Fowles & Fowles (No 2)
[2024] FedCFamC1A 115
•12 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Fowles & Fowles (No 2) [2024] FedCFamC1A 115
Appeal from: Fowles & Fowles (No 4) [2023] FedCFamC1F 819 Appeal number: NAA 305 of 2023 File number: MLC 8587 of 2015 Judgment of: ALDRIDGE, CAREW & CAMPTON JJ Date of judgment: 12 July 2024 Catchwords: FAMILY LAW – APPEAL – Property – Where the final hearing took five and a half years to complete – Apprehended bias – Interventions by the primary judge during cross-examination – Whether the primary judge should have recused herself – Interventions insufficient to establish apprehended bias – Procedural fairness – Appellant alleges length of hearing and cross-examination and the primary judge’s interventions led to procedural unfairness – Where no complaint about the progress of the matter was made at trial – Where the appellant was free to communicate with his lawyers whilst under cross-examination – Where the primary judge’s interventions were not so excessive – No procedural unfairness established – Adequacy of reasons – Appeal dismissed.
FAMILY LAW – CROSS-APPEAL – Whether the primary judge erred in not ascribing a value to various items on the balance sheet – Whether the primary judge failed to take into account unvalued items – Further evidence required to establish error – Application for further evidence not pressed – No indication the unvalued assets were not taken into account – Challenge to exercise of discretion – No error identified – Cross-appeal dismissed.
Legislation: Family Law Act 1975 (Cth) s 75 and s 79 Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Chang v Su [2002] HCATrans 446
CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76; [2019] HCA 50
Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2
Cresswell v Conroy (No 2) (2023) 67 Fam LR 366; [2023] FedCFamC1A 201
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63
Edinger v Duy (2023) 68 Fam LR 55; [2023] FedCFamC1A 194
Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17; [2004] FCAFC 189
Finch & Finch (2020) FLC 93-949; [2020] FamCAFC 60
Fowles & Fowles [2021] FamCA 368
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
GetSwift Ltd v Webb (2021) 283 FCR 328; [2021] FCAFC 26
Gollings and Scott (2007) FLC 93-319; [2007] FamCA 397
Goose v Wilson Sandford & Co (1998) 142 SJLB 92
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378
Huda & Huda and Laham (2018) FLC 93-837; [2018] FamCAFC 85
Jess & Jess (2021) FLC 94-055; [2021] FamCAFC 159
Johnson v Johnson (2000) 201 CLR 488; [2000] HCA 48
Keach & Keach [2011] FamCA 192
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Manifold & Alderton (2021) FLC 94-015; [2021] FamCAFC 61
Merritt & Richards (No 2) [2016] FamCA 66
Milankov and Milankov (2002) FLC 93-095; [2002] FamCA 195
NAIS v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 470; [2005] HCA 77
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
R v T, WA (2014) 118 SASR 382; [2014] SASCFC 3
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
Tibb v Sheean (2018) 58 Fam LR 351; [2018] FamCAFC 142
Vakauta v Kelly (1989) 167 CLR 568; [1989] HCA 44
Velten & Velten [2020] FamCA 384
Walters and Walters (1986) FLC 91-733; [1986] FamCA 8
Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 248 Date of hearing: 1 May 2024 Place: Heard in Melbourne, delivered in Sydney Counsel for the Appellant: Mr Wyles KC with Ms Frederico Solicitor for the Appellant: Barry Nilsson Counsel for the Respondent: Mr Sheales Solicitor for the Respondent: Lander & Rogers ORDERS
NAA 305 of 2023
MLC 8587 of 2015FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR FOWLES
Appellant
AND: MS FOWLES
Respondent
ORDER MADE BY:
ALDRIDGE, CAREW & CAMPTON JJ
DATE OF ORDER:
12 JULY 2024
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The cross-appeal is dismissed.
3.Within 14 days of the date of these orders, the parties are to confer in respect of costs and in the event an agreement is reached, the parties have liberty to approach the Southern Appeals Registry with a proposed minute of consent orders.
4.In the event of the parties being unable to reach an agreement in respect of costs, within 28 days of the date of these orders, the parties are to file written submissions of no more than five pages as to what costs order, if any, should be made in respect of both the appeal and cross-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).
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 Fowles & Fowles has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, CAREW & CAMPTON JJ:
This is an appeal from property settlement orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 6 October 2023, in proceedings between Ms Fowles (“the wife”) and Mr Fowles (“the husband”). There is also a cross-appeal by the wife.
Although the appeal focused on the delay in the proceedings (the hearing occupied 43 days and took five and a half years to be completed), which we will address shortly, and the adequacy of the primary judge’s reasons, it is helpful to have some understanding of the issues determined by her Honour.
BACKGROUND
At the time of the hearing, the husband lived in Australia, although he had spent various periods of time since separation in the United States of America which is where he was born. Interim orders made by the primary judge prohibited him leaving Australia for much of the hearing, however he was permitted to travel to the United States to attend his father’s funeral and spend time with his family following his father’s unexpected death.
The wife was also living in Australia with the parties’ son, D, who was 20 years old at the time of judgment delivery. They lived in an apartment in X Street, Melbourne (“the X Street apartment”), owned by the husband.
The husband unsuccessfully contended that the X Street apartment was encumbered by a charge in favour of his father to secure a loan.
The husband conducted a business as a share broker, specialising in shares in United States companies. His Australian business operated through W Pty Ltd and the United States business through T Inc.
The husband’s interest in the United States company was valued at $1,492,535.
In 2014, the Fowles Family Trust was established in State FF. It is the owner of an apartment in City AW (“20 B Apartment”). The primary judge ultimately found that the Fowles Family Trust was the alter ego of the husband (at [306]), but it is unnecessary to detail the primary judge’s reasoning as her Honour was unable to ascribe a value to the Trust due to the husband’s non-disclosure.
The husband’s uncle set up a trust known as the 1989 DD Trust with the husband’s father being within the class of beneficiaries. Again, in ways unnecessary to detail, the husband’s interest in that trust later became held by the 2017 DD Trust. Due to the husband’s non-disclosure, neither the nature of his interest in that trust nor its value could be identified (at [340]).
In short, the orders made by her Honour provided for the wife to have the X Street apartment and a payment of $1,240,231.
The delay
The hearing commenced on 19 March 2018 and ran over 43 days until 10 September 2021. Written submissions were received between 22 August 2022 and 3 January 2023. Judgment was delivered on 6 October 2023.
The husband was in the course of cross-examination for 22 days over a two-year period. However, that information is apt to mislead because the husband was not cross-examined on many of those days and many of the other days were part days.
The next section of these reasons is a detailed analysis of the hearing which is essential as delay is the focus of the husband’s appeal.
It is clear from our analysis that there were many reasons for the length of the hearing. The husband was a difficult witness. He continued to disclose significant documents and serve important evidence throughout the hearing. Counsel bickered constantly. COVID-19 intervened and the resultant Microsoft Teams hearings tended to follow the awkward pattern typical of them. We know from an aide memoire provided to us that these difficulties were aggravated due to the unavailability of counsel and the usual difficulties of obtaining future hearing dates.
Having taken into account all those matters, we cannot condone the time and length of the hearing, the responsibility for which must, ultimately, fall at the feet of the primary judge. There is no need for us to repeat the recent and not so recent authorities against excessive delay, including those from judges of the highest courts.
It is unfortunate that no adequate block of time was set aside to finish the hearing at an early stage, running it over and displacing other matters if necessary. Nor do we understand the extraordinary delay in the provision of the written submissions.
No trial in any court should last this length of time and, ultimately, it is the responsibility of a trial judge to ensure that justice is delivered in a timely manner.
THE PROCEEDINGS
The husband’s approach to the litigation became clear on the first day of hearing when his senior counsel announced that the husband’s Financial Statement had just been uploaded to the court portal and was about to be served on the wife. The husband continued to disclose further documents throughout the course of his evidence.
In the course of objections to affidavits being taken, an application was brought by the wife which resulted in the husband giving an undertaking that, for the next 48 hours, he would not resign from the investment committee of the Fowles Family Trust, take a number of specified steps in relation to the Fowles Family Trust or leave the Commonwealth of Australia (Transcript 19 March 2018, p.54 line 29 to p.55 line 28).
Most of the second day was taken up with objections, discussions about items on the Balance Sheet and an opening on behalf of the wife. Her cross-examination commenced late in the afternoon and was concluded the following morning.
The husband entered the witness box at 11.59 am on the third day of the hearing. At the end of the day, the above undertaking was extended for another 24 hours.
The husband’s cross-examination continued over the fourth day. At the conclusion, the undertaking was again extended for 24 hours.
The Court re-convened at just after 12.00 noon on the fifth day and the husband’s cross-examination continued until 1.05 pm. After lunch, the hearing resumed at 3.00 pm. Following discussions regarding the production of documents and privilege claims, the husband’s cross-examination again continued from 3.34 pm until 4.35 pm.
The matter was adjourned to the following Monday and Tuesday for further hearing, although it was agreed that the evidence would not finish on that Tuesday.
Most of the Monday was taken up with submissions as to whether documents produced by a firm of solicitors were privileged.
Those submissions were followed by applications for continuation of the undertakings and injunctions. For the purposes of that application, the husband returned to the witness box at 5.47 pm. Orders were made shortly after 6.00 pm.
The hearing on the following day, the seventh day, commenced just after midday and was taken up with an application by the husband to vary the orders made the previous evening.
The hearing resumed on 26 June 2018. During that break, the husband filed four further affidavits. Two were from individuals in the United States, a lawyer and an accountant, giving expert evidence about trusts in State FF in general and, to some degree, evidence about the Fowles Family Trust, which is governed by the law of that state. The third affidavit was from an accountant engaged as a joint single expert and the fourth was a further affidavit from the husband’s Australian accountant, Mr DD.
The cross-examination of the husband resumed at 10.13 am that day and continued, with interruptions for submissions by counsel, for the rest of the day.
After a delayed start on the following day, the husband produced a box of documents in answer to a call made the day before. Time was then taken for the wife’s lawyers to look at them.
The husband’s cross-examination resumed at 12.11 pm. Again, with significant interruptions, it continued for the rest of the day. Much of the cross-examination arose from documents served or produced by the husband after his cross-examination had commenced.
The following day, day 10, followed a similar course, as did day 11 until 2.04 pm. Thereafter, the day was taken up with submissions and interlocutory applications.
The next day of hearing was on 4 July 2018. That day and 5 July 2018 followed the now familiar pattern. Interlocutory applications were heard late into the day on 5 July 2018.
The matter was adjourned for further hearing to 1 October 2018 (Order 8 of the orders dated 5 July 2018).
On 10 September 2018, her Honour heard and determined an interim parenting matter between the parties. In the course of that application the husband gave some oral evidence and was cross-examined.
Notwithstanding the order noted, the hearing did not resume until 4 February 2019. The husband had filed yet another affidavit from Mr DD along with a medical assessment from Dr FO and an affidavit of Mr Y, a trust manager from Region FP. The cross-examination of the husband continued.
An issue emerged in the afternoon as to whether documents relating to the 2017 DD Trust held in Region CT were under the possession or control of the husband and whether they were disclosable. The husband agreed to sign a letter authorising the wife’s lawyers to obtain them having given instructions to his lawyers to that effect (Transcript 4 February 2019, p.89 lines 12–37).
Submissions on evidentiary matters took up the morning and half of the afternoon on day 16 (5 February 2019). After that, the cross-examination of the husband once again continued.
