Greer & Mackintosh - [2013] FamCAFC 16

FAMILY COURT OF AUSTRALIA

GREER & MACKINTOSH

[2013] FamCAFC 16

FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Where the trial Judge adopted a global approach – The trial Judge’s consideration of relevant factors and the use of the global approach were not appealable errors – Where the trial Judge recorded the parties’ assertions but made no findings – Where the trial Judge found the parties’ initial contributions were “significant” but did not state which figures she adopted – In the absence of findings it is unclear on what basis the discretion was exercised – Appeal allowed.

Family Law Act 1975 (Cth)

House v The King (1936) 55 CLR 499
Kardos v Sarbutt (2006) 34 Fam LR 550
Norbisv Norbis (1986) 161 CLR 513

APPELLANT:

Mr Greer

RESPONDENT:

Ms Mackintosh

FILE NUMBER:

ADC

2242

2009

APPEAL NUMBER:

SOA

2012

DATE DELIVERED:

20 February 2013

PLACE DELIVERED:

Perth

PLACE HEARD:

Adelaide

JUDGMENT OF:

Finn, Thackray and Strickland JJ

HEARING DATE:

9 October 2012

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

15 February 2012

LOWER COURT MNC:

[2012] FamCA 55

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr North SC with Dr Ingleby

SOLICITOR FOR THE APPELLANT:

Howe Martin & Associates

COUNSEL FOR THE RESPONDENT:

Mr Whitington QC with Mr McGinn

SOLICITOR FOR THE RESPONDENT:

Jamison & Associates

Orders

The appeal be allowed.
The orders made by the Honourable Justice Dawe on 15 February 2012 be set aside.
The matter be remitted for hearing before a Judge other than the Honourable Justice Dawe.
There be no order as to the costs of the appeal.
The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing of the application.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Greer & Mackintosh has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SOA 20 of 2012
File Number: ADC 2242 of 2009

Mr Greer

Appellant

And

Ms Mackintosh

Respondent

REASONS FOR JUDGMENT

This is the husband’s appeal against orders made by Dawe J on 15 February 2012 dividing property in proportions 75 per cent to the husband and 25 per cent to the wife.

Brief background

The husband was born in Australia and was aged 70 years at the time of trial.
The wife was born in Scotland and was aged 56 years at the time of trial.
The husband and wife commenced cohabitation late in 2000. They were married in May 2001 and separated in May 2008.
There are no children of their marriage.
The dispute about their property led to an eight day trial in May and June 2011.
Dawe J delivered her judgment on 15 February 2012 and made the orders the subject of this appeal.

