Hsiao & Fazarri
[2019] FamCAFC 37
•5 March 2019
FAMILY COURT OF AUSTRALIA
| HSIAO & FAZARRI | [2019] FamCAFC 37 |
| FAMILY LAW – APPEAL – PROPERTY – Where the primary judge made a property settlement order after an undefended hearing – Whether the primary judge failed to properly take into account the appellant’s part ownership of a property and entitlements under a Deed of Gift – Whether the primary judge erred in making findings that did not take into account or give sufficient weight to particular evidence – Whether the primary judge made findings that were flawed, erroneous and contrary to the evidence – Where no error is established. FAMILY LAW – APPLICATION IN AN APPEAL – ADDUCE FURTHER EVIDENCE – Where the appellant sought leave to adduce further evidence – Where the appellant had an opportunity prior to the trial before the primary judge to file the evidence upon which she sought to rely and deliberately withheld doing so – Where none of the further evidence met any of the admission criteria as prescribed in CDJ v VAJ (1998) 197 CLR 172 – Where the application was refused. |
| Evidence Act 1995 (Cth) ss 59, 67(4), 177 Family Law Act 1975 (Cth) ss 71A, 79, 93A(2) |
| Candlish and Pratt (1980) FLC 90-819; [1980] FamCA 25 CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 Sykes and Sykes, Dotch (1979) FLC 90-652; [1978] FamCA 61 Woodcock v Woodcock (1997) FLC 92-739; [1997] FamCA 5 Woodland and Todd (2005) FLC 93-217; [2005] FamCA 161 |
| APPELLANT: | Ms Hsiao |
| RESPONDENT: | Mr Fazarri |
| FILE NUMBER: | MLC | 11418 | of | 2016 |
| APPEAL NUMBER: | SOA | 50 | of | 2018 |
| DATE DELIVERED: | 5 March 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Strickland, Kent & Watts JJ |
| HEARING DATE: | 11 December 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 19 June 2018 |
| LOWER COURT MNC: | [2018] FamCA 447 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Hines |
| SOLICITOR FOR THE APPELLANT: | GTC Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr North SC with Mr Schmidt |
| SOLICITOR FOR THE RESPONDENT: | Taussig Cherrie Fildes Family Lawyers |
Orders
The application to adduce further evidence filed by the appellant on 20 November 2018 be dismissed.
The appeal be dismissed.
There be no order as to costs.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hsiao & Fazarri has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 50 of 2018
File Number: MLC 11418 of 2016
| Ms Hsiao |
Appellant
And
| Mr Fazarri |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Hsiao (“the appellant”) appeals certain paragraphs of the final property settlement order made by the primary judge on 19 June 2018. The appeal is opposed by Mr Fazarri (“the respondent”).
The primary paragraphs of the order appealed against provide for the severance of the joint tenancy of the parties in the property at G Street, Suburb H (“G Street”) and that the appellant transfer to the respondent her interest in G Street.
On the first day scheduled for the trial, the appellant appeared as an unrepresented litigant and made an application that the trial should be adjourned. That application was dismissed for reasons set out in a separate judgment by the primary judge dated 19 June 2018.
The appellant did not appear at the trial on the second day and the competing applications for final property settlement orders were determined on an undefended basis.
The appellant argued that the primary judge made a property settlement order that failed to properly take into account the 50 per cent ownership that the appellant had in G Street at trial and her entitlements under a Deed of Gift which the parties executed in March 2015. Further, the appellant argued that the primary judge erred in making findings that did not take into account or give sufficient weight to particular evidence, and in making findings that were flawed, erroneous and contrary to the evidence.
The appellant also filed an Application in an Appeal on 20 November 2018 seeking to adduce further evidence, almost all of which was available and could have been placed before the primary judge had the appellant complied with orders for the preparation of, and participated in, the trial. A number of grounds of appeal assume that the Application in an Appeal to adduce further evidence succeeds.
