Halstron & Halstron
[2022] FedCFamC1A 65
•13 May 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Halstron & Halstron [2022] FedCFamC1A 65
Appeal from: Halstron & Halstron [2021] FamCA 437 Appeal number: SOA 45 of 2021 File number: SYC 2788 of 2016 Judgment of: MCCLELLAND DCJ, AUSTIN & GILL JJ Date of judgment: 13 May 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Whether the primary judge erred in dismissing the appellant’s application to adduce updated valuation evidence – Where the respondent was allowed to adduce updated valuation evidence – Protracted length of proceedings – Injustice – Error in identification of parties’ property established – Error in including statute barred loan on balance sheet established – Appeal allowed – Matter remitted for rehearing – Respondent to pay appellant’s costs in a fixed sum. Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 75, 79
Limitation Act 1969 (NSW) ss 14, 64
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 12.08, 12.17
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49
Campbell v Kuskey (1998) FLC 92-795; [1998] FamCA 10
Candle & Falkner [2021] FedCFamC1A 102
EB v CT (No. 2) [2008] QSC 306
Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21
Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22
Gilligan & Addison [2018] FamCAFC 211
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
House v The King (1936) 55 CLR 499; [1936] HCA 40
Hsiao v Fazarri (2020) 383 ALR 446; [2020] HCA 35
Khadem & Penk [2020] FamCAFC 211
Mallard & Mallard [2011] FamCA 876
Manifold & Alderton [2021] FamCAFC 61
Martin & Newton (2011) FLC 93-490; [2011] FamCAFC 233
Moose & Moose (2008) FLC 93-375; [2008] FamCAFC 108
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
R v Powch (1988) 14 NSWLR 136
Rigby & Olsen [2021] FedCFamC1A 46
Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
United Pacific Finance Pty Ltd (Receivers and Managers Appointed) v Govindasamy [2020] NSWSC 128
Zubcic & Zubcic (2019) FLC 93-918; [2019] FamCAFC 168
Number of paragraphs: 106 Date of hearing: 2 February 2022 Place: Melbourne (via videolink) Counsel for the Appellant: Mr Kearney SC Solicitor for the Appellant: Crumpton Lawyers Pty Ltd Counsel for the Respondent: Mr Puckey QC & Dr Smith Solicitor for the Respondent: Lander & Rogers ORDERS
SOA 45 of 2021
SYC 2788 of 2016FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS HALSTRON
Appellant
AND: MR HALSTRON
Respondent
ORDER MADE BY:
MCCLELLAND DCJ, AUSTIN & GILL JJ
DATE OF ORDER:
13 MAY 2022
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The parties’ respective applications for financial relief under Pt VIII of the Family Law Act 1975 (Cth) are remitted for re-hearing.
3.The respondent shall pay the appellant’s costs of and incidental to the appeal, fixed in the sum of $30,000.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Halstron & Halstron has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ AND AUSTIN J:
INTRODUCTION
This matter concerns an appeal from final property orders made by the primary judge on 24 June 2021. Consequent to the ending of the parties’ marriage, following a relationship of approximately 28 years, the appellant wife and the respondent husband have been engaged in what the primary judge described as a “long-standing and intractable dispute” (at [1]).
A significant issue in these proceedings is the length of time that has elapsed between the commencement of the hearing and the delivery of judgment. The substantive hearing initially commenced between 25 and 27 June 2019, before the matter was adjourned for further hearing between 17 and 20 February 2020. The matter was then adjourned for further hearing on 28 May 2020. At the conclusion of that hearing, the parties were to provide additional written material to the Court during the course of June 2020, with final submissions being provided on 1 July 2020. The next listing of the matter occurred on 28 May 2021, being 12 months to the day after the last substantive hearing date. The primary judge subsequently delivered judgment on 24 June 2021.
That period of delay becomes particularly relevant in considering a significant ground of appeal, namely, whether his Honour erred in dismissing the appellant’s application to adduce updated valuation evidence of the parties’ former matrimonial home, located at Suburb J, New South Wales (“the Suburb J property”) and acknowledged to constitute the major asset of the parties’ property pool.
The primary judge identified the parties’ combined property as having a value of approximately $16.16 million. In addition, his Honour recognised that the parties’ property included several properties located in the United States of America, which were not the subject of valuation, together with non-publicly listed shares in the parties’ names.
The effect of the orders, which are the subject of the appeal, is that the respondent retained 65% of the property and the appellant received 35%. The outcome was such that, of the $16.16 million property pool, the appellant received cash and shares worth $3,745,015 plus $1,910,211 in superannuation. Of the cash and shares received by the appellant, however, $1,426,000 represented notional “add backs”, a significant portion of which was acknowledged to have been in the appellant’s possession at one stage but which did not, in substantial part, exist as at the date of hearing.
Of the multiplicity of grounds of appeal, the essence of the appeal related to the following contentions:
·That the primary judge erred in rejecting the appellant’s application to call updated evidence of the value of the Suburb J property, in circumstances where there had been an extensive delay between the substantive hearing and the delivery of judgment. This was also in circumstances where his Honour had permitted the respondent to call evidence regarding an increase in the value of shares, which his Honour recognised had increased in value, as a result of a rebound in the aftermath of the social isolation measures introduced by the Australian government in response to the COVID–19 pandemic.
·That the primary judge erred in not including the respondent’s shareholdings in non-publicly listed companies on the balance sheet.
·That the primary judge erred in including the amount of $330,000 on the balance sheet, which had been advanced by the respondent’s brother to the respondent in 2007, in circumstances where the loan was unenforceable.
·That the primary judge erred in notionally adding back to the balance sheet funds of approximately $1.46 million, which his Honour found had been applied by the appellant for her own purposes.
·That the primary judge erred in respect to his consideration of factors set out in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
·That his Honour erred in the assessment of the parties’ respective contributions.
We have found there to be substance in the grounds of appeal relating to the first three areas of appeal which, in turn, impacted on his Honour’s consideration of an appropriate s 75(2) adjustment, such that a rehearing is required. In those circumstances, we have found it unnecessary to consider the grounds of appeal relating to the primary judge’s assessment of addbacks and the parties’ respective contributions: see Boensch v Pascoe (2019) 268 CLR 593 (“Boensch v Pascoe”) at [7]–[8].
