Cline & Cline
[2024] FedCFamC1A 163
•18 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Cline & Cline [2024] FedCFamC1A 163
Appeal from: Cline & Cline [2024] FedCFamC2F 618 Appeal number: NAA 153 of 2024 File number: SYC 1256 of 2022 Judgment of: ALDRIDGE J Date of judgment: 18 September 2024 Catchwords: FAMILY LAW – APPEAL – Appeal and cross appeal from final property orders – Where the parties agreed the primary judge erred – Primary judge considered material that was not relied on – Finding of fact contrary to the evidence – Orders for sale of property and division of proceeds expressed as lump sum instead of percentage – Error established – Appeal and cross appeal allowed. Legislation: Federal Proceedings (Costs) Act 1981 (Cth) Cases cited: Bhatnagar & Riju [2018] FamCAFC 144
Noetel and Quealey (2005) FLC 93-230; [2005] FamCA 677
Number of paragraphs: 17 Date of last submission: 22 August 2024 Date of hearing: Determined in chambers on the papers Place: Sydney Solicitor for the Appellant: Dorter Family Lawyers & Mediators Solicitor for the Respondent: Sydney Law Group ORDERS
NAA 153 of 2024
SYC 1256 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR CLINE
Appellant
AND: MS CLINE
Respondent
ORDER MADE BY:
ALDRIDGE J
DATE OF ORDER:
18 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The cross appeal is allowed.
3.The orders made by the primary judge on 27 May 2024 are set aside.
4.The proceedings are remitted for a rehearing by a judge of the Federal Circuit and Family Court of Australia (Division 2) other than the primary judge.
5.The appellant be granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to him in respect of the costs incurred by him in relation to the appeal.
6.The respondent be granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to her in respect of the costs incurred by her in relation to the appeal.
7.Each party be granted a costs certificate pursuant to s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being certificates that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payments under that Act to each party in respect of such part, as the Attorney-General considers appropriate, of any costs incurred by each party in relation to the new trial granted by these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cline & Cline has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
This is an appeal from property settlement orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 27 May 2024.
The appellant filed a Notice of Appeal on 21 June 2024. The respondent filed a Notice of Cross Appeal on 12 July 2024. On 8 August 2024, the parties approached the National Appeals Registry with a Minute of Consent Order agreeing to resolve both the appeal and cross appeal. On 22 August 2024, the parties filed a joint submission identifying the grounds of appeal that are conceded and indicating their agreement that the orders should be set aside and the matter remitted for rehearing.
Appeals are not allowed merely because the parties consent. The appeals court must still be satisfied that there is an error that justifies the orders that are sought (see the authorities collected in Bhatnagar & Riju [2018] FamCAFC 144).
THE CONCEDED GROUNDS OF APPEAL
The appellant was dilatory in filing his evidence for the hearing and did not comply with the orders of the Court. Thus, the primary judge refused to let the appellant rely on his affidavit filed 3 November 2023. He did not seek to rely on a Financial Statement filed on 28 October 2022. It was not subsequently tendered.
At [67]–[70], the primary judge referred to the Financial Statement and quoted from it. As the document was not in evidence and no-one had sought to rely on it, that was a course that was not open to her Honour. Further, the parties were given no indication that it was to be considered.
Whilst it is not entirely clear what use these findings were put to, they should not have been taken into account at all.
At [205], her Honour found that the respondent has been the primary carer of the parties’ two children. There was no mention of the fact that the children lived with the appellant on a week about basis from September 2020 to November 2021 and that one of the children continued in a week about arrangement at the time of the hearing, with no suggestion that it would change.
At [217], the primary judge found:
217.The wife will continue to have the full-time care of the children and will continue to be responsible for their day-to-day care and the expenses associated with their care, schooling and health.
This was, unfortunately, contrary to the evidence.
These two errors influenced the findings as to contributions based entitlements and future needs respectively.
