Han & Ngo
[2021] FamCAFC 97
•22 June 2021
FAMILY COURT OF AUSTRALIA
Han & Ngo [2021] FamCAFC 97
Appeal from: Ngo & Han (No. 2) [2020] FCCA 2617 Appeal number(s): SOA 87 of 2020 File number(s): MLC 9190 of 2009 Judgment of: STRICKLAND J Date of judgment: 22 June 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where there is no merit in any of the grounds of appeal – Where the primary judge’s findings were open on the evidence – Where the primary judge was comprehensive in her reasons for judgment and in particular in relation to the non-disclosure by the respondent – Appeal dismissed.
COSTS – Where the respondent seeks an order for costs – Where the appellant opposes any such order relying on her financial circumstances – Where impecuniosity is not a bar to an order for costs being made where there are circumstances which otherwise justify such an order – Where this is such a case – Costs ordered – Appellant to pay the respondent’s costs in the sum of $20,000.
Legislation: Family Law Act 1975 (Cth) s 117
Family Law Rules (2004) (Cth) r 19.18(1)
Cases cited: Black and Kellner (1992) FLC 92-287; [1992] FamCA 2
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
D & D (Costs) (No 2)(2010) FLC 92-435; [2010] FamCAFC 64
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Gronow v Gronow (1979) 144 CLR 513; (1979) HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Marsh & Marsh (2014) FLC 93-576; [2014] FamCAFC 24
Townsend & Townsend (1995) FLC 92-569; [1994] FamCA 144
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Division: Appeal Division Number of paragraphs: 63 Date of hearing: 11 February 2021 Place: Adelaide via video to Melbourne Counsel for Appellant: Mr Thomas Solicitor for the Appellant: Verduci Lawyers Counsel for the Respondent: Mr Howe Solicitor for the Respondent: RRR Lawyers ORDERS
SOA 87 of 2020
MLC 9190 of 2009APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MS HAN
Appellant
AND: MR NGO
Respondent
ORDER MADE BY:
STRICKLAND J
DATE OF ORDER:
22 JUNE 2021
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant wife pay the costs of the respondent husband fixed in the sum of $20,000.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Han & Ngo has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND J
INTRODUCTION
On 9 October 2020, Ms Han (“the wife”) filed a Notice of Appeal appealing from final property settlement orders made by a judge of the Federal Circuit Court of Australia on 17 September 2020.
Mr Ngo (“the husband”) opposes the appeal.
In summary, the orders appealed provide for the wife to elect to pay an amount to the husband, being the equivalent of 25 per cent of the equity in Property A, or sell that property with the husband receiving 25 per cent of the net proceeds of sale, and the wife the balance. Otherwise, each party is to retain the property, including superannuation entitlements, in their respective possession.
BACKGROUND
This matter has a complicated background, and a lengthy procedural history, but for the purposes of the appeal it is unnecessary to set out that background or history here. It is amply set out in her Honour’s reasons for judgment. However, any relevant background or history will be adverted to as may be necessary when addressing each ground of appeal.
THE APPEAL
I note that Grounds 7 and 8 in the Notice of Appeal were abandoned by the wife.
Ground 1 - The learned trial judge at first instance erred and Her Honour’s discretion miscarried in placing insufficient weight on the husband’s lack of financial disclosure when determining the asset pool and contributions of the parties.
Plainly this is a weight challenge, and thus it is apt to recall what Stephen J said in Gronow v Gronow (1979) 144 CLR 513 at 519-520 as to such a challenge, namely:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight.
(Also see per Latham CJ in Lovell v Lovell (1950) 81 CLR 513 at 519)
There is no doubt that the husband failed to provide full and frank financial disclosure, and her Honour was well aware of that saying as follows:
172.The Husband has not met his obligations to make full and frank disclosure. Only some of his bank statements and financial documents have been provided. …
And then, under the heading “Non-disclosure” her Honour said this:
186.The Wife asserts the Husband has significantly failed to meet his obligations regarding discovery. I agree with that assertion. The Husband had not fully disclosed a number of important documents, including his bank statements, his personal tax information, or the financial returns of the various entities he operated. The majority of the documents the Wife obtained were produced in response to subpoenas she issued to:-
a)Westpac Bank;
b)N accountants;
c)VicRoads; and
d)motor vehicle 1 finance service.
187.The Husband produced just three tax return forms. He did not produce his Notices of Assessment.
