Farrah & Cisek
[2024] FedCFamC1A 38
•28 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Farrah & Cisek [2024] FedCFamC1A 38
Appeal from: Cisek & Farrah (No 2) [2023] FedCFamC1F 804 Appeal number: NAA 292 of 2023 File number: PAC 1160 of 2021 Judgment of: TREE, BAUMANN & WILLIAMS JJ Date of judgment: 28 March 2024 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellant appeals from final property orders effecting a 100 per cent division of a piece of real property and 100 per cent of his superannuation interests to the first respondent after sale costs of that property and a cash payment to the second respondent – Where the primary judge made no discretionary error in applying Kennon & Kennon (1997) FLC 92-757 – Where the findings of the primary judge were reasonably open on the evidence – Adequacy of reasons – Where the primary judge’s reasons make plain the basis upon the conclusion was reached – No error established – Appeal dismissed – Costs ordered in a fixed sum Legislation: Family Law Act 1975 (Cth) ss 75, 90SF, 90RD 117 Cases cited: Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
House v The King (1936) 55 CLR 499; [1936] HCA 40
Keating & Keating (2019) FLC 93-894; [2019] FamCAFC 46
Kennon & Kennon (1997) FLC 92-757; [2020] FamCAFC 303
Mayhew & Fairweather (2022) 64 Fam LR 633; [2022] FedCFamC1A 53
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Number of paragraphs: 52 Date of hearing: 1 February 2024 Place: Heard in Sydney, delivered in Cairns Counsel for the Appellant: Mr Stapleton Solicitor for the Appellant: D’Agostino Solicitors Counsel for the First Respondent: Mr Fowler Solicitor for the First Respondent: Hikma Legal Counsel for the Second Respondent: Mr Heazlewood Solicitor for the Second Respondent: Coleman Greig Lawyers ORDERS
NAA 292 of 2023
PAC 1160 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FARRAH
Appellant
AND: MS CISEK
First Respondent
NEW SOUTH WALES TRUSTEE & GUARDIAN ON BEHALF OF MS ELSNER
Second Respondent
ORDER MADE BY:
TREE, BAUMANN & WILLIAMS JJ
DATE OF ORDER:
28 MARCH 2024
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant pay the first respondent’s costs in the sum of $20,000 within 60 days.
3.The appellant pay the second respondent’s costs in the sum of $5,000 within 60 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).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Farrah & Cisek has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE, BAUMANN & WILLIAMS JJ:
INTRODUCTION
By his (Amended) Notice of Appeal filed 20 December 2023, Mr Farrah (“the appellant”) appeals from final property orders arising from a de facto relationship with Ms Cisek (“the first respondent”) made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 22 September 2023.
Those orders provided for the first respondent to receive 100 per cent of the appellant’s interest in a property owned by him and 100 per cent of the appellant’s superannuation interests after sale costs of the property and after payment to the second respondent of $625,711. The second respondent, Ms Elsner (“the second respondent”), was a person the appellant formed a relationship with after the first respondent. The second respondent was represented by a litigation guardian.
The first respondent opposes the appeal, and for the reasons that follow, the appeal shall be dismissed. The second respondent, whose benefit under the final orders was not challenged by either the appellant or the first respondent, did not participate in the appeal, save to seek an order for their costs.
BACKGROUND
The appellant was 57 years old and the first respondent was 43 years old at the time the reasons for judgment by the primary judge were delivered on 22 September 2023.
The parties were born in Country C and Country B respectively and began dating in Australia around 1998. Although the parties participated in an Islamic marriage ceremony in November 1999, and the first respondent was pregnant at the time, some days later the first respondent entered into a civil marriage ceremony with the appellant’s brother. A child born in July 2000 (whose birth registration falsely recorded the appellant’s brother as the father) and a child born in March 2002, were both children of the appellant and the first respondent.
In 2013, the property at Suburb E, which constituted the most significant asset at the time of the hearing, was purchased in the sole name of the appellant and was the family home until final separation, which at the latest occurred by August 2015 when the appellant was incarcerated for 99 days for family violence perpetrated against the first respondent.
Whilst the relationship between the appellant and the first respondent was intact, the appellant commenced a relationship with the second respondent, a married lady in her eighties, she being his customer in the business he operated in Suburb H.
By May 2016, the second respondent was telling her doctor she wanted to leave her husband to be with her boyfriend (the appellant), and by July 2016 the second respondent and her husband separated under the one roof. By October 2016, the appellant and the second respondent commenced cohabitation and remained living together in the second respondent’s home until it was sold in February 2017.
