Calder & Calder
[2016] FamCAFC 36
•11 March 2016
FAMILY COURT OF AUSTRALIA
| CALDER & CALDER | [2016] FamCAFC 36 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Where the husband appealed findings concerning the value of livestock – Appeal conceded – Where the wife cross-appealed – The trial judge did not err in adopting a two-pool approach without notice – The trial judge did not err in deciding not to divide livestock in specie – The trial judge’s reasons were inadequate because it was not clear whether his Honour had taken into account the wife’s post-separation debt in assessing contributions – The trial judge erred by adding back some of the wife’s paid legal costs but not the husband’s – Cross-appeal allowed in part – On the re-exercise of the discretion, the property was divided in the same proportions as found by the trial judge. FAMILY LAW – APPEAL – PRACTICE & PROCEDURE – Parties should be in a position to properly address the question of whether any error found on appeal can be remedied by the Full Court re-exercising the discretion – In case the Full Court is minded to re-exercise, parties should at least be able to advise of material changes in circumstances since trial that need to be the subject of further evidence. |
| Family Law Act 1975 (Cth) – s 75(2), s 79(2), s 117(1) |
| Allesch v Maunz (2000) 203 CLR 172 Bennett and Bennett (1991) FLC 92-191 Bevan & Bevan (2013) FLC 93-545 Boege and Boege (2001) FLC 93-084 Brown and Brown (2005) 33 Fam LR 246 Chorn and Hopkins (2004) FLC 93-204 De Winter and De Winter (1979) FLC 90-605 Guse v Comcare (1997) 49 ALD 288 Guthrie and Guthrie (1995) FLC 92-647 Hearne & Hearne [2015] FamCAFC 178 Kowaliw and Kowaliw (1981) FLC 91-092 Scrymegeour & Scrymegeour (2014) FLC 93-600 Stanford v Stanford (2012) 247 CLR 108 Stead v State Government Insurance Commission (1986) 161 CLR 141 Truman & Truman [2013] FamCA 765 Vass & Vass (2015) 53 Fam LR 373 Waters and Jurek (1995) FLC 92-635 |
| APPELLANT: | Mr Calder |
| CROSS-APPELLANT: | Ms Calder |
| FILE NUMBER: | MLC | 9627 | of | 2009 |
| APPEAL NUMBER: | SOA | 96 | of | 2014 |
| DATE DELIVERED: | 11 March 2016 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bryant CJ, Thackray & Macmillan JJ |
| HEARING DATE: | 14 July 2015 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 December 2014 |
| LOWER COURT MNC: | [2014] FamCA 1106 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Dr Ingleby |
| SOLICITOR FOR THE APPELLANT: | Nedovic Lawyers |
| COUNSEL FOR THE CROSS-APPELLANT: | Mr Bartfeld QC with Mr Wilson |
SOLICITOR FOR THE CROSS-APPELLANT: | Kennedy Partners |
Orders
The appeal be allowed in part.
The cross-appeal be allowed in part.
Paragraph 1(a) of the orders made by the Honourable Justice Berman on 11 December 2014 be varied by deleting “EIGHT HUNDRED AND TWENTY SIX THOUSAND FOUR HUNDRED AND EIGHTY FOUR DOLLARS ($826,484)” and inserting in lieu “$788,325”.
To give effect to paragraph 3 above, the cross-appellant shall repay to the appellant the sum of $38,159 within 30 days.
Each party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal and cross-appeal by filing such submissions at the Southern Appeal Registry of the Family Court of Australia and serving them on the other party within 21 days.
The party against whom costs are sought shall file and serve written submissions in response within 21 days of service of the other party’s submissions.
The party seeking costs shall file and serve any written submissions in reply within 14 days of service of the submissions in response (or advise the other party and the Appeals Registrar in writing that they do not intend to file submissions in reply).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Calder & Calder has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 96 of 2014
File Number: MLC 9627 of 2009
| Mr Calder |
Appellant
And
| Ms Calder |
Cross-appellant
REASONS FOR JUDGMENT
The husband, Mr Calder, and the wife, Ms Calder, have appealed and cross-appealed respectively against orders made by Berman J on 11 December 2014 dividing their property after a 34-year marriage.
The appeal
The husband pursued only one ground of his appeal, by which he complained that a portion of the wife’s livestock was found to be worth $307,555, whereas the value had been agreed at $709,307. The wife conceded the error.
After taking into account another error relating to the value of other livestock, the parties agreed that the amount the wife was entitled to receive from the husband should be reduced by $124,189.
The appeal will therefore be allowed to that extent.
The cross-appeal
Although the wife did not abandon any of the grounds in her cross-appeal, she pressed only four complaints, which we categorise as follows:
1.The impact on the assessment of contributions arising from the agreed error relating to the livestock, which had the effect of overstating by about $400,000 the loss the wife had made in a farming operation she commenced after the separation.
2.The trial judge’s decision not to divide the livestock in specie.
3.The decision of the trial judge, made without invitation, to divide the assets into two pools, and his failure to explain why he divided the smaller pool in the proportions that he did.
4.The trial judge’s treatment of expenditure on legal costs.
Brief background
The parties married in 1975 and separated for the final time in 2009.
At the time of trial, the husband was 67 years of age and the wife was 61. Neither had re-partnered, and their adult children were independent.
The parties engaged in farming, initially overseas, and then in Australia. By the time of trial, their assets were worth more than $13 million.
In March 2012, consent orders were made for Property C to be transferred to the wife. In April 2012, she incorporated F Pty Ltd to run that property. Thereafter, she spent a large amount of borrowed money on the property.
The husband continued to manage the parties’ farming partnership from their other property known as Property A.
The trial judge decided that each party should retain the plant, equipment and livestock in their possession, on the basis that the husband would make a monetary payment to the wife to bring about an equal division of those assets.
His Honour determined that contributions to the rest of the assets had been made in proportions 57.5 per cent by the husband and 42.5 per cent by the wife. An adjustment of 2.5 per cent for the s 75(2) factors was made in favour of the wife, but this was not applied to the plant, equipment and stock.
After the livestock values are corrected, the net effect of the trial judge’s orders was that the wife received 47 per cent of all the assets, when she should have received 46.1 per cent on the division intended by his Honour.
The first complaint – overstating the wife’s losses
Grounds 4, 5 and 6 of the cross-appeal relate to the first complaint:
4. His Honour erred:
4.1at [69], [84], [216] and [217] of his reasons for judgment in valuing the [F Pty Ltd] livestock at $307,555 and not the agreed figures [sic] of $709,307;
4.2at [69] of his reasons for judgment in determining that the net effect of the debts of [F Pty Ltd] attributable to the funding of the farming operation conducted by the Wife was a deficiency of $506,770, whereas that deficiency was $105,018.
5.His Honour erred at paragraph 216 of his reasons for judgment:
5.1in valuing the livestock of [Property C] at $683,260 when the true value according to the evidence (Exhibit 39) was $489,711;
5.2In determining the value of the partnership livestock, plant and equipment was $3,360,860 when the value in accordance with the evidence was $3,167,311.
6.His Honour erred in his assessment of post-separation contributions in that in making that assessment his Honour had regard (at [250] of his reason [sic] for judgment) to the losses sustained in the operation of [F Pty Ltd] on the erroneous view that they were substantially greater than they were.
Although these grounds suggest there were more errors, there were only two, both of which were conceded. The first was in valuing the livestock owned by F Pty Ltd at $307,555, when in fact it was worth $709,307. The second was in valuing the livestock at Property C owned by the partnership at $683,260, when in fact it was worth $489,711. These mistakes were then transposed into the other errors identified in Grounds 4.2 and 5.2.
As we will shortly explain, the significance of the first error is that it could reasonably be thought that his Honour proceeded on the assumption that the loss sustained by the wife at Property C was $401,752 more than it actually was. The second error is of no consequence, it having been remedied by the agreed position relating to the outcome of the husband’s appeal.
The trial judge’s reasons relevant to the first complaint
The trial judge’s reasons describe the circumstances in which the wife became the owner of Property C by the making of an interim consent order:
42.The clear intention of the parties was that the wife would retain [Property C] free from encumbrance and that she would be free to operate and manage a separate farming enterprise distinct from the previous farming partnership with the husband.
His Honour then observed that the wife could have let Property C if she wished, and would have been entitled to retain the rent. His Honour also noted that the consent orders did not set out how any profit or loss made by the wife at Property C would be brought to account in the final settlement.
The trial judge first touched on the losses made by the wife at Property C in the context of making findings about whether $919,000 of the money the wife had borrowed to fund the Property C operation should be taken into account.
The husband complained about the liability because he argued that the wife ought to have let the property, and had incurred the debt without his knowledge. He argued that as the wife had been unsuccessful in operating the farm, she should bear responsibility for the liability.
Having set out the husband’s arguments, the trial judge said (emphasis added):
76.Whilst the wife would not concede that the farm was not viable, she did accept that the losses for [F Pty Ltd] were about $170,000 for each of the 2012 and 2013 financial years.
