HADLETT & RALPHSON

[2018] FamCAFC 258

FAMILY COURT OF AUSTRALIA

HADLETT & RALPHSON [2018] FamCAFC 258

FAMILY LAW – APPEAL – PROPERTY – Where the appellant asserts the primary judge’s finding that he engaged in tax fraud led her Honour to fail to accept his evidence as to the financial contributions made by him to the parties’ assets – Where the primary judge did not find that the appellant was a tax cheat – Where the primary judge found that the appellant’s income as disclosed in his notices of assessment for income tax was not sufficient to account for the contributions he asserted he made – Whether the primary judge erred in her findings under s 75(2) of the Family Law Act 1975 (Cth) – Adequacy of reasons – No error demonstrated – Appeal dismissed.

FAMILY LAW – APPEAL – COSTS – Where the appellant was wholly unsuccessful – Impecuniosity no bar to an order for costs – Appellant ordered to pay the respondent’s costs in a fixed sum.

Family Law Act 1975 (Cth) ss 4, 75(2), 79, 106B

Family Law Rules 2004 (Cth) Sch 3

Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Lenova & Lenova (Costs) [2011] FamCAFC 141
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Robinson Helicopter Company Incorporated v McDermott (2016) 331 ALR 550; [2016] HCA 22

APPELLANT: Mr Hadlett

RESPONDENT: Ms Ralphson

FILE NUMBER: BRC 9265 of 2016

APPEAL NUMBER: NOA 36 of 2018

DATE DELIVERED: 19 December 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Melbourne

JUDGMENT OF: Ainslie-Wallace, Aldridge & Austin JJ

HEARING DATE: 14 November 2018

LOWER COURT JURISDICTION: Federal Circuit Court of Australia

LOWER COURT JUDGMENT DATE: 29 March 2018

LOWER COURT MNC: [2018] FCCA 840

REPRESENTATION

THE APPELLANT: In person (by videolink from Brisbane)

COUNSEL FOR THE RESPONDENT: Ms Terrell solicitor (by videolink from Brisbane)

SOLICITOR FOR THE RESPONDENT: Carswell & Company

Orders

1. The appeal be dismissed.

2. The appellant pay the costs of the respondent fixed in the sum of $9,746.63.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: NOA 36 of 2018
File Number: BRC 9265 of 2016

Mr Hadlett

Appellant

And

Ms Ralphson

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Hadlett (“the husband”) appeals from property orders made in the Federal Circuit Court of Australia on 29 March 2018 in proceedings between him and Ms Ralphson (“the wife”).

2. At the time of the hearing the parties each had an interest in a house subject to a mortgage.  The property to be divided consisted largely of the equity in those two houses and a boat with a net value of $246,205.06.  In addition, the wife held interests in superannuation funds with a total value of $133,270.41 and the husband $38,465.85.

3. Pursuant to the orders, the parties’ assets and the superannuation were to be divided so that the wife received 63 per cent of the total and the husband 37 per cent.  To give effect to that division they each retained the real property they owned.  The husband was required to pay $108,800 to the wife and she was to transfer her interest in the boat to him.  They could not agree on the value of a car owned by the wife, so orders were made for its sale and the division of the net proceeds in the same proportion.  Each party was to retain the superannuation held by them.

4. The parties began living together in July 2006.  They married in 2009, separated in 2015 and divorced in mid-2017.  There are no children of the relationship.

The appeal

1. The husband acted for himself on the appeal and prepared the appeal documents.

2. The determination of the appeal has not been assisted by the form of the grounds of appeal.  Many are so general in terms that it is difficult to ascertain the nature of the error asserted.  The submissions in support often were similarly unhelpful as many consisted of a mere reiteration of the case the husband unsuccessfully pursued before the primary judge and did not attempt otherwise to identify error.  We shall not deal separately with Ground 16 which is a “catch all” ground.

3. The grounds, however, can conveniently be dealt with under the following headings.

Did the husband receive a fair trial?

1. A number of grounds and many of the submissions in support contended that, for a number of reasons, the husband did not receive a fair trial.  It is necessary to consider these matters first (Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577).

2. The husband submits that he did not receive a fair trial because:

   ·His evidence was not properly taken into account (Ground 1);

   ·The primary judge determined before the close of evidence that the husband was not to be believed (Ground 2);

   ·The husband’s evidence, which was accurate and cogent, should have been preferred to that of the wife but was not (Ground 4);

   ·The primary judge failed to have regard to the husband being an unrepresented litigant (Ground 7);

   ·The husband’s evidence as to his financial position at the beginning of the relationship was not accepted (Ground 9);

   ·The primary judge failed to take into account the wife’s lack of contributions to the boat (Ground 11);

   ·The removal of the husband’s liabilities from the “Assets and Liabilities Pool” created a “gross bias” in favour of the wife (Ground 12);

   ·The primary judge, in effect, found the husband to be guilty of tax fraud, which finding was not open on the evidence and coloured her findings as to the husband’s credit (Ground 13 as expanded in argument); and

   ·The primary judge failed to take the same sceptical approach to the wife’s earnings from her sewing and dressmaking business and failed to apply the same level of scrutiny to her claims and evidence (Grounds 14 and 15).

