C Law Firm & Naish
[2024] FedCFamC1A 129
•5 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
C Law Firm & Naish [2024] FedCFamC1A 129
Appeal from: Janzen & Naish [2024] FedCFamC2F 309 and Orders made 24 April 2024 Appeal numbers: NAA 83 of 2024
NAA 106 of 2024File number: CAC 119 of 2021 Judgment of: TREE J Date of judgment: 5 August 2024 Catchwords: FAMILY LAW – APPEAL – Costs – Where the primary judge made a personal costs order against the appellant firm that represented the second respondent wife in the primary proceedings – Where the appellant’s only opportunity to be heard was in response to an email from the primary judge’s chambers seeking two paragraphs of submissions on that discrete issue – Procedural fairness – Where the appellant was denied a reasonable opportunity to provide submissions or give evidence – Where the first respondent husband conceded the appeal – Appeal allowed – Costs order set aside.
FAMILY LAW – APPEAL – Property – Where the primary judge delivered reasons for judgment and determined that there should be a 65/35 division of property in the husband’s favour – Where the primary judge mistakenly relied upon the husband’s contentious balance sheet – Where the primary judge made arithmetical errors – Where the primary judge delivered supplementary reasons and purported to re-open the proceedings to accept the correct balance sheet into evidence and amend the arithmetical error – Where the fundamental error of assessing the parties’ contributions by reference to a materially incorrect pool cannot be assumed to automatically flow across to the correct pool – Appeal allowed – Matter remitted for re-hearing – Costs certificates granted for the appeal and the rehearing.
Legislation: Family Law Act 1975 (Cth) s 75
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 35
Cases cited: Bhatnagar & Riju [2018] FamCAFC 144
Brown v Brown (2002) FLC 93-098; [2002] FamCA 389
CDJ v VAJ (1998) 197 CLR 182; [1998] HCA 67
House v The King (1936) 55 CLR 499; [1936] HCA 40
Number of paragraphs: 38 Date of last submission: 2 August 2024 Date of hearing: 25 July 2024 Place: Melbourne (via video link) Counsel for the Appellants: Mr Moller SC Solicitor for the Appellants: C Law Firm Counsel for the First Respondent in NAA 83 of 2024 and the Respondent in NAA 106 of 2024: Mr Howard Solicitor for the First Respondent in NAA 83 of 2024 and the Respondent in NAA106 of 2024: Robinson McGuinness Family Law Counsel for the Second Respondent in NAA 83 of 2024: Mr Moller SC Solicitor for the Second Respondent in NAA 83 of 2024: C Law Firm The Independent Children's Lawyer: Submitting Notices filed on 3 May 2024 and 7 May 2024 ORDERS
NAA 83 of 2024
CAC 119 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: C LAW FIRM
Appellant
AND: MR NAISH
First Respondent
MS JANZEN
Second Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
TREE J
DATE OF ORDER:
5 AUGUST 2024
THE COURT ORDERS THAT:
IN APPEAL NAA 83:
1.The appeal is allowed.
2.Order 5 of the orders made by the Federal Circuit and Family Court of Australia (Division 2) on 14 March 2024 is set aside.
3.The appellant is granted a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs and disbursements incurred by it in relation to the appeal.
4.The first respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the first respondent in respect of the costs incurred by him in the appeal.
AND IT IS NOTED
A.The first respondent’s position with respect to costs of the proceeding below is reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)..
IT IS NOTED that publication of this judgment by this Court under the pseudonym C Law Firm & Naish has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
ORDERS
NAA 106 of 2024
CAC 119 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS JANZEN
Appellant
AND: MR NAISH
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
TREE J
DATE OF ORDER:
5 AUGUST 2024
THE COURT ORDERS THAT:
IN APPEAL NAA 106:
1.The appeal is allowed.
2.The orders made by the Federal Circuit and Family Court of Australia on 24 April 2024 are set aside.
3.The matter is remitted for re-hearing before a Judge of Division 2 of the Federal Circuit and Family Court of Australia other than the primary judge.
4.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by him in the appeal.
5.The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate stating that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in the appeal.
6.The Court grants to each party a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to the parties in respect of the costs incurred by them in relation to the rehearing.
