Dando & Attard
[2024] FedCFamC1A 158
•13 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Dando & Attard [2024] FedCFamC1A 158
Appeal from: Dando & Attard [2024] FedCFamC2F 349 Appeal number: NAA 95 of 2024 File number: CAC 927 of 2022 Judgment of: SCHONELL J Date of judgment: 13 September 2024 Catchwords: FAMILY LAW – APPEAL – Appeal from final financial orders – Denial of procedural fairness – Adequacy of reasons- Where the primary judge made orders in relation to a property contrary to the agreed position of the parties and without notice – Where the primary judge erred in his treatment of s 75(2) of the Family Law Act 1975 (Cth) in not taking into account a significant inheritance– Appeal allowed. Legislation: Family Law Act 1975 (Cth) ss 75(2) and 79
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9
Cases cited: Abbott & Vastano [2022] FedCFamC1A 222
AJO and GRO (2005) FLC 93-218; [2005] FamCA 195
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Boulton & Boulton [2024] FedCFamC1A 132
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Dando & Attard [2024] FedCFamC2F 349
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Hedlund & Hedlund (2021) FLC 94-065; [2021] FedCFamC1A 84
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Hoskins v Repatriation Commission (1991) 32 FCR 443
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
NHC & RCH (2004) FLC 93-204; [2004] FamCA 633
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Vida v Vida (2023) 67 Fam LR 285; [2023] FedCFamC1A 175
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Yarrow & Yarrow (2022) FLC 94-112; Yarrow & Yarrow (2022) FedCFamC1A 135
Number of paragraphs: 57 Date of hearing: 4 September 2024 Place: Sydney Counsel for the Appellant: Mr Sansom SC Solicitor for the Appellant: Parker Coles Curtis Counsel for the Respondent: Mr Othen SC Solicitor for the Respondent: Kennedy & Cooke Lawyers ORDERS
NAA 95 of 2024
CAC 927 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS DANDO
Appellant
AND: MR ATTARD
Respondent
ORDER MADE BY:
SCHONELL J
DATE OF ORDER:
13 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The orders made 22 March 2024 are set aside.
3.The matter is remitted for rehearing to a judge of the Federal Circuit and Family Court of Australia (Division 2) other than the primary judge.
4.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in the appeal.
5.The respondent is granted a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in the appeal.
6.The appellant and respondent are granted costs certificates 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 them in respect of the costs incurred by them in relation to the rehearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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 Dando & Attard has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
By Amended Notice of Appeal filed in 2024 the appellant wife (“the appellant”) appeals financial orders made pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) by a judge of Division 2 in 2024.
The appeal was opposed by the respondent husband (“the respondent”).
The Amended Notice of Appeal comprised five grounds. Grounds 1 and 2 were argued together contending a denial of procedural fairness. Ground 3 contended error in relation to matters of weight, Ground 4 contended error in failing to make an adjustment pursuant to s 75(2) and the inadequacy of reasons thereof, while Ground 5 contended error in the treatment of legal fees by way of addback.
BACKGROUND
The parties commenced cohabitation in or about 2009, married in 2017 and separated in 2021.
There are no children of the relationship, however both parties had children from former relationships. At the time of hearing, all children were over the age of 18.
In 2017, the parties acquired in their joint names a home (“the matrimonial property”).
Following the breakdown of the relationship, the appellant commenced proceedings for property settlement.
The primary judge captured the parties’ respective positions in Dando & Attard [2024] FedCFamC2F 349 (“the judgment”) as follows:
26.By her Amended Initiating Application filed 23 January 2024, the wife sought final orders to the effect that she receive 60 per cent of the value of the net property pool. By her Outline of Case Document, the wife contends that the contributions ought to be assessed as equal, there is no specified adjustment for future needs, but states the overall division of 60 / 40 in the wife’s favour is just and equitable.