77.The wife argues that she should be entitled to make a decision to run the farm and in circumstances where the bulk of the plant and equipment and quality livestock remained in the partnership but effectively under the control of the husband, it was inevitable that at first instance it was likely that losses be incurred whilst the [Property C] farming operation stabilised. It is strongly argued on behalf of the wife that whilst she must acknowledge a debt was incurred by her, it was not done so in a reckless or wilful fashion. It was put to the wife that at the very least she was unwise to have decided to run the [F Pty Ltd] farming enterprise rather than lease the property as had originally been contemplated by her. Her response was that no opportunity existed and that it was unlikely a lessee would be found. The husband of course was prepared to step into that role but, in any event, I think the answer is more straight forward namely, that the wife simply changed her mind. Taking into account the inability of the wife to farm [Property C] without the assistance of farm managers and a consultant, whilst that may be considered either poor or at the very least unnecessary management costs, that is different to the wife being reckless and/or negligent.
Having referred to authority about the need to identify the assets as at the time of trial, his Honour went on to say (emphasis added):
80.It may be the case that issues of contribution arise, but other than in unusual circumstances, it is an appropriate starting point to bring to account the assets and liabilities of the parties as they properly exist at trial and then give consideration to the behaviour of the parties in respect of the manner in which asset and liability [sic] may have been affected by their respective behaviour.
His Honour then immediately referred to the principle laid down by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The trial judge then continued (emphasis added):
82.Conduct of the kind referred to [by Baker J] having economic consequences is in my view a relevant consideration under s 75(2)(o).
83.It is now trite to observe that [Baker J’s] proposition represents an enduring and often relied upon statement of general principle.
84.Accordingly, I propose to bring to account the liability owed by [F Pty Ltd] in the sum of $919,000…
His Honour did not return to the issue of the F Pty Ltd debt until he came to assess the contributions of the parties.
His Honour’s discussion of contributions commenced by noting that the husband sought “an adjustment of 10 per cent”, primarily because the property he held at the time of the marriage had “significantly contributed” to the acquisition of Property A and Property C, which “collectively represent overwhelmingly the proportion of the property of the parties” (at [218]).
Importantly, the trial judge also noted that (original emphasis):
219.The wife acknowledges that it is likely the Court would find that the husband has made a superior financial contribution arising from his pre-marriage entitlements, but any such consideration must be weighed against the significant financial contributions of the wife by reason of her earnings, the inheritance received from her mother, support given to the husband during the lengthy marriage and her contributions as a homemaker taking into account the difficulty in bringing up a family and supporting the husband in “remote rural locations”.
His Honour went on to make findings relating to the contributions, which included interests the husband held at the time of marriage that realised more than £1 million when they were disposed of between 1978 and 1986. His Honour concluded:
231.Ultimately, the acquisition of [Property A] and [Property C] is a tracing exercise and whilst there is disagreement, I consider that ultimately the wife has conceded the broad thrust of the husband’s argument namely, that the purchase price for the properties can be traced from the property interests held by the husband at the commencement of the marriage.
The trial judge also recorded other contributions, including those of the wife as a mother and homemaker and in the farming partnership, before discussing authorities about the way in which a court should treat initial contributions. Amongst these was Brown and Brown (2005) 33 Fam LR 246 at [62], where the Full Court acknowledged a substantial contribution on the part of the husband but said:
those contributions must be weighed and balanced against the myriad of other contributions made by the wife during the course of the marriage, including the period of over 20 years prior to separation, of the occupation and operation of the cane farm.
The trial judge went on:
246.In the present case, the property of the parties excluding partnership livestock, plant and equipment is $10,403,880. The adjustment sought by the husband at 10 per cent would amount to a little more than $1,000,000, but taking into account the differential between the parties, the net effect is about $2,000,000.
247.The consideration of the weight to be given to contribution is not an arithmetical exercise, nor indeed is it a process that should be considered by reference to the allocation of each individual aspect of contribution. To do so would be artificial, particularly against the background of a long marriage.
248.It could be said that whilst the wife accepts that the tenancy rights of the husband acquired prior to the marriage represents a significant foundation stone for the current pool, both parties would agree that thereafter they each did what was required of them as part of the marital partnership.
249.I do not ignore the various arguments of the parties, in particular in respect of the assistance provided by the husband’s mother or indeed, the offsetting aspects as argued by the wife in terms of the lack of rent paid for the use of property and the significant assistance provided on an ongoing basis by the husband and the wife to her.
Then, in a paragraph which is at the heart of this complaint, his Honour said (emphasis added):
250.The circumstances of the contributions by the parties post-separation is however a little more problematic. Up until March 2012 the parties remained involved in the single farming partnership entity, although it must be conceded that the primary effort was expended by the husband. Following the transfer of [Property C], the wife was able to run her own farming enterprise whereas the husband continued to manage the farming partnership on behalf of both parties. There is argument as to the manner in which the wife drew monies down from the farming partnership, together with the expenditure and liability incurred in the operation of [Property C] noting the significant complaint by the wife as to the alleged over-capitalisation of [Property A] by the husband.
Having described the “argument”, but without resolving it, his Honour concluded his discussion of contributions in the following two paragraphs:
251.It must also be said that in the operation of the farming partnership, whilst orders provided for the drawings of each of the parties to be fixed, it is reasonable to find that the husband did not receive any adjustment for a notional wage involved in the management of the ongoing farming enterprise.
252.In all the circumstances, I consider that it is appropriate for an adjustment in favour of the husband of 7.5 per cent to properly reflect the weight that should be given to the contributions by each of the parties.
The submissions relating to the first complaint
Senior counsel for the wife observed that his Honour’s decision to bring the F Pty Ltd liability to account in determining the composition of the asset pool left open the possibility that the wife’s conduct in incurring the liability might still be taken into account in his assessment of contributions. (We also observe that his Honour left open the same possibility in relation to assessment of the s 75(2) factors.)
Senior counsel argued that the possibility that the economic consequences of the wife’s actions would be taken into account made it important to ascertain how much his Honour believed the wife had lost. It is in this context that the error about the value of the wife’s livestock assumes importance, because his Honour had earlier accepted at [69] that the $919,000 liability was:
to some extent offset by the inclusion in the asset pool of plant and equipment in the sum of $104,675 and livestock of $307,555 purchased from that outstanding liability. Accordingly, the net effect of the controversy is $506,770.
In fact, the livestock was worth $709,307, and therefore the “net effect of the controversy” was only $105,018 (as the husband had conceded in his closing written submissions in reply at trial at [17]). Accordingly, as senior counsel for the wife submitted, “to the extent that this figure [of $506,770] was to have an impact on his Honour’s assessment, the figure is substantially wrong”.
Senior counsel for the wife submitted that given the trial judge had described the matters at [250] as being “a little more problematic”, they must have been something “which affected his Honour in some way”. Senior counsel accepted that it was speculative to suggest that the figure for the wife’s Property C loss had made a difference to the final outcome, but argued that the need to speculate demonstrated the lack of certainty in his Honour’s reasons.
In his written submissions, senior counsel for the wife conceded that what his Honour later said in his reasons (when dealing with s 75(2) factors) made clear that the trial judge had discounted two of the three matters mentioned in [250] – i.e. “the manner in which the wife drew monies down from the farming partnership” and the “alleged over-capitalisation” of Property A. However, it was argued that this left unresolved the third matter, namely “the expenditure and liability incurred in the operation of [Property C]”.
In reply, counsel for the husband submitted that the husband had never proposed that the Property C debt should be treated as a contribution issue; counsel claimed that it was only argued that it should be excluded, and that the husband lost that argument.
Counsel for the husband also claimed that his Honour only mentioned the three matters at [250] to assure the parties that their arguments had been heard. Counsel submitted that his Honour had clearly not regarded the arguments as serious, and had dismissed all of them; and that on a fair reading of the judgment, the trial judge had given no weight to the loss. Counsel drew attention in particular to the fact that there was no finding that the wife’s conduct was reckless.
Counsel for the husband also pointed out that although the trial judge had said conduct of the kind mentioned by Baker J in Kowaliw and Kowaliw is “a relevant consideration” under s 75(2)(o), his Honour did not say anything at all in relation to this issue under that heading.
Counsel therefore argued that, in the overall scheme of things, his Honour’s treatment of the loss could not possibly have been a material error. In any event, counsel sought to defend the trial judge’s decision by saying that the “overwhelming circumstance” of the case was that the major assets had been derived almost entirely from assets the husband had at the time of the marriage.
Resolution of the first complaint
As we have recorded, the trial judge regarded the three matters mentioned at [250] as being “a little more problematic”. We have also recorded the wife’s concession that his Honour discounted two of the three matters, namely the husband’s complaint about the wife’s pre-separation drawings and the wife’s complaint about the overcapitalisation of Property A.
Although we were not taken to them, there were other findings made by his Honour earlier in his reasons relating to the wife’s drawings and the husband’s overcapitalisation. Significantly, these were made in the part of the judgment dealing with disputes about the composition of the asset pool.
Thus, at [143] his Honour found that whilst the wife’s “drawings were greater than those of the husband, there is no consequence to that finding”. Similarly, at [157] his Honour said, “I do not propose to bring to account as an add back or otherwise the alleged capital expenditure by the husband on [Property A]”.
These unequivocal findings stand in stark contrast to his Honour’s treatment of the F Pty Ltd debt. Although the wife was successful in persuading the trial judge that the liability should be brought to account, his Honour left open for consideration the consequences that flowed from the liability being brought to account. At [80] he flagged the possibility that “issues of contribution arise”, and at [82] he flagged the possibility that conduct issues could be relevant under s 75(2)(o).