3. Whilst not all of these grounds may appear to be closely linked, it is clear from the husband’s submissions that they flow from one over-arching contention.  The husband summarised it in the course of his oral submissions during the appeal hearing as:

   [I]t all comes back to the same point.  All my evidence has been disregarded based on a false accusation that I’m a tax cheat, which is untrue, unproven … Judge Cassidy has disregarded all of my corroborative evidence that proves what I’ve claimed in all of my affidavits and annexures throughout the case, where the opposition’s case has been a trail of deceit and deception and misled and providing illegible documents, does not prove anything of what the applicant is claiming.  Yet she was believed and I wasn’t.  That is not fair in justice.  I have not been treated equally as Judge Cassidy has treated the applicant…

4. We shall therefore deal with the primary judge’s ostensible finding of fraud first.  It is relevant because, as the husband asserts, in many instances his evidence was not accepted.  Whilst her Honour did not make a general credit finding and dealt with issues one by one, it was a continuing theme that the primary judge did not accept the husband’s evidence about the assets he held and contributions he made because his level of income as disclosed in his notices of assessment for income tax was not, in her view, sufficient to meet the financial contributions he asserted that he had made.

5. The primary judge recorded the husband’s taxable income as follows:

   17.The parties commenced living together in July of 2006.  The husband’s income tax assessments for the financial years ended 2008 until the year ended 2015 were tendered into evidence.  They disclose taxable income of the following:

   a)      For financial year ending 2008, nil;

   b)     For financial year ending 2009, nil;

   c)     For financial year ending 2010, $5;

   d)     For financial year ending 2011, nil;

   e)     For financial year ending 2012, $2291;

   f)      For financial year ending 2013, $3933;

   g)     For financial year ending 2014, $87; and

   h)     For financial year ending 2015, $21,619;

   A total of $29,930.

6. The primary judge found at [18] that for the period 2007 to 2015 the wife’s total taxable income was $444,125.

7. Her Honour then said:

   19.It is clear from these figures that the wife’s income over the period of the relationship was far greater than that of the husband’s.  I accept the submission of Mr McGregor for the wife that if I find that the husband has paid for significant costs of living and motor vehicles without identifying the source of the funds, I would have to consider referring the papers to the taxation authorities.

   20.The Federal Commission of Taxation could then have recourse to the husband’s affidavits in this Court to consider preparing amended tax returns (Atkinson v Federal Commissioner of Taxation (2000) FCA 552).

   21.I accept the wife’s evidence that the husband paid some of the rent payments, the electricity and the internet in their rented homes [in City B] and in [City E].  I note that the husband would have some part of those costs as a tax deduction because they would have been incurred in the course of his business because he worked from the home.  However, his declared income is such that there would have been very little other available income to pay additional costs of living for the purchase of motor vehicles for the family and other items.

8. The husband’s core complaint is that these passages record the primary judge’s belief, which he says was adopted early in the proceedings, that he was a tax cheat and that, as a consequence, his evidence was entirely disregarded.  We reject that contention because it is clear there was no such finding.  All her Honour said was that “if” she found that the husband had paid the expenses he asserted he paid without identifying the source of the funds, she would “consider” referring the papers.  There was no subsequent finding to that effect.  As noted by her Honour, any further action would be for others.

9. As will become apparent from our consideration of the primary judge’s findings in relation to particular issues, the issues in dispute were not resolved on the basis that the husband had not disclosed all his income in his tax returns.  Rather, the issues were resolved on the basis that his income as disclosed by those taxation assessment notices, and having regard to the payment of legitimate business expenses (which had the effect of increasing the funds available to him to spend), was not sufficient to account for the payments he said he made.  On the other hand, the primary judge accepted the wife’s explanation as to how particular assets were acquired.

10. The husband did not tender his income tax returns so as to demonstrate that the funds actually received by him as revealed in those documents were sufficient to make the contributions he asserted were made.  He merely relied upon his own evidence as to the payments made.  The primary judge also had the evidence of his taxable income as disclosed in the assessment notices.  That being so, it was open to the primary judge to be sceptical about the funds available to the husband.