…
30.By his Amended Response filed 2 December 2022, the husband sought final orders to the effect that the [matrimonial property] be sold and the net proceeds be divided equally, and each party retain all other property which they are already legally entitled to. The husband does not contend for a stepped approach of assessing contributions and future needs in monetary or percentage terms. He contends that an equal division of the parties’ joint property happens to be a just and equitable outcome overall.
The primary judge proceeded to identify the documents relied upon, the case for each party and addressed matters of credit. He then noted that there were issues about the initial contributions of the parties, contributions to the respondent’s business and real estate, the care of step-children, post-separation contributions, how the respondent’s inheritance should be treated and the present and future needs of the parties.
Having identified those matters, the primary judge determined the pool of assets including what was to happen by way of addbacks. The primary judge then, in a somewhat unconventional approach, assessed the parties’ contributions but did not, at the end of step two (Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]) make any findings as to contributions. His Honour then considered the matters under s 75(2) and determined that there should be no adjustment.
Under a heading of ‘Justice and Equity’ the primary judge identified the property to be retained by each of the parties and then stated:
124.The effect of the orders on the respective interests in the property of the parties or either of them is set out in Annexure A at columns J and K. The overall effect of transferring title to the [matrimonial property] to the wife, on the balance sheet that I have determined, is a division of the net property pool as to 63 / 37 percent in favour of the husband.
125.Having taken into account all of the matters referred to in section 79(4) of the Act, in particular the husband’s greater initial contributions and the use made by the parties of those contributions during and since the relationship, I am satisfied that it is a just and equitable result in all of the circumstances.
The Full Court in Boulton & Boulton [2024] FedCFamC1A 132 recently observed:
93.It has generally been recognised, albeit not legislatively mandated or required by the Full Court, that a disciplined approach and a structured process of reasoning of a s 79 determination is required (Lee Steere & Lee Steere (1985) FLC 91-626; Ferraro & Ferraro (1993) FLC 92-335; Townsend & Townsend (1995) FLC 92-569; Hickey and Hickey and Attorney-General (Cth) (Intervener) (2003) FLC 93-143 (“Hickey”)).
94.In Cosola & Moretto (2023) FLC 94-143, the Full Court confirmed at [38] that s 79 itself sets out the sequential tasks in which trial judges are to engage, as was made clear by the High Court in Stanford v Standford (2012) 247 CLR 108 (“Stanford”) at [37].
95.Section 79 of the Act does not require the ascribing of a monetary or percentage value to the contribution finding or adjustment thereto. This was identified by the Full Court in JEL & DDF (2001) FLC 93-075:
137.It is urged upon us by [senior counsel for the appellant] that in a case such as the present one, her Honour ought not to have assessed the parties’ contributions in percentage terms but rather on a monetary basis. It is true that traditionally the Court has assessed the parties’ contributions in percentage terms. There is, however, nothing in the Act which dictates such an approach.
96.The Full Court in Hickey identified a preferred approach to the determination of an application brought pursuant to the provisions of s 79 involving four inter-related steps. The second step is the identification and assessment of the contributions of the parties and a determination of the contribution-based entitlements of them as expressed as a percentage of the net value of their property. The third step is identification and assessment the relevant matters in ss 79(4)(d), (e), (f), and (g), including the facts in s 75(2), also expressed as a percentage of the net value of their property.
…
101.The preferred or orthodox approach identified in Hickey is not mandatory. What is mandatory is that the sequence of tasks specified in s 79 of the Act are completed.
Whilst the primary judge assessed the contributions and the s 75(2) matters in the sequence identified above, one cannot help but observe that had the primary judge followed a more orthodox approach, one of the grounds may have had less merit than might otherwise have been the case.
THE APPEAL
As indicated, there were five Grounds of Appeal. Where a Ground of Appeal makes a contention that goes to the integrity of the court process, then those matters should be dealt with prior to addressing the balance of the appeal (see Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577). Grounds 1 and 2 make such a contention and, accordingly, will be dealt with first.