At the end of the day, the wife sought to further amend her Initiating Application. Senior counsel for the husband asked if the cross-examination could conclude first as counsel for the wife advised that he was not going to finish with the witness by the end of the day. Counsel for the wife said:
…And can I indicate, I’ve got no difficulty if my learned friend wants to speak to the witness for the purpose of preparing for re-examination about what I’ve cross-examined him on so far. I’ve got no difficulty with that. If he wants to start doing that this evening, I’m not troubled.
(Transcript 5 February 2019, p.171 lines 30–33)
The husband’s cross-examination continued the following day at the end of which the wife pressed her application to amend her Initiating Application.
Day 18, 7 February 2019, commenced at 12.10 pm and was entirely taken up with legal arguments.
The hearing on 8 February 2019 commenced with counsel for the wife advising that bundles of documents had arrived from EE Company as the trustee of the 2017 DD Trust, along with a bundle of correspondence produced by the husband.
Her Honour then granted leave to the wife to file an Application in a Case seeking again to amend her Initiating Application.
The cross-examination of the husband then continued. Just before lunch on that day, senior counsel for the husband sought a direction that the cross-examination of his client conclude that day (Transcript 8 February 2019, p.345 lines 30–38). The primary judge’s response was that counsel for the wife should assume that the cross-examination would stop at the end of the day “subject to [counsel for the wife] making any application to extend it, for which you would need pretty good reasons” (Transcript 8 February 2019, p.346 lines 6–9).
At the end of the day, dates for further hearing were discussed and the following exchange took place:
[SENIOR COUNSEL FOR THE HUSBAND]: Was it 14 March at 9 am? Your Honour, your Honour will appreciate my client has been under cross-examination since 21 March last year. During the course of that time, almost 12 months now, the extent to which my instructors, my junior and I can confer with our client has been severely circumscribed. That has had – that imposes a great disadvantage in being able to - - -
[COUNSEL FOR THE WIFE]: I have no objection to my – to [the husband] speaking with his lawyers about any matter at all whilst he’s under cross-examination. I’ve got no objection at all.
HER HONOUR: From now on?
[COUNSEL FOR THE WIFE]: From now on.
HER HONOUR: Continue, otherwise say.
[COUNSEL FOR THE WIFE]: Yes. If I’ve got an issue, I will raise it with your Honour.
(Transcript 8 February 2019, p.396 lines 1–17)
The next day of hearing was 21 March 2019. It was the return date of the Application in a Case to further amend the Initiating Application and further applications were foreshadowed. That was all.
The Court re-convened on 19 June 2019. The trustee of the Fowles Family Trust was represented and was granted leave to file a number of affidavits. It sought an adjournment of the hearing which was granted. The growing number of interlocutory applications, including those by the husband for variations of spousal maintenance and child support, litigation funding and permission to leave Australia, were to be heard on a date to be fixed.
Day 22 was 4 November 2019. The primary judge proposed not dealing with the interlocutory applications and just getting on with the hearing. Procedural matters took up the morning. The husband returned to the witness box at 1.03 pm, continuing to give evidence until 2.27 pm. The matter was then adjourned until 6 November 2019.
The sixth of November 2019 commenced with the announcement that the husband had just served a bundle of documents of about 250 pages by way of disclosure, including documents going back to 2001. After a return to some of the outstanding interlocutory matters, the cross-examination of the husband restarted at 11.05 am. The husband withdrew at 11.37 am and then, at 11.43 am, the Court adjourned for the day so that the wife’s lawyers could look at the recently produced documents.
At the outset of day 24, 7 November 2019, senior counsel for the husband said that he had just been provided with three files of documents which he had not previously seen and may include documents that needed to be disclosed.
Junior counsel for the husband took evidence in chief from the husband as to these three files of documents. The cross-examination then resumed and continued, with significant interruption for legal argument, for the rest of the day.
Legal arguments took up the first part of 8 November 2019. At 10.57 am, when the cross-examination was to resume, senior counsel for the husband asked for a short adjournment as his client was upset. On resumption at 11.14 am, the following exchange took place:
[SENIOR COUNSEL FOR THE HUSBAND]: I have two applications. The first is that we not proceed further today. The second is that the cross-examination be determined now. My client has been under cross-examination for 15 or 16 days or thereabouts, at least.
HER HONOUR: I think it might be 15 days.
[SENIOR COUNSEL FOR THE HUSBAND]: About eight days ago – in terms of the dates of cross-examination – you informed my friend that he had another two days and no more. My client is distressed. He has been put through an ordeal of cross-examination that has become not merely a challenge to his voracity [sic] in the testing of his evidence, but has become an emotional and physical ordeal for him. It’s inappropriate that he be required to be subject to further cross-examination .....
HER HONOUR: Where is your client; is he not behind you?
[SENIOR COUNSEL FOR THE HUSBAND]: He’s not behind me because when the gentleman from the security service entered the court and it became apparent to my client that he was here because he was – my client was in an emotional state, he refused to remain in the same room as the security.
HER HONOUR: Well, we don’t seem to have a problem now.
[COUNSEL FOR THE WIFE]: He has just come in.
[SENIOR COUNSEL FOR THE HUSBAND]: Well, he has only just come in. But that has been the position he took on a number of occasions. It is the view of my learned junior and my view that my client is not at the moment in a fit state to respond to the questioning of any kind.
(Transcript 8 November 2019, p.196 line 45 to p.197 line 23)
The primary judge indicated that she was prepared to adjourn for the rest of the day, but not to end the cross-examination. After a short adjournment senior counsel for the husband said:
[SENIOR COUNSEL FOR THE HUSBAND]: Your Honour, can I inform you that my client is very firm in his instruction to me that he wants to continue. Can I also inform you that [my junior counsel] and I are both of the view that he’s not fit to continue today.
(Transcript 8 November 2019, p.199 lines 34–36)
Counsel for the wife did not oppose an adjournment even though, technically, one had not been sought. The matter was adjourned to a date to be fixed.
Interlocutory applications were before the Court on 9 December 2019, including an application by the husband for him to travel overseas with the parties’ son. Those applications returned for further hearing on 12 December 2019.
Interlocutory applications occupied 4 February 2020.
The hearing itself resumed on 19 October 2020. The husband’s further cross-examination commenced at 11.09 am (Transcript 19 October 2020, p.6 line 1). This was attended by the usual interruptions aggravated by the difficulties associated with a Microsoft Teams hearing which was necessary due to the COVID-19 outbreak. The cross-examination continued for the rest of the day.
On 20 October 2020, the cross-examination of the husband continued from 11.20 am until 2.09 pm when it was concluded. Re-examination followed immediately.
Day 31 was 21 October 2020. The re-examination of the husband took up the day and until 3.10 pm on 22 October 2020. The evidence of Mr DD then followed and continued on 27 October 2020.
The next day of hearing was 28 October 2020 when the husband asked the primary judge to recuse herself. Her Honour formed the view that, in light of what appeared to be a large number of events that were relied upon, she would be assisted by written submissions. The matter was then adjourned to 30 October 2020, although ultimately the Court did not reconvene on that date.
In reasons given on 9 June 2021, the primary judge refused the recusal application. It is regrettable, to say the least, that from the close of submissions on the recusal application in November 2020, there was a delay of some six months until the recusal application was determined.
The next day of the trial was 31 August 2021. It was taken up with legal arguments and interlocutory applications. A similar course followed on 1 September 2021 until 3.30 pm when the evidence of Mr DD resumed.
Thereafter, evidence continued on 2, 3, 6, 7, 8, 9 and 10 September 2021.
The primary judge received written submissions from the husband on 22 August 2022, 15 September 2022 and 3 January 2023 and from the wife on 16 September 2022, 9 December 2022 and 3 January 2023.
THE APPEAL
Should the primary judge have recused herself? (Ground 1)
On 28 October 2020, day 34 of the hearing, the husband asked the primary judge to disqualify herself. Her Honour refused in written reasons given on 9 June 2021 (Fowles & Fowles [2021] FamCA 368 (“the recusal reasons”)).
Whilst the application before the primary judge was based more broadly, on appeal it was contended that the number and nature of the primary judge’s interventions in the cross-examination of the husband gave rise to a reasonable apprehension of bias. Senior counsel, in oral submissions, limited the challenges to interventions made by the primary judge up to the time of the recusal application, no doubt having regard to the statements made in Vakauta v Kelly (1989) 167 CLR 568 (“Vakauta”) (as no subsequent application was made). We do not need to consider those parts of the written submissions which went further and relied on subsequent interventions as well as passages in the primary judge’s reasons.
It is well known that a judge should not continue to sit “if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide” (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6]).
Where conduct is relevant, as it is here, we will take into account the totality of it as matters which might not seem troubling on their own might amount to something more concerning when seen in the light of other comments.
We will also bear in mind the following statements of principle in Vakauta (at 571):
…In the course of an eloquent passage in his judgment in Reg. v. Watson; Ex parte Armstrong [(1976) 136 CLR 248, at p. 294], Jacobs J. expressed the view that judicial “silence” is a “counsel of perfection”. We respectfully disagree with the application of that observation to a trial judge sitting without a jury. It seems to us that a trial judge who made necessary rulings but otherwise sat completely silent throughout a non-jury trial with the result that his or her views about the issues, problems and technical difficulties involved in the case remained unknown until they emerged as final conclusions in his or her judgment would not represent a model to be emulated.
This was further explained in Johnson v Johnson (2000) 201 CLR 488:
13.Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge [(Webb v The Queen (1994) 181 CLR 41 at 73, per Deane J)], the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly [(1989) 167 CLR 568 at 571] Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of “the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case” [(see also Re Lusink; Ex parte Shaw (1980) 55 ALJR 12 at 15; 32 ALR 47 at 53, per Murphy J)]. Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.
Excessive intervention by a judge can give rise to an apprehension of bias, but can also lead to a miscarriage of justice because the judge’s questioning has unfairly undermined the proper presentation of a party’s case or the questioning is such an egregious departure from the role of a judge presiding over an adversarial trial that it unduly compromises the judge’s advantage in objectively evaluating the evidence from a detached distance (the “dust of conflict ground” per Kourakis CJ in R v T, WA (2014) 118 SASR 382 at [38]).
It is clear that some interventions may attract attention for both apprehended bias and the dust of conflict ground. Indeed, there is some overlap between the two grounds as “the ultimate question is always whether the intervention was unjustifiable and resulted in a miscarriage of justice” (Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 (“Royal Guardian”) at [169]).
The husband relied on many transcript references, which we have read, but we shall confine these reasons to those portions of the transcript to which senior counsel for the husband took us to in the course of his oral argument. That will, unfortunately, require us to set out significant slabs of transcript.
The primary judge dealt with those passages in her extensive reasons given for refusing to disqualify herself. Frequently, if not invariably, her Honour explained her questions as seeking to clarify the evidence, which is a perfectly permissible course. Indeed, in the course of oral submissions, senior counsel accepted that the questions would have been perfectly proper had they been asked by counsel. That may not, however, be a sufficient answer to the charge that these questions would have caused a fair-minded lay observer to consider that the judge asking them might not bring an impartial mind to the determination of the outcome of the hearing.
Finally, we observe that the husband was a difficult witness, frequently argumentative, opinionated, prevaricating and evasive and, in turn, provided answers that strayed well beyond what was being asked. Some shortness with the witness was therefore understandable even if not ideal. The primary judge too had difficulties with counsel for the wife forming questions in a clear and admissible manner, which gave greater scope for the need for clarification.
The first passage relied upon was:
[HER HONOUR]: Yes. Just going back to the liability for capital gains tax when you sell the property?
[THE HUSBAND]: Well then – okay. So then – capital gains tax on property sale in Australia?
[HER HONOUR]: Yes. When you sell it?