11. Of course, not every payment made by the husband would be tax deductible.  It is difficult to see how contributions towards households expenses (other than the 10 per cent claimed as a tax deduction because the husband worked from home), grocery bills, cars for the wife and her daughters or the boat used for recreation would be proper business deductions.

12. Incidentally, the husband wrongly suggested that the taxation assessment notices were not admissible because he had provided them to the wife during a settlement conference. 

13. The scepticism held by the primary judge fell well short of a finding of tax evasion or anything similar and this aspect of these grounds has not been made out.

14. In relation to the husband’s assertion that at an early stage of the hearing, during his evidence, the primary judge said that she would not believe him, we asked the husband to take us to the relevant passage in the transcript.  Eventually, he identified the following:

    HER HONOUR: All right. Well, I will – we’ve been doing this for a long time, and while you think there’s a lot of things I need to look at, there’s probably not all that many.

    [THE HUSBAND]: There has been a lot of assets sold since separation, there’s disputed assets – as you mentioned, the motor cars that are now not admissible, and - - -

    HER HONOUR: Yes. The big ticket, as far as I can see - - -

    [THE HUSBAND]: I spent a lot of money on motor vehicles, your Honour, and you said that they’re not allowable.

    HER HONOUR: Probably not. It seems to me there’s about 426,000 if you look at the equity in the boat, the houses, that’s 426. Those three things.

    [THE HUSBAND]: Will your Honour be taking into account - - -

    HER HONOUR: And then there’s super of about 170. That’s - - -

    [THE HUSBAND]: Will your Honour - - -

    HER HONOUR: They’re the big ticket items.

    (Transcript 20 December 2017, pp.70–71)

15. When it was pointed out that the alleged words did not appear, the husband stated that the offending words appeared after that exchange, but before lunch.  They do not.  A search of the transcript does not reveal anything said by the primary judge that remotely resembles the husband’s complaint.

16. The husband also submitted that the primary judge said “He’ll have to pay!”, which the husband suggests “indicat[ed] that it would not matter what the Husband said or did, the trial judge had already made up her mind & decided the trial outcome, before the Husband even started his cross-examination” (Husband’s Summary of Argument filed 5 October 2018, paragraph 40).

17. The words “have to pay” appear three times in the transcript.  The first two occur during an adjournment application foreshadowed early in the hearing as follows:

    HER HONOUR: Well, it’s my problem as well. So, I mean, he will have to pay the costs if we’re adjourning the trial - - -

    [COUNSEL FOR THE WIFE]: Yes.

    HER HONOUR: - - - because they’re thrown away, because I haven’t read any material.

    [COUNSEL FOR THE WIFE]: No.

    HER HONOUR: But I’m not inclined to do that unless you ask for that adjournment, but if you do need an adjournment, of course I will give it to you, and Mr [Hadlett] will have to pay - - -

    [COUNSEL FOR THE WIFE]: Yes.

    (Transcript 20 December 2017, p.3) (Emphasis added)

18. As is apparent, neither is a criticism of the husband’s evidence.  The husband’s response when this was pointed out was to assert that the transcript was incorrect in parts.

19. The third time the words appear is as part of an answer given by the husband in response to questions about his credit cards (Transcript 20 December 2017, p.68 line 35).

20. In a similar vein, the husband asserted that he was not permitted to question Ms F, the wife’s mother, as there was an “uproar from the judge” which led the husband to abandon his questioning.

21. The cross-examination began as follows:

    [THE HUSBAND]: I would like to start with are you and [Mr F] still legally married?---[Mr Hadlett] - - -

    [COUNSEL FOR THE WIFE]: What relevance is that?

    HER HONOUR: That’s not relevant.

    THE WITNESS: Be very careful what comes out your mouth.

    [THE HUSBAND]: Why is that, [Ms F]?

    HER HONOUR: No, no, no. I’m not going to allow this exchange. You need to put specific questions about the assets of the parties or the contributions that you’ve made, she has made or the wife has made that she might know an answer to. Whether she’s married or not doesn’t interest me at all. Not in a nasty way, but it just isn’t relevant.

    (Transcript 20 December 2017, pp.153–154)

22. The “uproar” was merely the primary judge properly rejecting an irrelevant question.  Contrary to the assertions of the husband that his cross-examination was unfairly truncated, his cross-examination then continued over a further two pages until he voluntarily concluded his questions, saying “[y]our Honour, I don’t think it would be helpful to ask my questions.  She’s obviously struggling” (Transcript 20 December 2017, p.155, lines 43–44).

23. The husband also pointed to an example which he says shows the primary judge intervened and answered a question for the witness.  The transcript reference provided by the husband does not bear this out (Transcript 20 December 2017, p.140).