GROUNDS 1 AND 2
1.His Honour erred by failing to afford the Appellant procedural fairness in making orders one (1) and two (2) without giving her notice of any intention to do so when the parties had agreed that the [matrimonial property] was to be sold which position was seemingly adopted by the Court.
2.His Honour erred by failing to provide any reasoning process for ordering the transfer of the [matrimonial property] (and the payment of its mortgage and expenses) to the Appellant rather than ordering its sale, the agreed position, in order to “achieve justice and equity” [at 120 Reasons].
Grounds 1 and 2 address the primary judge’s treatment of what is described as the matrimonial property.
The matrimonial property was purchased by the parties in their joint names in 2017 as their home. Following separation, the appellant vacated the property and moved to Melbourne where she has continued to reside. The respondent remained living in the matrimonial property until 2022 when he moved out and relocated to another town in New South Wales. The matrimonial property has remained vacant since that time.
The property had an agreed value for the purposes of the hearing of $2.3 million subject to a mortgage of slightly in excess of $500,000.
It is common ground that the parties jointly informed the primary judge that neither party sought to retain the property, and each submitted to the primary judge they wanted it sold and a distribution of its net proceeds of sale in accordance with the ultimate findings. Consequently, neither party made any submissions to the primary judge that addressed a position contrary to what was agreed.
Notwithstanding such an agreed position, the Court made orders in relation to the matrimonial property as follows:
1.Within 90 days from the date of these Orders, or such further or other period as may be agreed in writing between the parties, the parties shall do all acts and things and sign all documents necessary, at the Applicant Wife’s sole expense, to:
(a)Fully repay the loan secured by way of mortgage over the [matrimonial property], and to discharge that mortgage; and
(b)Transfer to the Applicant Wife the Respondent Husband’s interest in the [matrimonial property].
2.The Wife is to indemnify and keep indemnified the Husband in relation to all loan repayments, rates payments and any other outgoings with respect to the [matrimonial property] pending compliance with the preceding Order.
The primary judge recorded his Honour’s reasons for doing so as follows:
120.Neither party sought an order to obtain all of it. Both parties sought orders for it to be sold in order for the equity in it to be liquidated and made available for distribution in accordance with their competing claims. Nevertheless, an order providing for the transfer of it to the wife is necessary to achieve justice and equity in this case.
…
123.The wife retains nearly $900,000 in cash and her vehicle. The only liability she may have is the [matrimonial property] loan account if she chose not to sell that property. The property could be a source of income to her should she choose to keep it. There does not need to be ongoing engagement as between the parties as to any sale process if she chooses to sell it. It will be at her discretion as to what mix of her total net position of $3,300,000 to expend upon living or housing.
124.The effect of the orders on the respective interests in the property of the parties or either of them is set out in Annexure A at columns J and K. The overall effect of transferring title to the [matrimonial property] to the wife, on the balance sheet that I have determined, is a division of the net property pool as to 63 / 37 percent in favour of the husband.
The appellant submits in their Summary of Argument as follows:
14.No reasoning for that finding is provided by the Primary Judge. As was said in Soulemezis v. Dudley (Holdings) Pty. Limited (1987) 10 NSWLR 247 at 279,
“...without the articulation of reasons, a judicial decision cannot be distinguished from an arbitrary decision. In my opinion the giving of reasons is correctly perceived as “a necessary incident of the judicial process” because it enables the basis of the decision to be seen and understood both for the instant case and for the future direction of the law.”
15.Moreover, the consequences of the orders to the wife who could well be considered in a much weaker financial position to the husband and having moved back to Melbourne are not considered.
16.Nor is there any opportunity provided to her to make further submissions and bring further evidence upon the topic.
(Original emphasis)
In reply, the respondent contends that the orders contain no compulsion on the appellant to retain the property, that the primary judge was not bound by either party’s proposal, and the primary judge’s reasons at [121]–[123] of the judgment explain why his Honour made the orders that he did.
