Chang v Su
[2002] FamCA 156
•28 February 2002
[2002] FamCA 156
FAMILY LAW ACT 1975
IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA Appeal No EA 41 of 2001
AT SYDNEY File No SY 8088 of 1995
BETWEEN:
JAMES CHANG
Appellant Husband
- and -
SUSIE SU
Respondent Wife
REASONS FOR JUDGMENT OF THE
FULL COURT
CORAM: FINN, KAY & DAWE JJ
DATE OF HEARING: 20 August 2001 and 26 February 2002
DATE OF JUDGMENT: 28 February 2002
APPEARANCES: Mr Levet of Counsel, instructed by Mark Kennedy & Co, DX 11586 SYDNEY DOWNTOWN, appeared on behalf of the Appellant Husband on 20 August 2001 and the husband in person for the application to adduce further evidence
Mr Bell of Counsel, instructed by James Lee, Solicitor, DX 1000 SYDNEY, appeared on behalf of the Respondent Wife.
CHANG and SU
EA 41 of 2001
Coram: Finn, Kay, and Dawe JJ
Date of hearing: 20 August 2001 and 26 February 2002
Date of judgment: 28 February 2002
EVIDENCE – Admissibility – exclusion of affidavits where witnesses not available for cross-examination – Family Law Rules Order 16 Rule 10 – Evidence Act 1995 (Cth) sections 56 and 135.
PROPERTY–– lack of full and frank disclosure of assets – no visible pool of assets – ability of trial Judge to make order for alteration of property interests.
The husband appealed against property orders made by Moore J on 20 April 2001. The trial before Moore J was a rehearing of the competing property applications of the parties ordered by a Full Court in 2 September 1999.
Both parties were born in Taiwan. The relationship commenced in about 1990 in Taiwan, and they married in Sydney in 1993. There was one child of the relationship. The wife had previously been married, and there were two children from that relationship.
Prior to the marriage between the parties, the wife was a well-respected journalist with many years’ experience in Taiwan. The husband was employed as a company director and property developer in family businesses. He came from a wealthy and prominent family in Taiwan.
Since 1993, the wife and her three children lived in Australian for substantial periods, and were granted permanent residence in Australia in 1994. The husband continued to live and work in Taiwan, although he visited Australia regularly.
In June 1993 the husband purchased a property in Australia at 38 Greengate Road, Killara for $860,000, which was registered in his sole name. The husband contributed $300,000 towards the purchase price, with the remainder borrowed from the United Overseas Bank Limited.
In November 1996 the husband purchased a unit at 7/57 Lindfield Ave, Lindfield for $295,000. He asserted that he borrowed the money to finance the purchase from his sister.
Before Moore J, the husband sought to rely upon various affidavits by deponents who were not available in Australia for cross-examination (they all lived in Taiwan). Her Honour chose to disallow the affidavits rather than receive them subject to weight, as she thought in the contentious atmosphere of the case, that if they were admitted, the weight given to them in the absence of any opportunity to test them would be so minimal as to not warrant their receipt.
Moore J was suspicious of some of the conduct of the wife, who divested herself of companies and property that she owned shortly after separation from the husband. However her Honour also found that the husband had not made full and proper disclosure of his financial position. She found that in 1991 the husband was conservatively worth $4.55 million and was a “well resourced and knowledgeable businessman”. At the time of trial he submitted that he owed approximately $1.84 million and had assets of $1.22 million (which included the Killara and Lindfield properties). Moore J could not find any evidence to account for how the husband had lost the money and rejected his assertions as to the extent of his wealth.
Her Honour thought that s 75(2) factors, such as the wife’s limited earning capacity and her responsibility for the child, favoured the wife and that a meaningful adjustment should be made in her favour. Although it was impossible to express and order in terms of proportions because of the non-disclosure by the husband, she thought it just and equitable for the wife to acquire the Killara and Lindfield properties unencumbered.
On appeal, the husband argued that Moore J erred in excluding the affidavit evidence of the husband’s witnesses who were not available for cross-examination. He also argued that her Honour erred in ordering the husband to discharge the mortgages of the Killara and Lindfield properties, and transfer them to the wife, without first inquiring into the husband’s financial means.
Held: in dismissing the appeal
(per Kay and Dawe JJ, Finn J agreeing)
Moore J had a discretion under Order 16 Rule 10 of the Family Law Rules which allowed her to exclude affidavits from witnesses who were not available for cross-examination. There is no inconsistency between Order 16 Rule 10 and the Evidence Act 1995 (Cth). There was no reason shown for the Full Court to interfere with her Honour's exercise of that discretion.
In circumstances where there has not been full and frank disclosure of financial circumstances by a party, it is open to a Court to find that an indeterminate undisclosed amount is held by one of the parties and to make property orders without reference to an overall pool.
APPEAL DISMISSED
APPELLANT TO PAY RESPONDENT’S COSTS OF APPEAL
REPORTABLE
FINN J: I have read the reasons for judgment of Kay and Dawe JJ. I agree with their Honours that this appeal by the husband should be dismissed and that the husband should pay the respondent wife’s costs (as taxed on a party/party basis in default of agreement).
In relation to the first matter raised by the appeal, I agree generally with their Honours’ reasoning for concluding that there is no inconsistency between O.16 r.10 of the Family Law Rules and provisions of the Evidence Act 1995 (Cth), and that the trial Judge did not err in excluding the affidavits of the husband’s witnesses who were not available for cross-examination.
As to the second matter raised by this appeal, I agree with their Honours that the trial Judge made sufficient findings in her reasons for judgment (see paragraphs 50 to 101 of those reasons) concerning the husband's asset position to sustain the orders which she ultimately made requiring the husband to transfer to the wife on an unencumbered basis the Lindfield and Killara properties.
I also agree with Kay and Dawe JJ that the application (filed 11 February 2002) by the respondent wife to adduce further evidence should be dismissed for the reasons given by their Honours.
KAY AND DAWE JJ:
This is the husband's appeal against property orders made by Moore J on 20 April 2001.
The trial before Moore J was a rehearing of the competing property applications of the parties. That rehearing had been ordered by a Full Court (coram Finn, Kay and Mushin JJ) on 2 September 1999 (see Su v Chang (1999) FLC 92-859; 25 Fam LR 558).
Her Honour ordered that the husband discharge mortgages secured against two properties in New South Wales and then transfer those properties, free of encumbrances, to the wife. In return the wife was to transfer to the husband her shareholdings in two Taiwanese companies.
In this appeal the husband asks that those orders be "quashed" and that the matter be remitted to a single judge for a rehearing.
