HARRIS & HARRIS
[2011] FamCAFC 245
•22 December 2011
FAMILY COURT OF AUSTRALIA
| HARRIS & HARRIS | [2011] FamCAFC 245 |
| FAMILY LAW – APPEAL – PROPERTY – Family discretionary trust – Where the trial Judge found the assets of the trust to be assets of the husband – Whether the trial Judge erred in so finding – Where the Full Court relying on the observations of French CJ in Kennon v Spry (2008) 238 CLR 366 concluded that the husband did not as a matter of law directly control the trust and that the trial Judge’s findings did not support a conclusion of indirect control. FAMILY LAW – APPEAL – PROPERTY – Calculation of property pool – Whether certain property of the wife should have been “added-back” in the calculation of the value of the parties’ property – Where the Full Court found that in the absence of the trial Judge providing sufficient reasons for certain of these determinations, the relevant grounds of appeal had substance. FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Whether the trial Judge erred in dealing with the wife’s application under s 44(3) to institute spousal maintenance proceedings out of time at the same time as he determined the final property settlement – No substance in this complaint – But substance found in the complaint about the trial Judge’s decision to award maintenance made prior to determination of property division. FAMILY LAW – APPEAL – Appeal allowed – Orders set aside – Wife’s application for orders with respect to property settlement and for leave under s 44(3) of the Family Law Act 1975 (Cth) to institute proceedings for spousal maintenance be remitted for rehearing. FAMILY LAW – APPEAL – COSTS – Costs of the appeal – No order for costs – Costs certificates awarded to both parties under s 9, s 6 and s 8 of the Federal Proceedings (Costs) Act 1981 (Cth). |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) |
| Anast and Anastopoulos (1982) FLC 91-201 Ascot Investment Pty Ltd v Harper (1981) 148 CLR 337 Clauson and Clauson (1995) FLC 92-595 Kennon v Spry (2008) 238 CLR 366 Omacini & Omacini (2005) FLC 93-218 |
| APPELLANT: | Mr Harris |
| RESPONDENT: | Ms Harris |
| FILE NUMBER: | BRF | 3592 | of | 2005 |
| APPEAL NUMBER: | NA | 64 | of | 2010 |
| DATE DELIVERED: | 22 December 2011 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Finn, Thackray and Strickland JJ |
| HEARING DATE: | 14 February 2011 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 11 December 2009 |
| LOWER COURT ORDERS DATE: | 18 May 2010 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Carrigan |
| SOLICITOR FOR THE APPELLANT: | Stockley Furlong Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Hogan |
| SOLICITOR FOR THE RESPONDENT: | Schultz Toomey O’Brien |
Orders
The appeal against the orders made on 18 May 2010 (as amended on 26 May 2010) by the Honourable Justice Bell be allowed.
The orders be set aside.
The wife’s application for orders with respect to property settlement and for leave under s 44(3) of the Family Law Act 1975 (Cth) to institute proceedings for spousal maintenance, be remitted for rehearing by a Judge other than the Honourable Justice Bell.
There be no order for costs in relation to the appeal.
The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by him in relation to the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent wife in respect of the costs incurred by her in relation to the appeal.
The Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under the Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
IT IS NOTED that publication of this judgment under the pseudonym Harris & Harris is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 64 of 2010
File Number: BRF 3592 of 2005
| Mr Harris |
Appellant
And
| Ms Harris |
Respondent
REASONS FOR JUDGMENT
Finn & Strickland JJ
This is an appeal by the husband against orders made by Bell J on 18 May 2010 in proceedings between the husband and the wife for property settlement and spousal maintenance under the Family Law Act 1975 (Cth) (“the Act”).
The orders (which were subject to some amendment pursuant to the slip rule on 26 May 2010) gave effect to reasons for judgment which his Honour had delivered on 11 December 2009 after a three day trial on 26 to 28 October 2009.
In his reasons for judgment his Honour determined that the net value of the parties’ assets was $4,269,180.00. This figure included an agreed figure of $1,500,000.00 for the net value of the assets of a discretionary trust known as the Harris Family Trust (“the Trust”). His Honour further determined that the parties’ assets should be divided 45 per cent to 55 per cent in favour of the wife on account of their contributions, with a further adjustment of 10 per cent in her favour on account of the factors in s 75(2) of the Act. His Honour also determined that the husband should pay the wife periodic maintenance of $750.00 per week for a period of two years.
At an early point in his oral submissions to us, Counsel for the husband identified the following issues as arising on the appeal:
·whether the Trust was the alter ego of the husband, such that its assets were the property of the husband (Grounds 1 to 4);
·a challenge to the contribution assessment (Grounds 9 and 12);
·a challenge to the s 75(2) adjustment (Grounds 10, 11 and 12);
·a challenge to the grant of leave to the wife to bring proceedings for spousal maintenance “out of time” (Grounds 5 and 7);
·a challenge to the order for spousal maintenance (Grounds 6, 7 and 11); and
·whether certain property of the wife should have been “added-back” in the calculation of the value of the parties’ property (Ground 8).
In the above list of issues we have indicated what appears to us to be the relevant ground or grounds of appeal.
In the event that the appeal succeeds, the husband sought in his Notice of Appeal that we should re-determine the matter. This was a position which he maintained at the hearing of the appeal, although the possibility of remitting the question of whether the assets of the Trust should be included in the property of the parties was raised in the written submissions of Counsel for the husband (at paragraph 1.23).
For her part, the wife opposed the appeal. However, in the event that the appeal was successful in relation to the issue of whether the Trust assets should be regarded as property of the parties, the wife sought that there be a retrial. But if the appeal succeeded on other grounds, she was prepared for us to re-determine the applications which were before the trial Judge.
Background as found by the trial Judge
In his reasons for judgment his Honour made the following findings which appear to be uncontroversial.
The husband (who was born in 1959) and the wife (who was born in 1963) commenced cohabitation in August 1984. They were married in October 1998, and separated in March 2004. They had two children who are now adults. They also both had a child or children from earlier relationships.
From the commencement of their relationship, both parties were employed in a personal service accessories business or related businesses, which were operated through the Trust; the Trust had been established by the husband’s father in 1978. The wife apparently continued to work in the business, or an aspect of the business, until shortly after separation, and the husband continues to work in it.
