HALL & HALL
[2015] FamCAFC 154
•7 August 2015
FAMILY COURT OF AUSTRALIA
| HALL & HALL | [2015] FamCAFC 154 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – INTERIM SPOUSAL MAINTENANCE – Where the appellant seeks leave to appeal against interim spousal maintenance orders – Where the respondent did not fail to disclose assets –Where the trial judge did not err in failing to draw inferences from the respondent’s failure to call evidence of value – Where that evidence was not available – Where the evidence of the respondent’s income was accepted and taken into account in determining whether the respondent could adequately support herself – Where the trial judge did not err in finding that it was reasonable for the respondent to only work one day each week– Where it was not necessary for the respondent, applying for interim spousal maintenance on an urgent basis, to actually get in her assets before she could satisfy the threshold test in the Family Law Act 1975 (Cth), s 72 –Where the trial judge did not err in her consideration of whether the wife was able to support herself adequately – Where the trial judge did not err in finding that the respondent was not obliged to use up all of her assets and capital in order to satisfy the threshold test in the Family Law Act 1975 (Cth), s 72 – Where the trial judge did not err in finding that the wife was unable to support herself adequately – Where the trial judge did not err in finding that the appellant was able to make the required spousal maintenance payments –Where the trial judge correctly addressed the evidence of the respondent as to her needs and concluded that spousal maintenance of $10,833 per month was reasonable – Where there was no error of principle given that none of the proposed grounds of appeal would succeed – Where there was no substantial injustice – Where the issue is not one of general importance – Application for leave to appeal dismissed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the appellant and respondent seek to adduce further evidence – Where part of the appellant’s further evidence could arguably demonstrate that the order under appeal was erroneous – Where that evidence was before the trial judge at the subsequent hearing – Where it is therefore preferable not to receive that evidence in this appeal – Appellant’s application dismissed ––Where the respondent’s application is not opposed – Where the evidence is admitted –Where the evidence does not need to be taken into account given the dismissal of the application for leave to appeal. FAMILY LAW – APPEAL – LEAVE TO APPEAL – PROPERTY – INJUNCTION – Where the appellant seeks to appeal against orders preventing the sale of certain properties –Where the entitlements of the respondent under her late father’s will are not determinative of whether the injunctions should remain – Where the trial judge considered the new information from the ATO, relevant to the sale of assets – Application for leave to appeal dismissed. FAMILY LAW – APPEAL – LEAVE TO APPEAL – DISCHARGE INTERIM SPOUSAL MAINTENANCE ORDER – Where the appellant seeks to appeal against a refusal to discharge the interim spousal maintenance order – Where the trial judge failed to discuss or make findings in relation to the application to discharge the spousal maintenance order – Where the trial judge failed to consider or make any finding as to whether there was sufficient new evidence to discharge the interim spousal maintenance order – Where the trial judge erred in not taking into account the new evidence that the respondent was able to seek payment of $150,000 per year from a corporation operated by her brothers – Leave to appeal granted – Appeal allowed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Where the appellant and respondent seek to adduce further evidence – Where merit has been found in the appeal – Where it is unnecessary to deal with the applications, but there is no objection to the court receiving the respondent’s further evidence and that evidence is received. FAMILY LAW – APPEAL – RE-EXERCISE OF THE DISCRETION – Where the discretion is able to be re-exercised on the evidence before the trial judge – Where the appellant seeks to discharge the interim spousal maintenance order – Where it can be inferred from the evidence that if requested the respondent would receive a benefit of $150,000 per year – Where the respondent has the benefit of a personal overdraft of $1 million – Where the spousal maintenance order should be set aside – Where the order is discharged on and from the date it was made. FAMILY LAW – APPEAL – COSTS – Where, in the event that either appeal was successful, the appellant sought an order for costs – Where, in the event that either appeal was unsuccessful, the appellant agreed that costs should follow the event – Where the respondent sought that costs should follow the event – Costs order in favour of the appellant for the second appeal – Costs order in favour of the respondent for the first appeal. |
| Family Law Act 1975 (Cth) – ss 72 and 83(1)(c) and (6) Family Law Rules 2004 (Cth) – r 22.39(1) |
| CDJ v VAJ (1998) 197 CLR 172 Jones v Dunkel (1959) 101 CLR 298 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 Sadek and Ors & Hall and Anor (2015) FLC 93-634 Stanford v Stanford (2012) 247 CLR 108 |
| APPELLANT: | Mr Hall |
| RESPONDENT: | Ms Hall |
| FILE NUMBER: | ADC | 3671 | of | 2013 |
| FIRST APPEAL NUMBER: | SOA | 82 | of | 2013 |
| SECOND APPEAL NUMBER: | SOA | 42 | of | 2014 |
| DATE DELIVERED: | 7 August 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Thackray, Strickland & Aldridge JJ |
| HEARING DATE: | 12 November 2014 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 10 December 2013; 17 June 2014 |
| LOWER COURT MNC: | [2013] FamCA 975; [2014] FamCA 406 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr O’Shannessy |
| SOLICITOR FOR THE APPELLANT: | Kennedy Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Ackman QC with Ms Kari |
| SOLICITOR FOR THE RESPONDENT: | Barnes Brinsley Shaw Lawyers |
Orders
Appeal SOA 82 of 2013
The Application in an Appeal filed by the husband on 6 October 2014, and the Response thereto filed by the wife on 7 November 2014 be dismissed.
By consent, the Application in an Appeal filed by the wife on 3 November 2014 be allowed.
The application for leave to appeal be dismissed.
The husband pay the costs of the wife of and incidental to the application for leave to appeal, such costs to be assessed on a party/party basis in default of agreement.
Appeal SOA 42 of 2014
The Application in an Appeal filed by the husband on 6 October 2014, and the Response thereto filed by the wife on 7 November 2014 be dismissed.
By consent, the Application in an Appeal filed by the wife on 3 November 2014 be allowed.
The application for leave to appeal be granted.
The appeal be allowed.
Paragraph 6 of the orders made by Dawe J on 17 June 2014 be set aside to the extent that it dismisses the application by the husband to discharge the interim order for spousal maintenance made on 10 December 2013, and in lieu thereof that order be discharged as on and from 10 December 2013.
The wife pay the costs of the husband of and incidental to the application for leave to appeal and the appeal, such costs to be assessed on a party/party basis in default of agreement.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hall & Hall 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 Numbers: SOA 82 of 2013; SOA 42 of 2014
File Number: ADC 3671 of 2013
| Mr Hall |
Appellant
And
| Ms Hall |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed on 20 December 2013 (in SOA 82 of 2013), Mr Hall (“the husband”) seeks leave to appeal, and if leave is granted, to appeal all orders made by Dawe J on 10 December 2013. However, at the hearing of the appeal, the husband’s counsel indicated that the husband was only seeking to set aside order 1.3 of the orders made by her Honour, namely, that he pay to Ms Hall (“the wife”) interim spousal maintenance in the sum of $10,833 per calendar month. The application for leave to appeal and the appeal are opposed by the wife.
Additionally, by Notice of Appeal filed on 14 July 2014 (in SOA 42 of 2014), the husband seeks leave to appeal and, if leave is granted, to appeal paragraphs 4 and 6 of the order made by Dawe J on 17 June 2014. Those orders prevented the husband from attempting to sell, or selling, the properties at AA and BB, W Street, Suburb F, and dismissed his Application in a Case filed on 7 March 2014 by which, inter alia, the husband sought to discharge the interim spousal maintenance order. The application for leave to appeal and the appeal are also opposed by the wife.
These Notices of Appeal were heard concurrently by this court, in addition to the Notice of Appeal filed on 11 July 2014 (in SOA 41 of 2014) by the husband, challenging orders made by Dawe J on 17 June 2014 which, in summary, dismissed four Notices of Objection filed in relation to subpoenas issued by the husband. On 20 February 2015, this Full Court refused the husband’s application for leave to appeal in that matter (see Sadek and Ors & Hall and Anor (2015) FLC 93-634.
These reasons for judgment concern appeals SOA 82 of 2013 and SOA 42 of 2014 respectively.
Background
The husband was born in 1952 and is in the property industry.
