Daultrey & Tavener

Case [2024] FedCFamC1A 64

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Daultrey & Tavener [2024] FedCFamC1A 64

Appeal from: Daultrey & Tavener [2023] FedCFamC2F 1480
Appeal number: NAA 345 of 2023
File number: CAC 374 of 2018
Judgment of: CAMPTON J
Date of judgment: 22 April 2024
Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from a determination that it was not just and equitable to make orders adjusting property – Where the appellant raises grounds as to error of principle and failure to provide adequate reasons, and asserts that the primary judge made findings which were either not available on the evidence or against the weight of the evidence – Where no error of principle is established – Where the findings were open on the evidence and not contrary to the weight of the evidence – Where the findings were satisfactorily explained – Appeal dismissed – Order for the appellant to pay the respondent’s costs in a fixed sum.
Legislation: Family Law Act 1975 (Cth) s 90SM
Cases cited:

Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430

Bennett v Bennett (1991) FLC 92-191; [1990] FamCA 148

Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116

Cosola & Moretto (2023) FLC 94-143; [2023] FedCFamC1A 61

De Winter v De Winter (1979) FLC 90-605

DL v The Queen (2018) 266 CLR 1; [2018] HCA 26

Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Hedlund & Hedlund (2021) FLC 94-065; [2021] FedCFamC1A 84

House v The King (1936) 55 CLR 499; [1936] HCA 40

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Pachris & Tajir (No 3) [2023] FedCFamC1A 230

Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110

Re The Minister for Immigration and Multicultural Affairs; ex parte Durairajasinghan (2000) 168 ALR 407; [2000] HCA 1

Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Swain v Waverley Municipal Council (2005) 220 CLR 517; [2005] HCA 4

Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12

Waterways Authority v Fitzgibbon (2005) 221 ALR 402; [2005] HCA 57

Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 145
Date of hearing: 15 April 2024
Place: Sydney
Counsel for the Appellant: Mr Givney
Solicitor for the Appellant: Walsh & Blair Lawyers
Counsel for the Respondent: Mr Catlin
Solicitor for the Respondent: HPH-Princeton Legal

ORDERS

NAA 345 of 2023
CAC 374 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

MR DAULTREY

Appellant
AND:

MS TAVENER

Respondent

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

22 APRIL 2024

THE COURT ORDERS THAT:

1.The Amended Notice of Appeal filed 14 February 2024 is dismissed.

2.The appellant pay the respondent’s costs fixed at $15,000 within 28 days.

Note:…

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AGLC
Daultrey & Tavener [2024] FedCFamC1A 64
Case
[2024] FedCFamC1A 64
Decision Date

CaseChat Overview and Summary

The appeal was brought by the appellant, Mr Daultrey, against a decision of the Family Court of Australia, which found it was not just and equitable to make orders adjusting the property interests of the parties. The primary judge found that the appellant’s contributions to the relationship, including financial contributions and non-financial contributions, were insufficient to warrant an adjustment of property interests in his favour. The respondent, Ms Tavener, sought costs fixed in the sum of $22,243 at scale, while the appellant conceded that if the appeal was dismissed, he ought to pay costs, but submitted that a reasonable order for costs would be in the range of $15,000.

The primary issues for the court to determine were whether the primary judge erred in principle in his approach to determining the adjustment of property interests, and whether the primary judge’s findings were against the evidence or not open on the evidence. The appellant contended that the primary judge failed to consider the asset pool as a whole and instead adopted an asset by asset approach, which was inappropriate in the circumstances. The appellant also argued that the primary judge’s findings were not supported by the evidence, or were against the weight of the evidence.

The court found that the primary judge did not err in principle in his approach to determining the adjustment of property interests. The court noted that the primary judge had identified longstanding authority as to the approach to be taken in determining applications for the adjustment of property interests, and that the court was required to identify the property, liabilities, and financial resources of the parties at the time of the hearing, to evaluate the contributions made by the parties under section 90SM (4) of the Family Law Act 1975 (Cth). The court found that the primary judge’s findings were open on the evidence and were not against the weight of the evidence. The court noted that the primary judge had given detailed reasons for his findings, and that the appellant had not provided any documentary evidence to support his claims of financial contributions.

The appeal was dismissed, and the appellant was ordered to pay the respondent’s costs fixed at $15,000 within 28 days. The court noted that the respondent’s costs schedule sought to double count items for the preparation of the Summary of Argument by both solicitor and counsel, and claimed more than $2000 for photocopying in circumstances of a digital appeal. The court found that such an order for costs was just.