Background
At the date of the trial before the primary judge, the appellant was 44 years of age and the respondent was 58 years of age. Their intimate relationship began in August 2012 whilst the respondent was still residing with his former wife. After the respondent separated from his wife in March 2013, he rented premises and the parties spent nights at one another’s home. The primary judge found at [62] that the parties lived together for intermittent periods but at [39] found they did not commence a de facto relationship. Both parties maintained separate residences throughout their relationship and short marriage.
The respondent travelled internationally and the appellant often went with him and fulfilled a limited role as a personal assistant. The appellant was not otherwise engaged in paid employment of substance during the parties’ relationship and marriage. The primary judge recorded at [42] the respondent’s evidence that the appellant did not otherwise support the respondent’s career or work and her attendance at social events was rare.
During the relationship, the parties unsuccessfully attempted to have a child. The appellant received benefits from the respondent, including access to his bank and credit card facilities and having her expenses paid; being made a beneficiary of a family trust; being advanced $20,000 by way of contribution to her superannuation fund; and being given a new motor vehicle. The primary judge recorded that in 2015 the appellant took $40,000 from an account controlled by the respondent without his authority.
At the time the parties commenced their relationship the respondent had assets of approximately $20 million which were subsequently reduced to about $9 million as a result of the property settlement with his former wife. The appellant had minimal assets, being a motor vehicle and some superannuation.
In April 2014, the respondent purchased G Street for $2.2 million which was financed by the respondent from his own funds and borrowings. The primary judge found at [48] that the parties had not lived together in any sense of a committed relationship when G Street was purchased. Simultaneously with the settlement of G Street, the respondent transferred to the appellant 1/10th of his interest in G Street by gift, so that the registered proprietors of that property were the respondent as to 9/10th and the appellant as to 1/10th as tenants in common. G Street was not habitable. The respondent subsequently paid for renovations but neither party has resided in the property.
On 15 December 2014, whilst the respondent was in hospital with a suspected heart attack, he signed a transfer of a further 40 per cent interest in G Street to the appellant. That transfer was registered on 27 February 2015 at which time the parties became joint proprietors of G Street.
In March 2015, the parties signed a Deed of Gift, the provisions of which are referred to below.
The parties married on 22 August 2016 and separated on 12 September 2016, a period of three weeks.
At the time of the trial, the parties owned G Street as joint tenants which was worth $3,070,000. In addition, the respondent had net assets and superannuation of $9.1 million and the appellant had assets of $330,000. The effect of the primary judge’s property settlement orders left the appellant with assets of $430,000 and the respondent with in excess of $12 million.
Application to adduce further evidence
As referred to above, on 20 November 2018, the appellant filed an Application in an Appeal seeking to adduce further evidence.
Section 93A(2) of the Family Law Act 1975 (Cth) (“the Act”) provides that the Court, in its discretion, may receive further evidence. The basis upon which the Court would exercise that discretion is guided by considerations from well‑known parts of the judgment of the plurality in CDJ v VAJ (1998) 197 CLR 172 (“CDJ”) particularly at [104], [109], [111] and [113]–[116]. Both parties relied upon different parts of [111] of the judgment with the appellant emphasising that this Court “must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of hearing the appeal” and the respondent emphasising the second part of the paragraph which is in the following terms:
…Nevertheless, it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
The further evidence which the appellant sought to adduce is contained in three affidavits filed on 20 November 2018, 27 November 2018 and 6 December 2018 and can be generally described in the following categories:
a)Documents relating to whether the respondent was under pressure and sedation and not in a position to argue when he signed the transfer of a 40 per cent interest in G Street to the appellant on 15 December 2014 and whether the respondent subsequently acquiesced to the transfer after he got out of hospital (documents numbered 2, 3, 4, 5, 6, 7, 8, 9, 10, 14, 15, 17, 18 and 19 annexed to the appellant’s affidavit filed 20 November 2018; the document annexed to the appellant’s affidavit of 27 November 2018);
b)Documents relating to whether the parties were domestic partners and lived together on a genuine domestic basis (documents numbered 2, 11, 12 and 13 annexed to the appellant’s affidavit filed 20 November 2018; in addition, at paragraph 34 of the appellant’s affidavit filed 20 November 2018, the appellant indicated that she sought to rely upon her affidavit filed in the Federal Circuit Court on 14 February 2017 which contains evidence to support a contention that the respondent and herself were in a de facto relationship prior to being married);
c)Document 20 annexed to the appellant’s affidavit filed 20 November 2018 which relates to whether the documents in (a) and (b) were the subject of discovery to the appellant by the respondent; and
d)Documents relating to the appellant’s failure to appear on 15 June 2018 being a medical certificate of Dr L dated 26 June 2018 (document 21 annexed to the appellant’s affidavit filed 20 November 2018) and the appellant’s affidavit filed 6 December 2018 which contains assertions by the appellant about the history of her legal representation in 2018 and some general assertions about her health from February 2017 to June 2018.