Background
Each of the parties was 47 years of age at the time of the hearing before the trial Judge. Until 1993 they had lived most of their lives in Taiwan.
Her Honour found that the parties began to live together in late 1990/early 1991. They married on 13 July 1993 and separated in August 1995. The marriage was subsequently dissolved in May 1997.
They have one child F who was born on 11 September 1993. The wife has two children from a previous marriage to Hong Yi Huang namely E Huang born December 1980 and K Huang born April 1983.
The husband and the wife migrated to Australia shortly prior to F's birth. The wife and her children have lived in Australia since that time. The husband continued to live and work at his business in Taiwan, however he visited Australia regularly over the subsequent years. He said that in July 1998 he moved to Taiwan and he now only returned to Australia for the purpose of contact with his daughter.
When the parties met in 1990 the wife was an experienced journalist working in Taiwan. Her work was apparently focused upon financial, economic and political fields. She said she was earning about $5,000 per month.
The husband said that prior to his relationship with the wife he was employed as a company director and property developer in family businesses. The wife asserted that he came from a wealthy and prominent family in Taiwan, his father having been the founder of the Taiwan Steel Tower Group. He was the eldest son of six children. She said he claimed to have told her he had more than $50 million in assets.
In 1991 the husband had applied for permanent residence in Australia under the business migration program and engaged solicitors, Messrs Baker and MacKenzie, to act on his behalf. His application to the Department of Immigration revealed that:
He obtained a degree in Engineering Science from the Cheng Kung University in 1977 and a Masters of Public Administration from the University of San Francisco (by attendance there and course completion) in 1983.
His occupation was described as self-employed “shareholder, supervisor, managing director and chairman”. His employers since 1977 had been various companies in which he held shares and, at the time of signing the document, he was employed by four of those companies.
In the supporting documents he was described as a shareholder and director of two very substantial companies in Taiwan, Taiwan Steel Tower Co Ltd and Shin Fa Steel Mfg Co Ltd with a turnover in excess of NT$500 million and NT$200 million respectively. He was also supervisor and 65% shareholder of Tip Top International Co Ltd and chairman and 41.86% shareholder of Jamac Timber Limited of Fiji. He was also described as having over ten years of successful business experience in various industries including steel processing and refining, film and publication, and timber cutting and manufacturing. He was said to be a very well resourced and knowledgeable businessman.
Apart from his interest in various companies of which he was a director and shareholder these companies and the work he undertook for them, his other assets were said to include cash at bank of NT$16 million and land and buildings at market value (NT$70 million). Adding his shares in two companies at par value, his assets were said to total NT$91,550,020. This was said to approximate, “conservatively estimated”, net assets in excess of $4.55 million (AUD).
According to the wife, in 1991 the husband encouraged her to change her career from that of professional journalist and go into business. As a result, two entities were established, the City Entertainment Co. in 1991 and Ming Jih Development Co in July 1992. The conduct of these companies was the subject of some contention between them at the trial.
The wife said she had a property settlement with her former husband prior to her marriage to the husband. As part of that settlement she was paid $100,000. She said she also had cash and savings of approximately $300,000. Additionally, she was the registered owner of a unit at Fu-Yuen Street in Taiwan. She alleged this was part of the settlement she had with her former husband and it was to be held in her name if she remained unmarried, for the benefit of the children of her first marriage.
This picture of her financial circumstances was refuted by the husband who asserted that she was the owner of the Long River Publishing House, a business in which he had invested $20,000 in 1992 at her request. Her Honour did not find the wife's explanation about the history of her ownership of that business satisfactory but she could not find, on the evidence available, what her interest was, or is, in that business.
Whilst the wife claimed that her Taiwanese unit was the subject of a mortgage to her first husband that equated to its value, the trial Judge rejected that evidence. However she found that the property was subject to a judgment debt in favour of the husband's sister, which resulted in the unit being “sealed and frozen” by orders of a Court in Taiwan. In those circumstances her Honour said she could not regard this property as available to the wife.
In June 1994 the husband purchased a property at 38 Greengate Road, Killara for $860,000. The husband contributed $300,000 and $560,000 was borrowed from the United Overseas Bank Limited (UOB), secured by way of mortgage over the property. It was registered in his sole name. In 1995, at around the time of their separation, the husband signed a document to enable the transfer of one-half of the house to her. He later changed his instructions to the solicitors he had engaged for the purpose and notified the bank of his change of mind.
In November 1996 the husband purchased a unit at 7/57 Lindfield Avenue, Lindfield for $295,000. He alleged that the purchase price was met by borrowing from his sister, Chang Hui Ya, repayment of which was secured over the property by a mortgage. He said he borrowed an additional $35,000 for furnishings, and the costs associated with purchase. The total amount borrowed from his sister and secured by mortgage was $330,000.
In July 1997 the husband borrowed a further $300,000 from the UOB. Security was to be a deposit of US$264,492 placed on deposit with the UOB in Taipei by Chang Hui Ya and pledged to UOB in Sydney. The existing all money mortgage held by the bank over the Killara property was to be cross-collateral security for the advance.
At trial the husband asserted that that he owed approximately $1.84 million and has assets worth $1.22 million. The wife's evidence was that her assets were worth $6,690 with liabilities totalling approximately $590,000, mainly to her family, former husband and friends. She was in receipt of government benefits totalling $262 per week.
The judgment
Because of the limited nature of the grounds of appeal we do not intend to set out Moore J's judgment at length.
After identifying the competing applications her Honour turned to issues of evidence. She indicated that this task was complicated by reason of language, foreign business customs and the complexity of the transactions canvassed in the evidence. She said:
"11.…much of the case was devoted to…the identification of the pool of assets available for division and to the parties’ current circumstances. The thrust of the wife’s case, generally expressed, was to allege the husband had been deceitful in his financial dealings with her and companies they had operated; that with the connivance of certain of his siblings he had sought to defeat her claim by a series of underhand dealings he had sought to camouflage with complexities; he had connived in actions that resulted in the ruin of her financial reputation in Taiwan, thus effectively prohibiting any prospect of her earning her income there by her former profession; contrary to his assertion of his own financial position, he was a wealthy person with all the indicia of a wealthy lifestyle; and he had failed to make a full and proper disclosure of his financial position. The thrust of the husband’s case was to deny all of this. He portrayed himself as a man of remaining modest means, with real risk of being unable to continue to work in the future by reason of his health; that actions of the wife had prejudiced the conduct of business in Taiwan; that obligations imposed upon him to contribute to the wife’s support had depleted his financial reserves; that she had taken steps to deal with property she owned so as to remove it from consideration in these proceedings; and that she had failed to make a full and proper disclosure of her financial position or earning capacity.”