The trial Judge’s reasons for judgment

Given the ambit of the appeal it is unnecessary to refer to all of the matters contained in the trial Judge’s reasons.
Her Honour commenced her discussion by observing that the “main matters in dispute … the liabilities and the contributions of the parties”. She then outlined each party’s case. In referring to the husband’s proposal she said:
12.In the amended case outline document filed on behalf of the husband it was proposed that property settlement be approached on an asset by asset basis placing particular emphasis upon assets which existed at the time of separation and those which were acquired after separation. It was argued that this approach should be preferred because it was the husband’s view that the parties’ marriage was of a short duration. Further, it was submitted that the real property of the wife retained at separation was significantly greater in value than at the date of commencement of cohabitation.
Although not the subject of comment during the hearing of the appeal, it is apparent to us that her Honour intended, in the first sentence of this paragraph, to refer to “commencement of cohabitation” rather than to “separation”.
The next part of her Honour’s reasons was set out under a heading called “Relevant background and chronology”. Importantly, a good deal of this part of the judgment consisted of a recitation of assertions made by each party, unaccompanied by findings as to whether the assertions were common ground or whether they were accepted by her Honour if they were contested.
Her Honour then provided a “brief summary of the witnesses and their evidence”, before referring to relevant provisions of the Family Law Act1975 (Cth) (“the Act”). Her Honour next set out a table of assets and liabilities, and concluded that the net value of the pool was $13,779,941.
Her Honour then turned to discuss the contributions made by the parties.
She commenced by acknowledging that “it was clear from the evidence that both parties … had significant assets prior to their cohabitation”, noting that the husband “owned a significant interest” in a substantial grazing property and that the wife “also had significant assets in Scotland”.
Her Honour then again recorded the husband’s submission that “the parties’ contribution should be considered on an asset-by-asset basis, particularly taking into account the length of the parties’ relationship”.
The following paragraphs of the judgment appear primarily directed to a consideration of the proposition that an asset-by-asset approach should be preferred. Given there is a ground of appeal directed to her Honour’s failure to accept this proposition, we will set out these paragraphs in full (original emphasis):
90.The husband says that he commenced a relationship with the wife in September 2000 and they commenced living together [on the grazing property] in December 2000.
91.The wife says that the parties commenced cohabitation in October 2000.
92.The parties lived together for approximately eight years. Both parties had been married twice before. There are no children of the marriage. The husband has three independent adult children. The wife moved from Scotland to Australia where she has resided since, with occasional trips back to Scotland.
93.The evidence established clearly that the wife has used assets which existed at the time of the commencement of cohabitation (being real estate and investments) to assist in the purchase of [two properties in coastal towns], acquiring furniture and effects and contributing towards the cost of development of properties and businesses.
94.The evidence also establishes that the husband has had a limited income, but has contributed towards the acquisition and maintenance of the substantial assets and day to day living expenses.
95.The wife and husband both gave evidence of their contribution towards living expenses, personal items and travel.
96.The wife made a contribution, other than her financial contribution, by assisting the husband in entertaining business associates, family and friends and carried out household chores with the assistance of paid staff.
97.The wife has also made a contribution by redecorating and improving the properties and setting up businesses.
98.The husband has continued to participate by managing and working on the businesses operated on the farming property.
99.On behalf of the husband it is maintained that the marriage should be treated as a short marriage. That and the husband’s submissions about the financial arrangements during the marriage support the husband’s claim that the approach to the property settlement should be on an asset by asset basis.
100.On behalf of the husband it is submitted that the submission gains weight because the parties did not “inter-mingle their financial affairs”.
101.The Court accepts that the length of the relationship of approximately eight years should be a factor to be taken into account when considering the relevant factors and whether the settlement is just and equitable. Similarly, the substantial assets of the husband at the time of cohabitation and the limited contribution by the wife to those assets is also a factor to be considered.
102.The decision of Norbis and Norbis (1986) 161 CLR 513 and the numerous reported cases thereafter indicate that it is appropriate in suitable circumstances to consider the property adjustment on an asset by asset basis.
103.The authorities have indicated either approach to the decision making process is permitted. The determination of the approach should depend upon the individual circumstances of each case. The global approach used in many cases promotes the assessment of contributions, both financial and non-financial. That approach has been generally preferred.
104.It is necessary to bear in mind the particular contributions made by each of the parties at the commencement of cohabitation, during the marriage and since separation, and to ensure that any overall decision is just and equitable.
105.The wife has contributed to the assets in her name and the assets remaining in joint names ([property in rural South Australia], [property in a coastal town] and Scotland) and has made financial contributions to the day to day living expenses and renovation and development of [two restaurants].
106.The financial contribution of the husband of the significant [grazing property and the assets of a farming partnership and a corporation associated with the grazing property], are assets to which the wife made very little direct financial contributions.
107.The husband also made a contribution to the day to day living expenses of the parties and provided his efforts to maintain the assets.
108.Both parties used their various credit card facilities to purchase items for general living expenses for the other party.
109.The wife has made a contribution towards the acquisition, maintenance and improvement of the properties at [the coastal town in South Australia, the two restaurants] and to a lesser extent, the [grazing] property.
110.The financial and non-financial contributions made by the wife since the commencement of cohabitation of the parties in late 2000 make it more appropriate to consider the overall situation rather than consider the issues on an asset by asset basis.
The balance of her Honour’s discussion of the contributions was brief. Given the attack on the ultimate outcome, and on the adequacy of the reasons, we set out in full the further five paragraphs dealing with this issue:
111.When considering the initial financial contributions of each of the parties to the assets which have been acquired and maintained during the relationship and since the relationship, together with the financial contributions of each of the parties generally, the significant factors are the assets and liabilities of each of the parties at the commencement of cohabitation, and the financial and non-financial contributions each of the parties has made during the relationship.
112.Of the assets owned by the parties at the time of commencement of cohabitation the interest the husband then held in the [grazing] property is the most significant.
113.The Court takes into account the subsequent acquisition of further assets when giving appropriate weight to the financial and non-financial contributions of each of the parties.
114.At the commencement of cohabitation the husband had significant substantial interest in the [grazing] property (being his then two-third interest), [the farming partnership] and the shareholdings through the [corporation associated with the grazing property]. This significant initial financial contribution is now represented by a large proportion of the net assets of the parties.
115.Taking into account the initial financial contributions of the parties and the subsequent financial and non-financial contributions of the parties, it is appropriate, just and equitable to treat the contributions of the husband as 75 per cent and those of the wife 25 per cent.
Her Honour then turned to discuss the matters in s 75(2) of the Act. As there is no criticism of this part of the decision, it is unnecessary to say more than that no adjustment was made on account of the s 75(2) factors.
Her Honour then went on to record how the wife would receive her 25 per cent of the pool. This involved her keeping the property she already owned; receiving the husband’s interest in the only piece of jointly owned property; and the husband paying her $1,665,238.
Her Honour concluded by saying that “careful consideration of all of the factors brings about a conclusion that an adjustment of 25 per cent to the wife and 75 per cent to the husband is in all of the circumstances just and equitable”.