Given his Honour’s unequivocal findings about the wife’s pre-separation drawings and the husband’s post-separation expenditure on Property A, we find it difficult, with respect, to follow why his Honour felt it necessary to say at [250] that “there is argument” in relation to these matters. His Honour had already disposed of the argument about both of those matters.
However, what his Honour failed to dispose of at any point was the husband’s complaint about the debt the wife had incurred after separation. The fact that his Honour chose to return to the issue in his discussion of contributions, and because he described it as one of the factors that was “a little more problematic”, leaves us to speculate about the extent to which, if at all, his Honour took into account the fact that the wife had lost money. Although the husband may not have articulated his argument as a contribution issue, he clearly wanted the debt taken into account against the wife’s interests, and one way this could have been achieved was by treating it as a contribution issue.
Given the structure and content of his Honour’s reasons, we consider it possible that the loss the wife incurred was one of the “circumstances” to which his Honour referred when he wrapped up his discussion of contributions at [252]. The upshot was that the husband’s contributions were found to be worth $1,546,570 more than the wife’s contributions (i.e. 15 per cent of the value of the larger pool of assets as found by his Honour).
A trial judge’s reasons are inadequate if the appeal court is unable to ascertain the reasoning upon which the decision is based, since the appellate court is denied the opportunity to detect error and the losing party is denied knowledge of why her case was rejected: Bennett and Bennett (1991) FLC 92-191. The uncertainty in the reasons here is compounded by the fact that his Honour must be presumed to have approached his assessment on the erroneous belief that the amount of the loss was in the region of half a million dollars, when in fact the loss was only about one-fifth of that amount.
While we acknowledge the merit in the husband’s submission that the error should be viewed in the context of an asset pool of over $13 million, we agree with the wife’s submission that the magnitude of the error is nevertheless significant when it is noted, for example, that it exceeds the value of the 2.5 per cent adjustment for s 75(2) factors.
The fact that the assessment of contributions may have fallen well within the range of the trial judge’s discretion does not mean that the complaint fails. The reasons do not adequately explain the process of reasoning, and it is possible that the decision was influenced by an acknowledged error by the trial judge.
There is therefore merit in the first complaint.
Re-exercise of the trial judge’s discretion relating to contributions
The wife sought that the matter be remitted for re-hearing if the cross-appeal was allowed. The desirability of this was challenged early in the oral hearing when the Chief Justice suggested that the need for a re-hearing might depend upon which grounds of appeal succeeded. Senior counsel for the wife agreed, but commented that the valuations would nevertheless be “out of date”. In the course of the ensuing discussion, senior counsel for the wife said (emphasis added):
Well, at the present time, we’re not in a position to say what the valuations are other than to say that they are out-of-date such that new valuations would need to be obtained, and whether there would be dispute about the result is a matter that can only be discussed after the new valuations are obtained. And, of course, we’ve not gone to the expense of getting new valuations at this stage because it’s premature.
Senior counsel for the wife later returned to this issue as appears from the following extract from the transcript (emphasis added):
MR BARTFELD: … we say that there is sufficient error demonstrated to take this case beyond the exercise of a discretion and require a retrial, and we make it clear that, unlike the litigants in Gaspaldi, we have always and continue to maintain that if the appeal is successful a retrial is almost inevitable given the changes that have taken place, as we believe, in values. Even if changes in values have not taken place it ‑ ‑ ‑
BRYANT CJ: That’s just – I mean, I’m not saying you’re wrong, Mr Bartfeld, but it seems to me that’s just an assertion from the bar table.
MR BARTFELD: It’s an assertion. It can only be an assertion from the bar table at this stage, and that’s why we proceed to the next point that even if values have not changed, which we very much doubt, the totality and the complexity of the corporate structures, the assets of the parties and the parties’ cases can best be judged at trial level. It ‑ ‑ ‑
BRYANT CJ: But there’s no argument about the – I mean, the – I mean, I’m testing the waters with you. I don’t have a concluded view on this, but we’ve been taken to a number of discrete matters, none of which really have anything to do with the complexity of the corporate arrangements.
MR BARTFELD: Well, no, but the effect is, your Honour, that the errors, particularly in relation to the in specie division and, of course, the assessment of contributions based on the post separation period, which is clearly wrong, is, in our respectful submission, sufficient to enable us to agitate for a retrial, and given that the court must take the assets and liabilities as it finds them today or at the date of the judgment, your Honours are not in a position to make any finding about what those assets and liabilities are.
BRYANT CJ: No, but we could call for – I mean, the whole point of Allesch & Maunz is, you know, we could call for evidence before re-exercising that. As I said to you earlier on, that’s ‑ ‑ ‑
MR BARTFELD: Well, your Honours could but, in our respectful submission, that is almost much more complicated than having a trial again where this evidence can ‑ ‑ ‑
BRYANT CJ: Well, it would have to be uncontroversial.
MR BARTFELD: It would have to be uncontroversial, yes.
THACKRAY J: You’ve strayed in your last comments away from the original proposition [which] was the values could have changed to saying now we don’t know what the property is, and I’m thinking about that in the context of your complaint about the plant, stock and equipment not having been divided in specie. If we were to accept your proposition that that is, in fact, what should have occurred, then I suppose the question that next arises [in] these farming operations is [whether the] plant, stock and equipment, that was reflected in the schedules that the wife handed up at trial … would now be there, and would again we be shooting in the dark?
MR BARTFELD: Well, we can say, on the basis of instructions, that it won’t be because since the trial we’re instructed that there are lambs that have been born, there have been stock – there have been crops that have been sowed and reaped, and it’s really a completely different case.
THACKRAY J: Well, excuse the pun, but it’s a moving feast like all farming operations.
MR BARTFELD: Well, it is. It has to be, your Honour, and that’s the nature of the beast, to pardon the pun. So, your Honours, that’s our submissions in relation to the matters which we say are relevant…
In response, counsel for the husband submitted that it would be “totally disproportionate and unnecessary” to remit the matter “given the proportion of the judgment that is represented by the height of the alleged error”. Counsel for the husband then dealt with the failure of the wife’s senior counsel to condescend to detail about any post-trial change in circumstances in this passage:
THACKRAY J: But your proposition was it’s not open to Mr Bartfeld to come along and say, “Well, until such time as we know what the outcome of the appeal is there’s no point going through the valuation exercise.” And you say the appeal was always going to succeed.
DR INGLEBY: Yes.
THACKRAY J: But if it was going to succeed on the very limited basis that’s agreed, then I don’t think there could have been any suggestion of a re-exercise other than to correct those mistakes. So why would you come along armed with evidence or even full instructions in relation to changes in valuation just because there’s an agreement about arithmetical matters?
BRYANT CJ: The answer may be – if that was the only – if that was all there was, you wouldn’t. But there was more. That’s your point really, isn’t it. Look, I mean, that wasn’t the only issue. There were more. But it was clear that the appeal was going to succeed.
DR INGLEBY: Yes.
BRYANT CJ: So you should be forearmed. That’s what you’re saying.
DR INGLEBY: Yes.
THACKRAY J: But you wouldn’t have conceded it being appropriate to have a complete re-exercise of the entire discretion by this bench based upon just those mathematical matters.
DR INGLEBY: Absolutely not.
THACKRAY J: Okay. Well, then so what has the valuation got to do with it?
DR INGLEBY: Because he could have said, “Look, there has been dry rot, an earthquake, on the one hand at [Property C], and at [Property A] there has been a discovery of gold and oil. And for that reason I want to bring my Allesch & Maunz application.” But he hasn’t done that. What he said, with candour, is, “I don’t know.” And also what he said is, of necessity – and obviously it has got to be correct – that farms, animals breed and die and get sold and crops grow and the seasons come and go.
The error of the trial judge that we have identified in dealing with the first complaint can be corrected by us either re-exercising or remitting the matter for a new trial. If we elect to re-exercise, we must be guided by what was said by the plurality of the High Court in Allesch v Maunz (2000) 203 CLR 172:
30 Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act “order a re-hearing, on such terms and conditions, if any, as it considers appropriate”. And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.
31If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances. …
Although the proposition at [31] of Allesch v Maunz is a binding principle, it does not prescribe how the opportunity to adduce evidence should be afforded, although we think some guidance on that issue might be gleaned from Kirby J’s separate judgment (footnote deleted, emphasis added):
58.The words used in a recent case are applicable here, although the obstacle on that occasion was a time default, not the absence of a party when judgment was given:
“If the Full Court considered that the application ... should have been converted, in effect, into a hearing of the appeal on its merits, the proper course was to notify the parties, to require the provision of the full transcript and, if asked, to afford the parties time to prepare for argument of a significantly different proceeding than that which they had come to prosecute.”
59.The same applies to further evidence. Either the Full Court should have remitted the matter to a single judge or it should have notified the parties of its intention to proceed to re-exercise the discretion for itself and of their right to present further evidence. What the Full Court could not do was to decide against the former course on the ground of a lack of certainty in the result, and then exercise the discretion as to whether to set aside the orders for itself without giving the appellant an effective opportunity to adduce further evidence. The same conclusion might not follow if the appellant had been legally represented before the Full Court or where evidence was unavailable to, or not adduced before, the Full Court because of a tactical decision or a failure to present the appeal properly.
The consequence of applying the Allesch & Maunz principle was recently discussed in Vass & Vass (2015) 53 Fam LR 373, where the Full Court said:
147.As this Court has sought to explain on a number of occasions, we are of course always anxious to avoid the parties being exposed to yet further expense and delay. However, this court is constrained in re-exercising not by willingness or whim, but by principle.
