Goldsmith & Stinson
[2022] FedCFamC1A 96
•30 June 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Goldsmith & Stinson [2022] FedCFamC1A 96
Appeal from: Stinson & Goldsmith(No 2) [2021] FamCA 540 Appeal number(s): NOA 47 of 2021 File number(s): BRC 397 of 2018 Judgment of: MCCLELLAND DCJ, BAUMANN & HARTNETT JJ Date of judgment: 30 June 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from final property orders – Whether the primary judge’s reasons were inadequate – Weight to be applied to contributions and respondent’s inheritance under s 75(2) of the Family Law Act 1975 (Cth) – No error established – Adequate reasons – Appeal dismissed – Costs ordered in fixed sum.
FAMILY LAW – APPLICATION IN AN APPEAL – Adduce further evidence of newly acquired employment – Findings of fact would be undisturbed by the new evidence – Application in an appeal dismissed.
Legislation: Family Law Act 1975 (Cth) ss 75(2), 78
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 35(a)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17(1)(a)
Cases cited: Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Bennett & Bennett (1991) FLC 92-191; [1990] FamCA 148
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Goldsmith & Stinson and Ors (2019) FLC 93-930; [2019] FamCAFC 230
Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Newett & Newett(No 2) (2021) FLC 94-051; [2021] FedCFamC1A 11
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Sun Alliance Insurance Limited v Massoud [1989] VR 8
Number of paragraphs: 45 Date of hearing: 3 March 2022 Place: Brisbane (via video link) Counsel for the Appellant: Mr Wilson QC Solicitor for the Appellant: Pippa Colman & Associates Law Practice Pty Ltd Counsel for the Respondent: Mr Drysdale QC Solicitor for the Respondent: Phillips Family Law ORDERS
NOA 47 of 2021
BRC 397 of 2018FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS GOLDSMITH
Appellant
AND: MR STINSON
Respondent
ORDER MADE BY:
MCCLELLAND DCJ, BAUMANN AND HARTNETT JJ
DATE OF ORDER:
30 JUNE 2022
THE COURT ORDERS THAT:
1.The appellant’s Amended Application in an Appeal filed 1 March 2022 be dismissed.
2.The appeal be dismissed.
3.The appellant pay the costs of the respondent fixed in the sum of $14,500 within sixty (60) days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Goldsmith& Stinson been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ, BAUMANN & HARTNETT JJ:
INTRODUCTION
On 20 August 2021, Ms Goldsmith (“the appellant”) filed a Notice of Appeal against property adjustment orders made by the primary judge on 23 July 2021. Mr Stinson (“the respondent”) seeks that the appeal be dismissed.
The hearing by the primary judge was undertaken after the appellant had successfully appealed earlier property adjustment orders, made by a different judge, and the proceedings were remitted for re-hearing: Goldsmith & Stinson and Ors (2019) FLC 93-930.
For the reasons which follow, the appeal will be dismissed.
BACKGROUND
The spouses commenced cohabitation in 2004 in northern New South Wales and each introduced assets into the relationship. The appellant was a professional and the respondent operated and owned a skilled professional activities business in Town A.
Relevantly, in 2000, the respondent’s father had purchased two rural properties in the region, known as ‘Property D’ and ‘Property P’. The interest the parties had in these properties was a matter of controversy at the first trial. This was in circumstances where the parties had constructed their family home on Property D.
The parties finally separated in 2017, although they continued to live under the one roof until 2019. They have two children together, now aged 15 years and 12 years. The children live with the appellant and spend five nights per fortnight and half of the school holidays with the respondent.
At the time of the first trial, the respondent’s elderly father (who was a party to those earlier proceedings) was alive, however he passed away in 2018 before final orders were pronounced. This caused the evidence to be re-opened.
Before the primary judge, the respondent’s interest as a beneficiary under the Will of his late father had crystallised, such that the property pool was mostly agreed at a net sum of $5,254,763 (at [33]). The orders made by the primary judge effected a division of the property whereby 42.5 per cent was given to the appellant and 57.5 per cent to the respondent. For context, at the trial, the appellant contended that she should receive or retain 60 per cent of the parties’ property interests, whilst the respondent submitted that the appellant should receive or retain 35 per cent of the matrimonial property pool.