After identifying the evidence that each of the parties relied upon, her Honour gave reasons explaining why she had excluded four affidavits the husband had sought to rely upon. The husband had indicated that none of the four deponents would be available for cross-examination. Her Honour said:
"17.The Rules of Court stipulate that, if a party requires the deponent of an affidavit to attend for cross-examination, their absence gives rise to a discretion in the Court to refuse to allow that affidavit to be used in the proceedings, or to allow it only on terms directed, or adjourn the proceedings until the deponent does attend. This was not a case in which the last of these options could have been given any consideration. As to the balance between the other two, I acknowledge on the one hand that the Court is obliged to proceed without undue formality and should endeavour to ensure that proceedings are not protracted (see Section 97(3) of the Act). I also appreciate the general range of expense that would be required for the husband to have arranged for these various witnesses to travel from Taiwan to Australia in order to give their evidence. Nonetheless, my ruling on this issue at the commencement of the hearing was to disallow the affidavits to be used rather than receive them subject to weight. I took that course because it was clear at that point from a reading of the parties’ primary affidavits that the financial history of their relationship was a matter not only of considerable contention but of central importance to the determination of their competing applications. The matters to be canvassed were neither trivial nor peripheral. Had they been admitted in the highly contentious environment in which this litigation has proceeded, the weight they could have been given in the absence of any opportunity to test them was so minimal as to not warrant their receipt. I therefore ruled to exclude them."
Her Honour then dealt with general credit issues saying:
"18.…Their relationship is one of obvious high conflict and mutual animosity. The intensity of that is likely to have had the effect of blunting their objectivity and diminishing their reliability as reporters of fact… their reliability is questionable… I feel bound to say in the circumstances that I did not find the evidence given by either to be such as to avoid criticism… In the result, I have felt constrained to regard the evidence of each party with some caution and no general credit finding could be made in favour of one party or the other. Such findings as are to be made will be done in the context of discussion about the particular issue having regard to the evidence presented on it and the probabilities arising from it."
Her Honour then endeavoured to trace through the various dealings that each party alleged led to their asserted present financial circumstances. She concluded (emphasis added):
"93.It is against that background that I turn to the assets, liabilities and resources of the parties. To set those out in this case is an impossible task. First, I say that because I could have no confidence whatever that the husband has presented his true financial position in this case.
94.Not only is there lacking a coherent account of his property dealings in the context of his own evidence of his assets at various times, but also there was evidence of searches undertaken by the wife reflecting his interest in various realty and companies of which there was no mention at all in his evidence in chief. Details can be found in a schedule prepared by counsel for the wife. His denials about ownership have to be seen the in the context of the lack of credit to be attached to his evidence generally. Moreover, he clearly has engaged in enmeshed and obscure financial transactions of varying kinds on many occasions with members of his family and companies in which they have interest or to which they are entitled to affix their seal. While he paid attention to giving particulars about borrowings from various family members, he was not as forthcoming about any other of his arrangements where their participation was obviously involved. In the result, I am satisfied that the husband has not made a full and proper disclosure of his financial position and I could make no finding as to the extent of his assets now.
95.What is apparent is that in 1991, as represented to the Department of Immigration, he was conservatively worth $4.55 million and was a ‘well resourced and knowledgeable businessman’. His account of his position now, as summarised in his financial statement of April 2000, was that he owes approximately $1.84 million and has assets worth $1.22 million.
…
99.When one looks for the explanation for his descent from being worth $4.55 million to now owing significantly more than he owns, there is nothing he presented to provide it. Even taking his own evidence at face value, a search for the means by which he lost the money does not turn up anything sufficient to account for it…
100.On the topic of his income, that was a matter also about which there could be no confidence that his position as stated in his material filed in these proceedings was any reflection of the truth. Support for that comes from a comparison of his financial statement with other documents produced reflecting his taxation position in Taiwan. His suggestion in the financial statement he relied upon, signed in April 2000, was that he had a total income of $115 per week. His occupation was said to be ‘real estate’. Yet when one goes to his taxation assessments that is a gross understatement, if the years prior to April 2000 are anything to go by.
101.Of course it is the obligation of parties to make a full and proper disclosure of the financial circumstances, either as to assets, liabilities or income (Marriage of Black and Kellner (1992) 15 Fam LR 343 and Marriage of Weir (1992) 16 Fam LR 154). As the latter case makes clear, where there has been non-disclosure by one party, the Court should not be ‘unduly cautious’ about making findings in favour of the other party.
102.As for the wife’s situation, I have already made observations about certain unsatisfactory aspects to her case so far as her dealings with assets were concerned. Her credit was further impugned by her failure on a number of occasions when material had been filed in this Court to disclose bank accounts she had in Taiwan. Her suggestion that she had not known about them, given her ostensibly modest means here, lacked credibility. That said, her position is by no means in the same category as the husband’s so far as the doubt that remains about current financial circumstances and assets held.
103.Her evidence of her assets was that they are worth $6,690 and consist of modest amounts in bank accounts, and some household and personal effects. Apart from a credit card debt of $1,746 at the time, she said she had other debts totalling $588,792 to her family, former husband and friends. Some of that debt has been raised to pay legal fees. Her costs memorandum reflected total payments (including the amount held in trust by her solicitors) of $95,000 (exhibit 4). She does not claim any debt to Ms Chang Chou Ya (Charleen Chang) who sued her on cheques in Taiwan and obtained, amongst others in the action, an order ‘sealing and freezing’ the unit at Fu Yuen Street registered in her name. That is no doubt because she regards the whole action as a conspiracy between her and the husband to ruin her. Yet, as I earlier observed, while the orders of the Court in Taiwan do exist, she could not be seen as able to derive any benefit from being the registered proprietor of that unit without taking account of the judgment debt. The only realistic way that situation can be met here, so it seems to me, is to disregard her proprietorship of that unit along with the judgment debt lodged against it. She claims no financial resources.
104.As for her income, that was said to be $262 per week being a government benefit and family allowance.
105.It remains to say that there was no contention about the value to be placed on the Killara and Lindfield properties here: Killara was to be considered as having a value of $925,000 and Lindfield $330,000.
…
107. … At the time their relationship began the husband was a man of substantial financial means, with tertiary qualifications and working in various companies in Taiwan in which he had interests. His portrayal of himself as someone with more debt than property now is implausible. The extent of his net asset position I could not say, but it is likely he remains a person of substantial means in Taiwan…”
Her Honour identified the contributions of the parties as being the provision of both capital and income by the husband towards the support of the wife and their child as well as some further provision towards the child's care and supervision. She was critical of the substantial arrears in child and spousal support which had placed greater burdens upon the wife. She found that the wife had depleted her capital by providing her funds to the husband for investment. She had contributed income and capital to the support of the child and had the major role in her upbringing.