The court’s decision provides guidance on the approach to be taken in determining applications for the adjustment of property interests, and the standard of proof required in such cases. The court emphasised the importance of providing detailed reasons for findings, and the need for parties to provide documentary evidence to support their claims of financial contributions. The decision also highlights the need for parties to be aware of the costs implications of appeals, and the need for costs schedules to be reasonable and not seek to double count items.

Orders

Orders of the court

NAA 345 of 2023

CAC 374 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR DAULTREY

Appellant

AND:

MS TAVENER

Respondent

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

22 APRIL 2024

THE COURT ORDERS THAT:

1. The Amended Notice of Appeal filed 14 February 2024 is dismissed.

2. The appellant pay the respondent’s costs fixed at $15,000 within 28 days.

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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

For the reasons that follow, the Amended Notice of Appeal filed 14 February 2024 is dismissed.BACKGROUND The appellant was born in 1961 and is currently 63 years old. The respondent was born in 1970 and is currently 54 years old. In 1990 the appellant commenced work as a tradesman for G Pty Ltd (“G Pty Ltd”), owned and operated by his ex-wife’s parents, and within a few years was appointed in a managerial role. In 2001 K Pty Ltd (“K Pty Ltd”), of which the appellant was the sole director and sole shareholder, purchased a 24.9 per cent interest in G Pty Ltd for $647,000 funded by an interest free vendor loan from his ex-wife’s parents. In 2009 the value of this liability was $246,136. The appellant had four children from previous relationships, all of whom are now adults. At the commencement of the relationship, the appellant lived with his two younger daughters, aged 18 and 14 years old at the time, and with the 18-year-old daughter’s boyfriend. The primary judge found the appellant contributed at that time:(1)A property at [O Street, Suburb P], N.S.W. (“[O Street]”) acquired in June 2007 for $473,500 subject to two loans valued in June 2009 at $84,665 and $378,800;(2)A 24.9% interest in a business named [G Pty Ltd], including land on which the enterprise traded, subject to a vendor finance debt of $246,136;(3) [Motor Vehicle 1]; and…25 …The [appellant] held an interest in superannuation in June 2009 of $114,760.(Footnotes omitted) At the commencement of the relationship the respondent had sole care of her three children, who at that time were aged eight, four, and two years old. The primary judge found she contributed:(1)Home at [J Street, Suburb Z in City D] N.S.W. (“[J Street]”) acquired in July 2004 for $565,000;(2) Furniture and Effects;(3) An investment property being [H property, AA Street, Suburb BB] in Brisbane (“[H Property] Apartment”) purchased for $519,000 subject to a mortgage of $579,958;(4) [Motor Vehicle 5]; and (5) A business with equipment.21… She had an interest in superannuation of $17,000 when the relationship commenced.(Footnotes omitted) Some of the primary judges’ findings were not the subject of contest on appeal, including that the property at J Street, Suburb Z (“the J Street property”) was unencumbered at the commencement of the relationship save it being a collateral security for the loan secured against H Property, AA Street, Suburb BB QLD (“the H property Apartment”) (at [175]), and:28 I find that at the commencement of the relationship the [respondent’s] property interests were substantially greater than the [appellant’s] interests. I accept the [appellant’s] interest in superannuation was greater than the interest in superannuation held by the [respondent]. The primary judge found (at [31]) that in early 2009 the parties commenced cohabitation when the appellant and one of his daughters moved into the respondent’s property at J Street. The appellant did not pay rent to the respondent. He retained the rent received from his investment property at O Street, Suburb P (“the O Street property”). The parties separated when the appellant and his daughter moved out of the J Street Property in or about mid-2009 (at [32]). The primary judge found that the respondent met all outgoings on the J Street Property (at [32]) and that the appellant did not make any financial or non-financial contributions to that property during that period of cohabitation (at [33]).