BACKGROUND
The appellant was born in 1964 and, at the time of the trial, was working in client service (at [8]). The respondent was born in 1956 and was found to have received income both as a company director and from share trading (at [9]). There is an issue, in respect to the appeal, as to whether the share trading income earned by the respondent and subsequently applied by him towards the payment of his legal fees, in the post separation period, included income received from shares which had been acquired during the course of the parties’ intact relationship. As a result of errors we have found in the identification of the parties’ property, it has not been necessary to consider this issue.
The parties first met between 1992 and 1993, with there being a disagreement regarding the time that their relationship commenced. The appellant contended that the relationship commenced in March 1993 and the respondent contended it commenced approximately one year later. We respectfully agree with the primary judge that little turns on that difference (at [10]).
The parties married on 18 October 1994 and separated on 22 April 2016. The respondent has continued to live in the Suburb J property in the period subsequent to the parties’ separation. The respondent retained the Suburb J property as part of the property adjustment effected by the orders made by the primary judge on 24 June 2021. The contention of both parties was that, subject to the capacity of the respondent to make an appropriate cash adjustment to the appellant, the respondent should retain the Suburb J property.
There are three children of the marriage. Ms B, who is 27 years old, has an autism spectrum disorder and has resided with the appellant since July 2017. The parties’ two younger children, Ms C who is 21 years of age and Mr D who is 19 years of age, reside with the respondent and have spent little, if any, time with the appellant in the period subsequent to the parties’ separation (at [12]).
The appellant also has a son from a previous marriage, Mr E, who is 36 years old. The primary judge observed that it had not been disputed in the proceedings that the respondent came to treat Mr E as his own child and played a significant role in raising him, including providing financial support (at [13]).
From [15]–[21] of his decision, the primary judge provided background to the parties’ respective financial contributions to the marital property. In circumstances where we have not found it necessary to consider the primary judge’s findings in respect to contributions, it is unnecessary to detail that background, save to the extent that his Honour found that both parties contributed to the marital property, both directly and indirectly. These contributions were made through earned income and also through the making of indirect contributions, including as homemakers and in caring for the parties’ children and the appellant’s child from her former relationship. His Honour found that, in making those contributions, the respondent was the primary breadwinner while the appellant was the primary homemaker and, although both parties undertook parenting responsibilities, the appellant primarily carried out such duties.
It was acknowledged by the respondent that, in addition to his income, he also received sizeable distributions from his parents’ family trust totalling $323,244 between 1999 and 2005, and a further $2,834,040 in distributions in the period 2007 to 2015 from his mother’s estate after both his parents passed away in 2006 (at [22]).
In 2007, the parties purchased two properties in Town Y in New South Wales. One property was put in the appellant’s name and the other was registered under the name of Halstron Investments Pty Ltd (at [23]). There is an issue in this appeal regarding the treatment of the sale proceeds of the property that was in the appellant’s name. It has, however, been unnecessary to deal with that issue.
The respondent contends that from 2007, his brother lent him what his Honour summarised as being “significant amounts of money, personally and through his entities.” Relevant to this appeal is the respondent’s contention that a loan of $330,000 extended to the respondent by his brother on 20 July 2007 remains outstanding (at [24]).
On 27 March 2018, the respondent and his brother entered into an agreement regarding what they contended were the outstanding loans between them, which read:
Whereas:
A.[The respondent’s brother] may from time to time advance funds to [the respondent] to pay for capital works on [the Suburb J property] (including directly paying for such capital works at the request and direction of [the respondent])
B.[The respondent’s brother] may from time to time advance funds to [the respondent]
C.[The respondent’s brother] and [the respondent] have agreed that such advances shall be subject to certain terms
D.[The respondent’s brother] and [the respondent] have agreed that past advances that were not subject to certain terms will, from the date of this agreement, be subject to the same terms as new loans
It is agreed:
1.This document is the written agreement under which all loans made by [the respondent’s brother] to [the respondent] are made.
2.Those loans shall be repayable on demand or upon the coming into effect of any matrimonial settlement of [the respondent] or upon settlement on the sale of [the Suburb J property], at the discretion of the lender.
(Affidavit of [the respondent’s brother] dated 23 May 2019, Annexure SGH-43)
There is an issue in this appeal as to whether the respondent and his brother intended to enter into a legally enforceable agreement at the time funds were advanced to the respondent in 2007 and, further, whether that agreement had become unenforceable by the time the respondent and his brother entered into the March 2018 agreement.
In 2009, the respondent was made redundant from GG Corporation and received a severance payment of approximately $400,000. It was not disputed that, as noted by the primary judge:
25.… After this time he held various directorships, some of which provided remuneration, but primarily he worked at home share-trading and otherwise managing the family finances, generally through the G Investment Trust and the parties’ self-managed superannuation fund. …
(Footnote omitted)
It was not disputed that, as noted by the primary judge at [28], in early May 2016, shortly after separation, the amount of $570,505 was “rolled out of the parties’ self-managed superannuation fund, the Mr Halstron Superannuation Fund No. 2, [and paid] into the appellant’s newly established self-managed fund, the Ms Halstron Superannuation Fund.” It has been unnecessary to deal with the parties’ contentions in respect to the treatment of superannuation.
The proceedings which are the subject of this appeal were commenced by the appellant in May 2016. Reflecting upon the history of litigation between these parties, the primary judge noted that, subsequent to the commencement of proceedings and prior to the commencement of the final hearing, the parties made no fewer than 14 applications for further orders of one kind or another (at [30]).
As earlier noted, the hearing of the matter took place from 25–27 June 2019, 17–20 February 2020, and on 28 May 2020. At the hearing on 28 May 2020, the primary judge requested that the parties prepare an updated consolidated balance sheet, which was filed on 30 June 2020, with the parties’ closing submissions being filed on 1 July 2020.
On 30 April 2021, the primary judge requested that the parties provide details of their updated share values and sought clarification of various items that appeared on the consolidated balance sheet (at [44]).
On 19 May 2021, the respondent’s solicitors wrote on behalf of the parties requesting a further listing of the matter on 28 May 2021 to address submissions made by the parties on the points of clarification requested by the primary judge.