148.It is plain from the decision of the High Court in Allesch v Maunz (2000) 203 CLR 172 that on any re-exercise of discretion, this court is obliged to achieve a just and equitable outcome by reference to the law and facts as they exist as at the date of re-exercise.
149.That presents difficulties both evidentiary and practical. Those difficulties arise where, as here, the Court is told that many matters central to the exercise of discretion are the subject of dispute; where there is no agreed pool of property and where the time that has elapsed since the orders were made might see arguments as to value, contributions (including post-separation contributions) adduced and, equally, might see the parties seeking to depose to changed financial circumstances directly relevant to the exercise of the discretion.
150.Thus, unfortunately, we consider that remitter is the only realistic option open to us.
The evidentiary and practical difficulties referred to in Vass & Vass arise only where there is a genuine dispute about matters that may impact upon the re-exercise by the Full Court, since such difficulties can only be overcome by having evidence tested at another trial. Given the delays and expense associated with a re-hearing, it is desirable that, wherever practicable, the Full Court should re-exercise the discretion when allowing an appeal. However, in order to ensure the efficient dispatch of the Full Court’s business, it is imperative that at the hearing of an appeal, the bench is provided with sufficient information to allow it to determine whether any error identified can be corrected by re-exercising or whether the matter will need to be remitted.
The proper approach in these matters was identified in Boege and Boege (2001) FLC 93-084, a decision of the Full Court delivered soon after Allesch & Maunz was handed down. We adopt what was said by the Full Court in this extract:
80. In Allesch v Maunz (2000) FLC ¶93-033; (2000) 26 Fam LR 237, the High Court of Australia discussed the ramifications of an appeal by way of re-hearing, which is the nature of the appeal to this Court. In their judgment, Gaudron, McHugh, Gummow and Hayne JJ said at FLC p 87,517; Fam LR p 245:—
“[31] If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances. It is not entirely clear that that happened in the present case, particularly as the Full Court indicated that it could only speculate as to the likely outcome of a fresh application of the principles governing property settlement to the property then owned by the parties.”
81. The other member of the Court, Kirby J, also referred briefly to the necessity to give the parties “an effective opportunity to adduce further evidence”.
82.That judgment was handed down on 3 August 2000. Since then, it has been a practice of this Court to enquire of the parties to an appeal whether, in the event that the appeal was allowed and the Court was to proceed to re- exercise a discretion, either party desired to place further evidence before the Court. In our view, a widespread and well known practice has developed that, while a party wishing to adduce further evidence before the Court is not required to have all of that evidence immediately available in admissible form, that party must be able to point to the nature of such evidence.
83. It is quite inconsistent with the orderly and expeditious conduct of proceedings that in response to such a request as aforesaid, a party indicates merely that he/she would like the opportunity to investigate whether there might or may or may not be some further evidence which might be placed before the Full Court for the purposes of determining the appeal.
84. We do not interpret the references in the judgments of the High Court to the need to grant an opportunity to parties to adduce evidence as requiring, other than in exceptional circumstances, the deferment of the determination of an appeal to enable a party to embark on such an investigation as was suggested on the part of the wife in this case. We do not consider that such circumstances exist in the present appeal.
As will be clear from the discussion above, integral to an appeal from a discretionary judgment is the question of whether the appellate court itself should re-exercise the discretion or remit the matter for re-hearing. Equally integral to the conduct and presentation of the appeal is the obligation of each party to properly address that question.
If the Full Court is minded to re-exercise the discretion, a party opposed to that course should be in a position to advance a basis for that opposition. They should be able to demonstrate that the discretion cannot be legitimately re-exercised by the Full Court, and that the appropriate order is to set aside the order and remit the matter for re-hearing or, in terms of s 94(2), “order a re-hearing, on such terms and conditions, if any, as it considers appropriate”.
In order to advance such an argument, the party opposing the re-exercise must satisfy the appellate court of the actual or likely existence of evidence which demonstrates such a change in circumstances since the trial as to be relevant to the exercise of the discretion (and that a re-hearing is necessary because the evidence of such a change is disputed).
While each case will depend upon its facts, the Full Court will ordinarily not be persuaded of the need for a re-hearing by assertions that investigation may result in evidence of a material change being revealed; nor will it ordinarily be persuaded if an inadequate explanation is provided for the failure to adduce that evidence before the Full Court. To be persuaded, the Full Court will require more than a broad assertion about the existence of evidence which, even if it exists, is not demonstrative of a material change.
In the present case, all we were told was that one party “believe[d]” that values would have changed (noting here that only seven months had elapsed between the delivery of the judgment and the hearing of the appeal). Apart from that, we were told nothing more than that stock had been born and crops had been sowed and reaped – hardly remarkable in a farming case.
In our view, these circumstances do not require a re-trial, which would be an appalling prospect given the parties have spent over $2.5 million on legal costs. Nor are we persuaded that we should adjourn the appeal to afford the wife a further opportunity to consider what evidence she might wish to adduce on the re-exercise of the discretion. The wife’s opportunity to inform us about likely material changes came and went at the hearing of the appeal.
The limited success the wife has achieved in this first complaint (and the limited merit which we will later go on to find in other complaints) leaves unchallenged the core findings in relation to the composition and value of the asset pool; the contributions of the parties; and the matters relevant to s 75(2). These findings provide a safe foundation upon which to re-exercise.
We have given careful consideration to all of the findings made by the trial judge. In particular, we have recognised that this was a long marriage during which both parties made major contributions, including the wife’s contributions as homemaker and parent, as well as her contributions to the farming operations. While we recognise that the wife made a loss after separation, her conduct was not reckless and the loss was minor. On the other hand, we have also taken into account the uncontested findings about the magnitude of the husband’s contribution at the time of marriage, which provided the springboard from which the parties came to hold assets worth more than $13 million.
We recognise that informed minds can reasonably differ about the appropriate weight to be given to the matters we have briefly mentioned above, and all of the other matters in his Honour’s judgment. Notwithstanding the length of the marriage, we consider that the initial contribution of the husband was of such magnitude that it should be given much more than token weight. We have concluded that the trial judge’s decision that contributions should be assessed at 57.5 per cent by the husband and 42.5 per cent by the wife achieves an appropriate balancing of all contributions. Nothing advanced by the wife persuaded us that the adjustment of 2.5 per cent for s 75(2) factors was anything other than an appropriate recognition of the findings made by the trial judge.
Accordingly, on the re-exercise, we conclude that a just and equitable outcome would be achieved by a division of the larger pool of assets in proportions 55:45 in favour of the husband (with the smaller pool being divided equally as the wife sought at trial). This division brings about an overall disparity in the parties’ positions of about $1.6 million if the livestock values are corrected.
The second complaint – the division of the livestock
The second complaint is encapsulated by Ground 8:
8.His Honour’s determination that the Wife’s assertion that the genetic make up of the partnership livestock was important was unsupported by evidence was erroneous and that error materially affected his Honour’s determination not to make an in specie division of that livestock.
The trial judge’s reasons relevant to the second complaint
This complaint seeks to impugn [204] of the reasons; however, to provide context, we will recite what his Honour said before and after that paragraph (original emphasis):
197.There is agreement reached between the parties as to the value of plant and equipment and in that regard there is no suggestion that the retention of the plant and equipment would do an injustice to the wife in circumstances where it is brought to account at proper value and the wife would be free to purchase the equivalent of the plant and equipment that she ultimately needs. Even were the parties to agree on the division of plant and equipment, it is not the case that the husband would necessarily agree the various items as appears in lists A and B as prepared by the wife.
198.The wife also seeks a similar order in terms of the livestock.
199.Whilst there is some complexity to the wife’s application in this regard, the focus is upon the retention by the husband as part of the farming partnership enterprise the “top quality … sheep”. The wife does not have and allegedly not [sic] be able to breed a comparable flock unless she has some of those sheep as breeding stock.
200.The wife argues that she is “unreasonably and unjustly disadvantaged” by the retention of both plant and equipment and livestock.
201.The husband was cross examined by senior counsel for the wife in respect of the genetics of the stock and at page 493 of the transcript the following appears:-
Question:So would it be fair to say, [Mr Calder], your very strong position is that the sheep [Mrs Calder] should receive from this Court would not permit her to maintain the breeding program that you and she have built up over all the years that you have had your livestock in this country?
Answer: No that is not true.
Question: Not true?
Answer:If she wants to build them, she can build them up, but…
Question: You identify which ones, please?
Answer:Well first of all you have got the [ewes] there and you can put whatever ram you want over them if you want to grow ….
Question: What, the culled ones?
Answer: Yes, all these. All these [sheep] are good [sheep].
Question:Well [Mr Calder], why can’t she have for example, looking at the sheep at [Property A] say on the third page of 14, the … ewes one and a half years old?
Answer:Well look at [Property A]. We run a system and if you go and break that system, especially with … – it’s a mixed farming operation and if you take that out, it takes a long time to get back into it.
Question: Yes?
Answer:These sheep are on the place till they die and you can’t replace that stock. I can’t replace first cross sheep any day.
202.The husband’s position is that the wife is able to purchase livestock at whatever quality or specificity of breed that she may require.