The parties initially lived in rented accommodation. They purchased their first property in 1992. In 1994 that property was sold and another purchased. It was sold and a third property was acquired in 1999. The third property was sold in 2003, with a fourth property being acquired with funds which included funds inherited from the wife’s parents, who had both died in 2001.
After the parties separated in March 2004 the husband remained living in that fourth property paying the mortgage and other outgoings until about April 2008 when the property was rented to another family member.
For a time after separation the wife was living in a de facto relationship with another person. That relationship ended in 2007.
The issue of the Trust
As mentioned at the commencement of these reasons, Bell J determined that the assets of the trust, with an agreed value of $1,500,000.00 should be regarded as property of the husband and thus included in the calculation of the value of the parties’ property, and again as earlier indicated, the husband’s first complaint in this appeal is that his Honour erred in this determination. It is contended in the husband’s fourth ground of appeal that his Honour “should have held that the assets of the Trust were not at any material time, or are still not, assets of the parties [or] … of either of them”.
In discussing the husband’s challenge to this determination by his Honour, it is necessary to explain at the outset that neither his Honour nor this Court had access to the original trust deed for the Trust. However, his Honour had before him reports by a single expert, Mr R, who is an accountant, and also affidavits from the present accountant to the Trust, Mr Q, and its former accountant, Mr T. All of these three accountants also gave oral evidence. On the basis of their evidence, his Honour was able to make a number of findings concerning the history and structure of the Trust, which was accepted before him to be in the nature of a discretionary trust (see for example, final address of Counsel for the husband at Transcript, 28 October 2009, p 95). Those findings are largely unchallenged. For the most part, it is only the conclusion, which his Honour drew from those findings, concerning the husband’s de facto control of the Trust and of the business or businesses which it operates, that is now challenged.
History, structure and business of the Trust
In addition to the material which was before his Honour, we also had the benefit of a very useful summary of the expert evidence concerning the history and structure of the Trust in paragraphs 1.5 to 1.8 of the written submissions of Counsel for the husband. In paragraph 7 of her written submissions Counsel for the wife stated that her client accepted the accuracy of the matters summarised in paragraphs 1.5 to 1.8 of the husband’s submissions save in relation to three matters (to which we will refer below).
We will now set out the history and structure of the Trust either as found by his Honour, or as it emerges from the summary provided by Counsel for the husband. What follows is understood to be uncontroversial, unless we indicate to the contrary.
As found by his Honour (in paragraphs 29 to 31 of his reasons) the Trust was established in July 1978, with the husband’s father being the first appointor until his death on 21 August 1995. On his death, his widow (the husband’s mother) became and continues to be the appointor.
The “beneficiaries” of the Trust are: the husband’s father (now deceased); the husband’s mother; the children of the husband’s father (being the husband and his sister, B); “the lineal issue” of the husband’s father; and “other persons and classes of persons (if any) referred to in the Schedule (of the Trust Deed) … and referred to as ‘Other Beneficiaries’”. According to Mr R’s evidence, there are no specific persons or class of beneficiaries recorded in the Schedule which was available to him.
Mr R noted in his report (dated 18 April 2008) at paragraphs 3.3.7 and 3.3.8 that notwithstanding that the wife “does not appear to be recorded, either specifically or within a class of beneficiary, as a beneficiary of the trust … [she] received distributions of income from [the Trust] as if she was a beneficiary, for a number of years”.
The original trustee of the Trust was a company Harris Nominees Pty Ltd; the directors of that company were or are:
·the husband’s father: 20 July 1978 to 22 August 1995;
·the husband’s mother: 20 July 1978 to 13 June 2003;
·the husband: 22 August 1995 to the present;
·the husband’s sister, B: 22 August 1995 to 6 May 2003; and
·the wife: 13 June 2003 to the present.
Thus the current directors of Harris Nominees Pty Ltd are the husband and the wife.
The original Secretary of that company was the husband’s father. Following his death it was the husband’s mother until 13 June 2003, when the husband became and remains the Secretary.
Apparently relying on a company search, which was “Exhibit PM 3” to Mr Q’s affidavit, Counsel for the husband stated as follows in his written submissions in relation to the shareholders in Harris Nominees Pty Ltd (omitting footnotes):
1.5(g) The Shareholders in [Harris Nominees Pty Ltd] were originally [the husband’s father] and his wife … Following the death of [the husband’s father] on 21 August 2005 [sic] [the husband’s mother] arranged a share restructure by the creation of additional shares totalling 100 shares and allocated them as follows:-
(i) [herself] 98 shares;
(ii)[the husband’s sister, B] 1 share;
(iii) [the husband] 1 share.
Accordingly, since 21 August 2005 [sic], the Husband has been a Shareholder of [Harris Nominees Pty Ltd]. The Wife has not been a Shareholder.
Two of the three matters with which Counsel for the wife takes issue appear in the above quoted paragraph.
First, Counsel for the wife points out that the husband’s father died on 21 August 1995. Thus the two references to “21 August 2005” in the above should be to “21 August 1995”. It is likely that these are mere typing errors.
Secondly, and more significantly, Counsel for the wife submits (at paragraph 7.c) of her written submissions:
c.Para 1.5(g) [of the appellant’s written submissions] – the Respondent contends that there was no evidence at trial to establish that ‘[the husband’s mother] arranged a share restructure following the death of [the husband’s father] by the creation of additional shares totalling 100’ and asserts that the Appellant has been a shareholder of [Harris Nominees Pty Ltd] since 21 August 1995.
We are prepared to accept the contention that there was no evidence to establish the proposition in italics.
We have already dealt with the issue of the date of death of the husband’s father and accept that the shareholding by the husband in the company in question dates from 21 August 1995.
On 1 June 2007 the husband’s mother as appointor gave a written direction for a change of trustee from Harris Nominees Pty Ltd to T Pty Ltd which was re-named HA Pty Ltd on the same date.
As from 1 June 2007 the following persons were the directors and also the shareholders in this new trustee company:
·the husband’s mother: 2 shares;
·the husband’s son (A) from a previous marriage: 1 share; and
·a person known as MB (who is apparently a long standing friend of the husband): 1 share.
Thus neither the husband nor the wife is a director of or a shareholder in the trustee company.
It will also be useful to refer at this point to the company known as AB Pty Ltd. According to Mr R’s report:
(a)this company was registered on 5 June 2003;
(b)the husband is the sole Director and Secretary;
(c)all 120 issued Ordinary Shares are held by the husband;
(d)the company has received distributions of income from the Trust since its registration on 5 June 2003;
(e)the company owns items of plant and equipment that it hires out to the Trust; and
(f)it is not a beneficiary of the Trust.