On 28 May 2021, the respondent was permitted to provide evidence in the form of a statement updating the value of the shares held by him, the G Investment Trust and the Mr Halstron Superannuation Fund as at 26 May 2021. The primary judge noted that “it was apparent from this statement that the market value of the shares held by each of those entities had increased significantly since the trial” (at [45]). Save in respect to certain shares in companies which were not publicly listed, the appellant accepted the updated share values provided by the respondent and, further, provided updated share values of her own shareholdings (at [47]).
Also on 28 May 2021, the appellant made an application for leave to provide evidence regarding an updated value of the Suburb J property. The primary judge rejected that application and indicated he would provide his reasons for doing so in his published reasons for judgment, which his Honour duly did (at [137]–[133]).
The orders proposed by each party in the primary proceedings are set out from [50]–[52] of the judgment. Significantly, according to each party’s proposal, subject to the respondent making an appropriate cash adjustment to the appellant, the respondent was to retain the Suburb J property. There was a significant dispute between the parties as to what that cash adjustment should be. In challenging the primary judge’s dismissal of her application to call evidence regarding an updated valuation of the property, the appellant places significance on the fact that each parties’ respective case anticipated the respondent receiving the Suburb J property.
The primary judge’s approach
No issue has been taken with the primary judge’s finding that it was “just and equitable” to make orders adjusting the parties’ property interests: see s 79(2) of the Act and Stanford v Stanford (2012) 247 CLR 108 (“Stanford”).
Having determined that such an adjustment was appropriate, the primary judge then adopted what has been regarded as the “preferred” approach to the determination of an application under s 79 of the Act, referred to by the Full Court in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”) (at [39]) by:
·Firstly, making findings as to the identity and value of the property, liabilities and financial resources of the parties as at the date of the hearing.
·Secondly, the Court identifying and assessing the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c), and determining the contribution-based entitlements of the parties expressed as a percentage of the net value of the parties’ property.
·Thirdly, identifying and assessing the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) including, as a result of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant, and determining the adjustment (if any) that should be made to the contribution-based entitlements of the parties established at step two above.
·Fourthly, considering the effect of those findings and determinations, resolving what order is just and equitable in all the circumstances of the case.
For reasons which we explain, we have determined that the primary judge failed to properly identify the value of the parties’ property and liabilities as his Honour was required to do in accordance with principles adumbrated by the High Court in Stanford. This led to consequential errors in the third step of the “preferred” approach, being the consideration of those matters set out in s 75(2) of the Act. In light of those findings, it has been unnecessary to consider the appellant’s contentions that errors also occurred in respect to the remaining steps, including his Honour’s assessment of addbacks and the parties’ respective financial and non-financial contributions.
GROUNDS OF APPEAL
The grounds of appeal were set out in the appellant’s Amended Notice of Appeal filed 26 November 2021 as follows:
1.That the Primary Judge erred in refusing the appellant’s application to adduce further evidence as to the value of the Suburb J property, including by:
1.1failing to properly determine the value of the interests of the parties, particularly in relation to the Suburb J property, as at the date of hearing or as close as reasonably proximate thereto;
1.2as a consequence, determining the value of the interests of the parties on a differential basis, resulting in a failure to properly and equitably determine their interests for the purpose of the s.79 exercise; and
1.3 failing to deliver proper reasons for the determination.
2. That the Primary Judge erred in:
2.1permitting the respondent, over objection, to adduce evidence during re-examination as to the use and application of $1,276,000 drawn from a Veridian line of credit following separation;
2.2having permitted the respondent to adduce such evidence, in refusing to permit the appellant to cross-examine the respondent in relation to such evidence;
2.3 failing to deliver reasons for determining in each instance;
and, in so determining has failed to afford the appellant procedural fairness.
3.That the Primary Judge erred in determining that shares held by the respondent which were not publicly-listed were to be ‘set to one side’ and not included in the interests identified for the purpose of the s.79 exercise, including by:
3.1failing to determine the nature and extent of the respondent’s interests in such shares;
3.2failing to determine the value of the respondent’s interests in such shares; and,
3.3failing to consider such interests in the determination of the entitlements of the parties pursuant to s.79;
and in failing to deliver proper reasons for the approach adopted in relation to such shares.
4. That the Primary Judge erred in:
4.1finding that the appellant conceded that the funds received by her post-separation from matrimonial assets should be ‘added back’ and, further and in reliance upon such finding and in any event determining that such funds were to be ‘added back’ in their entirety as against the appellant;
4.2failing to ‘add-back’ the entirety of the paid legal fees of each party, including in finding that the respondent’s legal fees (or any portion thereof) had been met from postseparation earnings or income;
4.3finding that the fact that the appellant unilaterally sold the Canadian property was, without more, determinative of whether the sale proceeds ought be ‘added back’ against the appellant without regard to the application of the monies so received;
4.4finding that the amount owing by the respondent on the Viridian Line of Credit had been incurred in circumstances and on expenditure:
4.4.1which included the acquisition of shares and undertaking works to the [Subrub J];
4.4.2which could not be impugned and in failing to consider and determine the issues raised by the appellant in respect of the same; and,
4.4.2such that the appellant ought share in the liability for such debt;
4.5determining that the debt owed on the Viridian Line of Credit by the respondent ought be included such that each party share in liability for the same whilst inconsistently, and in any event, determining by the notional inclusion of the entirety of the funds to which the appellant had access following separation as a pre-distribution to the appellant, that the appellant ought bear entirely and on a notional basis the funds expended by her, including on her own support;
4.6finding (to the extent that the Court did so) that the debt asserted by the respondent as owing to his brother was in fact owing, was a debt that was or would be called upon to be repaid, was a debt that would be repaid by the respondent and was a liability which, in any event, the appellant ought share;
4.7finding that there was a proper evidentiary basis for attributing a value to an estimated accounting liability of the respondent, that any such liability existed and that, in any event, that [sic] the appellant ought [to] share in any such liability;
and in each instance failing to deliver proper reasons for the findings made.