203.The issue however was further complicated by the evidence of the wife that [Property C] was currently at full capacity in respect of livestock and that if there was an implementation of the order that the wife seeks, she would have a surplus of livestock. The wife admitted that she had or intended to lease further property in order to provide the necessary excess carrying capacity to accommodate the livestock currently run on [Property C] but also if successful, the livestock to be transferred to her from the [Property A] property.
204.Whilst the wife asserts the genetic importance of the livestock as the foundation of her application and the husband disputes that proposition, no evidence was called to substantiate the wife’s proposition but perhaps more importantly, that for the value attributed to the livestock in its various breeds and components, the wife could not purchase the equivalent.
205.It is important that there is no dispute with the valuation of livestock and plant and equipment. In denying the wife’s application, she will receive appropriate compensation.
206.The husband has historically been the farmer and whilst that does not minimise the involvement of the wife in the farming enterprise, the very nature of the orders of March 2012 were predicated upon the continued operation of the farming enterprise. Post separation, the husband has discharged his obligations in respect of the management of the farming enterprise and it would not seem to be now an appropriate exercise to potentially convert a viable farming enterprise namely, the entity currently run by the husband from [Property A], into a situation of risk and uncertainty, whereas the wife has had the freedom to run and operate her enterprise as she wishes and now seeks the further accommodation of livestock and plant and equipment which at least in some respects may be surplus to her real requirements.
207.It is however reasonable that the plant and equipment and livestock be treated differently to the balance of the property interests of the parties and in that respect, whilst not acceding to the wife’s application to divide the livestock and plant and equipment in specie, I propose that there should be an equal division of the value of same. Accordingly, there will be a separate pool created to include plant and equipment and livestock belonging to the farming partnership which shall be the subject of equal division.
It is not in dispute that his Honour’s transcription of the last sentence of the transcript replicated at [201] is inaccurate. What the husband actually said was, “I can replace first-cross sheep any day”. Senior counsel for the wife placed no reliance on the misstatement of the evidence, but to be clear, we accept that the husband was saying he could not replace the purebred stock, whereas crossbred sheep could be replaced readily.
The submissions relating to the second complaint
Senior counsel for the wife submitted that the trial judge was wrong in finding that the wife’s claim about the genetic importance of the partnership livestock was unsupported by evidence, because the husband’s own evidence asserted the genetic importance of certain livestock. Senior counsel therefore submitted that his Honour was also incorrect in recording that the husband disputed the wife’s proposition.
Senior counsel drew attention in particular to the husband’s statement in the part of the cross-examination that his Honour replicated in [201] of the reasons:
These sheep are on the place till they die and you can’t replace that stock. I can replace first-cross sheep any day.
It was not in dispute that the sheep, which had all been retained on Property A, had been systematically bred by the partnership over many years. The wife explained in her evidence-in-chief why she wanted some of them:
[MR GEDDES QC] And again, in your own words, could you please tell his Honour why it is that you would prefer livestock rather than the monetary value of livestock?‑‑‑[THE WIFE] Well, currently on my farm, [Property C], I only have old culled, which are rejected sheep, or crossbreds which are bred for fat - for fat lambs. They’re not bred for wool. I wish to have a [purebred] flock which I have been breeding for the last 35 years on [Property A] and [Property C] and we have bred out the - bred the genetics that we require and it has taken considerable time. It is something that you just can’t buy and you actually can’t buy these sort of sheep. They’re - they’re - they’re top quality … sheep and I have none of them, and so consequently, I won’t be able to breed the sheep that I have unless I have some of these.
The wife’s position was further explained under cross-examination:
[MR BROWN SC] And then you put the sheep at [Property C]?‑‑‑[THE WIFE] Correct. Yes.
So you wouldn’t have to sell the sheep that are there?‑‑‑Well, I have to ‑ ‑ ‑
Not many?‑‑‑ ‑ ‑ ‑ because they’re old. The sheep I’ve got at the moment have all got to be sold because they’re old. They can’t last much longer. They’re already dying.
Yes. You could buy some replacement sheep if you felt like it, couldn’t you?‑‑‑Not of the quality that we have at [Property A].
You could go to a clearing sale and ‑ ‑ ‑?‑‑‑No.
‑ ‑ ‑ buy as much as you want, [Mrs Calder], couldn’t you?‑‑‑No. Not of the genetics that we have bred over the last 30 years.
We hear that in your evidence. We don’t see any evidence about it in the materials. The genetics you say?‑‑‑Genetics. They have the genetics. We’ve bred them.
Okay?‑‑‑We’ve classed them over the last 30 years.
Good?‑‑‑All the ones that aren’t any good are culled out, which are the ones that I’ve received.
Senior counsel for the wife submitted that husband had not suggested at trial that the wife could purchase equivalent sheep, but had instead asserted that if she wanted to establish a similar flock she could do so by “build[ing] them up”. In this context, senior counsel drew attention to the fact that the wife is now 62 years old and at a stage in life where she doesn’t have time to build up her own flock.
Senior counsel for the wife sought to draw support for his argument from views expressed by Fogarty J in Waters and Jurek (1995) FLC 92-635 concerning the difficulty that a woman experiences when she leaves a marriage in an inferior position because of the role she has been assigned in the marriage. It was argued that women placed in such a position had few opportunities, or if opportunities were available, would need time to access them. It was argued that the disadvantage to the wife of being denied any of the purebred sheep could be remedied only by an order for a re-hearing.
It was further argued that the refusal to allow the wife to have some of the stock she wanted also had an effect on the assessment of the s 75(2) factors. This part of the complaint concerned what his Honour said in the following paragraph:
255.Whilst it is difficult to assess the future income of the parties, it is clear that the asset pool is substantial and there is no suggestion that the parties suffer from any physical and/or mental incapacity which would see them being unable to continue their designated plans namely, that each will continue to run and operate a farming enterprise. The husband will retain [Property A] and the wife [Property C]. The property to be retained by each of the parties and the effect of the orders made herein will enable them to pursue their future goals with an appropriate level of financial security.
As we understood this part of the argument, it was that the wife’s future income from farming at Property C would be diminished as a result of the decision not to allow her to have some of the stock from Property A, and that the husband and wife had therefore not been left on an even playing field.
In reply, counsel for the husband submitted that the “overwhelmingly material reason” for the trial judge’s refusal to allow the wife to have the livestock appeared at [206] of his reasons. Counsel correctly observed that there was no challenge to the various findings made at [206].
Counsel for the husband submitted that when the trial judge found that “no evidence was called to substantiate” the wife’s assertion about the genetic importance of the livestock, his Honour was referring to the proposition put by the husband at trial that there was no expert evidence about that topic.
Counsel also submitted that the Waters and Jurek argument had not been advanced at trial, and in any event, the wife had been given, and had taken up, the opportunity to run her own farm. Although the wife may not have as much expertise as the husband, counsel pointed out that she did have assistance from an agronomist.
Counsel for the husband further submitted that there had to be a market for purebred sheep because there was expert evidence as to their value, and there was no challenge to that evidence.
Resolution of the second complaint
We accept the merit in the complaint that the trial judge overlooked the evidence of the husband in finding that “no evidence was called to substantiate” the wife’s assertion about the genetic importance of the livestock. Although we accept there was no expert evidence about this, there did not have to be any, given there was no contest on the issue.
His Honour was also not entirely correct in asserting at [202] that “the husband’s position is that the wife is able to purchase livestock at whatever quality or specificity of breed that she may require”, since the husband himself had asserted that he would not be able to replace the stock from Property A if the wife were to be given any of the sheep.
As the husband’s own evidence was that the livestock could not be replaced, it is now not open to his counsel to submit that there is, in fact, a market at which similar stock can be acquired. We acknowledge that the fact an expert provided a valuation of the sheep might suggest there is a market for them; however, we have no information about how the expert arrived at his valuation.
In our view, his Honour’s belief that the wife would be able to acquire equivalent livestock appears to have been material in his decision not to divide the stock in specie. This is seen most clearly at [204], where his Honour said (emphasis added), “no evidence was called to substantiate the wife’s proposition but perhaps more importantly, that for the value attributed to the livestock in its various breeds and components, the wife could not purchase the equivalent”.
Although we find merit in the complaint, that does not necessarily lead to the order relating to the livestock being set aside, since an appellate court can uphold a decision involving an error of fact if the court is satisfied that the result is “so plainly right that it can be allowed to stand notwithstanding the unsoundness of some of its foundations”: De Winter and De Winter (1979) FLC 90-605 at 78,092 per Gibbs J, with whom Aickin J agreed.
Accordingly, it would be open to us to uphold the decision, even if the error formed a part of his Honour’s reasoning, provided that we consider the result itself is “plainly right”. However, a finding to that effect would be tantamount to concluding that it would have been outside the range of the discretion to have ordered a division of the stock in specie, and we are far from persuaded that this has been established.
In the event that we were to remit the matter for re-trial for other reasons, this issue too would be remitted. However, as we are not persuaded that the merit in the other complaints warrants a re-hearing, we have determined that the appropriate course is to re-exercise the discretion in relation to the livestock.
Re-exercise of the trial judge’s discretion in relation to the livestock
Given the absence of any challenge to the findings recorded at [206] of the reasons, we accept the husband’s submission that the matters referred to therein are of such significance that the appropriate outcome is for the husband to retain the livestock and for the wife to receive monetary compensation. In doing so, we recognise that the wife is being deprived of the opportunity to have a share of a flock which has been bred up over many years.