[THE HUSBAND]: No. I would have – I would have relied - - -
[HER HONOUR]: No. I’m not asking you about in Australia. I’m asking you about in [X] Street. Your property in [X] Street. Is it going to be subject to capital gains tax unless you’ve tried to claim it as an investment property? You’ve never done that, have you, anywhere?
[THE HUSBAND]: No. In Australia have I claimed it as an investment property? Is that the question?
[HER HONOUR]: Yes. That’s the question?
[THE HUSBAND]: No. I’ve never claimed it as an investment property.
[HER HONOUR]: Okay. And in America you haven’t claimed it as an investment property either?
[THE HUSBAND]: No. No.
[HER HONOUR]: You’ve claimed it as your primary residence?
[THE HUSBAND]: It – yes. I - - -
[HER HONOUR]: Okay. So that’s the answer to that question?
[THE HUSBAND]: Yes.
[HER HONOUR]: So if you’ve claimed it as your primary residence in America and Australia?
[THE HUSBAND]: Yes.
[HER HONOUR]: The effect of Australian tax law – do you understand that it is – that it’s not going to be subject to capital gains tax under Australian taxation law?
[THE HUSBAND]: That’s my understanding.
[HER HONOUR]: Okay. But in America, your case is, that it is subject to capital gains tax?
[THE HUSBAND]: It – it is. Yes.
[HER HONOUR]: Okay. Now, to your way of working things out, and your understanding of the embedded tax that – the advantage of embedded taxation liability is for the acquisition of companies?
[THE HUSBAND]: Yes.
[HER HONOUR]: Doesn’t it – is it your understanding that, if you’re going to have to pay capital gains tax on the realisation of an asset, the corresponding aspect of that is generally, that you’ve been allowed to claim the expenses against your income?
[THE HUSBAND]: Yes.
[HER HONOUR]: Okay. So is that the basis, do you think, for interest payments being deductible in relation to loans on private residences in the United States of America?
[THE HUSBAND]: But I don’t think the interest was deductible in Australia.
[HER HONOUR]: That isn’t?
[THE HUSBAND]: So therefore - - -
[HER HONOUR]: Because – that’s right. It’s not deductible in Australia because it’s not - - -?
[THE HUSBAND]: Right.
[HER HONOUR]: There’s also no corresponding capital gains tax liability?
[THE HUSBAND]: And – and then I get a - - -
[HER HONOUR]: But where there is a capital gains tax liability in America?
[THE HUSBAND]: I - - -
[HER HONOUR]: And no exemption for dual citizenship?
[THE HUSBAND]: I see where you’re coming from.
[HER HONOUR]: Okay. You get a capital gains tax liability where you’ve generally had the benefit of being able to claim the expenses on the investment property. They go hand in hand?
[THE HUSBAND]: I’m not from the US tax office. So I understand what you’re saying.
[HER HONOUR]: Yes. But - - -?
[THE HUSBAND]: I can try to explain it if you would like me to.
[HER HONOUR]: Well, no one is offended by it?
[THE HUSBAND]: Well, the – the issue is that, I don’t get a deduction in Australia for that interest, but on my income tax return - - -
[HER HONOUR]: Because, I think the point is, that you haven’t paid it. You would have had to pay it to get the deduction?
[THE HUSBAND]: Yes. We’ve capitalised the interest. So I’ve capitalised the interest with my father.
[HER HONOUR]: Yes. Okay. All right. Why did you capitalise the interest?
[THE HUSBAND]: Because my father said that I could pay it later.
[HER HONOUR]: Okay. And did you find out, or did you or your father find out whether that capitalisation of interest will be deductible against the – will be taken into account on the calculation of the capital gains tax?
[THE HUSBAND]: I didn’t look into that.
[HER HONOUR]: Well, that’s pretty dumb, isn’t it?
[THE HUSBAND]: Well, not necessarily, because I don’t think that I’m entitled to deduction for the interest.
[HER HONOUR]: Why not?
[THE HUSBAND]: And if I’m not entitled to a deduction for the interest in Australia, then it goes to my income tax returns on an annualised basis. So if I’m not entitled to a deduction here, and then I’m filing a US return that takes a credit for things that happened in Australia, it ends up not impacting my US return for my income tax purposes, because it’s not significant. But when you go to the capital gain, the advice from [Mr NN] was that, if I sell my primary residency, and it still qualifies as a primary residency if I’ve lived there in two of the last five years, so it will still qualify as my primary residency until July 22. So after that I will no longer get the $250,000 exemption. So right now I have a lower capital gains tax because I’ve lived there in two of the last five years, but that I will have to pay capital gains on an additional $250,000 after 22 July.
[HER HONOUR]: How do you feel about being a taxpayer in the United States of America, where you have to pay tax on a capital gain but you get no benefit on the expenses?
[THE HUSBAND]: How do I feel about having my son taken away from me? I – I don’t - - -
[HER HONOUR]: No. Just answer my question?
[THE HUSBAND]: I know. How do I feel about that? I’m – I remain a US citizen. I maintain my US citizenship and that - - -
[HER HONOUR]: Yes. But this is not the way capital gains tax works, is it?
[THE HUSBAND]: How do you mean?
[HER HONOUR]: Well, capital gains tax works when you get – yes, you pay tax on the capital gain but you’ve had the benefit of being able to have your tax deduction on the outgoings?
[THE HUSBAND]: Well, some – some tax laws may not make sense. That doesn’t mean I’m not going to pay my taxes.
[HER HONOUR]: Okay. So you have no idea as to whether the capitalised interest is going to be allowed in any sense?
[THE HUSBAND]: I’m not expecting to take a deduction for any of the interest in Australia. And it won’t impact my US returns.
[HER HONOUR]: No. That’s not my question. Because it wouldn’t be payable in Australia?
[THE HUSBAND]: No.
[HER HONOUR]: It was never going to be payable in Australia - - -?
[THE HUSBAND]: No. But - - -
[HER HONOUR]: - - - for the purpose of your tax return. But in the United States of America - - -?
[THE HUSBAND]: But there’s no doubt – yes.
[HER HONOUR]: - - - you say, you have absolutely no idea as to whether or not you will be able to claim, in the United States of America, for the interest – the capitalised interest on the apartment as a deduction?
[THE HUSBAND]: I’ve never turned my mind to it. And, if I turn my mind to it I’m sure I could figure it out. But right now my – the way I’ve been – you know, I think a lot about my son. But on the interest I haven’t taken any deductions in Australia because I’m not entitled. In the US I - - -
[HER HONOUR]: I don’t want to hear that anymore?
[THE HUSBAND]: I’m sorry. I’m sorry.
[HER HONOUR]: Because I think that – I don’t think that you are genuinely not following?
[THE HUSBAND]: I apologise.
[HER HONOUR]: I’m only talking about the taxation situation in the United States of America?
[THE HUSBAND]: Yes, ma’am.
[HER HONOUR]: And your evidence is, as I understand it, and I’ve written it down, you have absolutely no idea as to whether you will ever be able to claim a deduction for any interest payable to your father on the apartment in [X] Street?
[THE HUSBAND]: I – I’m – I am not certain about that. I haven’t investigated that.
[HER HONOUR]: You mean you’re not certain that you now have no idea, or you are certain that you have no idea because you haven’t investigated it?
[THE HUSBAND]: I think – in – in preparing my – for my US tax returns I - - -
[HER HONOUR]: Can you just answer my question? Are you not certain that you have no idea, or do you have no idea because you haven’t investigated it?
[THE HUSBAND]: I’ve not turned my mind to whether the interest, when paid, will be deductible or not.
[HER HONOUR]: In America?
[THE HUSBAND]: In America.
[HER HONOUR]: Right?
[THE HUSBAND]: I also believe that it’s a statute. I also understand - - -
[HER HONOUR]: Does it strike you as being fairly naive?
[THE HUSBAND]: Excuse me?
[HER HONOUR]: Does it strike you as being a bit naive?
[THE HUSBAND]: No. Because there’s the – the push of taking a credit in – in the US for taxes paid in Australia, so it’s something that – so that – that I do consider.
[HER HONOUR]: For goodness sake. There is no tax payable in Australia?
[THE HUSBAND]: And I don’t think – I don’t – right. And I – on the overall income. On the overall income. So my income – and I get credit US for overall income, which would include interest and deductibility on interest. And so it has always been that my US ends up non-payable because I take a credit in Australia.
(Emphasis added)
(Transcript 21 March 2018, p.188 line 17 to p.191 line 34)
We see no difficulty with the course that was being followed. The primary judge was endeavouring to understand the husband’s evidence that capital gains tax was not payable in Australia if the X Street apartment was sold, but would be subject to tax in the United States where the husband lodged tax returns. In the latter event, her Honour was trying to ascertain how that liability would be affected by the interest payable on a loan the husband asserted that he had with his father. The husband’s contention was that he had capitalised the interest payable. Her Honour was keen to understand that in the light of what appeared to be the position that mortgage repayments are tax deductable in the United States.
The question “that’s pretty dumb, isn’t it”, whilst perhaps expressed too colloquially, seems merely to be her Honour affording the husband an opportunity to explain what was, on its face, a surprising answer. We do not see why a trial judge needs to sit mute in such a case and not seek the answer themselves.
It is true that the phrase “for goodness sake” bespeaks a certain tone but it was invited by the previous answer. The husband had already agreed that there was no tax payable in Australia.
The next extract arises in the context of the husband paying his father’s solicitors’ costs in the proceedings the father took against the wife. He said it was not a loan but when asked if it was a gift, he had not considered it (Transcript 21 March 2018, p.229 lines 32–45).
The exchange continued:
HER HONOUR: Has he - to the best of your knowledge, has he considered how you ought to reconcile it?
[THE HUSBAND]: His what?
[HER HONOUR]: Who - to your knowledge, has he considered how it should be reconciled?
[THE HUSBAND]: I don’t know. I don’t know. Right now, I’ve got a lot of other things to worry about, like my son.
[HER HONOUR]: Okay. So did you pay tens of thousands of dollars or hundreds of thousands of dollars?
[THE HUSBAND]: I could have been almost 100,000.
[HER HONOUR]: Right. And how many hundreds of thousands of dollars did you have lying around at the time?
[THE HUSBAND]: There was nothing left.
[HER HONOUR]: Okay. So this was money that was a fairly limited resource to you?
[THE HUSBAND]: Yes.
[HER HONOUR]: Okay. But you’re sure that there was no discussion between you and your father about how the moneys you were paying for his lawyers would be acknowledged by him or adjusted - - -?
[THE HUSBAND]: We haven’t come - - -
[HER HONOUR]: - - - between you?
[THE HUSBAND]: We have - we have not come around to resolving how we’re going to reconcile that.
[HER HONOUR]: No. My question was there was no discussion?
[THE HUSBAND]: We haven’t discussed how we will reconcile that.
[HER HONOUR]: Okay. And for your part, you haven’t even contemplated it?
[THE HUSBAND]: I’ve got much bigger issues to deal with.
[HER HONOUR]: Yes. But it’s correct, isn’t it, your evidence is that you have not even contemplated how it could be reconciled?
[THE HUSBAND]: I haven’t thought about how to reconcile that my father, no.
[HER HONOUR]: Okay. This is notwithstanding that, on your evidence, you owe him quite – by community standards, a significant amount of capital and a significant amount of interest. All right. The transcript doesn’t pick up when you nod your head, but I notice you’re nodding your head as if to say yes. Is that correct?
[THE HUSBAND]: Yes.
[HER HONOUR]: Okay. So your evidence is that you haven’t even contemplated that you could take the amount that you paid [J Lawyers] and deduct it from the amount of principal - - -?
