Hien & Chien
[2021] FedCFamC2F 111
•29 September 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hien & Chien [2021] FedCFamC2F 111
File number(s): CAC 2913 of 2020 Judgment of: JUDGE W J NEVILLE Date of judgment: 29 September 2021 Catchwords: FAMILY LAW – interlocutory application to set aside earlier consent Orders – Applicant Husband contends that the Wife suppressed evidence at the time of the consent Orders regarding her intention to sell the former marital residence – documentary evidence provided by the Wife and under subpoenæ issued by the Husband confirm that the Wife decided to sell the property some 2-3 months after settlement after spending significant funds on renovations on the advice of estate agents – a price higher than the valuation of 18 months earlier was obtained – in fact the Husband obtained his own valuation six months after the Wife’s valuation which showed the property had increased in value – the Husband never disclosed this later valuation either to the Wife or to the Court until just before the hearing in response to the Wife’s solicitor seeking discovery of any such valuation – Husband’s duty to the Court in such Applications to provide full and accurate evidence – Husband failed to establish that the Wife had suppressed evidence plus the Wife had strongly disproved such contentions – Application dismissed with an Order for costs in her favour. Legislation: Evidence Act 1995 (Cth), s 118
Family Law Act 1975(Cth), ss 45A(2) and (3), 75, 79, 79A(1)(a)
Cases cited: Barker v Barker (2007) 36 Fam LR 650
C v Commonwealth (2015) 234 81; (2015) 327 ALR 195
Ebner & Pappas (2104) FLC 93-619
Gebert & Gebert (1990) 14 Fam LR 62; (1990) FLC 92-137
Giannarelli v Wraith (1988) 165 CLR 543
Gitane v Velacruz (2008) 39 Fam LR 460
Gollings v Scott (2007) 37 Fam LR 428
Lane & Lane (2016) FLC 93-699
Lindon v Commonwealth (No.2) (1996) 136 ALR 251
Patching & Patching (1995) 18 Fam LR 675; (1995) FLC 92-585
Pearce & Pearce [2016] FamCAFC 14
Prowse & Prowse (1994) 18 Fam LR 384
Ritter & Ritter [2020] FamCAFC 86
Rondel v Worsley [1969] 1 AC 191
Smith & Smith (1991) 15 Fam LR 706; (1991) FLC 92-261
Spencer v Commonwealth (1907) 5 CLR 418
Spencer v Commonwealth (2010) 241 CLR 118
Three Rivers District Council v Governor and Company of the Bank of England (No.3) [2003] 2 AC 1G. Dal Pont, Lawyers’ Professional Responsibility (Sixth Edition) (Sydney: Lawbook Company, 2017)
Division: Division 2 Family Law Registry: Canberra Number of paragraphs: 160 Date of hearing: 16 June 2020 Counsel for the Applicant: Mr C Othen Counsel for the Respondent: Mr N James Solicitor for the Applicant: Farrar Gesini Dunn Solicitor for the Respondent: Robinson + McGuinness ORDERS
CAC 2913 of 2020 FEDERALCIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR HIEN
Applicant
AND: MS CHIEN
Respondent
ORDER MADE BY:
JUDGE W J NEVILLE
DATE OF ORDER:
29 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.The Initiating Application, filed 21st December 2020, be dismissed.
2.Absent any Application regarding indemnity costs being filed within 14 days, within 28 days, the Applicant is to pay the Respondent’s costs, either as agreed or taxed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Hien & Chien has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE WJ NEVILLE:
Introduction
On 2nd June 2020, this Court made final Orders by consent (“the June 2020 Consent Orders” or “the Consent Orders”) in relation to both parenting and property matters. Under the final property Orders, the Wife received, among other things, what is described in those Orders as the Suburb B property. Under the same Orders, the Husband received two properties, described as the Suburb C and Suburb D properties. To speak in general terms, there was a quite modest superannuation splitting Order in the sum of $65,000 in the Wife’s favour from the Husband’s PSS fund.
Again to speak in general terms, for the purposes of settlement discussions between the parties, there was a valuation of the Suburb B property, which the Wife obtained in 2019 and which indicated its value to be $900,000. A copy of the valuation is Annexure B to the Husband’s Affidavit, filed in 2020.
In 2020, the Husband filed an Initiating Application in which he sought Orders, in the first instance pursuant to s.79A(1)(a) of the Family Law Act 1975 (Cth) (“the Act”), that Orders 27 and 28 of the June 2020 Consent Orders be varied, and that, pursuant to s.79 of the Act, Orders be made whereby the Husband receive 53.5% of the non-superannuation property, and the Wife receive the balance. Some consequential Orders were also sought, including, almost as a de rigueur order, for the Wife to pay the Husband’s costs. Such Orders would result in the Wife paying the Husband an additional $117,000.00 over and above the operative effect of the June 2020 Consent Orders.
It is as well to note at the outset the following comments in Pearce & Pearce, where the Full Court said, at [34] (internal citations omitted; emphasis added):[1]
In Gebert and Gebert, this Court, in the context of a s 79A application, held that “... the law fortunately still allows persons to form their own views as to the arrangement of their affairs”. More recently, the High Court has held that “[i]f both parties are competent, it can still be assumed that any necessary or desirable adjustments can be made to their property interests consensually”. The well-settled proposition that “... [a]greement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice”, derives from these precepts. Of course, “... [t]here may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice”. It has been said that “[o]rdinarily, a failure to comply with that duty will amount to a miscarriage of justice”. Equally, however, “[i]t is not every failure of frank and full disclosure which would justify a court in setting aside an order ...”.
[1] Pearce & Pearce [2016] FamCAFC 14.
Section 79A(1)(a) is in the following terms:
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance …
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The Wife opposes the relief sought by the Husband. She seeks that (a) the Husband’s Application be summarily dismissed (pursuant to, among other provisions, s.45A of the Act), or (b) the matter be determined at a preliminary hearing to determine “the s.79A threshold test”, or (c) if the summary dismissal Application is not granted, the Husband pay $15,000 to the Wife by way of security for costs. Like the Husband, the Wife seeks an Order for costs. Somewhat curiously, the Wife has advised the Court recently that she no longer presses her Application for security for costs.
Quite summarily, at its highest, the gravamen of the Husband’s Application turns on possible inferences arising from the Wife selling the former marital residence, known as the Suburb B property, a few months after the property settlement for a price above what the agreed valuation had stated earlier the previous year.[2] As earlier noted, the Wife obtained the Suburb B property (but not the dog E who resided there: see Order 29(a)) as part of the consent Orders of June 2020, while the Husband retained the so-called Suburb C and Suburb D properties. The Husband’s case was founded, in effect, upon his suspicion that the sale of this property was “in the works”, so to speak, perhaps before or at the time the Consent Orders were entered into in June 2020. If that was the case, this information should have been disclosed to the Husband. Subject to what is said later in these reasons, the Husband said (as noted below) that if he had known of such a sale he would not have settled the matter on the terms set out in the Consent Orders.
[2] The requirement to take the Applicant’s evidence “at its highest”, is not in dispute. Among many authorities, see Ritter & Ritter [2020] FamCAFC 86 at [66]. The Full Court in Ritter noted in the same place that this requirement is subject to that evidence being “inherently incredible or unreliable.” In this case, as the unfortunately repetitive reasons here make plain, the Husband’s evidence was largely non-existent, or of such inherently poor quality or otherwise non-existent, and so strongly refuted by the Wife’s documentary evidence from third parties (among others), in my view the so-called exception referred to by the Full Court was here readily made out.
In Gitane v Velacruz, the Full Court said, at [17(ii)] (emphasis added):[3]
… an applicant for an order under s 79A(1) bears the onus of satisfying the court that the original orders should be set aside or varied, and that includes the onus of satisfying a court not just that there has been a “miscarriage of justice” but also that the appropriate exercise of the discretion is to so order.
[3] Gitane v Velacruz (2008) 39 Fam LR 460.
In my view,
(a)the Husband relied upon the Wife’s valuation that was obtained in March 2019, some 9 months or so prior to his offer of settlement to the Wife in January 2020, and some 15 months or so before the settlement and consent Orders in June 2020. In my view, it would almost border on remarkable (if not astonishing) if there was not some movement (including not insignificant movement) in the variables and market forces in play, and ultimate valuation and/or sale price, so long after the original valuation;
(b)valuations are based on a range of fluctuating conditions that are generally known at the time of the valuation but which are likely to change over time. By definition, valuations are usually “best estimates” across or within a certain possible “range” of prices, based upon a range of variables, including various market factors, all of which may and usually will change over time;
(c)Courts have recognised that there can be significant, even large, fluctuations in property valuations. Such comments are usually in terms like “wide differences between legitimate valuations”.[4] In Spencer v Commonwealth, two of the High Court Justices noted the difficulties that attend valuations this way. First, Barton J said (at p.435) (emphasis added):
[4] See, for example, the venerable decision in Spencer v Commonwealth (1907) 5 CLR 418 passim; and Smith & Smith (1991) FLC 92-261 at p.78,759 where the Full Court set out a number of observations about the hazards and difficulties regarding valuations that arise from “frequent and marked variations in the property market.” The Court also referred to valuations in property proceedings as being a “difficult and at times hazardous task” which “is likely to have a significant effect for better or worse on the fortunes of the parties.”
As in most cases of the kind, the witnesses, called as experts in land values, presented a view for each side difficult to reconcile with that for the other. The differences were upon a matter in which the worth of opinion, and not the degree of truthfulness, was in question.
(d)In slightly more detail, Isaacs J said (at p.442), quoting from an earlier Privy Council decision (emphasis added; internal citation omitted):
“It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at."
(e)This is also to say that valuations necessarily involve a certain degree of expert assessment which can frequently involve a very wide range of variables (indeed “guesswork” as indicated by Isaacs J in Spencer v Commonwealth). Almost by definition, they are necessarily somewhat imprecise (an “imprecise science” is the term of art sometimes used) and are usually considered to involve a range or spectrum of views regarding the range of possible prices. Sometimes the range can be quite small; sometimes rather wider even for a “fair market value” based on what a willing but not anxious purchaser would likely pay to a willing but not anxious seller of the property;[5]
(f)In his Affidavit (details are set out later in these reasons), the Husband effectively insinuates that the Wife had somehow abused her position based on the difference between the March 2019 valuation and settlement in early June 2020 when the consent Orders were finalised and made by the Court. Among other things, the Husband takes no relevant account of the multiple other variables associated with property market valuations, and similarly, the multiple other variables associated with fluctuations of property prices, in this instance over a period of approximately 15 months or more;
(g)Further, the Wife has provided significant contemporaneous documentary evidence to confirm that she made no decision to sell the Suburb B property prior to mid-August 2020, two and a half months after the Consent Orders were made. She also provided contemporaneous records of spending in excess of $50,000 to update and repair the property. This was on the advice of real estate agents who advised her that if she did this, she was more likely to obtain a significantly higher sale price;
(h)The Husband says that he would not have resolved the matter on the basis of the terms that became the Consent Orders in June 2020 if he had known about the intended sale of the Suburb B property. He provided no evidence that he ever communicated such views to the Wife. Nor did he provide any other evidence in support of his Application under s.79A, which proceeded only on the basis of a presumed, possible adverse inference against the Wife and when her intention to sell was formed. Subject to what is said later in these reasons, to make inquiries about a possible sale, as the Wife started to do in July 2020, does not, without more, equate to forming an intention to sell the property;
(i)The many variables noted or alluded to above, even without other matters recorded later in these reasons, in my view, are enough to confirm that the Applicant has not relevantly discharged the onus he bore, as stated in many cases, including by the Full Court in Gitane v Velacruz, in relation to establishing that there has been a miscarriage of justice for the purposes of s.79A(1)(a). The “other matters” just adverted to set out below give even greater weight to, and additional grounds for, refusing the Husband’s Application.