The reasons of the primary judge deal with allegations by the second respondent, first advanced against the appellant in proceedings commenced against him in the Supreme Court of New South Wales and transferred to the Federal Circuit and Family Court of Australia (Division 1) on 19 October 2022.
Although the primary judge found at [178] that the appellant had failed to disclose his use and application of $2,257,291 received by him from the second respondent, it was clear that the second respondent had made a direct contribution to the Suburb E property of $625,711 by paying off the outstanding mortgage balance.
At the time of the hearing before the primary judge, the second respondent had been diagnosed with dementia and was living in a nursing home. The second respondent’s incapacity to manage her financial affairs had caused the New South Wales Civil and Administrative Tribunal (“NCAT”) to appoint the New South Wales Trustee and Guardian (“NSWTAG”) to manage the second respondent’s financial affairs since November 2017.
Although this succinct summary provides some context for the discussion to follow, this complex factual scenario was the subject of comprehensive reasons that dealt with a range of disputes. However, by the time of the final hearing, with both the first respondent and the second respondent seeking property adjustment orders, the only property of any significance available for adjustment was the appellant’s Suburb E property (valued at $1,350,000) and his superannuation entitlement of approximately $118,217.00.
The appellant seems to be driven to pursue an appeal because, as his Summary of Argument asserts at paragraph 4 “[i]t is rare to see an outcome where a party to a relationship is ordered to receive nothing from a pool of property, and for that to be found to be just and equitable.”
THE APPEAL
It is appropriate to restate the relevant principles which govern appeals from discretionary judgments, in particular that it is well settled that error of the type identified in House v The King (1936) 55 CLR 499 at 504–505 must be established. There, the majority of the High Court said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
In this case, despite the appellant being directed to file submissions in response for consideration by the primary judge, the appellant did not do so. His failure to do so meant he did not put before the primary judge his case in respect of at least two significant factors – namely his credit and also the contentions by the first respondent before the primary judge that the appellant had failed to make full disclosure.
AMENDED APPEAL GROUND 1
The appellant asserts that:
The findings in [162] of the Decision Below were in and of themselves not sufficient to justify a Kennon adjustment and any of those findings which may have done only occurred at the end of the relationship, not during it, so could not have satisfied the element of the principle that the conduct made the contributions during the relationship more arduous; so in concluding [the second respondent’s] contributions, including Kennon, were 65%, the learned Judge:
(a) Made an error of law;
and/or
(b) Acted on a wrong principle;
and/or
(c)Gave excessive weight to the evidence of [the first respondent] which was not reliable and gave excessive weight to the non-Kennon contributions of [the first respondent] in arriving at a conclusion that was unreasonable and/or plainly unjust;
(d)Arrived at a conclusion that was plainly wrong.
Whilst the appellant’s Summary of Argument targets [162] of the reasons, that paragraph needs to be considered in the context created at [160]–[162] which states as follows:
160Below I set out the factual basis of the objectionable conduct of [the appellant], and the effect that it had on [the first respondent’s] contributions for my concluding that [the appellant] engaged in controlling behaviour towards [the first respondent], including incidents of actual physical and sexual violence and financial control, that separately and cumulatively made [the first respondent’s] contributions significantly more arduous in terms of the principles as set out in Kennon, and that a contribution based entitlement in [the first respondent’s] favour was required as a result.
161[The first respondent] did identify a nexus between the conduct of [the appellant] and its impact on her ability to make the contributions which she did, or to make those contributions significantly more arduous than they would otherwise have been. No percentage need be specified by the Court in this regard. The Full Court of the Family Court of Australia in Maine & Maine (2016) 56 Fam LR 500 at [49] made clear that direct evidence of the impact of violent conduct on the contributions of the other party is not necessary where there is “an inescapable inference that [the first respondent] contributions – in particular her s 79(4)(c) of the Act contributions at the very least – were made “more onerous”.
162I place significant weight upon the following:
•[The appellant’s] emotional, physical and financial abuse of [the first respondent].
•[The appellant’s] behaviours which impacted all the contributions of [the first respondent] generally, including [the first respondent’s] parenting.
•The ninety-nine days [the appellant] was in prison in respect of serious charges of violent conduct by him toward [the first respondent].
•The sexual violence perpetrated by [the appellant] on [the first respondent].
•The denigration of [the first respondent] by [the appellant] in front of customers at the business where he would call her “good for nothing” and “useless”.