The wife was born in 1972 and is a healthcare professional.
The parties were married in 2001.
There are two children of the marriage, K and D, born in 2003 and 2005 respectively.
In September 2013, the parties separated, which on the wife’s evidence was after a physical altercation at the former matrimonial home. Thereafter, the wife and the children resided at the home of the maternal grandmother.
On 2 October 2013, the wife filed an Initiating Application seeking orders in relation to children’s issues and for the use and occupation of the former matrimonial home at E Street, Suburb F.
On 23 October 2013, the wife filed an Amended Initiating Application seeking, in addition, orders for property settlement and for spousal maintenance in the sum of $20,000 per month. She also sought interim orders for “urgent spousal maintenance” of $14,000 per month, and “interim spousal maintenance” of $14,000 per month, and orders restraining the husband from “disposing, encumbering or dealing with [the former matrimonial home]” together with injunctions “restraining him from disposing of or dealing with assets save and except in the normal course of business without first notifying the wife” (at [8]).
On 23 October 2013, her Honour made interim orders, inter alia, that during the period of the adjournment the wife have the sole use and occupation of the former matrimonial home, the husband be restrained from disposing of, encumbering or dealing with the former matrimonial home, and from disposing of or dealing with any asset, save and except in the usual course of business, without first notifying the wife in writing and providing her with no less than 14 days’ notice. All applications were then adjourned to 9 December 2013.
On 13 November 2013, the husband filed a Response to the Amended Initiating Application seeking various orders, including that the wife forthwith vacate the former matrimonial home and “fully cooperate with the husband to allow its immediate sale” (at [9]). The husband also sought the immediate sale of the properties at AA and BB, W Street, Suburb F, and, pending final settlement of the proceedings, that any monies received from those sales be invested in the joint names of the parties.
On 9 December 2013, Dawe J heard argument and on 10 December 2013, her Honour delivered ex tempore reasons for judgment and made the order now appealed in SOA 82 of 2013.
On 18 December 2013, the wife obtained an intervention order against the husband in favour of herself and the children.
On 7 March 2014, the husband filed an Application in a Case seeking the following orders:
1.That paragraphs 1.1 and 1.3 of the order made by the Family Court of Australia at Adelaide on 10 December 2013 be discharged.
2.In the alternative, that the operation of paragraphs 1.1 and 1.3 of the order made by the Family Court of Australia on 10 December 2013 be stayed pending the determination of the Notice of Appeal filed by the husband on 20 December 2013.
3.Such further or other orders as this Honourable Court deems appropriate.
On 12 March 2014, the wife filed a Response seeking, inter alia, orders that the husband’s Application in a Case filed on 7 March 2014 be dismissed, injunctions restraining the husband from attempting to sell, or selling, the former matrimonial home, that he remove that home from being advertised for sale, and similar orders in relation to the properties at AA and BB, W Street, Suburb F.
On 14 March 2014, the matter came before Dawe J for hearing, and on 17 June 2014, her Honour delivered judgment and made the orders appealed in SOA 42 of 2014.
On 6 October 2014, the husband filed Applications in an Appeal and supporting affidavits seeking to adduce further evidence in both appeals. On 3 November 2014, the wife also filed Applications in an Appeal seeking to adduce further evidence in both appeals. We note that both parties sought that, to the extent necessary, the requirements of r 22.39(1) of the Family Law Rules 2004 (Cth) (“the Rules”) be dispensed with. The applications to dispense with r 22.39(1) were not opposed and we permitted the applications to be pursued.
On 7 November 2014, the wife filed Responses to the husband’s Applications in an Appeal seeking, inter alia, the dismissal of the Applications in an Appeal filed on 6 October 2014.
Orders made on 10 December 2013 and 17 June 2014
Her Honour made the following orders on 10 December 2013:
1Pending final determination of property settlement and spouse maintenance proceedings between the parties:
1.1Paragraphs 8.1 and 8.3 of the Order of 23 October 2013 are continued.
1.2The husband pay as and when they fall due all school fees for the children of the parties including all associated or related charges or expenses billed by the children’s school to either of the parties.
1.3The husband pay spouse maintenance to the wife in the sum of TEN THOUSAND EIGHT HUNDRED AND THIRTY THREE DOLLARS [$10,833.00] per calendar month commencing on Monday 16 December 2013 and each 16th day of the month thereafter payable to an account nominated by the wife and provided to the husband’s solicitors in writing by 4.00 pm on Thursday 12 December 2013.
(Original Emphasis)
It is necessary to set out paragraphs 8.1 and 8.3 of the order made on 23 October 2013 as follows:
8.1The wife do have the sole use and occupation of the former matrimonial home at [E Street, Suburb F] in the State of South Australia (“the former matrimonial home”) AND that the husband continue to pay all outgoings in relation to the same including but not limited to any mortgage payments, rates, taxes and utilities.
…
8.3 The husband is restrained is restrained [sic] and an injunction is granted restraining the husband from:-
8.3.1Attending at, or in the vicinity of, the former matrimonial home save and except for the collection and return of the said children pursuant to these orders;
8.3.2Disposing of, encumbering or dealing with the former matrimonial home;
8.3.3Disposing of or dealing with any asset, save and except in the usual course of business, without first notifying the wife in writing and providing her with no less than fourteen days’ notice.
The relevant orders made by her Honour on 17 June 2014 are as follows:
(4)That the husband be restrained and an injunction be granted restraining the husband from selling or attempting to sell the properties at [AA and BB, W Street, Suburb F], in the State of South Australia.
…
(6) The Application in a Case filed by the husband on 7 March 2014 is dismissed and removed from the active pending cases list.
The ex tempore reasons for judgment delivered on 10 December 2013
Her Honour commenced the reasons for judgment by setting out the interim orders sought by the wife, i.e. urgent and interim spousal maintenance in the sum of $14,000 per month (at [1]) and payment of outgoings for the former matrimonial home in which the wife and the children resided (at [2]).
Her Honour then set out the procedural orders made and the hearings already conducted in the matter.
Her Honour addressed the law as it applied to the determination of interim spousal maintenance, namely ss 72, 75, 77 and 80 of the Family Law Act 1975 (Cth) (“the Act”), noting that “the primary matter” for determination “was whether the wife passed the initial threshold test, or the first test, namely, whether the material before the Court disclosed that she was unable to support herself” (at [7]) and “if the need [was] established whether the amount sought was excessive, as claimed, and whether the husband had the ability to pay the same” (at [8]).
Her Honour referred to Mitchell & Mitchell (1995) FLC 92-601 at 81,995–6 (at [12]), noting that “the evidence before the Court in this interim matter is striking for the many facts that [are] in dispute” (at [13]) and from this, the number of issues in dispute meant that her Honour could only make “a limited determination” when considering the factors set out in s 75(2) of the Act (at [18]).
In relation to the wife, her Honour recorded that she had not produced a copy of her late father’s will, nor had she provided any details of his estate, and thus, although she may be entitled to a financial resource as a beneficiary of her late father’s will, “it is not currently an asset which the Court can take into account as a basis upon which to offset the wife’s claim to be presently unable to support herself adequately”, and similarly, her Honour recorded that the status of the wife’s interest in any family businesses was currently unknown (at [14] – [15]).
Her Honour also recorded that the wife earned a limited income as a healthcare professional and she had the primary care of the children.
Her Honour found that the major factor for consideration under s 75(2) of the Act was “the standard of living which might be reasonable in all the circumstances” (see s 75(2)(g) of the Act) (at [19]). Her Honour considered that the other factors in s 75(2) of the Act were not significantly relevant to the interim application before the court.
Her Honour recorded that an important matter yet to be determined was the income, property and financial resources of the parties; specifically, the wife’s interest in her family’s businesses and, as mentioned, any interest in her deceased father’s estate, and as for the husband, his business and real estate interests.
Relevantly, in his affidavit, the husband asserted that his current assets were valued at $75 million and the current debt was $54 million. However, the husband’s affidavit was unclear as to how these figures were calculated and there was no reliable evidence of his income and financial resources.
