full Court held that a judge is obliged to seek such evidence (at [34]). The dollar amount in Order 1(a) was to be re-determined as it related to the dollar value ascribed in calculating the superannuation split.
The rehearing took place on 13 August 2020. The husband did not appear and the hearing proceeded in his absence. The orders made on 15 March 2021 again had the effect of equalising the parties’ interests in their superannuation.
The husband has appealed from those orders. He raised 33 grounds, some of which are difficult to understand and some are repetitious. We shall deal with them in groups, as best we can. Grounds 15, 31 and 32 were not pressed.
Application in an Appeal to adduce further evidence
The husband initially sought to rely on a number of transcripts of various events but ultimately did not seek their reception.
The husband also sought to rely on a number of affidavits which had been filed but not relied upon or read in the proceedings before the primary judge. The mere fact of filing an affidavit does not make it evidence. That only occurs when an affidavit is “read” in proceedings. That occurs when it is made plain that one of the litigants wants to rely on its contents.
As that was not the case here, it is now too late for the evidence to be received.
The Application in an Appeal filed on 27 October 2021 will be dismissed.
The appellant prepared an aide memoire, however did not wish to have it adduced as he said they were his speaking notes.
The Appeal
Should the primary judge have recused himself? (Grounds 2, 18, 19, 22 and 26)
On 28 June 2019, the husband filed an Application in a Case which sought in part, the recusal of the primary judge. That application was dismissed on 29 July 2019 and the appeal from that decision was unsuccessful (Bulow & Bulow [2020] FamCAFC 120).
Thus, unless later conduct of the primary judge revived the earlier conduct in some way, or the combination of matters occurring before and after the application of 28 June 2019 required disqualification, the husband can only rely on events occurring after that time.
The matters relied upon by the husband are that:
·There was “a continuous thread of predetermination” from statements made by the primary judge from 28 February 2019 to 13 August 2020 (Husband’s Summary of Argument filed on 26 October 2021, paragraph 2.5);
·The order made on 7 May 2020 that the scope of the rehearing be limited (Husband’s Summary of Argument filed on 26 October 2021, paragraph 2.7);
·The primary judge communicated directly with the wife (Husband’s Summary of Argument filed on 26 October 2021, paragraph 18);
·The primary judge displayed open resentment towards every submission made by the husband to the Court (Husband’s Summary of Argument filed on 26 October 2021, paragraph 19);
·The primary judge colluded with the wife’s counsel about the appointment of the single superannuation expert (Husband’s Summary of Argument filed on 26 October 2021, paragraphs 22.1–22.2); and
·The orders that were made displayed punitive interest (Husband’s Summary of Argument filed on 26 October 2021, paragraph 26.1).
Unfortunately, in his submissions, the husband did not take us to any specific comments made by his Honour, or to any particular passages in the transcript but only referred to the entire transcript or to particular days. It is not for us to read the transcript for ourselves to identify the passages that the husband had in mind. It is for him to demonstrate that the conduct of the primary judge gave rise to a reasonable apprehension of bias.
Although Ground 2 identifies a passage in the transcript of a directions hearing on 28 February 2019, as identified above, the husband did not press his application to rely on this transcript.
It is plain from the reasons of the Full Court and the orders that were made that the remitted proceedings only concerned the parties’ superannuation interests and the effect of that split on the division of the proceeds of sale of the matrimonial home. Therefore, the order that was made on 7 May 2020 limiting the proceedings to that issue is entirely unremarkable and cannot give rise to an apprehension of bias.
The primary judge appointed Mr Y to be the single expert valuer of the parties’ superannuation interests. The appointment was proposed by the wife, it was opposed by the husband on the grounds that the assessment of a superannuation splitting order under s 79(2) and s 79(4) of the Family Law Act 1975 (Cth) (“the Act”) cannot be “subcontracted” as a substitute and because the husband had filed “authoritative expert evidence” after receiving advice from one of the fund’s trustees (Husband’s Summary of Argument filed on 26 October 2021, paragraph 23.2).