APPLICATION IN AN APPEAL
By an Application in an Appeal filed 14 February 2022, the appellant sought to adduce and rely upon an affidavit filed 14 February 2022 relating to her employment as a professional for a period which ended in October 2021. As at 14 February 2022, the appellant continued to be unemployed.
Subsequently however, on 22 February 2022, the appellant received and accepted an offer of employment, such that at the time of the appeal hearing, she was employed on a salary of $170,000 plus superannuation. The Amended Application in an Appeal filed 1 March 2022 sought to adduce new evidence of the appellant’s recent employment – essentially to observe the requirements of full disclosure and to inform the Court of the change in her employment subsequent to 14 February 2022.
Whilst the appellant’s first affidavit was directed to the finding of the primary judge at [82] that “the [appellant] has recently obtained employment with a salary package of $182,000”, the evidence now offered by the appellant is that she again has accepted a position with a similar salary package.
Pursuant to s 35(a) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), the Court has discretion to admit further evidence in an appeal if the evidence, if accepted, would demonstrate that the order under appeal is erroneous or was such that, if it had been received into evidence at the trial, it was “likely to have produced a different result” (CDJ v VAJ (1998) 197 CLR 172 at [109] and [149]).
The respondent contends that there is no utility in admitting the further evidence where the finding of fact at [82] is not in any way disturbed by the new evidence. We agree.
The Amended Application in an Appeal shall be dismissed.
THE APPEAL
In the appeal, the appellant challenges the percentage adjustment made in the respondent’s favour by the primary judge after taking into account the respondent’s post separation inheritance (Grounds 1, 2, 5 and 6) and the failure of the primary judge to make an adjustment in the appellant’s favour pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) (Ground 7). The appellant abandoned Grounds 3 and 4.
Grounds 1, 2, 5 and 6
While articulated differently, these grounds contend that, in finding that the contributions of the parties to their property favoured the respondent by 57.5 per cent to the appellant’s 42.5 per cent, the primary judge:
(a)gave inadequate reasons (Ground 1);
(b)failed to give adequate or any consideration to the contributions of the appellant (Ground 2);
(c)failed to give adequate or any consideration to the contributions of the appellant both during the marriage and after separation when attributing an additional 15 per cent in favour of the respondent for the inheritance (Ground 5); and
(d)erred in principle when assessing the weight to be given to the respondent’s post separation inheritance separate to the other contributions of the parties.
The obligation to adequately expose the reasoning for a decision is well established in Bennett & Bennett (1991) FLC 92-191 at 78,266, where the Full Court adopted the following test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at [18]:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
Furthermore, in appeals from discretionary judgments, it is well settled that an error of the type identified in House v The King (1936) 55 CLR 499 at 504–505 must be established. In that decision, the majority of the High Court said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
That these grounds are directed towards contributions and the weight to be applied to them is clear by the inclusion in the grounds of appeal of terms such as “failing to give adequate or any consideration to the contributions” and when assessing “the weight to be given to the respondent’s post separation inheritance separate to the other contributions of the parties”. The hurdles which such assertions face are well known: Gronow v Gronow (1979) 144 CLR 513 at [519]; CDJ v VAJ (1998) 197 CLR 172 at [230]–[231]; Norbis v Norbis (1986) 161 CLR 513.
To better understand the basis for the appellant’s arguments, some contextual background arising from the reasons of the primary judge is helpful.
In assessing the balance sheet of interests as totalling $5,254,763.46 at [33], the primary judge found that the value of the respondent’s interest in Property D was $1,050,000, with “$300,000 of the value held on constructive trust for the [appellant]”. The concession made by the respondent as to the existence of this constructive trust was based on Exhibit 1, being an agreed position relating to improvements made to the property on Property D by the parties to the marriage during a period of legal ownership by the respondent’s father. That concession was in these terms:
1.That prior to the death of the [respondent’s father], he held the following property on a constructive trust for the [respondent and [appellant] to the extent of $600,00[0], being the current value of the home constructed thereon financed mainly by the parties:
(a) [the lots collectively] known as [“Property D”].