The appellant conceded that almost all of the documents and evidence that she now sought to adduce by way of further evidence were in her possession or available to her as at the date of the trial but were not adduced before the primary judge because she had not complied with orders to file written evidence and had not participated in the trial. Whilst the appellant did not obtain documents 11, 12, 13 and 21 until after the trial, it is not controversial that apart from document 21 (Dr L’s medical report) the other three documents could have been obtained by the appellant prior to the trial.
Category (a) documents: Pressure to sign the transfer dated 15 December 2014
The documents in category (a) relate to Ground 3 of the Further Amended Grounds of Appeal filed 11 December 2018 which is in the following terms:
The Court's finding (at paragraphs 51, 84 and 104 of the Reasons) that the transfer of [G Street] to the parties as joint proprietors could not be seen as a gift to the [appellant] because of the [respondent]’s unchallenged evidence that the [appellant] pressured him at a vulnerable time was flawed by reason that the Court was unaware of and therefore did not take into account the letters and emails referred to in Ground 1 which make it apparent that the [respondent]’s unchallenged evidence referred to by the Court (given in paragraphs 116 and 117 of his trial affidavit filed 18 May 2018) was misleading and misled the Court in so finding.
The respondent’s unchallenged evidence before the primary judge was contained in paragraphs 115 to 118 of the respondent’s trial affidavit:
115.I was the sole purchaser under the contract of sale. However, prior to settlement, at her insistence, I nominated [the appellant] to hold a 10 percent interest as tenant in common.
116.Shortly after I settled on the purchase of [G Street] in September 2014, [the appellant] constantly demanded that I give her a 50 percent interest in the property. I declined to agree and I tried to avoid the subject whenever [the appellant] brought it up.
117.In December 2014, I was admitted to hospital with a suspected heart attack. While I was recovering in hospital, [the appellant] continued to demand that I sign a transfer to her of a further 40 percent interest in [G Street]. I was unwell, under sedation and did not want to argue with [the appellant], so I signed the transfer.
118.On 27 February 2015, [the appellant] was registered as a joint proprietor of [G Street].
In the reasons, the primary judge said at [51], [84] and [104]:
51. Having acquired [G Street], the [appellant] asked the [respondent] to increase her interest to 50% and that occurred although in controversial circumstances. He said that whilst in hospital with a suspected heart attack, the [appellant] demanded he sign a transfer and he did. The title was altered from 27 February 2015. Unlike the 10%, this could not be seen as a gift because of the circumstances under which it arose. I accept the [respondent]’s unchallenged evidence that the [appellant] pressured him at a vulnerable time.
…
84.In respect of the [G Street] interest, I suggested that the 10% interest could not be seen in the same light as the 40%. In respect of the latter, the [respondent] was under pressure and I accept his evidence that he was not in a position to argue. The absence of evidence from the [appellant] means that that version of events is plausible and I should accept it.