5.That the Primary Judge erred in finding that the appellant’s conduct in identified respects:
5.1 amounted to ‘non-disclosure and wastage of costs’; and,
5.2consequent thereon, finding that such matters were properly to be taken in account pursuant to s.75(2)(o), that there was a proper basis upon which such matters could so be taken into account even if established and in affording such matters any weight in that exercise;
and in each instance failing to deliver proper reasons for the findings made.
6. That the Primary Judge erred:
6.1in considering that, as a matter of law, the characterisation of an interim payment as one made by way of partial/interim property order is determinative of the treatment of such an advance on a final basis; and,
6.2in so finding in respect of the moneys received by the appellant pursuant to orders so characterised on an interim basis.
7.That the Primary Judge erred in relation to the ‘initial contributions’ asserted by the respondent by:
7.1failing to make findings as to the extent and value of such interests at the commencement of cohabitation; and
7.2having inappropriate regard and affording inappropriate weight, as a matter of law, to such contributions in the assessment of the weight to be afforded to the same in the contribution assessment.
8.That the Primary Judge erred in assessing the respective contributions of the parties as 32.5% on the part of the appellant and 67.5% on the part of the respondent, including by:
8.1affording the ‘initial’ and ‘direct financial’ contributions inappropriate weight in the determination;
8.2having insufficient regard to the entirety of the contributions of the appellant, including of a non-financial nature; and,
8.3 in failing to deliver proper reasons for the contribution assessment.
9.That the Primary Judge erred in the assessment of the matters arising for consideration pursuant to s.75(2) including:
9.1 on the basis of the matters raised by the preceding grounds;
9.2in failing to have appropriate regard to the effect on the financial position of the parties of the determinations made as to the interests to be considered and the contribution assessment; and,
9.3 in failing to deliver proper reasons for the contribution assessment.
(As per the original)
We have focused on those grounds which establish error in the identification of the parties’ property. Those errors are such that a rehearing is required and are, therefore, dispositive of the appeal: see Boensch v Pascoe at [8].
APPELLATE PRINCIPLES APPLICABLE TO DISCRETIONARY DETERMINATIONS
As noted by the Full Court in Gilligan & Addison [2018] FamCAFC 211 at [19], unless an appeal can be categorised within those recognised grounds concerning the appropriate exercise of discretion by a trial judge, as identified by the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 504–505 and Norbis v Norbis (1986) 161 CLR 513 at 539–540, the appeal will be futile.
This relevant principle, as adumbrated in House v The King, states that appellate intervention may be required where the primary judge:
(1)Acts upon a wrong principle; or
(2)Allows extraneous or irrelevant matters to guide or affect the decision; or
(3)Mistakes the facts; or
(4)Fails to take into account some material consideration; or
(5)Makes a decision that, upon the facts, is unreasonable or plainly unjust.
An appeal may also succeed on the basis of an inadequacy of reasons. In that respect, in Rigby & Olsen [2021] FedCFamC1A 46, the Full Court recently stated that:
38.The requirement for the giving of reasons is a fundamental requirement of the exercise of the judicial function, as it both demonstrates that justice has been done, and enables the proper challenge of a decision. The content required varies depending upon the circumstances of the case, but is that which makes apparent how the decision was arrived at (see Bennett and Bennett (1991) FLC 92-191 at 78,266). It is not required to give reasons regarding every argument, nor to perform a microscopic analysis “if, in all the circumstances, it is clear that the trial judge has considered and evaluated the relevant evidence, taken into account all relevant factors …” (A v J (1995) FLC 92-619 at 82,230).
CONSIDERATION OF RELEVANT GROUNDS OF APPEAL
Identification of the property of the parties
Ground 1 – did the primary judge err in refusing the appellant’s application to adduce further evidence as to the value of the Suburb J property?
In Manifold & Alderton (2021) FLC 94-015, Austin J at [116] (writing separately, but with whom Kent J also agreed), referring to Stanford at [37] and [50] and Hsiao v Fazarri (2020) 383 ALR 446 at [50], observed that the first task of a trial judge considering an application pursuant to Pt VIII of the Act is “to identify and value, as far as the evidence would allow, the parties’ existing legal and equitable property interests”. This necessarily involves identifying the value of the property, liabilities and financial resources of the parties as at the date of the hearing: Hickey at [39].
The difficulty that arose in this case was due to the protracted length of the hearing which, as earlier noted, extended from June 2019 until May 2021. In the context of that delay, on 28 May 2021, the respondent successfully applied for leave to tender updated evidence regarding the value of the parties’ shareholdings. At [185] of the judgment, his Honour stated that such leave was given having regard to “the time that has passed since the conclusion of the trial, the significant increase in the value of the relevant shares in the post COVID-19 share market recovery, and the difficulties presented by different cost bases, capital gains tax and realisation costs.”
While taking judicial notice of “the significant increase” in the value of the respondent’s shares in the period subsequent to the immediate onset of the COVID-19 pandemic, which occurred during the lengthy period over which the matter was heard, his Honour declined to grant similar leave to the appellant to obtain an updated valuation of the Suburb J property.
The appellant’s application was also rejected despite senior counsel for the respondent acknowledging that, in the period subsequent to the date of the valuation of the Suburb J property, its value had increased, albeit, as contended from the bar table, as a result of renovations undertaken by the respondent (Transcript 28 May 2021, p.31 lines 28–32).
The respondent contends that this ground of appeal should be dismissed on three bases. In summary, the first is that the order was made on 28 May 2021 and no appeal was made against that order (citing Khadem & Penk [2020] FamCAFC 211). Secondly, it was argued that the decision to deny the appellant’s application was an evidentiary ruling which is not amenable to appeal (citing R v Powch (1988) 14 NSWLR 136 at 138). Finally, it was submitted that the appellant has failed to identify any error on the part of the primary judge in refusing the appellant’s application to adduce updated valuation evidence.
In terms of failure to appeal at an earlier time in respect to this issue, it is clear from the transcript of proceedings on 28 May 2021 that his Honour contemplated giving reasons for the rejection of the appellant’s application in his substantive reasons for judgment, which are now the subject of this appeal.
More significantly, however, the first two arguments of the respondent are rebutted by the appellant’s entitlement to challenge, in an appeal from final property settlement orders, any earlier interlocutory order which affected the final result: Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478 at [6].
