GG & JFG

[2005] FamCA 498

FAMILY LAW ACT 1975

IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT SYDNEY

Appeal No. EA66 of 2004
File No. PAF 3387 of 2002

IN THE MATTER OF:

Appellant

- and -

JFG

Respondent

REASONS FOR JUDGMENT

BEFORE:                  Kay, Holden and Coleman JJ
HEARD:  5^th day of April 2005
JUDGMENT:           17^th day of June 2005

FAMILY LAW

APPEALS - Property settlement - parties' unequal contribution to the purchase price of a property - whether the trial judge should have found the property was presumed to be held in equity according to the contributions to the purchase price made by each of the parties

APPEALS - procedure - appeal by way of rehearing

KAY and HOLDEN JJ: This is an appeal against an order for settlement of property made by Stevenson J whereby she divided the property of the parties 55.22% to the respondent wife and 44.78% to the appellant husband.

Background

At the date of trial, the appellant husband was 53 years of age and the respondent wife 62. They married and commenced cohabitation on May 1972 and separated in September 1999 after having lived together for in excess of 27 years.
There were a number of children of the marriage, all of whom were over the age of 18 years as at the date of trial. They were all residing in the former matrimonial home with the respondent wife.

The judgment of the trial Judge

The grounds of appeal, to which we shall refer shortly, are very narrow and attack three aspects of her Honour's judgment. It is for that reason that it is unnecessary for us to refer to the judgment of the trial Judge in as much detail as we might normally.
Her Honour began her judgment by setting out in considerable detail the financial and non-financial history of the marriage. She then correctly set out the approach to be taken in property cases.
Her Honour then summarised the principal issues raised by the parties, only one of which need be mentioned and that is the value of the appellant husband's collection of vintage cars. The value of two of the vehicles was in dispute, they being a C and a V. The valuer for the husband had valued the C at $27,000 and the valuer for the respondent at $7,500. As it is only her Honour's finding with respect to the value of the C that is attacked by the grounds of appeal, it is only necessary for us to refer to what her Honour said in her reasons on that issue. Her Honour said:
"46.Mr [C] described the C [vehicle] as being in the final stages of "a reasonable amateur restoration" and said that he was of the view that it would cost $15,000 to $20,000 to achieve concours condition. He agreed that the premise of councours restoration is "to get the vehicle back to the original design concept as far as possible". He stressed that the C is not "a show car" and said that the majority of the market for such vehicles in Australia consists of incompletely restored vehicles. He agreed that he is a fancier of Cs and said that there is "an awe factor" with this kind of vehicle.
47.Mr [W] described the C [vehicle] as being in fair condition and the restoration as "hurried or unskilled". He said that it would cost approximately $20,000, excluding labour, to restore the C to concours condition. He was of the view that a purchaser who was prepared to buy a 1922 C would not accept a vehicle in the condition of the subject, particularly with wood trim which required replacement, vinyl trim and without a canvas hood.
48.[The husband] said that the C has not been restored to the best of his ability; rather, it was "put together temporarily" for display at the car Club in 1994. He said that the vehicle was last registered in approximately July 2002 and last driven when he took it to another State in 2002.
49.Neither valuer was able to say whether work was required to the engine of the C. Mr [C] conceded that engine work could impact upon the value of the car.
50.Mr [W] expressed the view that there is a greater demand for C's in the United States, "where people are passionate" about such vehicles. He said that Australian purchasers prefer British or domestic vintage cars. He was firmly of the view that C's will always achieve higher sale prices in the United States than would be the case in Australia.
51.Mr [C] carried out a number of internet enquiries as to sales of vintage C's in the United States and Australia. He referred to the sale of a 1927 C in excellent condition for the sum of $55,000 on 10 March 2003. Mr [C] explained that the 1927 model has features which the 1922 model lacks, with the result that the 1922 model is less valuable. Mr [W] said that the 1927 model is "more driver friendly" and more valuable than the subject.
52.Mr [C] referred to sales in August/September 2000 of a 1925 C for US$34,000 and a 1925 C for US$25,500. There was no evidence as to the condition of either of these vehicles. Mr [W] commented that the P model is substantially different to the subject vehicle.
53.Mr [C] also made reference to an unrestored C P model with parts, which was for sale in July 2003 for US$18,000. Further, a fully restored 1927 P was for sale in July 2003 for US$59,900. An unsuccessful attempt was made in 1998 to auction a 1921 C described as having "original interior, recent strip and paint" and "runs and drives well", in the United States. The final bid for this vehicle was US$33,000.
54.It is my view that there is no basis upon which I can prefer the evidence of either Mr [C] or Mr [W] in terms of their respective qualifications and experience. Each gentleman has had a long history of involvement with the motor vehicle industry, including motoring journalism and valuation of all kinds of vehicle. They have each had prior experience with the valuation of vintage cars and each was prepared to concede that this area is fraught with difficulty. I can only say that I concur with that concession.
55.With respect to Mr [W], it seemed to me that Mr [C] made more extensive enquiries as to sales of motor vehicles similar to the C and the V, before arriving at his valuations. In addition, Mr [C] appeared to have a greater knowledge of relevant matters relating to these two individual vehicles, particularly the details of registration of the V and the most recent occasions when each was driven.
56.For these reasons, I prefer the evidence of Mr [C] to that of Mr [W]. Accordingly, I find that the 1922 C has a value of $27,000 and the 1932 V a value of $6,500."
After resolving a number of other valuation issues, her Honour turned to the question as to how she ought to include property 1 in the asset pool. Earlier in her reasons, she had outlined the circumstances surrounding the acquisition of that property. She noted that the parties had sold another property for which they received a net sum of $72,000 in late 2001 which money was lodged in an interest-bearing account held by the appellant husband's solicitor. Her Honour then went on to say:
"26.[the appellant husband and his de facto partner from late 2001 to February 2003] decided to purchase a property at P for the sum of $250,000. They obtained a mortgage advance of $150,000 from the Bank and [the husband] had available cash of approximately $30,000, which remained from his workers compensation payment. The balance of the purchase money came from the sum of $72,000 lodged in the interest-bearing account, following the sale of another property. [The husband] was able to obtain access to this money after making an application and obtaining an order for its release to him. The available evidence suggests that Ms P made no lump sum contribution to the purchase price of this property.