…
104. Undoubtedly, the court is obliged to take into account the terms of any order. The [appellant] came into this relationship with nominal assets and the [respondent] had substantial assets. The absence of material from the [appellant] makes it difficult for me to assess each of these factors but the clear tenor of s 79(4) is about contribution and I have already made findings in respect of that that do not favour the [appellant]. Section 79(1) provides that the court may make such order as it considers appropriate and the last of the matters that are relevant is in s 75(2)(o) which mandates the court to consider any fact or circumstances which the justice of the case requires to be taken into account. As discussed in submissions with [counsel for the respondent], the 10 per cent contribution by the [appellant] (as distinct from the 40 per cent obtained under pressure) was a deliberate conferral of property on the [appellant] by the [respondent] and in my view, it would be unjust to have him then take it back on the basis that he gave it to her in expectation that they would have a long and happy life together and that such expectation has not been met. His evidence was that he gave it to her out of insistence rather than him voluntarily giving it to her out of some expectation of a future together or a magnanimous gesture. The very fact that [G] Street was acquired by the [respondent] in his name alone initially and with his money, must mean that he gave the [appellant] the 10 per cent interest.
The appellant submitted that the documents in category (a) provide evidence from which the inference should be drawn that the respondent did not sign the transfer of 40 per cent interest in G Street to the appellant after being pressured by the appellant at a vulnerable time. The appellant submitted that these documents cast serious doubt on that finding and suggested that the respondent intended to make the transfer at least by 9 December 2014 and failed to take any step after he got out of hospital and before 27 February 2015, to attempt to repudiate what he had done by preventing the registration of the transfer.
There is no question that the appellant took the Transfer of Land to the respondent whilst he was in hospital and he signed it there. We provide a short summary of the evidence in the category (a) documents:
Document 2
A letter dated 9 December 2014 to the respondent from his conveyancing solicitor enclosing the Transfer of Land and stamp duty document.
Document 3
An email dated 10 December 2014 from the respondent to the appellant indicating he was feeling stressed by the property negotiations with his former wife, promising the appellant he would redo his will and saying “[w]e should proceed with property transfer”.
Document 4
Emailed dated 13 December 2014 by the respondent to the appellant forwarding a copy of an email relevant to the property settlement negotiations between the respondent and his former wife.
Document 5
WhatsApp messages dated 14 December 2014 in which the respondent informed the appellant that he was going to hospital and subsequently informed her that he had been injected with blood thinning medicine.
Document 6
Emails dated 14 December 2014 and 15 December 2014 between the respondent and his conveyancing solicitor about the delivery of the Transfer of Land and stamp duty document.
Documents 7, 8, 9 and 10
Emails sent by the respondent from the hospital to his bank and to the appellant (about unrelated topics but which the appellant asserts are relevant to whether the respondent had been sedated).
Document 14
Email dated 23 December 2014 from the respondent to the appellant forwarding a copy of an email from his conveyancing solicitor saying that the State Revenue Office would take about 5 weeks to stamp the transfer.
Document 15
An email dated 27 February 2015 by the respondent to the appellant sending her a copy of the Certificate of Title showing her now to be a registered joint proprietor of G Street with the one line message “[w]e are now joined at the hips”.
Document 17
Emails dated 12 and 14 December 2014 between the respondent and a lawyer about an appointment to update his will.
Document 18 and 19
Emails dated 24 to 27 March 2015 relevant to the terms of the Deed of Gift.
Annexure to the appellant’s affidavit filed 27.11.18
WhatsApp messages the appellant says are dated 16 December 2014 between the respondent and the appellant about what provisions the respondent would make for his children by way of inheritance.
Had this evidence been adduced by the appellant in a defended trial it is likely the respondent would have had the opportunity of testing the appellant on the evidence; be tested himself about this evidence and provide other evidence about the circumstances of the execution of the transfer. The admission of this evidence would require a new trial.
Importantly, however, it should not be forgotten that the appeal is against a property settlement order which the appellant submitted is erroneous.
Counsel for the appellant asserted that the primary judge “set aside” the second transfer of the 40 per cent interest in G Street to the appellant. The primary judge did not do that. The primary judge took all of the considerations under s 79(4) of the Act into account and made an order for the adjustment of the property of the parties pursuant to s 79 of the Act.
When discussing the initial transfer of 10 per cent of G Street to the appellant, the primary judge said at [87]:
That is not to say that the [appellant] gets 10% but rather that it is a matter that should be taken into account with all of the other matters in s 79 that must be considered to arrive at a just and equitable outcome. In my view, this is a case where percentages, an approach often used by courts, is entirely inappropriate because of the limited evidence of contribution which can identify specific entitlements whilst taking into accounts benefits also received.