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 C Law Firm & Naish has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
INTRODUCTION
These proceedings involve Ms Janzen (“the wife”), Mr Naish (“the husband”) and the wife’s solicitors, C Law Firm (“CF”). On 14 March 2024, a judge of the Federal Circuit and Family Court of Australia (Division 2) delivered reasons in parenting and property proceedings (“the first reasons”) between the wife and the husband. Whilst the making of final substantive orders was deferred, nonetheless his Honour ordered that CF pay 70 per cent of the husband’s costs, either as agreed or taxed. From that order, CF appeals (“the costs appeal”).
Later on 24 April 2024, the primary judge made final property settlement orders. From those orders the wife appeals (“the property appeal”).
On 24 July 2024 CF, the wife and the husband filed a joint submission indicating the husband now concedes both appeals, the Independent Children’s Lawyer having filed Submitting Notices on 3 and 7 May 2024 did not seek to be heard.
At the hearing on 25 July 2024 CF and the wife both pressed applications filed on 24 June 2024 and 25 June 2024 to adduce further evidence in their respective appeals. In both cases that evidence was of correspondence between the parties and the chambers of the primary judge. The discretion to admit further evidence on appeal is a discretionary power contained within s 35 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and exists to facilitate the avoidance of errors (CDJ v VAJ (1998) 197 CLR 182 at [109]). Both applications were unopposed by the husband and accordingly they were at the granted for reasons that will become clear.
For the reasons which follow, both appeals will be allowed.
BACKGROUND
The trial of the proceedings was conducted before the primary judge on 1–3 November 2023. Some 7 days later, the parties provided the primary judge with an agreed balance sheet, as had been foreshadowed during submissions.
The first reasons determined that there should be a 65/35 division of the property in the husband’s favour (at [213]), however relevant to the property appeal, his Honour only ordered:
3.Within 30 days of the date of these Orders, the parties are to provide a consent Minute that reflects the Court’s findings and the procedural course regarding (a) the sale of one of the Husband’s properties (and the mechanics of the sale), and (b) the dollar amount payable to the Wife from the net proceeds of sale in accordance with the “just and equitable” percentages determined by the Court.
It transpired that the first reasons contained two relevant and uncontroversial errors; first, the primary judge did not adopt the agreed balance sheet, but rather adopted the husband’s earlier, contentious balance sheet. Secondly, although the conclusion as to the division of property was 65/35, that was the contribution based entitlement (at [207]) and did not include the adjustment made under s 75(2) of the Family Law Act 1975 (Cth) of 2 per cent in the wife’s favour (as found by his Honour at [211]).
On 11 April 2024 CF and the wife both appealed from the 14 March 2024 orders. Given Order 3, the wife’s appeal was premature. She was later discharged as an appellant to that appeal and became the second respondent.
Pursuant to the 14 March 2024 orders, in due course draft orders giving effect to the first reasons were provided to the Court, and further submissions were made in relation to them on 23 April 2024. On 24 April 2024, final property orders were pronounced. A degree of confusion arises from them, because they, to an extent, sought to accommodate the primary judge’s two errors in the first reasons, in that they proceeded on the basis of the agreed balance sheet, and on the basis that the division was 63/37, not 65/35.
On 2 May 2024, the Associate to the primary judge sent an email to the parties’ legal practitioners as follows:
Dear practitioners,
RE: [JANZEN & NAISH] – CAC199/2021
Further to the mention/directions hearing on Tuesday 23rd April, HH has asked that the following possible procedural course be noted and that both parties provide a single page submission regarding it by 12 noon on Wednesday 8th May.
As a matter of procedure and evidence, the two balance sheets sent to the Court by email dated 10th November 2023, are not formally in evidence. The email refers to them as “the parties' joint balance sheet”, notwithstanding that the attached document contained two separate balance sheets.
In the light of this procedural anomaly, as well as the matters canvassed by [Mr TT] at the hearing last week where the slip-rule was discussed but nothing about re-opening, HH inquires and seeks brief comment, via the submissions, directed on why the matter should not be re-opened for the purpose of admitting into evidence the two balance sheets provided under cover of the email of 10th November. There is ample authority regarding re-opening, including Autodesk Inc v Dyason (1993) 176 CLR 300; De L v Director-General (1997) 190 CLR 207, in circumstances where (as is the case here) Orders had not been entered, there was a risk of injustice, and there has been an accidental oversight.