27.During the marriage, [the husband] acquired a number of vintage cars. In 1984 he purchased a 1937 B for $2,000, which money he borrowed from his uncle. He repaid most of this loan and his uncle forgave the balance."

Later, in her judgment, her Honour said:
"114. The fact is that the P property is owned by [the husband] and Ms P as joint tenants and they have a joint liability as mortgagors. Both parties sought to include the full value of the property as an asset and the whole amount of the mortgage debt as a liability. There was, however, no allegation and certainly no evidence of a resulting trust or any similar claim which might justify a finding that [the husband] is beneficially entitled to the whole of the net equity in the property, regardless of situation at law."
In an affidavit sworn on 18 March 2003, the husband deposed as follows:
"91. I continue to reside in the home I purchased in September 2002. The relationship with my partner, Ms P, has ended. Ms P vacated the home on 6 March 2003. The interest only mortgage repayment on the property is $760.00 per calendar month. Given my limited financial resources, I am unable to meet the mortgage payment and support myself. Ms P has agreed to loan to me the sum of $100.00 per week to assist in meeting my commitments. It has been agreed that I will repay Ms P not only the monies loaned to me on a fortnightly basis, but also $3,400.00 rental arrears paid to my brother whilst I was residing at G M, as well as the monies contributed by Ms P towards the initial purchase of the home."
Her Honour specifically rejected that evidence saying in her reasons for judgment:
"122.In his affidavit sworn on 18 March 2003, [the husband] deposed that he and Mrs P had agreed that she would advance to him an amount of $100 per week. In his oral evidence on 24 November 2003, [the husband] said that Ms P provides to him a sum of $150 per fortnight.
123.The evidence as to the quantum of this alleged liability was confusing. In his Financial Statement sworn on 18 July 2003 [the husband] deposed that he owed to Ms P the sum of $11,700. In his oral evidence given on 24 November 2003 [the husband] at first said that he owed to Ms P approximately $3,500 and at a later stage in his evidence given that same day he said that the outstanding amount is approximately $13,000.
124.There was no evidence forthcoming from Ms P as to any amount owed to her by [the husband]. Strangely, his evidence was that he does not know where she lives and has only a mobile telephone for her. There was no evidence as to the manner in which she advances the sum of $150 per fortnight to [the husband] There was no evidence as to any requirement for or conditions of repayment by [the husband] to Ms P.
125.The state of the evidence in respect to this alleged liability is unsatisfactory and insufficient to enable me to make a finding that any such debt exists."
At trial, counsel for each of the parties invited her Honour to take in this property at the agreed value of $400,000 and the whole of the mortgage of $150,000. Although joining in that invitation counsel for the appellant husband made it clear that his case was that the respondent wife's entitlement on the basis of contribution ought to be limited to the $72,000 that had been obtained from the other property and was being held in trust.
Her Honour declined the invitation stating:
"114. The fact is that the P property is owned by [the husband] and Ms P as joint tenants and they have a joint liability as mortgagors. Both parties sought to include the full value of the property as an asset and the whole amount of the mortgage debt as a liability. There was, however, no allegation and certainly no evidence of a resulting trust or any similar claim which might justify a finding that [the husband] is beneficially entitled to the whole of the net equity in the property, regardless of situation at law."
Her Honour returned to discuss the P property when considering s 75(2)(o). Her Honour said:
"166.I have referred to the fact that Ms P is a registered owner of the P property, as joint tenant with [the husband], and that she is also a joint mortgagor. As I have said, she does not appear to have made any lump sum contribution to the purchase price of the property. She has, however, been providing a sum of $75 per week to [the husband] for approximately 12 months and it may well be that this money is being used to meet mortgage repayments.
167.Assuming that all of the money provided by Ms P has been applied to service the mortgage, an amount in the vicinity of $4,000 has thus been contributed to the property. She has received an interest which, in my view, I am obliged to treat as having a value of $200,000, together with a mortgage liability of $75,000. It is thus apparent that she has acquired an interest in the property with a net value of $125,000, yet she has contributed a sum only in the order of $4,000, at best. [The husband] elected to create in Ms P a valuable interest in the P property, which does not reflect her contribution to the purchase price or the mortgage payments. [The wife] had no choice in the matter, as the proceeds of sale of the other property were released to [the husband] by order of the Court.
168.Effectively, an amount of $125,000 has been removed from the pool of property, on account of Ms P's legal interest in this asset. Had I been able to include the full net value of the P property, [the wife] would have received an additional sum of $62,500. It thus seems to me that the justice of the case requires that there be an adjustment in her favour pursuant to this factor."
The final aspect of her Honour's reasons for judgment that we need to mention also arises in the context of her consideration of the s 75(2) factors. In discussing s 75(2)(m) her Honour said:
"164.I have already remarked upon the curious circumstances of [the husband’s] financial arrangements with Ms P. It seems quite extraordinary that she would separate from him in February 2003, yet continue to provide him with a regular payment of $75 per week. Although I have suspicions as to the true nature of their current relationship, the evidence does not enable me to make any finding in that regard."