In the wife’s evidence, she alleged that the husband had disclosed to her an income of $4 million per annum, which was not rebutted in his responding affidavits, and further, that she had received from him amounts of between $6,000 and $7,000 per month for housekeeping expenses (with one payment of $10,000), over and above the amounts required for payment of other outgoings such as mortgage repayments, holidays, clothes and entertainment (at [22]).
Her Honour was cognisant of the husband’s financial commitments with regard to payment of the mortgage, rates, taxes and utilities for the former matrimonial home in which the wife and children resided, and that the husband had offered to pay the children’s school fees, clothes and other expenses.
Her Honour thus took these commitments into account in determining the application for interim spousal maintenance.
Her Honour was satisfied that given the husband’s “conceded financial circumstances”, and taking into account his past lifestyle, that he had the “ability, on an interim basis, to pay significant spouse maintenance”, and the wife had established a need for spousal maintenance given her “current limited employment and her commitment to the role of parent” (at [26]).
Her Honour then considered the wife’s expenses as set out in her Financial Statement. There, her average weekly expenses were claimed to be $7,101, being $3,438 for the wife and $3,663 for the children. Her Honour found that she was “unable to rely on some of the wife’s figures as amounts which are necessary to support the wife in a standard of living that in all the circumstances is reasonable” (at [29]). Thus, her Honour made adjustments to the expenses claimed by the wife.
Her Honour found that “an amount of $2500 per week or $10833 per month [was] reasonable and appropriate. This is the sum to be paid by the husband as well as the mortgage and rates, taxes, utilities (gas, electricity) and school fees” (at [32]). That results in a total payment of approximately $28,000 per month, and her Honour found that the husband was “reasonably able” to make payment of that total amount pending trial (at [37]).
Finally, her Honour observed at [38] that:
The payments made pursuant to the order may be taken into account and any necessary or appropriate adjustments made when the final property settlement proceedings are determined pursuant to section 79 and section 75(2)(o).
The reasons for judgment delivered on 17 June 2014
Her Honour commenced these reasons for judgment by setting out the applications before the court and providing a summary of the relevant background and issues.
Her Honour identified that the primary application before the court was the husband’s Application in a Case filed on 7 March 2014, which sought the “discharge of paragraphs 1.1 and 1.3 of the Orders of 10 December 2013 or in the alternative that the Orders be stayed pending the appeal” (at [16]).
In the Response of the wife filed on 12 March 2014, she sought that the husband’s application be dismissed and various orders including an injunctive order in relation to the children’s mobile telephones, and restraining the husband from selling, or attempting to sell, the E Street and W Street properties at Suburb F.
Her Honour turned to the evidence of the parties, comprising an affidavit filed by the husband on 7 March 2014, and Financial Statement sworn on 12 March 2014. The wife relied upon an affidavit filed on 13 March 2014.
In relation to the evidence of the husband, her Honour recorded that his affidavit referred to him as in the property industry and that “[he] work[s] [in the property industry] managing a number of investments which [he] … collectively describe[s] … as ‘the [Hall] Group’” (at [21]). The estimated gross value of the Hall Group was $70 million with debts to third parties in excess of $50 million.
Her Honour recorded the husband’s assertion, in his affidavit, that he does not receive a salary from the Hall Group, but refers to “dealing with the trust and loan accounts” (at [22]). The husband denied the wife’s claim that his current annual income was around $4 million.
Her Honour then recorded the husband’s evidence in relation to his dealings with the Australian Taxation Office (“ATO”) and his assertion that he had received advice to “pay down the existing debt by realising assets” and thus he sought to sell the properties at W Street as they could be sold “quite quickly” (at [24]).
In relation to the wife’s evidence, her Honour recorded that she opposed the sale of the W Street properties because she wished to retain them as part of any final property settlement, that she alleged there had been little disclosure by the husband in relation to his financial interests and that she opposed any order for sale until full disclosure was made.
Her Honour noted, at [28], that much of the factual information set out in the affidavits of the parties was known at the time the orders were made on
23 October 2013 and 10 December 2013 respectively.
In support of his submissions in relation to discharge of the spousal maintenance order, and the injunctions for sole use and occupation of the former matrimonial home, counsel for the husband submitted that there was now information available to show that the wife had received, or would receive, shares from the estate of her late father in the approximate sum of $7.2 million and she was able to support herself (at [29]). Counsel for the husband also submitted that the ATO had cautioned the husband about “continuing to draw down from the loan accounts against the various commercial entities, rather than [disclosing] a greater taxable income” (at [30]).
In reply, the wife submitted “that she had fully disclosed her interest in the family companies based upon the information she had been given” (at [31]) and there was no clear or reliable evidence to support the husband’s assertion that the value of the shares from the estate of her late father were valued at $7.2 million (at [36]).
Her Honour noted that there was still “considerable dispute about what interest, if any, the wife [had] in her late father’s estate” (at [32]) and there was “also considerable disagreement about the value of the husband’s interest in the various entities, taking into account monies he had borrowed from those entities” (at [33]).
Turning to the law as it applied to stay applications, her Honour recited r 22.11 of the Rules and the authorities of Friscioni & Friscioni [2009] FamCAFC 43 and Trahn & Long (No 2) [2008] FamCAFC 194 (at [37] – [38]). In relation to the law as it applies to injunctions, her Honour recited s 114 of the Act and referred to Yunghanns & Ors (1999) FLC 92-386, Blueseas Investment Pty Ltd & Mitchell and McGillivray (1999) FLC 92-856 and Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681.
Her Honour then said, at [43]:
The authorities all indicate that the discretion is to be exercised on the basis that it is not necessary for the person seeking the stay to demonstrate special or exceptional circumstances, but the onus is on the person seeking the stay to establish the basis for the stay.
Her Honour found that the evidence in relation to the ATO, and the new issue concerning the value of the wife’s shares in her late father’s estate, did not provide “sufficient reliable evidence upon which to discharge the injunctions and permit the husband to sell the former matrimonial home in which the wife and the children currently reside and the other two [W Street] properties” (at [45]). Relevantly, her Honour found that “significant factual matters” still remained to be determined (at [46]).
In relation to the ATO, her Honour recorded that “[s]ensible negotiations and appropriate disclosure and discovery should enable the parties to make arrangements which would satisfy the ATO” (at [47]).
In relation to the husband’s application to stay the orders made on
10 December 2013, her Honour found that the grounds of appeal contained in the Notice of Appeal, filed on 20 December 2013, only referred to the orders for spousal maintenance and not to the injunctive orders. Accordingly, the husband “[had] not established any basis upon which he [had] an arguable case so far as it [related] to the interim injunctions concerning the use and occupation of the former matrimonial home and the injunctions concerning the sale of the other properties” (at [48]).
In further assessment of the merits of the appeal, her Honour recorded that the “person who has obtained a judgment is entitled to the benefit of that judgment and to presume it is correct” (at [50]). Her Honour found that, if the husband was successful in his appeal and the spousal maintenance order was set aside, an adjustment could be made in the final property settlement to reflect that.
Her Honour then dismissed the husband’s Application in a Case.
Finally, at [58], her Honour found that there was “uncontested evidence that the husband [had] taken steps … to place the former matrimonial home on the market for sale”, albeit there were orders in place preventing this (see the orders made on 23 October 2013 at [22] above). It was therefore “appropriate to extend the orders made in paragraph 8 of 23 October 2013 so that there is no room for doubt that the husband should not take any steps to sell or attempt to sell the former matrimonial home”, or the properties at W Street, Suburb F.
Appeal SOA 82 of 2013
Leave to appeal
The facts relied on in support of the application for leave to appeal are as follows:
Part CLeave to Appeal
2.The order of the learned Trial Judge sought to be appealed, paragraph 1.3 of the order of 10 December 2013 that the appellant pay spouse maintenance of $10,833 per calendar month (“the appealed order”) was an interlocutory decree and leave to appeal is required by section 94AA(1) of the Family Law Act 1975 and Regulation 15A(1) of the Family Law Regulations 1984.
3.Leave to appeal is sought on the grounds set out hereafter.
4.The appealed order was based upon an error of principle.