The husband did not explain why the rejection of these submissions portrays collusion between the primary judge and counsel for the wife, and we, for ourselves, are unable to see it.
On 4 March 2021, sometime after the undefended hearing in August 2020, the primary judge relisted the matter for the purpose of clarifying to what extent the remaining property orders had been put into effect. Only the wife appeared. The husband says that he was not notified.
However, the husband’s complaint is not only as to procedural fairness but also as to the apprehension of bias. However, the “communication” with the wife was actually a court hearing which was properly transcribed. That is not a communication which falls within the bounds of an improper communication between a judge and a party as described in Charisteas v Charisteas (2021) 95 ALJR 824.
As to procedural fairness, we are unable to determine from the material before us whether the husband was notified of the listing or not. However, even if he was not notified and assuming for a moment that he should have been, notwithstanding that at the time, the matter was proceeding on an undefended basis, not every breach of procedural fairness justifies a retrial (Stead v State Government Insurance Commission (1986) 161 CLR 141).
At the hearing on 4 March 2021, the primary judge obtained some limited information. The husband did not suggest that it was incorrect. There can therefore be no suggestion that the relisting improperly affected the outcome of the trial hearing.
It follows that we are not satisfied that these grounds have been made out.
The husband’s application for an adjournment and to attend electronically (Grounds 16, 17 and 33)
The husband submitted that on 24 April 2020 he informed the primary judge that he intended to seek special leave to appeal against the decision of the Full Court. On 7 May 2020 his Honour listed the matter for hearing on 13 August 2020 and made a number of procedural orders.
The matter was also listed for 7 August 2020 for directions and essentially as a compliance hearing. The husband had not filed any material at all pursuant to the earlier directions.
At that directions hearing, according to the primary judge, the husband said that he would be making an application to the Full Court for a full rehearing and an application for special leave to appeal to the High Court of Australia (“the High Court”) against the decision of the Full Court. Nonetheless, the primary judge indicated that the matter would proceed the following week and that the hearing would take place in person.
The day before the hearing on 12 August 2020 at 4.27 pm, the husband sent an email to the primary judge’s chambers attaching an application to attend by telephone on the grounds of “safety and medical” without explaining why that was necessary (at [13]). The application was refused.
Early on the morning of the hearing on 13 August 2020, the husband forwarded an Application in a Case to the chambers of the primary judge, essentially seeking a stay of proceedings pending the appeal in the High Court and provided the appeal reference “LOD-002537” (at [14]). The affidavit which supported the application did not refer to any High Court appeal. Enquiries made revealed that the appeal registry had not received any notice of an application for special leave being sought or granted and that the matter number quoted for the appeal was not recognised by the High Court as valid.
The reality was, as recorded by the primary judge, the husband lodged an application for special leave eight days after the hearing on 21 August 2020 which was subsequently dismissed.
The hearing of 13 August 2020 commenced at 10.47 am. The husband was not present and his Honour decided to proceed in his absence.
In these circumstances we are quite unable to detect any error in the course taken by the primary judge.
The husband submitted that he was denied the right to make submissions but he had no such right. He was entitled to be given notice of the proceedings and to be given the opportunity to make submissions, which is what happened here (Kioa v West (1985) 159 CLR 550). If the husband declined to take that opportunity up, that was a matter for him.
These grounds do not succeed.
The assessment of contributions (Grounds 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 21, 29 and 30)
The husband challenged the assessment that contributions of the parties should be equal and that there should be no adjustment after taking into account the considerations in s 79(4) of the Act; in many ways, but essentially his contentions were that he had made significantly greater financial contributions than the wife and that the outcome left him with insufficient income for the future.
It is convenient to commence by looking at his Honour’s reasons for judgment.