24. Finally, on this aspect of the grounds, the husband submitted that at some point after lunch the primary judge disallowed the evidence on which he wished to rely.  He did not identify the proposed evidence.  After the lunch break the husband commenced questioning the wife and did not tender any evidence.  There is no merit to this aspect of the husband’s complaint.

25. We now turn to the specific examples where the husband says that his evidence was treated differently to that of the wife or his case was approached unfairly.

The $110,000 in cash

1. The husband contends that he had $110,000 in cash at the commencement of the relationship, and his evidence to that effect and as to how he acquired the cash was unfairly rejected. He said that the $110,000 comprised $54,000, which he received in March 2004 following a property settlement with his former wife, as well as the proceeds from the sale of assets from his former business which he began to sell from February 2002.  He contended that the proceeds of sale were not income and were not included in his tax returns.

2. The primary judge determined the issue of the $110,000 in cash in the following manner:

   22.On 19 December 2017, on the eve of the trial commencing 20 December 2017, the husband filed a further affidavit. In this affidavit, the husband claims that he had savings of $110,000 in cash in the safe at his home at the commencement of the relationship.

   23.The husband conceded he had no documents at Court to substantiate this sum, and he could not recall the denomination of the notes that made up the $110,000.  He also could not describe the size of the pile of the money that made up the $110,000.  I would expect him to have been able to answer those questions about the size of the bundle of notes and the nature of the denominations, if he had had $110,000 in cash in his safe at his home.  I do not accept that evidence, because while the husband in his affidavit swears that he”:

   “...earned a comfortable income from my [former business], supplying, installing and maintaining [equipment] from my home, small and medium business clients…”

   This is not borne out by the notice of assessments that were exhibits one to eight, tendered at the trial.

   (Original emphasis)

3. The primary judge thus gave four reasons for rejecting the husband’s evidence, namely: 

   ·The cash was first mentioned in an affidavit filed on the eve of the hearing;

   ·No documents were available to support that evidence;

   ·The husband could not recall the make-up of the cash; and

   ·The amount of cash was inconsistent with the notices of assessment.

4. The husband’s evidence was properly rejected and we do not accept that it was on the basis that he was a tax cheat.

5. The evidence called by the husband on the issue of the $110,000 was scant. In his affidavit of 18 December 2017, the husband asserted that he had “Savings/Personal Funds” of $110,000 at the commencement of the relationship.  He did not say how the funds had been acquired.

1. In cross-examination he said:

   [COUNSEL FOR THE WIFE]: Okay. You received a property settlement of approximately $53,000 from your former partner, didn’t you?

   [THE HUSBAND]: No. I received it from her solicitor following the trial.

   [COUNSEL FOR THE WIFE]: You received that money in - - -?

   [THE HUSBAND]: It was my money, actually, from the property settlement.

   [COUNSEL FOR THE WIFE]: You received - - -?

   [THE HUSBAND]: From my assets.

   [COUNSEL FOR THE WIFE]: When did you receive that money?

   [THE HUSBAND]: On the date of the statement you have in front of you.

   [COUNSEL FOR THE WIFE]: Don’t presume to know what I have in front of me?---

   [THE HUSBAND]: Well, it’s in [Ms Ralphson]’s evidence. I would assume you have her evidence.

   [COUNSEL FOR THE WIFE]: Don’t presume to know what I have in front of me?---

   [THE HUSBAND]: It’s pre – again, as I objected earlier, it’s pre-cohabitation, pre-relationship and none of your business.

   …

   [COUNSEL FOR THE WIFE]: Right. Did you use the proceeds of your property settlement, or part of it, to purchase the [Motor vehicle 1]?---

   [THE HUSBAND]: I don’t know. I used my own personal funds, which - - -

   [COUNSEL FOR THE WIFE]: Yes?

   [THE HUSBAND]: - - - may have included some of that - - -

   [COUNSEL FOR THE WIFE]: Right?---

   [THE HUSBAND]: - - - and may not have.

   [COUNSEL FOR THE WIFE]: Okay?

   [THE HUSBAND]: I do not remember specifically.

   …

   [COUNSEL FOR THE WIFE]: Right. Have you ever, in any of your previous affidavits prior to this one of 18 December 2017, asserted that you had $110,000 in cash?

   [THE HUSBAND]: As it was outside the scope of the court requirements, I did not.

   [COUNSEL FOR THE WIFE]: Right. So the answer is no, you didn’t. You did – you have never asserted, prior to this affidavit, that at the commencement of the relationship with [Ms Ralphson] you had $110,000 in cash, have you?

   [THE HUSBAND]: I don’t recall where I’ve previously asserted it, but I have certainly asserted it.