2.That the [respondent] currently holds the said property on a constructive trust for the [appellant] to the extent of $300,000, being 50% of the current value of the home constructed thereon.
(As per the original)
The reasons of the primary judge were structured by reference to the issues identified at [5] and relevantly include:
…
3)Having regard to the myriad of contributions made by each party over the course of the marriage, should greater weight be given to one party’s contributions over the other?
4)Having regard to the myriad of contributions made by each party during to the marriage and after separation, what weight should be given to the [respondent’s] post separation inheritances?
Although Ground 4 challenged the primary judge’s conclusion at [68] that “the myriad of contributions made by each party during the marriage should be regarded as equal”, not only was this ground not pressed before us and effectively abandoned, but the appellant accepted that this finding should effectively be construed as “equal”, save for the respondent’s inheritance.
At [69]–[74] of the reasons, the primary judge found:
(a)the respondent inherited three properties with an agreed total value of $1,940,000 which, after allowance for the agreed value of the former matrimonial home (including sheds situated on the land), meant the “adjusted value of the inherited properties is $1,340,000”;
(b)“the inheritance cannot be viewed as a contribution made solely on behalf of the [respondent]. To do so would be to ignore the myriad of contributions made by the [appellant] during the marriage in circumstances where the [respondent] expected the inheritance and worked the [business] properties (particularly [Property D] and [Property P]) with that expectation in mind”. Further, after acknowledging that the appellant bore a greater financial responsibility for the children’s expenses from her own resources, “the time and energy spent by the [respondent] on the [business] must be balanced against the time and energy spent by the [appellant] in caring for the children and the household in the [respondent’s] absence”; and
(c)the critical finding under attack, expressed as follows:
This is not a case where the inheritance should, in effect, be in a separate pool. The connections with the inherited property during the marriage and the [appellant’s] indirect contributions thereto militate against such an approach. Such an approach would run the risk of undervaluing the [appellant’s] contributions. The inheritance is nevertheless a significant contribution made by the [respondent] and overall results in my assessment of contributions favouring the [respondent] in the proportion 57.5% to the [appellant’s] 42.5%.
The appellant submitted that:
(a)the inheritance received by the respondent should not have resulted in an adjustment in his favour because, prior to receiving the inheritance, the respondent “had an unassailable claim to an equitable interest in each of the properties known as [Property D] and [Property P] for the “full extent of the properties”.[1] Further, the concession referred to in Exhibit 1 reinforces the submission that “[n]o plausible reason could be advanced as to why the respondent’s father did not hold the whole of [Property D] and [Property P] on trust for the respondent, during the father’s lifetime”;[2]
(b)because the equitable title was already held by the respondent, the primary judge failed to explain how the respondent’s inheritance of the legal title, in monetary terms, added anything to what the respondent already held and why it was a “significant” contribution by him or, in fact, worth anything;
(c)the primary judge erred in finding at [74] that the inherited properties valued at $1,340,000 (being $1,940,000 less $600,000 for the conceded interest) came to the respondent after separation for the first time and should be a treated as a contribution by him, justifying a 7.5 per cent adjustment in the respondent’s favour; and
(d)it was “erroneous for the trial judge to make an adjustment using the full value of the properties” and it was “necessary to examine the inheritance in the particular facts of this case”.[3]
[1] Appellant’s Summary of Argument filed 21 December 2021, paragraph 17.
[2] Appellant’s Summary of Argument filed 21 December 2021, paragraph 20.
[3] Appellant’s Summary of Argument filed 21 December 2021, paragraph 34.
Although the respondent contended that the appellant was advancing a fundamentally different case to that before the primary judge – which, if correct, would face the difficulties identified in cases such as Metwally v University of Wollongong (1985) 60 ALR 68 – we do not agree. The language used at trial by Queen’s Counsel for the appellant was different, however the core submission before the primary judge was that there should be no adjustment on account of the inheritance received by the respondent post separation.[4]
[4] Transcript 23 April 2021, p.15–17.