Finally, the primary judge found that the non-superannuation property be divided so that the respondent receive 88.5 per cent and the appellant 11.5 per cent. To give effect to this division, orders were made for the appellant to transfer his interest in the parties’ major asset, a property at Suburb B, to the respondent who was to pay him $35,570.66. The respondent was to refinance the three mortgages over the property so that she became the sole borrower. If she was unable to refinance within 12 months, the property was to be sold and the respondent was to pay the appellant $35,570.66 and retain the balance.
If the property was to be sold it would be most unlikely for the sale price to be the value of the property taken into account by her Honour which was based on a valuation dated 28 October 2022. That would be even more so if the sale took place over 12 months after the orders had been made.
The orders for the distribution of the proceeds did not provide for the property selling at a different price to that taken into account in the reasons. As framed, the respondent would bear the shortfall or gain the windfall if there was a decrease or increase in value. Either way, the orders would not give effect to the property division found to be just and equitable by the primary judge.
In Noetel and Quealey (2005) FLC 93-230, the Court said:
143.The practice of drafting orders based on a percentage entitlement rather than a fixed sum to achieve fairness between parties in the event of a sale is subject of many authorities. Those authorities were subject of comprehensive review in Sinclair and Sinclair [2000] FamCA 262. We take this opportunity to repeat that summary and emphasise the importance of the well established principle:
“108.A long line of authority in this Court (Waters and Waters (1981) FLC 91-019 at 76,208; Williams and Williams (1988) FLC 91-959 at 76,940; Docters van Leeuwen and Docters van Leeuwen (1990) FLC 92-148 at 78,024; Little and Little (1990) FLC 92-147 at 78,020; Smith and Smith (1991) FLC 92-261 at 78,759; and Bell and Bell (1993) FLC 92-347 at 79,683) establishes as a clear guideline for the exercise of discretion under s 79 of the Act, that, absent some special consideration (such as a desire by one spouse to retain a particular piece of property, in specie), and particularly where the value of an asset is contentious, or even where it is not but the market for the property is volatile, or there is likely to be a significant time lapse between judgment and sale, and where the value of the asset is to be divided between the parties, the Court should order its sale and the apportionment of the proceeds between the parties rather than order one party to pay to the other a fixed sum representing a notional proportion of its assessed value.
109.Moreover, in Docters van Leeuwin (sic) (supra) at 78,025, the Full Court (Fogarty, Nygh & Rowlands JJ), after citing a passage from the judgment of Mason and Deane JJ in Norbis v Norbis (1986) FLC 91-712 at 75,165–6, said this:–
‘In our view the time has come to regard a departure from a long-standing guideline, such as the one given in Waters, without adequate explanation as a ground for finding that the exercise of discretion has miscarried.’
110.In Bell and Bell (supra) at 79,763, the Full Court (Ellis, Baker & Purvis JJ), after referring to the earlier decisions in Docters van Leeuwin (sic), Little, and Waters (all supra) said this:–
We see no reason to depart from the line of authority referred to above. There is always uncertainty in relation to the amount which will ultimately be obtained in respect of the sale of matrimonial property and, in particular, matrimonial real estate.
…
Although the order which the trial judge made was essentially discretionary in nature, in our opinion the authorities above referred to clearly establish that where a sale of property is necessary to satisfy a lump sum order for settlement of property and the calculation of any lump sum payable arises from a finding as to the value of the property to be sold, then the amount to be paid to one or other of the parties following any such sale should be expressed in percentage terms, rather than by way of lump sum payment, unless good and sufficient reasons are given for doing so.
The trial judge gave no reasons for departing from the above principle and, given the facts of the case, we are unable to perceive that there was any justification in law for doing so. For this reason therefore, we consider the trial judge has erred in the proper exercise of his discretion and we would allow the appeal to this extent.’”
The orders do not adhere to these principles. There appears to be no reason why the division could not have been expressed in percentage terms.
DISPOSITION
Taking these matters into account, I am satisfied that the combination of them identifies error which justifies the appeal and cross appeal being allowed and the matter remitted for rehearing.
The errors are errors of law and accordingly, it is appropriate that there be certificates for the parties under the Federal Proceedings (Costs) Act 1981 (Cth) for the appeal and the rehearing.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 18 September 2024
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