•The depression and anxiety now suffered by [the first respondent].
•The episode wherein [the appellant], on 11 June 2015, dragged [the first respondent] by her hair upstairs, before pushing her in front of him upstairs, ordering her to take her clothes off, forcing her to get to her knees to perform oral sex on him whilst holding a knife over her head; and, on 6 July 2015, forcing himself into the bathroom where she was standing, ripping her clothes off and sodomising her.
(Footnote omitted)
The findings of the primary judge were clearly shaped by her findings about credit, and in that regard:
(a)at [19], the primary judge found:
[The first respondent] was a reliable witness who gave her evidence in a straightforward manner. Save in the very limited instances indicated hereafter, where there was a dispute of fact in the evidence given by [the first respondent] and [the appellant], I prefer the evidence of [the first respondent] to that of [the appellant].
(b)whereas at [20], the primary judge found:
[The appellant] was an unreliable witness. He was often inconsistent in the giving of his evidence, much of it which was garbled, he often giving contradictory evidence, and he appeared to answer questions on the basis of what he perceived would be the most favourable answer to promote his case, regardless of its lack of truthfulness. He was both non-responsive at times, and argumentative at others. He gave at other times, answers in cross-examination that were simply implausible.
The concerns about the reliability of the appellant’s evidence were raised throughout the reasons, for example:
(a)at [41] – when the appellant’s evidence about owning Motor Vehicle 1was described as “patently absurd evidence”;
(b)at [43] – when the appellant gave evidence about when he commenced to live in the home of the second respondent and her husband. This evidence was described as “extraordinary and implausible evidence. There was not a semblance of truth in it”;
(c)At [87] – where the primary judge found the appellant’s evidence about carrying out renovations at a cost of about $1 million to the Suburb E home, as “untruthful”; and
(d)At [93] – where the appellant’s evidence about the use of funds from the sale of his business in October 2017 was described as “entirely unreliable”.
Counsel for the appellant was limited in being able to challenge the findings made about the appellant’s credit (which clearly shaped the primary judge’s findings around the allegations of family violence) and therefore at paragraph 8 of the appellant’s Summary of Argument, particulars were identified from the transcript to support the submission that “the finding that the [the first respondent] was a reliable witness was not justified”.
As to the specific sub-paragraphs of paragraph 8 of the appellant’s Summary of Argument, we say:
(a)the appellant’s counsel did put the credibility of the first respondent in issue at Transcript 28 November 2022, p.83 lines 17–19;
(b)the first respondent gave evidence that she could not recall the type of pension she was receiving from 2002, some 21 years before her cross-examination. The first respondent said, and the primary judge accepted, the appellant facilitated the application for government benefits;
(c)whilst it is true that the first respondent said “I don’t even remember what I did yesterday. Like, what I’m saying, it just happened a long time ago”, we agree that this statement needs to be read in context. The first respondent was being cross-examined about an event that occurred at the beginning of 1999. The first respondent said (Transcript 28 November 2022, p.108 lines 20–22) “Whatever I could remember, I wrote it all down there [referring to her trial affidavit], but I don’t remember every single thing exactly what happened years ago. It was over 20 years ago”; and
(d)the first respondent’s Summary of Argument (at paragraph 7(f), (d) and (e)) provides a detailed and compelling response to the isolated passages in her evidence identified in the transcript by the appellant in his Summary of Argument at paragraph 8(d) and (d). We agree with those submissions.
The appellant has attempted to “cherry-pick” parts of the first respondent’s evidence to support a submission that she was not a reliable witness. The primary judge not only had the forensic advantage of observing both the appellant and the first respondent in the witness box, the reasons for judgment demonstrate why the findings of credibility her Honour made were reasonably open to her.
The appellant’s Summary of Argument focusses on the findings at [162] to which her Honour attributed significant weight, contending that there was not a sufficient basis for a Kennon & Kennon (1997) FLC 92-757 (“Kennon”) finding, given that the findings related to events that only occurred at the end of the relationship, not during the relationship.