[5] Spencer v Commonwealth (1907) 5 CLR 418 at 432 (Griffiths CJ); at 436 – 437 (Barton J), and at 441 (Isaacs J).
Further, in addition to not relevantly establishing any miscarriage of justice, in my view and for the reasons that follow, taking his evidence at its highest, there is also insufficient evidence to warrant the exercise of any discretion under s.79A in the Husband’s favour. Indeed, if it ever came to it, such discretion should be exercised in the Wife’s favour because of the Husband’s failure to disclose to this Court (outlined below) important evidence regarding a later, higher valuation he obtained regarding the Suburb B property.
For the reasons that follow, the Husband’s Application to re-visit the Consent Orders of June 2020 under s.79A of the Act must be dismissed. Absent any Application within 14 days seeking indemnity or any other costs Order, within 28 days he is to pay the Wife’s costs either as agreed or taxed.
Husband’s Orders Sought
1.The Applicant Husband’s Application for the final property Orders dated 2 June 2020 to be varied be listed for final hearing on a date to be advised by the Court (estimated duration 2 days).
2.The Respondent Wife’s interim application contained in her Response to Initiating Application filed 12 March 2021 (“the Wife’s Interim Application”) be dismissed.
3.The Respondent Wife pay the Applicant Husband’s costs of and incidental to responding to the Wife’s Interim Application.
Wife’s Orders Sought
1.Pursuant to s.45A(2) of the Family Law Act 1975 the Applicant husband’s Initiating Application filed 23 December 2020 dismissed on the basis that:
a.The Applicant has no reasonable prospect of successfully prosecuting the proceeding, or
b.The proceeding is frivolous, or
c.The proceeding is an abuse of the process of the Court.
2.Further, or in the alternative, pursuant to Rule 13.10 of the Federal Circuit Rules 2001 the Applicant husband’s Initiating Application be dismissed.
3.That the Applicant husband pay the Respondent wife’s costs of an incidental to the proceedings on an indemnity basis.
4.In the event the Court does not make an order pursuant to paragraph 1 or 2 herein, that within 21 days the husband pay the sum of $15,000 into the trust account of Robinson + McGuinness by way of security costs pending a hearing of the husband’s application filed 23 December 2020.
Outline of Applicant’s evidence
The focus of the Husband appeared to be upon an alleged suppression of evidence by the Wife. He infers it – with the emphasis upon “infers” – from the following circumstances. Indeed, at par.6 of his Affidavit, filed 21st December 2020, the Husband said (emphasis added):[6]
Ultimately, I seek Orders that, as a result of Ms Chien’s failure to disclose relevant information in our negotiations and when the property Orders were made, the Property Orders be altered pursuant to s.79A(1)(a) of the Family Law Act 1975 (Cth).
[6] Unless otherwise indicated, all references to the Husband’s evidence will be to his Affidavit, filed 21st December 2020 (“the Husband’s Affidavit”).
Strictly speaking, the Husband contended that the Wife failed to disclose “relevant information” on two occasions: (a) in the course of the negotiations between them, and (b) when the consent Orders were made.
The Husband noted, by way of “background” (pars.7 – 10), that (a) it was the Wife who initiated the property proceedings, and that her Orders sought included sole occupation of the Suburb B property; (b) the Wife had obtained a valuation from an “independent property valuer”, which valued the Suburb B property as at 6th March 2019 at $900,000 (a copy of that valuation is Annexure B to the Husband’s Affidavit); (c) on 18th December 2019 the parties attended private financial mediation. For that purpose, the Husband said that he accepted the March 2019 valuation of the Suburb B property.
Under the heading “Ms Chien’s representations about the Suburb B property”, at pars.11 – 16, the Husband said that “the Suburb B property held great sentimental value” because the parties built it together. He did not specify whether the great sentimental value was mutually held by them both or only by him. In discussions with the Wife at the time of separation in 2018, he averred that she said that she wanted to keep the property and was opposed to selling it, among other things, so that she could provide a stable and familiar home environment for the children. He contended (at par.16) that the Wife “never represented to [him] that she intended on listing the Suburb B property for sale.” He said that in 2018, it was agreed between them that one of them would retain the Suburb B property. Those discussions were briefly outlined further at pars.13 and 14. It is sufficient for current purposes to record that no agreement was reached regarding the Suburb B property. The Husband deposed (par.14) (emphasis added): “… It later became clear to me that we would not be able to reach such agreement, and I decided that the best way to allow the children to spend meaningful and substantial time with myself and Ms Chien would be if we both remained living in the Suburb B property.” It is perhaps curious that the Husband determined, namely it was his decision, to remain living under the one roof with the Wife after separation. He does not say that the Wife agreed with this course that he had determined.
In any event, it is almost trite to note that discussion and agreement on some things, and lack of agreement on others, is completely common-place, particularly in family law litigation. This is also to say that the situation between the parties remained, in a number of respects, quite fluid, which is likewise a common-place feature of family law litigation.
The Husband deposed further that the Wife consistently sought sole occupation of the Suburb B property. The Husband said that he did not agree and only moved out of it on 6th June 2020. The Wife continued to reside at the property after that date. Again by way of observation only at this stage, “sole occupation” does not, of itself, import unconditional or permanent living arrangements.
The Husband further deposed (par.16) that in discussions with the Wife regarding settlement “she never represented to me that she intended on listing the Suburb B property for sale.” Again, such a statement is consistent with the Wife’s evidence that her decision to sell that property only emerged some time after the final Consent Orders had been made. The converse must also be true, namely, if no decision had been made, and equally (or even) no intention formed to sell, there is – logically and factually – nothing to communicate.
At par.17, the Husband confirmed that, settlement of the Suburb B property “was scheduled for 1 September 2020” on which date he transferred his interest in it to the Wife. Somewhat curiously, the Husband never referred to the fact that, under the terms of settlement, which became the Consent Orders of June 2020, settlement was originally meant to take place 42 days after the Orders were made, which would put settlement in approximately mid-July 2020. We only learn from the Wife’s evidence of how and why the delayed transfer of the property actually took place in September. This was another piece of the factual puzzle that was unfortunately not communicated by the Husband. In my view, the way par.17 is drafted, it is somewhat misleading. It stated: “Settlement of the Suburb B Property was scheduled for 1 September 2020. On that date, I transferred my interest in the Suburb B Property to Ms Chien.” It made no reference to the much earlier prescribed transfer time of the property – 42 days after the date of the Consent Orders on 2nd June 2020.
On 24th September 2020, for reasons not explained, the Husband was advised by his lawyer that the Suburb B property sold for $1.12 million. Thus the difference between the 2019 valuation and the sale price was $220,000. The Husband said (par.18) he was “shocked” by the sale. It is unclear if the Husband would have been equally as shocked if the sale had taken place perhaps six or twelve months after the Consent Orders. Nor is it clear if the Husband advised the Wife of any of his intentions regarding the two properties he obtained under the Consent Orders. He said, at par.18 without explanation: “I did not expect the Suburb B property to sell for some $220,000 more than the value attributed by Ms Chien’s valuation, particularly in such a short period of time after the Orders were made.”
The Husband here seems to elide, unfortunately without explanation or evidence, (a) why he was apparently surprised at the price fetched by the property, (b) why the three months after the Consent Orders in early June 2020, and the later sale, was considered to be “a short time”, (c) what the exact relevance was, for him, of it being “such a short time”, and (d) the discrepancy between the transfer date specified under the June 2020 Orders, being 42 days after the date of those Orders (in July), and the actual date of transfer in September. Indeed, even in his oral submissions (which have been further checked against the transcript of the hearing), the Husband never referred to the date of transfer under the 2nd June 2020 Consent Orders, transfer to take place 42 days later (in mid-July), and only made reference to the actual transfer of the property in September.
At par.19 the Husband deposed that he had instructed his lawyer on 25th September 2020 to make a settlement offer to the Wife that she make a payment to him to account for the sale price differential.
At par.20, the Husband confirmed that the Wife’s lawyer wrote on 12th October 2020 to advise that the Wife had undertaken “significant works on the Suburb B property” after the Husband had moved out. The Husband said that he was unaware of any improvements that the Wife had made. Why he would or should have been advised, or had any expectation to have been so advised, and the legal basis for same, of any such work was not explained. Presumably he would not accede to any similar inquiry by the Wife about improvements made to the properties he retained under the terms of settlement, namely the Suburb D and Suburb C properties. The Husband sought relevant particulars. These were provided in the Wife’s Affidavit, filed 12th March 2020.
Without getting too far ahead in the narrative, in the Wife’s reply Affidavit, with supporting documentation, she recorded the range of improvements and repairs (based, inter alia, on advice from the selling agent), together with an itemised list of payments that totalled $52,490.
Summarised, the Husband’s claims seem to be based – as a matter of evidence – upon the following matters:
(a)At par.22 of his Affidavit, the Husband asserted that the Wife “failed to disclose or otherwise suppressed relevant information in relation to the Suburb B property.” In the same place he continued (emphasis added): “I am unsure if Ms Chien formed the intention to sell the property prior to the property Orders being made.” The Wife confirmed in her material that she did not form any such intention until some time after the terms were signed and Orders were made by the Court, and some of the dust of litigation had settled;
(b)In the same paragraph, the Husband speculated: “… I am concerned that an offer was made on the property before the Orders were made, in the light of the short timeline between when the property was transferred out of my name and its subsequent sale.” Other than possible inference, the basis of such speculation is not identified;
(c)At par.23, the Husband averred, without any particulars, that at the time of signing, and the Court making, the Consent Orders “neither he nor the Court was in possession of all relevant material”. For the moment, this assertion or declaration could be read as to the Husband making a contention on behalf of the Court. Formally, I do not take it this way however imprecise the assertion is and the lack of evidence to support it (which also erroneously seeks to shift the onus of proof to the Wife to establish her bona fides);
(d)The Husband said (par.24) that if he had known that the Wife was going to sell the property he would not have consented to the Orders made in June 2020. He further contended that the Orders ultimately made “do not reflect a just and equitable alteration of our interests.” I need here only observe that it is not apparent, nor is there any evidence in relation to it, that any of this information regarding him wanting to know about any change in the Wife’s situation, was made clear by the Husband to the Wife. Certainly there is nothing about such a declaration or position, conditional about him signing the Orders, ever having been made.