The Court looks forward to hearing from the parties in accordance with the direction indicated. Should it need to be stated, the ICL is not required, but is not prevented, to provide any submission on this matter.
…
(Affidavit of the wife filed 25 July 2024, Annexure W-1)
On 3 May the wife filed an appeal from the 24 April 2024 orders.
On 8 May 2024, both parties filed written submissions responding to his Honour’s 2 May email. In broad terms, the wife contended that no re-opening could occur, as the primary judge was functus officio, whereas the husband said that the matter should be re-opened to admit the agreed balance sheet.
I observe that, notwithstanding the material errors of the primary judge, the need to seek submissions on the parties’ divergent views on whether his Honour had exhausted the original jurisdiction were entirely avoidable had he not delegated to them the responsibility of formulating the orders, which practice was cautioned against recently by the Full Court (Aitken & Aitken [2023] FedCFamC1A 69 at [36]), and simply pronounced them himself coincident with his reasons for judgment.
On 16 May 2024, the primary judge delivered further reasons (“the second reasons”), and pronounced further purported orders as follows:
1. The evidence be reopened for the purpose of
(a)admitting into evidence the November 2023 balance sheets of the parties,
(b)assigning Exhibit numbers respectively, AW1 and RH1, and
(c)annexing those Exhibits to these reasons.
2.Exhibit RH1 be substituted for the balance sheet set out at paragraph [202] of the principal reasons of 14th March 2024.
3.Pursuant to rule 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the final percentage figure at paragraph [213] of the principal reasons of 14th March 2024 be amended to 37% to the Wife, and 63% to the Husband.
AND IT IS NOTED THAT these Orders have been amended pursuant to Rule 10.13(1)(g) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
THE APPEALS
Both appeals arise from the exercise of a discretion by the primary judge. It is well settled that in order for such appeals to succeed, error of the type identified in House v The King (1936) 55 CLR 499 at 504–505 must be established. There, the majority of the High Court said:
…The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred…
Further, although the appeals are both conceded by the husband, the court must nonetheless be satisfied of error for itself (Bhatnagar & Riju [2018] FamCAFC 144 at [3]–[7]).
COSTS APPEAL – GROUND 1
This conceded ground provides:
1.The Trial Judge failed to accord procedural fairness to [CF] by:
a.Informing [CF], by an email from the Trial Judge’s Associate dated 29 February 2024 (the 29 February 2024 email), that only two paragraphs of submissions could be provided in relation to costs;
b.Not informing [CF], in the 29 February 2024 email or otherwise, that their submissions should address s 117(2) of the Family Law Act 1975 (Cth) (the Act) as well as Part 12.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Rules);
c.Refusing [CF’s] requests, made in emails sent to the Court on 13 March 2024 (3:40 PM) and 14 March 2024 (9:06 AM), for an opportunity to supplement the 2 paragraph submissions they had provided in relation to costs;
d.Making an award of costs against [CF] based on s 117(2) of the Act as well as Part 12.5 of the Rules; and
e.Denying [CF] a reasonable opportunity to provide submissions or evidence in relation to:
i.whether a personal cost order should made against [CF];
ii.whether a personal cost order should be made against [CF] on an indemnity basis, which formed part of the Trial Judge’s consideration (at [245], [246] and [250]) of the cost order made against [CF];
iii.whether a personal cost order should be made against [CF] pursuant to s 117(2) of the Act; and
iv.the appropriate quantum of any personal cost order made against [CF].
(Emphasis in original)
The 29 February 2024 email referred to in Ground 1(a) was relevantly as follows:
... The second matter arises out of the [Wife’s] confirmation in her oral evidence in re-examination and further cross-examination, that her 2 Financial Statements, and 3 Costs Notices, were inaccurate because none of them referred to the fact that her legal fees were being paid by her employer. This may lead to issues of “costs” being considered, including or specifically under Part 12.5 of the Court's Rules. Two paragraphs of submissions are sought on this discrete issue. Please be advised that these submissions should be provided to Chambers within 7 days, being by 4pm on 7th March 2024.
(Affidavit of [Ms LL] filed 24 June 2024, Annexure [CF]-1)
The parties’ submissions in response are significant. The husband’s read:
…
3.It is noted that there are no applications for costs on foot by either party at this stage of the proceedings . It is the [Husband’s] position that any issues of costs should be reviewed by the parties post-delivery of the final parenting and property Orders and Reasons for Judgment. Notwithstanding such, under Part 12.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021, the Court may make an Order for costs on its own initiative.