I do not accept all of the respondent’s submissions.
In Abbott & Vastano [2022] FedCFamC1A 222 Tree J observed:
10.Procedural fairness requires each party to be given an adequate opportunity to be heard, and to present their cases (Kioa v West (1985) 159 CLR 550 at 582). However, it is only the opportunity to present evidence and argument which the interests of justice requires, not the actuality of it.
11.A trial judge is not bound by the proposals of the parties or by the evidence of a witness (U v U (2002) 211 CLR 238 at [80]). However, it is an error for a trial judge to represent to the parties that a certain order is not in contemplation but then make that order without affording an opportunity for the parties to make submissions in respect of it (see Bolitho and Cohen (2005) FLC 93-224 at [85]; Lenova & Lenova (2011) FLC 93-467 at [55]; Robertson & Sento [2009] FamCAFC 49 at [138]).
While in Jabour & Jabour (2019) FLC 93-898, the Full Court observed in respect of an error occasioned in relation to post-separation contributions as follows:
95.This did not, off course, preclude the primary judge from undertaking such a consideration but, if that course was to be taken, that possibility must have been squarely raised with the wife and her submissions sought on each aspect of the proposed consideration. Her Honour did not do so. We consider that the primary judge erred by not affording procedural fairness to the wife: Kioa v West (1985) 159 CLR 550; Stead v State Government Insurance Commission (1986) 161 CLR 141. Having regard to the above exchange, the wife would have properly considered that no claim for post-separation contributions was in contemplation.
I am satisfied that the approach adopted by the primary judge constituted a denial of procedural fairness to the appellant. The primary judge accepted the joint position of the parties that the property would be sold. The primary judge did not raise with the parties for consideration and submission by them that his Honour would make orders contrary to their agreement. In doing so the primary judge denied to the appellant the opportunity to place submissions as to why such a proposal would not be just and equitable.
The effect of the primary judge’s orders was to visit solely upon the appellant an asset which the primary judge knew the appellant did not want to keep, the retention of which would visit solely upon the appellant all of the costs of sale in circumstances where previously the costs were borne equally. The consequence of doing so is to cause the appellant to incur a liability which was not considered by the primary judge in the effect of the orders sought, such that the amount the appellant was to receive was less than that which the primary judge had previously determined represented a just and equitable determination (by analogy see Vida v Vida (2023) 67 Fam LR 285 at [53]).
The primary judge also imposed an obligation upon the appellant to discharge the mortgage thereby reducing her available capital without enquiring as to her capacity to refinance or whether in doing so it would otherwise compromise her financial position.
I am also satisfied that the primary judge’s reasons for transferring the matrimonial property to the appellant were inadequate. It is uncontroversial that reasons will be inadequate if the Court is unable to divine the path of reasoning, the parties do not understand why the decision was made and justice is not seen to be done (Bennett and Bennett (1991) FLC 92-191; Yarrow & Yarrow (2022) FLC 94-112 at [17]).
In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110, McColl JA summarised the principles with respect to the obligation to give reasons as follows:
57.The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes “a sense of grievance” and denies “both the fact and the appearance of justice having been done”, thus working a miscarriage of justice: Mifsud v Campbell (1991) 21 NSWLR 725 (at 728); Beale (at 442) per Meagher JA.
58.The extent and content of reasons will depend upon the particular case under consideration and the matters in issue: Mifsud (at 728) per Samuels JA; Hull v Thompson [2001] NSWCA 359 (at [53]) per Rolfe AJA (Sheller JA and Davies AJA agreeing). While a judge is not obliged to spell out every detail of the process of reasoning to a finding (Yates Property Corporation Pty Limited (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 (at 171) per Mahoney JA, (at 182) per Handley JA), it is essential to expose the reasons for resolving a point critical to the contest between the parties: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435 (at 442) per Kirby ACJ; Soulemezis (at 259) per Kirby P, (at 270) per Mahoney JA, (at 280) per McHugh JA; applied in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; (2003) 216 CLR 212 (at [40]) per Gleeson CJ, Gummow and Heydon JJ.