Although not in his Application, rather improperly the Husband sought further Orders in his Affidavit regarding details of the improvements made on the Suburb B property by the Wife. As already noted, this was provided in the Wife’s Response Affidavit. Likewise, she has provided correspondence with the selling agent (among others) regarding the sale of the property, which details the Husband also sought. That correspondence is, in part, annexed to the Wife’s Affidavit, and in her Tender Bundle.
Outline of Respondent’s evidence
From the Wife’s Affidavit, filed 12th March 2020, the following matters may be outlined.
At par.11 of her Affidavit, the Wife confirmed that, under the agreement reached with the Husband, she retained the Suburb B property. She also confirmed that she wanted to keep it “in order to provide stability for the children [as the Husband had also deposed] and to stay in the property market.”
At par.12, the Wife said that, after the Consent Orders were made on 2nd June 2020 she “took stock of [her] financial position.” She noted, unsurprisingly, that her financial position had “diminished” as a result of the litigation. She said that she tried to assess the best way forward to maintain the Suburb B property, having regard to her income, expenses, the children’s needs, and “future expenses.”
At par.13, she noted that the Suburb B property is a “large 4-bedroom 2-bathroom home.” The Wife said that, reluctantly, she made the decision that it would be better for she and the children to move to a smaller home that was more affordable and required less maintenance. Having made that decision, she said that she wished to move as soon as possible so as to avoid paying the mortgage on it once it was transferred into her name under the Consent orders. She noted that the Husband had been making the mortgage payments of just under $3000 per month pursuant to interim Orders made on 22nd August 2019.
Under the June 2020 Consent Orders, the Husband was required to transfer the Suburb B property within 42 days of them, namely by 21st July 2020. However, due to the impact of the COVID-19 pandemic, the transfer of the property did not take place until 1st September 2020.
At par.17, the Wife confirmed that on 20th July 2020, she approached Agency E to obtain a building report in relation to the property. When persons from that Agency visited the Wife at the property the following day, they indicated that in order to maximise prospects at auction, certain works on the property would be necessary. A number of these items to fix, which included landscaping and decking, were set out here and later in the Affidavit.
At par.20, the Wife deposed and quoted from an email from Ms G from Agency F, dated 21st July 2020. That email stated:
After doing further research, we would expect a sale price in the vicinity of $1,025,000 to $1,075,000 to be achievable, however a price in excess of that range is a strong possibility as stock levels are currently low whilst buyer demand is high.
Next, the Wife deposed (par.21) that on 21st July 2020, Agency F conducted an onsite inspection. Summarily, without any of the works they proposed, they rated the property as “average.” If the “works” suggested were undertaken, they rated the property as “above average.” Relevant details of the correspondence between the Wife and real estate agents, taken from the Wife’s Tender Bundle provided at the hearing, is set out below
At pars.22 – 24, the Wife outlined that for the 2 years or so that the parties lived separated but under the one roof, the Husband “stopped maintenance on the property.” There were also, she said, various works that remained unfinished since the property was built in 2008-2009. She said that, in order to reduce her costs, her parents and her brother assisted her regularly to help her get the property ready for sale, obviously after it was transferred into her name pursuant to the June 2020 Consent Orders. Her parents came every day, she said, to help with cleaning, replace lights, to fix bathroom accessories, and to run errands for various “tradies” who were working on the property. After a number of different inquiries, the Wife said that she was put in touch with a handyman, “Mr H”, who agreed to undertake certain works. He provided her with a general quote of $18,250 for said works. Ultimately, the Wife paid him $16,250. Copies of a SMS message (in different formats) is Annexure A to the Wife’s Affidavit. There were 11 different areas of work for Mr H. These were set out in par.26 of her Affidavit. I need not repeat them here.
What is particularly noteworthy about the contemporaneous correspondence with Mr H, is that it confirms the Wife’s account to Mr H of her desire/need, as a “single Mum” with 2 young children, to “downsize.” The contemporaneous note to Mr H also confirmed (long before the current Application by the Husband in December 2020) that the Suburb B property was “a little hard and costly to maintain. And cost being my major hurdle and sticking point.” She confirmed also to Mr H that she had a budget for the repairs and renovations because of “cost savings.”
At par.27, the Wife confirmed that on 20th August 2020, she engaged Agency F as her agents to sell the Suburb B property. Annexure B to this Affidavit is a copy of the contract with Agency F to so act on her behalf. As earlier noted, the transfer of the Suburb B property was delayed until 1st September from the original transfer date of 21st July. As from 2nd September, the Wife deposed, “stylists” started work on the property with the Wife and children moving to live with her parents. On 3rd September 2020, the property was listed for sale with agents J, following which there was a three week sales campaign.
The first open house inspection took place on 5th September (par.32). On 6th September 2020 the Wife received a pre-auction offer of $1,050,000. The Wife’s agents negotiated further to achieve an offer of $1,120,000, which the Wife accepted. Contracts were exchanged on 9th September 2020.
At par.35, the Wife outlined the matters and expenses she attended to prior to the sale of the property. Those matters totalled $52,490.
At pars.36 – 39, the Wife deposed that (a) she obtained (at her expense), in March 2019, the family law valuation of the Suburb B property (annexure B to the Husband’s Affidavit of 21st December 2020), (b) she received no offers to sell the Suburb B property prior to the Consent Orders being made on 2nd June 2020, and (c) nor did she obtain any (formal or informal) valuations or appraisals of the property prior to the Consent Orders being made on 2nd June 2020.
The Wife confirmed that, as far as she was aware, the Husband relied upon his own valuation of the property. Indeed, she confirmed that in February 2019, the Husband’s lawyers provided her lawyers with two appraisals of the Suburb B property, which gave selling price ranges, at that time of course, in one instance of between $970,000 – $990,000, and in the other, of between $850,000 – $910,000. These appraisals were not referred to in the Husband’s evidence.
Finally, the Wife confirmed (as at the date of affirming her Affidavit; pars.40 – 42) that she was then living with her parents, but had purchased a townhouse in Canberra suburb K for the sum of $710,000. Settlement had not, by then, taken place.
In addition to what has been said already, one comment should be made about the Wife’s Affidavit evidence. In my view, it is of some significance.
As recorded in [43] above, the Wife deposed that in February 2019, the Husband provided to her, via her lawyers, two appraisals. If it ever became necessary, the respective lawyers could be called to give evidence and copies of the appraisals “called for”, or provided, and admitted. Those appraisals included a selling price range for the Suburb B property of $970,000 to $990,000. The Wife’s evidence in this regard was never challenged. Curiously, perhaps, the Husband never referred to, or provided copies of, these earlier appraisals. Why he did not do so was never explained. In my view, this was an important oversight.
Accepting the difference between a valuation and an appraisal, nonetheless, why he relied upon the Wife’s valuation, dated one month after his slightly earlier appraisals, was also not explained or even commented on. In any event, with such unchallenged evidence from the Wife about the appraisals provided to her by the Husband, which could reasonably be taken at least to indicate a significant possible price range (including a potential sale price close to one million dollars), (a) the Husband could reasonably be taken to have some notice of a very wide price range for the property, and (b) as such, this would reduce the Husband’s claim (were it to be accepted) from a price differential between the Wife’s March valuation and the property’s sale in September 2020, from $220,000 to $130,000, the latter being the difference between his top February 2019 appraisal and the sale price seventeen months later in September 2020.
As confirmed in later submissions, the Husband was seeking payment from the Wife of $117,000. This was predicated upon the difference between the March 2019 valuation and the sale price in September 2020. If however, at any future hearing, the evidence supported the Husband’s earlier appraisal, the disparity would perhaps or likely result, on a best case scenario, of him receiving $65,000 under s.79 of the Act, being half the differential price (set out in the preceding paragraph) of $130,000. At any hearing regarding the property overall, having regard to all of the usual considerations in property proceedings more generally and the four-step process, it could not be said with any certainty on the evidence thus far that the Husband would actually get this sum, or that the amount he sought in his Application was perhaps, more likely than not, outside the usual “range” based on the Court’s exercise of its discretion.
Respondent’s documentary evidence
In addition to her Affidavit, the Wife provided a Tender Bundle for the hearing, to which there was no formal objection. It contained a series of contemporaneous email correspondence with, for example, her real estate agents in July and August 2020. Those emails confirm that:
(a)there were a range of recent property sales (circa mid 2020) in the general or surrounding area of the Suburb B property that had achieved prices in excess of one million dollars (details are provided in the documents referred to which I need not recount here);
(b)the Wife did not immediately commit to sell the property after the terms of settlement and Consent Orders were made on 2nd June 2020;
(c)the Wife confirmed to agents on 23rd July 2020 that she had still not decided whether to sell the property;
(d)significantly, on 10th August 2020, the agents inquired whether the Wife had yet made up her mind to sell the property;
(e)on 13th August 2020, approximately 2½ months after the Consent Orders were made, the Wife advised her real estate agent that she had committed to undertake work on the property (painting, tiling, etc). She advised the same agents that other real estate agents had been “knocking down her door” with substantial offers in relation to the property. In this email the Wife also confirmed that “every cent counts”, that she was doing everything she could “within her means”, and that she had “really stretched herself [financially]” in relation to the renovations and repairs; and
(f)the Wife put to the agents on 13th August 2020: “Maybe you could dazzle me with some brilliance in the interim to sway me?”
Subject to what is said later in these reasons, the contemporaneous material provided by the Wife clearly and concisely confirmed (a) her account of events, which included the fact that she had not committed to the sale of the Suburb B property until approximately mid-August (2½ months after the Consent Orders were made, as already noted) and (b) the sale price obtained in September 2020 was as indicated by her real estate agents, particularly after some updating work was done on the property.
It might also be said that if anyone was following or checking market property trends in the Suburb B area between mid-2019 (or even in February 2019 as the Husband clearly had done with the appraisals earlier referred to) and the sale of the Suburb B property in September 2020, the sale price achieved by the Wife would hardly come as a surprise, or perhaps more relevantly as some contrived result.
Applicant’s submissions
The Applicant Husband’s primary submissions, filed 11th June 2020, were as follows (footnotes omitted):[7]
[7] Although the Husband was the Applicant for the purposes of the s.79A Application, because the Wife sought to have it, in effect, summarily dismissed under s.45A of the Act, or that a threshold issue determined, by agreement, oral submissions were first made on behalf of the Wife, then by the Husband. For the purposes of these reasons, however, I have kept the order of submissions in accordance with the Husband being the Applicant.
APPLICANT’S WRITTEN SUBMISSIONS PRIOR TO INTERIM HEARING
(Filed pursuant to Orders 3(b) of the Orders dated 29 March 2021)
1. This is an interlocutory application brought by the Wife. On a final basis, the Husband seeks to vary final property settlement Orders made under s 79A of the Family Law Act 1975 by reason of there having been a miscarriage of justice (“s 79A Application”).
2. In the interlocutory matter, the Wife is seeking (as the Husband understands it):
a. Summary dismissal of the s 79A Application; and
b. If that is not granted, security for costs.