As to s 75(2) considerations her Honour noted
That although the husband had hepatitis C he had been able to work over the years in quite demanding positions associated with his employment with various companies in which he had an interest. He had been able to pursue his business career, despite his condition and the symptoms from which he suffers. She found that he would continue to earn his livelihood as he has in the past and that he had a demonstrated earning capacity enabling him to earn a comfortable income from his employment and business activities. She could not say what the extent of his property was in Taiwan, save that it was likely to be relatively substantial.
The wife has qualifications for work as a journalist and apparently was of some standing in that profession in Taiwan. She has limited command of the English language. Her future earning capacity was rather limited and of a much lesser dimension than the husband’s.
The wife presently had no property of her own (putting aside the unit in Taiwan as discussed), and she would be largely dependent on what she received from the proceedings to make her way in the future.
She has the care of a quite young child, and so has many child rearing years ahead of her. The husband exercises contact to their daughter by coming to Australia
She had a child support assessment in an amount of $14,687 per annum in her favour. There were significant arrears owing. The fact of arrears made it unlikely that she could look forward with any confidence to financial assistance in the raising of the parties’ daughter in the future.
Having thus determined that the size of the pool of assets was unascertainable, and having made relevant findings under s 79(4)(a),(b), (c), and (e) of the Family Law Act her Honour concluded (emphasis added):
"118.The balance of these matters favours the wife considerably and ought to produce an adjustment of meaningful proportions in her favour. Her current position in life suggests that as well as the limited prospects for her own future and her need to care for and support her daughter over quite a number of years to come.
119. The question then arises as to what order should be made. In coming to that I am conscious of the fact that I have not expressed views about the proportion of the parties entitlements on contributions nor the proportion of adjustment on the balance of the S.75(2) factors. Usually that would be able to be done in the context of findings as to the identity and value of property available for division. That has not been possible in this case. However, the terms of S.79(2) of the Act require that an order be just and equitable. When that is taken in context of the findings I have made of non-disclosure by the husband of his property in Taiwan, it is necessary to fall back on that imperative.
120. In my assessment, it would be just and equitable for the wife to be put in a position of having, unencumbered, the home acquired here in 1994 and also the unit that was acquired here following their separation to assist her in the task ahead of her. In other words, I consider it to be just and equitable that she should receive the whole of the property here in Australia unencumbered and for the husband to retain the property he has in Taiwan, subject to his discharge of the liabilities against the properties in Australia.
121. As discussed earlier, the mortgagee of the Lindfield unit is his sister, Ms Chang Hui Ya, and the mortgagee of the Killara home is a bank. He will be required by the orders giving effect to the decision made to discharge those debts and remove the encumbrances from the properties. He will also be required to indemnify the wife against any claims made against her by either. I should acknowledge at this point that there were submissions made by the husband’s counsel to the effect that orders could not be made that would ‘disturb the interests of the bank’ in relation to the Killara home and no order could be ‘disturbing the mortgage’ to Ms Chang Hui Ya in relation to the Lindfield property because she was not a party to the proceedings. At least that is as I apprehend the submissions. But that is not the effect of orders I propose. The orders I propose are against the husband requiring him to discharge the debt and indemnify the wife in relation to any claims made and to transfer the properties to the wife.
122. The orders will provide a period of six weeks for the husband to re-arrange the finance on both properties and transfer them to the wife, a period I would consider adequate but will be subject to any submissions as to form.
123. The orders will also provide for the wife to transfer to the husband any shares she has in City Entertainment and Ming Jih, if applicable, and he will be required to indemnify her in relation to any claims made against her by reason of offices she held in either company.
124. Further orders will be made allowing the wife to retain the contents and furniture located at the home, certain ceramic paintings located at the home and to have transferred to her the Mitsubishi motor vehicle. The latter two matters were part of the husband’s orders sought.
125. From what they each receive they will be responsible for the balance of their legal costs and any other debts they have incurred to third parties."
Her Honour then concluded that once the wife received the Australian properties unencumbered she would have assets worth over $1,255,000. She would not then have a viable claim for spousal maintenance.
The Appeal
The husband's appeal is based on two grounds. They are expressed in the Notice of Appeal as follows:
"1. Her Honour erred in excluding the evidence of the husband's witnesses who were resident in Taiwan and not available for cross examination.
2. Her Honour erred in ordering the husband to discharge the mortgages of two residences and to transfer to the wife without first enquiring into the husband's financial means."
Ground 1 - The exclusion of the affidavits
Order 30 rule 2 of the Family Law Rules provides that unless the court otherwise orders, evidence in chief must be given by affidavit at the hearing of an application.
Order 16 rule 10 provides:
"Notice to attend for cross-examination
(1) A party may require a named deponent to attend for cross-examination, by written notice given to a party by whom an affidavit was filed.
(2) If a party requires a deponent to attend for cross-examination and the deponent fails to do so, the court, or a Registrar, may: refuse to allow the deponent's affidavit to be used; or
(a)allow the affidavit to be used only on terms directed by the court, or the Registrar; or
(b)adjourn the proceedings until the deponent attends for cross-examination.”
Section 56 of the Evidence Act 1995 (Cth) provides:
"Relevant evidence to be admissible
(1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding.
(2) Evidence that is not relevant in the proceeding is not admissible."
Section 135 provides:
"General discretion to exclude evidence
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a)be unfairly prejudicial to a party; or
(b)be misleading or confusing; or
(c)cause or result in undue waste of time."
What has been urged upon us on behalf of the appellant husband is that Order 16 rule 10 is inconsistent with the provisions of the Evidence Act. He submitted that once there was evidence before a court which is relevant to the proceedings, the only manner in which that evidence can be excluded is by means of s 135.
We see no inconsistency between the provisions of Order 16 rule 10 and the Act for two reasons.
Section 193 of the Evidence Act expressly provides:
“…
(2) The power of a person or body to make rules of court extends to making rules, not inconsistent with this Act or the regulations, prescribing matters:
(a)required or permitted by this Act to be prescribed; or
(b)necessary or convenient to be prescribed for carrying out or giving effect to this Act.
…
(4) Without limiting subsection (2), rules made under that subsection may provide for the exclusion of evidence, or for its admission on specified terms, if the rules are not complied with.”