Evidence

Evidence Before The Court

Other subsidiary findings as to the reliability of the appellant’s evidence and the integrity of his “bald assertions” about his financial contributions and conduct (some of which are the subject of challenge on appeal by way of other grounds) also included:(a)As to the appellant’s conduct and role in the purchase and sale of the Apartment:59…No bank statement nor any documentary evidence was produced to support that the deposit [of $58,000] was in fact paid [by the appellants Daultrey Unit Trust] and who received it…The property settled [in late] 2010 when the sum of $461,859.30 was handed over by the ANZ bank. The [appellant] claimed the [Daultrey Property Unit Trust] obtained the loan from the ANZ bank… a copy of the ANZ bank statement evidencing the loan payment and that document was never produced.60 The evidence with respect to this transaction remains unsatisfactory. The [appellant] claimed that the ANZ loan was paid out by an NAB mortgage account number [“…99]” for $440,000. No record of that account exists though a subpoena was issued to NAB to produce the account. No settlement statement was produced. At annexure M to the [appellant’s] trial affidavit he annexed a letter from [Mr TT] dated [late] 2010 referencing receipt of $461,859.30 from the ANZ bank with payouts of $227,977.06 (“Ms VV’s loan”) and $209,403.49 (WW Property Unit Trust as per your authority).…122In his report [Mr Y] observed that the [H Property] apartment was sold [in mid- 2017] for [over $500,000] including a deposit of $25,000. The balance received by the [appellant] on settlement was $495,292.54. [Mr Y] noted that the [appellant] represented that the funds from the sale of the [H Property] apartment paid out the NAB account [#..99] and “the second NAB loan account [#..79] was transferred to [the A Street property] the balance being $300,000.” [Mr Y] observed:the original mortgage for the purchase of the [H Property] apartment was obtained by [K Pty Ltd] as trustee for the [Daultrey Property Unit Trust]. It is my expectation that the NAB [#..99] loan was also in the name of the [Daultrey Property Unit Trust] however I am not able to confirm the balance of the loan that was paid out on settlement. [Mr Y] observed he had not been able to locate the $25,000 deposit in the bank statements made available to him. Nor have statements for the account NAB [#...99] been produced purportedly where $442,527.66 was paid into. The [appellant’s] evidence was that he had obtained a loan from ANZ but no bank statement had ever been produced. The sum of $48,656.76 was paid with respect to outstanding body corporate levies for the [H Property] apartment. The evidence regarding this transaction remains completely unsatisfactory save that I accept the [H Property] apartment sold. I am not satisfied that any of the net proceeds of sale from the [H Property] apartment were contributed by the [appellant] to the parties’ properties.(Emphasis added)(b)As to the appellant’s financial contribution to the parties household:70The [appellant] said he continued to make financial contributions in 2011 towards the parties’ household. To support that contention, he produced one page of a bank statement dated October 2011 but produced no other bank accounts… The [respondent] gave evidence that she had 100% dental cover under [XX Insurance]. The [appellant] subsequently agreed to withdraw his assertion about paying for the [respondent’s] dental expenses on the basis that the transactions were for the benefit of his own daughter [Ms HH]. With respect to his claim that he paid the [respondent’s] ongoing expenses or expenses for her children he said “they were in a ‘relationship’ and he did not feel the need to keep invoices or receipts that may have come to the [respondent] not himself.” (Emphasis added)(c)As to the appellants payment of the deposits for the Town F properties the primary judge rejected the appellant’s evidence at [75] – [77].(d)As to the appellant’s financial contributions to the improvements to the A Street property:89He said when they moved into the house it was not finished and they continued to work on the home for another 18 months. They installed a [workspace] at a cost of $35,000, a shed and a mezzanine floor. They completed landscaping, a large lawn and full irrigation system. The [appellant] annexed to his affidavit at Annexure Y expenditure undertaken on the property between [mid] and [late] 2012. The [appellant] said the [K Pty Ltd] NAB loan account was overdrawn to $43,591.63 between [early] 2013 and [early] 2014. He was able to make that payment following the sale of [G Pty Ltd]. The [appellant] claimed further work on the property was undertaken in consultation with the [respondent]. He claimed the funds were coming out of [K Pty Ltd]. Counsel asked him to point to any expenditure including for pumps, cement, driveways and the like. He said, “It would be difficult to point individual items out.” Counsel suggested it was not difficult at all as the [appellant] had multiple properties and knew how to claim deductions and no doubt the [appellant] maintained careful records. The [appellant] referred to Annexure X1 in his affidavit where items added up to $952,000. Counsel suggested that the document did not evidence any payments for things like decking, plumbing and other expenditure the [appellant] claimed. The [appellant] agreed he had ordered a shed and Counsel suggested “Yes. You had the shed installed, and then you reimbursed yourself for the cost of that shed, didn't you?---How – how do I reimburse for the costs? Counsel suggested he took the money out of the loan account ([#..28]).” The [appellant] did not respond other than to claim that they both used the shed. I reject the [appellant’s] evidence regarding his claim that additional funding was spent on [the A Street property] in the absence of independent documentary evidence such as receipts, invoices or credit card statements. (Emphasis added)(e)At [119] the primary judge found that none of the funds the appellant received from the sale of his interest in G Pty Ltd, other than $199,890.90, were contributed to the property of the parties. The primary judge found that the $199,890 was to be construed as a financial contribution of the respondent based on an earlier finding that the appellant agreed and later paid the shortfall on the sale of the H Property Apartment.(f)As to the appellant’s conduct and use of application of funds of K Pty Ltd including the funds received on the disposal of the G Pty Ltd trading enterprise and its real property:108The [appellant] said he last lodged a tax return for [K Pty Ltd] in 2015 and the company was deregistered [in late] 2020. He indicated he accepted sole liability for any tax owing with respect to the company [K Pty Ltd]. The [appellant] did not produce any recent financial statements for the company [K Pty Ltd]. … 155[K Pty Ltd] has been wound up. The [appellant] agreed he had not produced any financial records or other document for [BJ Company] and no mention was made of that company in his personal tax returns. He said it was still trading but as a hobby. He agreed it had a lot of equipment. The [appellant] agreed that his hobby business [BJ Company] was owned by [K Pty Ltd] and had equipment worth $391,000. When asked whether he created an asset register for the business totalling $680,000 he said that was not correct. He said most of the equipment is second hand (Exhibit R5). He said the business was for his future. He agreed he advertised on the internet that his company could lease equipment. He accepted he had kept the finances surrounding [BJ Company] the assets, liabilities, income and expenditure completely separate from the [respondent] at all times. He said he was building the equipment at the time, so she knew he was making some spare cash out of it which was helpful for the family and it kept us going. He accepted there was no financial information for the business trading as [BJ Company].(Emphasis added)