59.The reasons must do justice to the issues posed by the parties’ cases: see Moylan v Nutrasweet Co [2000] NSWCA 337 (at [61]) per Sheller JA (Beazley and Giles JJA agreeing). Discharge of this obligation is necessary to enable the parties to identify the basis of the judge’s decision and the extent to which their arguments had been understood and accepted: Soulemezis (at 279) per McHugh JA. As Santow JA (with whom Meagher and Beazley JJA agreed) explained in Jones v Bradley [2003] NSWCA 81 (at [129]) it is necessary that the primary judge “ ‘enter into’ the issues canvassed and explain why one case is preferred over another”; see also Flannery v Halifax Estate Agencies Ltd t/as Colleys Professional Services [2000] 1 All ER 373 (at 377-378) per Henry, Laws LJJ and Hidden J.
The primary judge determined that the matrimonial property should be transferred to the appellant because it was necessary “to achieve justice and equity” at [120] of the judgment. The primary judge provided no reasons as to why it was necessary to achieve justice and equity to transfer the property to a party who did not want it, provided no reasons as to why it could not be sold, nor provided any reasons as to why it should be transferred to the appellant as opposed to the respondent. A mere assertion that it is necessary to achieve justice and equity without more is not a reason.
I am satisfied that there is merit to Grounds 1 and 2.
GROUND 3
His Honour erred in the treatment of the weighing and assessing of the parties’ respective contributions through the course of their relationship and in particular:
a.His Honour erred by not making findings as to the parties’ respective contributions of all types at separation and trial.
b.His Honour erred by attributing excessive weight to the Respondent’s contended initial contributions and failing to holistically weigh and assess them despite indicating [at 106] that such contributions should not be “segmented or compartmentalise[d]”.
c.His Honour erred in the approach taken [at paragraphs 112 and 114 and elsewhere] by referring to the non-erosion of the Respondent’s direct initial financial contributions (whatever that means) as opposed to actually assessing them and apparently inconsistently [with paragraphs 108 and 109].
Sub-Grounds 3(a) and 3(c) assert error in the assessment of contributions. The task of the primary judge was to assess the contributions of the parties in a holistic way (Dickons v Dickons (2012) 50 Fam LR 244; Horrigan & Horrigan [2020] FamCAFC 25). It is clear that the primary judge did so by his Honour’s considerations of the respective contributions between [45]–[83] and then between [106]–[114] of the judgment. It does not constitute an error as referred to earlier to not make a finding at the contribution stage, albeit it is the preferred approach. Nor is there merit when the reasons are read as a whole in relation to the primary judge’s assessment of the respondent’s initial contributions. The primary judge correctly identifies the significance of that contribution is what weight is to be given to it in all the circumstances.
Sub-Ground 3(b) is a challenge to the primary judge’s assessment of weight. The criticism of the primary judge in relation to the application of weight is unfounded if unattached to a challenge that the result was unreasonable or plainly unjust (Hedlund & Hedlund (2021) FLC 94-065). Here, there was no challenge to the finding that the appellant’s initial contributions were $700,000 and the respondent’s initial contributions were $1,800,000. The relationship was of approximately 12 years and there is no challenge to the findings of equality of contribution during the relationship. Where there was no contention that the result was unreasonable or plainly unjust and where it was within a reasonable ambit of discretion, then the weight challenge must fail.
There is no merit to Ground 3.