3. With respect to summary dismissal, the Court has power under s 45A(2) of the Family Law Act 1975 and/or rule 13.10 of the Federal Circuit Court Rules 2001 to summarily dismiss the Husband’s s 79A Application where:
a. The party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
b. The proceeding or claim for relief is frivolous or vexatious; or
c. The proceeding or claim for relief is an abuse of the process of the Court.
4. The Husband apprehends the application is brought only under ground (a) above.
5. The Husband intends to submit at the final hearing of the s 79A Application:
a. That the Husband and the Court were under a misapprehension as to the value of the family home at the time the final Consent Orders were made; and
b. That the final Consent Orders would not have been made if the Husband and/or the Court had known the true value of the family home.
6. In light of the above, the Husband respectfully submits that the s 79A Application has reasonable prospects of success and should be determined at final hearing.
7. The Husband will seek to supplement these submissions orally upon receipt of the Wife’s particularised claim.
8. Turning to the Application for security for costs, the Court has power to make such order as to security for costs as it considers just under s 117(2) of the Family Law Act 1975.
9. The relevant matters to be considered include:
a. The means of an applicant to satisfy an order for costs;
b. The prospects of success;
c. Whether the claim is made bona fide;
d. Whether the litigation involves a matter of public importance;
e. Whether there has been a delay in bringing the application;
f. Whether there would be difficulty in enforcing an order for costs;
g. The amount of the costs to be incurred.
10. The Husband opposes the application for security for costs and, adopting the above numbering, submits:
a. The Husband’s net worth excluding superannuation is approximately $520,000 and he earns an income of $2,540 per week;
b. The s 79A Application has reasonable prospects of success;
c. The s 79A Application is made bona fide;
d. The litigation does not involve a matter of public importance;
e. There was no delay by the Wife in bringing the application for security;
f. The Wife would face little difficulty in enforcing an order for costs; and
g. There is no evidence as to the likely costs to be incurred.
11. If the Wife’s interlocutory application is wholly unsuccessful, the Husband seeks his costs of the application on that basis.
12. On the understanding no final hearing would be available for some time, the Husband seeks the matter be allocated a Conciliation Conference. Otherwise, there is no further step to be taken pending final hearing.
List of Documents to be Relied upon
1. Initiating Application filed by the Husband on 23 December 2020
2. Affidavit of Mr Hien affirmed 21 December 2020
3. Financial Statement of Mr Hien affirmed 21 December 2020
4. Orders dated 2 June 2020
The Court sent some further questions to the parties on 22nd June 2020, approximately one week after the hearing. The Applicant responded by email dated 30th June 2020. Those responses on the Applicant’s behalf (including the questions posed by the Court) were as follows (emphasis in original):
1.Which documents in the Tender Bundle are intended to be tendered and relied upon? And by whom?
None of the documents in the Tender Bundle are sought to be tendered or relied upon by the Husband.
2.As requested at the hearing, what was the percentage division of property under the 2020 Consent Orders?
The matter resolved at mediation so no formal finding about this issue was made.
The major issue was that the Wife argued the equity in the property at L Street, Suburb C, registered in the Husband’s name, was the property of the parties. The Husband argued it was not. The Husband addressed this in paragraphs 19 to 25 of his affidavit dated 21 August 2019.
There were other disparities in terms of inclusion of bank accounts, and the value of things like trailers and landscaping equipment, but the Suburb C property was the major dispute between the ‘Husband’s pool’ and the ‘Wife’s pool’. Each party made concessions during the course of the mediation for the purposes of limiting the dispute around the composition of ‘the pool’.
Noting those limitations to a clear answer to this question and the significance of the Suburb C property issue:
a. On the Husband’s pool, the non-superannuation property was divided approximately 78% to the Wife and 22% to the Husband and the superannuation was divided 50% to the Wife and 50% to the Husband;
b. On the Husband’s pool, the ‘overall’ pool (including superannuation) was divided approximately 61.5% to the Wife and 38.5% to the Husband;
c. On the Wife’s pool, the non-superannuation property was divided approximately 35% to the Wife and 65% to the Husband and the superannuation was divided 50% to the Wife and 50% to the Husband;
d. On the Wife’s pool, the ‘overall’ pool (including superannuation) was divided approximately 42% to the Wife and 58% to the Husband.
3.Was it part of the Applicant’s submission that, in the event the Court determined that the June 2020 Consent Orders should be re-visited, any re-hearing would be confined only to the issue of the circumstances relating to the sale of the Suburb B property?
This application is confined to the issue of summary dismissal, but by way of clarification of the Applicant’s position as to any re-hearing, his application is premised on effectively a variation of the Orders to provide him with 53.5% of the ‘additional’ value of the Suburb B property [a sum of $117,700]. However, the Applicant’s Initiating Application filed in December 2020 is struck in broader terms, referring to a 53.5% division overall. The reason for that in simple terms is that he concedes the authorities make clear it is not for him to seek to fetter or limit the Court’s discretion under s79A to a particular item of property.
4.If such a hearing was to take place, how would it be so confined, including in relation to witnesses? Counsel for the Applicant seemed to suggest that it might be able to be confined to perhaps half a day? Is this correct? If not, what is apposite in the circumstances?
If the Court accepted that the hearing would be limited to the issue raised by the Applicant in the preceding point then it is currently anticipated the witnesses would be limited to the parties. The Applicant expects the evidence and the cross examination would be relatively confined. The Applicant suggests a trial plan of one hour for cross examination of each of the parties and one hour for submissions.
5.What, if any, consideration should the Court have to the High Court’s principles set out in AON v ANU (2009) 239 CLR 175 in the current Application?
This is a summary dismissal application of an application for relief under 79A of the Act. For the reasons argued before the Court, the Applicant submits the summary dismissal application is misconceived and should be dismissed, but the principles in the AON case are not relevant to that determination. Here, the statute permits the Court to set aside or vary orders if satisfied a ground is established under s79A and the Court, in its discretion, considers it appropriate to set aside or vary an order and make a new order in substitution. This is a legislative exception to the finality of the property adjustment order which has been made. The procedure for the determination of that application is affected by the decision in the AON case in the same way it is for all applications before the Court, but the fact that final orders have been made before is not related to the AON principles.
6.The following scenario would usually be given to the parties in open Court. The attenuated hearing last week militated against it. HH wishes it raised here to ensure that the parties are fully aware of a range of scenarios (accepting that lawyers would have presented similar information): (a) a worst case scenario is that, for example, having had one hearing, whatever the Court’s determination, one or either party appeals that decision; thus there is the initial cost of the Application, the time taken for the appeal (perhaps between 6 and 12 months) and the cost of the appeal. If the appeal is successful, the matter is usually remitted for re-hearing, which incurs further cost; (b) if the Court determines that the matter should be re-opened, there would be the further cost of the hearing regarding the Wife’s Application for security of costs (that determination could be appealed), then the hearing, possible appeal, then re-hearing if the appeal is successful. Each or all of these courses is known, colloquially as “a lawyers’ picnic” because, if the single focus is the proposed or purported extra funds arising from the later sale of the property (perhaps a maximum of $200k; it could be less if the Husband’s recently disclosed valuation is taken into account) the legal costs could potentially carve out close to half of the sum in question (perhaps more, perhaps less), thereby leaving a net pool of perhaps less than $100k. If this is all that is left, the Court presumably will be called upon to make a determination of what is “just and equitable” (presumably the Court will not be bound by whatever the parties agreed in June 2020). It may be that the Court could determine that the just and equitable division of whatever is likely to be left over is 50/50 (or some other figure).
The Applicant is well aware of these potential scenarios and, by means of the pre-action procedures, did his utmost to resolve the dispute on reasonable terms. If the Wife is prepared to confirm to the Court she will make a genuine attempt to resolve the dispute then the Husband proposes that after determination of the summary dismissal application (assuming the application is not summarily dismissed) that the parties be referred to a Conciliation Conference or external private mediation before the Court takes further steps to deal with the s79A application proper.
7.For more abundant caution, because if the matter is re-opened and considerations regarding property are re-visited, the Court may have to take into account parenting arrangements, therefore in a more simplified form, could the parties please confirm what the current parenting arrangements are.
The care arrangements are as set out in Order 3(b) and 7 of the June 2020 orders, namely the children spend time with the father:
During school terms, from 8.30am on Day 5 until 8.30pm on Day 8 in each 8 day cycle (approximately an equal time arrangement, 4 full days and 3 overnights out of 8)
For half of each school holiday period.
In oral submissions on his behalf, the Husband’s experienced Counsel noted the following, having had the benefit of the Wife’s oral submissions being given first.
Early in his submissions, Counsel referred to [124] in the Full Court’s decision in Barker (set out in full later in these reasons).[8] He drew attention in particular to the statement: “Where there is some intervening factor known to one party but not the other, this may lead to a result which is unfair and unjust and can be characterised as a flaw in the judicial process.”
[8] See Transcript (16th June 2021) p.12. Hereafter “T” followed by the page number.
Two matters should be noted here that were canvassed in the Husband’s oral submissions.
First, Counsel for the Husband agreed that the basic premise and foundation of his case was predicated upon an inference that the Wife had formed a view at some stage before the Consent Orders were made to sell the Suburb B property.[9]
[9] See T 13 – 14.
Secondly, Counsel confirmed that his instructors had issued subpoenæ to the Wife’s building inspector and real estate agent. Rather tellingly, and consistent with the Wife’s evidence, Counsel confirmed that “I can’t tender a document … which is the smoking gun which proves that this lady was making inquiries to sell the property with agents and so on prior to the Orders being made.”[10]
[10] T 14. Counsel for the Wife had earlier, similarly, referred to the fact that there was no “smoking gun” produced or provided by the Husband in the material produced under subpoena. See T 7.
In the same vein, there was the following exchange (emphasis added):[11]
HIS HONOUR: But my question was: the documents that had been returned pursuant to subpoena, they’re all post the date of the orders, are they not?
MR OTHEN: Yes. I understand that they’re consistent with what the respondent says in her affidavit as to the date she approached people. Obviously, we haven’t had an opportunity to call as witnesses the people who have been engaging with this lady, so it’s another matter – this is the problem: if the state of the evidence were as it is today at the conclusion of the trial we can have these exchanges. But we haven’t proved our case yet. We’ve done our best on what we had. The forensic process is still continuing and what I say to your Honour is that at the present stage of the matter you would be satisfied we’ve done better than no reasonable prospect.
[11] T 14 – 15.
Counsel for the Husband confirmed that his client’s case was founded upon the Husband’s suspicion about when the Wife formed an intention to sell the Suburb B property. Counsel said (emphasis added):[12]
… We are limited to whether there’s no reasonable prospect of establishing a miscarriage of justice in circumstances where my client suspects – and based on some reasonable circumstantial evidence we would say – suspects that the decision to sell was taken before the orders were made and that the respondent had the obligation to inform him of that…
[12] T 15.