In arriving at this conclusion, we observe that the wife’s argument seemed to proceed on an assumption that Property C could only be viable in the event she was to run stock equivalent to those being run on Property A. We were not taken to any evidence to support such an assumption. We observe also that the wife consented to interim orders for her to have Property C without there being any guarantee that she would be successful in obtaining an order for a division in specie of the flock at Property A.
Although it is not the basis upon which we have reached our decision, we nevertheless think it worth mentioning that an order requiring a division in specie of the flock could lead to further disputation and cost to the parties.
The third complaint – the two pools issue
The third complaint finds expression in Ground 3:
3.His Honour erred at [207] of his reasons:
3.1in determining to make an assessment under s 79 of the Family Law Act (the Act) by reference to two separate pools of assets, one being the livestock and plant and equipment of the partnership and the other the remaining assets of the parties, without first having given either party any or any reasonable opportunity to be heard as to the adoption of such an approach or as to whether or not it was appropriate to make different assessments with respect to those pools or as to an appropriate assessment for each pool;
3.2in failing to provide any or any adequate reason as to:
3.2.1explain why he made his s 79 assessment by reference to two pools; or
3.2.2explain why it was that he divided the partnership livestock and plant and equipment in the proportion that he did; or
3.2.3demonstrate that in making that determination he had regard to any of the factors under s 79(4) of the Act or to s 79(2) of the Act.
This complaint seeks to impugn [207] of the reasons, which we have already recited in dealing with the second complaint. In that paragraph, his Honour determined that it would be “reasonable that the plant and equipment and livestock be treated differently to the balance of the property interests of the parties”, and concluded there should be an equal division, in value, of the plant, equipment and livestock.
Senior counsel for the wife submitted that the judgment was silent as to the reason why his Honour decided, without invitation, to divide the assets into two pools, and said it was impossible to comprehend why that approach had been adopted. Senior counsel accepted that the court was entitled to adopt a two pools approach, but submitted that his Honour could not do so without a “principled explanation”.
Senior counsel for the wife accepted that the wife had received what she wanted from the first pool because her proposal was for an equal division of all of the assets, but stressed that the wife’s proposed division of the chattels and livestock involved a distribution in specie, which she did not receive.
In reply, counsel for the husband argued that the reasons were not completely silent about why the property had been divided into two pools. In any event, he argued that there was no basis for the wife to complain about the division because she received what she asked for.
We accept that his Honour was not invited to divide the assets into two pools and that he did not foreshadow his intention to do so. Senior counsel for the wife submitted that this was a denial of natural justice, and argued that it was not possible for us to be satisfied that compliance with natural justice would have made no difference. In support of his proposition he cited Burchett J who held in Guse v Comcare (1997) 49 ALD 288 at 292 that:
the principle of natural justice does not place on [the appellant] any onus to show that an opportunity to be heard would have in fact proved fruitful. Natural justice stands on a higher plane than that.
We are not convinced that it is obligatory for a trial judge to advise the parties that he or she intends to adopt a two-pool approach where both parties have presented a global case directed to the entire pool of assets. In some respects, the approach of notionally dividing the assets into more than one pool is a matter of convenience for the author of the judgment. In our view, issues of natural justice only come into play where the trial judge’s approach leads to an outcome outside the parameters of the competing claims, or where the judge has adopted an approach to one of the pools which neither party had advocated: Guthrie and Guthrie (1995) FLC 92-647.
Even if we are wrong, it is well established that not every denial of natural justice will lead to the order being set aside: Stead v State Government Insurance Commission (1986) 161 CLR 141. It was the wife’s case that all of the assets should be divided equally, hence it is not open to her to complain about the trial judge having given her what she wanted, albeit in relation to only the smaller pool. For the same reason, it is not open to the wife to complain about the absence of reasons for the smaller pool being divided in the proportions she sought.
No submissions were advanced to explain what different approach the wife’s senior counsel would have taken at trial had his Honour foreshadowed notionally creating two pools. Certainly, no additional evidence would have been called. The case is thus quite unlike Scrymegeour & Scrymegeour (2014) FLC 93-600, where the departure by the trial judge from the agreed position of the parties was shown to have occasioned prejudice. There being no possible prejudice to the wife in the present case, there can be no merit in this part of her complaint.
Finally, we observe that while it is true that when his Honour came to deal with the factors in s 75(2), he did not acknowledge that his consideration was restricted to the larger pool. However, the calculations recorded at the end of the judgment demonstrate that his Honour had not overlooked that the adjustment related only to the larger pool. In any event, as the wife had sought 50 per cent of the assets in the smaller pool, there is again no basis for any complaint by her about the absence of an adjustment in relation to that pool.
The fourth complaint - the treatment of legal costs
The fourth complaint was expressed in Ground 7 in the following terms:
7.His Honour erred in failing to make any adjustment to the asset pool by reason of the Husband’s expenditure on legal fees and in particular in failing to do so after having disregarded $400,000 of the Wife’s liabilities by reason of those borrowings having been expended on legal fees or alternatively his Honour erred in disregarding that liability without also notionally adding back the expenditure.
It should be observed at the outset that the decision to “disregard” $400,000 of the wife’s F Pty Ltd liability was in accordance with the wife’s case at trial. The essence of the complaint now is that while the wife accepted responsibility for her debt related to legal fees, almost all of the husband’s fees had been paid prior to trial and no adjustment was made to reflect that fact.
The trial judge’s reasons relevant to the fourth complaint
To provide context, we will set out the paragraphs that preceded and followed [169] of the reasons, which counsel for the husband submitted was the “key paragraph”. We will also set out some other relevant paragraphs.
65.Each of the parties were ordered to prepare and subsequently tender a Costs Statement as to the extent of their legal fees incurred, leading up to the commencement of the proceedings. Whilst the husband seeks to include a liability to his daughter … in respect of monies borrowed from her to assist in the payment of his legal fees, the wife considers that the treatment of the respective legal fees of the parties should be restricted to a concession by the wife that a proportion of her [F Pty Ltd] debt the sum of $400,000 should be excluded but adopting the same approach would bring to account that proportion of the husband’s legal costs paid from capital.
…
TREATMENT OF MONIES RECEIVED BY THE HUSBAND FROM THE [J TRUST]
158.The wife initially was concerned to investigate how the husband had dispersed monies received by him from the [J Trust].
…
160.Pursuant to orders made on 8 November 2010, the parties borrowed $400,000 from the trust pursuant to a loan agreement dated 4 April 2011.
161.A further $200,000 was borrowed from the [J Trust] pursuant to orders made on 25 August 2011.
162.In November 2012, the parties agreed to disperse the balance of the funds held by the trust and by agreement, the wife received $305,684.05 and the husband received $266,184.05.
163.The wife explains that a significant proportion of her money was used to pay legal fees and disbursements in respect of the conduct of the proceedings, with the balance deposited into the working account of [F Pty Ltd].
164.Ultimately, the wife conceded that the amount received by the husband was spent on legal costs and disbursements.
165.To the extent that the enquiry was ever necessary or relevant, the wife accepts the husband’s explanation. What remains is the treatment of those monies dispersed by the husband to his solicitors.
166.The wife refers to the decisions of Chorn & Hopkins (2004) FLC 93-204 and Farnell & Farnell (1996) FLC 92-681.
167.In La Costa & La Costa (supra), consideration was given to the treatment of adding back assets notionally into the pool, but in respect of the specific issue of legal costs, the following was said:-
…additionally, because of the requirement for each party to bear their own costs, it is generally appropriate to add back to the pool of assets notionally any legal costs that have been spent on the litigation and to deal with the costs as a separate issue at the end of the litigation (see Farnell).
168.The question of the treatment of legal fees has been given significant recent consideration and as an indication of an alternate view in Truman & Truman [2013] FamCA 765 Fowler J said at paragraph 54:-
This Court does not follow the practice of adding back and dividing non-existent assets. There is no warrant for doing so in the Act. The once fashionable practice was one which assisting in pointing perhaps a way to a just solution; however, there exists plenty of opportunity for the Court to come to a just and equitable assessment as to the source and application of funds in its consideration of contribution under section 79(4) and matters referred to in section 75(2), and also in particular section 75(2)(o).
169.I suspect that the payment of legal fees can in an appropriate case fall into the category of circumstances where an add back of the legal fees into the pool is justified. The case at hand however is not such a case. The parties have spent significant sums on their legal costs and disbursements relating to these proceedings and in a general sense, neither counsel has made any overarching submission that the entirety of legal costs incurred by the parties should be brought back to account. Moreover, there is no suggestion that the amounts disbursed from the [J Trust] to each of the parties pursuant to the relevant orders, should be arithmetically accounted for. The monies received by the parties were spent in a variety of ways, but the expenditure was unfettered by order, condition or agreement. Even on the wife’s case, a significant proportion of monies she received from the [J Trust] was utilised for the payment of her legal fees.
170.Other than to ensure that the liabilities of the parties are not burdened by the payment of legal fees (as is the case with the [F Pty Ltd] liability), to attempt to reinstate with forensic precision the disbursement of money received from the [J Trust] would be an artificial and barren exercise.
171.I do not propose to bring back to account the expenditure by each of the parties of monies received by the husband from the [J Trust].
It should be observed that the J Trust referred to in this extract was controlled by the husband and wife before being wound up in February 2013. The trustee of the Trust was ST Limited.