4.It is submitted that the Court would have regard to the conduct of the Wife throughout the course of the final hearing in assessing and determining any issue of costs. There was no attempt by the Wife or indeed her legal team at the commencement of her Evidence in Chief to correct the record in relation to her 2 financial statements and 3 costs notices, none of which referred to the fact that the Wife's legal fees were being paid by her employer. Specifically, under cross-examination by Counsel for the Husband, the Wife gave evidence that she prioritised paying her legal fees over paying the mortgage on the former family home. It was only in re-examination by the Wife's Counsel that it was disclosed that her legal fees were being funded by her employer. His Honour re-called the Wife on Day 2 of the trial following this late-breaking development, and the Wife further disclosed that there is no expectation of repayment to her employer of these legal fees, representing a large financial resource available to the Wife which was not previously disclosed.
(Husband’s written submissions dated 7 March 2024)
The wife’s submissions read:
…
2.Neither the father nor the ICL have made an application for costs pursuant to Rule 12.13(2) or 12.15(3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 ("the Rules"). Rules 12.13(1) and 12.15(3) provide that the court may make an order for costs on its own initiative. Rule 12.15(1) states an order may be made where the lawyer has caused costs to be incurred by a party or another person, or to be thrown away.
3.The [Wife’s] Costs Notice dated 31 October 2023 states that she paid her legal fees from gifts, which is accurate given the payment of her legal fees by her employer. It also refers to her using assets, income, savings, credit cards and loans, which is accurate in circumstances where she personally paid her previous lawyers' fees and the fees relating to the family violence matter. The [Wife’s] Costs Notices were drafted in a similar fashion to the [Husband’s] costs notices, who also received gifts from his mother for his legal fees. The [wife] submits that the gift from her employer is the same as a gift from a parent in circumstances where the payment of her legal fees are not a benefit from her employment and are not ongoing. Further, it is submitted that the Court cannot find that additional costs were incurred by a party or another person, or thrown away, as a result of the [Wife’] Financial Statements and three Costs Notices not specifically referring to the fact that her legal fees were being paid by her employer.
(Wife’s written submissions dated 7 March 2024)
At [15] of the parties’ joint written submissions on the costs appeal filed 24 June 2024, they said:
15.For the reasons advanced in [CF’s] summary of argument, there can be no doubt that the primary judge's failure to accord procedural fairness was material in the relevant sense.
(Parties’ joint submissions filed 24 July 2024)
CF’s written submissions relevantly contended:
23.[CF’s] only opportunity to be heard was in response to the Court’s 29 February email. That email referred to the Wife’s legal funding and stated, “This may lead to issues of costs being considered, including or specifically under Part 12.5 of the Court’s Rules” and invited “two paragraphs of submissions...on this discrete issue”.
24.For several reasons, that was not a “fair crack of the whip” nor a “reasonable opportunity to be heard”:
24.1.First, the Court’s 29 February email was vague and non-specific. It stated the issue of the Wife’s legal funding “may lead to issues of costs being considered, including or specifically under Part 12.5” (emphasis added). The language of “may lead [to] being considered” is equivocal. It did not make clear the primary judge was contemplating making a special costs order and was certainly not sufficient to put [CF] on notice of the “critical issues” about costs the primary judge might consider or determine or the nature and content of information he might consider in deciding those issues. It did not descend to identify (a) against whom a costs order was being contemplated or (b) on what basis. The reference to Part 12.5 was also vague. Although that part of the Rules concerns costs orders against lawyers, the reference was elliptical (“including or specifically under…”). Further, the email did not give notice that the primary judge was contemplating making a cost order under s 117(2) of the Act – which raises different considerations to those raised by Part 12.5. Yet, that is a basis on which his Honour made Order 5 (Reasons, [240]-[250]) –without [CF] having been given any opportunity to address it.
24.2.Second, as is self-evident, two paragraphs were insufficient to address whether a personal costs order should be made, particularly given that those paragraphs had to deal with the prospect of such an order against either (or both) the Wife or her solicitors, as between whom the Court’s 29 February email did not distinguish.