[THE HUSBAND]: I - yes, I - - -
[HER HONOUR]: - - - that you owe your father under the alleged loan?
[THE HUSBAND]: If - if your Honour’s point is that - - -
[HER HONOUR]: No?
[THE HUSBAND]: - - - I used - - -
[HER HONOUR]: Don’t worry about my point?
[THE HUSBAND]: The merit - - -
[HER HONOUR]: Don’t worry about my point. Just answer my question?
[THE HUSBAND]: Yes.
[HER HONOUR]: You haven’t contemplate - you haven’t even contemplated that you could adjust the amount of legal fees you paid for your father against the amount of the principal under the loan agreement, as alleged?
[THE HUSBAND]: No, I hadn’t considered that.
[HER HONOUR]: Okay. And you haven’t even contemplated that you might adjust the $100,000 against the accrued or deferred interest that you allegedly owe him?
[THE HUSBAND]: No, I haven’t considered that.
[HER HONOUR]: Okay. And when you completed your financial statement for these proceedings, did you make any reference to the $100,000?
[THE HUSBAND]: No.
[HER HONOUR]: Right. Do you understand that you were required to complete the document to the best of your ability?
[THE HUSBAND]: Yes.
[HER HONOUR]: All right. So do you recall there was a section in the document for assets?
[THE HUSBAND]: Yes.
[HER HONOUR]: Well, that $100,000, if it’s going to be repaid to you by your father, would be an asset, wouldn’t it?
[THE HUSBAND]: Yes.
[HER HONOUR]: Okay. So is it the case that that $100,000 won’t be repaid by your father?
[THE HUSBAND]: I don’t know. Would you like an explanation?
[HER HONOUR]: No. I want to know why it doesn’t appear in your statement of financial circumstances?
[THE HUSBAND]: It - it doesn’t appear because I’ve been relying very heavily on [Mr DD]. Because there are some very - in my mind, some complicated issues resolve - regarding trying to get money to pay lawyers. And so I had to take a dividend out of [W Group] and then I had to repay some inter-company loans, and I’ve been trying to reconcile and balance things up. And [Mr DD] missed it and I missed it.
[HER HONOUR]: Missed what?
[THE HUSBAND]: The $100,000. The $100,000 asset. I think we missed it in the financial statement.
[HER HONOUR]: All right. Or is it the case that it’s not going to be repaid?
[THE HUSBAND]: I - I haven’t turned my mind to that. I mean it may be. I haven’t turned my mind to it. I think offsetting it against the amount owing to him sounds like a reasonable idea, and I will - and I will turn - I should turn my mind to that.
[HER HONOUR]: So you didn’t turn your mind to it when you otherwise said how much was owing to your father?
[THE HUSBAND]: No, I didn’t consider - I didn’t bundle the two at the time. I was – my mind was elsewhere.
[HER HONOUR]: And how much - what do you pay Mr [DD] to do?
[THE HUSBAND]: Mr [DD], how much has he been paid? I think it’s - - -
[HER HONOUR]: No. What do you pay him to do?
[THE HUSBAND]: Well, he - he was a partner at ..... [AP Firm], but now he has retired and he’s working for me as an [finance professional].
[HER HONOUR]: Right. And it’s his job to do your accounting?
[THE HUSBAND]: Yes. Yes. He does the tax returns and he coordinates the auditor for [W Pty Ltd].
[HER HONOUR]: A bit of a significant omission to lose you $100,000, isn’t it?
[THE HUSBAND]: Yes, it is.
[HER HONOUR]: Okay. But it doesn’t take away from the fact that the statement of financial circumstances was something that you had to affirm as true and correct in every particular?
[THE HUSBAND]: Yes. I admit it was - it - I admit that it was missed, yes.
[HER HONOUR]: Okay. So at the moment, what do you say the $100,000 is?
[THE HUSBAND]: What do I say it is?
[HER HONOUR]: Yes?
[THE HUSBAND]: Well, I would say that it’s money owed to me by my father.
(Transcript 21 March 2018, p.230 line 1 to p.232 line 15)
It was submitted that the primary judge was cross-examining the witness. Certainly, her Honour used leading questions at times, but that does not make it improper.
We do not see anything in this passage which demonstrates that the primary judge was doing anything other than seeking to understand the husband’s answers. Nothing points to an apprehension of pre-judgment.
The next passage relied upon was the following, which again concerned the husband’s payment of his father’s legal fees:
HER HONOUR: Did you tell [your lawyer] that you were paying your father’s legal fees, or part of them?
[THE HUSBAND]: No.
[HER HONOUR]: Did he ask?
[THE HUSBAND]: Not that I remember.
[HER HONOUR]: What sort of financial position is your father in?
[THE HUSBAND]: I don’t know. He gave away most of his money, and he’s 84 and I think he has got enough money that, you know, he’s got an annuity and a, you know, a bit of money.
[HER HONOUR]: Who did he give his money away to?
[THE HUSBAND]: Well, to his brothers and sisters and nieces and nephews and to – to – to me.
[HER HONOUR]: And how much did he give you?
[THE HUSBAND]: Me, well, that’s a big question. So in – in 2002 he gave me [SS Company] which had $3 million in it.
[HER HONOUR]: So - - -?
[THE HUSBAND]: And then he gave some money to [D] for school and - - -
[HER HONOUR]: That was about 10,000?
[THE HUSBAND]: I would need to look at the bank statements. I thought it was more than that.
[HER HONOUR]: Right. So you think that he has reasonably comfortable at the moment?
[THE HUSBAND]: He has what he needs.
[HER HONOUR]: Right. Well, why didn’t he pay his own legal fees?
[THE HUSBAND]: I don’t know.
[HER HONOUR]: Did you ask?
[THE HUSBAND]: Well, part of the, you know, the reason that [H Inc] loaned the money to me in the initial place when it was really coming from my father is that [H Inc] had an Australian dollar bank account, so it was – it was easy to use that Australian dollar bank account to make the payments.
[HER HONOUR]: Mr Fowles, did you ask your client - - -?
[THE HUSBAND]: And it is similar with the legal fees.
[HER HONOUR]: No, Mr Fowles, just excuse me?
[THE HUSBAND]: I’m sorry.
[HER HONOUR]: Did you ask your father why he couldn’t pay his own legal fees?
[THE HUSBAND]: I said I have Australian dollars. I will cover it for now.
[HER HONOUR]: Did you ask your – third time, okay?
[THE HUSBAND]: I’m sorry.
[HER HONOUR]: Did you ask your father why he couldn’t pay his own legal fees?
[THE HUSBAND]: No, I didn’t ask him that.
(Transcript 22 March 2018, p.252 line 22 to p.253 line 16)
Again, the questions are relevant. The husband can hardly complain about a question being asked three times when he did not answer on the first two attempts.
The next passage arose from evidence from the husband that he had recently paid his lawyers $130,000. There had been earlier evidence from the husband that despite an order requiring him to do so, he had not paid the Westpac mortgage on the X Street apartment because he did not feel like it (Transcript 26 June 2018, p.516 lines 43–44). That apartment was where the wife and son were living. The passage is as follows:
HER HONOUR: Just whilst we’re on that topic, do you understand you will need to pay your lawyers some more money?
[THE HUSBAND]: Yes.
[HER HONOUR]: And have you been told how much that is?
[THE HUSBAND]: No. But I’ve asked not to see it because that will really upset me. So I’m under cross-examination - - -
[HER HONOUR]: Can I tell you something that might be a bit more upsetting?
[THE HUSBAND]: What?
[HER HONOUR]: Can I tell you something that might be a bit more upsetting?
[THE HUSBAND]: That I’m going to have to be self-represented?
[HER HONOUR]: No. No. But there could conceivably be an application that whatever you pay your lawyers also pay the bank. Right. So that your lawyer - - -?
[THE HUSBAND]: Also?
[HER HONOUR]: Also pay the bank for the Westpac loan on the house, on the apartment?
[THE HUSBAND]: Then maybe – well, maybe I won’t pay them.
[HER HONOUR]: That’s right. So then you may be - - -?
[THE HUSBAND]: Yes.
[HER HONOUR]: - - - self-represented but that will be something that’s up to you?
[THE HUSBAND]: Yes. Okay.
[HER HONOUR]: If you feel so strongly about not paying the mortgage on the apartment that you would not pay your lawyers and then be self-represented, that is a matter for you that could carry consequences but it is ultimately a matter for you?
[THE HUSBAND]: I don’t understand what you mean by carry consequences.
[HER HONOUR]: I might make findings about it?
[THE HUSBAND]: You might make – so if I have to pay them money then they’re going - - -
[HER HONOUR]: If you have to pay – given that your answer to a question was, “Why didn’t you pay the Westpac mortgage?” and you [sic] response was, “Because I didn’t feel like it”, okay, and yesterday when I asked - - -?
[THE HUSBAND]: Well, I think – I think my response was I’m having to allocate assets because it’s - - -
[HER HONOUR]: “I didn’t feel like it”, then later on you said it was a matter of priority?
[THE HUSBAND]: Okay. So - - -
[HER HONOUR]: Okay. So there might be some need to re-prioritise?
[THE HUSBAND]: Yes.
[HER HONOUR]: And if you’re going to be shelling out or paying over another $80,000 or $100,000 to your lawyer, it is unlikely that the wife’s practitioners will leave here today without having made an application that there at least be some monies paid from – paid off the Westpac mortgage on property which should be preserved for the purpose of these proceedings and which is where your wife and child live. Right?
[THE HUSBAND]: It is not really - - -
[HER HONOUR]: Right. Because, at the moment, that’s two months in arrears?
[THE HUSBAND]: Yes. Well, I mean, I haven’t seen my son for, what, a year or so.
[HER HONOUR]: Yes. It’s not – you don’t just get not to pay for where he lives because you don’t see him because there are other reasons that you don’t see him. You don’t buy the right to see your child?
[THE HUSBAND]: I understand.
[HER HONOUR]: Well, you certainly don’t buy it from me?
[THE HUSBAND]: Excuse me?
[HER HONOUR]: You certainly don’t buy it from me. It’s not paying – I’m not going to let you see your child because you pay money. They’re unrelated circumstances?
[THE HUSBAND]: I think – I think you made it clear that this isn’t a custody hearing.
[HER HONOUR]: This has got nothing to do with your child, except he does happen to live in an asset - - -?
[THE HUSBAND]: It’s – this is all about money. I understand. Yes.
[HER HONOUR]: Okay. But he does happen to live in an asset which should be preserved and whilst you have – whilst you have an apparent ability to raise money for things that are for you a priority - - -?
[THE HUSBAND]: So – so I will consider - - -
[HER HONOUR]: - - - there may be a requirement that you pay some mortgage payments at the same time - - -?
[THE HUSBAND]: I will consider that. I will consider that.
[HER HONOUR]: - - - as pay your lawyers?
[THE HUSBAND]: What if I borrow the money from my father?
(Transcript 29 June 2018, p.815 line 38 to p.817 line 11)
The husband pointed out that there were no extent applications of the kind envisaged by her Honour, as appears from the form of the questions. The context of these questions was the husband’s contention that he had no funds, yet could pay his lawyers and his father’s lawyers, apparently without any arrangement with his father, but could not pay the mortgage. Whilst we accept that these questions were posed in a somewhat idiosyncratic manner, we do not see how that links to the exercise of discretion or shows that the primary judge might not have exercised that discretion in an impartial manner.
It is helpful to take the next extract out of the order taken by counsel for the husband. To provide some background, the wife had served the husband with a Notice to Admit, part of which required the husband to admit the authenticity of specified documents. He did not dispute the notice. In his evidence, however, the husband took the stance that whilst he might have admitted a document was authentic, he did not necessarily accept that it was “true”.