The grounds of appeal

The appellant husband relies on three grounds of appeal, which are as follows:
"1.Her Honour was in error in accepting Mr [C’s] valuation of $27,000.00 in preference to that Mr [W] at $7,500.00 and, in particular, in failing to have regard to a comparable valuation guide which was in evidence, and was referred to by Mr [C], which would have attributed a value of $6,300.00 to the value.
2.Her Honour was in error in failing to take into account, or afford any weight to, the circumstances that the Wife had a substantial financial resource in the form of the support of the 6 adult children who remained living in the home with the Wife, while making only a nominal contribution to household expenditure.
3.Her Honour was in error in failing to hold that Ms P had a beneficial 30% interest in the P property, and in making an adjustment under s.75(2) which had the effect of notionally including the whole of the P Property, including Ms P's 30% beneficial interest in it, in the Husband's property or resources."

The merits of the appeal

Not unnaturally, Senior Counsel for the appellant husband concentrated his submissions on ground 3. He relies upon the following unchallenged finding of fact by her Honour:
(1) The purchase price of the P Property was $250,000.
(2)Of the purchase price $150,000 was raised jointly by way of mortgage by the appellant and Ms P.
(3)The balance of $100,000 was paid by the husband. $72,000 was paid from the moneys released from the Trust Fund and $28,000 from the husband's worker' compensation payment.
He submits that where parties contribute unequally to the purchase price of a property, they are presumed to hold it beneficially pro-rata to their contributions to the purchase price unless that presumption is rebutted by a presumption of advancement, or by evidence. He further submits that where parties jointly borrow funds on mortgage loan, they are to be regarded as contributing that part of the purchase price so raised equally.
In support of his submissions Senior Counsel for the appellant relies upon the authority of Calverley v Green (1984) 155 CLR 242.
In that case Gibbs CJ said as follows, at 246:
"Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such - not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money."
At 251 he went on to say:
"However, both the presumption of advancement, and the presumption of a resulting trust, may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase: see Charles Marshall Pty. Ltd. v. Grimsley [(1956) 95 CLR 353, at pp. 364-365]. Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained. In the present case however both purchasers contributed the purchase money. The amount of $18,000 borrowed under the mortgage was provided equally by the parties, for it was lent to them jointly, on terms which made them jointly and severally liable for its repayment, and, having thus been borrowed, was applied by them in part payment of the purchase price. Where there are two purchasers, who have contributed unequal proportions, but have taken the purchase in their joint names, the intentions of both are material. Even if the parties had no common intention, the intentions of each may be proved, for the purpose of proving or negating that one intended to make a gift to the other."
Senior Counsel for the appellant husband submitted that even if the appellant husband had been meeting the mortgage repayments or had agreed to indemnify Ms P against any liability that she had for those payments that would make no difference to the presumption. He quoted the following passage from the judgment of Mason and Brennan JJ in Calverley and Green (supra) at 257:
"The first question is whether the plaintiff was a contributor to the purchase price of the property, as the Court of Appeal found, or whether she was not, as Rath J. found. The defendant's payment of the instalments due under the memorandum of mortgage, in accordance with the arrangement made between the parties, may be thought to be, or to be the equivalent of, the provision pro tanto of the purchase price of the property. After all, the only moneys which were actually paid out of what the parties had owned before settlement of the contract for the purchase of the Baulkham Hills property or out of what they had earned thereafter had come out of the defendant's pocket. The property was purchased on the basis that the purchasers should pay it off over twenty years, a basis familiar to many home buyers. It is understandable but erroneous to regard the payment of mortgage instalments as payment of the purchase price of a home. The purchase price is what is paid in order to acquire the property; the mortgage instalments are paid to the lender from whom the money to pay some or all of the purchase price is borrowed. In this case, the price was $27,350, of which $18,000 was borrowed from the mortgagee by the plaintiff and defendant jointly. The balance was paid by the defendant out of his own funds, being part of the proceeds of the sale of the Mount Pritchard property. Thus the plaintiff and defendant both contributed to the purchase price of the Baulkham Hills property. They mortgaged that property to secure the performance of their joint and several obligation to repay principal and to pay interest. The payment of instalments under the mortgage was not a payment of the purchase price but a payment towards securing the release of the charge which the parties created over the property purchased. We would agree with the view expressed by the English Court of Appeal in Crisp v. Mullings [[1976] E.G. 730, at p. 733], a case in which the material facts are not distinguishable from the present:
'The situation, in our view, is that the defendant does not establish that he alone provided the purchase price, any more than he would have, had the whole price been provided by a joint mortgage; and the resulting trust of the whole is therefore not established.' "

They went on to say at 258:
"Once it was found that both parties had contributed to the purchase price, the conclusion had to conform to the relevant equitable presumption unless it was displaced, rebutted or qualified. When two or more purchasers contribute to the purchase of property and the property is conveyed to them as joint tenants the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal."