GROUND 4
His Honour erred as regards the finding [at 115] that there is no basis for an adjustment in either party’s favour as to s 75(2) pursuant to s 79(4)(e) and His Honour:
a.Failed to take into account at that point the Respondent’s substantial inheritance that His Honour indicated [at 80] was to be treated as being in a separate pool as a financial resource and which His Honour indicated [at 82] was of considerable value … at $3,468,000 which distinguished it somewhat to the relatively nominal values in Bishop and Jarrott.
b. Failed to provide any or adequate reasons for the finding.
By this ground, the appellant contends the primary judge erred in failing to take into account, pursuant to s 75(2) of the Act, that the respondent had a substantial inheritance and in so doing failed to provide any or adequate reasons. As the argument developed, it broadened to include a failure to consider all of the matters advanced in the appellant’s case that were said to warrant consideration for an adjustment.
The respondent, in his Summary of Argument, contends that when one has regard to [75]– [83] and [122] of the judgment, it is apparent that the primary judge considered the inheritance and weighed it against the future needs when determining that no adjustment was warranted.
A careful analysis of those paragraphs reveals that not to be so. At [75]– [82] of the judgment, the primary judge considered whether the inheritance was to be treated as property or a financial resource and whether there should be one pool or two. He found the inheritance had a value of $3,468,000 at [82] of the judgment and determined that rather than excluding the inheritance from the pool, it should be treated in a separate pool as a financial resource. The primary judge then records:
83.Therefore, whilst the cash component and the real property component of the inheritance are distinctly different in character, they are both financial resources that are to become exclusively available to the husband and ought to be recognised as such in all of the circumstances of this case.
Nowhere in those paragraphs is there a consideration of the inheritance within the context of s 75(2) of the Act.
In undertaking the contribution-based analysis, the primary judge had regard to the contributions of the parties to the relationship and the property of the parties. Consistent with the analysis of the s 79(4)(a), 79(4)(b) and 79(4)(c) factors, there was no consideration of the financial resources of the respondent. The only place for the consideration of financial resources was when the primary judge had regard to s 79(4)(e) by reference to the matters under s 75(2). Section 75(2)(b) calls for the Court to have regard, where relevant, to “the income, property and financial resources of each of the parties …”
The primary judge had already determined that it was a relevant consideration, having said that it should be in a separate pool and was exclusively available to the respondent and “ought to be recognized as such” at [83] of the judgment. The primary judge does so in the construction of two pools (Annexure A to the judgment).
The primary judge’s consideration of s 75(2) was as follows:
RELEVANT SECTION 75(2) FACTORS PURSUANT TO SECTION 79(E)
115.In light of the facts determined, particularly at paragraphs 100-108 above, there is no basis for an adjustment in either party’s favour after taking into account the matters referred to in subsection 75(2) pursuant to subsection 79(4)(e) of the Act.
The reference to “paragraphs 100-108” seems infelicitous. Those paragraphs reference back to an amount in a safe, the primary judge’s consideration of addbacks and some of the primary judge’s considerations of contributions. None of those matters bear upon the s 75(2) adjustment. Counsel for the respondent submits that it should be read particularly in light of the words “facts determined” to be a reference to [84]– [87] of the judgment which appear under the heading ‘What are the present circumstances and future needs of the parties.’ Assuming that to be so, those paragraphs make no reference to the inheritance.
Counsel for the respondent submits that the primary judge considered the inheritance when he came to determine it in the just and equitable analysis at [122] of the judgment, where the primary judge determined that the respondent would retain his inheritance. The difficulty with that submission is that the primary judge had already determined what property the appellant was to retain, and that determination was made without consideration of the financial resources to be retained by the respondent.
The appellant’s case was that an adjustment under s 75(2) of between 5 per cent and 10 per cent was warranted. The appellant’s counsel made submissions to the primary judge that the respondent’s inheritance should be considered by the primary judge in the s 75(2) analysis. At no point in the primary judge’s determination does his Honour engage with the submissions advanced by the appellant. While it is not necessary that a judge mention every fact or argument in the proceedings (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447) where a matter is identified as a relevant issue for consideration, in this instance whether or not there should be an adjustment under s75(2) because of a particular factor, the primary judge was required to quell the controversy raised by the submission, particularly where no contrary submission was advanced. As observed by Pinkus J in Hoskins v Repatriation Commission (1991) 32 FCR 443 at 448, if:
… a submission worthy of serious consideration and seriously advanced is not dealt with, one ought to infer that it has been overlooked, giving rise to an error of law.