Counsel for the Husband confirmed that the matter ultimately turned on “whether the Wife is telling the truth”. In the face of the Wife’s documentary evidence attached to her Affidavit, plus what was in her Tender Bundle, this was a remarkable submission. To succeed, the Husband would presumably need to show (among other things) that there was some sort of conspiracy by the Wife with her real estate agents, her handyman Mr H, and others, with whom she had concocted, and they had manufactured, evidence to support her case. This otherwise unsupported claim of lying was never made by the Husband in his Affidavit, presumably because he was sufficiently prudent and cautious not to accuse the Wife of doing so (and deposing so), and having no evidence to support such a serious allegation, other than his suspicion.
Counsel said that it was all about “the state of mind of persons.”[13] A little later in his submissions, Counsel referred generally to “some [inferred] bad faith in the negotiating” and that the Wife’s actions in selling the property occurred “straight after the Orders were made.” Given that the Court cannot know or be told anything about “settlement negotiations”, in my view, this was a most unfortunate, if not inapposite, submission, alluding to matters about which the Husband said nothing in his material, and about which the Court cannot be told. The evidentiary basis for making such a serious submission was not stated.
[13] T 15.
Counsel continued, relying upon the Full Court’s comments in Barker, saying (emphasis added):[14]
What Barker v Barker says is, as I say, first of all, if there’s one factor known to somebody and not the other before the orders are made, that could result in a miscarriage of justice.
The full court went on to say there may also be circumstances in which the judicial process could be impugned by a sale after orders were made and, in the absence of bad faith by either party or suppression of some relevant fact, if it led to a significant miscarriage of justice, well the full court doesn’t go into any further detail about what they mean about that, but certainly, it doesn’t appear to be the case that cases such as this are limited to people suppressing relevant evidence prior to orders being made- another reason that your Honour would be cautious to strike this out without a trial. So, your Honour, when your Honour is considering the matter, it’s certainly true that your Honour has to take my client’s evidence at its highest.
[14] T 15.
To repeat: based on the Husband’s own material, the highest to which his evidence rises, is only a possible “inference” and his own, unparticularised, “suspicion.” No other evidence is provided by the Husband in support of his claim and the very limited contentions he made.
Further, at this stage, there was no mention by the Husband, either in his Affidavit, in his written submissions, or in oral submissions, to the (a) the February 2019 appraisals, or (b) to the valuation he obtained in September 2019 that showed an increase in the value of the Suburb B property even over the period of six months between the March and September 2019 valuations.
Counsel pressed on with his submissions on behalf of the Husband. He contended (as noted earlier) that there may have been “some bad faith in the negotiating”, and that the Wife decided to sell her property “straight after Orders were made”, and “way above what either party thought it was worth.” He stated: “certainly, as a matter of fact, subject to cross examination, we could well get up.”[15] In my view, and in addition to what I have already said, the submissions regarding “some bad faith in the negotiating” (a) were never expressly made by the Husband, (b) nor were any particulars ever provided. I have significant concerns about the lack of evidence (and lack of particulars) in support of such a serious submission. Absent the specific formulation of such a claim in the Husband’s material, and relevant particulars provided well before the hearing, in my view, the submissions in this regard should not have been made.
[15] See T 16.
By way of observation only at this stage:
(a) as just noted, “bad faith” was never formally raised by the Husband on or in his material. Indeed, given that the highest to which his case ever rose was one only of inference and suspicion (the Husband’s words or those of his Counsel), he could not formally raise “bad faith” against the Wife on the material filed;
(b) to contend that the sale of the Suburb B property was “straight after Orders are made” was, doubtless, something of a rhetorical flourish that contained a degree of poetic licence. This is plainly so because it was not until 2½ months after the Consent Orders were made that the Wife still had not determined to sell the property – not “straight after” the Orders were made in early June 2020; and
(c) the reference to the sale price being “way above what either party thought it was worth” has multiple flaws, both factually and legally. For example, as is set out shortly, even by the time of the offer of settlement made by the Husband to the Wife in January 2020, as a result of his own “secret” valuation he obtained in September 2019, he knew that in the 6 months between March and September 2019 the property had increased in value, though he never provided the Wife with a copy of the valuation, or otherwise advised the Wife of this. It is therefore inaccurate to contend that both parties accepted the value of the property as at the date of the valuation in March 2019.
Further, why would not either party at least be wary of a March 2019 valuation at both the date of offer of settlement, and especially at settlement and the Orders in early June 2020, unless it suited one or other of them to accept that lower valuation? A fortiori must this be the case when the Husband had provided even higher appraisals in February 2019 that put him (and the Wife) relevantly on some notice of the potentially higher price the property could attract.
The Husband’s submissions were directed by the Court to what was described as “the bottom-draw valuation … in September 2019.” The Court inquired what the duty was of the Husband in relation to it. The response was simply that because it was a privileged document, brought into existence for the purpose of litigation, it did not need to be disclosed.[16] For the moment, accepting this proposition to be correct, it rather put a quite different understanding upon the ongoing principle, under the Rules of Court, and according to authority, of the requirement of ongoing, full and frank disclosure, and the duty (by parties and their legal advisers) in the current proceeding, to provide all relevant evidence to the Court.[17]
[16] T 17.
[17] There was no reference at any stage of the current litigation to s.118 of the Evidence Act 1995 (Cth) regarding the import, scope, and operation of that section regarding “advice privilege” in relation to the Husband’s September 2019 valuation.
Counsel for the Husband contended that people needed evidence about why they reach agreements. Accordingly, it was said that the subject of the Husband’s September 2019 valuation, and whether there had been any deliberate misleading (presumably including of the Court), would or should be the subject of cross examination.[18] I pause here simply to note that in submissions on behalf of the Wife, her Counsel confirmed that the September 2019 valuation only came to light the day before the hearing on 16th June 2021 as a result of the Wife’s solicitors writing a few days earlier to the Husband’s lawyers seeking discovery of any valuation or appraisal of the Suburb B property.[19]
[18] See T 17 – 18.
[19] See T 4 – 5.
In my view, subject to what is said later in these reasons, whatever purpose motivated the Husband to obtain a later valuation in September 2019, none of that altered the ongoing duty owed by the Husband and his lawyers to ensure that all relevant evidence was put before the Court in the current Application.[20] The fact that this valuation only came to light after the Wife’s lawyers sought discovery, and immediately prior to the hearing, only adds to the serious concern, if not significant disquiet, of the Court about this apparent concealment of evidence and lack of candour before the Court. In my view, the later valuation should have been disclosed by the Husband in his Affidavit material. In the face of this unfortunate and significant failure of duty, it makes the Husband’s contentions about possible mala fides on the Wife’s part, which would have to be inferred in any event because no “smoking gun” was found (in fact, the evidence is all to the contrary), seem even weaker than the evidence itself. The suggestion by Counsel that the Husband’s failure to put all relevant evidence before the Court could be remedied in some way by cross examination was, respectfully, inappropriate. In fact, it could (subject to evidence, submissions, and any findings the Court might make), ultimately, result in the Husband facing very difficult questions, on many fronts.[21]
[20] The fundamental duty to the Court is “over-riding” and “paramount”, Giannarelli v Wraith (1988) 165 CLR 543 at 555-556 (Mason CJ). See also the long-standing principle set out by Lord Reid in Rondel v Worsley [1969] 1 AC 191 at 227 regarding the over-riding duty to the Court. Under standard practice Rules (national and local), there is an unfettered duty of complete candour in the presentation of facts. So well-known is this duty, and the legal profession Rules (and cases that have applied them), it is unnecessary to set them out. Many of them are conveniently collected in standard works such as G. Dal Pont, Lawyers’ Professional Responsibility (Sixth Edition) (Sydney: Lawbook Company, 2017) Chapter 17 “Duty to the Court.”
[21] In property matters generally, there is a very wide discretion exercised by the Court. It has already been noted that in Applications under s.79A of the Act, the Court must also exercise its discretion. Given what has already been said regarding the conduct of the parties, in my view it is unnecessary to consider, for the purposes of the Court’s exercise of its discretion, some basic maxims of equity, such as, “those who seek equity must do equity”, and “those who come to equity must come with clean hands.”
To return to the Husband’s oral submissions, again Counsel posited the proposition that the Wife sold the Suburb B property “very promptly after the Orders were made.” It is otiose to indicate, again, that “promptly” could not reasonably be an appropriate descriptor regarding the sale. The sale did not take place until late August or early September 2020, some 2½ or so months after the Consent Orders were made. Fairly and properly, Counsel confirmed the following (emphasis added):[22]
… your Honour posed the question of me, “well, what if it was six months? What if it was 12 months?” It’s perhaps unfortunate that I don’t have to concern myself with that because it was so shortly after the orders were made. I would have to concede in terms of drawing inferences and trying to understand the true state of mind of persons the longer it was after the orders were made, the harder it would be to draw inferences. If somebody sold a property 12 months down the track after orders were made, it would be much harder for a court to infer that shortly before the orders were made, or before the orders were made, the change of mind had already occurred. I think it would be a relevant matter if there’s no other evidence, if that’s of any assistance, your Honour.
[22] T 18.
It remains only to observe that, on the proper concession made by the Husband, even if the Wife had formed the intention to sell the Suburb B property on the day of, or the day after, the terms of settlement were signed, all she had to do was wait until perhaps 12 months later to sell the property. As Counsel for the Husband confirmed, the longer the period between the date of settlement and the date of sale of the property, the greater the difficulty in establishing relevant mala fides and or the requisite intention to sell the property in question. On the submissions made to the Court, the important distinction between a party having or forming an intention to sell, and the actual sale, was not addressed at all. As I have just noted, there are obvious ways to circumvent any focus upon intention. Moreover, focussing upon the intention of a party takes no account of a party’s ability or capacity to change her or his mind. As such, an undue focus upon intention could be, in many circumstances, something of a red herring and ultimately miss the main game, so to speak. Without deciding this issue, the focus upon intention can and will likely lead to even less certainty than at the present time. Greater focus needs to be, and should have been, given here to the conduct of both parties and the date of the actual sale of the property in question, and the circumstances surrounding it.
On the facts here, however, and subject to comments later in these reasons, (a) the Wife deposed that she formed an intention to sell the property sometime after the Consent Orders were made, (b) she formed this intention upon looking at her financial situation after settlement, (c) contemporaneous, independent documentation provided by the Wife supports her account (which was partially acknowledged by the Husband in oral submissions, namely that the documentation provided by the Wife was consistent with her account of events and the time-line), (d) even after subpoenæ had been issued by the Husband to the Wife’s correspondents and agents at the time, no “smoking gun” had been found, and (e) the Husband did not disclose to the Court (or the Wife) his later, higher valuation for the subject property until just before the hearing and only after a request for discovery was made by the Wife. There is also the relevance and weight to the Husband’s un-referred to earlier and higher appraisals of the Suburb B property.
Put another way, the Wife has provided contemporaneous evidence in support of her account of events. The Husband has provided no evidence; nor has he provided any particulars. At its highest, the Husband relies upon an “inference” and a suspicion. He provided nothing else. He confirmed that no “smoking gun” had been found in documents produced under subpoena. Nor has he provided evidence of how a change in the Wife’s intention constitutes any relevant “miscarriage of justice” for the purposes of s.79A of the Act and the long line of authorities to which reference was made in submissions, some of which are noted below.