Senior Counsel also relied upon the following statement from the judgment of Deane J at 266 - 268:
"There are three presumptions of equity which are here relevant. The first is that which was applied by Rath J. at first instance in this case but was held by the Court of Appeal to be irrelevant upon a proper appreciation of the facts. Worded in terms that are appropriate for present purposes, it is: where a person pays the purchase price of property and causes it to be transferred to another or to another and himself jointly, the property is presumed to be held by the transferee or transferees upon trust for the person who provided the purchase money. The second can properly be seen as complementary of the first. It is: where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds or hold the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it.
…
The evidence indicates that Miss Green became a party to the purchase and the mortgage in order to facilitate the raising of finance. To that end, Mr Calverley and she falsely represented that they were married and both the transfer and the mortgage referred to Miss Green as "Dianne Lea Calverley" and state that she was Mr. Calverley's wife. Regardless of motivation however, the fact remains that the loan made pursuant to the mortgage was made to Miss Green jointly with Mr. Calverley and that, in the absence of a contrary understanding to the effect that the borrowed money should be Mr. Calverley's alone (and none was shown), the loan moneys applied in the purchase of the home were Miss Green's as well as Mr. Calverley's. That being so, the Court of Appeal was correct in concluding that the case could not properly be approached on the footing that the purchase price had been provided by Mr. Calverley alone. Upon a proper analysis, one-half of the moneys which were jointly borrowed and applied towards the purchase were provided by Miss Green. The residue was provided by Mr. Calverley. In these circumstances, the second of the above presumptions was applicable unless the circumstances came within one of the cases in which equity assumes an intention of advancement, that is to say, unless the fact that Mr. Calverley and Miss Green had been for some years, and intended to continue, living together precluded a presumption that the property was held upon resulting trust for themselves in shares corresponding to their respective contributions to the purchase price."
The proposition is that having rejected the invitation of each of the parties to treat the whole of the equity in the P property as being the property of the husband, her Honour erred in finding that the husband's interest in that property was, in fact, only a 50% interest.
The uncontested facts are that the appellant husband contributed $100,000 plus one half of the mortgage (being $75,000) or a total of $175,000 to the purchase of P. Ms P contributed her half of the mortgage (being $75,000). On the powerful authority of Calverley and Green (supra), her Honour ought to have found not that the appellant husband had a 50% interest in the property but rather that the property was presumed to be held in equity by the appellant husband and Ms P in the proportions 7:3 respectively.
We accept that her Honour fell into error in this regard. We find ourselves, however, having considerable sympathy for her Honour and readily understand how she fell into that error. The fact is that none of the matters argued before us, based on Calverley and Green (supra) were argued before her Honour, nor was anything said or done that might have alerted her Honour to the fact that she might fall into error.
Counsel for the appellant husband readily concedes that if her Honour had made the correct finding as to the appellant husband's ownership of the property, the asset pool would be increased by an amount of $50,000 to a total of $1,246,434. We agree with the submission that what her Honour did in considering s 75(2)(o) was to notionally add back Ms P's interest in the P property. He submits:
"Her Honour (incorrectly) thought that the interest was 50%, whereas in fact it was only 30%. But there should have been no such "add-back" at all. The principle upon which Her Honour acted was that by placing the property as to half in Ms P's name, the Husband had effectively alienated to her property which would otherwise have been entirely his, and which would therefore have been available for division. In short, her Honour treated that alienation as a premature distribution. However, that overlooks Ms P's liability under the mortgage. By assuming that liability, she contributed half of the mortgage moneys. She remains liable to the bank on the mortgage. She was beneficially entitled to 30% of the equity, being $75,000, at trial. Her Honour's conclusion that the property was acquired with purchase moneys which were entirely matrimonial property overlooks Ms P's half of the mortgage loan.
Whether it was beneficially his pursuant to a resulting trust (as is the better view), or a Townsend "add-back" as a preliminary distribution (which was Her Honour's approach), it was entirely appropriate to include in the pool of assets 70% of the equity in the P Property or - to the extent that it was not so included - to make a s. 75(2) adjustment which produced the same ultimate result. However, Her Honour went too far in treating the 30% which reflected Ms P's equity in the same manner, because that was neither a premature distribution, nor other than property of Ms P."
The effect of correcting that error would be to increase the amount payable by the respondent wife to the appellant husband by $37,500.
Assuming that we see no merit in the remaining grounds of appeal, counsel for the respondent wife submits that having found error we must either re-exercise the discretion or remit the matter for a rehearing. Senior Counsel for the appellant husband does not disagree with that proposition, but submits that the extent of the rehearing may well depend upon the extent to which the findings of the trial Judge are attacked by the grounds of appeal and the manner in which the appeal are conducted.
The nature of an appeal to this Court from a single Judge sitting at first instance is well established. In Allesch and Maunz (2000) FLC 93-033 the High Court described it as follows:

"The nature of the appeal to the Full Court

20. The nature of the appeal to the Full Court is to be discerned from s 93A(2) of the Family Law Act 1975 (Cth) (``the Act''), which was considered by this Court in CDJ v VAJ and in DJL v Central Authority and, also, from s 94 of the Act. Section 93A(2) provides that, subject to s 96, which is concerned with appeals from courts of summary jurisdiction:
' ... in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and, in its discretion, to receive further evidence upon questions of fact, which evidence may be given by affidavit, by oral examination before the Family Court or a Judge or in such other manner as the Family Court may direct.'

21. Section 94(1)(a)(i) provides that, subject to s 94AA, which is not presently relevant, an appeal lies to a Full Court of the Family Court from ``a decree of the Family Court, constituted otherwise than as a Full Court, exercising original or appellate jurisdiction ... under [the] Act''. And s 94(2) provides:
' Upon such an appeal, the Full Court may affirm, reverse or vary the decree or decision the subject of the appeal and may make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re-hearing, on such terms and conditions, if any, as it considers appropriate.'

22. The majority in CDJ v VAJ proceeded on the basis that an appeal under s 94(1) of the Act is an appeal by way of rehearing. That is undoubtedly correct. So much is to be discerned from the terms of s 93A(2), in particular its conferral of power to receive further evidence. That is not a power possessed by appellate courts whose jurisdiction is confined to appeals in the strict sense and whose function it is simply to determine whether the decision under appeal was or was not erroneous on the evidence and the law as it stood when the original decision was given. And an appeal under s 94(1) is, as s 93A(2) indicates, to be distinguished from an appeal under s 96 which is a hearing de novo.
23. For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand." [footnotes omitted]

The Court went on to say at 87,517:
"30. Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act ``order a re- hearing, on such terms and conditions, if any, as it considers appropriate''. And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question." (See also Fox v Percy 197 ALR 201)
To engage in a full rehearing of this matter would require us to read and digest 805 pages of appeal books. Even if we were prepared to undertake that exercise, it would have the serious limitations that were pointed out by the High Court in Fox v Percy (supra) where it was said by Gleeson CJ, Gummow and Kirby JJ at 207:

"22 The nature of the "rehearing" provided in these and like provisions has been described in many cases. To some extent, its character is indicated by the provisions of the subsections quoted. The "rehearing" does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. No such fresh evidence was admitted in the present appeal.
23 The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance". On the other, it must, of necessity, observe the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the "feeling" of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole." [footnotes omitted]

The alternative of remitting this matter for a retrial is no more palatable. Judging by the appeal books, the parties must have already expended a considerable amount of money between them on legal fees. They have had a five-day trial and now this appeal in a case where the total net assets have a value of a little over $1,000,000; the majority of which is represented in the value of the former matrimonial home.
In our view, it is possible for us, to the extent that it is necessary to do so, to rehear the matter in a very limited way. This is so because:
(a)her Honour found that the entitlement of the parties on the basis of contribution was equal. No ground of appeal or argument advanced challenges that assessment;
(b)her Honour was invited to adopt an asset-by-asset approach when assessing contributions but adopted a global approach. No complaint is directed to that approach in this appeal;
(c)the only adjustment that her Honour made on account of the s 75(2) factors was pursuant to s 75(2)(o). Under that section, her Honour adjusted in favour of the wife by 5.22% because of her finding that an amount of $125,000 had been removed from the asset pool on account of Ms P's "legal interest in the P property".
The only complaint is not directed towards the approach that her Honour adopted. The complaint is that her calculations were incorrect by virtue of her failure to have regard to the Calverley and Green (supra) principles.
Given that we find no merit in the other two grounds of appeal for reasons which follow, it is our view that we will have sufficiently reheard the matter if we redo her Honour's calculations having regard to the Calverley and Green (supra) principles discussed in detail above as everything else is not the subject of any controversy in this appeal.
Ground 1 complains that her Honour was in error in accepting the evidence of the wife's valuer, Mr C, who valued a vintage C motor vehicle at $27,000 over that of the husband's valuer, Mr W, who valued the vehicle at $7,500. The specific complaint is that she did not have regard to a valuation guide which was in evidence and that if she had, she would have attributed a value of $6,300 to it.
Both valuers appear to be highly qualified to value vintage motor vehicles. They both gave evidence and were cross-examined extensively. Mr C was asked if, during the course of his valuation, he had made reference to a book entitled CARS AND PARTS 2002 Ultimate Collector Car Price Guide. He answered in the affirmative. He was then asked about the publication.
Mr W was also questioned about the book. During the course of his cross-examination the following exchange took place:
"There is a book in America, as I understand, sir, that is called the CARS AND PARTS Ultimate Collector Car Price Guide, are you aware of that book?---I know about the book, yes.
Well, you know about it, have you had cause to consult it for the purpose of this valuation?---No."
He was further asked questions during re-examination when the following exchange took place:
"COUNSEL: I think, Mr [W] (sic) you said you were familiar with the publication?---I am familiar with it.
What do you say, sir, is the usefulness of that book in respect of the C in particular?---It's a guide only, it's American and I have great difficulty in taking a great deal of notice of American valuations, they are not appropriate to Australia and never have been."
Given the fact that Mr C was not cross-examined at all about the book and given the exchanges that we have set out above, it is difficult to understand how her Honour erred in not referring to the book. In her reasons she extensively examined the evidence of each valuer. She acknowledged that she could not separate them in terms of their "respective qualifications and experience". She concluded:
"55.With respect to Mr [W], it seemed to me that Mr [C] made more extensive enquiries as to sales of motor vehicles similar to the C and the V, before arriving at his valuations. In addition, Mr [C] appeared to have a greater knowledge of relevant matters relating to these two individual vehicles, particularly the details of registration of the V and the most recent occasions when each was driven.
56.For these reasons, I prefer the evidence of Mr [C] to that of Mr [W]. Accordingly, I find that the C has a value of $27,000 and the V a value of $6,500."
In our opinion, that conclusion was clearly open to her Honour on the evidence and it was not relevant or necessary for her Honour to refer to the publication. We agree with the submission of counsel for the respondent that it is not incumbent upon a trial Judge to overtly consider every piece of evidence advanced in a case, particularly where such evidence is of marginal or no relevance and the course of, and the reasons for, the Court's determination is otherwise clear.
Ground 2 relates to the continued occupation of the wife's home by the six adult children of the marriage. Neither counsel added to their written submissions. Having carefully read those submissions and considered them, we are of the opinion that this ground is entirely without merit.
Costs of the appeal
At the conclusion of oral argument, counsel sought that any submissions with respect to the costs of the appeal be by way of written submissions as there were relevant matters which we ought not be privy to until after the determination of the appeal.
COLEMAN J: I have had the benefit of reading the judgment of Kay and Holden JJ in this matter. I agree with their Honours’ conclusions with respect to grounds 1 and 2 of the Notice of Appeal and their reasons for such conclusions. It is with their Honours’ conclusions with respect to ground 3 of the Notice of Appeal and reasons for such conclusions that I regretfully have difficulty. I respectfully agree with their Honours’ analysis of the submissions of learned Senior Counsel for the husband and their conclusions based thereon.
My reluctance to embrace their Honours' conclusion with respect to ground 3 arises from the contention of learned counsel for the wife that the case for the husband “sought to now be made out, is entirely inconsistent with the case advanced by the Appellant [husband] at trial”, and his assertion that it was “not open to the Appellant to now advance the proposition that he only holds a 70% beneficial interest in the P property”.
It was submitted on behalf of the wife that, before the trial Judge, the husband’s case had been “that he was the beneficial owner of the P property, subject only to a debt payable to Ms P in the amount of $13,000 reflecting Ms P’s contributions to the purchase and to the parties’ obligations under the mortgage”, as was submitted (vol 2, AB 761) on the husband’s behalf by his then counsel; his Junior Counsel on this appeal. The table of assets relied upon by the husband which clearly included the P property at $400,000.00, less the mortgage of $150,000.00, the husband’s alleged debt to Ms P “for outlays on the purchase” of $10,000.00 and his debt to Ms P for “cash advances for loan” $3,000.00 provide further support for the contention of counsel for the wife. The trial Judge referred to each of these matters in her Judgment, and made findings with respect to the two matters last mentioned.