However, we are satisfied that the summary of events identified at [162] was open to her Honour based on the evidence and findings, for example:
(a)the first respondent at paragraphs 53 and 61 of her trial affidavit gave evidence of the shared volatile relationship including prior to separation:
(i)being forced to engage in sexual intercourse every day, and when she refused it created anger in the appellant (paragraph 54);
(ii)the appellant being verbally abusive (paragraph 56);
(iii)being the subject of physical abuse including that the appellant “would slap me and grab my throat to choke me” (paragraph 57);
(iv)being the subject of controlling behaviour, including not allowing the first respondent to work for most of the marriage and requiring express permission to leave home (paragraph 58);
(v)being financially dependent on the appellant for money (paragraph 59);
(b)at paragraphs 62–69 of her trial affidavit, the first respondent deposed as to family violence after the parties separated (initially under the one roof) in May 2015 including:
(i)the appellant “hitting me on the face whilst sitting on me and swearing at me” on 7 June 2015; and
(ii)being grabbed on the throat and being pushed, with a particularly serious incident occurring in June 2015 when the appellant placed a knife to her throat (paragraph 63), which incident was reported to police.
(c)the cross-examination of the first respondent undertaken in a very thorough and persistent manner by the appellant’s trial counsel revealed at Transcript 29 November 2022, p.121–159, where some of the evidence given was graphic, particularly about the sexual violence perpetrated upon the first respondent by the appellant.
We accept the submission of the first respondent (at paragraph 12 of her Summary of Argument) that she “did not resile from this evidence during cross examination”.
The first respondent’s evidence about family violence generally after separation, apart from at [160]–[162] of the reasons, is the subject of further findings at [55]–[64] of the reasons.
It follows that we are satisfied that the conclusion reached by the primary judge that the appellant had perpetrated emotional, physical, sexual and financial abuse upon the first respondent during the relationship and post separation was well open to her Honour.
The extent and nature of the family violence found by her Honour allows a clear inference to be made, as her Honour did, of “the required nexus between proven family violence and the significant adverse effect upon the contributions of the victim” (Benson & Drury (2020) FLC 93-998 at [49])
Furthermore, at the time of separation the first respondent was still undertaking a primary carer role for the daughter of the parties (then 13 years of age) so that contributions post separation (when some of the violent events occurred) was still likely to have had been made more arduous (see Keating & Keating (2019) FLC 93-894 at [33]).
To the extent that the appellant contends at paragraph 27 of the Summary of Argument that the primary judge erred by not finding it was necessary “to identify the extent of the deemed Kennon element separately from the other contributions finding”, we disagree. In making the finding at [163] that:
163.Upon a consideration of the above matters in a holistic manner, I conclude that there should be a contribution adjustment in favour of [the first respondent] of 65 per cent with 35 per cent to the [appellant].
Her Honour was referring to all the evidence on contributions, not just the Kennon factor. In our assessment, it cannot be demonstrated that her Honour’s broad discretion miscarried or was “plainly wrong”.
Ground 1 of the Amended Notice of Appeal does not succeed.
AMENDED APPEAL GROUND 2
The appellant asserts that:
By conflating non-disclosures by [the appellant] in respect of his financial relationship with the second respondent, in arriving at a future needs’ adjustment for [the first respondent] the primary judge:
(a)Made an error of law.
and/or
(b)Acted on a wrong principle.
and/or
(c)Allowed extraneous or irrelevant matters to affect her Honour’s conclusion about the extent of the future need’s adjustment in favour of [the first respondent] that was unreasonable and or plainly unjust.
and/or
(d)Arrived at a conclusion that was plainly wrong.
and/or
(e)Failed to give any or adequate reasons for not making a future needs adjustment in favour of [the second respondent]
Sensibly in this case where the primary judge was dealing with two de facto relationships, being:
(a)between the appellant and the first respondent spanning the period from 20 November 1999 to separation in June 2015; and
(b)between the appellant and the second respondent spanning the period from October 2016 to September 2017 (a declaration under s 90RD(1) of the Family Law Act 1975 (Cth) (“the Act”) having been made by the primary judge)
Her Honour structured her reasons for judgment by making findings about the contribution based entitlements arising from each relationship before, at [172]–[186], making findings about the “[s]ection 90SF(3) matters as applicable to all parties”.
Significantly, when dealing with s 90SF(3)(r) of the Act – any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account – the primary judge dealt specifically with non-disclosure by the appellant, in particular finding that:
(a)the appellant “has not credibly accounted for his application of more than $1,300,000 of the second respondent’s funds (at [176]);
(b)based on the analysis at [177]–[182], found the appellant had engaged in “multiple deliberate non-disclosures”.
The usual way in which defective disclosure is taken into account is either by adding a sum to the pool, reflective of an estimate of the value of undisclosed property, or under s 90SF(3)(r) of the Act (which is the de facto counterpart to s 75(2)(o) of the Act, see Mayhew & Fairweather (2022) 64 Fam LR 633 at [14]).