   (Transcript 20 December 2017, pp.50, 51, 53)

2. The husband did not tender any documents that supported his assertions.

3. A trial judge’s findings of fact will not be overturned unless “they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’”, or they are “glaringly improbable” or “contrary to compelling inferences” (Robinson Helicopter Company Incorporated v McDermott (2016) 331 ALR 550 at [43]).

4. These challenges are not made out.

Were the husband’s debts unfairly excluded?

1. The husband submitted that the primary judge included the wife’s credit card debt as a liability to be borne by both parties but wrongly excluded his credit card, chattel mortgage and personal and business debts.

2. As to the chattel mortgage, the primary judge indicated during the hearing that she would not take it into account because the motor vehicle the subject of the mortgage was not included as an asset to be divided (Transcript 20 December 2017, p.24, lines 3–4). 

3. The husband was asked for the documents to establish the other loans but did not produce them.

4. The husband’s submissions do not identify any error in the primary judge’s conclusions as to the chattel mortgage or personal and business debts. 

5. The husband’s credit card debt was noted as being $3,349.02 (Transcript 20 December 2017, p.24, line 8).  It is not referred to in the primary judge’s reasons.

6. The husband’s written submissions to the primary judge asserted that his credit card debt was $15,000, which was the combined maximum limits of his credit cards.  He repeated this assertion during cross-examination (Transcript 20 December 2017, p.68).  Plainly, on the evidence, this was not so. One can understand why the actual sum was overlooked by her Honour having regard to the submissions that were made.

7. Assuming the failure to include the debt was an error, it was one of little magnitude.  The husband must bear all of the debt instead of 37 per cent thereof – a difference of approximately $2,000.  Given that $2,000 is a relatively insignificant sum, it is not material to the outcome and no substantial injustice has occurred.

Was the husband’s evidence about the purchase of cars unfairly rejected?

1. It was the husband’s case that he contributed $112,500 to the acquisition of cars during the relationship.  He submitted that his evidence was unfairly rejected.  As with the husband’s other submissions, this too was largely based on the husband’s erroneous suggestion that the primary judge found he was a tax cheat.

2. The primary judge recorded the evidence and made findings as follows:

   24.The husband’s evidence in relation to the motor vehicles is that he contributed to various motor vehicles.  This evidence is set out at page 12 of his affidavit, within paragraph 34, filed on 18 December 2017, and it says:

   “34.…Also, I have calculated that I have spent well over $112,500, plus all related purchase and sale expenses, on cars for [Ms Ralphson] and her daughters [Ms Y] and [Ms P].

2006	[Motor vehicle 2] ([Ms Ralphson])	$26,000
11/05/2007	[Motor vehicle 1] ([Mr Hadlett])	$40,000
04/01/2010	[Motor vehicle 3] ([Mr Hadlett])	$42,000
04/12/2009	[Motor vehicle 4] ([Mr Hadlett])	$54,000
08/02/2012	[Motor vehicle 5]	$20,000
May 2014	[Motor vehicle 6]	$6,000
Feb 2014	[Motor vehicle 7]	$6,000
April 2014	[Motor vehicle 8]	$6,000
22 Dec 2014	[Motor vehicle 9]	$20,500
$112,500

Annexure: ‘[Hadlett]-8’ shows a spreadsheet of all the cars in the family. Deposit for [Motor vehicle 5], [T] Motor Centre Contract to purchase [Motor vehicle 3], and [Motor vehicle 4], insurance for [Motor vehicle 3], bank statements displaying deposits, tinting etc, for [Motor vehicle 4] & [Motor vehicle 3], tax invoice for [Motor vehicle 4], and Trade of [Motor vehicle 10], [H Bank] Chattel Mortgage for [Motor vehicle 10], [M Group] Tax Invoice, and [G Motors] Contract for [Motor vehicle 9], and bank statement with deposit paid.

ANZ Chattel mortgage for [Motor vehicle 11]…”

25.He then refers to an annexure that is a spreadsheet of the family cars.  The wife concedes that the husband made a contribution to the $3000 car purchased in 2012, of approximately $1000.  This car was given to the wife’s daughter [Ms Y].  The wife also concedes that the husband may have paid $6000 for [Motor vehicle 8] in 2013.  This was a gift to [Ms Y] for her eighteenth birthday.  Other than that, the purchase of cars seems to have been paid for by the parties.

26.This is consistent with the husband’s low income, so I accept the wife’s evidence in relation to the purchase and sale of motor vehicles …

1. For the reasons given earlier, we consider that the primary judge was entitled to prefer the wife’s evidence.

2. The husband’s oral submissions on appeal focussed on the purchase of Motor vehicle 4 in 2009.

3. The wife’s evidence was that she drew down $49,900 on her mortgage, which was then used to pay the husband’s credit cards which he had used to buy the car (Transcript 20 December 2017, p.102, lines 6–13).  The husband accepted that the mortgage records did record that drawdown (Transcript p.104, line 32).