Respondent’s submissions
The Respondent’s primary submissions, also filed 11th June 2020, were as follows (emphasis in original):
1.The Applications
a)The wife brings application by way of Response filed 12 March 2021 to summarily dismiss the husband’s application filed 23 December 2020 wherein he seeks to vary the final property consent Orders made on 2 June 2020 pursuant to s79A(1)(a) of the Family Law Act 1975 (“the Act”).
b)The wife contends that the husband’s application has no reasonable prospects of success, is frivolous or vexatious and/or is an abuse of process of the Court and should be summarily dismissed. In the event the Court summarily dismisses the husband’s application the wife seeks that he pay her costs on an indemnity basis. If the Court does not summarily dismiss the husband’s application the wife seeks the husband pay $15,000 security for costs to the wife’s solicitor pending a final hearing.
2. General principles with respect to summary dismissal
a)Section 45A(2) of the Act allows a Court to make a summary decree in favour of one party, in relation to the whole or part of a proceeding, if satisfied that a party has no reasonable prospect of successfully prosecuting the proceedings. Proceedings need not be hopeless or bound to fail (s45A(3) of the Act). A court can “dismiss all or part of proceedings at any stage if it is frivolous, vexatious and/or an abuse of process” (s45A(4)of the Act). The wording in ss45A(2) and 45A(4) of the Act are largely reflected in the wording of Rule 13.10 of the Federal Circuit Court Rules 2001. The Full Court discussed the power of the court to summarily dismiss proceedings in Bigg v Suzi (1998) FLC 92-799 and adopted the articulation of the principles of Kirby J in Lindon v The Commonwealth (No 2).
b)An application for summary dismissal must be determined on the basis only of the material put forward by the Respondent (to the summary dismissal application).[23]
[23] Beck & Beck (2004) FLC 93-181; Bigg v Suzi.
3. General principles with respect to s79A of the Act
a)The Applicant bears the onus of satisfying a Court that the original orders should be varied or set aside, that there was a miscarriage of justice, and the appropriate exercise of discretion should follow.[24]
b)A miscarriage of justice under s79A(1)(a) will occur if circumstances exist which “for some significant reason, make the order contrary to law and justice according to law as it relates to the integrity of the judicial process” and the circumstances creating the miscarriage must nevertheless have been such as to have had an influence on the outcome of the litigation.[25]
c)A miscarriage of justice within the meaning of s79A(1)(a) can arise only from circumstances in existence at the date of the order.[26]
d)Agreement to a consent order which may not adequately reflect a party’s entitlements under s79 of the Act does not, of itself, show that there has been a miscarriage of justice.[27]
e)There will “be many cases in which an order will be made, by consent or otherwise, based upon an agreed valuation which has been prepared many months earlier. There may be factors in the intervening period which have affected the value so agreed. Unless there is some particular act which impugns the process by which the orders were obtained, the mere effluxion of time and the consequent changes in the market during that period, whether they be upward or downward, will not of themselves create an injustice, nor require either party to make further investigations of value if they choose not to do so.”[28]
4. Ground relied upon by husband to vary order pursuant to s79A of the Act
a)The material filed by the husband in the current proceedings are his Initiating Application filed 23 December 2020, an affidavit and Financial Statement affirmed by the husband 21 December 2020 and subpoenas to Agents J and Agency F Inspections dated 18 March 2021. The documents produced to the Court under subpoena have been released for inspection by the parties.
b)Paragraph 6 of the husband’s affidavit asserts that the wife failed “to disclose relevant information in our negotiations and when the property orders were made…”. Paragraph 22 of the husband’s affidavit asserts that the wife “failed to disclose or otherwise supressed relevant information in relation to the Suburb B property. I am unsure if Ms Chien formed an intention to sell the property prior to the property orders being made. Further I am concerned that an offer was made on the property before the orders were made…”. Paragraph 23 of the husband’s affidavit asserts that “At the time of me signing and the Court making the property orders, I say that neither myself nor the Court were in possession of all relevant material.” Paragraph 24 of the husband’s affidavit says that the husband would not have consented to the property Orders had he been aware that the wife intended to sell the Suburb B property.
[24] Prowse and Prowse (1995) FLC 92-557 at p.81,566.
[25] Barker v Barker (2007) 36 Fam LR 650 the Full Court explained at 675
[26] Holland and Holland (1982) FLC 91-243 at p 77,339,Molier and Van Wyk(1980) FLC 90-911 at pp 75,767–75,768 and Lane and Lane (2016) FLC @ 81,204 – para 130
[27] Holland v Holland (1982) FLC 91-243.
[28] Barker & Barker [2007] FamCA 13 paragraph 122. Also see paragraphs 120, 121 and 123-127 re suppression of evidence.
5. It is submitted on behalf of the wife that:
a)The formation of an intention by the wife to sell the Suburb B is not relevant information that has the effect of impugning the judicial process and amounting to a miscarriage of justice. Unless there are specific Court orders relating to how a party is able to deal with any item of property that they retain pursuant to final orders, a party should be unfettered in retaining, disposing of or otherwise dealing with property after orders are made. Even if this submission is wrong, in any event, there is no evidence that the wife had formed this intention prior to or at the time the orders were made[29].
b)There is no evidence in the husband’s material or in the subpoena material that an offer was made on the property, or that any further valuations were obtained/carried out by the wife before the orders were made. There is also no evidence in the husband’s material or in the subpoena material that there was failure by the wife to disclose relevant information in negotiations and when orders were made.
c)The issuing of the subpoenas by the husband amounted to a “fishing expedition” in an attempt to procure evidence in support of a potential claim for non-disclosure or suppression of evidence in circumstances that the husband was not in possession of any other evidence in this regard. This demonstrates that the husband’s claim is frivolous, vexatious and/or an abuse of process.
[29] See paragraph 22 of husband’s affidavit 21.12.20 – “I am unsure if Ms Chien formed an intention to sell the property prior to the property orders being made.”
The Respondent’s supplementary submissions in response to the Court’s questions, were provided to the Court by email on 6th July 2020. They were as follows (emphasis in original):
Further submissions on behalf of the Respondent Wife in response to queries from Judge Neville’s chambers (emails dated 22 June 2021 and 25 June 2021)
1. Which documents in the Tender Bundle are intended to be tendered and relied upon? And by whom?
The Wife seeks to tender and rely upon pages 1 to 10 inclusive of the tender bundle prepared by the Respondent Wife and the valuation of the Suburb B property prepared by Company M on 7 October 2019.
2. As requested at the hearing, what was the percentage division of property under the 2020 Consent Orders?
There is no admissible evidence before the Court as to the percentage division of property under the 2020 Consent Orders. The parties at no stage tendered an agreed list of property and liabilities or agreed values. The matter resolved by a compromised position by both parties. The Court was satisfied on the available evidence that the adjustment of property between the parties was just and equitable. Objection is taken to unsworn assertions to the contrary and what essentially amounts to ‘evidence from the bar table’.
3. Was it part of the Applicant’s submission that, in the event the Court determined that the June 2020 Consent Orders should be re-visited, any re-hearing would be confined only to the issue of the circumstances relating to the sale of the Suburb B property?
It is noted that the Applicant in his Affidavit only made reference to the ground of suppression of evidence leading to a miscarriage of justice, but now appears to have abandoned that ground. It is unclear to the Respondent what ground the Applicant now relies upon and what miscarriage of justice arises from his ‘misapprehension’ argument (detailed further below).
The Respondent would argue that justice and equity could not be done between the parties without the whole matter being revisited, particularly as the Husband also retained real property as part of the 2020 Consent Orders that has very likely increased in value.
4. If such a hearing was to take place, how would it be so confined, including in relation to witnesses? Counsel for the Applicant seemed to suggest that it might be able to be confined to perhaps half a day? Is this correct? If not, what is apposite in the circumstances?
If a full hearing on the Section 79 application were to take place the Respondent would reserve the right to call further evidence such as expert evidence as to the change in the market value of the Suburb B property leading up to the sale and as to the effect on the value by reason of the repairs, renovations and improvements to the property carried out by the Respondent after final orders were made. The matter could take an estimated 1 to 2 days.
5. What, if any, consideration should the Court have to the High Court’s principles set out in AON v ANU (2009) 239 CLR 175 in the current Application?
The Respondent submits that the Court should give consideration to the principles in AON v ANU as the Applicant is essentially seeking to recast it’s case and rely upon a completely new ground in lieu of the ground he relied upon in his original application and Affidavit (being that the Wife failed to disclose or otherwise suppressed evidence in relation to the sale of the Suburb B property) which now seems to be abandoned. On the basis of the submissions made during the summary dismissal application it is apparent that the Respondent is facing a new and different ground which is not set out clearly in any supporting Affidavit.
The Applicant argues that he wished to retain the Suburb B property, and if he knew the Respondent would change her intention and sell (rather than retain) the property, he would not have settled the matter. It is unclear to the Respondent if this is the ground the Applicant now relies upon and, if so, what miscarriage of justice arises from his ‘misapprehension’ of the wife’s intentions in relation to retaining or selling the Suburb B property.
Nonetheless, even if the Court accepts this ‘misapprehension’ ground, it is inconsistent with the Husband’s evidence. In his Affidavit affirmed 29 January 2020, at paragraph 33, he contemplates the property being sold and says “My preference is to continue to live in the Suburb B property until it is sold or final orders are made by agreement or after a contested hearing. I then intend to purchase a home using my entitlement to property settlement.”
The Court has a discretion in the matter but there is recognition by the High Court that there must be limits placed on the traditional adversarial model of litigation and it is open to the Court to ‘shut out’ the Applicant from putting a new and different case than the one in their initiating material.
6. The following scenario would usually be given to the parties in open Court. The attenuated hearing last week militated against it. HH wishes it raised here to ensure that the parties are fully aware of a range of scenarios (accepting that lawyers would have presented similar information): (a) a worst case scenario is that, for example, having had one hearing, whatever the Court’s determination, one or either party appeals that decision; thus there is the initial cost of the Application, the time taken for the appeal (perhaps between 6 and 12 months) and the cost of the appeal. If the appeal is successful, the matter is usually remitted for re-hearing, which incurs further cost; (b) if the Court determines that the matter should be re-opened, there would be the further cost of the hearing regarding the Wife’s Application for security of costs (that determination could be appealed), then the hearing, possible appeal, then re-hearing if the appeal is successful. Each or all of these courses is known, colloquially as “a lawyers’ picnic” because, if the single focus is the proposed or purported extra funds arising from the later sale of the property (perhaps a maximum of $200k; it could be less if the Husband’s recently disclosed valuation is taken into account) the legal costs could potentially carve out close to half of the sum in question (perhaps more, perhaps less), thereby leaving a net pool of perhaps less than $100k. If this is all that is left, the Court presumably will be called upon to make a determination of what is “just and equitable” (presumably the Court will not be bound by whatever the parties agreed in June 2020). It may be that the Court could determine that the just and equitable division of whatever is likely to be left over is 50/50 (or some other figure).