It is conceded in the written submissions of Counsel for the husband that AB Pty Ltd is in effect the “alter ego” of the husband, and that according to Mr Q’s evidence it was set up for “tax minimisation or reduction purposes”. Distributions of trust funds have been made to AB Pty Ltd on the husband’s account since 2003.
As to the business or businesses run by the Trust, Counsel for the husband in his summary of argument (at paragraph 1.5(b)) simply stated that “[t]he Trust’s primary business was the manufacture of [personal service] accessories and distribution of its products to the [personal service] industry”.
This is the first of the three matters in the written submissions of Counsel for the husband, with which Counsel for the wife takes issue and she does so in the following terms:
7. a.Para 1.5(b) [of the appellant’s written submissions] – the Respondent asserts that the evidence at trial was that until about the time the parties commenced cohabitation in 1984/1985, the business operated by the Trust was that of owning and running [personal service businesses] (and some property development)and that, from the time of the cohabitation, the business developed into one which involved the manufacture and distribution of … accessories and/or products to the [personal service] industry (i.e. the Respondent contends that the evidence at trial established that this activity developed as a consequence of the efforts of the Appellant and the Respondent during the course of their cohabitation and later marriage and was not, simply, the continuation of an existing business in the form which existed prior to their cohabitation);
In paragraph 29 of his reasons Bell J described the husband’s father as having “been involved in the general [personal service] business for some considerable period …”. It would seem that the “considerable period” referred to by his Honour was a period prior to the creation of the Trust in July 1978.
His Honour then proceeded to describe the expansion of the business after the creation of the Trust in the following way:
30.In or about 1978 a business known as [Harris Nominees Pty Ltd] was set up as well [as] the [Harris Family Trust] … Subsequent thereto various entities were brought into existence and businesses were run. Most of these businesses were, from about 1982, based in [south Queensland]. A factory [on the north coast of Queensland] was bought which was used to do moulding and other plastic products for the … business. This business increased in value and in work and eventually they were sold in the 1980s and some of the capital derived from the sale went to purchase a … machine from Europe which became the nucleus of the present … business.
31.… At the time of the death of the [the husband’s father] the [husband] was working in one business in [south Queensland]. [The husband’s sister, B] was helping [the husband’s father] at [the north coast factory] and also [the husband] received assistance from the mother.
32.As I have indicated previously, after the death of the [husband’s father] [the husband’s sister, B] ran, with her husband, a business on the north coast and [the husband] did generally run the business [in south Queensland] with some supervisory capacity of the north coast business. This did not work out and as a result, as I’ve indicated previously, [the husband’s sister, B] left the business and has had no contact with it since that time.
Earlier in his reasons his Honour had focused on the efforts of the husband and wife in the business saying:
15.It is quite clear on the evidence, and for once both parties agree, that they worked exceptionally hard in the business. The wife was involved in [a] section of the business in [south Queensland] and the husband was responsible for sales which involved frequent travelling in Queensland and interstate. I am able to say that both parties worked exceptionally hard in the respective sections of the business and generally together. It could not be suggested that they failed in such energetic exercise as the business became very successful and profitable.
His Honour referred to this matter later when assessing the parties’ contributions saying:
65.As I have said before and I reiterate and emphasise, as far as I am concerned, on the material before me, it could not be suggested that with the husband and the wife in this case working immensely hard in the creation and improvement of the business that this has caused the trust to become very, very successful and to have developed assets of, as I have already indicated, $1.5m.
66.If it had not have been for one matter, to me it would have seemed quite clear that the property of the parties in relation to contribution should be divided equally at 50/50 … [His Honour then went on to refer to an inheritance received by the wife which persuaded him that the wife’s contributions should be assessed at 55 per cent rather than 50 per cent].
It will be seen from these citations that paragraph 7 of the written submissions of Counsel for the wife contains a more comprehensive statement of the trial Judge’s findings concerning the evolution of the business, and the parties’ contributions to it, than does paragraph 1.5(b) of the written submissions of Counsel for the husband.
Bell J’s conclusions concerning control of the Trust and its business
Having provided some background (in paragraphs 29 to 33 of his reasons) concerning the creation of the Trust and its business, his Honour referred (in paragraph 35) to the wife’s claims that “the business is ‘the alter ego’ of the husband” and that his mother is “nothing else but a figurehead”.
His Honour then posed (in paragraph 36) the question “[w]ho has the control of the business?” and he answered that question in this way:
36.… Obviously [the husband] is what I would call the general overall manager and managing director. He has run the business for a considerable number of years and as was said by [Mr Q] and those paragraphs to which I have hereinbefore referred, seems to have done it comparatively on his own. The [husband’s mother], was consulted on occasions.
We observe in passing that there appears to be no dispute that the husband was the manager of the actual business which was conducted on behalf of the Trust. But the issue raised by the case was whether the husband had sufficient control of the Trust itself such that its assets could be regarded as his assets. His Honour appears to have recognised this important distinction at least at this point (although not necessarily elsewhere in his judgment) when he went on to pose this further question:
37.Am I able to say on the material before me that [the husband] is the controller of the trust?
Immediately after posing that question, his Honour indicated (in paragraph 38) that the wife relied on “an aborted share transaction which took place in early June 2003”, being a proposed transfer of one share from the husband’s sister, B, to the wife. Having identified that matter and also the fact that the proposed transaction had been the subject of a mistake in the office of the accountant, Mr Q, his Honour turned to another matter without reaching any clearly expressed conclusion regarding the wife’s claim in relation to the proposed share transfer. But as will be seen, his Honour later returned to the issue of the share transfer.
The other matter to which his Honour had turned was one which he described (in paragraph 40 of his reasons) as having been “faintly suggested” by the wife’s Counsel, being that his Honour should infer from the evidence of Mr Q, that there was “a conspiracy” between the husband and Mr Q “to exclude [the wife] from any claim that she may have by way of shareholding and/or support the contention that the [husband’s mother] had not abandoned control of the property”.
However, his Honour can then be read (in paragraph 40) as rejecting any suggestion that Mr Q would “conspire … to give false evidence” in relation to whether or not the husband’s mother had “abandoned control”.