The passage is:
[COUNSEL FOR THE WIFE]: I’m not going to bother reading the rest at the moment, but do you agree that’s a true copy of the agreement between you and [UU Group]?
[THE HUSBAND]: I don’t know what you mean by true copy, but that looks like an accurate document where I signed it and faxed it to [UU Group]; that’s what - - -
HER HONOUR: Okay?
[THE HUSBAND]: - - - it appears to be.
[HER HONOUR]: What’s confusing about the term “true copy”?
[THE HUSBAND]: Well, there’s all these questions – I – I – I’m not a lawyer. You know, and – you know, sometimes I go outside - - -
[HER HONOUR]: Okay. What’s true mean?
[THE HUSBAND]: I don’t know what it means in terms of the law. You know, there’s all these legal terms - - -
[HER HONOUR]: Well - - -?
[THE HUSBAND]: - - - that I don’t - - -
[HER HONOUR]: No, true - - -?
[THE HUSBAND]: That are used - - -
[HER HONOUR]: - - - is just a word?
[THE HUSBAND]: Well, there are lots of words that, in my business, that have lots of - - -
[HER HONOUR]: What do you think true means?
[THE HUSBAND]: I don’t know; that’s the point.
[COUNSEL FOR THE WIFE]: I couldn’t agree more?
[THE HUSBAND]: I don’t know.
HER HONOUR: You serious? You don’t know what true means?
[THE HUSBAND]: What – I had to – what is it? Authenticate documents? I mean - - -
[HER HONOUR]: I’m not asking you about authentication. I’m asking you about whether you know what true means?
[THE HUSBAND]: No. Would you please explain it to me.
[HER HONOUR]: You’ve never heard the word true before?
[THE HUSBAND]: I’ve heard the word true, but I don’t know what it means in the context of being in - - -
[HER HONOUR]: True - - -?
[THE HUSBAND]: - - - in a witness box.
[HER HONOUR]: - - - means true?
[THE HUSBAND]: Well – well, you can’t define a word by itself.
[COUNSEL FOR THE WIFE]: You can.
HER HONOUR: No, I want you to tell me what you think the word true means?
[THE HUSBAND]: Well, I’m telling the truth and the whole truth, but I don’t – but I don’t whether this - - -
[HER HONOUR]: So is what you say true?
[THE HUSBAND]: Your Honour, I think we’re wasting our time here. This - - -
[HER HONOUR]: No, I don’t – you are wasting time when you sit there and say, “I don’t know what a true copy is”.
[COUNSEL FOR THE WIFE]: Priceless.
HER HONOUR: Because you know the next question I’m going to ask you is what’s a copy, so how come you don’t know what the words “true copy” mean?
[THE HUSBAND]: Because I – I had to step out of the room for a couple of hours yesterday on these – you know, while you guys are discussing the legal definition of me authenticating documents, and I - - -
[HER HONOUR]: I’m not asking you for that. I’m just asking you what you think the words “true copy” mean because you seem to have difficulty with them, and I don’t understand why?
[THE HUSBAND]: I do. I have a lot of difficulty with a lot of these questions.
[HER HONOUR]: No, just the words “true copy”, because if you can’t tell me what you think a true copy is, I may wonder whether you know much at all and whether you’re really trying to answer?
[THE HUSBAND]: I’m trying - - -
[HER HONOUR]: Sitting there, you’re doing your hardest, you can’t tell me what your interpretation of the words “true copy” is?
[THE HUSBAND]: Okay. So to me, true copy means do I think the facts in this are accurate, and I would say, yes, I would think the facts in here are accurate. That’s what I think true means. So I think this - - -
[HER HONOUR]: Okay. I will tell you?
[THE HUSBAND]: - - - represents the – I think this represents the truth.
[HER HONOUR]: True copy means it’s a copy that is correct. It’s a copy that has - - - ?
[THE HUSBAND]: Well, I can’t – I can’t prove that. I can say that the facts here all look right to me, but I can’t tell you – whether it’s an actual copy or not. I mean, I haven’t seen the provenance of it. I don’t know where this document came from.
(Transcript 4 July 2018, p.932 line 25 to p.934 line 4)
The husband’s submissions were that these were questions for counsel to ask and not the primary judge.
A related extract is:
[COUNSEL FOR THE WIFE]: Do you accept – do you – you know this document you have in front of you here of the 2003 [DD] Trust - - -?
[THE HUSBAND]: Yes.
[COUNSEL FOR THE WIFE]: - - - do you accept that that’s a true copy of that document which was set in the trust indenture which was settled [in] August 2003?
[THE HUSBAND]: Sure. It’s true.
[COUNSEL FOR THE WIFE]: I seek to tender that, your Honour.
[THE HUSBAND]: I have no idea.
HER HONOUR: W58.
…
[THE HUSBAND]: No. You know what? I have no idea.
[COUNSEL FOR THE WIFE]: No, just hold on. Now - - -
[JUNIOR COUNSEL FOR THE HUSBAND]: Well, your Honour, he qualified that then.
[COUNSEL FOR THE WIFE]: Mark it for identification then.
HER HONOUR: What do you mean? He said it was a true copy.
[COUNSEL FOR THE WIFE]: No, he says - - -
[JUNIOR COUNSEL FOR THE HUSBAND]: And then he said, “I have no idea”.
[COUNSEL FOR THE WIFE]: I think what he’s saying, your Honour, is – he was being sarcastic saying it was - - -
[THE HUSBAND]: No, what I’m saying is - - -
[COUNSEL FOR THE WIFE]: - - - a true copy.
[THE HUSBAND]: - - - I’m exhausted.
HER HONOUR: Just excuse me. Did you say that this was a - - -?
[THE HUSBAND]: I - - -
[HER HONOUR]: - - - true copy?
[THE HUSBAND]: No, I corrected myself. I – I – I said - - -
[HER HONOUR]: No. Sir, you sat there and you said this was a true copy?
[THE HUSBAND]: I said it was true because I’m exhausted and I’m – I – I’m fatigued and what I should have said is - - -
[HER HONOUR]: Do you understand that it’s your duty to tell the truth?
[THE HUSBAND]: Yes, I understand that.
[HER HONOUR]: What were you doing when you told me that it was a - - -?
[THE HUSBAND]: I’m - - -
[HER HONOUR]: - - - true copy?
[THE HUSBAND]: I’m exhausted. I’m exhausted. I’m exhausted and I should have said I don’t know. I apologise.
[JUNIOR COUNSEL FOR THE HUSBAND]: Your Honour, your Honour may not have heard what he said immediately after he said it’s true or after a pause. He said it’s true and after a pause he said, “I have no idea. I really have no” - - -
HER HONOUR: Well, how can they stand as consistent statements?
[JUNIOR COUNSEL FOR THE HUSBAND]: Well, your Honour, in my respectful submission, it’s apparent from the tone with which he said the word “true” that it was an insincere statement.
[COUNSEL FOR THE WIFE]: Like most of his evidence. But, your Honour, I’m only seeking to mark it for identification.
HER HONOUR: Were you being facetious?
[JUNIOR COUNSEL FOR THE HUSBAND]: He was.
[THE HUSBAND]: No, I - - -
HER HONOUR: No. Were you being facetious?
[THE HUSBAND]: I was exhausted and I should have – not have said that it was true. I should have said I don’t know. I – I – it – I – I was - - -
[HER HONOUR]: Do you know what facetious means?
[THE HUSBAND]: No.
[HER HONOUR]: Do you know what sarcastic means?
[THE HUSBAND]: Yes.
[HER HONOUR]: Were you being sarcastic?
[THE HUSBAND]: No.
[HER HONOUR]: Do you know what lying means?
[THE HUSBAND]: Yes.
[HER HONOUR]: Were you lying when you said it’s a true copy?
[THE HUSBAND]: No. I spoke in error out of fatigue.
[COUNSEL FOR THE WIFE]: Now, I apologise and I apologise for my phraseology in the previous question, your Honour.
As her Honour has made clear to you, you understand you have to make full disclosure continuously at all times?
[THE HUSBAND]: Yes, I understand that I – yes.
HER HONOUR: Seeing as you were just interrupted, [counsel for the wife], again, how many other answers have you given incorrectly, sarcastically, out of fatigue?
[THE HUSBAND]: None that I can remember. That’s the first.
[HER HONOUR]: But you might have?
[THE HUSBAND]: No, I don’t – I’m tired. Can I have a break?
[HER HONOUR]: You want a break?
[JUNIOR COUNSEL FOR THE HUSBAND]: Your Honour, could we deal with these documents first?
HER HONOUR: No, he wants a break. Let’s half his dime.
(Transcript 4 July 2018, p.944 line 16 to p.946 line 21)
Perhaps it may have been wiser if her Honour had not followed the witness down these rabbit holes, but clearly the primary judge is trying to clarify the husband’s rather odd evidence. The point is, however, whether those questions could give rise to an apprehension of pre-judgment. Standing alone we do not see that it does. The primary judge is dealing with and trying to control an obviously difficult witness.
The next segment relied upon was:
HER HONOUR: No. Just before we do that, why haven’t you spoken to your father?
[THE HUSBAND]: I haven’t been – I’ve been pretty sad. Just keeping to myself.
[HER HONOUR]: Well, you’ve been in court when [counsel for the wife] has been talking about your father having been notified that property that he thinks he has got, being an entitlement – a security entitlement over the apartment in Melbourne - - -?
[THE HUSBAND]: Yes. I haven’t been - - -
[HER HONOUR]: - - - is going to be set aside. Why didn’t you do something about that?
[THE HUSBAND]: I’m not following that up. He wrote through [J Lawyers] to my lawyers making a claim for the apartment and I don’t want to bother him with it. He’s – I don’t – he’s not – his wife’s not well. He’s not that well. And I’m not pushing.
[HER HONOUR]: So - - -?
[THE HUSBAND]: I’m not pushing the point with him. I’m not discussing the matter with him is the answer. And I - - -
[HER HONOUR]: Okay. So do you think - - -?
[THE HUSBAND]: And I don’t want to.
[HER HONOUR]: How do you think he’s going to feel – and I don’t mean to sound heartless, because I’m not. But if his situation doesn’t improve, all right – his wife – you know, this time in six weeks. His wife is still sick?
[THE HUSBAND]: Yes.
[HER HONOUR]: All right. You still are not seeing [D]. You’re still sad. You’re still keeping to yourself. But he doesn’t have any interest whatsoever in that property in Melbourne. How much better do you think he’s going to feel that you didn’t tell him?
[THE HUSBAND]: That he doesn’t have an – he’s made - - -
[HER HONOUR]: That you didn’t – that you took no steps to notify him?
[THE HUSBAND]: I’m confused. I apologise. I didn’t take steps to notify - - -
[HER HONOUR]: No. You say you won’t take steps to notify him?
[THE HUSBAND]: He’s aware. He was dealing through [J Lawyers] to make his claim.
[HER HONOUR]: So are you satisfied that he’s aware that these proceedings are on now and that your - - -?
[THE HUSBAND]: Yes, he – yes, I - - -
[HER HONOUR]: - - - wife is making a claim - - -?
[THE HUSBAND]: Yes.
[HER HONOUR]: - - - in which she will likely ask me to ignore any security interest which you or he have previously asserted in the property in [X] Street?
[THE HUSBAND]: I assert that I owe him the money. He asserts that he’s owed the money.
[HER HONOUR]: Yes. And if you are unsuccessful in these proceedings, all right, and your father does not get to keep his – there’s no security interest recognised - - -?