A number of submissions were made by learned counsel for the wife in relation to the beneficial ownership of the P property. Nothing there raised persuades me to disagree with the conclusions reached by Kay and Holden JJ in that regard, nor their reasons for such conclusions.
It remains however to consider the submission by learned counsel for the wife that:
32.To accept the position now put forward by the Appellant [husband] by excluding 30% of the value of the property is to:
...
32.3 do an injustice to the Respondent in circumstances where the trial was conducted on the basis of the Appellant’s case as set out above.
Notwithstanding the matters to which I have referred, and that she was, in my view, entitled to determine the case on the basis of the clear and unequivocal position adopted by both parties in relation to the P property, as recorded at paragraph 114, her Honour recorded that there was:
… no allegation and certainly no evidence of a resulting trust or any similar claim which might justify a finding that [the husband] is beneficially entitled to the whole of the net equity in the property, regardless of [the] situation at law.

She thus concluded:

I cannot see that I can do other than include a 50% interest in the property as an asset and an amount equal to 50% of the mortgage debt as a liability. I will, however, give further consideration to the ownership of this property pursuant to section 75(2)(o).

For reasons which the trial Judge gave, and which were clearly open to her, particularly as Ms P did not give evidence, and there was no explanation for her failure to give evidence, the husband’s allegations of indebtedness to Ms P were rejected. As her Honour observed, the evidence of the husband’s alleged indebtedness to Ms P was “confusing”. Whether or not such evidence was accepted, the husband’s case in relation to his alleged indebtedness to Ms P was more consistent with the basis upon which his case was conducted before the trial Judge than the assertion in this Court that Ms P had an equitable interest in the property.
In the context of s 75(2)(o) the trial Judge again referred to the P property, concluding that Ms P did “not appear to have made any lump sum contribution to the purchase price of the property” although she had “been providing a sum of $75 per week to [the husband] for approximately 12 months and it may well be that this money is being used to meet mortgage repayments”. Her Honour then said:

Assuming that all of the money provided by Ms P has been applied to service the mortgage, an amount in the vicinity of $4,000 has thus been contributed to the property. She has received an interest which, in my view, I am obliged to treat as having a value of $200,000, together with a mortgage liability of $75,000. It is thus apparent that she has acquired an interest in the property with a net value of $125,000, yet she has contributed a sum only in the order of $4,000, at best. [The husband] elected to create in Ms P a valuable interest in the P property, which does not reflect her contribution to the purchase price or the mortgage payments. [The wife] had no choice in the matter, as the proceeds of sale of the [other] property were released to [the husband] by order of the Court. (Judgment, paragraph 167)

She thus concluded that “Effectively, an amount of $125,000 has been removed from the pool of property, on account of Ms P’s legal interest in this asset” and further concluded that:
Had I been able to include the full net value of the P property, [the wife] would have received an additional sum of $62,500. It thus seems to me that the justice of the case requires that there be an adjustment in her favour pursuant to this factor. (Judgment, paragraph 168)

