Fonseka & Tennakoon
[2022] FedCFamC1A 12
•10 February 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fonseka & Tennakoon [2022] FedCFamC1A 12
Appeal from: Tennakoon & Fonseka [2021] FCCA 1567 Appeal number(s): SOA50 of 2021 File number(s): MLC957 of 2019 Judgment of: AUSTIN, GILL & MCEVOY JJ Date of judgment: 10 February 2022 Catchwords: FAMILY LAW – APPEAL – Property – Where the primary judge made property settlement orders – Where the parties filed joint submissions seeking that the appeal be allowed – Where the primary judge made material errors of fact – Where the primary judge made arithmetic error in calculations – Appeal allowed – Re-exercise – Where the parties entered into consent orders substituting revised orders – Orders made – Costs certificate issued for both parties in respect of the appeal. Legislation: Family Law Act 1975 (Cth) s 79
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9
Cases cited: De Winter and De Winter (1979) FLC 90-605
House v The King (1936) 55 CLR 499; [1936] HCA 40
Number of paragraphs: 10 Date of hearing: 31 January 2022 Place: Heard by way of written submissions Solicitor for the Appellant: Freeman Family Law Solicitor for the Respondent: Madison Marcus ORDERS
SOA50 of 2021
MLC957 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FONSEKA
Appellant
AND: MS TENNAKOON
Respondent
ORDER MADE BY:
AUSTIN, GILL & MCEVOY JJ
DATE OF ORDER:
3 FEBRUARY 2022
IT IS ORDERED THAT:
1.The appeal is allowed.
BY CONSENT, IT IS FURTHER ORDERED THAT:
2.In respect of the orders made by the Federal Circuit Court of Australia (as the Court was then known) on 23 July 2021:
2.1Order 1 is substituted with the following:
The husband pay to the wife the sum of $73,264.50.
2.2Order 2(b) is set aside.
2.3Order 5(aa) is inserted as follows:
(aa) D Street, Suburb E; The wife do all things necessary and sign all documents required to give effect to Order 4 herein to transfer her interest in D Street, Suburb E to the husband.
2.4Order 6 is substituted with the following:
The husband do all things necessary to remove the wife’s name from any of the entities, companies and trusts as listed in Order 5 at his expense.
3.The orders made on 22 July 2021 are affirmed in all other respects.
4.The Court grants to the husband a costs certificate pursuant to the provisions of 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 husband in respect of the costs incurred by him in relation to the appeal.
5.The Court grants to the wife a costs certificate pursuant to the provisions of 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 wife in respect of the costs incurred by her in relation to the appeal.
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 Fonseka & Tennakoon has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN, GILL & MCEVOY JJ:
By an Amended Notice of Appeal filed 6 December 2021 the appellant husband appealed against final property settlement orders made on 22 July 2021 by a judge of the Federal Circuit Court of Australia (as the Court was then known) pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The husband and the respondent wife had sought an alteration of their property interests following the cessation of their marriage.
The grounds of appeal were that:
(1)the primary judge had made a material error of fact in concluding at [165] of the reasons (and reflected in the calculations made in Schedule 1 of the reasons) that the liability related to the Company V business totalled approximately $800,000 rather than approximately $1,282,500; and
(2)notwithstanding this material error of fact, his Honour made a material error of fact in calculating Schedule 1 of the reasons with a ‘total’ of $810,000 rather than $610,000 (being $1,300,000 less $690,000).
The appeal was listed to be heard on 31 January 2022. However, on 18 January 2022 the Court was informed that the parties had resolved the appeal and that a minute of consent orders was forthcoming. On 24 January 2022 the Court received joint written submissions from the parties and a minute of consent orders seeking the appeal be allowed and substituting revised orders. Orders were also sought for costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”) with a notation that neither party sought costs against the other. The parties agreed in their written submissions that the appeal should be allowed because the primary judge had erred on the two grounds specified by the husband in the Amended Notice of Appeal.
We agree that the primary judge made the material errors of fact identified in the grounds of appeal, that the appeal should be allowed, and that there should be orders broadly in the terms proposed by the parties in their minute of consent orders. Accordingly, those orders were made in chambers on 3 February 2022 with short reasons to follow, which we now address below.
GROUND 1
This ground is concerned with the primary judge’s understatement of the liability related to one of the businesses owned by the husband, Company V, by approximately $482,500. At trial the parties disputed the value of the husband’s businesses. The relevant experts were “hot tubbed” and cross examined. However, his Honour did not accept the values espoused by the experts and instead concluded (at [165] and [175]) that it was appropriate to consider the “worst case scenario” for the husband if the businesses were sold, reducing these conclusions to a calculation in Schedule 1 of the reasons.
The primary judge’s calculations commenced with the starting point that the husband would have to pay out debts of $800,000, however this was contrary to the evidence. The parties accept that it was uncontroversial that the debt owed by the husband’s businesses had not been reduced to $800,000 but by $800,000, that there was no evidentiary basis for the $800,000 figure his Honour adopted, and that the appropriate figure to use with respect to the debt owed by the husband’s business interests, having regard to the best evidence available, was $1,282,500 (see Supplementary Expert Report dated 1 April 2021, Appendix X).
Had the primary judge used this $1,282,500 figure in calculating the value of the husband’s business interests the total value of these interests on a “worst case” scenario would have been $270,250 (allowing for the correction of the error identified by Ground 2), and the parties agree that this is the figure that should have been used. It may thus be accepted that the exercise of his Honour’s discretion miscarried by reason of a material error of fact in his calculations concerning the debt owed by the husband’s businesses and therefore Ground 1 must succeed: House v The King (1936) 55 CLR 499 at 504–505; De Winter and De Winter (1979) FLC 90-605 at 78,091.
GROUND 2
This ground is concerned with a further material error of fact in the nature of an arithmetic error in the primary judge’s final calculations in Schedule 1 of the reasons. Shortly stated the parties agree, as is the case, that in his Honour’s computation of the total value of the husband’s business interests on a “worst case” scenario insofar as the Company V business and the sale of a property at Suburb K was concerned, his Honour used a figure of $810,000 when the actual figure by reference to the evidence should have been $610,000. The effect of this was to carry through subsequent calculations to produce an erroneous final figure of $952,750 when (leaving to one side the error the subject of Ground 1) the final figure ought to have been $752,750. This being so it follows that Ground 2 must also succeed.
DISPOSITION
The parties do not seek to alter the 65/35 per cent split of the assets in favour of the wife that the primary judge determined. They accept that, in our re-exercise of discretion, the correction of the errors which are the subject of the appeal would produce a result whereby either the husband would retain one of the properties and pay the wife the sum of $73,264.50, or the wife would pay the husband the sum of $311,735.50 and retain that property (as the orders of his Honour contemplated). Having regard to these matters the parties’ agreed minute of order provides that the appeal be allowed and modifies the orders made by his Honour to enable the husband to retain one of the properties and pay the wife the sum of $73,264.50.
Having regard to our conclusions we consider that orders in these terms are just and equitable. In all the circumstances we also consider it appropriate that the parties have costs certificates pursuant to the Costs Act. There will accordingly be orders as set out at the commencement of these reasons which are broadly consistent with the parties’ agreed minute of orders.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, Gill & McEvoy JJ. Associate:
Dated: 10 February 2022
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