[THE HUSBAND]: There’s no – no, because the caveat is not there. So there’s no security in the caveat.
[HER HONOUR]: All right. But if it is found by the court that there’s no money owing back to your father, either by way of capital or interest, do you understand that that is - - -?
[THE HUSBAND]: If that happens, that will be a tragedy for him. Yes.
[HER HONOUR]: Okay. Now, because that would be a tragedy for him in your view, why haven’t you contacted him in the last week?
[THE HUSBAND]: I’m depressed and I’m overwhelmed.
[HER HONOUR]: Because this time in six weeks, if the wife succeeds, he will be in America. His wife will still be sick. You will still not have seen [D]. And he will have sustained a pretty significant loss?
[THE HUSBAND]: That’s so. And as I have. That’s why it’s so depressing.
[HER HONOUR]: No, I’m talking about the loss in the proceedings if the wife was to succeed in her claim?
[THE HUSBAND]: Well, I feel – I think he has done as much as he can. I think he has tried very hard to protect his interest. And I feel that he has – there’s not much more that he can do other than have [J Lawyers] write a letter of demand. And he’s just not well enough to come back to Australia to be here in the case. And I pleaded with him to come - - -
[HER HONOUR]: Yes. But we told you he didn’t have to come back to Australia. He can give evidence from over there?
[THE HUSBAND]: He doesn’t want anything more to do with the Australian court system. He doesn’t want to get – come down here and be involved or he doesn’t want to have to give testimony. He just wants to be with his wife now. So he relied on [J Lawyers] to write the letter and he said, “…take care of it as best you can.” And I think he’s sick.
[HER HONOUR]: Thank you.
(Transcript 23 March 2018, p.381 line 5 to p.382 line 30)
Of this, her Honour said in the recusal reasons:
167.I was ensuring that relevant evidence was before the Court and that the husband had a thorough opportunity to explain his failure to call his father. Having regard to the fact that the husband was represented by senior and junior counsel and a prominent firm of solicitors, the absence of evidence required explanation.
The contention of the husband was that this was a submission to be made by counsel for the wife, and not for the primary judge to take up by way of cross-examination.
That again goes more to entering the dust of conflict rather than pointing to an apprehension of bias.
The next extract is:
[COUNSEL FOR THE WIFE]: Your Honour, I would seek leave to simply ask a couple of other questions on other matters which are relevant to the application in relation to passports.
HER HONOUR: When you – looking at – in a moment I will decide that. In W18, “I will be submitting my resignation from [T Inc],” so the American entity “and [W Pty Ltd] next week. I quit. Now what is it worth?” Can you tell me what was intended – what sort of response you were intending to elicit from the expert witness for the wife in these proceedings?
[THE HUSBAND]: Your Honour, I’ve been abused for years, and I’m exhausted, and I need a break.
[HER HONOUR]: Just answer the question, please?
[THE HUSBAND]: And I just need some – I need some time off from work.
[HER HONOUR]: Well, what were you resigning?
[THE HUSBAND]: From day to day – I don’t want a – I want a break. I don’t know. I want a break.
[HER HONOUR]: So you don’t know what you were going to resign from? What offices could you resign from?
[THE HUSBAND]: I’m not sure. I would like to just go see my family and have a break.
[HER HONOUR]: Yes, what offices could you resign from?
[THE HUSBAND]: What could I? Well, [UU Group] is dismissed. [VV Company] is a failure.
[HER HONOUR]: No, what offices within [T Inc] and [W Pty Ltd] could you resign from? You can resign as a secretary?
[THE HUSBAND]: I guess I could resign from W Group. I guess I - - -
[HER HONOUR]: You can resign as a director. You can’t resign as a shareholder, right. What other offices could you possibly resign – I don’t know what resignation refers to, so tell me what you could - - -?
[THE HUSBAND]: Okay. So at [T Inc] – at [T Inc], for example, I m [sic] what’s referred to as a 24, and I’m also a 4, and I’m also a 7.
[HER HONOUR]: For goodness’ sake, just tell what you can resign from?
[THE HUSBAND]: Being an advisor or a supervisor under ..... rules and regulations.
[HER HONOUR]: In [W Pty Ltd], the Australian entity, what offices can you resign from?
[THE HUSBAND]: What offices? Well, under the undertaking I can’t resign from being a director.
[HER HONOUR]: I’m not asking you in relation to the undertaking. It occurs to me that you can resign as a director?
[THE HUSBAND]: I - - -
[HER HONOUR]: You could?
[THE HUSBAND]: I don’t know whether I can or not and that was a question I asked [Mr DD] last night. So as a sole director of a company - - -
[HER HONOUR]: No?
[THE HUSBAND]: I said, “Can I resign as a director,” and I said, “Well, what if I die or what if I become incapacitated? What happens to a single member company if there’s a sole director?” And that was a question I had for my accountant and I don’t have an answer for that. So I don’t know whether I could or could not. I don’t know the corporate law.
(Emphasis added)
(Transcript 26 March 2018, p.476 line 4 to p.477 line 3)
The submission was this was more than an expression of mere annoyance, especially when it was in the context of the primary judge’s own cross-examination.
There was a show of annoyance evident in the exclamation “for goodness’ sake”, but that was after a very simple question had been asked seven times without receiving a sensible answer. Some annoyance was understandable.
The next extract concerns the husband’s cryptocurrency accounts. The wife asserted that the husband had, or had in the past, a significant interest in, at least, Bitcoin. He used applications on his phone (EN Application and EQ Finance) to manage his interests.
The husband said that he had held Bitcoin, that the last transaction on his phone was on 17 January 2018 and the largest transaction was USD1,900 (Transcript 22 March 2018, p.310 lines 32–37). He then added that he paid Ms SS (his girlfriend) the equivalent of $9,000 in Bitcoin on 25 January 2018. His solicitors had informed the wife’s lawyers that the husband held no documents relating to this.
The exchange continued:
[COUNSEL FOR THE WIFE]: Your name is on the card?
[THE HUSBAND]: - - - yes, when I’m travelling I use this for personal expenditures and - - -
HER HONOUR: And the - - -?
[THE HUSBAND]: And business - - -
[HER HONOUR]: Did any of these involve a [EN Application] for transactions on
the - - -?[THE HUSBAND]: No. No. Not that I know of.
[HER HONOUR]: In the documents you have deleted, have you deleted any documents which in any way link in with anything on W10, which is the statement?
[THE HUSBAND]: I’m sorry, could you say that again?
[HER HONOUR]: Have you deleted any documents that relate to transactions shown here?
[THE HUSBAND]: Have I deleted any documents? From the [CC Company] - - -
[HER HONOUR]: No, deleted any - - -?
[THE HUSBAND]: Well I’ve deleted the [EQ Finance] accounts, yes.
[HER HONOUR]: And what was involved in doing that?
[THE HUSBAND]: Create a login and just close the account.
[HER HONOUR]: Okay. A login to what?
[THE HUSBAND]: Well you can go to – [EQ Finance’s] – is a – you can go to a website. You can login and create an account.
[HER HONOUR]: So you logged into your account?
[THE HUSBAND]: And then you – and you delete the account.
[HER HONOUR]: And the purpose of deleting the account was?
[THE HUSBAND]: Didn’t want to have it anymore.
[HER HONOUR]: But why would you delete it?
[THE HUSBAND]: I didn’t need it. I didn’t want it.
[HER HONOUR]: But why did you delete it?
[THE HUSBAND]: To simplify things here.
[HER HONOUR]: To simplify things here. Can you tell me how your life then became more simple here?
[THE HUSBAND]: It didn’t.
[HER HONOUR]: Well what was your intention in terms of simplifying your life here?
[THE HUSBAND]: Sorry, could you say - - -
[HER HONOUR]: Tell me how you think deleting them simplified – at the time you did it, how did you think that deleting them would simplify your life?
[THE HUSBAND]: I don’t know.
[HER HONOUR]: Well then is it the case that you didn’t delete them because you thought it would simplify your life?
[THE HUSBAND]: Is it the case that I didn’t delete them?
[HER HONOUR]: Well is it – is simplifying your life not the reason you deleted them?
[THE HUSBAND]: I deleted them because I didn’t want them anymore.
[HER HONOUR]: You didn’t want the statements or you didn’t want the amenity of using the account?
[THE HUSBAND]: Didn’t want the account. I didn’t want the Bitcoin.
[HER HONOUR]: Well if you didn’t want the account and you didn’t want Bitcoin, what’s – what moved you to login to an account and delete statements that could just sit there?
[THE HUSBAND]: Well I helped – I helped [Ms SS] out and then I was done with the – I didn’t need the account anymore.
[HER HONOUR]: But why did you need to delete any statements?
[THE HUSBAND]: Well they’re online so you just – I just threw away the account when I was done with it.
[HER HONOUR]: And you did this on what date?
[THE HUSBAND]: I can’t remember.
[HER HONOUR]: 25 January?
[THE HUSBAND]: I – I can’t remember when.
[COUNSEL FOR THE WIFE]: Must have been after 1 February?
[THE HUSBAND]: Must have been.
[COUNSEL FOR THE WIFE]: Yes.
HER HONOUR: All right. Well then wasn’t it the case that on 25 January when your solicitors wrote and said you had no documents - - -?
[THE HUSBAND]: It says I don’t have any balances. So all interests and I didn’t have any interests at that time. Any and all interests. And I didn’t have any interests at that time.
[HER HONOUR]: On the 22nd of – this – in the period 22 December to 25 January, did you have – did you conduct any transactions whatsoever through [EQ Finance] or using Bitcoin?
[THE HUSBAND]: When – when - - -
[COUNSEL FOR THE WIFE]: [EQ Finance] or the [EN Application], your Honour.
HER HONOUR: [EQ Finance] or the [EN Application]?
[THE HUSBAND]: Could you ask the – the question again?
[HER HONOUR]: Between 22 December 2017 - - -?
[THE HUSBAND]: Yes.
[HER HONOUR]: - - - and 25 January 2018, did you have any transactions whatsoever on the [EN Application] - - -?
[THE HUSBAND]: Yes.
[HER HONOUR]: - - - or through [EQ Finance]?
[THE HUSBAND]: No.
[HER HONOUR]: So yes on the [EN Application]?
[THE HUSBAND]: Yes on the [EN Application].
[HER HONOUR]: And what transactions did you have?
[THE HUSBAND]: On January 6th I – no that’s – yes January 6th I spent 198, and then on January 7th I received $5.96, and then on January 17th I spent $90 and this is equivalent, $90.23, and then on January 17th I spent $336.72.
[HER HONOUR]: Well why weren’t they transactions that would come under paragraph 7 of the letter of 22 December?
[THE HUSBAND]: Because at the time that I responded to this I didn’t have any interest.
[HER HONOUR]: That’s your reading of your obligations?
[THE HUSBAND]: Yes ma’am.
(Transcript 22 March 2018, p.313 line 4 to p.315 line 5)
Again, the complaint is that this is cross-examination by the primary judge when it was a matter for counsel.
The next passage relied on is:
HER HONOUR: Did that trouble you when you paid your lawyers?
[THE HUSBAND]: Who – well, they got to show up here today. Yes. I paid them. I made that priority so maybe some creditor will sue me for paying them, but, you know, I don’t know who to pay.
(Transcript 26 June 2018, p.518 lines 1–3)
The complaint is that it is difficult to understand the relevance of the question. It was, however, not the subject of objection. It was clearly relevant in the context of the wife’s contention that the husband had ready access to funds when it suited him.