The focus of the appellant’s submissions, which were about the circumstances in which the appellant obtained the 40 per cent interest in G Street and the Deed of Gift the parties signed in about March 2015, are distractions. What the primary judge was bound to do, as part of making a determination under s 79 of the Act, was to assess contributions to the acquisition, conservation and improvement of G Street. The primary judge concluded that the appellant could only claim the most moderate non-financial contributions and that the respondent had made the overwhelming financial contributions to the acquisition, conservation and improvement of G Street during a short relationship and a very short marriage. When considering s 79(4)(d)-(f), the primary judge was cognisant of the respondent’s financial position and earning capacity as compared to those of the appellant. The primary judge made the property settlement order after considering the relevant evidence in light of the statutory requirements.
We conclude that the category (a) evidence, if admitted, would not demonstrate that his Honour erred in making the paragraphs of the property settlement order which are under appeal. We are not satisfied that the admission of the evidence would have produced a different result.
Category (b) documents and evidence: Did the parties live together on a genuine domestic basis?
The documents and evidence in category (b) relate to Ground 1C which is in the following terms:
The Court's finding (at paragraphs 48, 62, 67 and 104) that the [respondent] and the [appellant] had not been in a de facto relationship, that the relationship was made up of intermittent periods when the parties were together, and that the relationship as a whole had been modest, (at paragraphs 67, 96 and 105) was flawed by reason that the Court was unaware of and therefore did not take into account previous written statements and representations by the [respondent] that the [appellant] was the domestic partner of the [respondent] (that is, the parties had lived together before being married).
Documents 2, 11, 12 and 13 relate to a transfer signed by the respondent which refers to “the Natural Love and Affection the [respondent] has for his domestic partner being the [appellant]” and a stamp duty document prepared on behalf of the respondent but signed only by the appellant which contains the statement “[a]lthough we are not married to each other we are domestic partners to each other and are living together as a couple on a genuine domestic basis”.
At paragraphs 18 to 43 of the respondent’s trial affidavit under the heading “We Did Not Live Together” the respondent sets out what he says were the living arrangements during the relationship.
The primary judge made the following findings:
48. The parties had not lived together in any sense of a committed relationship when in April 2014, the [respondent] purchased G Street….
…
62.In assessing the nature and extent of the parties’ relationship, the only conclusion open on the evidence is that it was short and made up of intermittent periods when the parties were together. The duration of the relationship is irrelevant save that it sets the physical parameters of the focus of the court on what each did.
…
67.To the extent that [the appellant] fulfilled a role as homemaker, it is hard to see where as G Street was not the parties’ home and they each seemed to retain separate residences...
…
96.In respect of the orders I propose affecting the [appellant], G Street has never been her home and so returning the legal interest to the [respondent] is not an issue…
…
105…In addition, subsequent to its acquisition, the property has been renovated at the [respondent’s] expense and never lived in by the [respondent] and [appellant] together.
The appellant submitted that these findings would not have been made if the category (b) evidence which the appellant now sought to adduce had been before the primary judge. We do not accept that submission. The inferences which the appellant sought the Court to draw from this evidence are disputed. Again, had this evidence been available during trial, the respondent would have had the opportunity of testing the appellant on the evidence; been tested himself about this evidence and been able to provide other evidence which buttressed his assertions about the course which the relationship with the appellant had taken.
During final submissions, counsel for the appellant conceded that even if the primary judge had made an error in relation to how the parties were “living together”, no contribution finding would flow from that evidence. The extent of the submission was that the evidence, if adduced, would have assisted the appellant at trial because it would have usefully allowed the primary judge to better understand the quality of the relationship. Section 93A(2) of the Act does not permit the admission of further evidence merely because it is useful (see CDJ at [113]).
The admission of this new evidence would require a new trial. We are not satisfied that this further evidence would produce a different result nor that justice would be served by admitting this further evidence. The admission of this evidence would not demonstrate that his Honour erred in making the paragraphs of the order under appeal.