24.3.Third, the foregoing points were brought to the primary judge’s attention. [CF] specifically pointed out (on 13 March 2024) that they wanted the opportunity to provide further submissions “In the event His Honour [was] minded to make any costs order” and (on 14 March 2024) that (1) the lack of specificity about what costs orders (if any) the Court proposed to make prevented them from making further submissions and (2) the two paragraphs they had been permitted to provide were only “in relation to costs in a very general sense”. Yet the primary judge denied their requests for clarity and proper opportunity to make submissions. Specifically:
(a)The Court’s initial response (13 March 2024, 4.28pm) was rhetorical, if not facetious: “the Court simply inquires how many more opportunities need or should be provided for either party to make additional submissions in relation to the supplementary submissions already made”.
(b)Of the Court’s subsequent responses – sent on 14 March 2024 (the same day the Reasons were published): the first (9.42am) stated his Honour “noted” what the Appellant had said and confirmed the Reasons would be delivered later that day and the second, sent unprompted at 11.31am, stated “According to principle and authority, both parties have been provided with relevant opportunity to be heard.”
(c)In the Reasons, the primary judge stated “In the course of preparing this judgement, I asked the parties to provide further written submissions regarding costs in the light of the Wife’s admissions of default and in the light of the terms of Part 6.1 (regarding disclosure, including consequences of non-disclosure) and Part 12.5 (regarding costs)” (Reasons, 231]) and that “the lawyers for both parties were requested to provide written submissions in relation to costs, and by reference to the relevant Rules, specifically regarding whether a personal costs Order might or should be made”: Reasons, [242]. With respect to the primary judge, neither of those statements accurately describes the contents of the Court’s 29 February email. For example, that email did not ask (in terms) for “further written submissions regarding costs” nor for submissions “specifically regarding whether a personal costs Order might or should be made”. Nor did the email refer to Part 6.1 of the Rules or the “consequences of non- disclosure”. Further, nowhere in the Reasons did the primary judge record that he had directed the supplementary submissions be limited to two paragraphs.
(d)His Honour also explained (Reasons, [242]) “on the day prior to delivery of these reasons, [CF] sought a further opportunity to make submissions regarding costs” but that the authorities “do not say that the opportunity to be heard is (or should be) “open ended”, that the parties “were given the opportunity to be heard” and had provided written submissions, and “[t]he parties need finality to their litigation”. But he did [not] explain how, according to principle or authority, an email inviting two paragraphs of submissions about events that “may lead to costs issues to being considered, including or specifically under Part 12.5 of the Court’s Rules” constituted a sufficient opportunity to address the matters that he went on to detail in Reasons [216]-[250].
24.4.Fourth, although evidence relating to whether a costs order should be made against [CF] could be expected to be an important consideration, at no stage did the primary judge provide an opportunity for [CF] to adduce such evidence.
24.5.Fifth, the Court’s 29 February email did not put [CF] on notice that the primary judge was contemplating making a costs order on an indemnity basis. The primary judge’s conclusion that there were “sound reasons” for making an indemnity costs order against [CF] formed part of his consideration for making Order 5: Reasons, [245], [246] and [250]. Yet, [CF] was not given a reasonable opportunity to address the issue.
25.Thus, [CF] was denied a reasonable opportunity to provide submissions or evidence about:
25.1.whether a personal cost order should made against them;
25.2.whether they had “conveniently ignored” and “flagrantly breached” duties of disclosure (see Reasons, [59]);
25.3.whether a personal cost order on an indemnity basis was justified (which formed part of the primary judge’s reasoning for making Order 5);
25.4.whether a personal cost order should be made against them under s 117(2) of the Act; and
25.5.the appropriate quantum of any cost order made against them.
([CF]’s Summary of Argument filed 24 June 2024, Emphasis in original, footnotes omitted)
All of those points are validly made. Plainly procedural fairness was not afforded to CF.
Indeed it has to be said that the purported findings – often in quite intemperate terms – against CF, which are liberally peppered throughout the relevant parts of the first reasons (and indeed the second reasons too), are difficult to understand, much less justify.
Ground 1 is made out, and the costs appeal was properly conceded by the husband.
The costs appeal succeeds.