The grounds of appeal

There were originally six grounds of appeal, but three were abandoned.
The remaining grounds were directed to:
·her Honour’s rejection of the “asset-by-asset” approach (Ground 1);
·her Honour’s alleged failure to make findings (Ground 3); and
·the outcome and the alleged inadequacy of the reasons (Ground 5).

Ground 1 – Failure to adopt asset-by-asset approach

By this ground it was asserted that:
1.The learned trial Judge:-
1.1.erred in adopting a global approach rather than an asset by asset approach in her determination as to the appropriate adjustment of property interests;
1.2.erred in concluding that the financial and non-financial contributions made by the wife made a global approach more appropriate;
1.3.failed to give any, or in the alternative, adequate reasons for rejecting an asset by asset approach, including a failure to give any proper consideration to the husband’s submission that the parties did not “inter-mingle their financial affairs”.
It will be seen two errors are asserted – first, in adopting a global approach and, secondly, in failing to give adequate reasons for doing so.
The husband properly acknowledged that the decision to adopt either the global or the asset-by-asset approach was discretionary, but it was submitted that the discretion “is not exercised in a vacuum”, and that guidance for its exercise has been laid down by the High Court in Norbisv Norbis (1986) 161 CLR 513 (“Norbis”) and by this Court in a number of cases. Reference was also made to Kardos v Sarbutt (2006) 34 Fam LR 550, where Brereton J said at 551 that “the principal indicator for an asset-by-asset analysis was discrepant identifiable contributions of the parties to different assets”.
The husband also acknowledged that the trial Judge had referred to many of the relevant considerations, including the length of the relationship, the substantial assets the husband held at the commencement of cohabitation and the limited financial contribution made to those assets by the wife. However, it was submitted that her Honour had only, at best, “obliquely acknowledged” that the parties had made “discrepant identifiable contributions to different assets”.
It was submitted that the trial Judge had failed to observe that:
·the assets to which the wife had made “very little direct financial contribution” represented 86.05 per cent of the asset pool;
·two properties to which the wife had made contributions had either been brought into the marriage by her or given to her by her father, and that the husband had made no direct or indirect contribution to these assets and made no claim against them;
·one of the properties in the pool was owned and acquired by the wife using funds from the sale of another property, which in turn had been acquired with funds provided by the wife, and that the husband also made no claim to that property; and
·there were only two pieces of property to which the husband and wife each claimed to have made contributions of any significance, and that the husband conceded that one of these should pass to the wife, subject to the existing mortgage.
It was submitted that her Honour’s failure to make reference to all these matters demonstrated appellable error (House v The King (1936) 55 CLR 499 at 504-505).
Although the husband acknowledged that the trial Judge had referred, inter alia, to the wife’s financial contributions when explaining her decision to adopt a global approach, it was submitted there had been failure to identify that these contributions had, “by and large”, been made to property owned by the wife. It was further submitted that the trial Judge had failed to explain why those financial contributions, even considered with the wife’s non-financial contributions, were of such significance as “to overcome the disparate contributions by each to different assets owned by the parties separately”.
Senior counsel for the husband asserted that the parties and the appellate court had been left to wonder by what process of reasoning her Honour had decided to adopt the global approach. It was also argued that it is not sufficient to identify considerations that may be relevant to the exercise of a discretion, but then to exercise the discretion without offering any explanation as to why particular considerations swayed the exercise in one direction, especially where no reference was made to other material considerations.
Senior counsel for the wife, in response, stressed that s 79 of the Act confers a broad discretion and does not dictate that the evaluation of contributions is to be undertaken by any particular means, since the ultimate requirement is to make an order that is just and equitable, having regard to all relevant factors.
Relying upon statements made in Norbis, it was submitted by the wife’s senior counsel that the two different techniques used to assess contributions should not yield two different results. It was noted that her Honour had “indicated correctly that the global approach has generally been preferred and went on to prefer it in her judgment”. It was submitted that the global approach was not “clearly inappropriate”, and it was further submitted that there is no requirement for a trial Judge to give an explanation for using a particular method of assessment.
In responding to the attack on the adequacy of the reasons, it was submitted that error is not demonstrated merely by asserting that a judge did not “collect together and recite again all of the non-contentious, self-evident or found facts immediately before announcing a conclusion on the choice of method”. On the contrary, an experienced trial Judge would be presumed to have had regard to all such facts without any need for repetition. It was also submitted that when the Court is exercising a discretion as broad as that conferred by s 79, it is unnecessary for a judge to detail each and every factor that has been found to be relevant or irrelevant and to itemise each fact taken into account.
Finally, it was submitted on behalf of the wife that the mathematical calculations indulged in by the appellant (i.e. drawing attention to the precise percentage of the assets to which the wife had made no financial contribution) was not an approach adopted at trial and should not be permitted on appeal.
We are not persuaded there is any merit in the last submission made on behalf of the wife. Although it is true that, at trial, senior counsel for the husband did not advance his argument in the same mathematical terms as now advanced on appeal, we are satisfied that much the same argument was advanced in words.