The wife had interests in two superannuation funds which were valued by the single expert in accordance with the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) as $63,979 and $334,995.56 as at 30 April 2020.
The husband had an interest in the H Super Fund (“the H Fund”) which was valued at $849,498.70.
It is to be recalled that such valuations are only obtained for the purposes of a splitting order
(s 90XT of the Act).
The primary judge then explained the nature, form and characteristics of the husband’s interests as follows:
40.[The husband’s] interest in the H Fund is a defined benefit superannuation interest in the growth phase of a contributory member. To demonstrate the characteristics of the scheme, Mr [Y] used the H Fund amount as at 21 November 2017 for illustrative purposes. The members benefit is to be distinguished from the valuation for family law purposes. By reference to the H Fund Deed, Mr [Y] gave evidence, which I accept, of the equation used to calculate the members H Fund benefit. Multiplying the accrued benefit multiple (ABM) by [the husband’s] average salary results in the benefit amount of $640,426.41 as at 21 November 2017. There are three amounts of actual financial contributions in [the husband’s] interest. These comprise the funded component of his interest. As at 21 November 2017, the funded component was comprised as follows:
[The husband] (21 November 2017) Member contributions (AMC) $22,474.80 Productivity contributions (APC) $78,834.25 Accumulated Transfer Amount (ATA) $7,664.73 Total Funded Component $307,973.78
41.It is the first two components which are used to fund the defined benefit entitlements including the life pension amount. The transfer amount is invested by the trustee and ultimately paid as a lump sum. It cannot be used towards funding the life pension. The shortfall between the funded component and the benefit amount is referred to as the unfunded component. The governing rules for the H Fund provide for payment of both the funded component and the unfunded component.
42.As its name suggests, the unfunded component is an amount which has not yet been contributed by the employer. By virtue of the governing rules of the H Fund it will be available at the point in time at which the members benefit entitlement crystallises on satisfying a condition of release such as retirement and meeting preservation age. At the time of [the husband’s] retirement, the trustee of the H Fund will pay an amount to the Commonwealth equal to his accumulated funded contributions. The Commonwealth will then be responsible for payment of the total benefit amount being the funded and unfunded components.
43.[The husband’s] total benefit does not suffer any reduction as a result of any investment losses, for example as a result of the recent macroeconomic crisis caused by COVID-19. The members total benefit entitlement is calculated by reference to the benefit multiple and his salary. Those factors are not negatively affected by investment losses. The H Fund is designed to ensure that the unfunded component is increased where necessary to make up for any further shortfall due to investment losses from the investment of the funded component.
44.There is a difference between the entitlement amount on 21 November 2017 ($640,426.41) and the amount calculated in accordance with the approved method on that date ($688,764.81). If the entitlement was payable on 21 November 2017, the amount of $640,426 would be payable as a lump sum. Given that there is a pension option any trustee would nonetheless need to be in a position to fund the pension.
45.In Mr [Y]’s opinion, the amount of $688,764.91 represents the trustee’s liability on 21 November 2017 in relation to a person of the age and gender of [the husband]. That is the amount which an ordinarily prudent trustee ought to have under its supervision at the relevant date in a fully funded superannuation plan with respect to a member of the respondent’s age and gender having regard to the nature, form and characteristics of the superannuation benefit as set out in the governing rules of the superannuation plan. In the event of a splitting order, the trustee’s liability would not increase above the approved amount.
46.For that reason, the family law provisions for the splitting of superannuation with respect to an interest in the H Fund, will result in a splitting of the trustee’s liability not a splitting of the member’s entitlement. The same observation applies to the wife’s interest in the P Fund and K Fund schemes although they are fully funded plans.
47.Mr [Y]’s reasoning with respect to the amount payable on 21 November 2017 applies equally to his calculation of the amount payable as at 30 April 2020.