The parties’ positions at trial regarding legal costs
The closing submissions at trial were made in writing. The husband’s, which were dated 1 August 2014, were constructed by reference to “Items” set out in a Table which the wife’s senior counsel handed up during the trial.
The Items which assume relevance were those numbered 19 and 20. Item 19 concerned $266,184 the husband received from the J Trust and Item 20 concerned $75,000 he received from the J Superannuation Fund. The wife initially asserted that the husband had failed to account for these funds, but the husband’s written submissions at trial drew attention to the concessions the wife had made in cross-examination that the funds were paid to the husband’s solicitors.
At [63] to [68] of the husband’s submissions at trial, his senior counsel discussed the law relating to “add backs”. After referring to authorities, it was submitted:
68.In our submission, in the light of this authority, the Court must exercise caution when being invited to addback notional assets to an asset pool. In relation to the three addbacks claimed, namely the Husband’s shareholding in [Calder Ltd], payments to the children from [J Trust], and capital expenditure on [Property A], it is submitted that none of these alleged addbacks are able to be retrieved.
The wife’s written submissions, which were dated 11 August 2014, dealt with the relevant Items as follows (original emphasis, footnotes omitted):
18.Item 28 (being the debts of [F Pty Ltd] totalling $1,319,222) is controversial. The Wife conceded that “about $400,000” of that debt was applied towards the payment of legal costs in respect of these proceedings, but the proper inference to be drawn from the whole of the cross-examination of the Wife on this topic is that the balance of that debt (that is, approximately $919,000) was applied towards the agricultural pursuits of [F Pty Ltd].
…
50.Items 19 ($266,184) and 20 ($75,000) were amounts the Husband had received from the [J Trust] and his superannuation fund respectively but not accounted for. During the hearing it was put to the Wife in cross-examination that the Husband had spent those funds on legal costs and trust account receipts were tendered. Whilst this is an explanation (albeit provided very late) for how the money was applied, the amounts should still be added back and/or properly taken into account as property used by the Husband to meet legal his costs, in accordance with the principles in such cases as Farnell v Farnell (1996) FLC 92-681 and Chorn v Hopkins [2004] FamCA 633. This is also the approach the wife concedes by these submissions should be taken in respect of her farming debts referred to in paragraph 18 of these submissions. In this context, it is noted the evidence indicates that the Wife paid a very large proportion ($200,000) of the funds she received from the [J Trust] into [F Pty Ltd] (see Exhibit 24).
The husband’s submissions in reply were dated 19 August 2014. These dealt with [18] of the wife’s submissions merely by repeating what had been said in the husband’s earlier written submissions, namely that the wife should bear responsibility for the entire F Pty Ltd liability. The submissions dealt with [50] of the wife’s submissions by saying:
27.At paragraph 50, the wife makes submissions in relation to items 19 and 20. The funds received by the husband from the [J Trust] and his superannuation fund were, as the wife has set out, accounted for. By her submission, the wife is seeking to add back these funds. In our submission, for the reasons set out in paragraphs 63 to 68 of the husband submissions, the funds do not form part of the assets available for distribution.
The total legal costs incurred by the parties
As his Honour noted at [65], the husband and wife were each required to tender a “Costs Statement as to the extent of their legal fees incurred”. His Honour did not, however, refer in his reasons to the content of the statements, namely the one prepared by the wife solicitors dated 22 November 2013 and the one prepared by the husband’s solicitor dated 24 November 2013. (The trial commenced two days later.)
There was considerable confusion at the hearing of the appeal about the state of the evidence relating to the paid legal costs of both parties. It ultimately transpired that while the wife’s Costs Statement was formally received as an exhibit, the husband’s was not. It was conceded that both statements were properly before the trial judge and that we should take them into account.
The wife’s Costs Statement relevantly provided:
4. Your costs to date and money in trust have been paid as follows:
4.1 [Calder Ltd] $106,000.00
4.2 [F Pty Ltd] $190,000.00
4.3 [ST Limited] (as set out below) $23,032.54
4.4 From you personally $900,788.86
Total: $1,219,821.40
We confirm settlement funds received on your behalf from [ST Limited] of $305,684.05 were paid into our trust account and that an amount of $82,651.51 was paid to yourself and $200,000 paid to [F Pty Ltd] as instructed by you. The amount of $23,032.54 was retained in our trust account for payment of costs.
The total amount paid by the wife to her solicitors was therefore $1,219,821.40. Counsel for the husband drew our attention to the fact that the wife’s Costs Statement disclosed that only $190,000 had been paid from F Pty Ltd, whereas the wife’s evidence had been that about $400,000 of the F Pty Ltd loan funds had been paid to her lawyers. However, counsel for the husband himself properly conceded that the money recorded in the wife’s Costs Statement as having been paid by her “personally” may have included the funds borrowed by F Pty Ltd.
The husband’s Costs Statement relevantly provided:
2.Costs and disbursements, including counsel’s fees and consultants’ fees paid by the husband and the [J Trust] (and as to $100,000.00 by [Ms MC] as a loan to the husband) to Nedovic & Co to date (including money paid on account of future costs): $1,122,245.33.
3.Amount presently held in trust (and included in the above sum) on account of future costs: $76,432.23.
The total paid by the husband in legal costs was therefore $1,122,245.33, of which $100,000 was borrowed from a third party. The trial judge did not take the $100,000 loan into account when determining the composition of the larger of the two pools of assets.
The wife’s payments towards her legal costs exceed those of the husband by $97,576; however, in determining the composition of the pool, the wife’s debt of $400,000 was not taken into account, whereas the liability of the husband not taken into account was only in the sum of $100,000.
Assuming that the balance of the legal fees were paid from monies that would otherwise have been included in the pool, it can be seen that the wife has been disadvantaged to the extent of $202,424 (i.e. $400,000 - $100,000 - $97,576).
The submissions relating to the fourth complaint
Senior counsel for the wife submitted that the effect of the approach adopted by the trial judge was that the assets the husband received as part of his settlement were not encumbered by any liability to pay legal costs (save of course for the $100,000), whereas the assets the wife retained were so encumbered. Relying on what was said by the Full Court in Chorn and Hopkins (2004) FLC 93-204, senior counsel for the wife submitted that the outcome was unjust and required appellate intervention.
Senior counsel for the wife initially argued before us that the adjustment required to ensure the parties’ expenditure on legal costs was treated in the same fashion should be made on a “dollar for dollar” basis by reference to s 75(2)(o). After a member of the bench drew attention to what had been said in Vass & Vass, senior counsel for the wife abandoned his initial position that expenditure on legal fees could not be treated as an “add back” because of what had been said by the High Court in Stanford v Stanford (2012) 247 CLR 108.
The Full Court in Vass & Vass said (original emphasis):
138.There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford (2012) 247 CLR 108 - is authority for any necessary contrary solution. Some statements made by the High Court may lead to the conclusion that references to “notional property” as have been referred to in decisions of this court and at first instance may need to be reconsidered.
In reply, counsel for the husband submitted that the wife was attempting to run an argument on appeal that had not been run at trial. We do not accept this proposition. The wife has advanced an argument on appeal that corresponds precisely with what she advanced at trial; although the argument was much easier to comprehend on appeal after we extracted the Costs Statements from counsel, which were not referred to at all in the submissions at trial.
While acknowledging what the trial judge said in the final sentence of [65] of the reasons, counsel for the husband submitted that the wife had not “particularised [her] claim”. We do not accept this proposition, as the wife’s written submissions at trial at [50] made clear that she was proposing that $341,184 of the husband’s expenditure be added back.
Counsel for the husband submitted that there was no challenge to the finding at [169] that “neither counsel has made any overarching submission that the entirety of the legal costs incurred by the parties should be brought back to account”. We accept that proposition as far as it goes, but it is not a complete answer to the application the wife made for parts of the expenditure to be added back.
Counsel for the husband also argued that it was open to the trial judge to refuse to add back the money that he had spent because the wife had:
told the court that part of the money that she received from the [J Trust] went on legal fees as well. So what the judge is saying here is that it’s not quite an apples for apples circumstance. … there was a reason for him not to accede to the wife’s argument in paragraph 50 that the 266 should be added back in because it went to legal fees. And the reason for that is, firstly, we’re not taking an overall view, and, secondly, the money that the wife received from legal fees in itself came from the [J Trust] as well.
We accept this argument, but only to the extent that it correctly observes that the way in which the wife framed her claim did not take “an overall view” because it was restricted to the $400,000 she had used from the F Pty Ltd loan and the $341,184 the husband had used from J Trust and J Superannuation Fund. We also accept that the wife’s argument would have been fundamentally flawed had there been a major discrepancy between the parties’ total costs. But as we have shown, the wife spent only $97,576 more than the husband, and she was proposing that only $341,184 of his expenditure be added back, whereas $400,000 of her expenditure was added back.
Counsel for the husband also argued that it was speculation as to whether the money the husband had paid in legal costs came out of his own pocket or from the joint purse, and that the wife’s counsel at trial had an opportunity to explore this issue and chose not to do so. We do not see any merit in this submission. The husband’s Costs Statement itself disclosed that the funds used by the husband to pay his legal costs, save for the amount of $100,000, had come from him and the J Trust. There was nothing in his Honour’s findings, nor in the submissions made to us, to suggest that the monies spent on legal costs would not all have been included in the pool had they not been dissipated.