188.When asked why he had not complied with his obligations as to disclosure, the Husband suggested he was not aware of the Wife having made requests for documents to be produced. He also said he produced what he could, it was difficult to get documents, he tried to get documents through his accountant and he made efforts to obtain the documents. He was unable to explain why he could not produce all his tax returns or completed financial returns. When asked why he did not produce his bank statements, he said he did not think they were relevant, and that he did not think he was obliged to provide them. He said he did not know he was obliged to make full and frank disclosure, and he received many letters from his solicitors and he got confused and did not understand what was required of him.
189.I do not accept that evidence. The Husband’s failure to provide full and frank disclosure has caused the Wife to have to issue a number of subpoena to try to ascertain the Husband’s financial circumstances. In particular, I am concerned regarding the failure by the Husband to properly explain and account for the closure of Company E, what happened to the plant and equipment in that business, and how it came to stop producing an income for him.
190.I note the Husband complained in his affidavit material that the Wife had not provided documentary evidence to support her allegations regarding the payment to him of $100,000 cash despite repeated requests that she do so. That undermines his assertion that he did not understand his obligations to produce documents to support his case.
191.Counsel for the Wife asserts that without proper disclosure, the Court cannot determine the value of Company E, or what funds were generated from that venture. The Wife says this makes it impossible to determine an appropriate ‘add back’ for Company E.
192.Counsel for the Wife relied on the Full Court of the Family Court of Australia’s decision in Weir & Weir [1992] FamCA 69. In that case, their Honours said that although the Court could not make precise findings about the funds misappropriated by the Husband or about the precise extent of the Husband’s assets, once the Court was satisfied the Husband had hidden or non-disclosed assets, the Court was entitled to make the best estimate it could. Specifically, their Honours said:-
It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
193. Their Honours went on to say:-
…the Court’s jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
194.I am also mindful that a party through being sufficiently cunning or sufficiently vague so as to cover his tracks ought not to benefit from that.
195.As is clear, it is my view that the Husband has not been transparent regarding his abandonment of Company E and/or Company C. Nor do I find his evidence as to his income satisfactory. He has not properly provided disclosure of his bank statements, his tax returns or the business returns to enable a proper consideration of his financial circumstances.
196.It would, in my view, be inappropriate for me to add back some arbitrary amount into the pool. Being careful not to double count, I am satisfied the proper way to take these matters into account is by considering:-
a)the Husband’s abandonment of the businesses, and his expenditure on motor vehicles when weighing up the parties’ contributions to the pool; and
b)the Husband’s earning capacity when weighing up the parties’ competing future needs.
Her Honour then did what she foreshadowed in [196] in [203 e), f) and g)] in relation to contributions, and in [206] in relation to future needs.
As can be seen, her Honour was comprehensive in her reasons in relation to this topic, including referring to the leading case of Weir and Weir (1993) FLC 92-338, and taking the husband’s non-disclosure into account when assessing contributions and future needs. Thus it is not apparent to this Court how her Honour has made an appealable error in addressing this aspect of the matter.
In the wife’s summary of argument filed on 20 January 2021, a vague attempt is made to suggest that it would be appropriate to apply the result in other cases where non-disclosure featured, such as Black and Kellner (1992) FLC 92-287 and Weir, but that was not a course that was open to her Honour. It cannot be contended that the facts of those cases were on all fours with the facts of this case. Each case must be decided on its own facts, as those other cases were, and it is a mistake to look to compare the results in those other cases in that way and submit, as the wife did, that those results should determine the outcome of this case.
Next, the submission made by the wife at trial in relation to the husband’s non-disclosure, was referred to in the wife’s summary of argument, and it was seemingly suggested that her Honour erred in not adopting that submission. How, that can be a basis for finding appealable error is not explained. As had to be recognised by the wife, her Honour in her reasons for judgment set out above, accurately recorded the husband’s non-disclosure, and as is the quintessential task of a trial judge, her Honour, in the exercise of her wide discretion, then determined how that non-disclosure should be taken into account. And I note that there is no challenge to that process, but merely that her Honour did not attach sufficient weight to that non-disclosure.
It is also submitted that her Honour “save for identifying the lack of disclosure … simply did not take the issue any further” (paragraph 16 of the wife’s summary of argument). However, that is not an accurate description of what her Honour did; as referred to above, her Honour indicated in [196] how she proposed to take the non-disclosure into account, and she then did so in [203] and [206].