Particulars of alleged error of principle
4.1In the circumstances of:
4.1.1The obligation of disclosure upon an applicant for an interim maintenance order to disclose all of his or her assets, income and financial resources to the Court and the respondent; and
4.1.2The applicant for maintenance having a shareholding in private companies described by her counsel as “vast”; and
4.1.3The applicant for maintenance having an entitlement pursuant to the will of her late father who died in 2009; and
4.1.4The proper inference to be drawn from the circumstance of an applicant for an interim maintenance order failing to call evidence as to his or her assets, income and financial resources, including the shareholding in private companies and entitlement under a will,
it was an error of principle for the Court to limit consideration of whether the applicant for maintenance had passed the initial threshold test to the material before the Court (which is taken to mean the affidavit material of the parties), see paragraph 7 of the reasons (AB p.12).
4.2It was an error of principle for the Court to apply the principle of In the Marriage of Mitchell, see paragraph 12 (at AB p. 16), so as to excuse the applicant from:
4.2.1Calling evidence as to and disclosing her assets and income;
4.2.2Pursuing for herself her own assets and income as a means to support herself;
4.2.3Having the appropriate inference drawn from the applicant not calling evidence as her own assets and income.
Further, in the circumstances of the matters alleged at paragraphs 4.1.1 to 4.1.4 and 4.2.1 to 4.2.2 herein, it was an error of principle for the Court to proceed on the basis that the applicant did not have access to her own assets (paragraph 27).
4.3It was an error of principle for the Court not to require an applicant for maintenance to pursue his or her own assets and income as a means to support him or herself.
4.4It was an error of principle for the Court to regard the applicant’s assets and entitlement under a will as not being sufficient to “offset” her claim to be unable to support herself adequately when the obligation is upon the wife to identify her own assets and she failed to do so.
4.5In the circumstances where:
4.5.1The applicant for maintenance worked part time as a [healthcare professional] (and by inference she earns $300 for a four hour session or $75 per hour) and, since the birth of the parties’ second child, had so worked since 2010, and
4.5.2The children of the parties in the applicant’s care were of school age; and
4.5.3The applicant for maintenance had not sought more than one four hour session per week since separation,
it was an error of principle for the Court to find, by implication, that the applicant’s commitment to care for the children (paragraphs 16, 17 and 26 of the reasons at AB p. 16) meant that she was not expected or required to seek any further sessions or employment to support herself.
4.6In the circumstances where the applicant for maintenance has not provided any information about the extent of her assets but it is conceded she owns shares in companies of great wealth, described as “vast” (see AB p. 391) it was an error of principle to assume that a final property settlement or order was inevitable (paragraph 38) and that any payments made could be taken into account and appropriate adjustments made in those inevitable property orders.
5.The appealed order is a substantial injustice to the appellant.
Particulars of alleged substantial injustice
5.1The spouse maintenance ordered is a substantial sum. The payment of such a substantial sum until further order, when it is difficult to determine when the matter will be ready for final hearing, is a substantial obligation upon the respondent and in the circumstances a substantial injustice to the appellant.
5.2In the circumstances that it cannot be said that it will be found to be just and equitable for there to be any order pursuant to section 79 whereby the appellant husband would pay any sum to the respondent wife, to proceed on the basis that any necessary or appropriate adjustment can be made in section 79 orders is a substantial injustice to the appellant.
6.The issues are of general importance.
Grounds of appeal
The proposed grounds of appeal, if leave to appeal is granted, including an additional Ground 11 which we granted leave to rely on, are as follows:
Grounds of appeal
1.The learned Trial Judge erred in failing to find that the appellant for spouse maintenance had not properly disclosed and provided evidence as to the value of her assets including:
1.1Her shareholding in private companies where she conceded those companies were “vast”.
1.2Her interest under her late father’s will.
2.The learned Trial Judge erred in failing to draw the appropriate inferences from the failure to disclose and lead evidence as alleged in ground 1.
3.The learned Trial Judge erred in failing to find that the appellant as a [healthcare professional] earning about $75 per hour was, in the circumstances where the respondent was paying the interest due upon the loan secured upon the home (the [E Street] property) where the applicant for maintenance then resided, able to support herself.
4.The learned Trial Judge erred, in the circumstances alleged at grounds 1 to 3 herein, in finding that the threshold test of section 72 (paragraph 27) had been met.
5.The learned Trial Judge erred in failing to take into account the earning capacity of the applicant for spousal maintenance of her occupation of [healthcare professional].
6.The learned Trial Judge erred in failing to find that an applicant for interim spouse maintenance has an obligation to chase up or get in her own assets.
7.The learned Trial Judge erred in finding, in the circumstances where the applicant for spouse maintenance:
7.1Has or may have assets and potentially income; and
7.2Had not sought to chase up or get in those assets and income
had satisfied the threshold conditions for an order for interim spouse maintenance.
8.The learned Trial Judge erred in finding that in the circumstances where the applicant for spouse maintenance:
8.1Has or may have assets and potentially income; and
8.2Had not sought to chase up or get in those assets and income,
had satisfied the first threshold test (of section 72) because she was not required to use up all of her assets and capital in order to support herself adequately (“the Mitchell’s case principle”).
9.The learned Trial Judge erred in the circumstances where the applicant for spouse maintenance:
9.1Has or may have assets and potentially income; and
9.2Had not sought to chase up or get in those assets and income;
9.3Has not disclosed or provided evidence of the value of her own assets and the income of those assets,
in finding that those circumstances could not be taken into account in determining whether the wife was unable to support herself adequately.
10.The learned Trial Judge erred in finding that the husband was reasonably able to make total payments including the appealed order of $28,000 per month pending trial.
11.The learned Trial Judge erred in finding the wife’s reasonable needs as $10,833 per month (paragraph 32) in addition to the school fees, mortgage payments, rates, taxes and utilities.
Appeal SOA 42 of 2014
Leave to appeal
The facts relied on in support of the application for leave to appeal are as follows:
Part CLeave to Appeal
2.The orders of the learned Trial Judge sought to be appealed, paragraph 4 and 6 of the order of 10 December 2013 [sic] dismissing the husband’s application in a case seeking the discharge of the paragraph 1.3 $10,833 spouse maintenance order and the discharge of an order restraining him from selling [AA and BB, W Street, Suburb F] (“the 2014 appealed order”) was an interlocutory decree and leave to appeal is required by section 94AA(1) of the Family Law Act 1975 and Regulation 15A(1) of the Family Law Regulations 1984.
3.Leave to appeal is sought on the grounds set out hereafter.
4.The 2014 appealed order was based upon an error of principle.
Particulars of alleged error of principle
4.1The matters alleged in the grounds 1 and 2 (AB Vol. 1, p. 4) of the Notice to [sic] Appeal filed 14 July 2014 are errors of principle.
4.2The matter alleged in ground 3 of the Notice to [sic] Appeal filed 14 July 2014 is an error of principle.
4.3The matter alleged in ground 4 of the Notice to [sic] Appeal filed 14 July 2014 is an error of principle.
4.4The matter alleged in additional ground 6 of the Notice to [sic] Appeal filed 14 July 2014 is an error of principle.
4.5The matters alleged in ground 7 of the Notice to [sic] Appeal filed 14 July 2014 is an error of principle.
4.6The matters alleged in ground 8 of the Notice to [sic] Appeal filed 14 July 2014 is an error of principle.
5.The circumstances of the dismissal of the husband’s application in a case (note the application to discharge the sole use order relating to [E Street, Suburb F] was withdrawn at hearing) was a substantial injustice to the husband.
6.The issues are of general importance.
Grounds of appeal
The proposed grounds of appeal, if leave to appeal is granted, are as follows:
1.The learned Trial Judge erred in failing to take any account of the circumstances of the wife by:
1.1Failing to call any evidence as to the value of the wife’s known share entitlements, income and financial interests pursuant to the Will of her late father;
1.2Failing to make any inquiry as to the value of the wife’s known share entitlements, income and financial interests pursuant to the Will of her late father.
2.The learned trial Judge erred in failing to take into account the wealth of the wife and the impact of that wealth on the wife’s ability to support herself.
3.The learned trial Judge erred in proceeding on the basis that the wife would receive a property settlement and that any payment of maintenance inappropriately made to her pursuant to interim orders could be adjusted in the making of final orders.