The next segment relied upon is:
[COUNSEL FOR THE WIFE]: I understand that. But we’re just in a difficult position because of what we will ultimately be submitting is just the flagrant lack of disclosure in relation to – we say it’s just incredulous - - -
HER HONOUR: The flagrant lack of disclosure doesn’t necessarily put money in the bank.
[COUNSEL FOR THE WIFE]: Your Honour, I understand that. I understand that. Your Honour has asked me what I’m saying about this loan. This has sort of got off the track a bit. We are trying to deal with the evidence that is martialled in the case. We have martialled what we can. Until we get to cross-examine – especially [Mr DD] – it’s a circumstance where we’re not really in a position to know what the extent of the evidence before your Honour will be.
HER HONOUR: Very well. Yes.
(Transcript 26 June 2018, p.601 lines 31–45)
As her Honour pointed out in her recusal reasons at [178], this is not a finding of non-disclosure. Rather, the primary judge, picking up the actual words used by counsel for the wife, was reminding counsel that even flagrant lack of disclosure does not of itself increase the asset pool.
The husband submitted that this was not so because in the final reasons her Honour said:
383.I am satisfied that the husband has failed in his duty of full and frank disclosure to the wife and to the court. A great deal of time and money was wasted by virtue of his intentional concealment and obfuscation.
The problem, it was said, lay in the acceptance of the flagrant non-disclosure.
The two do not seem related to us. The fact that a subsequent finding of non-disclosure was made, which was not challenged on appeal, does not rob the earlier comment of its nature. It was a comment and falls short of being considered a provisional finding.
The husband submitted that, having regard to all of the passages relied upon, the reasonable lay observer might readily form the view that the primary judge had a perception of the husband which would fall short of the impartiality required. This was because her Honour had entered into the dust of conflict, giving rise to a reasonable apprehension of bias. The primary judge was said to have waded in, even though it was accepted that her Honour was raising reasonable matters with a difficult witness.
The relationship between the dust of conflict ground and apprehended bias was discussed in Royal Guardian by Basten JA who said:
35.In R v T, WA, Kourakis CJ acknowledged “the subtlety of the distinction between the bias ground and the dust of conflict ground as I have articulated it.” It will be recalled, that the Chief Justice identified the “dust of conflict” ground as conduct demonstrating a compromised capacity to adjudicate on the issues raised at trial. Although it may be possible that both grounds are satisfied in a particular case, it is also possible that a particular case is better judged by reference to one ground than the other. In any event, a ground more broadly identified as the unfair trial ground is also more clearly distinguishable from an apprehension of bias than the more limited concern about a compromised capacity to adjudicate.
(Footnote omitted)
In the same case, Ward JA said:
168.At [40], Kourakis CJ acknowledged that many interventions will attract a consideration of both the bias and dust of conflict grounds but accepted that there would be some interventions which, even though they did not suggest pre-judgment, nevertheless showed that the judicial officer had lost the advantage of judicial detachment which he or she would otherwise have enjoyed as a judge adhering to the common law adversarial method of trial.
In CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76, Kiefel CJ and Gageler J said:
27.The fair-minded lay observer would again here recognise that an understanding of the role of the judge within the judicial process has some analogical application to the role of the Reviewer within the review process. In relation to the role of the judge within the judicial process, she would recognise the wisdom of the following observation ([Public Utilities Commission of the District of Columbia v Pollak (1952) 343 US 451 at 466–467]):
“The judicial process demands that a judge move within the framework of relevant legal rules and the covenanted modes of thought for ascertaining them. He must think dispassionately and submerge private feeling on every aspect of a case. There is a good deal of shallow talk that the judicial robe does not change the man within it. It does. The fact is that on the whole judges do lay aside private views in discharging their judicial functions. This is achieved through training, professional habits, self-discipline and that fortunate alchemy by which men are loyal to the obligation with which they are entrusted. But it is also true that reason cannot control the subconscious influence of feelings of which it is unaware. When there is ground for believing that such unconscious feelings may operate in the ultimate judgment, or may not unfairly lead others to believe they are operating, judges recuse themselves. They do not sit in judgment. They do this for a variety of reasons. The guiding consideration is that the administration of justice should reasonably appear to be disinterested as well as be so in fact.”
We take the principles to be applied, as expressed in Finch & Finch (2020) FLC 93-949, as follows:
16.Further, the following principles may be distilled from the previous authorities in relation to excessive judicial intervention:
(a)Although it may overlap with ostensible bias, excessive judicial intervention leading to a lack of procedural fairness is a separate basis of appealable challenge (RPS v The Queen (2000) 199 CLR 620 at 625; Royal Guardian at [35]–[39] and Jorgensen at [95]);
(b)A failure to assert a want of procedural fairness at the trial does not preclude it being first raised on appeal (Royal Guardian at [30]–[33] and [255]);
(c)The evaluation of whether interventions are excessive involves an assessment and balancing of the appropriate role and limits of judicial engagement and management, with the need for the appearance of detachment, and the provision of fairness (Royal Guardian at [18]; Royal Guardian at [171] citing Michel v The Queen [2010] 1 WLR 879 (“Michel”) and Jorgensen at [102]);
(d)Inept representation may justify greater judicial intervention, in order to ensure the proper use of court resources, and avoid delay or unnecessary prolongation of the hearing (Royal Guardian at [38]);
(e)Nonetheless the judge must not assume the role of advocate, or be unduly intimidatory, interventionist or directionist, nor unduly press so-called “preliminary views” (Royal Guardian at [220]; Royal Guardian at [17] citing Michel and Royal Guardian at [163] citing Denning LJ in Jones v National Coal Board [1957] 2 QB 55); and
(f)The number, frequency and duration of the judicial interventions will be relevant, as will their nature and context (including the stage of the trial), content and manner of delivery (including tone of voice) (Royal Guardian at [164] citing Galea).
The reasoning is plain and clear.
Did the primary judge err in finding that the husband provided $100,000 to have the trustee of the Fowles Family Trust appear in the proceedings thinking it would create difficulty for the wife? (Ground 6)
Did the primary judge err in finding that the Fowles Family Trust is the puppet of the husband? (Ground 7)
The husband’s submissions dealt with these grounds together and were:
53.The primary judge failed to explain her finding, at paragraph 306 of the Reasons, that the Fowles Family Trust is a puppet of the [husband], and that neither the [husband’s] sister nor the trustee exercised control over the trust. The evaluative paragraphs 304 and 305 disclose no proper basis for inferring, as the primary judge does, that the settlor intended the trust to operate other than in accordance with its terms. The primary judge identified no means by which the [husband] could on his own compel income of the trust or any part of its corpus to be distributed to him.
54.It is notable that paragraphs 304 to 305 do not contain any reference to transcript upon which the primary judge relied to reach her conclusions. The use of pejorative language by the primary judge, using such words as “inconceivable”, appears to have overtaken the judicial exercise of examining the evidence to make determinations of fact. That pejorative view of the [husband], not referenced to any transcript, was reiterated in the last sentence of paragraph 306.
55.The primary judge did not explain sufficiently, or at all, the path of reasoning leading to the antecedent finding that “the [husband] provided $100,000 to have the trustee of the [Fowles] Family Trust appear in this proceeding when he thought that it would create difficulty for the [wife]”. The evaluative paragraphs at 283 to 299, do not support such a finding.
(Footnotes omitted)
Her Honour’s findings were:
304.I accept that the husband has control of the Fowles Family Trust in his capacity as the Investment Committee and that he exercises that control in fact. There is no reasonable alternative explanation as to why the husband would allocate $3 million plus of assets by gifting them to the Fowles Family Trust other than that he would retain control. Notably, the husband admits that he continues to bear the taxation liabilities for the Fowles Family Trust. It is inconceivable that he would do so if he doesn’t retain the benefit of the Fowles Family Trust. His own evidence is that the Fowles Family Trust “was established [in] 2014 for the benefit of [the wife], [D] and me. It was in part, for asset protection.” The husband’s claim that he now has no control over the assets of the Fowles Family Trust is inconsistent with he, the wife and D’s benefiting from the Fowles Family Trust or assets being “protected”.
305.The appearance of EE Company in the proceedings is emblematic of the husband’s control and responsibility. He paid the $100,000 required by the trust company to appear and, had he not paid it, there would have been no appearance.
306.I find that the Fowles Family Trust is the puppet of the husband. Neither his sister nor the trustee exercise any control over the Trust or the assets of the Trust. I cannot attribute a value to the Trust because of the husband’s non-disclosure. From the manner in which the husband has conducted these proceedings, so as to deflect any meaningful assessment of the Trust assets, I infer that the Trust assets are substantial.
They are, in part, based on the following earlier findings:
295.The wife submits that the expert evidence that was led by the husband was an attempt to “muddy the waters and created the illusion of complexity (where none existed).”
296.My impression of the husband’s experts is that they gave their evidence in a disembodied superficial manner. That is, they gave evidence of general principle. They did not give evidence rooted in personal knowledge of the entities concerned or the husband’s business dealings and history and where everything fits. My impression is that the husband withheld experts who have had hands on experience of the husband and his operations and provided other experts to give evidence who knew considerably less than the wife and her advisors.
297.The wife’s submissions in regards to the husband’s professional witnesses included that:-
The Husband carefully chose the witnesses he called. By withholding all relevant personal financial information from the witnesses Ms [OO], Mr [AZ], Mr [CG] and Ms [BB], each of those witnesses when called could only speculate as to the facts in issue, their actual evidence only informing the Court as to tangential issues of general principle.
298.The wife asserts, and I accept, that the husband failed to provide sufficient explanation why the following witnesses were not called in relation to the Fowles Family Trust:-
(a) Mr G Fowles;
(b) Mr Z;
(c) Ms DA;
(d) The Trustee of the Fowles Family Trust; and
(e) Mr NN.
299.Notably, the husband provided $100,000 to have the Trustee of the Fowles Family Trust appear in this proceeding when he thought that it would create difficulty for the wife.
300.The relevant inference to be drawn from the husband’s failure to call the above witnesses is that their evidence would not have assisted the husband’s case.
The reasoning is plainly apparent. The finding as to the payment of $100,000 is also clearly supported by the findings at [252]–[265] which are, contrary to the written submissions, replete with transcript references.
These grounds do not succeed.
Did the primary judge err in finding that the husband had control of the 2017 DD Trust? (Ground 8)
The history of the 2017 DD Trust was summarised by the husband in his Summary of Argument:
57.The history of the 2017 [DD] Trust, as recorded in the Reasons, is as follows:
57.1.In 1989, [Mr CR] (the [husband’s] uncle) established the 1989 [DD] Trust (1989 Trust);
57.2.In 2003, [Mr CR] passed away and the 2003 [DD] Trust (2003 Trust) was created with the appointment of the corpus assets of the 1989 Trust;
57.3.At the time the 2003 Trust was established, four additional sub-trusts were established, one of which, was the [Fowles] Family Trust which later became known as the [EE] Trust ([EE] Trust);
57.4.In 2014, the corpus assets of the [EE] Trust were rolled into the 2003 Trust and thereafter the [EE] Trust ceased to exist; and
57.5.In 2017, the 2017 [DD] Trust was created, with the appointment of the corpus assets of the 2003 Trust.
(Emphasis in original)
The husband asserted that the primary judge erred because the husband was only entitled to part of the 2003 DD Trust so the husband therefore could not be entitled to all of the 2017 DD Trust.