Finally, the bald statement is made that her Honour “did not properly engage with the law in Weir and Black and Kellner and as a result erred” (paragraph 17 of the wife’s summary of argument). That claim is not explained, but in any event, it cannot be maintained given her Honour’s reasons as set out above, and in particular [196].
There is no merit in this ground of appeal.
Ground 2 – The learned judge at first instance erred and Her Honour’s discretion miscarried in failing to make add-backs into the property pool in respect of the husband’s retention of the Company D business sale proceeds, Company C sale proceeds and/or the $100,000 cash paid to the husband by the wife.
Again, this complaint is nothing more than a plea that her Honour should have accepted the argument put at trial by the wife, namely, that three amounts received by the husband should be notionally added back to the asset pool. However, there is no principled argument presented by the wife to enable this Court to find that her Honour made appealable error in not accepting the wife’s submission, as her Honour did not.
The decision to “add-back” or not, entails the exercise of a discretion, and the Full Court has consistently held that where “the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity require it” (Trevi & Trevi (2018) FLC 93-858 per Murphy J at [30]). That was not found to be the case here, and it is not demonstrated in this appeal how her Honour erred in that regard
It is opportune to remind the wife and her legal representatives of what the High Court said in House v The King (1936) 55 CLR 499 at 504-505 as to the principles governing how an appeal against a discretionary decision is determined, namely:
… It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
Here, no error of principle is identified, there is no suggestion of extraneous or irrelevant matters being taken into account, no mistake alleged, and no failure to take into account a material consideration. And nor is it demonstrated that the result is unreasonable or plainly unjust, such that it can be inferred that there has been a failure properly to exercise the discretion.
Reliance is sought to be placed on the Full Court decision in Townsend & Townsend (1995) FLC 92-569, and the submission is made that the amounts sought to be notionally added-back “essentially” comprised a premature distribution of assets, as was found to be the case in Townsend. However, it is not apparent that that is an apt description of the amounts involved here, and thus Townsend does not assist. Indeed, this is yet another doomed attempt to draw a comparison between the facts of a decided case and the facts of the case at bar.
Her Honour found that the wife paid the husband $100,000 in 2007, being monies that she had saved from working with the husband in the business Company C. The husband then used that money to establish the Company D business, also in 2007.
The parties then did not finally separate until June 2009, and around that time the husband asserted that he sold the Company D business for $250,000, although her Honour was not so certain that that was the case.
The husband’s evidence was also inconsistent as to what he then did with those proceeds, however much they were. Her Honour though found that it was likely that the husband used those proceeds to establish the Company E business in 2010 ([98]). Then, in 2017 or 2018, the husband abandoned that business, not being able to sell it.
The final amount sought to be added-back was an amount of $50,000 which in an affidavit the husband deposed to having received from his then girlfriend for the Company C business that he had taken back from the wife in 2013. However, in his oral evidence the husband inconsistently said that no money was exchanged when his girlfriend took over that business. Her Honour was not able to make a finding as to whether the husband did or did not receive any money from that business.
In summary then, there was no clear basis on the evidence, such as it was, for her Honour to add-back any of these amounts. Indeed, her Honour said this at [114] in relation to the $100,000:
In my view, whether the Husband received or retained $100,000 in 2007 is not materially relevant to the determination I now make, some 13 years later, in the context of the parties’ reconciliation in 2008/2009 and all the other contributions made in those intervening years.
This ground fails.
Ground 3 – The learned judge at first instance erred and Her Honour’s discretion miscarried in awarding the husband 25% of the total asset pool when such a distribution was not supported by the evidence and/or the law.
Ground 6 – The learned judge at first instance’s decision [sic] is ‘plainly wrong’.
In the wife’s summary of argument these two grounds are addressed together, albeit Ground 6 is miss-described as Ground 7. In any event, I will also address them together, but it need only be brief.
The sole submissions made in relation to these grounds is first, that “[i]t is open to an appeals court to set aside a judgement [sic] in the event that it was ‘plainly wrong’”, citing CDJ v VAJ (1998) 197 CLR 172. Secondly, “[a] failure to take proper account of a relevant matter can support an argument that a judgement [sic] was “plainly wrong”, particularly in the family law context”, citing Marsh & Marsh (2014) FLC 93-576. And finally, “…that, having regard to the above-mentioned matters which were not properly taken into account by Her Honour, this could make out the ground of the decision being “plainly wrong”, and the decision should be set aside” (paragraph 42 – 44 of the wife’s summary of argument).