Nevertheless, the appellant has failed to persuade us that the primary judge fell into error for the following reasons:
(a)We do not agree that the respondent had an “unassailable claim” to an entire equitable interest in the properties known as Property D and Property P. The respondent’s father had used his funds to acquire the properties, continued to pay the rates and insurances since 2000, and did not charge the parties any rent for living on Property P after they completed construction of their home in early 2008, nor did he charge any agistment for the livestock they ran on the property (at [14]);
(b)Although the respondent’s father had informed the respondent that he should treat the properties as his own, the parties, when given an opportunity to acquire, for example Property P in 2000, declined as they could not afford to do so.[5] This demonstrates that at least the respondent’s father felt his interest was of some value. Certainly, the respondent, as the only child of the deceased, held an expectation that he would inherit the properties, but these unchallenged facts do not support a finding that the respondent had an “unassailable claim” as submitted;
(c)The passing of the respondent’s father meant that the primary judge was not required to consider the nature of the respondent’s equitable interest in the two properties, and no application for a declaration under s 78 of the Act was maintained. We do not accept that the merger of any earlier equitable interest held by the respondent in Property D and Property P with the legal interest obtained upon his father’s passing meant the respondent contributed nothing of value from the inheritance. For example, viewed simplistically, the respondent lacked the capacity to sell, mortgage or otherwise deal with the two properties prior to his father’s passing;
(d)Clearly the issue of the weight to be given to the inheritance was identified by the parties and, apart from our view that the respondent’s interest in Property D and Property P had some value to him, those two properties do not amount to the entire benefit the respondent received upon his father’s passing. He also received a third property known as ‘Property Q’, with an agreed value of $190,000 (at [33]), and cash funds of $85,796 (at [26]). In our view, the primary judge correctly found that the respondent did receive a benefit post separation from his inheritance. Nothing turns on the primary judge’s description of the inheritance as being “significant”. Clearly, it was an issue of significance where, at the trial, the respondent contended that he was solely entitled to the benefit of the inheritance – a position rejected by the primary judge;
(e)Read holistically, we are well satisfied that the primary judge did adequately illuminate her reasons for finding that the respondent should have credit for the inheritance;
(f)As to the discretionary assessment of a 7.5 per cent adjustment to the respondent (equivalent to, in effect, 15 per cent of the property pool or $788,214), this was well within the broad discretion available to the primary judge, considering:
(i)it represents a mathematical discount on the highest amount for the value of the three properties “adjusted”, as the primary judge found was appropriate, from $1,940,000 to $1,340,000;
(ii)the concession under Exhibit 1, at a figure of $600,000, represented both direct financial contributions and non-financial contributions to the improvements undertaken by the parties and was taken into account;
(iii)even though, consistent with authority,[6] the primary judge had found contributions as equal before considering the inheritance, in assessing the weight to be given to the inheritance, the primary judge, as the reasons at [69]–[74] and the preceding heading makes clear, had “regard to the myriad of contributions made by each party during to [sic] the marriage”; and
(iv)we are satisfied that the inevitable “leap” from words to the figure of 7.5 per cent by the primary judge in this matter does not invite appellate intervention: see Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234].
[5] Appellant’s affidavit filed 20 November 2020, paragraph 116.
[6] For example, recently in Jabour & Jabour (2019) FLC 93-898.
Grounds 1, 2, 5 and 6 are not established.
GROUND 7
The appellant challenges the finding by the primary judge that there be no adjustment to the contribution-based evaluation of 57.5 per cent to the respondent and 42.5 per cent to the appellant pursuant to considerations set out in s 75(2) of the Act. The ultimate finding by the primary judge, following a discussion of the evidence at [81]–[87] was: “Overall I conclude that the s 75(2) factors do not favour either party” (at [88]).
Although the appellant was unemployed when her Summary of Argument was filed on 21 December 2021, as the earlier discussion arising from the appellant’s application to adduce evidence in this appeal reveals, the appellant has now obtained employment. The asserted error at [82] where the primary judge found the appellant “has recently obtained employment with a salary package of $182,000” could not be maintained at the appeal. The primary judge identified that the employment was probationary and that the parenting arrangements meant the appellant “is unable to relocate to a place where her employment prospects may be better”.