4.The learned trial Judge erred in failing to take into account the wife’s obligation to support herself as a [healthcare professional] and from her own assets and financial resources.
5.The learned trial Judge erred in the exercise of her discretion in making the orders.
6.The learned Trial Judge erred in failing to consider the husband’s application for discharge of paragraph 1.3 (the $10,883 maintenance order) (sic) of the 10 December 2013 orders.
7.The learned Trial Judge erred in failing to consider whether or not the circumstances of:
7.1The wife’s duty of disclosure and failure to call evidence; and
7.2The husband’s recent dealing with the ATO; and
7.3The limited knowledge of the wife’s entitlements pursuant to her late father’s will arising from Mr [Simons’] affidavit (AB Vol. 1, p. 50); and
7.4The limited knowledge of the value of the wife’s shareholding in the family private companies, stated by her late father in 2009 to be $7,228,465
were sufficient circumstances for the husband’s application to discharge paragraph 1.3 (the maintenance paragraph) of the recent 10 December 2013 orders to be discharged.
8.In the circumstances of:
8.1The obligation of disclosure upon an applicant for an interim maintenance order to disclose all of his or her assets, income and financial resources to the Court and the respondent; and
8.2The applicant for maintenance having a shareholding in private companies described in 2009 by her late father as then having a value of $7,228,465 (AB Vol. 1, p. 50 at 14.4); and
8.3The applicant for maintenance having an entitlement pursuant to the will of her late father who died in 2009 that included an annual distribution of $150,000 per annum (AB Vol. 1, p. 51); and
8.4The proper inference to be drawn from the circumstance of an applicant for an interim maintenance order failing to call evidence as to his or her assets, income and financial resources, including the shareholding in private companies and entitlement under a will; and
8.5The husband having (since the December 10 2013 orders) the requirement of selling down assets to reduce his loan account to avoid taxation penalties (AB Vol 1,
p. 91); and8.6The [W Street] properties producing little income and the cost of servicing the substantial debt secured being borne solely by the husband and being serviced by debt,
the learned trial Judge erred in finding that there was not sufficient reliable evidence to discharge the injunctions concerning the sale of [AA and BB, W Street] to permit their sale.
Orders Sought
In relation to appeal SOA 82 of 2013, the husband sought the following orders (as amended in the Summary of Argument filed on 26 September 2014):
1.That the Applicant/Appellant be granted leave to proceed with an appeal.
2.That the Orders made herein on 10 December 2013 be discharged.
3.That the Respondent pay the Applicant/Appellant’s costs of and incidental to the appeal.
However, as we confirmed at the hearing, counsel for the husband advised that in this appeal the husband was only seeking to set aside paragraph 1.3 of the orders made on 10 December 2013, namely, the interim spousal maintenance order and not the order (paragraph 1.1) continuing the injunctions made on 23 October 2013.
In relation to appeal SOA 42 of 2014, the husband seeks the following orders as per the Notice of Appeal filed on 14 July 2014:
1.That the application for leave to appeal be granted.
2.That orders numbered 4 and 6 of the orders made by the Family Court of Australia at Adelaide on 17 June 2014 be set aside.
3.That order numbered 1.3 of the orders made by the Family Court of Australia at Adelaide on 10 December 2013 be discharged.
4.That the respondent pay the appellant’s costs of and incidental to this appeal.
5.Such further or other orders as this Honourable Court deems appropriate.
It is of course unclear from these orders what the husband says should happen to that part of the application of 7 March 2014 seeking the discharge of paragraph 1.1 of the orders made on 17 June 2014, if order 6 made on 17 June 2014 is set aside, and we are not assisted in this regard by any written or oral submission of counsel. In those circumstances we propose to proceed on the basis that it is only that part of order 6 that dismisses the application to discharge the interim order for spousal maintenance that is the subject of the appeal.
Discussion
Appeal SOA 82 of 2013
In relation to the application for leave to appeal, it can readily be seen that most of the alleged errors of principle relied on by the husband, in seeking leave to appeal, are to be found in the proposed grounds of appeal, and it is convenient therefore to address those grounds of appeal and then return to the application for leave.
Grounds 1 – 7
These grounds can conveniently be considered together.
The complaints of the husband are that the wife failed to disclose and provide evidence of the value of her assets, that the trial judge failed to draw the appropriate inferences from that failure, and in those circumstances her Honour erred in finding that the wife had satisfied the threshold requirements for an order for spousal maintenance. In addition, but in the same context, it is claimed that her Honour erred in failing to find that the wife, as a healthcare professional, could support herself.
In relation to the alleged non-disclosure and lack of valuation evidence, the assets identified are the wife’s shares in various private companies and her interest in her late father’s estate. In that regard, we note that the wife’s father died in 2009 and that probate has not yet been sought.
We do not accept the claim that the wife has failed to disclose these “assets” and, indeed, it is beyond doubt that the wife revealed these assets and interests at the time of the hearing before her Honour.
The parties separated in September 2013, the wife’s initial application was made on 2 October 2013, and her amended application was filed on 23 October 2013. On 23 October 2013, her Honour made orders for the parties to each file a Statement of Financial Circumstances. The wife complied with that order but the husband did not, instead he later, on 5 December 2013, filed an affidavit detailing his financial circumstances. The hearing of course came before her Honour on 10 December 2013.
In the wife’s Statement of Financial Circumstances filed on 8 November 2013, she deposed to having shares in various companies, which she named, and an interest in the estate of her late father, but she did not know the value of either. Further, in her affidavit filed the same day, the wife set out all that she knew about her shares and her interest in her late father’s estate.
As to evidence of the value of her shares, it is plain that it would have been impossible for the wife to provide that evidence at that time. She explained in her affidavit (at paragraphs 67 – 86) her position vis-a-vis the private companies in which she held shares and, as her counsel told her Honour:
MR ACKMAN: Well, your Honour, that of course would be – as your Honour would gather the companies are very large and vast. Her shareholding is a very small minority. It’s set out in her affidavit that she owns one share where there might be 100 shares, one share where there might be ten. To evaluate that will require all of the interest to be valued, and her shareholding to be valued subject to a discount for a minority shareholding. That is a matter that is a long way down the track, your Honour.
HER HONOUR: And in relation to the debts, any loan accounts that she has with any of those entities or ---
MR ACKMAN: She says as far as she’s aware she doesn’t have any. She has no interest. She’s not a director …
(Transcript 9.12.13, page 12, lines 23 – 35).
As to her interest in her late father’s estate, the wife’s counsel informed her Honour that the wife had asked her brother, who is the executor under the will, for a copy of the will, but he had refused to provide it. Separately, the husband had issued subpoenas to obtain copies of the will, but objections had been lodged and those objections had yet to be determined.
It must also be remembered that this was an application for an interim order, brought on an urgent basis, almost immediately following separation. Plainly, there was inadequate and incomplete information before her Honour from both sides, but in the circumstances, her Honour had to do the best that she could with the evidence that was before her. Significantly, there was no application by either party to adjourn the proceedings for better financial information to be presented.
Her Honour clearly recognised this in her reasons for judgment. For example, [12], [13], [25] and [27] of those reasons speak to this issue in various ways.
That leads into a consideration of the next aspect of the challenge, namely, the inferences that her Honour allegedly should have drawn.
It is said that, because of the failure by the wife to disclose her “assets” and her failure to call evidence as to the value of her shares and her interest in the estate of her late father, her Honour should have inferred that the disclosure of those “assets” and the evidence of value “would not have supported her case that she could not support herself adequately” (paragraph 13 of the husband’s summary of argument).
We can immediately put aside the submission based on the wife’s alleged non-disclosure, but equally, the submission as to the failure to call evidence of value cannot withstand scrutiny.
In making the latter submission, the husband’s counsel relies on the rule in Jones v Dunkel (1959) 101 CLR 298, at 308, 312 and 320 – 321, but with due respect to counsel, that rule does not support the submission. The rule is that the unexplained failure by a party to call witnesses or tender documents may, not must, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted that party’s case. The inference is not that that evidence would have been adverse or damaging to the party (Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at [64]) and the rule cannot be applied to fill gaps in the evidence. Rather, it entitles a court to more readily draw any inferences fairly to be drawn from the other evidence by reason of the party being able to prove the contrary but not choosing to do so. Thus, it is readily apparent that the rule cannot support the inference that it is submitted her Honour should have drawn.