Counsel for the husband submitted that the Costs Statements were only estimates, as both were provided in the few days leading up to the trial and as such, were not of the “necessary precision to base any findings at the conclusion of the trial”. There is no merit in this submission, as the relevant part of the Costs Statements did not constitute estimates, but rather a precise statement of how much money had been paid to that stage. It was only the balance of the Costs Statements which estimated future costs, and these estimates are of no relevance here.
The husband’s submissions also relied on the fact that there was no dispute at trial that there was to be a “cut-off date for valuations”, which was said to have been in November/December 2013. That argument is of no assistance to the husband, as Items 19 and 20 related to payments made prior to the “cut-off date”.
The husband’s fundamental submission, however, was that all of the findings at [169] of the reasons were not only open to the trial judge but were not challenged, and that these findings provided the basis for the decision about legal costs.
Resolution of the fourth complaint
The trial judge proceeded on the basis that he “suspect[ed] that the payment of legal fees can in an appropriate case fall into the category of circumstances where an add back of the legal fees into the pool is justified”. His Honour’s suspicion accords with well-established authority (see for example Chorn and Hopkins at [55]). If there was any doubt that the position might have changed as a result of what was said in Stanford v Stanford or Bevan & Bevan (2013) FLC 93-545, that doubt has been removed by what was said by this court in Vass & Vass.
To that extent, we consider that the view expressed by Fowler J in Truman & Truman [2013] FamCA 765 (referred to at [168] of the reasons) must be interpreted with some caution. Fowler J decided not to follow “the practice of adding back and dividing non-existent assets”. The fact that Fowler J did not adopt such a practice does not mean it is not open to other judges to adopt that practice (although we add that we are not aware of any case where a judge has “divided” non-existent assets).
Accordingly, the issue we must determine is whether the trial judge’s reasons support his decision not to add back a portion of the husband’s paid legal costs. In determining that issue, we agree with the husband that the gravamen of his Honour’s reasons is to be found at [169], although we would also add that we consider [170] to be important in understanding how the decision was reached.
Ordinarily, we would agree with the trial judge that the absence of an “overarching submission that the entirety of legal costs incurred … should be brought back to account” would be fatal to the wife’s case. The purpose of adding back funds expended on costs is to ensure that one party does not end up paying the other’s costs in the absence of an order. Normally, therefore, no purpose would be served by looking at just one part of the expenditure on legal costs.
We are sympathetic to the position in which the trial judge found himself in dealing with this issue, because neither party made any attempt in their written submissions to place the wife’s claim in the context of the bigger picture of the entire costs expended. Nevertheless, this did not relieve his Honour from his obligation to consider all of the evidence relevant to the issue.
As we have earlier recorded, the Costs Statements demonstrate that the parties’ expenditure on legal fees differed only to the extent of $97,576. Had the submissions drawn attention to that evidence, his Honour might then have considered that there was more attraction in the wife’s proposition, since she was only asking for $341,184 to be added back on account of the husband’s expenditure, whereas $400,000 of her own had, in effect, been added back.
The other difficulty we perceive in his Honour’s reasons relates to his finding at [169] that there was “no suggestion that the amounts disbursed from the [J Trust] to each of the parties pursuant to the relevant orders, should be arithmetically accounted for”. This is true, yet, at [170] his Honour said that “to reinstate with forensic precision the disbursement of money received from the [J Trust] would be an artificial and barren exercise”. As nobody had asked his Honour to carry out such an exercise, we consider it can be assumed that neither party was concerned about how the funds from the Trust had been disbursed, save for the wife’s concern about the expenditure on legal costs.
By the use of the opening words “other than” at [170], his Honour accepted that seeking “to ensure that the liabilities of the parties are not burdened by the payment of legal fees (as is the case with the [F Pty Ltd] liability)” was not an artificial and barren exercise. In our view, his Honour’s discretion miscarried when he declined to carry out the exercise that he had been asked to perform. As a result, he failed to appreciate that there was a close similarity between the amounts the parties had spent on legal costs. The effect was that the wife was disadvantaged to the extent we calculated earlier.
Re-exercise of the trial judge’s discretion on costs
We recognise that $202,424 is a small sum by comparison with the total value of the assets. It is nevertheless not insignificant, and it concerns the important principle stated in s 117(1) that parties to proceedings should pay their own costs unless the court orders otherwise: see Chorn and Hopkins at [55].
Had his Honour adopted the add-back route agitated by the wife, she would have received an additional $86,030 (i.e. 42.5 per cent of $202,424); and if his Honour had instead approached the issue by reference to s 75(2), the same result ought to have been achieved.
On the re-exercise of the discretion, we consider the amount of the wife’s entitlement should be increased by $86,030.
The other grounds of cross-appeal
Although the wife did not abandon the remaining complaints in the Amended Notice of Cross-Appeal, her counsel did not address any of them in his oral argument. We have considered the written submissions in relation to the remaining grounds of Cross-Appeal. We are not persuaded there is merit in any of them, and deem it unnecessary to say anything about them save for the following comments in relation to Grounds 1 and 10.
Ground 1
Ground 1 was expressed in these terms:
His Honour erred at [218], [245], [246] and [252] of his reasons for judgment in approaching his assessment of contributions by commencing from an assumed position of equality and adjusting his assessment from that position in order to “properly reflect the weight that should be given to the contributions by each of the parties” (see [252]).
This ground concerns the following paragraphs of his Honour’s reasons:
218.The husband seeks an adjustment of 10 per cent to represent his superior contribution primarily arising out of his assertion that the property and interests held by him as at the date of marriage significantly contributed to the purchase of the properties at [Property A] and [Property C] which collectively represent overwhelmingly the proportion of the property of the parties.
…
245.Nonetheless, the trial judge considered the initial contribution of the husband warranted an adjustment of 6.6 per cent, which in the context of that case translated to an adjustment of about $10,000,000 for initial contribution alone.
246.In the present case, the property of the parties excluding partnership livestock, plant and equipment is $10,403,880. The adjustment sought by the husband at 10 per cent would amount to a little more than $1,000,000, but taking into account the differential between the parties, the net effect is about $2,000,000.
…
252.In all the circumstances, I consider that it is appropriate for an adjustment in favour of the husband of 7.5 per cent to properly reflect the weight that should be given to the contributions by each of the parties.
We accept that use of the language of “adjustment” when applied to findings about contributions can lead to suspicion that the judge has commenced from an assumed position of equality, which the authorities make clear must not be done. However, on a fair reading of his Honour’s reasons, we do not accept that he proceeded on the basis of such an assumption, and consider that his use of the word “adjustment” reflects nothing more than looseness of expression.
Ground 10
The wife asserted by Ground 10 that:
His Honour erred in failing to have regard to s 79(2) of the Act or in failing to demonstrate by his reasons that he had had regard to it by satisfying himself that the orders he ultimately made were in all the circumstances just and equitable.
The wife’s written submissions complain that (footnotes omitted):
43.Having satisfied himself that it was just and equitable to embark upon an adjustment of the property interests of the parties at no stage did his Honour express a satisfaction the Orders in fact made were just and equitable in all the circumstances. Either he failed to consider the question, in which event he is in error, or his reasons are deficient in that they do not demonstrate that he was so satisfied and he is for that reason in error.
There can be no doubt that his Honour was aware of his obligation under s 79(2) not to make an order unless satisfied that it was just and equitable in all the circumstances to do so, since he set out the relevant provision in his unchallenged statement of the law at [47]–[53]. We are in no doubt that his Honour recognised that his obligation not to make orders unless it was just and equitable to do so extended beyond finding that it was “just and equitable to embark upon an adjustment of the property interests of the parties”. For example, at [90] his Honour mentioned that the wife had abandoned an application she commenced pursuant to s 106B because success in her application was “not required … in order to effect a just and equitable outcome”.
Although in our view desirable, there is no mandatory requirement for a judge to make a positive finding that his or her orders adjusting property interests are just and equitable. The statute merely states that a judge must not make an order adjusting property interests unless satisfied, in all the circumstances, that it is just and equitable to make the order.
In the recent decision of Hearne & Hearne [2015] FamCAFC 178, the other members of the Full Court agreed with Strickland J who said at [73]:
where, as in this case, there is no express finding by the trial judge that it is just and equitable to make orders altering property interests, the question becomes, can it be implied from the totality of the reasons that the trial judge has considered this to the extent necessary, depending always on the facts and circumstances of the case.
In our view, considered as a whole, it is apparent that the trial judge did consider that the orders he made were just and equitable.
The orders
The appeal and cross-appeal will both be allowed in part. The husband achieved success in the appeal by having the wife’s entitlement reduced by $124,189, and the wife achieved success in the cross-appeal by having her entitlement increased by $86,030. The net result is that the wife’s entitlement will be reduced by $38,159. As we understand she has already received her full entitlement, she will need to reimburse this sum to the husband.
Although it is our usual practice to take submissions on costs at the oral hearing (based upon the alternate possible outcomes), on this occasion we deferred to the request of counsel that costs submissions be made after the delivery of our judgment. Our orders contain a timetable for the filing of those submissions, although counsel may be able to agree what seems to us to be a fairly obvious way of disposing of the costs issues.
I certify that the preceding one hundred and fifty-seven (157) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Thackray & Macmillan JJ) delivered on 11 March 2016.
Associate:
Date: 11 March 2016
2
7
1