His Honour went on to make the following findings about the intention of the husband’s father when he established the Trust and the position of the husband’s mother:
41.In fact both [Mr T] and [Mr Q’s] evidence clearly indicates that it was the intention of [the husband’s father] to have a trust set up so not only was the trust looking after the business, but [the husband’s mother] subsequent to his death. She has at all times been looked after by the trust, save for a period when perhaps she was not being paid an amount that she should have been paid and I can, with respect, seem to suggest that there is this interest of [the husband’s mother], who is the appointer, an [sic] that whilst the business has been run, as many businesses are run by general manager, that being [the husband] in this case …
Having then referred to Ascot Investment Pty Ltd v Harper (1981) 148 CLR 337 and certain other authorities, his Honour continued:
44.… There seems to be the suggestion in many authorities … that there must be the ability of, in this case, [the husband] to control the trust to such an extent that he has the power to realise for him the value of the assets of the company.
45.The most difficult question in this case is whether or no [sic] the trust is the “alter ego” of the husband. This is alleged by the applicant and in her affidavits as well as in her extensive evidence and cross-examination. She is of the belief that subsequent to the death of [the husband’s father], the original appointer of the trust, that notwithstanding the fact the, [husband’s mother], became appointer by the death of [the husband’s father], that the person who “controls the trust”, who runs the trust and who is the person solely responsible for the welfare of the trust is that of the husband.
46.Clearly on the evidence before me, and it has not been gainsayed by the husband in any way whatsoever, he is the person who is in effect the general manager and has been the general manager of this business for many years. As I have already indicated, that as a result of his work, assisted greatly by the applicant wife, the company has been successful. He appears, on the face of it, to make all the decisions in relation to the running of the business. There has in fact been very little, if any, written correspondence by the appointer [the husband’s mother] in relation to the business before the Court, save for one letter which was directed to Mr [M] and is referred to quite extensively in cross-examination … of Mr [M].
Having again said (in paragraph 47) that the wife believes that the company is the alter ego of the husband and “as a result” he is the alter ego of the Trust, his Honour went on to say that “one of the points that the wife points to” is the fact that the husband had dismissed the accountant, Mr T, who had been responsible with the husband’s father for the creation of the original Trust, and replaced him with Mr Q. In this context his Honour returned to the issue of the proposed transfer of the share (in the then trustee company) by the husband’s sister, B, to the wife, saying:
49.Subsequent to the date of the appointment of [Mr Q], he has slotted into the same position as [Mr T] and as he has said in his evidence, he has given certain advice to the directors of the trustee company which generally have been accepted by them. This is the mooted question of when [the wife], the applicant, became a director of the trustee company and the alleged share transaction.
50.She says that at or about the time of her becoming a director, she signed certain documents which entitled her to have the share of [the husband’s sister, B], who was a one shareholder in the trustee company, transferred to her at or about the same time as her being appointed director.
51.There appears to be some very confused evidence in support of what she says in that [Mr Q] says that he received directions from [the husband] for the installation of [the wife] as a director of the company and for the preparation of the transfer of a share, being [the husband’s sister, B’s] share, she having one share, as I have said, in the company, from her to [the wife]. This did not take place. Documents were prepared by [Mr Q] and forwarded to [the husband] for the purpose of effecting his instructions. The only documents that were returned were the documents appointing the [wife] as a director. Some documents were created for the purpose of effecting share transfers between various parties. At that time there were three shareholders: [the husband], [the husband’s sister, B] and [the husband’s mother]. [The husband’s mother] held 98 and [the husband] and [the husband’s sister, B] held one each.
52.As a result of a mix-up and total confusion, nothing ever took place for the transfer of a share from [the husband’s sister, B] to [the wife], notwithstanding documents were forwarded to ASIC. These were subsequently revoked and as appears in [Mr Q’s] evidence, it was an embarrassment for his company that such a disaster took place.
53.[The wife] is strongly of the view that this in itself is evidence to show that not only was she badly treated, there may be some suggestion of fraud, but that [the husband], because of the control that he had, was able to influence the other directors and to run the business to such an extent that he precluded her from receiving the share of [the husband’s sister, B].
His Honour then observed (at paragraph 54) that it “behoves me then to look closely at what the evidence is in relation to the control by [the husband] of the company” and he went on to make the following findings:
54.… Clearly [the husband] runs the company. He has done so for many years, as I have said, and has, in fact, been successful with the assistance of [the wife] up until separation in 2004. He seems to have made decisions with the assistance of Mr [Q]. I refer in particular to pages 13 to 26 of the transcript of [Mr Q’s] cross-examination. He was involved in this aborted share transfer. He gave instructions to [Mr Q] to appoint [the wife] as a director he was instrumental, on the advice of [Mr Q], in distributing large profits of the company in the manner in which it has been set out in the evidence. He was responsible for varying up and down, as I understand, the “remuneration” of [the husband’s mother].
55.In passing it appears that [the husband’s father] was strongly of the view that he insisted that [the husband’s mother] would in future be financially looked after. Initially, the figure was placed at $1000 per week (see [Mr T’s] evidence) but that this varied up and down. It also appears that at a later stage after [the husband’s sister, B] ceased any connection with the business an amount of some $200 (see[ Mr Q’s] evidence) was included in the $1000 per week that [the husband’s mother] received to be some form of assistance to [the husband’s sister, B]. He explains the reason for this in that if in fact the money had been paid directly to [the husband’s sister, B] it might affect her social service entitlements. This appears to have been with [the husband’s] approval.
His Honour then turned to another topic which concerned the proposed transfer, at a time before the husband and wife separated and indeed before the husband’s father died, to the husband’s sister of an interest in some land which the husband had held with his mother, and also a proposal whereby the husband would receive the mother’s shares in the trustee company.
While we are prepared to accept the submissions of Counsel for the husband that his Honour may have been in error in suggesting that these proposals were related (see Appeal Transcript, 14 February 2011, p 29-35), the proposed transfers apparently never eventuated, and although his Honour commented that the arrangement was “somewhat suspicious”, we are of the view that he placed no weight on these particular proposed arrangements.