Section 123 of the Family Law Act 1975 provides:
"(1) The Judges, or a majority of them, may make Rules of Court not inconsistent with this Act, providing for or in relation to the practice and procedure to be followed in the Family Court and any other courts exercising jurisdiction under this Act, and for and in relation to all matters and things incidental to any such practice and procedure, or necessary or convenient to be prescribed for the conduct of any business in those courts and, in particular:
(a)providing for and in relation to the attendance of witnesses;… "
In our view Order 16 rule 10, which rule was last substituted by SR1995 No 371, r24 and commenced operation on 8 January 1996, some 9 months after the Evidence Act 1995 came into operation on 18 April 1995, may be categorised either as a rule "necessary or convenient to be prescribed for carrying out or giving effect to this [the Evidence] Act" or it as a rule "in relation to the practice and procedure to be followed in the Family Court". In either case it is not a rule that is in anyway inconsistent with the provisions of the Evidence Act.
Order 16 rule 10 is concerned with the procedure to determine the receipt into evidence of all affidavits at any stage of the proceedings. This includes interlocutory and interim hearings as well as evidence in chief at final hearings. It does not deal with questions of the admissibility of evidence, but rather with the manner in which such evidence may be given.
The Evidence Act 1995 (Cth) and the Evidence Act (NSW) 1995 are uniform Acts that are substantially identical. Section 52 of each Act provides:
"Adducing of other evidence not affected
This Act (other than this Part) does not affect the operation of any Australian law or rule of practice so far as it permits evidence to be adduced in a way other than by witnesses giving evidence or documents being tendered in evidence."
In Protective Commissioner v B and Another (BC9702917, 23 June 1997, unreported) Hodgson J in the Supreme Court of NSW was required to rule on the possible exclusion of affidavits by a person who was unable to attend for cross examination. Order 38 rule 9 of the NSW Supreme Court Rules provides that a party may require the attendance for cross-examination of a person making an affidavit and that where the attendance of a person is required, the affidavit may not be used unless the person attends or is dead or the court grants leave to use it.
We agree with the approach taken by his Honour when he said, in response to a submission that the admissibility of the affidavit was entirely governed by the Evidence Act:
"The objection to these affidavits raises at least two questions in relation to the new Evidence Act.
…
The second question which the application raises concerns the place of affidavits in the scheme of the new Evidence Act.
Pt 2.1 of the Act deals with the giving of evidence by witnesses, and Pt 2.2 deals with the giving of evidence by the tender of documents. It seems clear that Pt 2.1 is directed to the giving of evidence by witnesses who are actually present in court (see particularly s21 to s23 and also s26 to s28).
It was suggested by Mr Greenwood for the respondent that, accordingly, affidavits should be regarded as documents and therefore admitted into evidence only to the extent that the Act allows hearsay material. Accordingly, on this approach, an affidavit could be read in the absence of the deponent only if the deponent was not available, as provided by s63 of the Act, or, alternatively, if the conditions referred to in s64(2) of the Act were fulfilled.
There is reference in s170 to s173 of the Act to the giving of evidence by affidavits in certain circumstances, but they are only very limited circumstances and do not apply to the present case.
In my opinion the Act should not be interpreted as putting an end to the possibility of evidence being adduced by affidavit, in those circumstances where the practice of the court was to permit evidence to be adduced in this way prior to the passing of the Act. S52 of the Act does seem to be adequate to preserve this practice.
On that approach, the question of whether these affidavits should be permitted to be read would fall to be determined under Pt38 r9 of the Supreme Court Rules, rather than under s63 and s64 of the Evidence Act."
Although the specific argument as to inconsistency was not raised before the first Full Court in Su v Chang, that Full Court said:
“74. In the course of addressing us generally as to whether or not the wife received a fair trial, counsel for the wife drew our attention to some passages concerning the availability of the husband's witnesses and the admissibility of the affidavits in the event that they were not required for cross-examination.
75. The husband's counsel opened the case by informing his Honour that there were affidavits from a number of deponents who were resident in Taiwan. The trial Judge was informed that notices had been provided by the husband, purportedly pursuant to s 67 of the Evidence Act, seeking to rely upon absent witnesses, and that a fax had been received on 9 July 1998, from solicitors who were then acting for the wife, advising that those witnesses were required to attend for cross-examination.
76. The wife indicated to the trial Judge that she thought the law was that if the parties could not attend to be cross-examined then the court could not rely upon their affidavits, and the trial Judge said:
‘I will have a look at the law more carefully but it may be that I can say the affidavits have to go away and cannot be used, it may be that I can say the affidavits can be used but I must remind myself that you have not had a chance to test them and therefore I have to be more careful before I rely on that evidence.’
77. The wife indicated that she understood that the witnesses could readily come to Australia and his Honour said:
‘I will allow you to give evidence of that fact when you’re in the witness box and if I don't ask you, you should remind me that you’re in a position to give that evidence. Did you at any stage say that you wanted those witnesses present?
THE INTERPRETER … I have sent them a formal letter about it.
HIS HONOUR: I will not make up my mind absolutely at this stage but I am inclined to receive the evidence that (sic) only give such weight as the circumstances suggest is proper given that you have not had the opportunity to ask those witnesses questions...’
78. At the end of the third day of the hearing his Honour again turned to the issues of the admissibility of the evidence from other witnesses and said (Appeal Book 950):
‘I thought I had given an indication that I was inclining to the view that they be received as affidavits in which the deponents have not had their evidence tested by cross-examination so that the evidence would be received but I would have to constantly remind myself that they had not been tested by cross-examination. That is my inclination.
MR LEVET: But in so reminding yourself that, your Honour, my submission would be that we had complied with s 67 of the Act in fact.’
79. The discretion which the trial Judge needed to exercise in respect to the admissibility of this evidence was not the discretion urged upon him by counsel for the husband, namely pursuant to s 67 of the Evidence Act, but was that given to the trial Judge pursuant to provisions of Order 16 rule 10 of the Family Law Rules. Those Rules provide:
‘1.A party may require a named deponent to attend for cross-examination, by written notice given to a party by whom an affidavit was filed.
2.If a party requires a deponent to attend for cross-examination and the deponent fails to do so, the court or a Registrar may,
(a)refuse to allow the deponent's affidavit to be used; or
(b)allow the affidavit to be used only on terms directed by the court,... or
(c)adjourn the proceedings until the deponent attends for cross-examination.’
80. In order to properly exercise that discretion, it would be necessary for the Court to give consideration to matters similar to the exercise of the discretion to admit hearsay evidence in civil proceedings if the maker of a statement is available, as is contained in s 68 of the Evidence Act, such as whether the attendance of the deponent would cause undue expense or undue delay or would not be reasonably practical. The Court would also need to pay attention to Family Law Act s 97(3) (above) (see also re O'Neil (Dec') [1972] VR 327 at 333 and re O'Brien; Ex parte Allchurch [1923] SASR 411).