Otherwise, we accept the submissions made on behalf of the wife. In doing so, we respectfully adopt these remarks of Brennan J in Norbis at 541:
The global approach is no more than a procedure for determining the exercise of the discretion. It is a procedure which tends to shorten the hearing so as to avoid sapping the finances of the parties and engendering further ill-feeling between them. The primary judge’s adoption of the asset-by-asset approach in lieu of the global approach was not an error affecting the validity of the order which he made. There is no logical foundation for concluding that one approach should produce, at the end of the day, an order different from, or preferable to, the order which the other approach would produce. Either approach is capable of producing a just and equitable order. To intervene merely on the ground that the primary judge did not adopt the global approach would be to require primary judges to follow a single procedure when more than one procedure is consistent with the provisions of the Act.
The trial Judge recognised she had two options in assessing contributions. She was not required to identify every potentially relevant factor in choosing the method of assessment. Whilst it may be true that most of the wife’s financial contributions were made to assets she introduced to the marriage and in relation to which the husband made no direct claim, the wife also made non-financial contributions. Although the husband’s case was that the wife’s non-financial contributions were not of any great moment, those contributions were part of the wife’s case. The trial Judge determined that they, along with the financial contributions, would be best assessed by a global approach. We are not persuaded that she erred in doing so.
We therefore find no merit in this ground.

Ground 3 – Failure to make findings

By this ground it was asserted that:
3.In assessing the financial and non financial contributions of the parties, the learned trial Judge erred in that she: -
3.1.failed to make findings regarding matters that were in dispute;
3.2. described various matters as assertions by the husband or the wife without indicating whether she accepted or rejected those assertions;
3.3. described various matters as assertions by the husband when they were, in fact, matters which were not contested.
In support of this ground, senior counsel for the husband drew attention to the many instances in her Honour’s reasons where the assertions of the parties were recorded, but without any finding being made as to their accuracy. It was submitted that, “in the absence of findings, whatever else might be apparent from the reasons becomes immediately mysterious”.
Matters that the husband submitted had been in contest, but which remained unresolved, included whether:
·the husband had made financial contributions to assets that were held in the wife’s name;
·the wife had made contributions to assets that were in the husband’s name;
·the wife made an indirect contribution to the farming operation;
·the husband gave the wife proper financial support during the marriage or deprived her of opportunities to advance her position;
·the wife was prevented by the husband from operating a particular business.
Senior counsel for the wife did not suggest that the trial Judge had overtly resolved all the various contentions that she had recorded. However, it was submitted this had to be seen against the background of the way the case was conducted. It was submitted that the matters referred to by the husband were:
effectively, non-contentious and, therefore, not requiring any resolution by the court or non-contentious within a relatively narrow pecuniary band which meant that they were insignificant in the calculus of the section 79 equation.
This argument was supported by reference to a schedule attached to the wife’s Summary of Argument which dealt with each of the paragraphs in the reasons in which her Honour had recorded an assertion without indicating whether the assertion was common ground or had been accepted as accurate.
Senior counsel for the wife also defended the trial Judge’s reasons by submitting that:
·her Honour had dealt with some of the matters which are now the subject of specific complaint “at the level of generality in which it was put to her in the husband’s [closing] address”;
·some of the issues about which complaint is now made related to a “very small financial contribution” and are not the “sort of matter that should detain a judge with a specific finding”;
·some of the matters were not relevant because of other evidence and were therefore not issues her Honour had to decide and, as far as senior counsel could recall, were not issues she was asked to decide; and
·propositions advanced by the wife appear not to have been taken into account to the wife’s advantage.
Given the view we will later express in relation to Ground 5, it is unnecessary for us to analyse each of the paragraphs in her Honour’s reasons in which the parties’ assertions were recorded without commentary as to their validity. It is sufficient to say that if a proposition is considered to be important enough to be recorded in the reasons, it would normally be expected that the trial Judge would record whether the proposition was accepted or rejected. Failure to do so will inevitably give rise to uncertainty as to whether the assertion recorded was in any way influential in the ultimate outcome.