His Honour can then be seen as reaching his conclusion that the assets of the Trust were the assets of the husband in the following paragraphs:
58.The matters that I have looked at in relation to the trustee being [the husband] and [the husband] being the trustee is that he has quite clearly, he says with the approval of [the husband’s mother], and I doubt this, he has varied the distributions received by the grandmother, he says with the advice of accountants who were the accountants for the company at that time. However, Mr [T] is not of that view. He, in his material, indicates that he was not approving of the fact that the grandmother was at some times not receiving what was agreed to be paid to her, and that was some $52,000 per year …
59.Once again, it appears to me that he has complete control over the amount of funds to be distributed notwithstanding his allegations that he consults deeply with his mother. (I do not accept the fact that he does so.) He accepts the recommendations of his agents, ie. the company accountants, and is able to manipulate the payments to his own devices. I note that subsequent to separation, the distributions of substantial amounts of moneys to [the wife] ceased and she was brought back to base for around about $52,000 per year as she believed were company directors fees.
60.Perhaps the most telling is the creation of [AB Pty Ltd]. It was registered on 5 June 2003. It was created by [the husband] and [the husband] alone. It was to be a beneficiary of the trust – notwithstanding that it was not an original beneficiary nor added as one – [Mr Q] was hopeful that there would be a variation of the Deed to include [AB Pty Ltd] but nothing happened (see page 39 of Mr [Q’s] evidence) – [AB Pty Ltd] has received distribution query wrongfully. [The husband] is the sole director and shareholder. This creation and distribution indicate strongly to me that [the husband] is the Trust and consequently together with the other indicia, I am satisfied and I find the assets of the trust are his within the meaning of the Act.
Challenges to the trial Judge’s reasoning in relation to control of the Trust
Despite the relatively lengthy discussion in his Honour’s reasons (paragraphs 28 to 61) in relation to the control of the assets of the Trust, and despite paragraphs 58 to 60 in particular, it is not easy to identify with absolute precision the matters which caused him to conclude that the assets of the Trust should be treated as the assets of the husband.
We have already (in paragraph 53) expressed the view (contrary to the written submissions of Counsel for the husband at paragraph 1.16), that in reaching his conclusion to treat the assets of the Trust as the assets of the husband, his Honour ultimately placed no weight on the proposed transfer to the husband’s mother of an interest in land which the husband held with his sister and on a proposal for the husband to receive the shares of his mother in the company. Thus, to the extent the grounds of appeal are directed to this matter, they are without merit.
Somewhat less clear is whether his Honour placed any weight in reaching his conclusion that the assets of the Trust were the assets of the husband on what he referred to as the “aborted” transfer of the share of the husband’s sister in the then trustee company to the wife. It will be seen from our earlier analysis of his Honour’s reasons that he dealt at some length with this matter, particularly at paragraphs 50 to 54 of his reasons. On balance, and particularly having regard to his Honour’s reference to the “aborted share transfer” in paragraph 54, it seems that this matter did influence him in reaching his conclusion that the husband at least had control of the Trust.
We agree with the submission of Counsel for the wife (made in her written submissions at paragraph 13) that the conclusion which Counsel for the husband sought to draw in paragraph 1.12(f) of his written submissions (being that it was the other directors of the then trustee company rather than the husband who opposed the transfer of the share to the wife), should not be drawn. But however that may be, we do not consider that the evidence overall in relation to the circumstances of the “aborted” share transfer (which appears adequately summarised in paragraphs 51 to 52 of his Honour’s reasons) could support a conclusion of control by the husband either of the then trustee company or of the Trust.
So far as the relationship between the husband and the trustee is concerned, it is important to observe that while the husband was and remains a director and minority shareholder in the original trustee, Harris Nominees Pty Ltd, he is neither a director nor a shareholder in the company, HA Pty Ltd which has been trustee of the Trust since 1 June 2007. It is also important to observe that his Honour made no reference in his reasons to this change of trustee. Nor did his Honour provide any examination of the husband’s relationship with the current trustee company. The husband in support of his appeal placed considerable reliance on these omissions by his Honour. We think that they were serious omissions which significantly undermine his Honour’s decision.
One matter on which his Honour placed considerable emphasis, indeed the opening words in paragraph 60 of his reasons suggest decisive emphasis, was the husband’s role as sole director and shareholder in the company known as AB Pty Ltd, and on the fact that that company has been receiving distributions from the Trust.
We have earlier explained the origins, structure and business of AB Pty Ltd, and also the concession made on behalf of the husband that this company is his alter ego. But none of those matters support his Honour’s conclusion in paragraph 60 that the husband “is the Trust”. Neither does the mere fact that AB Pty Ltd has been receiving distributions from the Trust (albeit “wrongfully” to use his Honour’s words, given that it is not a beneficiary of the Trust) of itself establish, as his Honour also suggested in paragraph 60 of his reasons, that the husband “is the Trust”.
However, it is the history of substantial distributions from the Trust to the husband as well as to his “alter ego” AB Pty Ltd on which his Honour also relied to support his conclusion that the Trust assets should be regarded as the property of the husband.
Counsel for the wife annexed to her written submissions a chronology of relevant history as it emerged from the evidence at trial. Included in that chronology was a history of Trust distributions for the financial years ending 30 June 1999 to 30 June 2008. We have extracted the relevant material from Counsel’s chronology in the following schedule, and from which it will be seen that in each year, apart from 2004, either the husband or AB Pty Ltd has received substantial distributions from the Trust:
Financial Year Profit Amount
DistributedAmount and to whom distributions made Source 30/6/1999 $122,295.00
$122,295.00 Distributed equally between the husband and wife Transcript, 27 October 2009 p 66 30/6/2000 -
$111,416.04
$52,000.00 to the husband’s mother
$29,708.02 to the husband
$29,708.02 to the wifeTranscript, 27 October 2009 p 67 30/6/2001 $226,00.00
$199,577.00
$53,800.00 to the husband’s mother
$72,260.00 to the husband
$72,260.00 to the wife
$3,057.00 to [N] the husband’s daughter from his first marriageTranscript, 27 October 2009 p 72 30/6/2002 - $198,000.00 $52,000.00 to the husband’s mother
$52,000.00 to the husband
$52,000.00 to the wife
$42,000.00 to [M] the wife’s daughter from a previous marriage – not a beneficiary to the TrustTranscript, 27 October 2009 p 74 - 75 30/6/2003 $361,732.00
$149,614.00
$63,000.00 to the husband’s mother
$29,000.00 to [M] the wife’s daughter from a previous marriage
$57,614.00 to [AB Pty Ltd] – not a beneficiary to the TrustTranscript, 27 October 2009 p 75 - 76 30/6/2004 $448,546.00
$95,476.00 $52,476.00 to the husband’s mother
$43,000.00 to [A] the husband’s son from a previous marriageTranscript, 27 October 2009 p 77 30/6/2005 $630,478.00 $568,872.00 $418,872.00 or $150,000.00 to the husband
Transcript, 27 October 2009 p 77 - 79 30/6/2006 $464,917.00
$463,230.00 $94,000.00 to the husband’s mother
$247,000.00 to the husband
$71,230.00 to the wife
$51,000.00 to [A] the husband’s son from a pervious relationshipTranscript, 27 October 2009 p 79 30/6/2007 $678,767.00
$678,094.00 $419,422.00 to the husband
$129,000.00 to the husband’s mother
$129,672.00 to [A] the husband’s son from a previous relationshipTranscript, 27 October 2009 p 94 30/6/2008 - - $500,000.00 to the husband Transcript, 27 October 2009 p 94
Discussion and conclusion in relation to the assets of the Trust
In seeking to uphold his Honour’s decision to include the assets of the Trust in the assets of the husband, Counsel for the wife has sought to rely on the observations of French CJ in Kennon v Spry (2008) 238 CLR 366 at 387-389 [52]-[57] that the term “property” when used in s 79 of the Act should be given a wide meaning. However in that decision French CJ also said:
77.The beneficiary of a non-exhaustive discretionary trust who does not control the trustee directly or indirectly has a right to due consideration and to due administration of the trust but it is difficult to value those rights when the beneficiary has no present entitlement and may never have any entitlement to any part of the income or capital of the trust.