The primary judge was required to ensure that justice was seen to be done. The parties were entitled to see how the determination was reached which meant the provision of reasons addressing the appellant submissions as to why a financial resource that the primary judge had previously described as of “considerable value” ([82]) at $3,468,000 was not to be considered in the context of s 75(2). The primary judge, in not doing so, fell into error.
I am satisfied that there is merit to Ground 4.
GROUND 5
5.His Honour erred in the treatment of add-backs to legal fees failing to there carry out a principled consideration of the issues and only adding back $25,000 to the legal fees of the Respondent failing to consider that the vehicle that had advanced his fees had been substantially contributed to by the Appellant and failing otherwise to exercise a proper discretion to the issue or alternatively there was a lack of reasons for the determination as to the add-back of costs as they related to the Respondent.
Ground 5 contended error on the part of the primary judge in relation to the treatment of addbacks by way of legal fees.
The primary judge dealt with the question of addbacks for legal fees in four paragraphs beginning at [102] of the judgment. In the first two of those four paragraphs, the primary judge articulated the principles arising from the Full Court’s decisions in AJO and GRO (2005) FLC 93-218; NHC & RCH (2004) FLC 93-204; and Trevi & Trevi (2018) FLC 93-858.
The primary judge thereafter recorded as follows:
104.Both parties conceded that the funds demonstrated to be derived from property of the marriage and applied to respective legal fees ought to be added back as notional property to their client’s respective credit. Accordingly, $252,857 with respect to the wife and $25,000 with respect to the husband has been added back.
105.I decline to addback the balance of the amounts claimed by either party. Funds used to meet necessary living expenses where those expenses are reasonably incurred should not be added back.
(Footnote omitted)
During the course of argument, Senior Counsel for the appellant conceded that the submissions made by then counsel for the appellant, advanced in different places during the course of submissions, contended for different amounts to be added back. In taking the Court to the respondent’s Costs Notice, he conceded that it was difficult to ascertain from the notice the exact amount that was paid and that there was no clarity as what amount paid was sourced from income, sourced from a loan account or sourced from the sale of assets.
It also transpired that the loan account to meet the payment of legal fees, while forming part of the assets included in the valuation of the company, was not included in the balance sheet of the parties as a liability of the respondent. Consequentially, any addback by way of paid legal fees sourced from the loan account would also require, implicitly, recognition of some part of the same document as a liability. The above concessions were all properly made by Senior Counsel for the appellant. Ultimately, he submitted that the ground remained “faintly” pressed.
It is for the appellant to make good the asserted error. I am not satisfied that the primary judge erred. The amount added back for the respondent’s paid legals was an amount conceded by the appellant as referred to at [70] of the judgment. It was for the appellant to establish what was the quantum of the balance of the paid legal fees and how much could be the subject of an add back. She was unable to do so.
I am not satisfied that the appellant has established an error on the part of the primary judge in the terms of that set out in Ground 5.
DISPOSITION
For the above reasons I am satisfied that there is merit to Grounds 1, 2, and 4. The parties opposed a re-exercise of discretion and, accordingly, the matter will unfortunately have to be remitted to another judge for hearing.
Accordingly, I will make order setting aside the primary judges orders.
COSTS
In circumstances where the appellant has been successful on a point of law, then it is appropriate that a costs certificate be granted to each of the appellant and the respondent for both the appeal and the rehearing pursuant to ss 6, 8 and 9 of the Federal Proceedings (Costs) Act 1981 (Cth).
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 13 September 2024
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