4. For his part, the husband asserted that Motor vehicle 4 was acquired by him trading in another car he owned.  During the hearing the husband tendered a receipt which he said established his contention (Transcript 20 December 2017, p.102, line 20).  That led to an objection and a discussion of the mortgage accounts.  The husband asserted that the loan advance was never spent, saying:

   [THE HUSBAND]: It does. It shows that that $49,900 drawdown never left the account, was not used to by [Motor vehicle 4]. I bought [Motor vehicle 4] - - -

   HER HONOUR: Well, Mr McGregor says it shows that it did go.

   [THE HUSBAND]: I bought [Motor vehicle 4].

   [COUNSEL FOR THE WIFE]: It’s just a complete misunderstanding of what a loan account shows, with respect.

   HER HONOUR: Yes.

   [COUNSEL FOR THE WIFE]: There was a loan advance of $49,900, and the loan balance went up by that amount, and, of course, the loan balance is a debit.

   [THE HUSBAND]: That’s not being argued, your Honour.

   [COUNSEL FOR THE WIFE]: So she was debited another $49,900.

   [THE HUSBAND]: The money went up because it stayed there. It was never transferred out of the account.

   (Transcript 20 December 2017, p.104 line 43 to p.105 line 16)

5. The husband did not pursue the tender of the receipt.

6. We confess we do not understand the husband’s argument to her Honour and repeated to us, that because the loan account did not decrease by the amount of the payments of the credit cards, the advance was not taken up.  The bank records show the increase in the liability and are consistent with the wife’s evidence (Wife’s affidavit filed 21 November 2017, p.24).

7. Thus, the primary judge was entitled to accept the wife’s evidence on this issue and the submissions of the husband fall well short of establishing error.

The contributions to the boat

1. In 2010, the parties purchased a boat for $175,000.  The wife’s evidence, accepted by the primary judge, was that it was financed by the payment of $54,000 from the parties’ joint account, $20,000 borrowed from her parents and a refinancing of the mortgage over a property owned by the wife, increasing the debt by approximately $101,000 (Wife’s affidavit filed 21 June 2017, paragraphs 9–11).

2. The primary judge said:

   27. The wife’s evidence in relation to the purchase of the boat is set out in her affidavit.  The husband’s evidence is set out in paragraph 51 and 52 of his affidavit.  He says that:

   “51.Early in 2010, after crewing on other people’s [boats] and catamarans, [Ms Ralphson] and I decided to purchase a [boat] of our own.

   I had planned to spend around $50,000 of my personal funds. But unfortunately, after much searching we weren’t satisfied with what we could buy for that amount.

   [Ms Ralphson] suggested we speak to her Finance Broker ([Mr Z]) at [Suburb J in City B] to discuss accessing some of the equity in her house at [D Street, Suburb G, City E].

   [Mr Z] suggested replacing [Ms Ralphson]’s existing St. George Home Loan with a “BreakFree” mortgage package with ANZ Bank, which included and “Offset” account to minimise interest charges and a Visa Rewards Credit Card.

   21 May 2010, The ANZ Offset account was opened.

   52.On 11 June 2010, the new joint $252,000 ANZ “Breakfree” mortgage was drawn down. After $150,187.81 was used to payout [Ms Ralphson]’s existing St. George Home Loan account Number …, which included [Ms Ralphson]’s $49,900 drawdown on 17/12/2009, which never left the account, accruing interest and increased the amount required by the new ANZ mortgage by $50,000 to pay out the St, George Home Loan, $101,812.19 remained. $100,000 plus [Mr Hadlett]’s $50,000 and [Mr and Ms F’s] $20,000 (Totalling $170,000) for the purchase of [the boat] and additional expenses such as Marina Fees, Insurance and any unforeseen expenses, leaving the $1,812.19 balance for other expenses.

   See: Annexure ‘[Hadlett]-10’, ANZ Joint Mortgage … Statement #1

   I refer to [Ms Ralphson]’s affidavit and her Annexure ‘[Ralphson]-11’.”

   28.The husband referred the Court to a further annexure of his affidavit. I accept the wife’s evidence in relation to the purchase of the boat.  I am not able to understand where the husband would get $50,000 to put into the boat given his taxable income during the relationship.

3. This finding is consistent with the findings made earlier to the effect that the husband’s income could not support his asserted expenditure.