In considering the appellant’s application to reopen evidence for the purpose of presenting an updated valuation of the Suburb J property, the primary judge appropriately gave consideration to the potential prejudice to the respondent if that application was granted (in accordance with Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266–267). Specifically, at [130] of the reasons, his Honour noted the respondent’s contention that he would suffer “significant prejudice” as there had been, according to the respondent, “significant renovations to the property” in the period subsequent to the valuation that was presented to the Court during the course of the trial. In those circumstances, his Honour determined that the admission of that fresh evidence would require the proceedings to be reopened for the purpose of re-examination of both parties’ financial circumstances. This, his Honour was unwilling to do.
However, in focusing primarily on the issue of prejudice to the respondent, his Honour erred in failing to apply the primary guiding principle in deciding whether to grant leave for a party to re-open evidence. That guiding principle “is whether or not the interests of justice are better served by allowing or rejecting the application”: EB v CT (No. 2) [2008] QSC 306 at [2]. In that case, Applegarth J, in the context of a de facto property settlement, determined that it would be unfair to a party to open up the general issue of the current value of some of the parties’ assets but determine the value of other assets as at the date of hearing.
In this case, such an injustice occurred. The primary judge permitted the respondent to present updated evidence regarding the value of the respondent’s shareholding in circumstances where he recognised there had been an increase in the value of the shareholdings in the period of recovery subsequent to the COVID-19 isolation measures. It is to be noted, in that respect, that his Honour distinguished the positions regarding the value of the parties’ shares and the value of the Suburb J property. This was on the basis that the parties had agreed as to the value of the Suburb J property prior to the hearing commencing and it was an agreed position during the trial that the parties were to provide updated valuation evidence of their respective shareholdings, the substantial portion of which were owned by the respondent.
That was not, with respect, a valid point of distinction in the circumstance of this case. The application to re-open and adduce updated valuation evidence in respect of the Suburb J property took place against the background that the trial had already taken a year to hear, and would take another year thereafter for judgment to be delivered. The parties’ initial agreement about the value of the Suburb J property was struck before the trial started. That valuation was two years out of date by the time the appealed orders were made. Once an order was made permitting the respondent to rely upon an updated valuation of his shares, which his Honour noted were to be distributed “in specie” in accordance with the percentage adjustment determined by the primary judge to be appropriate, that determination then became a relevant consideration in his Honour’s consideration of the appellant’s application to rely upon an updated valuation of the Suburb J property.
This is because, as we have noted, the risk of undervaluing the Suburb J property, which the parties agreed was to be retained by the respondent, had the potential to result in the respondent alone receiving a fortuitous windfall through that increase in value without the appellant sharing in that gain.
The primary judge’s rejection of the appellant’s application to present updated valuation evidence, similarly, had the potential to cause significant injustice to the appellant. This was in circumstances where his Honour accepted that there had been a significant increase in the parties’ share values due to unique factors associated with the COVID-19 pandemic, but failed to give the same opportunity to the appellant to present similar evidence in respect to the most significant asset in the parties’ property pool: the Suburb J property. In those circumstances, there was a real possibility that any increase in the value of the Suburb J property was due to similar market forces that had impacted on the value of the respondent’s shares. Further, it was not a matter of mere speculation in circumstances where the respondent admitted that the Suburb J property had increased in value since the commencement of the hearing.
In that respect, it was significant that the appellant had not been provided with the opportunity to test the assertion from the bar table, by counsel for the respondent, that the acknowledged increase in the value of the Suburb J property was due to renovations undertaken by the respondent. That controversy could have been readily resolved by updated valuation evidence which identified the extent to which the acknowledged increase in value was due to either or both market forces or the renovations.
This resulted in injustice to the appellant because it was contemplated by both parties that the respondent would retain the Suburb J property subject to an appropriate cash adjustment to the appellant. Receiving evidence regarding an increased value of the parties’ shareholdings, which were to be distributed to the parties in specie, was likely to result in a determination that the cash adjustment would be reduced to the extent of that increase in value of the shares. This determination was, therefore, one which benefited the respondent’s case. At the same time, rejecting the appellant’s application to present evidence of an increase in prices in the city property market, and hence the Suburb J property, in the same post COVID-19 lockdown period was a determination that also favoured the respondent because he avoided the possibility of such an increase in price correspondingly increasing the size of the cash adjustment required to compensate the appellant for his retention of the Suburb J property.
The failure of the primary judge to permit the appellant to present such updated valuation evidence in those unique circumstances constitutes an appellable error.
The ability of the primary judge to make a just and equitable adjustment of the parties’ property was, in the unique circumstances of this case, infected by the delay in his Honour delivering reasons for judgment. In that respect, as the High Court observed in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, even a period of 10 months was “an excessive period of reservation, even for the most complex of trials” (at [152], citing Friend v Brooker (2009) 239 CLR 129 at 169–171).
The resulting injustice was exacerbated by his Honour’s decision to permit an updated valuation of one aspect of the parties’ property, namely, the parties’ shareholdings but not of the major asset of the parties, being the Suburb J property, in circumstances where the property was to be retained by the respondent.
Ground 3 – that the primary judge erred in determining that shares held by the respondent which were not publicly-listed were to be ‘set to one side’ and not included in the interests identified for the purpose of the s 79 exercise
The appellant contends that the primary judge fell into appellable error by failing to properly identify all of the parties’ existing property interests in the balance sheet, as Stanford requires, because some private shares worth approximately $130,000 were omitted from consideration as property.
This ground of appeal relates to [162]–[163] of his Honour’s reasons, which are as follows:
162.On 28 May 2021, in response to the Court’s invitation, the [respondent] submitted a table showing all listed shares held by him in his personal name, all shares held by the Trust, and all shares held by his superannuation fund. The updated value of the [respondent’s] personal shares is apparently $978,468 (up some $255,016 since his 5 February 2020 financial statement). The updated value of the shares held by the Trust is apparently $3,470,993 (up some $1,677,955 since his financial statement). The updated value of the shares held by the [respondent’s] superannuation [fund] is $4,132,835 (up some $905,186 from his financial statement).