The first submission is a correct statement of the law, but per se does not provide a basis for finding merit in either ground of appeal. The second submission is in the same category. With the third submission, the only sense that I can make of it is that the “above-mentioned matters” that are said to not be properly taken into account, are the matters raised in the previous grounds of appeal, namely Grounds 1, 2, 4, 5 and perhaps 3.
Grounds 1 and 2 I have dealt with and found them to be without merit, and thus they cannot provide a basis for the success of Ground 6.
I have not yet addressed Grounds 4 or 5, but as will be seen shortly, they both lack any merit and thus, similarly, they cannot lead to Ground 6 being successful.
With Ground 3, there is nothing put in the summary of argument in support of that ground other than to rely on the bare submissions made in support of Ground 6. Thus, I am none the wiser as to the basis on which it is said that the evidence does not support an award of 25 per cent, and no principle is cited, and no fact identified that demonstrates her Honour made an error in that determination.
These grounds must also fail.
Ground 4 – The learned judge at first instance erred and Her Honour’s discretion miscarried by giving equal weight to the evidence of the husband and the wife, when Her Honour ought to have preferred the evidence of the wife on the basis of credit.
This is an extraordinary ground.
Her Honour made findings in relation to the credibility of both parties, saying as follows:
71.Both members of Counsel made submissions that I should prefer the evidence of their client over the evidence of the other party where that evidence differed. Regrettably, this is not a case in which I can simply accept one party over the other. It is clear that the parties have each sworn affidavits in this Court that are not the whole truth, and their own evidence is, at times, inconsistent with the evidence given in subsequent affidavits, in their oral evidence, or with the information provided to third parties.
Her Honour then proceeded to detail those inconsistencies and the evasiveness of both parties at [72] – [83], concluding as follows:
84.In the circumstances, I am unable to wholly accept one parties’ version of events and reject the other parties’ version. I must therefore evaluate the evidence in relation to each disputed fact and make a finding where required. I note that a number of the disputed facts do not impact on the determination that I must make.
And then reiterating her findings at [90]:
90.As is clear, I have significant reservations as to the veracity of each party. Each of them has been prepared to mislead the Court or third parties to gain an advantage.
Despite these findings, the assertion of the wife is that accepting her Honour’s assessment of the credibility of each of the parties, her Honour “ought to have preferred the evidence of the … wife over the … husband on matters of disputed fact” (paragraphs 31 and 35 of the wife’s summary of argument). And the reason for that is none other than the wife’s evidence was “not as affected by serious mistruth and attempts to conceal facts from the court” (paragraph 35 of the wife’s summary of argument).
In other words, although neither party was found to be a credible witness, because the husband was allegedly less credible than the wife when balancing and comparing their respective lack of credibility, her Honour should have accepted the evidence of the wife over that of the husband, where there was a dispute.
I find this to be a submission without merit, and it is rejected.
However, that is not the end of it. The wife, who was represented in this appeal by solicitors and counsel, followed this up with the claim that if her Honour had preferred the evidence of the wife, her Honour would “likely have arrived at different conclusions in relation to key matters” (paragraph 36 of the wife’s summary of argument – my emphasis), and the outcome would have been “dramatically altered” (paragraph 37 of the wife’s summary of argument).
I need say no more than indicate that this ground fails.
Ground 5 – The learned judge at first instance erred and Her Honour’s discretion miscarried by placing insufficient weight upon the post-separation contributions made by the wife in paying the mortgages from 2009.
This is another weight challenge which cannot be maintained.
The wife has fallen into the trap of failing to appreciate that the assessment of contributions is an holistic exercise with all of the contributions of the parties of whatsoever nature being taken into account (Dickons v Dickons (2012) 50 Fam LR 244 at [23] – [26]). Thus, it is not open to the wife to submit that her Honour’s exercise of discretion in arriving at a percentage division of 70 per centum/30 per centum in the wife’s favour is “manifestly inadequate” by the bare assertion that greater emphasis should have been placed on the wife’s post-separation contributions, without factoring in all other contributions made by the parties.
There is no merit in this ground of appeal.
Ground 9 – The learned judge at first instance failed to provide adequate reasons.
Although not referred to in the ground of appeal, the summary of argument identifies three topics in respect of which it is said the reasons are inadequate, namely:
(a)“[W]hy it was not appropriate to make add-backs in the manner submitted by the Wife, or at all.”
(b)“[T]he issue of contributions was not dealt with in any significant detail, save for Her Honour simply stating that the contributions of the parties was 70/30 in the [wife’s] favour.”