4. The husband did not point to any source for the contribution of the $50,000 said to be made by him.  Instead, it appears that it was not asserted to be a lump sum contribution but rather a reduction of the joint mortgage.  In his Summary of Argument at paragraph 29, he said:

   Since May 2010, when the Joint ANZ Mortgage was drawn down prior to the [boat]’s purchase in December 2010, the Wife did not contribute to the Joint ANZ Mortgage and did not arrange for her salary to be paid into the ANZ Offset Account associated with the Joint ANZ Mortgage.  The Wife continued to keep her personal funds separate, including her earnings from her [business], and not apply them to the relationship and joint expenses.  During this time the Husband was solely responsible for 100% of the Joint ANZ mortgage ($265,000), which funded the purchase of [the property at D Street, Suburb G, City E], where the Wife’s parent’s lived under a Life Tenancy Agreement with the Wife, $50,000 draw down by the Wife prior to the Joint ANZ Mortgage replacing the former St George Mortgage and $100,000 of the [boat]’s purchase price.  The Husband was also solely responsible for the [boat]’s ongoing ownership expenses, Marina Fees, Insurance, Registration, Repairs, Upgrades & Maintenance, in addition to 100% of the Rent and Household Expenses, as well as jointly paying for Groceries as he had since 1 July 2006 when the Wife and her 2 daughters moved into the Husbands fully furnished home at [Suburb K].

   (Emphasis removed)

5. As is apparent from the reasons given by the primary judge, her Honour did not accept that the husband had the income available to him with which to make all the payments he asserted that he made.  We have already found that that was a course open on the evidence.

6. Indeed, contrary to the husband’s submissions, the wife’s evidence was consistent with the documents that were available.

7. For these reasons, the attacks on the integrity of the trial process and the fact finding by the primary judge fail.

8. It follows that Ground 4, which asserts the husband’s evidence should have been accepted over that of the wife, must also fail. 

9. The husband submitted that he was not treated fairly as an unrepresented litigant because he was not allowed sufficient time to “properly and fully present his case as per his Case Summary without being hurried along and threatened by the trial judge with additional costs if he did not finish in time” (Husband’s Summary of Argument, paragraph 39).  The husband did not take us to any passages of the transcript that support his submissions and a reading of the transcript does not bear them out.

10. Finally, the husband submits that he was treated unfairly because the primary judge did not apply the same level of scrutiny to the wife’s income as she did to his.  In particular, he pointed to a sewing machine bought for $10,000 and a car for $26,000 as proof that her tax returns must be inaccurate.

11. The wife said she purchased these two items by drawing down on her mortgage (Transcript 20 December 2017, p.96, lines 36–37; p.148, line 17).  That evidence was not challenged by the husband and clearly explains the source of the funds used to purchase them.  

12. The husband argued that the wife received significant cash payments from her use of the sewing machine. This was denied by the wife and in the absence of evidence to support his claim the primary judge was entitled to accept the wife’s denial.

13. For these reasons, Grounds 1, 2, 4, 7, 9, 11, 12, 13, 14 and 15 fail.

Did the primary judge fail to take into account that the wife’s oral evidence was inconsistent with her affidavits? (Ground 3)

1. The husband did not direct any written or oral submissions to this ground, which must therefore fail.

Did the primary judge fail properly to take into account the significantly greater contributions made by the husband? (Ground 5)

1. Her Honour found:

   34.The husband sets out his assets at the commencement of the relationship in paragraph 18 of his affidavit.  He sets out furniture and chattels of $53,000, personal funds of $110,000 and superannuation of $15,000.  I accept the wife’s interest in the property at [L Sreet, Suburb N], seeded the parties’ acquisition of the subsequent real properties the parties purchased and the acquisition of the [boat] (Pierce (1999) FLC 92 844).

   35.The finding I have made about the husband’s $110,000 in cash in his house leaves his initial contributions as his furniture and the chattels, which had an insured value of $53,000.  I consider that the market value of the chattels would be significantly less than the $53,000, which is the insured value. 

   36.The wife had more property than the husband at the commencement of the relationship, but it was the real property that has allowed the parties to secure the purchase of the boat and the other real properties that were of significance.

   37.During the relationship, the wife earned significantly more income than the husband, and this, in my view, was a significant financial contribution on her behalf. I note that the husband received $110,000 from the estate of his late mother, late in the relationship, and this inheritance enabled him to acquire the real property he currently has in his name.

2. These findings led to the conclusion that the wife made a significantly greater financial contribution than the husband and that the overall contributions made by the parties were 65 per cent by the wife and 35 per cent by the husband (at [42]).

3. It can be seen that the above findings flow directly from the earlier findings about the husband’s contributions.  The husband’s submissions on appeal were based upon the premise that his evidence was to be preferred.  As the grounds seeking to establish that premise have failed, this ground must also fail.