163.In a document which was not submitted until 18 June 2021, the [appellant] accepts all these figures, save that she contends that there are shares held by the [respondent] which are not publicly listed valued at $130,000 which must also be taken into account. The [respondent’s] position in relation to this contention is not clear. For present purposes it is convenient to leave this alleged $130,000 worth of shares, which are not publicly listed, to one side. If it is necessary to do so I will hear the parties on the question of what, if any, orders should be made in relation to these shares.
There is substance in this ground, at least to the extent of the respondent’s acknowledged shareholdings to a combined value of about $80,000 in WW Ltd and XX Ltd.
In that respect, relevantly, in his financial statement filed on 5 February 2020, the respondent declares ownership of shareholdings in:
· WW Ltd with a value of $50,000; and
· XX Ltd with a value of $30,000
The respondent was not challenged on that evidence.
In both his financial statements filed on 25 May 2019 and on 5 February 2020, the respondent additionally declares ownership of shares in YY Company and ZZ Company, however he omits a valuation of those shares.
His Honour failed to explain why he omitted from the balance sheet, at least, the respondent’s shareholdings in WW Ltd and XX Ltd totalling $80,000, in circumstances where the primary judge acknowledged the existence of those shares (in Order 24) and where the respondent had himself provided estimated values of those shares in the financial statements to which we have referred. Instead of doing so, at [165] of the judgment, his Honour stated his intention to provide the appellant the opportunity to re-litigate that issue by way of a liberty to apply provision. In so deciding, his Honour failed to provide reasons as to why he thought that course of action was appropriate, rather than undertaking that task required by Stanford of determining the balance sheet on the basis of the available evidence as at the date of hearing.
While the value of the shares was a relatively small component in the context of the parties’ total property pool, it was significant in the context of the actual cash adjustment received by the appellant. The failure by the primary judge to include the shares on the balance sheet as property in the respondent’s possession had the effect of reducing the cash adjustment to be paid to the appellant by an equivalent amount. The primary judge was required to provide an explanation as to why he adopted that course of action which disadvantaged the appellant who, pursuant to his Honour’s orders, is required to engage in further litigation to address the situation.
In summary on this issue, his Honour fell into error by both failing to correctly identify the parties’ existing property interests and also in failing to provide adequate reasons as to why he postponed determination of that issue to an unspecified date.
Ground 4.6 – finding (to the extent that the Court did so) that the debt asserted by the respondent as owing to his brother was in fact owing, was a debt that was or would be called upon to be repaid, was a debt that would be repaid by the respondent and was a liability which, in any event, the appellant ought share
This ground of appeal relates to the respondent’s contention that a loan of $330,000, extended to him by his brother on 20 July 2007, remains outstanding.
The primary judge’s finding in respect to the respondent’s contention is set out at [155] of the judgment as follows:
155.Whilst it may be accepted that by operation of the Limitation Act an action on the 2007 loan would not have been able to have been brought by [the respondent’s brother] against the parties after 2013, and indeed that [the respondent’s brother’s] cause of action would have been extinguished from that time, I do not regard this as being dispositive of the question of whether the funds which both the [respondent] and [the respondent’s brother] say are owed to [the respondent’s brother] should be included on the balance sheet as a liability.
At [156] of the judgment, the primary judge explained why he included both the amount of the 2007 loan and a subsequent loan, made in 2018, on the balance sheet. Together, those two loans totalled $380,913 (at [157]). There is no dispute that the primary judge appropriately included the amount of the 2018 loan. The issue is whether the primary judge erred in including the $330,000 loan, in circumstances where it had become statute barred by the operation of the Limitation Act 1969 (NSW) (“Limitation Act”) prior to the parties’ confirming their agreement in writing on 27 March 2018.
As earlier observed, the agreement entered into by the respondent and his brother on 27 March 2018 stated that the agreement was “on the same terms” as the previous oral agreement between the parties made in 2007. Specifically, the agreement recorded that the loans were “repayable on demand.”
Senior counsel for the respondent conceded, appropriately, that the statute of limitations commences its operation, in respect to a loan repayable on demand, from the date the funds are advanced. Surprisingly, however, there was no concession that the 2007 loan was unenforceable as result of the operation of the statute of limitations.
In United Pacific Finance Pty Ltd (Receivers and Managers Appointed) v Govindasamy [2020] NSWSC 128, Henry J stated at [174]–[175]:
174.The time at which a cause of action accrues in relation to amounts due under a loan contract is determined by the repayment terms in the relevant contract: Peter Handford, Limitation of Actions, The Laws of Australia (4th ed, 2017, Lawbook Co) at [5.10.640].
175.A loan which is payable on demand creates an immediate and enforceable debt and the cause of action arises as soon as the money is advanced: Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 at 566; Ogilvie v Adams [1981] VR 1041, at 1043 and 1049.
Section 14 of the Limitation Act provides:
(1)An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:
(a)a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed, …
Accordingly, the respondent’s brother permitted the statute of limitations to extinguish any claim that he otherwise would have had in respect to monies advanced by him to the respondent in 2007 due to the operation of ss 14 and 64 of the Limitation Act. That had occurred prior to the parties entering into the written agreement on 27 March 2018. The putative loan should not, therefore, have been included on the balance sheet.
Contrary to what we regard as being the clear language of [155] of the judgment, senior counsel for the respondent contended that “the judgment doesn’t record any finding one way or another” as to whether the loan had ceased to be legally enforceable at the time the 27 March 2018 agreement was entered into. For reasons which we have set out, we do not accept that as being an accurate construction of [155]. Nevertheless, even if it is correct, it constitutes appellable error because his Honour failed to address a highly relevant consideration in determining the property of the parties as at the date of the hearing, namely, whether the respondent was indebted to his brother in the sum of $330,000 pursuant to a legally enforceable contract.
The fact that the primary judge found that the respondent’s brother expected payment of the $330,000 and the respondent expected that he would, in the future, repay that sum in the absence of the arrangement being legally enforceable, meant that any obligation of repayment existed as no more than a moral obligation.
The High Court in Stanford made it clear that mere “moral obligations” did not come into consideration in the Court undertaking that task of identifying the existing legal and equitable interests of the parties in the property. In that respect, relevantly, the plurality in Stanford stated that those legal and equitable rights of the parties “were to be determined according to law, not by reference to other, non-legal considerations” including merely moral claims (at [52]).