RELEVANT LAW

In Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 the High Court at 438:
The circumstances in which an appellate court will entertain a point not raised in the court below are well established. Where a point is not taken in the court below and evidence could have been given there which by any possibility could have prevented the point from succeeding, it cannot be taken afterwards.
In Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 the High Court said at 71:
It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.
In Coulton v Holcombe (1986) 162 CLR 1 Gibbs CJ, Wilson, Brennan and Dawson JJ said at 7:
It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.
In Banque Commerciale SA En Liquidation v Akhil Holdings Pty Limited (1990) 169 CLR 279 Mason CJ and Gaudron J said at 284:
Some aspects of that rule appear to derive from public policy considerations directed to ensuring the finality of litigation. On the other hand, some aspects of the rule may have their genesis in estoppel by election in the conduct of litigation, although, if so, the relevant consideration is not that the other party is put in a worse position but that he or she may have been so placed. See, for example, Moustakas, where the refusal to allow the appellant to raise a new case was rested on "the possibility that the [other party] may, if it had been raised below, have wished to call evidence in response to it". So far as the rule may derive from public policy, the relevant consideration is that the case sought to be made on appeal is a new or different case from that which emerged at the trial. See Browne v Dunn, cited with approval in Rowe v Australian United Steam Navigation Co Ltd; Moustakas. (footnotes omitted)

DISCUSSION

How the husband conducted his case at first instance is not in doubt. To the extent that, for the reasons Kay and Holden JJ explain, the trial Judge in seeking to be scrupulously fair to the husband, may have erred, the husband ought not in my view now be permitted to succeed upon the complaint articulated in ground 3. I am not persuaded that “most exceptional circumstances” have been demonstrated in this case. A number of factors impel me to that conclusion.
It is clear that the point raised by ground 3 was not “taken in the court below”, the consequence of which was that counsel for the wife had no reason to forensically examine evidence adduced by the husband, or to seek to adduce evidence in the wife’s case in relation to the beneficial ownership of the P property. Had the point been “taken in the court below”, evidence “could have been given there which by any possibility could have prevented the point from succeeding” (emphasis added) (see Suttor v Gundowda Pty Ltd at 438). In those circumstances, I would not allow that point to now be taken.
There is no question that ground 3 constitutes “a new argument which, whether deliberately or by inadvertence” (emphasis added), counsel for the husband “failed to put during the hearing when he had an opportunity to do so” (see Metwally (No 2) v University of Wollongong at 71). There can be no doubt that the argument now sought to be raised by ground 3 could have been “put during the hearing” before the trial Judge. It matters not whether the failure to do so was deliberate or inadvertent, the consequences being, as the High Court said in Metwally, that to allow the “argument” to now be put would in the circumstances be “contrary to all principle”.
The effect of allowing ground 3 to be agitated is to raise a case on appeal which is “a new or different case from that which emerged at the trial”, the consequence of which is that the wife “may have been” placed “in a worse position” (emphasis added) (see Banque Commerciale SA En Liquidation v Akhil Holdings Pty Limited at 284) than she was at trial.
Allowing ground 3 to be raised is contrary to the principle that “the substantial issues between the parties are ordinarily settled at trial” (see Coulton v Holcombe at 7). To allow the ground to be now raised, in the circumstances in which that is being sought is to countenance moving the “main arena for the settlement of disputes” from “the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish” and should not in my view be permitted (Coulton v Holcombe at 7).
It cannot in my view be concluded that, had the husband presented his case at trial in the manner presented to this Court, her Honour could not, albeit by a somewhat different reasoning process, have come to the same conclusion as she did at trial. Her Honour’s findings of fact provided ample basis for doing so, either in reliance upon the decision of the Full Court in Townsend v Townsend (1995) FLC 92-569 or s 75(2)(o).
In the circumstances, to allow the husband to successfully rely upon ground 3 in this Court would, in my view, be to visit an injustice upon the wife, essentially for the reasons I have endeavoured to articulate. I would thus not uphold ground 3 of the Notice of Appeal. No other ground of appeal having succeeded; I would accordingly dismiss the appeal.

Orders

1. That the appeal be allowed.
2.That the figure "$350,000" in order 1 of 17 June 2004 be deleted and in lieu thereof be inserted "$387,500".
3.That the parties be at liberty to file written submissions with regard to the costs of the appeal in accordance with the following timetable:
(a)on behalf of the appellant husband within twenty-one days of the date hereof;
(b)on behalf of the respondent wife in response thereto within twenty-one days thereafter; and
(c)on behalf of the appellant husband in reply thereto within seven days thereafter.

4.That each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.

I certify that the preceding 63 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Associate

[2005] FamCA 498

17 June 2005

Key Legal Topics

Areas of Law

Civil Procedure

Administrative Law

Legal Concepts

Appeal

Judicial Review

Jurisdiction

Procedural Fairness

Standing