At [51], his Honour recorded that a split of the base amount of the husband’s interest of $225,262.07 would equalise the parties’ superannuation interests and at [52]–[53] would entitle the wife to an associated preserved benefit in the amount of $236,360.15 on the 28 April 2000 figures. Such a split would obviously reduce the husband’s future entitlements (see also [62]–[64]).
At [54], the primary judge found that in the years between separation on 20 November 2012 and the first trial on 20 November 2015, the husband’s interest as valued under the Regulations had increased by $66,100. This increase was due to the husband increasing his contributions from 2 per cent of his salary to 10 per cent. His Honour then recorded that “[t]he husband’s position at the first trial was that his post separation contributions should be disregarded for the purpose of the superannuation pool” and that this, in the absence of any submissions to the contrary, remained his position.
His Honour then accepted the husband’s contention that the wife had made no financial contribution to his superannuation but said, correctly, that he was required to take into account the non-financial contributions of the wife, including those made after separation (at [55]).
The primary judge turned to these considerations which concerned the care and support of the parties’ children by the wife with only limited financial assistance from the husband. His Honour said:
59.… I am satisfied that in doing so, she made not merely a contribution to the welfare of the family but also an indirect contribution towards the husband’s ability to make voluntary after tax contributions towards his H Fund superannuation. I regard the wife’s indirect contribution towards the ability of the husband to accrue additional superannuation in the post separation period up to the time of the first trial as being at least equal to that of the husband’s direct contributions. …
This led to the conclusion:
65.As observed by the Full Court, the question of contributions is a matter of judgment and not computation. Not only is there no particular science in assessing contributions, a holistic approach being required. I am satisfied that contributions towards superannuation interests should be assessed as being equal. I am satisfied that a just and equitable division of the parties’ entitlements requires an equalisation of their respective interests. I remain satisfied that it is appropriate to make a splitting order with the respect to the superannuation on the basis of a 50:50 division. Such a split would produce the result on the April 2020 figures referred to in paragraph [52] above.
(Footnotes omitted)
The primary judge then turned to the existing division of non-superannuation assets before finding that the overall division was just and equitable.
The husband submitted that the above exercise was plainly wrong and that the primary judge should not have found that any division of property was just and equitable.
As to the first, we consider that his Honour took a completely orthodox approach to the superannuation and that the outcome that was reached was entirely unremarkable.
As to the second, the parties had acquired assets during the relationship to which they had both contributed, financially and non-financially. As that relationship had ended, it was just and equitable to divide those assets between them.
The husband relied on a series of calculations, made by him, which he asserted demonstrated that:
·The lower value of the wife’s superannuation was due to her personal decision not to increase it by means of a salary sacrifice (Husband’s Summary of Argument filed on 26 October 2021, paragraph 1.5.1(c));
·After his mortgage payments are taken into account, his superannuation entitlements will see him living on $14,000 per year (Husband’s Summary of Argument filed on 26 October 2021, paragraph 1.5.2(b));
·His pension would be reduced to $43,505 per year (Husband’s Summary of Argument filed on 26 October 2021, paragraph 1.5.2);
·That the wife had provided less than 50 per cent of her income for the benefit of the family but the husband had provided 100 per cent of his (Husband’s Summary of Argument filed on 26 October 2021, paragraph 11.3(b)); and
·That for eight years after separation the increase in the husband’s accrued benefit multiple was “8 x 0.31 = 2.48 instead of only 8 x 0.11 = 0.88 without contributions” (Husband’s Summary of Argument filed on 26 October 2021, paragraph 21.4(b)).
An immediate difficulty for the husband is that none of these were put to the single expert for comment or raised with the primary judge. A further difficulty is that the husband has not established that he has the qualifications to provide such expert evidence. It is difficult to assert that a judge was in error by failing to take into account matters that were not raised at the hearing.
As appears from the passages above, the primary judge was well aware of the nature, form and characteristics of the husband’s entitlements and that the effect of the order would be to reduce the husband’s pension payments in due course. We are quite unable to see that such inappropriate weight has been given to any considerations that rendered the outcome unreasonable or plainly wrong.