Moreover, the evidence must be available and here that is simply not the case. Accordingly, this aspect of the challenge also fails.
Turning to the issue of the wife’s employment and income as a healthcare professional, we must say that we do not understand the complaint made in Ground 3. The fact of the matter is that the wife’s evidence was that she earned $300 per week for a four hour session at a clinic on one day each week. Her Honour accepted that evidence and plainly took it into account in determining whether the wife could adequately support herself.
It seems that the husband’s complaint here is better expressed in Ground 5 and it is convenient that we address that ground at this point.
Her Honour dealt with this issue at [16] and [17] as follows:
16.It is clear from the material before the Court that the wife has qualifications as a [healthcare professional] and discloses an income from limited employment.
17.It also discloses that she has a commitment and wishes to continue with her commitment to provide care for the two children of the marriage. Consent orders were made during the period of the adjournment that the children live with her and spend specific but limited time with the father.
The complaint in Ground 5 is that her Honour failed to take into account the wife’s earning capacity as a healthcare professional, where there was no evidence that the wife’s care of the two children of the marriage constrained her from working more than she did.
We are not persuaded that this complaint has any merit. As her Honour identified at [17], by consent, the children, who were then aged nine and seven years, live with the wife and spend limited time with the husband. It did not take specific evidence for her Honour to proceed on the basis that in these circumstances it was reasonable for the wife to only work one day each week. Accordingly, there is no merit in this ground of appeal.
Grounds 8 and 9
Both of these grounds proceed, at least in part, on the basis that the wife was obliged to “chase up or get in … assets and income” and that her Honour erred in finding that the threshold test in s 72 of the Act was satisfied where the wife had not done this.
Again, the assets in question are the wife’s shares and her interest in the estate of her late father, and pausing there, we fail to see why it is necessary for a party applying for interim spousal maintenance on an urgent basis to actually “get in” their assets before they can satisfy the threshold test. In any event, it is plain that, on the evidence before her Honour, the wife was not able to do that with the assets in question, and that provides a complete answer to this aspect of these grounds.
As to the question of income, the immediate answer is the same, in that the wife disclosed that she had not received dividends from her shares for some time, and she knew nothing about her interest in the estate. Thus, on the evidence before her Honour, her Honour has not erred by not taking into account those assets and any potential income when determining whether the wife was able to support herself adequately.
This outcome may be different though, dependent on whether we admit the further evidence sought to be adduced by the husband, and we will come to that issue later in these reasons.
In the meantime, to continue our consideration of these grounds, the challenge in Ground 8 stems from what her Honour said in [12] of her reasons as follows:
12.It was part of the argument in this matter that the wife’s property and possible financial resources were not clarified and therefore the Court should not be in a position to find that the wife satisfied the first threshold test. In this regard there is the often reported authority In the Marriage of Mitchell (1995) FLC 92-601, in which the Full Court said at pages 81,995 – 81,996:
“The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”. Where the line is to be drawn will depend upon the circumstances of individual cases.”
(Original emphasis)
It is said that her Honour misapplied the principle emanating from this case. However, it is apparent that her Honour was attempting to make the point, by reference to Mitchell, that even if there was complete evidence before the court as to the wife’s assets, she was not obliged to “use up all of her assets and capital” in order to satisfy the threshold test in s 72.
We do not take her Honour’s reference to that case as suggesting that there is no need for parties, where evidence as to the value of the assets for example is available, to present that evidence.
Here of course that evidence was not available and could not have been obtained for the purpose of the hearing before her Honour.
With Ground 9, we were taken to [14], [15] and [27] of her Honour’s reasons, where her Honour said this:
14.Counsel for the husband emphasised that the wife’s father died in 2009 and the wife has not produced a copy of his Will or any particulars of his estate. The wife’s affidavit said that she did not have a copy of his Will and did not know the particulars of her late father’s estate. Presently, therefore, the wife may be entitled to an asset or financial resource or income that is not known. However, it appears that it is not currently an asset which the Court can take into account as a basis upon which to offset the wife’s claim to be presently unable to support herself adequately.
15.Similarly, the unknown value of the wife’s shareholding in her family’s businesses at this interim stage does not form a sufficient basis upon which to offset the wife’s interim claim.
…
27.In determining this need I have taken into account the property and financial resources disclosed by her and the apparent lack of access to possible assets of unknown value, namely her father’s estate and the shares in the family business. On an interim basis I am satisfied that the conditions for spouse maintenance are met. The amount must be determined taking into account the ability to pay and reasonable needs.
We would suggest that [20] should also be included as relevant to this issue. That paragraph provides as follows:
One of the significant matters to be determined is the income, property and financial resources of the parties. As I have previously indicated, there is an unknown factor in relation to the value of the wife’s share in her family’s businesses and her possible or unknown probable interest in her deceased father’s estate. There is also the question of the husband estimating his own assets in the extensive business interests and real estate.
It must again be emphasised that her Honour was dealing with an application for interim spousal maintenance brought almost immediately after the separation of the parties, when neither party was able to provide, and with respect, could not have necessarily been expected to provide, complete details (including valuations) of their assets and their income, given the nature of the same, and in relation specifically to the wife, given her lack of knowledge about the same. We also again emphasise that an adjournment of the hearing was not sought by either party, and particularly by the husband.
Thus, again, we are not persuaded that her Honour erred in the manner suggested in making the finding that, on the evidence before her, and given the nature and limitations of the hearing before her, the wife was unable to support herself adequately. Thus, we find no merit in these grounds.
Ground 10
In the husband’s written submissions, it is said that her Honour’s findings as to the husband’s position can be found in [33] – [37]. That is so, but it is also necessary to take account of what her Honour said in [21] – [26] of her reasons for judgment. We highlight of course what her Honour said at [25], namely, “[t]here is difficulty in determining this matter on the papers, considering the significant facts in dispute.”
Again, we are not persuaded that her Honour erred in making the findings she did about the husband’s ability to make the required payments. We have not been taken to anything in the evidence, or in the submissions, which would demonstrate the merit of this ground of appeal.
Ground 11
The challenge here is limited to the submission that because during the relationship the housekeeping received by the wife for the family of four was between $6,000 and $7,000 per month, except on one occasion, that is the maximum amount of spousal maintenance that could have been found to be reasonable, and that of course includes the children’s expenses as well.
Plainly, that information is relevant background material for her Honour and, indeed, her Honour referred to this in [22] of her reasons for judgment. However, what her Honour had to determine was the reasonable needs of the wife at the time of the hearing in the entirely different scenario created by the separation. Thus, her Honour correctly addressed the evidence of the wife as to her needs at that time and concluded that $10,833 per month was reasonable (bearing in mind that the wife had sought $14,000 per month).
There was no direct challenge to her Honour’s assessment of the needs claimed by the wife, and thus this ground must fail.
Conclusion
To return to the application for leave to appeal, as can be seen, we do not accept that there has been an error of principle given that none of the proposed grounds of appeal would succeed. There is, though, one alleged error of principle that is not found in the grounds of appeal and which we propose to address, albeit it was conceded by the husband’s counsel that it was not an issue raised before her Honour.
In paragraph 4.6 of the facts relied on in support of the application for leave, it is put that it was an error of principle by her Honour “to assume that a final property settlement or order was inevitable (paragraph 38) and that any payments made [for spousal maintenance] could be taken into account and appropriate adjustments made in those … orders”. In his written submissions, counsel for the husband relies on the High Court decision of Stanford v Stanford (2012) 247 CLR 108 in support of this argument.
It is true that a court has to find that it is just and equitable for any property settlement order to be made at all, but here, that requirement can be readily satisfied by the circumstances that the marriage has ended, the parties have joint assets and they have each sought a property settlement. They provide a clear indication that it would be just and equitable for the court to make orders for property settlement.