Did the primary judge err in her findings pursuant to s 75(2) of the Family Law Act 1975 (Cth)? (Ground 6)

1. After having found that the parties’ contributions favoured the wife as to 65 per cent, the primary judge made an adjustment of 2 per cent in favour of the husband pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). Her Honour’s reasons for doing so were:

   43.I must consider the various matters set out in section 75(2) and decide whether any further adjustment should be made in favour of either party. The section 75(2) factors mainly assess future needs of the parties.

   44.The wife was born [in] 1963 and is fifty-four years old..  The husband was born [in] 1958 and is fifty-nine years old.  He will be sixty [soon].    There is no medical evidence to suggest that the husband or the wife are in any other state than reasonable health for their respective ages.

   45.The husband, on the evidence before me, has a limited income, and virtually no income was earned during the relationship.  After separation, the husband was employed on some contracts but is currently unemployed.  The wife has earned an income throughout the relationship and continues to earn from her employment.  There is no doubt that the husband has the physical and mental capacity to earn a gainful income.  However, he has earnt very little income during the relationship.

   46.Neither the husband nor the wife currently needs to be responsible for the care of a child or any other person that they have a duty to support.  Neither the husband nor the wife is yet eligible for an aged pension, and neither receives any pension, allowance or benefit.

   47.The duration of the marriage has not affected the earning capacity of either the husband or the wife.  Both the husband and the wife have commenced living with another person, but there is no evidence of the financial circumstances of these persons.

   48.The husband is, effectively, sixty years old, and is thus six years older than the wife. His income is far less than hers.  This, in my view, needs a small adjustment in the husband’s favour.  Two per cent is $8357, and I consider this is an appropriate adjustment in favour of the husband.

2. The husband submitted that this adjustment was inadequate because it did not pay proper regard to his age, health and ability to work and overlooked his future needs.

3. He did not direct us to any evidence about his health to demonstrate that any of the findings we have just set out were wrong.  It is not for us to rummage around in the evidence to see if there was any material that supports his assertions (Bahonko v Sterjov (2008) 166 FCR 415 at [3]). Thus, we cannot find that her Honour erred by ignoring relevant evidence.

1. It follows that the challenge to her Honour’s findings under s 75(2) of the Act becomes one of weight. Such challenges face a high bar. In Gronow v Gronow (1979) 144 CLR 513 at 519 – 520, Stephen J said:

   The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight.

2. We are not satisfied that any error of the kind described has been demonstrated.

Did the primary judge give adequate reasons? (Ground 8)

1. Contrary to this ground, to which no submissions were directed, we consider that her Honour’s reasoning is readily apparent.  The reasons disclose the relevant factual findings and relevant considerations.  The reasons allow the parties to understand how her Honour reached her decision and are therefore adequate (Bennett and Bennett (1991) FLC 92-191 at 78,266-78,267; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [57]–[59]).

Did the primary judge fail to include as property available for division assets retained by the wife at separation? (Ground 10)

1. The husband submits that the primary judge “failed to consider and include the value of the assets retained by the Wife at separation” (Husband’s Summary of Argument, paragraph 28).  The submission then refers to a property owned by the wife at Suburb G, which he says was sold in late 2016, and to some cars which were owned by the wife and possibly her daughters at the time of separation.  The wife’s case was that the cars were purchased for her daughters.  The husband accepted that the cars had, at the least, either been given away or sold before the hearing. Similarly, the proceeds of the property at Suburb G had been used to purchase the wife’s current home which was one of the assets divided between the parties.

2. Pursuant to s 79 of the Act, the Court may make such orders as it considers appropriate with respect to the property of the parties or either of them. As the definition of “property” in s 4(1) of the Act makes clear, that is the property then held by the parties. The Court cannot alter interests in property no longer held by them.

3. The husband did not mount any challenge under s 106B of the Act or assert that account should be taken of any improper disposal of property.

4. It follows that the primary judge was correct in not taking into account those assets.

Conclusion

1. None of the grounds has been established and the appeal will be dismissed.

Costs

1. On the basis that the appeal has been wholly unsuccessful the wife seeks an order for the payment of her costs in the sum of $9,746.63, which has been calculated pursuant to Sch 3 of the Family Law Rules 2004 (Cth).

2. The husband opposes this order.  He says he receives Newstart payments of $650 per fortnight and that his mortgage payments are $1,301 per month.  He says that his income is insufficient to meet his expenses.

3. However, impecuniosity is not necessarily a bar to a costs order because otherwise an impecunious party could litigate with impunity (Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12]).

4. Taking these considerations into account, we are of the opinion that a costs order as sought by the wife should be made.

I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge & Austin JJ) delivered on 19 December 2018.

Legal associate: 

Date:  19 December 2018