81. A notice pursuant to s 67 of the Evidence Act is applicable where hearsay evidence is sought to be relied upon, either because the maker is not available or calling the maker would cause undue expense or undue delay or would not be reasonably practicable. In those circumstances there is a requirement for notice, subject to a discretion to waive notice in appropriate circumstances. The material sought to be relied upon from each of the absent deponents was not of a hearsay nature and accordingly s 67 notices had no application to the evidence.”
Similarly in Costa v Costa (Appeal No. EA 85 of 1995, unreported, delivered 8 August 1996) Ellis, Fogarty and May JJ dealt with an appeal that largely challenged aspects of the property pool which the trial Judge had arrived at. The wife's cross-appeal contended that the trial Judge should have made a greater adjustment in her favour under s 75(2). As to a ground of appeal challenging the rejection of an affidavit by a witness who was unavailable for cross examination their Honours said:
“Ground 8
Mr Broun, in introducing this ground, conceded that it was not his ‘strongest ground’. We agree with that and deal with it briefly.
Mrs Giuseppina Costa, the husband's mother, swore an affidavit in support of his case. However, she was not available for cross-examination, apparently for medical reasons. (See transcript 28 August, 1995, pp.43 and 50-52).
His Honour ruled that he had a discretion whether to receive the affidavit in those circumstances but that ‘having regard to the very serious and bitterly contested issues in this case I do not think it appropriate for me to admit that affidavit which, as I said was an affidavit which I thought was of some relevance...’.
The affidavit in question appears in vol.2 at pp.346 et seq. We think that it was of marginal relevance. His Honour had a discretion in the matter because the witness was not available for cross-examination, and concluded that he should not admit the evidence.
Mr Broun in his submissions to us, but not apparently to the trial Judge, drew attention to ss.64 and 67 of the Evidence Act relating to the admission in civil proceedings of a previous representation. His Honour was in his ruling no doubt referring to Order 16 rule 10 of the Family Law Rules which provides in effect that where a deponent is not available for cross-examination the court has a discretion whether to admit or reject the affidavit.
The trial Judge did not have the benefit of the submissions in relation to the Evidence Act but if he had we doubt if it would have made any difference. The trial Judge had a discretion in this matter. We think he exercised it correctly. In any event it would have made no substantial difference to the outcome of this trial."
The views in Su v Chang (supra) and Costa v Costa (supra) seem to accord entirely with the views expressed by Hodgson J in Protective Commissioner v B and Another (supra).
The requirement of a witness to attend for cross-examination is extensively present throughout Australia and the common law world (see for example Orders 14 and 24 Federal Court Rules, Part 32.7 of the English Civil Procedure Rules, Rule 40.04 of the Victorian Supreme Court Rules).
The importance of cross-examination in our legal system has been stressed repeatedly, often in hyperbolic terms. In R v Reid [1999] VSCA 98 (2 July 1999) Winneke P., Buchanan and Chernov JJ.A. observed:
"140. According to Wigmore on Evidence, vol. 5, para 1367:
‘For two centuries past, the policy of the Anglo-American system of evidence has been to regard the necessity of testing by cross-examination as a vital feature of the law. The belief that no safeguard for testing the value of human statements is comparable to that furnished by cross-examination, and the conviction that no statement (unless by special exception) should be used as testimony until it has been probed and sublimated by that test, has found increasing strength in lengthening experience. ... [I]t is beyond any doubt the greatest legal engine ever invented for the discovery of truth.’
141 .However, cross-examination, while a useful device to secure greater accuracy and completeness and on occasion to expose fraud or honest error, is not indispensable. The statement of a witness who has not been cross-examined is not so fatally lacking in reliability that it is not even worth hearing in court. The fact that the witnesses whose testimony was taken in New York were not cross-examined does not of itself bar the admission of the testimony as evidence in the proceeding. Otherwise a litigant could prevent the admission of testimony taken overseas by the simple expedient of refusing to attend to cross-examine the witnesses. The question is not whether the witnesses were cross-examined, but whether an adequate opportunity was afforded to the applicant to procure their cross-examination…"
The United States Supreme Court emphasised the importance of cross examination in Perry v Leeke (1989) SCT.308 488 U.S. 272, 109 S. Ct. 594, 102 L. Ed. 2d 624, 57 U.S.L.W. 4075. Stevens, J, delivered the opinion of the Court, in which Rehnquist, CJ, and White, O'Connor, and Scalia, JJ, joined:
“[85] The age-old tool for ferreting out truth in the trial process is the right to cross-examination. ‘For two centuries past, the policy of the Anglo-American system of evidence has been to regard the necessity of testing by cross-examination as a vital feature of the law.’ 5 Wigmore, Evidence § 1367 (Chadbourn rev. 1974). …
[86] The Court has consistently acknowledged the vital role of cross-examination in the search for truth. It has recognized that the defendant's decision to take the stand, and to testify on his own behalf, places into question his credibility as a witness and that the prosecution has the right to test his credibility on cross-examination. . . . Once the defendant places himself at the very heart of the trial process, it only comports with basic fairness that the story presented on direct is measured for its accuracy and completeness by uninfluenced testimony on cross-examination.”
The assumption underlying the rules requiring attendance is that unless evidence can be tested by cross-examination, it can be of little weight. This assumption is not universally accepted. The Law Reform Commission in its Interim Report No. 26- Evidence, when discussing changes to the hearsay rule said (references omitted):
“663. Absence of Cross-Examination. It has been argued that absence of cross-examination prevents an adequate testing of the evidence. This could lead to error by the tribunal.
‘The maker of a hearsay statement may have deliberately lied, or may have defective powers of observation, memory and expression. His weaknesses in these respects cannot be noticed during examination-in-chief and tested by cross-examination; his demeanour while testifying cannot be observed. 'Whoever has attended to the examination, the cross-examination, and the re-examination of witnesses . . has observed what a very different shape their story appears to take in each of these stages.'