The finding accepts that to be so:
340.The wife contends that the court should find that there is a moral obligation or mutual understanding between members of the Fowles family that the portion of assets of the 2017 DD Trust which is attributable to the EE Trust, is an entitlement of the husband. Various values are attributed to the husband’s interest in the 2017 DD Trust from an entitlement to cash and assets of “at least $1,175,909” to a financial resource of $12,880,954. I am satisfied that the husband exercises control over the 2017 DD Trust and I do not accept Mr Y’s evidence to the contrary. I have no idea about what is in the 2017 DD Trust I cannot infer a value to the husband of or with respect to the 2017 DD Trust. However, I am satisfied that it, along with is antecedents, the [Fowles Trust], the EE Trust and the 2003 DD Trust, are all entities in respect of which the husband has deliberately failed to make disclosure in the sense of In the Marriage of Weir (1993) FLC 92-339 and successive cases to which will come later.
(Emphasis added)
The balance of the finding is based on the evidence overall. To the extent there might be a paucity of reasons, no material injustice has flowed from that (Conway v The Queen (2002) 209 CLR 203). The 2017 DD Trust appeared on the table of legal and equitable interests (at [388]) as an entry, but with an unknown value. It is not mentioned in the discussion of the income, property and financial resources of the parties (at [428]–[436]). No finding was made as to the value of the husband’s interest (at [463]). No orders were made in relation to it.
This ground does not succeed.
Did the primary judge err by failing to treat the wife’s interest in an inheritance from her late mother as property of the parties? (Ground 9)
At [352], the primary judge noted that probate had not yet been granted in relation to the wife’s mother’s estate and that there were a number of unresolved matters which could affect the value of the wife’s interest in the estate.
Her Honour did not investigate these matters further because the wife had charged her interest with payment of her legal fees and whatever the likely interest, the wife would not receive any part of it.
We see neither error nor lack of reasons in her Honour’s approach.
Did her Honour err in finding that the parties’ contributions were equal? (Ground 11)
The husband submitted that the finding as to contributions was in error, lacked reasons and was unreasonable.
Her Honour extensively discussed the parties’ contributions at [395]–[418]. It was found that the husband had made the bulk of the financial contributions but those of the wife as homemaker and parent “far outweighed” those of the husband in that regard. They were found to be “very significant” and “demanding” with many of the difficulties having been created by the husband (at [417]).
The assessment of contributions is the exercise of a wide discretion (Gronow v Gronow (1979) 144 CLR 513; Norbis v Norbis (1986) 161 CLR 513). We have already referred to House v The King which sets out the nature of an appeal from such a decision. A mere assertion of error and that another result should have occurred does not identify appealable error. The submissions of the husband did not deign to go into any further detail.
The reasons are adequate as we can follow her Honour’s reasoning.
In the case of a long marriage with a child, where each party has made significant contributions, a finding of equality is entirely unremarkable and certainly not unreasonable.
This ground fails.
Did the primary judge err in requiring the husband to make a payment to the wife that exceeded the identified legal and equitable interests of the husband? (Ground 12)
The primary judge ordered the husband to transfer to the wife the X Street apartment, free of the mortgage, and to pay her $1,240,231.
The husband was to retain T Inc (valued at $1,492,535) as well as his unknown interest in the Fowles Family Trust and an unknown interest in the 2017 DD Trust (at [466]).
It can easily be inferred that her Honour considered these interests to be sufficient to meet the orders. Thus, it is incorrect to say the identified assets were insufficient to meet the order. It was simply that not all the available interests had a known value.
The orders therefore provided a distribution of existing assets and did not require the husband to enlarge the property pool by acquiring assets or borrowing. Thus, authorities such as Milankov and Milankov (2002) FLC 93-095, Gollings and Scott (2007) FLC 93-319, Merritt & Richards (No 2) [2016] FamCA 66, Velten & Velten [2020] FamCA 384, Keach & Keach [2011] FamCA 192 and Walters and Walters (1986) FLC 91-733 are of no assistance.
This ground does not succeed.
Did the primary judge err in making an adjustment of 10 per cent in favour of the wife pursuant to matters raised by s 75(2) of the Act? (Ground 13)
The submissions in support of this ground were:
77.The learned primary judge erred in finding, as she did, that it was just and equitable to make a 10 percent adjustment in favour of the [wife] pursuant to s 75(2) of the Act. The primary judge does not explain the path of reasoning, in the evaluative paragraphs 424 to 464 of the Reasons, or otherwise, that led her to the erroneous conclusion. It is unclear whether the primary judge took into account the 2017 [DD] Trust or the [Fowles] Family Trust as a financial resource of the [husband].
78.Although the primary judge considers each of the factors pursuant to section 75(2), the Reasons fail to articulate the basis for the adjustment. It is not possible to determine how the primary judge arrived at her conclusion that there should be an adjustment of $690,000 to the [wife], or a disparity between the parties of $1,380,000.
(Footnotes omitted)
We do not accept that there is a lack of reasons. The path of reasoning is exposed in [424]–[464].
The primary judge did not mention either the 2017 DD Trust or the Fowles Family Trust in that discussion, but that does not mean they were not given appropriate weight. The mere fact that they were not expressly mentioned does not mean that they were not taken into account (see Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62]; Fox v Percy (2003) 214 CLR 118 at [41]; Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385–386; Tibb v Sheean (2018) 58 Fam LR 351 at [75]–[88]).
The primary judge’s findings that the husband had failed to comply with his duty of full and frank disclosure permeate the reasons, and it is apparent to us that those findings informed, not only the primary judge’s conclusions in relation to the husband’s interests in the 2017 DD Trust and the Fowles Family Trust, but, as a corollary, an appropriate adjustment pursuant to s 75(2) of the Act.
This ground does not succeed.
It follows that the appeal will be dismissed.
THE CROSS-APPEAL
The wife did not wish to proceed with her application for leave to adduce further evidence and it was subsequently dismissed.
Did the primary judge err in her alteration of the parties’ property interests? (Ground 1)
It is useful to set out Ground 1 of the cross-appeal in full. It too is in an unhelpful form, combining at least two distinct grounds.
1.The primary judge erred by altering the legal and equitable property interests of the parties pursuant to s.79 of the Family Law Act 1975 in a manner that was not just and equitable. The primary judge erred:
a.By significantly undervaluing the total value of the assets (legal and equitable interests) available for division to be adjusted between the parties as $6,900,840.00 ("Reasons") at [388]–[389]). The primary judge:
i.Erred in finding as to [20 B Apartment], an asset beneficially owned by the [Fowles Family Trust]: “There is no valuation of or with respect to [20 B Apartment]” (Reasons at [268]);
ii. Erred by failing to:
1.Value the assets of the [Fowles Family Trust] as being at least $US 3.1 plus an additional US$1.1 for increase on evidence in the value of [20 B Apartment] from purchase to offer to sale; or alternatively
2.Value the assets of the [Fowles Family Trust] as being at least US$3.1M; or alternatively;
3.Ascribe any minimum monetary valuation of the assets of the [Fowles Family Trust];
iii. Erred by failing to:
1.Value the assets of the 2017 [DD] Trust; or alternatively
2.Ascribe any minimum monetary valuation of the assets of the [DD] Trust;
iv. Erred in finding:
1.That the [W] Group was "not…appropriately valued as a going concern" (Reasons at [320]); or alternatively
2.Ascribe any minimum monetary valuation of the assets of the [W Pty Ltd];
b.When taking into account matters pursuant to section 75(2)(b) and/or 75(2)(o) the primary judge erred by failing to give any or alternatively proper weight to any of:
i.the "substantial assets" found to have been concealed by the husband (Reasons for Judgment dated 6 October 2023 ("Reasons") at [387]), or
ii.the "substantial" value of the [Fowles] Family Trust, or
iii.the husband's interest in the 2017 [DD] Trust.
(As per the original)
Should the primary judge have ascribed a value to the Fowles Family Trust, the 2017 DD Trust or the W Group?
First, the wife sought to ascribe a value to 20 B Apartment. There is force in her submission that it could be inferred from all of the evidence that the unit had a value of about USD2,200,000, in at least 2020 or 2021, leading to an Australian value of $3,013,698.
However, the apartment is not owned by the husband. It is owned by YY Inc, which is a flow through entity to SS Company, which is a flow through entity to the Fowles Family Trust. In short, the apartment is held by the Fowles Family Trust. It is not known what other assets and, importantly, liabilities it has which must be taken into account when assessing its value. One of its assets cannot simply be taken in isolation as the value of the Fowles Family Trust.
This consideration, however, bolstered her Honour’s view that the Fowles Family Trust had a substantial value, although the exact value remains entirely one of speculation.
For similar reasons it cannot be assumed the Fowles Family Trust had at least the value of the other assets transferred to it.
The value of the 2017 DD Trust similarly cannot be inferred from the value of the EE Trust even if the husband was entitled to all of it, let alone only a part.
In order to successfully argue that the primary judge treated the W Group as a going concern, the wife would need to have the further evidence proposed by her accepted. It was not pressed so the state of the evidence at the hearing was that it has lost the services of its clearing agent in the United States and was no longer a going concern, as her Honour found.
Did her Honour fail to take into account the unvalued “substantial assets” under s 75(2)(o) of the Act?
The primary judge did not specifically mention the assets “concealed” by the husband nor the value of the Fowles Family Trust or the 2017 DD Trust in that context, but that does not mean that they were not considered (see the discussion above at [226]–[227]).
These assets form a significant part of her Honour’s reasons and, reading them as a whole, there is no reason to think that they were not taken into account in deriving the adjustment.
Accordingly, Ground 1 of the cross-appeal does not succeed.
Did the primary judge err by failing to apply the principles enunciated in Chang v Su [2002] HCATrans 446 (“Chang”) and Weir and Weir (1993) FLC 92-338? (Ground 2)
The wife submitted that the effect of the orders made is that the husband is able to retain “all of the assets he has successfully prevented the court from being able to precisely value” (wife’s Summary of Argument filed 26 March 2024, paragraph 44).
In Chang, in the course of arguments, Callinan J said the idea that a party could limit the amount of settlement by hiding assets was a nonsense.
In the reasons for refusing the grant of leave, the High Court said:
This is an application for special leave to appeal from a decision of the Full Court of the Family Court affirming a judgment in which the primary judge made the best assessment that she could of the means of the respective parties and ordered that the applicant make a substantial disposition of property in favour of the respondent.
The primary judge was unable precisely to ascertain the means and assets of the applicant. The reason for this was his inconsistency and want of frankness in his assertions and disclosures about his means. Accordingly, her Honour was thrown back principally on statements made by the applicant in his application for permanent residence in Australia in 1991 in which, among other things, he said that his net assets conservatively estimated at a volume in excess of $4.5 million.
The primary judge was entitled to rely on the information contained in the application for permanent residence and the applicant’s failure to explain the difference between his financial status at that time and his claim in the proceedings to a very much reduced position at the time of the trial. The Full Court of the Family Court reviewed the evidence for itself and was unable to discern any error of law or fact on the part of the primary judge.
Here, her Honour did the best that could be done. Effectively, the wife received the benefit of the bulk of the assets that could be ascribed a value. The value of the Fowles Family Trust and the husband’s interest in the 2017 DD Trust were matters of speculation. There was no evidence as to how these interests might be realised if the husband chose to remain out of Australia and did not comply with an order for payment derived from those interests.
In reality, this is a challenge to the exercise of the discretion in weighing the s 75(2) considerations and simply arguing a different result. That, again, does not identify error. The fact that a court may have approached the matter in a different way or arrived at a different result does not identify error.
It may have been different if Ground 1 had succeeded and the wife had established that the assets held by the husband had a value in excess of $8 million. However, the Court has to do the best it can on the evidence before it.
This ground does not succeed.
The cross-appeal will be dismissed.
I certify that the preceding two hundred and forty-eight (248) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Carew & Campton. Associate:
Dated: 12 July 2024
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