In the present case and on the basis of the material before us the husband appears to be no more than such a beneficiary of such a trust. He is not the appointor of the Trust nor does he hold any position in the current trustee company. On the assumption that by the use of the word “directly”, the Chief Justice was referring to the strict legal position, it therefore cannot be said that the husband “directly” controls the current trustee. Nor could it be said that he “directly” controlled the previous trustee.
On the assumption that the reference by the Chief Justice to “indirect” control of a discretionary trust by a beneficiary was a reference to a “puppet” situation, in the sense that the person with legal control of the trust is a puppet of the beneficiary, that could be the situation in the present case. In the sense, that is, of the mother (who is the appointor of the Trust, and one of the three directors of the trustee company holding two shares in that company with each of the other two directors holding one share each) being the puppet of the husband. This, as was made clear by Counsel’s oral submissions to us, has always been the wife’s case.
The difficulty, however, for the wife on this appeal is to be able to point to any evidence which would support a finding that the husband’s mother is his puppet, and that it is through her, or perhaps otherwise, that he exercises de facto control of the trustee company and of the Trust.
In an endeavour to satisfy us on this particular point, Counsel for the wife took us to Mr Q’s oral evidence given under cross-examination on 28 October 2009, Transcript at p 19 to 23 and again at p 40 to 42. The difficulty with these passages of evidence is that they largely relate to the earlier periods when the company, of which the husband was a director, was the trustee of the Trust, and so it would only be expected that the husband would have had discussions canvassing trust distributions with the accountant.
There was, we note, later cross-examination (Transcript, 28 October 2009, p 45 to 49) of Mr Q concerning the change of the corporate trustee in mid 2007. But that evidence would not, in our view, support the necessary finding that the mother is the husband’s puppet.
One of the difficulties in this case is that the husband’s mother was not called to give evidence. It appears from the following passage of his Honour’s reasons that this was a matter raised by Counsel then appearing for the wife, but on which his Honour ultimately placed no weight:
61.Before I go on to the distribution of the assets may I point to one matter which has concerned me. [Mr F] of Counsel for the wife submitted that because the paternal grandmother … the appointer, was not called that this in fact lessened the case of [the husband] and indicated that the doctrine of Jones v. Dunkell was in support of such submission. My memory is that that has got nothing to do with it at all. Jones v Dunkell’s principle is a positive principle, not a negative principle. In other words it says that if a person who is available to be called and is not called, the inference is that that person will not advance (my underlining) his case – in this case not, as [Mr F of Counsel for the wife] suggested, that it would weaken his case. (Original emphasis)
As might be expected, his Honour’s conclusion about this matter was not challenged by the husband on the appeal. But neither did the wife seek to agitate the matter in any way. We consider it preferable not to express a view given our comments which follow.
It will be clear from what we have said so far, that we do not consider that his Honour’s conclusion that the assets of the Trust should be treated as the assets of the husband can be supported on the basis of his findings, nor indeed on the basis of any of the evidence before him to which we have been referred.
In these circumstances it would be impossible for us to re-determine the matter to reach the same conclusion as his Honour. On the evidence to which we have been referred, the best that we could do would be to determine that the Trust is a very significant financial resource for the husband. (This is particularly so given that the only available valuation is of the Trust as a whole and not of the husband’s “rights” in the Trust.)
However, the submission clearly made on behalf of the wife, and certainly suggested in the written submissions on behalf of the husband, was that if we found his Honour’s finding that the assets of the husband could not stand, then there would have to be a retrial.
We would have preferred to have avoided inflicting the costs and trauma of a new trial on the parties. But as will be seen from the discussion which follows of other matters, it is as a consequence both of the success of the appeal in relation to the assets of the Trust, and also the success of other complaints raised by the husband on the appeal, which make a new trial inevitable. At that retrial the question of whether the assets of the Trust are the assets of the husband or only a financial resource available to him will have to be determined on the basis of the evidence then available.
Other issues relating to the parties’ property
Before considering further complaints made by the husband in relation to his Honour’s determination of the parties’ property, it will be useful to consider the relevant passages in his Honour’s reasons.
Having set out a history of the parties’ relationship prior to separation (in paragraphs 2 to 17 of his reasons) and before considering their respective positions following separation, his Honour said:
18.I am able to say that the assets of the parties and the value attributable to them have been agreed upon between the parties. I refer to and incorporate in these my reasons a document headed “Contended for and on behalf of Wife”. There are two differences. One where it is necessary to add back an extra amount of partial property settlement paid to the wife of some $6,800 and to increase the wife’s Westpac liability from $55,000 to $59,000.
Then later after his discussion and determination of issues relating to the husband’s control of the Trust, his Honour continued:
63.I have referred to a document which has been put before me and which I now incorporate in full.