These grounds do not succeed.
Should the evidence of the single expert have been accepted? (Grounds 23 and 24)
Under these grounds the husband submits that he opposed the appointment of the single expert and that he lacked the necessary expertise. The reason the husband opposed the appointment of the single expert was because the single expert advocated for a split and because the husband, on advice from the trustees, had filed authoritative evidence.
The first point, even assuming the husband’s contentions to be well founded, cannot establish error in the appointment because they are matters that go to the weight to be given to the expert’s opinion.
The primary judge described the expertise of the single expert as follows:
33.Mr [Y] is a legal practitioner and a specialist practitioner for the Self-Managed Superannuation Practitioners Association. He was admitted to practise in 1989. He has undertaken specialist studies in superannuation law. He has also completed a Diploma in Taxation with the Australian Taxation Institute which encompassed studies with respect to the taxation of superannuation. He is the former head of the Family Law and Legal Assistance Division of the Commonwealth Attorney Generals Department in which role he led a task force on the government’s proposed superannuation and family law reforms at the time Parliament passed amendments in the form of the Family Law Legislation Amendments (Superannuation) Act 2001 which provided for splitting of superannuation benefits. He is the author of the text Super Splitting for Family Lawyers which was published in 2011. He has given expert evidence on superannuation matters on numerous occasions.
The husband did not suggest that the primary judge misstated the evidence or explain why the qualifications of the expert fell short of establishing him to be an expert in the H Fund scheme. As we have explained, there was no evidence that the husband had the relevant expertise to provide an opinion on the nature form and characteristics of the parties’ superannuation entitlements or their value under the Regulations.
The fact that the appointment was proposed by the wife and made by the primary judge does not support the assertion of collusion, which would require much more to be established.
We can detect no error in the appointment of the single expert.
These grounds fail.
Were the reasons adequate? (Ground 20)
The husband submitted that the reasons were inadequate “as per Grounds 8, 10, 11, 14” (Husband’s Summary of Argument filed on 26 October 2021, paragraph 20.1). Those grounds assert error in the reasons. Reasons may be adequate yet wrong.
Here, the reasoning process of his Honour is readily apparent and therefore the reasons are adequate. See Bennett and Bennett (1991) FLC 92-191 and Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110.
This ground fails.
The remaining grounds (Grounds 12, 14, 25, 27 and 28)
Under these grounds the husband contended that the primary judge defied the Child Support (Assessment) Act 1989 (Cth) (because the primary judge maliciously implied a shortfall in contributions because the wife has exploited the children), had deliberately suppressed the husband’s evidence, persistently suppressed evidence and made wrongful findings of credit.
We are quite unable to see any support at all in the material before us to support these grounds.
Finally, the husband submitted that his Honour’s comment that a superannuation order “will result in a splitting of the trustee’s liability not a splitting of the member’s entitlement” (at [46]) was “glaringly false” and was a “knowingly false statement …with the intent to fabricate a justification for a pre-determinedly biased outcome” (Husband’s Summary of Argument filed on 26 October 2021, paragraphs 14.1 and 14.3) (as per the original).
The hyperbole is most regrettable.
The comment made by the primary judge is an entirely accurate description of the technical effect of a splitting order. As we have already explained, his Honour was well aware that a splitting order would reduce the husband’s entitlements.
These grounds do not succeed.
The appeal will be dismissed.
APPEAL NO. SOA 40 OF 2021
This was an appeal against the refusal of the stay of the primary judge’s orders. The husband accepted that it was now futile and should be dismissed.
Accordingly, the Application in an Appeal filed by the husband on 9 July 2021 in this appeal is also dismissed.
COSTS
The wife appeared for herself and did not seek an order for costs.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Watts & Tree. Associate:
Dated: 18 February 2022
7
3