No error by the primary judge is established on this finding.
The second limb of the appellant’s challenge in Ground 7 is articulated in her Summary of Argument as “the complete absence of any consideration of the respondent’s earning capacity should he choose to exercise it”.
The primary judge recorded, in her Honour’s reasons, the following unchallenged findings:
(a)The respondent is 63 years of age and now self-employed. The respondent sold his skilled professional activities business in 2018 and is subject to a restraint of trade until 2023 and, further, that “the [respondent] hopes to make his [business] enterprise profitable” (at [13]);
(b)The current lack of income available to the respondent “was an outcome of his own making” (at [83]); and
(c)The appellant is likely to have a longer working life than the respondent (at [84]).
Although, during the trial, reference was made to a tender bundle of documents said to include details of positions in the locality which the appellant asserted the respondent was qualified to seek, that evidence was not actually adduced before the primary judge, nor was the respondent (perhaps unsurprisingly) the subject of cross-examination on what the appellant asserted to be his “lifestyle” choice to continue to conduct the non-profitable business, rather than return to the skilled professional activities industry.
We detect no failure to provide adequate reasoning by the primary judge or error in making the evaluation of the comparative future needs and financial positions of the parties. The conclusion her Honour reached was well open on the evidence.
Accordingly, Ground 7 fails.
For completeness, Ground 8 asserted, as an alternative to Grounds 2 through to 7, that the primary judge erred in principle by failing to give proper, genuine and realistic consideration to the merits of the case in accordance with the law, however was not supported by any written submissions. It cannot be assumed that, absent reasonably obvious error, an appeal court will embark on the task of locating the material said to establish error: Newett and Newett (No 2) (2021) FLC 94-051. As has been observed by the Full Court of the Federal Court of Australia in Bahonko v Sterjov (2008) 166 FCR 415 at [3]:
Notwithstanding the obligation of an appeal court, where it is able to do so, to make its own evaluation of the material at first instance, it is a fundamental aspect of the appellate process that appeals are made available for the correction of error (see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [14]; Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [22]–[30]; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd (2005) 220 ALR 211 at [45]. This basic principle imposes an obligation upon an appellant to identify where error of fact, law or general principle. It is not necessary for an appeal court to hunt through all the material at first instance and recanvass every aspect of it unless an occasion arises for suspecting, on reasonable grounds (generally those provided by the appellant), that such an examination may yield a conclusion of appellable error.
Queen’s Counsel for the appellant acknowledged, appropriately in our view, that he would be “hard pressed” to say what else there is that falls within Ground 8, other than the challenges that had already been identified (and have now been dealt with in these reasons). We agree.
As no ground of appeal has been established, the appeal will be dismissed.
COSTS
Neither party was in receipt of legal aid.
As the appellant has been wholly unsuccessful in this appeal and noting that each party, as a result of the primary judge’s orders, will retain property of some value, we are satisfied that circumstances exist which require a costs order to be made against the unsuccessful appellant.
On 21 February 2022, the respondent filed an itemised costs schedule (estimating total costs, it seems, on an indemnity basis) seeking “up to $23,610.15”. This figure included his counsel’s fees curiously described as being between $9,970.80 and $17,093.40. We do not regard the circumstances of this appeal as justifying an order for indemnity costs.
No submissions were received from the appellant as to the quantum of costs claimed by the respondent.
It is well settled that the purpose of r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), in enabling the Court to order costs in a specific amount, is to avoid the expense, delay and aggravation involved in further litigation arising out of an assessment of costs: Graham & Squibb (2019) FLC 93-892 at [92]–[94].
To avoid any further contest between the parties over the quantification of costs at an assessment before the Registrar, we shall order that the appellant pay the respondent’s costs in the fixed sum of $14,500, which is approximately 60 per cent of the respondent’s claim for costs.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland, and Justices Baumann & Hartnett. Associate:
Dated: 30 June 2022
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