His Honour therefore acted on a wrong principle of law in concluding, at [156]–[157] of his decision, that the totality of the sum of $380,913 should be included on the joint balance sheet as a liability of the parties, in circumstances where that amount included the $330,000 which had been advanced by the respondent’s brother to the respondent in 2007 in circumstances where the agreement to repay those funds was no longer legally enforceable.
Finally, in response to this ground of appeal, senior counsel for the respondent contended that there was no obligation on the primary judge to state how he made the decision to include the sum of $330,000 on the balance sheet. Specifically, senior counsel for the respondent contended that the primary judge did not need “to identify the particular section of the Act under which he is taking into account a particular matter” and that the question for the Full Court is “did his Honour err, as a matter of principle, in reaching the conclusion that the loan should be taken into account” (Appeal Transcript 2 February 2022, p.59 lines 1–4). For the reasons that immediately follow, we do not agree.
It is possible that the Court may, in an appropriate case, give consideration to a party’s perceived moral obligation to repay funds to another person in considering those matters set out in s 75(2) of the Act. In that respect, during the course of the appeal, we were referred by senior counsel for the respondent to Martin & Newton (2011) FLC 93-490, where the majority said:
226.In our view, the legislative scheme we have outlined is cast sufficiently widely to allow the court to take account of moral obligations. In saying this, we use “moral” in its normative, rather than its descriptive sense. …
That passage is consistent with other cases including where, for instance, in Zubcic & Zubcic (2019) FLC 93-918 the Full Court stated:
94.Section 75(2)(o) is expressed in the widest terms and forms part of a suite of provisions that recognises more than merely financial matters.
However, such a broad consideration, if it was to occur, would take place at the discretionary stage of considering whether there should be any adjustment made pursuant to s 75(2). In that respect, in Campbell v Kuskey (1998) FLC 92-795 per Baker, Lindenmayer, Maxwell JJ, it was observed that (at 84,918):
It has been said many times in the authorities, see for example Pastrikos and Pastrikos (1980) FLC 90-897 and Ferraro and Ferraro (1993) FLC 92-335, that a trial Judge has the clear obligation and responsibility to identify the assets and liabilities of the parties before considering and making the necessary findings as to the respective contributions which the parties have made to them. Once that exercise has been carried out, a trial Judge may then give consideration to such of the s 75(2) factors as are relevant to the facts of a particular case.
The authorities are, in our view, quite clear that the discretionary exercise of giving consideration to those matters set out in s 75(2) does not take place until the Court has undertaken the task of firstly identifying the property of the parties according to ordinary common law principles. At that first stage, perceived moral obligations are not relevant. The inescapable conclusion is that his Honour erred in undertaking that first task because he included on the balance sheet a putative liability of the respondent to repay his brother the sum of $330,000 in circumstances where, as a matter of law, that liability did not exist and was merely a moral obligation.
Finally, in rejecting that submission by senior counsel for the respondent that his Honour was, in actual fact, considering the putative loan of $330,000 in the exercise of his discretion pursuant to s 75(2), we note that there is an absence of reasons in the judgment to explain any such process of reasoning. That is, there is an absence of reasons as to the extent to which his Honour, considered, if he so did, the putative loan as a s 75(2) factor and the extent to which it impacted upon his Honour’s assessment that there should be a 2.5% adjustment in favour of the appellant as a result of s 75(2) factors.
This is significant because the consequence of including the amount of $330,000 on the balance sheet had the effect of the appellant being assigned 35% of that liability. This is despite the obligation to repay those monies existing only as a moral obligation. In other words, whether repayment occurred was totally at the discretion of the respondent, as was any possible arrangement in respect to the period of time for repayment to occur. In short, if the primary judge adopted the approach as contended by senior counsel for the respondent, it was incumbent upon his Honour to identify and explain these considerations in his reasons for judgment. That did not occur and constituted error in terms of Ground 9.3 of the amended grounds of appeal.
Consequence of errors in respect to the formulation of the balance sheet
Ground 9 – The primary judge erred in the assessment of the matters arising for consideration pursuant to s 75(2)
As recently observed by the Full Court in Candle & Falkner [2021] FedCFamC1A 102:
102.When it comes to s 75(2) adjustments in particular, it is well established that the real impact or value of the adjustment in money terms is ultimately the critical issue, not its expression as a fraction or percentage of the overall assets: Clauson & Clauson (1995) FLC 92-595 at 81,911; Adair & Adair [2019] FamCAFC 70 at [66]; Simons & Simons [2020] FamCAFC 128 at [18].
As a result of the primary judge’s errors in the proper identification of the parties’ property, it is necessarily the case that his Honour was unable to analyse the effect of the s 75(2) adjustment, which he identified as being appropriate, in real money terms. His Honour’s failure to undertake that task, on the basis of an accurate assessment, vitiated the exercise of his Honour’s discretion and constituted an appellable error.
NATURE OF THE ERRORS RESULTS IN THE NEED FOR A RETRIAL
Counsel for the respondent contended that any errors relating to the question of valuation of the Suburb J property and the identification of the property of the parties may be capable of being rectified by the Full Court re-exercising discretion. We do not accept that course to be practicable.
As the judgment is vitiated by appellable error, the parties must be given the chance to adduce updated evidence: Allesch v Maunz (2000) 203 CLR 172 at 183 and 191–192. Here, at the very least, the appellant wished to adduce updated evidence about the Suburb J property and she is entitled to do so.
As, for the reasons which we have explained, it is necessary for there to be a retrial, it is unnecessary for us to consider the remaining grounds of appeal.
COSTS
In the event the appeal was successful, the appellant sought that the respondent pay her costs in the sum of $67,657.76. It is evident from the appellant’s schedule of costs that such a sum is not costed on a party/party basis at scale rates, as the procedural orders of the appeal registrar required. We accept that a costs order is warranted, despite the respondent’s objection, because the appeal could reasonably have been conceded and the respondent’s comfortable financial circumstances do not militate against any order being made. However, in reliance upon rr 12.08 and 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), we pare back the rather extravagant sum sought by the appellant to $30,000, a sum which is more commensurate with the respondent’s own costs of $37,982.69 and reflective of the appellant’s likely party/party costs.