ASSETS
VALUE
[Fourth property acquired by the parties] registered in the joint names of the husband and the wife and subject to a mortgage liability to the ANZ Bank. Value as agreed
$750,000
2002 Mazda Motor car in the Wife’s possession
$15,000
Furniture/Artwork in the possession of the Husband – valued by joint expert … of LMW Valuers – date of valuation 26 July 2006
$32,525
Furniture and Chattels in the possession of The Wife – Valued by joint expert … of LMW Valuers – date of valuation 26 July 2006
$39,000
The Husband’s shares in the company AB Pty Ltd – Valued by [Mr R] as at 30 June 2009
$66,413
The Husband’s beneficiary loan account balance with the Harris Family Trust – valued as per [Mr R’s] valuation as at 30 June 2007
$4,000
Husband’s bank account balances – now revised
$3,775
Addback of partial property division previously paid to the Wife and agreed between the parties at the time of payment to be treated as partial property settlement
$25,000
+$6,000
The net assets of the Harris Family Trust valued by [Mr R’s] as at 30 June 2007
$1,500,000
Sub Total
$2,435,713
LIABILITIES
AMOUNT
Joint mortgage indebtedness of the Husband and Wife in respect of the mortgage liability secured by the K property
$403,000
Wife’s Westpac liability less $23,000 borrowed – used to pay for a car for [Mr D]
$55,000
$59,000
Wife’s current Visa card liability
$25,000
Husband ANZ personal loan liability (not including amount borrowed for legal fees)
$25,000
Sub Total
$508,000
SUPERANNUATION
VALUE
Wife’s interest in Sunsuper Fund
$2,000
Wife’s interest in AXA Fund
$22,000
Wife’s interest in[HA Superannuation Fund] as per [Mr R’s] latest valuation report of 22 October 2009
$1,089,538
Husband’s interest in Sunsuper Fund
$11,802
Husband’s interest in [HA Superannuation Fund] as per [Mr R’s] latest valuation report of 22 October 2009
$1,207,127
Sub Total
$2,332,467
TOTAL
$4,260,180
TOTAL (IF TRUST NOT INCLUDED)
$2,760,180
64.You will note I have already referred to the increases of $6000 to the partial property division and increased the Westpac liability of the wife from $55,000 to $59,000. This would then seem to indicate to me with my notoriously inaccurate maths that the total, if the trust was included, now comes to $4,269,180.
With respect to his Honour, it seems to us that when an amount of $6,000.00 is added and $4,000.00 is deducted (being $59,000.00 - $55,000.00) from the total shown in the first column, the figure should be $4,262,180.00.
At the conclusion of his reasons when considering the assets which each party should receive or retain, his Honour said:
75.I might just touch upon the Westpac liability. This was brought about as a result of her purchasing a company car for [Mr D] to whom I have referred and for other living expenses as well as assisting the children. She also has a current Visa card liability which she says she has been using basically for living expenses. Consequently, I will order that the amount of $2.4m be made available to the wife in the following manner:
·The net proceeds of the sale of the former matrimonial home together with the balance to be split from the husband’s share to make up the amount that I have ordered.
·Secondly, there must be set off the amounts to which I have referred hereinbefore.
76.The order of the Honourable Justice Jordan of 26 May 2008 indicates that there are certain matters which I should take into consideration and determine. They are set out in 6(a), (b) and (c). I am of the opinion that the wife is entitled to the refund of the income tax. (I think that may have been paid, I am not sure). According to 6(b) it is to be characterised by the judge. I think that she is entitled to that and there should be no deduction or addition in any way whatsoever.
The husband complained in Ground 8 of his grounds of appeal that his Honour had erred in failing to “add-back” into the “assets pool” seven items of property of the wife. However at the hearing of the appeal, Counsel for the husband only pressed this ground in relation to the following three items:
·“the Wife’s refund of income tax” (Ground 8(a));
·“the Wife’s Westpac loan applied towards the payment of her credit card debt incurred [sic] the payment of legal expenses and costs of a third party and for contribution to her own legal expenses” (Ground 8(f)); and
·“the funds removed by the Wife from [the parties’ superannuation fund]” (Ground 8(g)).
We mention at this point that it has been extremely difficult for us to consider the complaints regarding these three matters because it appears from the transcript of the final addresses to his Honour, and also from paragraph 18 of his reasons, that he had before him written submissions, or at least schedules of property, which he was able to discuss with Counsel, but which have not been made available to us. We note also that no documents in the nature of case outlines are available to us in this matter. Furthermore, because of time constraints, Counsel for the husband did not address us orally about these complaints, but rather relied on his supplementary written submissions.
The first item of complaint by the husband, being the wife’s tax refund, had been the subject of the following notation to orders made by consent by Jordan J on 6 May 2008 (that is, well over a year before the trial before Bell J):
IT IS NOTED
6a. That the Husband and the Wife acknowledge and agree that the Wife is to receive her refund of income tax from the Commissioner of Income Tax in the sum of approximately $26,000.00.
b.That the refund of income tax of approximately $26,000.00 is to be characterised by the trial Judge.
c.That the payment of $1,000.00 per week is to be characterised by the trial Judge.
There was evidence from both parties about this tax refund (as is recorded in paragraph 1.4 of the appellant’s supplementary submissions to us). But for the reasons earlier indicated, their final submissions to his Honour in relation to this matter are unclear to us.
However, his Honour can be seen as making a determination about this matter at the conclusion of his reasons at paragraph 76, with that determination being that the wife should not have to account for the tax refund monies in any way. It is, of course, true as was submitted by Counsel for the wife, that this was a matter within his Honour’s discretion (see paragraph 27 of Counsel’s written submissions). But in the absence of his Honour providing any reasons for his determination in relation to this matter, we cannot be certain that his discretion has not miscarried, and thus Ground 8(a) has substance.
In relation to the third item complained about by the husband, being the wife’s withdrawal of $20,000.00 from the parties’ superannuation fund, there was evidence before his Honour about this matter (as is recorded in paragraph 1.12 of the appellant’s supplementary submissions). But again for the reasons we have indicated, it is difficult to ascertain what was finally put to his Honour about this matter, although it would seem that a concession may have been made by Counsel then appearing for the wife that $6,800.00 of the superannuation fund “should be added back” (Transcript, 28 October 2010, p 90, line 22).