Decision

Reasons for decision

All that is necessary is for the reasons to enable the parties to identify the basis of the decision and the extent to which their arguments have been understood and accepted (Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110). The pathway of reasoning by which the primary judge made the above finding and did not accept the appellant’s evidence is both discernible and clear within [89]. Ground 5 fails.CONCLUSION The appeal will be dismissed. In the event the appeal was unsuccessful, the respondent sought costs fixed in the sum of $22,243 at scale, as contained in her costs schedule. The appellant conceded that if the appeal was dismissed that he ought to pay costs. He submitted that costs fixed in the range of $15,000 was just. The respondent’s costs schedule rapaciously sought to double count items for the preparation of the Summary of Argument by both solicitor and counsel. The schedule also claimed more than $2000 for photocopying in circumstances of a digital appeal. The respondent did not make any submission persuading the fixing of costs other than at $15,000. Such order will be made.

Ratio Decidendi

Legal Principle Established

The ground asserts the primary judge made a mistake in law as to the approach in determining applications for the adjustment of property pursuant to s 90SM of the Act. It is useful to record what that section provides:90SM Alteration of property interests(1) In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:(a) in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them—altering the interests of the parties to the de facto relationship in the property; or……(3) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or(ii) otherwise in relation to any of that last‑mentioned property;whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or(ii) otherwise in relation to any of that last‑mentioned property;whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and(Emphasis added) In support of the ground, the appellant in his Summary of Argument submitted:64.[The primary judge] failed to approach the matters simply on the basis of considering the asset pool and considering the overall contributions of the parties.…66.In circumstances of this case, an asset by asset approach was simply inappropriate and could not possibly have brought about a just and equitable result.(Emphasis added) The primary judge identified longstanding authority as to the approach to determine applications seeking the adjustment of property interests pursuant to s 90SM of the Act, recording:162…The Court is required to identify the property, liabilities and financial resources of the parties at the time of the hearing, to evaluate the contributions made by the parties under section 90SM (4) (in de facto cases) including the matters referred to in section 90SF (3) in so far as they are relevant. Under section 90SM (3) the Court must not make an order unless it is satisfied that in all the circumstances it is just and equitable to make the order. It is the justice and equity of the actual order that the court is required to consider: See Russell v Russell (1999) FLC 92-877.