(c)It is not clear what weight (if any) was given to the husband’s non-disclosure.
(Paragraph 47 – 49 of the wife’s summary of argument)
As to (a), I need not say any more than what this Court has said in addressing Ground 2 above. The claim of inadequate reasons in this regard is simply not made out.
As to (b), again, the claim of inadequate reasons fails.
Her Honour went to great pains in her reasons for judgment to set out the complicated and lengthy history of this matter, and then addressed the issue of the respective contributions of the parties from [119] – [203]. There her Honour correctly recognised that the exercise was an “holistic assessment taking into account the contributions of all types” ([201]). In that context her Honour summarised the findings that she had made in recording the history of the parties and their relationship, and made further findings ([202]). Her Honour then set out the further matters that she took into account, and subsequently concluded as follows:
209.In my view, taking into account all the competing contributions, and doing my best to give value to the myriad of elements that went into the parties’ relationship, I assess the parties’ respective contributions at 70% to the Wife and 30% to the Husband. That recognises the Husband’s contributions to Property B and Property A, but also appropriately recognises the Wife’s greater contributions post-separation to the properties, as well as her greater responsibility for the support of the parties’ children. It also factors in that the Husband has apparently diminished the pool available for distribution between the parties as outlined extensively in these reasons.
Plainly then, it is not correct to suggest that “the issue of contributions was not dealt with in any significant detail”. The reasons are more than adequate in dealing with the assessment of the respective contributions of the parties, and no error in that regard is established.
Finally, in relation to (c), that too is a complaint that cannot be maintained.
Her Honour is not obliged to assign specific “weight” to any aspect of the evidence. What needs to be done is for her Honour to take into account the evidence that is relevant to the decision she has to make, and as her Honour recognised, the non-disclosure by the husband was in that category.
As conceded by the wife, her Honour detailed that non-disclosure and “devoted a significant portion of her judgment to that issue” (paragraph 49 of the wife’s summary of argument).
Having identified the non-disclosure, her Honour then set out in [196] quoted above in [7] how she proposed to take those matters into account, and as referred to when addressing Ground 1, her Honour then took them into account as foreshadowed in [203] and [206].
There is no merit in this ground of appeal.
CONCLUSION
Having found no merit in any of the grounds of appeal, the appeal must be dismissed.
COSTS
In the event that the appeal was dismissed, the husband sought an order for costs in the sum of $29,121.52.
The wife opposed any order for costs, relying on her financial circumstances which are said to still be the same as her Honour recorded in her reasons for judgment at [204] – [205]. In short, the wife earns $292 per week working part time in a restaurant, and she receives a Centrelink benefit. She has re-partnered and her partner has historically earned an annual income of approximately $120,000.
Thus, her financial circumstances are limited, but as the husband pointed out, she has Property A, and if it is sold she will receive 75 per cent of the proceeds of sale.
Costs are governed by s 117 of the Family Law Act 1975 (Cth), and s 117(2) provides that an order for costs can be made if there are circumstances that justify it. Section 117(2A) sets out the factors that must be taken into account in determining whether there is such a circumstance, and what, if any, order is made.
Here the circumstance relied on by the husband is the fact that the wife was wholly unsuccessful in the appeal (s 117(2A)(e)), and it is beyond doubt that that can be sufficient to justify an order being made.
However, pursuant to s 117(2A)(a) the financial circumstances of the parties must also be taken into account, and to repeat, the wife relies on her financial circumstances to oppose any order for costs.
Certainly, the wife’s financial circumstances are relevant, but I do not accept that they are such that they should prevent an order being made. Apart from the fact that she will have funds to meet any order, there is ample Full Court authority that even impecuniosity is not a bar to an order for costs being made where there is a circumstance that otherwise justifies it (D & D (Costs) (No 2)(2010) FLC 92-435), as is the case here.
Thus, I propose to make an order for costs, but not in the amount sought. For a start, that includes the costs in relation to the husband’s Notice of Cross-Appeal which was discontinued. Further, there are items in the schedule filed on 2 February 2021 that I am not prepared to allow, e.g., in relation to the production and reading of the transcript, and where it is not made clear what the work done was in fact for.
This Court has a discretion as to the question of costs, and pursuant to r 19.18(1) of the Family Law Rules 2004 (Cth), this Court can make an order for costs of a specific amount. I propose to make an order in the sum of $20,000.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strickland. Associate:
Dated: 22 June 2021
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