Ground 5 - The outcome and the alleged inadequacy of the reasons

By this ground it was asserted that:
5.The learned trial Judge erred in:-
5.1. concluding that the contributions of the parties should be assessed as 25% to the wife and 75% to the husband;
5.2.failing to give any, or in the alternative, adequate reasons for concluding that the contributions of the parties should be assessed as 25% to the wife and 75% to the husband;
5.3.finding that the adjustment of 25% to the wife and 75% to the husband was just and equitable;
5.4. determining that an order that the husband pay to the wife the sum of $1,665,238 … was just and equitable.
The husband’s written submissions in support of this ground focussed on the trial Judge’s alleged failure to make findings concerning the disparity in initial contributions. Those submissions were made in general terms, and it was only in oral argument that the husband identified three particular areas of complaint.
Before dealing with the three specific complaints, it is important to consider whether there was any contest at trial as to the value of initial contributions, since the wife now contends there was no contest, which if true would explain why her Honour dealt with initial contributions only in very general terms.
The starting point is the wife’s Outline of Submissions, which was received on 2 June 2011, the last day of trial. The opening paragraphs, under the heading “Assets at the commencement of cohabitation”, were in these terms:
There is a conflict between the parties as to the value of the assets and resources which they brought into the relationship.
The wife’s reckoning should be preferred to that of the husband.
The Outline of Submissions claimed that the wife’s initial contribution was worth $2,943,500 and the husband’s initial contribution was worth approximately $5,824,706.
We observe that earlier in the proceedings, the wife had asserted that the husband’s initial contribution was worth only $4,521,566 (Annexure C to the wife’s affidavit sworn 12 April 2011). This assertion was repeated in her Amended Case Outline received on 2 May 2011 – i.e. at the commencement of the trial.
On the other hand, the husband’s assertion was that he had brought property into the relationship worth $6,169,179 (Trial transcript, 1 June 2011, p 541).
Senior counsel for the husband rejected arguments advanced on behalf of the wife on appeal that the husband had not made clear at trial how he arrived at his figure of $6,169,179 and that the figure was inconsistent with the evidence. Senior counsel submitted that it had been made clear at trial how this figure was arrived at, but in any event stressed that this was the figure for which the husband had contended at trial.
The final positions at trial showed a difference of $344,473 in claims about the husband’s initial contributions, which senior counsel for the husband submitted was “a material difference … about which there is simply no finding”. However, he went on to query whether the trial Judge had, in fact, accepted as the value of the husband’s initial contribution:
·the $6,169,179 figure contended for by the husband;
·the $5,824,706 contended for by the wife in her Outline of Submissions; or
·the $4,521,566 contended for by the wife in her affidavit of 12 April 2011 and in her Amended Case Outline provided at the start of the trial.
We accept that it is not possible to discern from her Honour’s reasons which of these figures was adopted as representing the value of the husband’s initial contribution.
Senior counsel for the husband also observed that the order in which the closing addresses was given was important, since the wife’s Outline of Submissions, in which she conceded the husband’s initial contributions were as valuable as $5,824,706, was only handed to the trial Judge after the husband’s counsel had addressed the Court. That concession, contained in the written submissions of the wife, was not referred to in the oral closing submissions made on her behalf.
Senior counsel for the husband also drew attention to the fact that, at trial, the wife had initially claimed she had assets at the commencement of cohabitation worth $3,025,105, and that the concession that this was overstated to the extent of about $81,600 came only in her Outline of Submissions handed up during final addresses. In the absence of any quantification in her Honour’s reasons of the respective initial contributions, the issue again arises as to which of the figures was taken into account in arriving at the final decision.
Senior counsel for the husband submitted that the contentions at trial about the wife’s initial contribution went well beyond the dispute about the $81,600. He identified what he claimed were three other serious challenges made to the wife’s assertions about her initial contribution which had not been mentioned in her Honour’s reasons. It was asserted that if the husband had succeeded on the first two of these three challenges, the value of the wife’s initial contribution would have been reduced to about $1,939,201, and if the husband succeeded on the third challenge, then the wife’s initial contribution would be no greater than $1,620,724.
The three areas of contention related to assets mentioned in Annexure B to an affidavit sworn 12 April 2011 in which the wife originally claimed she had assets worth $3,025,105 at the commencement of cohabitation.