Although there is no error of principle demonstrated, that still leaves the claim of substantial injustice. However, that too must be rejected because we have found that her Honour has not erred in finding that the wife was unable to adequately support herself, that her reasonable needs were $10,833 per month and that the husband was able to make the required payment.
Finally, it is said that leave should be granted because the issue involved “is one of general importance”. We fail to see how that submission can be maintained and we reject it as well.
Thus, we propose to refuse leave to appeal the order made by her Honour on 10 December 2013.
The Applications in an Appeal
It is convenient that we address, at this point, the applications by the parties to lead further evidence in this appeal. The evidence sought to be led by the husband comprises three topics:
a)The fact that in March 2014 the wife obtained a personal overdraft from Bank SA in the sum of $1 million, guaranteed by the wife’s mother.
b)An affidavit filed on 20 February 2014, by Andrew Shaw, the solicitor for the executor of the estate of the wife’s late father, and the solicitor for the wife’s brothers and the family businesses, which provided details of the will and the estate of the wife’s late father.
c)Extracts from the balance sheets and profit and loss statements for the financial year ended 30 June 2013 of the private companies in which the wife had shares.
On 7 November 2014, the wife filed an affidavit in response to the husband’s affidavit setting out this further evidence, and effectively the only “evidence” that she challenged was the attempt by the husband in his affidavit to calculate the book value of her shares and her notional share of the net profit of the private companies.
The wife, of course, opposed the admission of this further evidence and it falls to us to determine the application.
The principles in relation to the admission of further evidence are well settled and they are encapsulated in what the High Court said in CDJ v VAJ (1998) 197 CLR 172, namely:
…
109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
…
111.Still another consideration is that the discretion is given to an appellate court hearing an appeal against an order made in the exercise of original jurisdiction. No doubt it is true that, because the appeal is by way of rehearing, the Full Court’s jurisdiction is neither purely appellate nor purely original. … Appellate jurisdiction in the strict sense is jurisdiction to determine whether the order of the court below was correct on the evidence and in accordance with the law then applicable. In contrast, the Full Court of the Family Court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of hearing the appeal. … Nevertheless, it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
…
114.No doubt the Full Court will readily admit further evidence which is not in dispute and which the Court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings re-heard. Further evidence of this kind is particularly likely to be admitted where the evidence relates to events occurring after trial. In the case of undisputed evidence which the Full Court can evaluate as part of the evidence in the appeal, the discretion to admit the evidence may even be properly exercised without the Full Court considering what effect it would have had on the trial judge’s decision. In that context, the likely effect of the further evidence on the Full Court’s view of the evidence before the trial judge is the important consideration. Where there is no need for a new trial or extensive taking of evidence, other discretionary factors such as the availability of the evidence at the trial and the need for finality of litigation are likely to be more relevant in the exercise of the discretion than the effect that the evidence would have had at the trial.
(Footnotes omitted)
It is submitted by the husband’s counsel that “the evidence is likely or probable to affect the outcome of the case … and on the probabilities would have compelled another judge to make a different order”.
However, we are not persuaded that we should admit the evidence comprised in the first and third categories above. To establish that the wife is able to borrow $1 million, guaranteed by her mother, does not “demonstrate that the order under appeal is erroneous” or that a different order would have been made, and the fact that it is not in dispute does not assist either argument.
As to the evidence comprising the extracts from the balance sheets and the profit and loss statements, we are also not persuaded that they should be admitted. To be received as further evidence that evidence must be admissible, and here the documents themselves are arguably admissible, but certainly not the calculations that the husband seeks to present. Further, it would be of no benefit to the husband to simply receive the documents, because their contents cannot be taken as evidence of the value of the wife’s shares in those private companies.
However, in relation to the second category of further evidence, it is certainly arguable that, if accepted, that evidence would “demonstrate that the order under appeal is erroneous”. We have a choice though; in other words, in relation to the appeal in SOA 42 of 2014, this evidence was before her Honour at the hearing and one of the primary issues that emerges is whether her Honour erred in failing to take this evidence, or part of it at least, into account and discharge the order for spousal maintenance. In these circumstances, and because both appeals have been run together, we consider it preferable not to receive this evidence in relation to appeal SOA 82 of 2013, but rather address it in the context of appeal SOA 42 of 2014.
Thus, we propose to dismiss the husband’s Application in an Appeal filed on 6 October 2014 to adduce further evidence in appeal SOA 82 of 2013.
The wife also filed an application in that appeal on 3 November 2014, seeking to adduce further evidence comprising a letter from one of her brothers, the executor named in the will of the wife’s late father, providing his assessment of the effect of the terms of the will. That application is not opposed and accordingly we will admit that evidence. However, we are not persuaded that that evidence provides a complete answer to what the wife might be able to receive as a result of the terms of her late father’s will. That is better addressed by reference to the affidavit of Mr Simons.
In any event, that evidence is said to bolster the decision made by her Honour because it demonstrates that the wife has no interest of the estate of her father. Thus, it would support the dismissal of the application for leave to appeal, but, given that that is what we propose to do, we do not need to take this evidence into account in this appeal.
Appeal SOA 42 of 2014
As with the first appeal, the alleged errors of principle relied on by the husband, in seeking leave to appeal, are to be found in the proposed grounds of appeal, and accordingly we will again initially address those grounds.
In that regard, it seems to us that the first grounds that should be considered are Grounds 6 and 7, given that, if those grounds have merit, then it may be that it is unnecessary to address all of the remaining grounds, either at all, or in any great detail.
Grounds 6 and 7
In considering Ground 6 it is necessary to revisit the structure of her Honour’s reasons. We do not need to repeat all that we have said above, but we highlight the following.
Her Honour identified the Application (and the Response) before her and the orders sought, including a discharge of the interim order for spousal maintenance. Her Honour also referred to the affidavits of the parties that were relied upon and recited the history of the proceedings (including the extant appeal) and the orders made.
Her Honour then said this at [29]:
In the submissions on behalf of the husband in relation to the discharge of the spouse maintenance order and the discharge of the injunctions for sole use and occupation, counsel for the husband maintained that the information now available in relation to the estate of the late father of the wife indicated that the wife has, or is going to have, shares worth approximately $7.2M. He submitted that this therefore removed the basis upon which any spouse maintenance order could be made because the wife was able to support herself.
Her Honour also referred to the submissions of the husband, as to the recent information from the ATO that affected him, and the circumstance that there was still “considerable disagreement about the value of the husband’s interest in the various entities, taking into account monies he had borrowed from those entities” (at [33]).
The submission of the wife, recorded by her Honour, was that, apart from the information from the ATO, “there was no new material which warranted further consideration of the existing orders” (at [35]).
In relation to the new information about her late father’s estate her Honour recorded the wife’s submission at [36] as follows:
It was maintained on behalf of the wife that there was an error in the wife’s late father’s Will when it referred to shares being transferred to the wife on the basis that she already owned those shares. It was also maintained on behalf of the wife that there is no evidence that the shares that the wife held were worth $7.2M. It was maintained that significant issues remained not only as to the value of those shares, but the wife’s capacity to sell the shares.
Her Honour then turned to discuss the relevant law but, significantly, that discussion was limited to the law in relation to stay applications pending the hearing of an appeal.
There then followed what her Honour described as her “Discussion and finding”. However, nowhere does her Honour “discuss” or make “findings” in relation to the application to discharge the spousal maintenance order. The only reference to the spousal maintenance order was an inconsequential reference in [44] and otherwise was in the context of the stay application in relation to the appeal that the husband had filed, and in respect of which her Honour concluded:
51.If the husband is successful in his appeal and the order for spouse maintenance is set aside an appropriate adjustment will be capable of being made on final determination of the property settlement proceedings.
What her Honour in fact discussed, and then found, was first, that “the dealings with the ATO” did not “of itself indicate that on an interim basis the former matrimonial home in which the wife resides with the children and the other assets which the wife seeks to retain in an overall property settlement should be sold” (at [44]). Secondly, that “the fresh information concerning the ATO and the new issue concerning the value of the wife’s shares and the possible, but not yet determined, interest in her late father’s estate” (at [45]) did not provide “sufficient reliable evidence upon which to discharge the injunctions” (at [45]). Finally, that a consideration of the grounds of appeal challenging the orders of 10 December 2013 did not justify a stay of those orders.