The importance for the fact-finding task of being able to cross-examine a witness is something that can be over-rated - particularly the value of observing the demeanour of witnesses. Further, suggesting facts to a witness in the course of cross-examination may distort the witness’ memory. The fact remains, however, that it is not possible to test powers of perception, memory, recall and narration by questioning the maker of the statement. In addition to increasing the chances of error it may detract from a fair trial. It may properly cause a litigant to feel that justice has been denied. Some defend the basic rule strenuously:
‘The values of hearsay exclusion are great and fundamental. Sir Walter Raleigh burned them deeply into the conscience of the common law when he found himself condemned for treason by a witness admittedly lacking any firsthand knowledge of the treasonable act. Denouncing this as hearsay, Raleigh turned upon his judges and said, "If this may be, you will have any man’s life in a week". Raleigh was right, and they had first his liberty, then his estate, then his honor, then his son’s life, and finally his own life. He stands a martyr to the rights protected by the Hearsay rule. His trial showed us what common law justice could be like without the requirements of cross-examination and firsthand knowledge . . . The abolition or emasculation of the Hearsay rule would make men’s lives, liberty, fortunes, and reputations depend upon the testimony of those who lack firsthand knowledge of the relevant facts they assert. Should men so affected be denied, without most pressing reason, the right to cross-examine those asserting such potentially damaging facts against them? Should men seeking to establish a right or make a recovery be turned back by such evidence?’
Much depends, however, on the importance of the evidence and whether it is disputed or disputable. It must be acknowledged that evidence in many of the cases referred to above would not have been materially affected by cross-examination. This rationale does not justify exclusion of evidence where the maker of the statement is called to give evidence.”
The critics did not appear to persuade Matsch CJ of the United States District Court for the District of Colorado when ruling on whether there should be separate trials for the co-accused in the Oklahoma bombing case [USA v McVeigh and Nichols Criminal Action No. 96-CR-68- even the abuses, the mishandlings, and the puerilities which are so often found associated with cross-examination have availed to nullify its value. It may be that in more than one sense it takes the place in our system which torture occupied in the mediaeval system of the civilians. Nevertheless, it is beyond any doubt the greatest legal engine ever invented for the discovery of truth. However difficult it may be for the layman, the scientist, or the foreign jurist to appreciate this its wonderful power, there has probably never been a moment's doubt upon this point in the mind of a lawyer of experience. 5 Wigmore, Evidence Sec. 1367"
The exercise of discretion by Moore J to exclude the affidavits of the four Taiwanese witnesses was entirely understandable given that a core issue involved in this case concerned the husband's wealth. The ascertainment of that wealth was intimately interwoven with dealings he had in Taiwan with his siblings and other relatives. These issues had been clearly identified over many years of litigation. No attempt was made to take evidence out of Australia. All parties conceded that taking evidence by telephone or video link was not practicable in this case. Her Honour was left to resolve the dilemma as to whether to allow untested evidence in or exclude it. She chose the latter course.
The challenge to the exclusion of the four affidavits rested entirely on the challenge to the validity of Order 16 rule 10 in light of the provisions of the Evidence Act 1995. There was no challenge to the manner in which her Honour exercised her discretion under that rule. The challenge has been confined to attacking the existence of such a discretion. As we are of the view that the rule is not inconsistent with any of the provisions of the Evidence Act, this ground fails.
Ground 2 - no visible pool of assets.
The submissions put to us were that as a necessary prerequisite to making an order under the provisions of s 79 of the Act the Court must determine that there exists adequate property to meet the order and make the order appropriate in the circumstances of the case. An order can only be seen to be appropriate or just and equitable if it can be measured against the whole of the available assets of the parties.
Mr Levet submitted that given the findings of the trial Judge that she could not make any assessment of the extent of the husband's property, it was not open to her Honour in the circumstances to make an order which may potentially have exceeded the total extent of the property. In any event, it could not be seen in the circumstances of this case that even if the order exhausted, or almost exhausted, the whole of the property, it would be a just and equitable order having regard to the duration of the marriage and other factors which the Court would need to properly consider under the provisions of s 79.
Counsel acknowledged that there exists a class of cases where the Court cannot be satisfied as to the extent of the property and can thus be less cautious than might otherwise be the position when making an order. Particular reference was made to Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957. In that case the trial Judge held that the husband had failed to adequately account for $200,000 which had been in his possession some 15 months earlier. The trial Judge said:
"I can only conclude that the husband has the vast bulk of that money and has invested it wisely over the last two years since he removed it from the parties' bank accounts."
The order made by the trial Judge was challenged before the Full Court on the basis (inter alia) that it was appropriate to apply the principles enunciated in Monte v Monte (1986) FLC 91-757 to the facts of Mezzacappa. The Full Court said in Mezzacappa:
“In Monte's case, the trial judge found that in addition to the net proceeds of the sale of the former matrimonial home, the husband had ‘undisclosed financial resources’ which were not disclosed to the court for the purpose of the proceedings, but which were somehow available to meet an order. However, the trial judge was not able to identify or quantify these assets or resources. In Monte's case, the trial judge ordered the transfer to the wife of the proceeds of the sale of the home (the fund) and ordered the husband to pay a further $40,000. The Full court said:
‘In our view the finding that the husband had "assets ... which are somehow available to meet an order” cannot stand in the light of the trial judge's earlier findings and comments in regard to the financial position of the husband and the state of the evidence before the trial judge in that regard. To found jurisdiction under s 79 in relation to the property, other than the fund, her Honour was obliged to make findings as to the existence and value of that other property even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identify and value.’
The present case is quite different. There was a finding that the husband had received the proceeds of the sale of various properties and other moneys and that the amounts received in 1984 amounted to $262,418.01. This finding now remains unchallenged. There was a further finding that the husband had accounted for an expenditure of $60,000 and that he had retained the balance. There was therefore a finding that in May 1985 the husband had in his possession $202,418 of the property of the parties. His Honour concluded in the absence of an acceptable explanation as to the disposition of this large sum that the husband had retained it and that the money had been invested by or on behalf of the husband. Consequently, there was a finding identifying the assets, viz the balance of the moneys received by the husband in 1984 from the sale of properties and other defined sources, and the identified real property and there was an express finding as to their value. The fact that the husband had hidden the money and refused to disclose its whereabouts did not make the funds unascertained or unascertainable. See Abdullah and Abdullah (1981) FLC 91-003 and Giunti and Giunti (1986) FLC 91-759.
The last submission was that, as the money could not be traced to particular assets, it was not identifiable as property of the parties. However, this submission ignores the finding that the husband was in control of the funds. The funds had been traced and found to be in his possession. He was the only person who knew their precise whereabouts and he refused to disclose them. In this situation, the fact that the funds had been traced no further than to being in his possession or under his control is of no significance.”
Particular weight was then placed upon the finding at paragraph 94 by Moore J that (emphasis added) "I could make no finding as to the extent of his [the husband's] assets now”. It was thus submitted that without a finding as to the extent of the husband's assets it was not possible to make an order which may well have exceeded those assets or to make any order which could be said to be just and equitable in the circumstances.