Furniture, artwork and jewellery

Senior counsel for the husband first took us to items 11 and 12 in Annexure B of the wife’s affidavit, namely:
·“furniture and artwork” said to be valued at $418,000; and
·“jewellery” said to be worth $207,201.
It was submitted that the trial Judge erred if she had taken these contributions into account. This proposition was advanced by reference to the following submission made on behalf of the husband at trial (Trial transcript, 1 June 2011, p 540):
Your Honour also knows, too, that the list – or the schedule – is misleading in the sense that items 11 and 12 are not items that should have in any event been included in the sense that they are items, your Honour understands, was the subject of a belated concession that they would – they and the similar items in the husband’s possession – would not form part of the property pool or issues in respect of this case. So the first point we make to your Honour is that it is not our contention that we accept that schedule B adequately or accurately or properly represents anything to do with the wife’s financial contributions, but it may have some connection in respect of property and resources that the wife held as at that date.
Senior counsel for the husband observed that items 11 and 12 involved property worth $625,201, and submitted to us that the dispute about those two items alone constituted a serious challenge to the wife’s contentions about the value of her initial contribution. It was further submitted that without any indication as to how the trial Judge had dealt with that issue “it’s difficult to know where her Honour stood with respect to the comparative and effective weight of the parties’ initial contributions” (Appeal transcript, 9 October 2012, p 6).
The fact that there was an evidentiary basis for the argument referred to in paragraph 61 above that had been put by the husband at trial about items 11 and 12 can be demonstrated by reference to paragraph 39.6 of his affidavit, which was in the following terms:
Art collection, furniture and effects
At the time that [the wife] moved into [the grazing property] I owned (and still continue to own) an art collection and various items of furniture and effects, some of which are antiques. These items have all been acquired by me over many years either as a result of my own purchases or by way of inheritances or gifts from various members of my family. No valuation of these items have been undertaken for the purposes of these proceedings, as it has been formally agreed between [the wife] and I (through our respective solicitors), and as recorded in open Court, that no value is sought to be attributed to any of these items that were and remain in my possession, and no value is sought to be attributed to any of the art collection or items of furniture and household effects or jewellery owned by [the wife] at the date of the marriage.
In seeking to deal with this part of the appellant’s argument, senior counsel for the wife said he had been taken by surprise, given the absence of any mention of the issue in the appellant’s Summary of Argument and the absence of any ground of appeal expressly directed to the issue. Although senior counsel submitted he was hampered in the way he could deal with the complaint, he nevertheless was able to deal with it by taking us to relevant parts of the record. He did reserve his position about this, but ultimately did not seek to address us further on this complaint.
In dealing with paragraph 39.6 of the husband’s affidavit, senior counsel for the wife commented in these terms (Appeal transcript, 9 October 2012, p 30):
Now, the husband there deposes to a formal agreement. Now, I haven’t had the opportunity because of the way in which this has arisen today to check the record, but, as my junior understands it, that was an agreement in relation to the division of assets in the matrimonial pool at separation, not in relation to initial contributions.
With great respect to counsel, and acknowledging the difficulty he had in responding to a submission not previously foreshadowed, it is difficult to accept that the alleged agreement could be confined in the way suggested. It is important to observe that paragraph 39.6 of the husband’s affidavit, in which the alleged agreement was mentioned, came under the heading “Assets at the commencement of cohabitation and marriage”.
Senior counsel for the wife also attempted to deal with this part of the argument by saying he had no recollection of any objection being taken by the husband at trial to the receipt of Annexure B based on any agreement of the type now asserted by the husband.
In considering this argument, it is important to recognise that Annexure B was attached to the wife’s affidavit of 12 April 2011, while the husband’s assertion about the alleged agreement was made in his affidavit filed on 11 April 2011. We cannot see how the husband could formally object to the annexure to the wife’s affidavit, but the fact the contents of the annexure were contentious was made clear by the husband’s submission which we have recited above.
In this context it is important also to record that we were not taken to any part of the transcript to indicate that senior counsel for the wife sought to correct the advice given to the trial Judge by senior counsel for the husband that there had been a “belated concession” that the art collection, furniture and effects “would not form part of the property pool or issues in respect of this case”.
The next proposition put to us by senior counsel for the wife was that while the wife had been cross-examined “about some agreement” in relation to the art collection, furniture and effects, that cross-examination had gone “nowhere”.
In dealing with this proposition, it will be helpful to set out the relevant passage of the transcript of the wife’s cross-examination by Mr Berman SC (Trial transcript, 4 May 2011, pp 143 and 145):
All right. Thank you. Now, in paragraph 34 of your affidavit you talk of the property and financial resources worth $3,025,105, and that figure is to be found, I think, at annexure B of your affidavit, being a schedule headed The Wife’s Initial Financial Contributions. Can you turn to annexure B, please? Do you have that?‑‑‑Yes, I do.
…
All right. In terms of the bottom of that schedule, items 11 and 12, they relate to furniture and artwork and jewellery. Now, in terms of these proceedings, and you tell me if I’m wrong about this, but I think the position is that between you and my client there was a common position that furniture and jewellery and, I suppose, personal effects, but let’s just restrict it to furniture and artwork and jewellery, were matters not to be the subject of valuation and were simply excluded from the proceedings. That is, you keep your furniture and jewellery and artwork, and he keeps his furniture, jewellery and artwork?‑‑‑I can’t remember. I can’t remember, Mr Berman.
You don’t remember whether you instructed your solicitors to put forward a joint approach to her Honour that jewellery and artwork and furniture of yours, and jewellery and artwork and furniture of the husband, were not to be brought to account as balance sheet items, but rather to be excluded?‑‑‑I can’t be certain. I do remember it being discussed here in the court with her Honour, and I believe at the time I was unable to prove the value of my jewellery. However, I believe that I was then able to, and I assume that that’s why it’s in the balance sheet.
It will be seen that at no point during the wife’s cross-examination was it suggested to the trial Judge that Mr Berman had misrepresented the terms of the agreement, namely that the jewellery, artwork and furniture were to be “excluded”. Be that as it may, in light of the cross-examination of the wife (and the absence of cross-examination of the husband on paragraph 39.6 of his affidavit) we consider the trial Judge was obliged to engage with the issue as to whether there had been an agreement as alleged.
The final submission made by senior counsel for the wife on this topic was that, as far as he could tell, there had been no submission at trial that the jewellery, furniture and artwork should be excluded from the “initial pool”. However, our examination of the transcript reveals the following exchange which occurred during cross-examination of the wife (Trial transcript, 6 May 2011, p 326-327):
HER HONOUR:   Yes. Whilst your counsel is doing that, [the wife], can you have a look at the paragraphs 40 and 41, which refers to the assets you say you held at – sorry, paragraph 40, which refers to the assets that you held at separation, annexure D. Perhaps, very quickly, if you just go to annexure D now that you know what it relates to?‑‑‑Yes, I’ve got the page, your Honour.
The annexure D refers to those pieces of real estate and bank accounts but there is no reference to jewellery, furniture or artwork which were included in the – I think they were included in schedule B?‑‑‑Yes, I remember we discussed this and I – and, yes, they should be, I would agree.
MR WHITINGTON:   Your Honour, I think there’s an agreement between the parties that they will not be taken into account on either side and I think, as I understand it, that explains their absence in schedule D. Is that the agreement?
MR BERMAN:   Yes, your Honour. Certainly, your Honour, in respect of the balance sheet your Honour will not find either in any of the balance sheets or at least perhaps in the more recent ones but certainly in the one that my friend provided to your Honour or tendered on 2 May, there was – there are no items, your Honour, that relate to either furniture, effects, artwork or jewellery in the possession of the husband or, indeed, in respect to the possession of the wife.