Thus, it can be seen that although her Honour recognised that there was an application before the court to discharge the spousal maintenance order, and there was new evidence in relation to the wife’s shares about which both parties made submissions, her Honour failed to consider, and indeed make any finding as to whether there was sufficient new evidence before her to discharge the interim spousal maintenance order. Accordingly, Grounds 6 and 7 have merit. However, in relation to Ground 7.1, given our finding as to the issues of non-disclosure and the failure to call evidence in the first appeal, we do not consider that that part of Ground 7 has any merit.
As to Ground 7.3, we are concerned about her Honour’s failure to take into account one particular aspect of the information provided in the affidavit of Mr Simons, namely, that part of the wife’s late father’s will that specified that she should receive from the V Group an annual payment of $150,000, net of income tax, from the date of his death until she receives payment from the V Group of an amount of $16.5 million (also referred to in the will). Plainly, this is an expression of a wish by the father for the wife to have this benefit and it does not bind the executor, but there are clear indications or inferences to be made from the evidence before her Honour that the wife’s brothers (including the executor of the will), who now control the V Group, would carry out their father’s wish in this regard.
These indications or inferences are that the wife has a good relationship with her brothers, it is a wish of their father directed to the brothers and, significantly, the brothers do already provide for the wife, presumably via the V Group (but that is unclear on the evidence), by supplying her with late model luxury motor vehicles. At the time of the hearing before her Honour, the wife was the registered owner of a late model luxury convertible motor vehicle and a late model luxury four wheel drive, valued by the wife at a total of $265,000. These vehicles replaced other brand new vehicles purchased previously for her on the same basis.
There was no evidence before her Honour that the wife had requested her brothers to comply with their father’s wish, once she became aware of the relevant terms of the will, nor that any such request had been denied. Thus, her Honour erred in not taking into account the “new evidence” that the wife was able to seek payment from V Group of $150,000 per year, net of income tax, in addressing the application to discharge the interim order for spousal maintenance.
We note of course that the payment of the $16.5 million was only payable on the happening of certain events and none of these events had yet taken place. Thus that amount could not be taken into account by her Honour.
Plainly, the consequence of the success of Grounds 6 and 7 must be that her Honour’s dismissal of the application of 7 March 2014, to the extent that it sought a discharge of the interim spousal maintenance order, warrants appellate interference. In those circumstances there is no need to address Grounds 1 – 4, but we would say this about two of those grounds. Even allowing for the inadequate drafting of Ground 1, such that it failed to identify errors of the trial judge rather than errors of the wife, that ground could not have succeeded in light of our earlier findings in relation to Ground 1 in the first appeal.
With Ground 3, that suffers from the same defect as we identified when considering an alleged error of principle by her Honour in relation to the first appeal, namely, that the answer to this challenge is that the marriage has ended, the parties have joint assets and they have both sought a property settlement, and those circumstances provide a clear indication that it would be just and equitable for the court to make orders for property settlement.
That leaves of course Ground 8, which relates not to the spousal maintenance order but to the injunctions restraining the sale of AA and BB, W Street, Suburb F.
On the basis of our findings in the first appeal, we can immediately discount Grounds 8.1 and 8.4. As to Grounds 8.2 and 8.3, we fail to see how the financial circumstances of the wife, in the context of her entitlements under the will of her late father, can be determinative of whether the injunctions should remain. The primary reason for the injunctions was that the wife seeks to retain the properties as part of her property settlement entitlement and, until the respective financial circumstances of both parties can be put before the court, it would be inappropriate to allow their sale.
In relation to Ground 8.5, that raises the new information from the ATO and does directly relate to the sale of assets, but her Honour dealt with this in her reasons at [44] – [47] and we are not persuaded that her Honour has erred in this regard.
Finally, there is Ground 8.6, which frankly does not take the matter any further, and, in light of her Honour’s findings as identified in the previous paragraph, no basis for appellate interference here is demonstrated.
In summary then, we only find merit in Ground 6 and in certain aspects of Ground 7.
Before concluding this discussion, there are of course applications in this appeal, filed by each of the parties, seeking to adduce further evidence. The evidence the husband seeks to adduce is, again, the fact that in March 2014 the wife obtained a personal overdraft from Bank SA in the sum of $1 million, guaranteed by her mother, and extracts from the balance sheets and profit and loss statements for the 2013 financial year of the private companies in which the wife has shares.
The evidence the wife seeks to adduce is, again, the letter from her brother, the executor of the will of her late father.
However, given that we have found merit in this appeal, it is unnecessary for us to deal with these applications for the purpose of determining the appeal, save and except to note that there is no objection to us receiving the letter from the wife’s brother, and we will do so.
Conclusion
To return to the application for leave to appeal, in this instance, given we have found merit in this appeal, we consider it appropriate to grant leave to appeal and we will do so.
As for the appeal, again, given that we have found merit in Grounds 6 and parts of Ground 7, we propose to allow the appeal. The question then becomes whether, after setting aside the relevant part of the order, we would re-exercise the discretion or whether we would remit the matter for rehearing.
The orders sought by the husband contemplate that we would re-exercise the discretion on the evidence before her Honour and the wife’s counsel agreed with that if we reached that point. For our part, we accept that position and we consider that we are able to re-exercise the discretion.
Re-exercise of the discretion
The relevant application of the husband is to discharge the interim spousal maintenance order made by her Honour on 10 December 2013. Pursuant to s 83(1)(c) of the Act, a spousal maintenance order may be discharged “if there is any just cause for so doing”.
The issue for consideration here is whether there is now evidence before the court that demonstrates that the wife is able to support herself adequately.
The evidence relied on is as described above, namely, that in the will of the wife’s late father he expressed the wish that V Group provide the wife with $150,000 per annum, net of income tax. To repeat, there is no evidence that the wife has requested this payment from her brothers, who it is common ground control V Group, or in particular, that any request that she has made for her father’s wish to be carried out has been rejected. Indeed, in paragraph 5.9 of the letter from the wife’s brother attached to the wife’s affidavit of 3 November 2014, he states that “[a]ny voluntary payment by [V] Group to [her] is entirely a matter for [V] Group and its Directors”. Importantly, there is no suggestion here that there would be an objection by this brother to such a voluntary payment.
The inference from the evidence is that, if requested, the wife would receive that benefit, and we make that finding.
To also repeat, the evidence from where that inference can be made is that the wife has a good relationship with her brothers, it is a wish expressed in the will of their late father and the brothers provide the wife with late models of luxury motor vehicles, possibly through the V Group (although that is unclear on the evidence).
We also note, in considering the wife’s financial circumstances generally, that she now has the benefit of a personal overdraft of $1 million, apparently obtained to meet her legal expenses and her living expenses. Of course, that is a two edged sword though, in that any amount that she draws down from that overdraft immediately becomes a liability that she must repay.
In these circumstances, we propose to set aside the relevant part of the order made by her Honour and discharge the order for spousal maintenance made on 10 December 2013.
We note that s 83(6) of the Act permits a court to express an order discharging a spousal maintenance order “to be retrospective to such date as the court considers appropriate”. In this instance, and to avoid any confusion, we propose to discharge the order as on and from the date it was made, namely 10 December 2013. We acknowledge that that will require the wife to reimburse the husband for the payments made by him, but as we have found, she can pursue the payment of $150,000 per year, and of course she has the ability to draw down her overdraft of $1 million. We observe that that would have been the case as well if we had taken the course of acting on the further evidence and found error by her Honour in making the order in the first place, and thus, there should be no difference between the two possible outcomes in that regard.
Costs
At the conclusion of the hearing we sought submissions as to the issue of costs depending on the result.
In the event that either appeal succeeded, the husband sought orders for costs and agreed that if either appeal was unsuccessful then costs should follow the event.
The wife made the same submissions, in other words, that costs should follow the event.
We accept those submissions and, on that basis, propose to order that the husband have his costs of the second appeal and the wife have her costs of the first appeal.
I certify that the preceding One Hundred and Sixty (160) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland & Aldridge JJ) delivered on 7 August 2015.
Associate:
Date: 7 August 2015
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