In our view, the finding at paragraph 94 has to be read in context. The first finding is at paragraph 50 where her Honour says, "I propose to proceed on the basis that his position in August 1991…was that he was then conservatively worth net $4.55 million in net assets."
Her Honour, after paragraph 50, discusses the husband's evidence as to dealings he has had which might explain the state of his assets as he presently asserted them to be. Having concluded that the husband had not made a full and proper disclosure in his financial position, a finding which was not the subject of any challenge before us, her Honour made the statements already referred to, that she "could make no finding as to the extent of his assets now". However, she immediately went on to repeat her earlier remarks saying at paragraph 95, "What is apparent is that in 1991…he was conservatively worth $4.55 million and was a ‘well resourced and knowledgeable businessman’".
Further at paragraph 107, her Honour said "His portrayal of himself as someone with more debt than property now is implausible. The extent of his net asset position I could not say, but it is likely he remains a person of substantial means in Taiwan." Finally at paragraph 112, her Honour said "I could not say what the extent of his property is in Taiwan, save that it is likely to be relatively substantial."
In these circumstances we read her Honour's judgment as saying that absent any acceptable information she finds that the husband has assets not substantially less than those which it was established he had some nine years before the trial in 1991.
Her Honour had to do the best she could with very limited material. As she said in paragraph 119, it would be normal to proportion the parties' entitlements in the context of findings as to the identity and value of the property available for division. She went on to say, however, that because of the findings of non-disclosure by the husband, the only imperative that she could fall back upon was that the order be just and equitable, and she concluded it would be just and equitable for the wife to have the visible assets in Australia unencumbered, leaving the husband with all of the Taiwanese assets.
The law to be applied and the approach that may be adopted in cases where, through the lack of a full and frank disclosure, the Court is unable to fully ascertain the extent of a party's wealth, is well settled (see Stein v Stein (1986) FLC 91-779; 11 Fam LR 353; Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957; Black and Kellner (1992) FLC 92-287; 15 Fam LR 343 and Weir v Weir (1993) FLC 92-338; 16 Fam LR 154).
In Black and Kellner (supra) the appellant had submitted that, absent findings as to the extent of his wealth, the order made by the trial Judge was plainly unjust. The key finding of the trial Judge was:
“...the failure on the part of the [husband] to disclose his financial position to the court and his attempts to conceal this matter from the court, which has left the court in the position of not knowing what the [husband’s] financial position is, except that he deliberately underestimated it."
Chief Justice Nicholson (with whom Ellis and Cohen JJ agreed), said in dismissing the appeal:
"As senior counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Giunti and Giunti (1986) FLC 91-759, particularly at 75,555 where the court commented:
‘It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs- see Briese and Briese; (1986) FLC 91-713, affirmed by the Full Court in Oriolo v Oriolo (1985) FLC 91-653, there is no problem, although there may be disputes as to valuation.
However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.’
The Full Court in Oriolo and Oriolo, supra, referred with approval to the remarks of Smithers J in Briese and Briese, and it is perhaps worth reiterating a portion of his Honour's statement at 75,181 where he said, after referring to the decision of the House of Lords in Livesey v Jenkins (1985) All ER 106:
‘... I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins… is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred.’
Regard also may be had to the decisions of this court in Stein and Stein (1986) FLC 91-779 at 75,676 and Mezzacappa and Mezzacappa (1987) FLC 91-853.
In the present case a similar situation arose. The assets of the parties could not be ascertained in full because of obvious non-disclosures.
It is apparent that if his income was more substantial than he claimed, then this would be reflected in the value of his practice and in this regard it is perhaps of interest to note that the wife's former husband's practice of a similar nature, was capable of being sold for a figure in 1973 terms which would if reflected in 1991 terms, represent a very substantial asset indeed. Finally, another part of a judge's obligation in cases of this nature in considering s 75(2) factors is to consider the respective incomes of the parties. Again, through the behaviour of the husband, this was something which the learned trial judge could not do.
It follows from what I have said that I do not believe that his Honour's judgment can be attacked upon the basis relied upon by the husband."
In Weir v Weir (1993) FLC 92-338;16 Fam LR 154 the Full Court (Nicholson CJ, Strauss and Nygh JJ) dealt with an appeal against the refusal by the trial Judge to make orders in respect of unascertained property because he could not quantify it. The Court said at 79-593:
"This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC 91-759 , and Mezzacappa and Mezzacappa (1987) FLC 91-853 . It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of Monte and Monte (1986) FLC 91-757, the Full Court said that to found jurisdiction under s. 79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identify and value.
We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed."
It was clearly open to Moore J to apply these principles to the matter before her. Her Honour concluded that the extent of the husband's wealth, whatever it might have been, was sufficient to justify the order she was proposing to make. This is not an appeal based upon the lack of reasons why her Honour concluded it would be just and equitable to put the wife in a position of having an unencumbered home. It is an appeal which is based upon the inability of the trial Judge to make any order under s 79 without first ascertaining the pool of assets.
For reasons which we have explained, we conclude that her Honour made findings sufficient to indicate that the husband was a man of substantial wealth and well able in the circumstances to meet the order made and still retain for himself adequate assets so as to make the outcome in the proceedings just and equitable, having regard to the matters highlighted by her Honour that she was obliged to give consideration to under s 79. These were issues of contribution and factors that could be identified under s 75(2). She was extremely hampered in the exercise of that discretion by the non-disclosure by the husband of his financial position and in those circumstances was entitled to take the more robust view that she did. Accordingly this ground of appeal has not been established.
Further evidence
On 26 February 2002 we heard and dismissed an application by the respondent wife to have the appeal reopened to admit evidence of the sale of the property at 38 Greengate Road, Killara at a mortgagee's sale late in 2001. The evidence was apparently not contentious. The trial Judge's orders the subject matter of the appeal required (inter alia) that the husband transfer that property to the wife free of encumbrances. The grounds of appeal challenge the exclusion of evidence and findings as to the husband's financial resources. The outcome of the appeal would not be altered by our learning that since the making of the orders the property has been sold. Any matters concerning variation or enforcement of the orders that arise as a result of such a sale would be appropriately dealt with by an application to a judge sitting at first instance.
Costs
Mr Levet appropriately conceded that should the appeal be dismissed, costs should follow the event.
Orders
The appeal be dismissed
The appellant pay the respondent's costs of the appeal as agreed or, in default of agreement, as taxed on a party - party basis.
I certify that the 74 preceding
paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.
Elizabeth Hore
Associate
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