PROPERTY APPEAL – GROUNDS 2 AND 3
These conceded grounds read:
2.The Trial Judge erred in including and relying on the balance sheet from the Husband's case outline in His Honour's judgment at [202] in circumstances where:
a.The “[Husband’s] value” column includes an arithmetic error, resulting in the [Husband’s] net asset position being $100,000 lower;
b.The balance sheet at [202] includes the full value of the loan secured over [the Suburb P property] in both the “[Wife’s] value” and “[Husband’s] value” columns, resulting in it being counted twice and the value of the total net non-superannuation assets being $350,545 less;
c.The parties submitted a joint balance sheet to the Court on 10 November 2023 which contained several significant differences to the balance sheet in the Husband's case outline;
d.The balance sheet agreed between the parties (adjusted in accordance with His Honour's findings) totalled $1,760,855. The balance sheet at [202] totalled $1,162.341 (difference of $598,514);
e.The balance sheet at [202] does not include some assets that were agreed at trial should be included and included other assets that were agreed should not be included;
f.His Honour included the loan from Husband's mother, for the Husband's costs, in the balance sheet at [202] and provided no reason for doing so;
g.His Honour has included items in the balance sheet that His Honour explicitly stated should not be included (such as jewellery) (at [195]).
3.The Trial Judge erred by failing to consider the joint balance sheet sent to the Court on behalf of both parties on 10 November 2023.
In the parties’ joint submissions they agreed:
16.As the Wife's summary of argument explains (apropos ground 2, citations omitted):
[39]It is not possible to discern from the Reasons how the primary judge would have approached the task of holistically assessing the parties' contributions, or determining what adjustments or alterations should be made, if he had had regard to the agreed balance sheet.
[40]However, given the amounts involved, and significant difference in the net property pool as between the two documents, it seems almost certain that the agreed document would have had some impact, if the primary judge had had regard to it. The appeal should be upheld on this basis alone.
and (apropos ground 3, citations omitted):
[43] When parties agree on facts (including a balance sheet setting out an agreed property pool), those facts should be taken as established and relied on by the Court unless there are compelling reasons to question their accuracy or relevance. Further, requirements of procedural fairness mean that agreed facts should not be departed from without reasonable notice and an opportunity to respond and a well reasoned explanation.
17.As explained above, the Husband (who is the only other active party to the appeal) concedes grounds 2 and 3.
18.For the reasons advanced in the Wife's summary of argument, the appeal should be allowed on those grounds alone.
(Parties’ joint submissions filed 24 July 2024) (Emphasis in original)
I have already explained that, to the extent possible, the parties attempted to accommodate the two errors in the first reasons by fashioning the 24 April 2024 orders so as to practically effect the adoption of the joint balance sheet and the 63/37 split.
However the starting point for most – and specifically this – property division case, is the balance sheet, and hence here everything was premised upon a wrong list of assets, liabilities and net estate. It was by reference to them that contributions were firstly assessed, and secondly calculated and expressed. The differences between the mistaken balance sheet and the correct one are material – totalling, as Ground 2(d) identifies, nearly $600,000 – which in a pool of this size is clearly significant. Unsurprisingly therefore, the husband did not file a Notice of Contention seeking to support the outcome, notwithstanding the error.
The primary judge’s attempt to re-write history and, one suspects, outflank the property appeal (of which, given the extensive references to it in the second reasons, his Honour was fully aware) cannot undo the fundamental error that the assessment of contributions to a materially incorrect pool cannot be assumed just to automatically flow across to the correct pool. And more, that is not what his Honour even said in the second reasons. Rather, all his Honour said was “the substitution of the balance sheet does not affect any of the Court’s findings in [the first reasons]” (at [71]) although how this could possibly be so is left unexplained.
Grounds 2 and 3 succeed, and again, were properly conceded.
The property appeal will be allowed.
OUTCOME
The costs order should be set aside. There is no undetermined costs application which could be remitted for rehearing, and no party sought remitter in any event.
The property orders need to be set aside in their entirety. The parties agreed that remitter of the proceedings for rehearing before another judge was the appropriate outcome, and indeed it is.
COSTS
The costs appeal succeeds on a question of law. Neither party sought a costs order against the other, but applied for costs certificates for the appeal. Such is an appropriate outcome.
The property appeal succeeds on both questions of law and fact (Brown v Brown (2002) FLC 93-098 at [9]). Again, no inter partes costs orders were sought, but certificates for the appeal and rehearing were. Such are sufficiently justified in this case, and the certificates will issue.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 16 September 2024
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