The Respondent notes HH’s comments and says that it is acknowledged that the family law court system in Australia can involve inordinate delays, multiple hearings and high costs. The Respondent respectfully submits that the parties in this matter would be best served by the Court making a decision that is swift and final (and the Respondent would argue is patent). The Application brought by the Husband is without merit and should be dealt with according to law. It is improper for the Husband’s representatives to allude to any settlement negotiations that may have occurred prior to the Husband filing his Application. The Wife does not agree to attend a Conciliation Conference or a private financial mediation.
7. For more abundant caution, because if the matter is re-opened and considerations regarding property are re-visited, the Court may have to take into account parenting arrangements, therefore in a more simplified form, could the parties please confirm what the current parenting arrangements are.
The current care arrangements are as set out in Order 3(b) and 7 of the June 2020.
In terms of “evidence”, the Husband has provided nothing to substantiate what he described in his Affidavit as the Wife’s “Representations about the Suburb B property.” The inference – at its highest – is that somehow the Husband was misled by the Wife because she did not tell him of any plans to sell the property. She denies that she had such plans prior to or during the settlement discussions and making of Orders; she said that her intention to sell only came later.
The further inference seems to be that somehow (or for other unexplained reasons) the Wife bound herself not to sell the property, or even bound herself not to sell it without first giving the Husband perhaps a first right of opportunity to buy it. None of these latter inferences or possibilities were ever raised by the Husband.
As stated many times already: at the time of the Consent Orders, the Husband had the Wife’s somewhat dated valuation from March 2019, plus his own undisclosed higher valuation from September that year. He had highly experienced lawyers advising him, presumably which included the due diligence task to check on the valuation of all properties much closer to settlement.
The Court also has documentary evidence (e.g. emails and SMS messages with a real estate agent, and with prospective handyman) regarding repairs, updating of the property and confirmation of the decision in mid-August 2020 to undertake the repairs to the property, and to continue discussions about the possible or likely sale of it.
Apart from the most generalised assertion, the Husband provided no relevant evidence supporting his claim of “representation” by the Wife. The alleged “representations” are of the broadest and unparticularised kind. They are unsupported by anything from the Husband. They are firmly refuted by the Wife, whose evidence is strongly supported by the contemporaneous records she has provided.
Further, whatever the nature of any alleged representation, there is no detail about what the legal significance of it was, or was likely to be. It was not suggested at any time or in any way that any estoppel was created that precluded the Wife ultimately selling the property.
Absent relevant evidence provided by the Applicant Husband, recalling that the onus was/is upon him under the s.79A Application, or of any relevant legal consequence as a result of said “representation”, this second foundation of the Husband’s s.79A Application has no substance.
Suppression of evidence issue
As the Husband stated in his Affidavit (par.22; emphasis added): “I am unsure if Ms Chien formed the intention to sell the property prior to the property orders being made.” He also expressed concern that an offer was made prior to the Orders being made. To state the obvious: there is no evidence, or particulars, for such contentions or, as the Husband expressed them, his lack of certainty (on the one hand), and his “concern” on the other. This is tantamount to challenging the Wife’s veracity and bona fides regarding the terms of settlement. By inference only, it was seeking to force the Wife to establish to the Husband’s satisfaction the accuracy and bona fides of the terms of settlement. As already noted a number of times, the evidentiary and other onus rested firmly upon the Husband for the purposes of the s.79A Application, not upon the Wife. Given what I have already said in relation to the Husband’s conduct towards the Court and the lack of disclosure of the September 2019 valuation (and the earlier, higher appraisals), it borders on the most brazen chutzpah, if not much worse.
The Husband further contended (par.23) that at the time of him signing the terms of settlement, and the Court making the Orders on 2nd June 2020, “I say that neither myself nor the Court were in possession of all relevant material.” Such a serious contention (and further, without any particulars) was made, at its highest, on inference only. Of course, to be terribly tedious and repetitive, it was the Husband who was actually in possession of information that he chose not to disclose in his Affidavit so that it was the Wife and the Court who were “not in possession of all relevant material.” As such, one might reasonably take the view that his evidence was false (or at least seriously deficient) and that he put a false (or factually deficient) Affidavit before the Court because it lacked any information or even a reference to the higher, later September 2019 valuation which he alone (and presumably his lawyers) knew about. How and why his lawyers permitted or facilitated this was, unfortunately, never explored or explained.
Then at par.24, the Husband said that he would not have consented to the property Orders had he been aware that the Wife intended to sell the Suburb B property. He provided no evidence (or particulars) for such an assertion, or that he ever made this intention or view known to the Wife. Presumably over the period of time when they lived separated but under the one roof in that property, there were discussions about what was to happen to the property (in the context presumably of the other properties more generally), some of which he set out, as did the Wife in her material. Nowhere is there any evidence of the Husband informing the Wife that, in addition to him retaining the Suburb D and Suburb C properties, he would not settle the matter if she sold (or intended to do so) the Suburb B property. Presumably, too, if he had formed such an intention (a) that would have to be the subject of cross examination at any hearing along with much else, and (b) it would necessitate the Court looking at all the property of the parties to ensure that any Orders made were “just and equitable” pursuant to s.79(2) of the Act.
Although summarised earlier in these reasons, in a little extra detail, the Husband’s contentions may be reduced to the following propositions, and such evidence as there is, outlined thus (again I remind myself that I am required to take the Husband’s evidence at its highest – which is a tad difficult here given his failure to provide the Court with all the evidence he had, and he alone knew he had):
(g)At par.22 of his Affidavit, the Husband asserted that the Wife “failed to disclose or otherwise suppressed relevant information in relation to the Suburb B property.” In the same place he continued: “I am unsure if Ms Chien formed the intention to sell the property prior to the property Orders being made.” The Husband gave no particulars of the alleged “failure to disclose” by the Wife. The Wife deposed, and provided contemporaneous documents to support her account, that she did not form any such intention until after the terms were signed and made by the Court, and some of the dust of litigation had settled. At any hearing, as intimated by the Husband’s Counsel, absent supportive or opposing documentary evidence (which seemingly the Wife primarily has), there is some likelihood that the result would come down to what the Court believed and accepted in the evidence of both parties. On the Husband’s side, this would simply be his “concerns”, his “unsureness”, his assertions and suspicions. On the Wife’s side, there are the contemporaneous SMS messages with a handyman, email correspondence from her real estate agents, and the contract in the latter part of August 2020, confirming that nothing was done about the sale of the Suburb B property prior to or at the time of the terms of settlement were concluded and the Order made on 2nd June 2020;
(h)Further, in oral submissions, the Husband confirmed that (i) there was “no smoking gun” in documents produced under subpoena, and (ii) the documents so produced by the Wife’s real estate agent, and others, were consistent with the Wife’s narrative set out in her Affidavit. These proper concessions by the Husband during oral submissions ultimately leaves the state of his evidence, at its highest, as being based on his lack of surety, his uncertainty about the Wife’s intentions regarding the Suburb B property, and some adverse inference being drawn against the Wife. In such circumstances, all the Husband has left is to attack the Wife’s credibility, which he proposed to do at a hearing. Thus, apart from the contemporaneous documents that support the Wife’s account of events, the best the Husband can hope for is that some chink in the Wife’s account of events comes to light during her cross examination. Counsel for the Wife referred, perhaps a tad curiously, to the Husband hoping for some “knight in shining armour.” The Husband seems to take no account of the risks to his own evidence across the board but most particularly in relation to the undisclosed September 2019 valuation (and the earlier higher appraisals), if he was to be cross examined. His best and only gambit, so to speak, is to hope that in a contest over credibility, the Wife comes out of that contest in second place. Respectfully, one might think that if that is the best course for the Husband, it might prove to be a significant gamble. Time, and other things, will tell. Thus far, the evidence seems strongly to support her, as apparently recognised by the Husband’s careful and considered Counsel;
(i)In the same paragraph, the Husband deposed: “… I am concerned that an offer was made on the property before the Orders were made, in the light of the short timeline between when the property was transferred out of my name and its subsequent sale.” The Husband’s “concerns” do not, without evidence, constitute either a factual or legal foundation for the current Application. Moreover, without repeating further what has already been set out, the Wife’s denials and her account of events, are confirmed by contemporaneous records that are either annexed to her Affidavit, or provided in her Tender Bundle. The Husband provided no such evidence, either contemporaneous or otherwise;
(j)At par.23, the Husband averred, without any particulars, that at the time of signing, and the Court making, the Consent Orders “neither he nor the Court was in possession of all relevant material”. The comments made in the previous paragraph (and earlier in these reasons) relevantly and completely answer the unsubstantiated assertions made by the Husband. Moreover, in the light of the “bottom-drawer valuation” obtained by the Husband in September 2019 and only disclosed to the Court (and very slightly earlier to the Wife) shortly before the hearing, the reality is that until that time, it was the Husband who was the only perpetrator of concealing information from the Court;
(k)The Husband said (par.24) that if he had known that the Wife was going to sell the property he would not have consented to the Orders made in June 2020. He further contended that the Orders ultimately made “do not reflect a just and equitable alteration of our interests.” I need here only observe that it is not apparent, nor is there any evidence (or particulars) in relation to it, that any of this information regarding him wanting to know about any change in the Wife’s situation, was ever communicated by the Husband to the Wife. Certainly there is no evidence at all about such a declaration or position, conditional about him signing the Orders, ever having been made. Further, in my view, if the matter were to go to any hearing, in order properly to assess what is just and equitable as between the parties, it would be imperative that all the property of the parties would need to be assessed. It may be, for example, that if/when such an analysis was undertaken, what the parties agreed to in early June 2020 would not necessarily represent what the Court relevantly determined to be just and equitable.
By way of further comment (with apologies for the repetition) on each of the Husband’s assertions – which is precisely what they are – noting that he provided no evidence to support any of his claims and asks the Court to rely upon inferences only, I make the following comments.
The Husband asserted that the Suburb B property held “great sentimental value.” Presumably this was intended to refer to sentimental value to him. It was not otherwise specified. In any event, whatever the sentimental value of the property, it is unclear what the Court is meant to make of such a generalised and unsupported assertion. As well, to state the obvious, “sentimentality” is not a recognised category or consideration under either s.75 or s.79 of the Act in the making of property Orders to ensure that the distribution of property is just and equitable.
Likewise, the Husband asserted that the Wife had said, in 2018 at or around the time of separation, that she wished to retain the property. There was no suggestion however that such a claim, even if established, operated in any way to bind the Wife at that time, or into the future. Certainly there was no claim based on some form of estoppel raised against the Wife regarding discussions with the Husband prior to the June 2020 Orders or otherwise.
Nor was it claimed by the Husband that the Wife had ever represented that she would never sell the Suburb B property in any circumstance. It also somewhat begs the question, which was not addressed during the hearing or otherwise: if the Suburb B property had been sold for less than the March 2019 valuation (and likewise less than the Husband’s previously undisclosed September 2019 valuation), would the Husband say that it would be just and equitable for the Wife to seek compensation from the Husband for such a loss? It is surely speculation, but one might think the Husband would very likely resist such a claim.