Ultimately, because of the generality of the trial Judge’s findings, we are left in doubt as to whether the wife’s contribution of jewellery, furniture and artwork was taken into account. It seems possible these items were taken into account, since, even after senior counsel for the husband concluded his oral submissions at trial, the wife was still advocating a position on initial contributions which took into account the value of these items (see the wife’s Outline of Submissions).
For these reasons we consider there is merit in this part of the complaint.

Wife’s property in Scotland

The second initial contribution claimed to have been made by the wife which the husband asserted was the subject of an unresolved challenge at trial related to item 1 in Annexure B to the wife’s affidavit of 12 April 2011, namely a property at SW in Scotland, said to be worth 274,000 pounds (AUD744,768).
This property had been sold by the wife on 16 October 2000, which was around the time the wife said cohabitation commenced. Bank statements showed that an amount of 270,291 pounds, representing the proceeds of sale of the property, was deposited into the wife’s bank account on 17 October 2000; however, at that time the account was in debit to the extent of 135,854 pounds.
It was put to us that the husband’s contention at trial was that the wife did not make an initial contribution of a property worth 274,000 pounds, but that she had instead made an initial contribution of a bank account with a credit balance of 134,436 pounds. Using an exchange rate the wife had herself used, it was submitted to us that the figure claimed by the wife at item 1 of Annexure B to her affidavit of 12 April 2011 had been inflated to the extent of AUD379,103.
It was submitted by senior counsel for the husband on appeal that the trial Judge had not dealt with this controversy, in the same way she had not dealt with the controversy regarding the furniture, artwork and jewellery.
In response, senior counsel for the wife again complained that no notice had been given of this complaint in the appellant’s Summary of Argument or in the grounds of appeal. He also submitted that, as far as he could recall, it was not an issue that the trial Judge had been asked to resolve.
Notwithstanding the absence of notice of the complaint, senior counsel for the wife was able to recall that the debit balance in the wife’s account largely arose from the transfer of 100,025 pounds to the wife’s brother on 9 October 2000. He submitted, correctly, that the evidence showed this money was repaid during cohabitation and hence had been treated as being “asset and liability neutral” (see Trial transcript, 4 May 2011, p 170). It was submitted that the remaining part of the debit balance in the wife’s account had otherwise been accounted for in Annexure B to her affidavit of 12 April 2011.
In reply, senior counsel for the husband drew attention to the following passage in the closing address of senior counsel for the husband at trial (Trial transcript, 1 June 2011, p 543-544):
To the extent, your Honour, that we have some idea, but don’t really know what the wife did with the balance of her funds – we don’t. Your Honour will remember the wife’s evidence after a significant level of cross examination going through E9 in terms of various transactions that needed explanation. But as that exercise unfolded – so your Honour, the story unfolded as to the wife’s dealings; moneys provided to a member of her family, moneys provided to a friend, moneys provided to a housekeeper and/or some associate, various investments in money market accounts and the like – and they were all proper matters for the wife to engage in – but with respect, they were all matters that the wife dealt with without reference to the husband. And to the extent that she was successful or unsuccessful in terms of those dealings, they are matters again, your Honour, absolutely for the wife. Each of these parties ran their operations and their investments separately and without any significant assistance or input from the other.
We accept that her Honour appears not to have engaged in her reasons with the propositions advanced on behalf of the husband in the passage just cited; however, those propositions appear to us directed to what became of moneys during the marriage rather than what the wife contributed.
In this context it is important to recall that the wife asserted that cohabitation commenced in October 2000. It would have been correct for her, in the early part of that month, to say that she had equity of 274,000 pounds in the SW property. Her position changed during the course of the month after the property was sold; but it seems to us that it would have not made any difference if she had stated her financial position at the point in the month after the property was sold and after she had advanced the 100,025 pounds. The money she had disclosed from the sale would have been reduced by 100,025 pounds, but there would have been a corresponding item for the amount she was owed by her brother.
We are therefore not persuaded there is any merit in this part of the complaint.