GILL J:
I am respectfully unable to agree with the conclusion of McClelland DCJ and Austin J that the primary judge fell into appellable error in declining to allow the appellant to reopen the evidence regarding the Suburb J property value, which had previously been agreed by the parties. Otherwise, I agree with their Honours’ reasoning, and the orders they propose.
Three grounds were directed to this issue, at 1.1, 1.2 and 1.3. The grounds were as follows:
1.That the Primary Judge erred in refusing the appellant's application to adduce further evidence as to the value of the Suburb J property, including by:
1.1failing to properly determine the value of the interests of the parties, particularly in relation to the Suburb J property, as at the date of hearing or as close as reasonably proximate thereto:
1.2as a consequence, determining the value of the interests of the parties on a differential basis, resulting in a failure to properly and equitably determine their interests for the purpose of the s.79 exercise; and
1.3 failing to deliver proper reasons for the determination.
(As per the original)
The background to this issue is well set out in the joint judgment of McClelland DCJ and Austin J.
The challenge to the primary judge’s refusal to reopen the valuation question requires careful analysis of both the relevant trial transcript, and the reasons in the judgment directed to this issue.
The agitation of the revaluation issue arose on the passage of a year since the end of the hearing and on the reopening of proceedings, as had been foreshadowed during the trial, to enable updated values for the shareholdings of the parties. The reopening to allow the updating of the share values was an uncontroversial step agreed to by the parties at the close of the trial. The appellant then agitated an application to reopen to provide an updated valuation of the Suburb J property (Transcript 28 May 2021, p.7 lines 2–4).
The central justification for reopening was the significance of a change in the value of the Suburb J property. The respondent was to retain that property. Therefore, the ultimate percentage adjustment of the overall pool would be effected by a dollar adjustment in relation to the Suburb J property, based on the valuation of that property. This meant that any significant change in the value of the property from that which had been agreed by the parties at trial, either up or down, would necessarily result in a hidden skewing of the division of the property, unless any subsequent change in the value of Suburb J was identified. The appellant was undoubtedly correct in identifying that any significant change in the value of the Suburb J property would, unless accounted for by revaluation, impact adversely on the justice and equity of the division of the pool of property. This was particularly so due to the value of that property constituting a large component of the pool of property.
In support of the need for such a revaluation, the appellant emphasised the different manner in which the primary judge dealt with the revaluation of shares as opposed to the proposed revaluation of the Suburb J property. The appellant pointed to a purported inadequate explanation given by the primary judge as to why he had adopted such a differential approach.
However, it should be observed that the revaluation of the shares was the result of an agreed position at the end of the trial in May 2020. The proposed revaluation of the Suburb J property was not the subject of such agreement. Accordingly, different issues arose in respect of the two issues, and the issue that required explaining was not why the primary judge treated the shares and the Suburb J property differently, but rather, why he did not permit the reopening to allow the further valuation of the Suburb J property.
The primary judge explained his refusal to reopen the proceedings for the purpose of obtaining further evidence as to the value of the Suburb J property (at [127]–[133]).
The primary judge accepted that the discretion to reopen was to be guided by the interests of justice. No criticism is made of the legal principles identified by the primary judge.
After having essayed the arguments made, he identified as central to his refusal the embarrassment or prejudice, being the costs and delay, caused by such a step. He identified, in the context of these matters, that he did not consider that the interests of justice would be better served by the reopening.
It may be observed that the reasons given by the primary judge do not include an assessment of whether the content of the proposed evidence justified the reopening, despite the impact upon the respondent. The outline of argument provided by the respondent correctly identifies from Mallard & Mallard [2011] FamCA 876 that materiality of the fresh evidence, and the probability that it would affect the result, are matters to be considered in determining whether the interests of justice point to the reception of the evidence on reopening. However, this absence was not a deficit in the primary judge’s reasoning process. There was no proposed evidence, merely the proposal to obtain evidence, the content of which could only be gleaned by speculation. Evidence was not presented to the primary judge that indicated neither that there had been a change in the value of the Suburb J property, nor even that there was the likelihood that further evidence would reveal such. At best, what was being pressed was the reception of evidence capable of showing that there had been a change in value, if such change had in fact occurred.
The only potential exception to reliance upon speculation was the concession that works had been completed by the respondent on the property (funded outside the trial pool) that would have impacted the value (Transcript 28 May 2021, p.28 lines 28–38). It was (properly) not suggested at trial that this sort of movement of value was a matter that would justify the reopening.
While it can readily be accepted that a significant change in value of the Suburb J property would skew the property division, it was not enough for the appellant to simply speculate to the primary judge that this may have happened, absent an evidential basis for such a proposition. That evidential basis was not given by the parties’ agreed position in relation to the revaluation of the shares, nor was it given by any evidence led on the point.
Insofar as the attack is upon the reasons given, what was required of the primary judge was what was identified in Moose & Moose (2008) FLC 93-375 at [63] by Boland J, where her Honour reiterated the test in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 that the nature of the reasons to be given will:
… depend upon the circumstances of the case. But the reasons will in my opinion, be inadequate if:
(a)the appeal court is unable to ascertain the reason upon which the decision is based; or
(b)justice is not seen to have been done.
In this case, both the law and reasoning pathway were disclosed by the primary judge, and, to the extent that the attack on the ruling is grounded on a lack of reasons, it should fail.
Insofar as the attack is on the failure to allow the revaluation, the application lacked the support of appropriately directed evidence as to the likelihood of a shift in value. What follows from this is that if the primary judge had allowed the reopening for further valuation of the Suburb J property, he would have done so on the basis of a speculative assertion. In the absence of the sort of agreement that was reached in respect of the revaluation of the shares, such a speculative approach would have been in error. The effect of the lack of evidence, or agreement, pointing to a shift in value was that there was no indication that it was in the interests of justice to reopen. Rather, as indicated by the primary judge, the embarrassment or prejudice occasioned by reopening were determinative of the issue.
Accordingly, error has not been identified in respect of the refusal to reopen for revaluation, and I would not allow the appeal on the grounds directed to the failure to reopen.
In all other respects, I agree with McClelland DCJ and Austin J.
I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland, and Justices Austin & Gill . Associate:
Dated: 13 May 2022
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