His Honour certainly did not refer in his reasons to the wife’s withdrawal from the superannuation fund. Nevertheless, we cannot discount that the additional figure of $6,800.00 which his Honour referred to in paragraph 18 of his reasons and/or the figure of $6,000.00 referred to in paragraph 64 of his reasons and which he then included in the calculations of the total value of the property, do not relate to this matter.
Given the lack of certainty concerning his Honour’s treatment of this item, Ground 8(g) must also be regarded as having substance.
The second complaint pursued by the husband in the present context relates to the wife’s borrowings from Westpac which his Honour ultimately treated as a liability of $59,000.00, and also, it would seem, to her Visa credit card liability of $25,000.00. It appears from paragraph 75 of his Honour’s reasons that he concluded that apart from using these borrowings to buy a car for a Mr D, the wife had used them for living expenses and to assist the children.
It emerges from Ground 8(f) as drafted and then from supplementary written submissions of Counsel for the husband (paragraph 1.11), that the husband contends that the borrowings in question were used to pay legal fees, and thus should be treated as an asset of the parties on the basis of the decision in Omacini & Omacini (2005) FLC 93-218. However, the evidence relied on in the husband’s submissions indicates that the legal fees in question were incurred by the parties’ children and were not the wife’s own legal fees. Thus, they would not be within the scope of Omacini.
The husband’s submissions also appear to suggest that had the wife not spent the sums in question, those sums would “have remained an asset of the parties” and “should be regarded as a premature distribution of matrimonial assets”. We have difficulty understanding that submission given that the sums in question were borrowings. Accordingly, we find no substance in Ground 8(f).
However it is the success of Grounds 8(a) and (g) which further fortify us in our decision to order a new trial.
The contribution assessment and s 75(2) adjustment
Given our conclusion that his Honour’s decision to include the value (at $1.5 million) of the assets of the Trust in the assets of the parties cannot stand, his Honour’s assessment of the parties’ contributions to that property clearly cannot stand. The parties’ contributions will have to be reassessed once the issue of “ownership” of the assets of the Trust is re-determined.
We do, however, consider that we should make the following observations regarding his Honour’s contribution assessment. We have earlier (at paragraph 40) set out paragraph 66 of his Honour’s reasons in which he concluded that he would have assessed the parties’ contributions as equal were it not for the monies which the wife inherited from her parents and put into the business of the Trust and into the parties’ fourth home. However, we consider that there is much force in the husband’s complaint contained in Ground 9 that in so doing his Honour would appear not to have given adequate weight to the contribution of the business itself by the husband and his parents.
Again given what we have concluded about his Honour’s contribution assessment, the adjustment he made in the wife’s favour on account of s 75(2) matters also cannot stand.
The spousal maintenance order
The first complaint made by the husband in relation to the spousal maintenance order made by his Honour in favour of the wife appears to be that his Honour should not have dealt with her application under s 44(3) to institute spousal maintenance proceedings out of time at the same time as he determined the final property settlement proceedings.
Counsel for the wife was able to draw our attention to the orders made by consent on 6 May 2008 which provided for the maintenance application (including the issue of leave under s 44(3)) to be consolidated with the s 79 property proceedings. Accordingly, there can be no substance in this particular complaint by the husband.
We do, however, consider that there is some substance in the husband’s complaint concerning the grant of leave to the wife to institute spousal maintenance proceedings, and that there is even greater substance in the complaint about the making of the order itself in circumstances where by way of property settlement the wife was to receive 65 per cent of assets valued by his Honour at over four million dollars.
We are particularly concerned that his Honour appears to have determined to make the maintenance order at an early stage of his judgment (paragraph 27), well before he had determined the value of the property to be divided or the percentages in which it was to be divided. We note in this regard that s 75(2)(n) requires the Court when exercising jurisdiction under s 74 to make an order for spousal maintenance, to take into account the terms of any order made or proposed to be made under s 79 with respect to property (see Anast and Anastopoulos (1982) FLC 91-201 at 77,062; Clauson and Clauson (1995) FLC 92-595 at 81,907).
Again, however, it is unnecessary for us to say more about these matters as the wife’s applications under s 44(3) and s 74 will need to be re-determined in the context of the new trial in which the value of the parties’ property will be re-determined.
Costs
Having regard to submissions made at the conclusion of the appeal, we propose to order that there be no order for costs in relation to the appeal. We also propose to order that each party receive certificates under the Federal Proceedings (Costs) Act 1981 (Cth) both in relation to the appeal and the new trial.
Thackray J
I have had the considerable benefit of reading in draft the judgment of Finn and Strickland JJ. I agree with the orders they propose and with most of the reasons they have given.
Their Honours have found merit in Ground 8(g), which relates to the proposed add-back of $20,000 removed by the wife from a superannuation fund. I am unable to agree there is any substance in the husband’s complaints on this topic.
I accept the submissions of Counsel for the wife that the inclusion of this
add-back in the asset pool was not pressed by the husband at trial. It was on this basis that Counsel for the wife agreed at trial that the figure of $6,800 (referred to in paragraph 18 of his Honour’s reasons) should be added back. (Transcript, 28 October 2009, at pages 90 and 133).
The only difficulty I perceive with the trial Judge’s reasons on this topic is what I accept is a typographical error in the asset table included in his Honour’s judgment. That error is then repeated in paragraph 64 of the reasons, in which his Honour sought to explain the table. It appears the figures were not checked, as the paragraph also contains another obvious typographical error (the figure of $4,269,180 should have been $4,262,180, as Finn and Strickland JJ have noted).
In my view, any possible merit in Ground 8(g) would be limited to the consequences of the typographical error which favoured the wife to the extent of just a few hundred dollars – which is, of course, de minimis. I do not accept it was open to the husband to seek to agitate on appeal the whole of the $20,000 add-back when that was not pressed at trial.
Finn and Strickland JJ have also said there is much force in the husband’s complaint in Ground 9, which relates to the assessment of contributions. They have referred in particular to his Honour’s failure to give “adequate weight to the contribution of the business itself”. The difficulty his Honour faced in giving weight to that contribution is there was no evidence of the value of the original business, in circumstances where that business was an entirely different enterprise to that which existed at the time of trial. This does not, of course, mean that the contribution of the original business should be ignored.
I agree it was an important matter to be taken into account when determining what weight should be given to the inheritance received from the wife’s family.
I certify that the preceding one hundred and seven (107) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Thackray and Strickland JJ) delivered on 22 December 2011.
Associate:
Date: 22 December 2011
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