The Husband asserted (again without evidence or particulars) that the Wife “failed to disclose or otherwise suppressed relevant information in relation to the Suburb B property.” In the same place he continued (also without evidence or particulars): “I am unsure if Ms Chien formed the intention to sell the property prior to the property Orders being made.” The documents produced by the Wife, and confirmed by Counsel for the Husband regarding documents produced under subpoena, showed that no such intention or decision was formed (and confirmed, according to correspondence with the real estate agent) until some 2½ months (in mid-August 2020) after the terms were signed and made by the Court on 2nd June 2020.
Two other matters may be mentioned, accepting that they were not canvassed at the hearing.
First, in Pearce & Pearce (cited earlier in these reasons), the Full Court discussed at some length the “materiality” of any alleged non-disclosure. It is apposite to let the Full Court’s discussion speak for itself.[44] At [34] – [37], the Court said (emphasis in original; internal citations omitted):
[34] In Gebert and Gebert, this Court, in the context of a s 79A application, held that “... the law fortunately still allows persons to form their own views as to the arrangement of their affairs”. More recently, the High Court has held that “[i]f both parties are competent, it can still be assumed that any necessary or desirable adjustments can be made to their property interests consensually”. The well-settled proposition that “... [a]greement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice”, derives from these precepts. Of course, “... [t]here may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice”. It has been said that “[o]rdinarily, a failure to comply with that duty will amount to a miscarriage of justice”. Equally, however, “[i]t is not every failure of frank and full disclosure which would justify a court in setting aside an order ....”
[35] In the case of consent orders, the related propositions just discussed intersect at a point where the requisite miscarriage of justice derives from a party’s consent not being a “free and informed consent”; where there is a failure to disclose matters relevant to the decision to enter the consent orders that are “... peculiarly within [the] knowledge” of that party or omissions which knowingly engendered, or permitted, a mistaken understanding on the part of the other party.
[36] Facts and circumstances as to value might inform the application of those principles in a particular case but, equally, facts and circumstances independent of value might do so.
[37] It is important to emphasise that the retrospective valuation of property and a comparison between the result that might reasonably have been achieved had full disclosure been made may well be relevant to the exercise of discretion required by s 79A once both a relevant ground and a miscarriage of justice is established. The exercise of that discretion is not undertaken by reference to a closed set of circumstances and retrospective values of assets whose values have been included within consent orders may be one of those circumstances and, of course, all the more so in circumstances similar to those referred to in Holland referred to above. But, again, the comparison of values is but one example of a circumstance that might inform the exercise of that discretion.
[44] Pearce & Pearce [2016] FamCAFC 14.
The non-disclosure allegation raised against the Wife here, even if established (which it was not), is significantly reduced in terms of its “materiality” as discussed in Pearce in the significant circumstances which the Court now finds itself, namely the Husband having had his own higher valuation six months after the valuation he said he relied upon from September 2019.[45] In my view, the materiality of the Husband’s non-disclosure is significant for the reasons already given but viewed here through the lens of the Full Court decision in Pearce.
[45] There is also the Husband’s non-disclosure of the earlier 2019 appraisals to which reference has been made, brought to the Court’s attention by the Wife in her Affidavit, and not challenged or even referred to by the Husband in submissions – written or oral.
Secondly, although noted earlier in these reasons, again viewed through the lens of Pearce, the Husband’s non-disclosure could also formally be considered in terms of the Wife being misled. However, because of what has already been laid out at length in these reasons, I need not take this aspect further.
Conclusion
Without repeating all of the principles set out earlier in these reasons, and the outline of evidence and facts (such as they can be confirmed or established from independent sources) from both parties, I note the following summarily.
In my view, the most appropriate course is to consider the matter primarily under the terms of the Wife’s Response, namely to see whether, as a preliminary matter, the s.79A threshold questions regarding miscarriage of justice have been relevantly satisfied. This is not to say that the summary decree “tests” under s.45A are not satisfied. In my view, on the facts set out in these reasons, most notably (a) the Husband’s failure to disclose information to the Court (the higher September 2019 valuation), (b) his failure to discharge the onus placed upon him under s.79A, (c) the Wife providing a range of documents that support her account of events regarding the sale of the Suburb B property, and (d) the documents provided by the Wife, and to the Husband under subpoenæ, being acknowledged by Counsel for the Husband as being consistent with the Wife’s narrative, the Application must be dismissed. The only prospect of the Husband succeeding at any level is completely dependent upon the cross examination of the Wife exposing her to have fabricated her evidence and her documents produced by third parties, or otherwise that her credit as a witness is so compromised as to warrant the Court to hold a complete hearing of the property proceedings and make findings and determinations for the purposes of making Orders pursuant to s.79(2) of the Act..
However, in my view, not only has the Husband failed to discharge the onus of proof that rests upon him under s.79A, his evidence is so lacking in detail, particulars and otherwise (based as it is solely upon inference and “concern” and lack of knowledge more generally), in conjunction with his failure properly to disclose all evidence in his care and control, that he has no reasonable prospect of success for the purposes of s.45A of the Act and the relevant summary decree in this regard.
In Ebner & Pappas, the Full Court said (at [64]):
… the setting aside or variation of Orders under s.79A(1)(a) requires satisfaction not only of a suppression of evidence, which includes failure to disclose relevant information, but also a miscarriage of justice by reason of that suppression.
Here, the Husband affirmed that he relied upon a somewhat outdated valuation (my description) from March 2019 for the purposes of agreeing to and signing Consent Orders in June 2020 under which he retained two properties and the Wife one. Until the hearing in June 2021, and not even in his supporting Affidavit, did the Husband ever disclose to the Wife or to the Court that in September 2019 he had obtained a further, higher valuation for the Suburb B property.
Prior to signing the Consent Orders, the Husband appears to have taken no steps to satisfy himself about the values of any of the properties that were to be the subject of those Orders. Certainly he has not disclosed any such due diligence step having been undertaken, or that he was so advised to take, prior to settlement, given how old the March 2019 valuation was, and on which he purportedly relied. He so relied, he said, solely on the March 2019 valuation. This would have required him, among other things, to have completely ignored his own, later valuation from September 2019. He never disclosed this later valuation until forced to do so by the request for discovery by the Wife.
Not only did the Husband relevantly not disclose, and obviously suppressed, this higher, later valuation, the Wife provided contemporaneous documentation that supported her account of events, namely that (a) she did not form any relevant intention (or decision) to sell that property prior to or at the time of the Consent Orders; (b) as advised by real estate agents some 1½ months after the Consent Orders were made, and on that advice to ensure a likely higher price for the property, she arranged significant work to be done on it which totalled approximately $52,000; (c) it was not until mid-August 2020 that she responded to inquiries from her agents, who had inquired at that time if she had made up her mind to sell the Suburb B property. It rather begs the question: why would the agents make such an inquiry if the Wife had already made up her mind to sell the property?
As noted earlier in these reasons, the Full Court in Gebert also confirmed that “fairness” (or even the lack of it as the Husband here alleged) does not, without more, warrant judicial intervention.
In a similar vein, as noted earlier in these reasons, the Full Court in Barker held that:
In order for a claim under s.79A(1) to succeed, the Court must be satisfied that a miscarriage of justice has resulted. It is not sufficient to establish the existence of one or more of the stated grounds (at [120] and [123]);
The establishment of a miscarriage of justice does not automatically result in the varying or setting aside of Orders (at [134]).
In my view, the Husband has patently not provided particulars or evidence (other than his assertions and alleged inferences he asks the Court to draw) to support his Application under s.79A(1)(a). Nor has he “established” either a relevant ground under s.79A, nor that a miscarriage of justice has occurred, in circumstances where, among other things, he obtained two properties under the Consent Orders and the Wife only one. Moreover, as stated multiple times already, the Wife has provided significant contemporaneous documentary evidence that supports her account of events regarding the sale of the Suburb B property. The Husband’s experienced Counsel confirmed in oral submissions that the documents provided by the Wife, and produced under subpoena, support the Wife’s narrative. In doing so, she strongly and clearly undercut the rather shallow claims (being essentially assertions only) brought against her by the Husband. Apart from providing copies of the Consent Orders, and the March 2019 valuation, the Husband provided no documents or any other material to support his contentions. In this important respect, the Husband has clearly failed to discharge his responsibility to establish any relevant case against the Wife under s.79A.
Further, as earlier remarked, if the matter were to go to a hearing pursuant to the current Application, in my view it would not be prudent to limit it just to the consideration of events surrounding the Suburb B property. In my view, if that were to occur, there would be too great a risk of not ensuring that justice and equity was properly done to both parties in relation to the property side of the proceedings pursuant to s.79 of the Act. Put another way, in my view, if the matter were to go to such a hearing, the whole of the property of the parties should be re-considered so that the Court could make a considered assessment of all of the property rather than one discrete portion of it in isolation. Regrettably, such a course would doubtless be a costly exercise, financially, emotionally and in all other respects. To be blunt: the amount the Husband is here seeking would very likely pale next to the amount the parties would be forced to spend on legal fees (assuming they kept lawyers involved) for a full hearing on property matters to ensure that the ultimate Orders were “just and equitable.”
Finally, on the facts as set out in these reasons, if I am wrong in relation to either the outline of principle, and/or the evidence provided to the Court, in the exercise of the Court’s discretion (which is obviously very wide, based on authorities such as Gitane & Velacruz), I would be very strongly disposed not to exercise it in the Husband’s favour. In my view, the evidence as I have outlined it strongly militates against such an exercise of discretion in the Husband’s favour.
Further in relation to the exercise of discretion, on the state of the evidence outlined in these reasons (often repetitively I accept), if the Court were minded to exercise its discretion in the Husband’s favour, it would be, in effect, to reward a party for not disclosing (or certainly not disclosing in a timely way) relevant evidence. In the Court’s firm view, such poor and ill-considered behaviour, indeed likely in breach of duty to the Court, should not be rewarded.
In addition to the reasons given, otherwise I accept and adopt the Wife’s submissions.
For the reasons set out above, the Husband’s Initiating Application, filed 21st December 2020, must be dismissed. Should it need to be stated, in my view, it was best (and I have done so) to treat the Husband’s Application and the Wife’s Response to it more in terms of the failure of the Applicant to discharge his responsibility for the purposes of s.79A of the Act, both because of the paucity of evidence he produced (such as it was), and having regard to the significant rebuttal evidence provided by the Respondent. In proceeding this way, formally it was unnecessary to address directly the application of principles in relation to the alternative course of summary dismissal.
In the Wife’s Response, she sought an Order for indemnity costs. In my view, the appropriate Order regarding costs is as follows: absent any Application regarding indemnity costs being filed within 14 days, within 28 days, the Husband is to pay the Wife’s costs, either as agreed or taxed.
I certify that the preceding one hundred and sixty (160) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Judge W J Neville. Associate:
Dated: 29 September 2021
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