The extent to which the wife’s assets were brought to Australia

The third matter that senior counsel for the husband contended had been the subject of an unresolved controversy at trial was the extent to which the assets the wife owned at commencement of cohabitation were repatriated to Australia.
We do not propose to spend time discussing in detail the submissions advanced in relation to this part of the dispute. It is sufficient to say that we accept the argument of senior counsel for the wife that there is no authority for the proposition that the trial Judge should have looked only at moneys actually remitted to Australia. We agree with senior counsel that this part of the husband’s complaint is “intimately connected with [the husband’s complaint concerning] the asset-by-asset approach and it should fall with it”.

Conclusion on Ground 5

It will be seen that we have found merit in only one of the three complaints made by the husband regarding the initial contributions. However, this one complaint is of some significance, since it gives rise to doubts whether her Honour may have inflated the wife’s initial contribution by as much as $625,201. There is also the issue of the value the trial Judge attributed to the husband’s initial contributions in circumstances where we are not persuaded that the value was common ground.
The difficulty that arises from her Honour having not descended into any particulars in her finding that each party made “significant” initial contributions is that the word “significant” could properly be ascribed to any of the figures asserted by the husband and the wife as to their respective initial contributions. However, the weight properly attributable to those contributions would surely be different depending upon which of the figures was accepted.
In a valiant attempt to defend the trial Judge’s reasons, senior counsel for the wife referred us to the well-established principles governing the circumstances in which an appellate court can interfere with the exercise of a discretion as wide as that conferred by s 79 of the Act. He also referred us to well-known authorities dealing with the issue of adequacy of reasons. We accept all that he said, but ultimately the absence of findings by her Honour on crucial matters, but in particular the dimension of the respective initial contributions, leaves us in doubt about the factual basis upon which she exercised her discretion.

The outcome and costs

For the reasons we have given the appeal must be allowed.
The question that then arises is whether we can re-exercise the discretion or whether the matter needs to be remitted in full or in part.
Senior counsel for the wife urged us to allow an opportunity for further submissions on this issue after delivery of our judgment. He submitted that it may be possible for us to redetermine the matter, or alternatively for there to be an outcome short of a new trial. He even foreshadowed the possibility of a partial remitter to Dawe J, and in doing so noted that her Honour had not made any adverse credibility findings.
With the greatest of respect to counsel, we cannot envisage any circumstances in which we would be able to redetermine the matter given the absence of findings on crucial issues, and the absence of any credibility findings. Nor can we see how a limited remitter would be appropriate. Most regrettably, and recognising the impact on legal costs, delay and stress we see no alternative other than for a full remitter to another judge.
Turning now to the issue of costs, senior counsel for the husband sought an order for costs in the event the appeal was allowed. Senior counsel for the wife opposed that application and submitted that cost certificates should be granted, both for the appeal and the rehearing.
In considering the issue of costs, we note that three of the six grounds of appeal were abandoned; however, this is not of great significance as the respondent was not required to deal with those grounds in her Summary of Argument.
We do, however, take into account the facts that:
·it was only in the oral submissions advanced by senior counsel for the husband that the real strength of the husband’s case became apparent;
·one of the three grounds agitated was found to be without any merit and another succeeded only in part; and
·the financial position of the husband is much stronger than that of the wife.
In these circumstances we consider each party should bear their own costs of the appeal. Senior counsel for the wife sought a costs certificate for the appeal, but senior counsel for the husband did not. We are not persuaded this is an appropriate case for costs certificates for the appeal itself.
We accept, however, that the parties will incur significant expense on the rehearing, given that the original trial took eight days. The necessity for a rehearing does not arise as a result of the conduct of either of the parties. We are satisfied both parties should be granted costs certificates for the rehearing as they requested.

I certify that the preceding ninety nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 20 February 2013.

Associate:

Date: 20 February 2013