It is clear that, on the evidence offered to the trial judge, her Honour was not able to make any reliable estimate of the value of the appellant’s undisclosed property.
The appellant’s Summary of Argument at paragraphs 34–47 advances an argument that concludes with a contention at paragraph 47 that “[n]owhere was there a reason for the conclusion that the [first respondent] receive a 35 per cent adjustment and [the second respondent] receive nothing.”
The intended outcome urged upon us by the appellant was for the appellant to receive not less than 30 per cent of the amount available to be distributed from the sale of the property, after payment of the amount found to be due to the second respondent ($625,711), pursuant to a “windfall” constructive trust as found by the primary judge at [134].
The appellant did not challenge the primary judge’s findings as to non-disclosure by the appellant, nor does he challenge her Honour’s conclusions that:
(a)there should be a contribution adjustment in favour of the second respondent which would see her being reimbursed for her contribution to discharging the appellant’s mortgage – the asserted “windfall” constructive trust (at [171]) but that a “further contribution entitlement as against the [appellant] that must be considered”, along with the appellant’s “contribution entitlement if any, in the context of the [first respondent’s] claim”;
(b)there is no need for any adjustment in the second respondent’s favour (at [184]).
In these circumstances, it is not clear on what basis the appellant is entitled to advance this appeal against orders that benefit the second respondent, which she does not seek to disturb.
The critical finding in respect of non-disclosure is found at [186] which was that:
186.The [appellant’s] non-disclosure is so great, and his evidence so unreliable, that the Court cannot ascertain the whereabouts and/or application of those funds in the sole control of the [appellant] as derived from the second respondent. But they exceed or equate to the monies to be shared by each of the [appellant] and the second respondent.
The discretion exercised by the primary judge was to determine, in respect of these competing claims, what orders do justice and equity for all the parties.
Having found that the appellant already had control of substantial undisclosed funds, the available pool was divided between the first respondent and the second respondent.
As to the contention that the primary judge did not provide adequate reasons, what reasons will be found to be adequate depends upon the circumstances of the case, but the authorities make it clear that reasons will be inadequate if justice is not seen to be done, or if an appellate court is unable to ascertain the process of reasoning undertaken by the primary judge (see Sun Alliance Insurance Ltd v Massoud [1989] VR 8)
The adjustment of 35 per cent in favour of the first respondent under all considerations prescribed by s 90SF(3) of the Act – not just sub-section (r) – was supported by the primary judge’s findings at [172]–[176] including the significant disparity comparatively between the appellant and the first respondent in relation to income, earning capacity, property and financial resources – mostly undisclosed. The first respondent was on unemployment benefits and was found to have “struggled with her mental health”. Furthermore, the evidence of Ms Z from NSWTAG, is that the appellant is a beneficiary under a Will made in 2016 by the second respondent. That interest is a “financial resource” available at some future time to the appellant.
We do not accept the submission of the appellant (at paragraph 45 of the Summary of Argument) that a 35 per cent adjustment in favour of the first respondent “was an application of excessive weight to the non-disclosure in respect of [the second respondent’s] money in arriving at a conclusion in favour of the [first respondent]” resulting in a decision that “was plainly wrong and substantially unjust”. This submission about the result was said (at paragraph 50 of his Summary of Argument) to be such as “may appear to some as infused with a degree of moral indignation about the [appellant], which is not relevant or fair.”
When invited to explain this submission within the context of legal principles (for example asserted bias), counsel for the appellant abandoned the submission.
We are not satisfied that the primary judge failed to provide adequate reasons. The pathway to her orders, dividing what is left and available for adjustment, is readily discernible.
This ground of appeal fails.
COSTS
Before withdrawing on the day of the appeal hearing, counsel for NSWTAG (on behalf of the second respondent Ms Elsner) agreed if the appeal was unsuccessful, costs fixed in the sum of $5,000 was appropriate. We agree.
Properly, counsel for the appellant conceded that if the appeal was unsuccessful, a proper application of the considerations prescribed by s 117 of the Act would mean that circumstances exist to justify an order for costs in respect of both the first and second respondent. We agree.
Considering the costs schedule filed by the first respondent estimating her costs as $22,862.45, and adopting a common current practice of the Full Court to fix costs rather than to burden parties with further costs of assessment or negotiation, we assess that the costs of the first respondent be fixed in the sum of $20,000. Both awards for costs are to be paid by the appellant within 60 days from the date of these orders.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Tree, Baumann & Williams. Associate:
Dated: 28 March 2024
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