Category (c) document: Discovery
This document relates to Ground 1 which asserts that, had the respondent complied with his obligations of disclosure, the documents the appellant now wishes to adduce in categories (a) and (b), would have been provided by the respondent to the Court and the Court would not have been misled by the respondent’s unchallenged evidence.
The category (c) document is about inter partes discovery. As already mentioned, the appellant either had or had access to all of the category (a) and (b) documents. It is consequently of no moment as to whether the respondent had formally discovered these documents to the appellant. This document is not a relevant document and is, accordingly, not admissible.
Category (d) documents: The appellant’s failure to appear on 15 June 2018
These documents relate to Ground 1B which is in the following terms:
The findings that the [respondent] should be permitted to proceed at trial on his own unchallenged evidence as that course did not create any significant prejudice to the appellant not of her own making, that any adjournment was futile, and (at paragraph 11) that there was no acceptable basis for the [appellant] not to attend the trial were flawed for the additional reason that the Court was unaware that she was medically unfit to attend or appear at the trial.
The appellant sought to adduce by way of further evidence a medical certificate dated 26 June 2018 from a doctor (document 21). It asserted that the appellant was bed bound due to pelvic pain and migraines from Friday 8 June 2018 until Friday 15 June 2018. The respondent submitted that the document was not admissible given the rule against hearsay evidence (s 59 of the Evidence Act 1995 (Cth) (“the Evidence Act”)). The appellant sought to rely alternatively on s 67(4) or s 177 of the Evidence Act. In relation to s 177, there is no evidence that service was effected within the requisite time. In any event, the admission of hearsay evidence under either of those sections requires an exercise of discretion. The primary judge recorded that the appellant appeared on her own behalf for the whole of 14 June 2018. The transcript commences at 10:53 am and concludes at 4:16 pm. Counsel for the appellant conceded that the appellant was not “bed bound” on that day. Counsel for the appellant indicated that the document could be admitted subject to it being given little weight. We are of the view that given the difficulty with the assertions on the face of the document, we would not exercise the discretion suggested by the appellant and the hearsay objection is upheld.
The appellant also sought to adduce evidence in an affidavit filed 6 December 2018 which contained assertions about the history of her legal representation and about her health.
In April 2018, the final trial was set down to commence on 14 June 2018 and a timetable for the filing of evidence by affidavit was ordered. The respondent complied with that timetable and the appellant did not. The appellant’s lawyers ceased to act for her on the day after the appellant’s evidence by affidavit was due to be filed. The appellant appeared on 14 June 2018 without legal representation.
The primary judge recorded that at the end of the proceedings on 14 June 2018 the appellant announced that she could not attend the following day. She was warned that her absence would lead to the matter proceeding without her. The appellant did not attend on 15 June 2018. The primary judge found that there was no acceptable basis for the appellant not to attend.
In a separate judgment, also published on 19 June 2018, the primary judge recorded the reasons for making the orders on 14 June 2018 dismissing the appellant’s application for an adjournment. The appellant has not appealed the order of 14 June 2018 which dismissed her application for an adjournment of the trial.
There is no basis to allow evidence relevant to an application, the dismissal of which, is not the subject of any appeal.
Conclusion about the application to adduce further evidence
The appellant has not established a basis for adducing any of the further evidence. Further, counsel for the appellant conceded that the appellant had the opportunity, prior to the trial before the primary judge, to file the evidence upon which she now seeks to rely and that she deliberately withheld doing so. The deliberate failure to call evidence at trial ordinarily weighs heavily against the exercise of discretion (CDJ at [116]). The admission of the further evidence would require a new trial and we conclude that that would not be in the interests of justice.
The application to adduce further evidence filed by the appellant on 20 November 2018 shall be dismissed.
grounds 1, 1B, 1C and 3
Counsel for the appellant indicated that these grounds were reliant upon the success of the application to adduce further evidence. That application has been unsuccessful and accordingly, nothing more need be said about these grounds.
Ground 1a
This ground asserts that the primary judge did not take into account or give sufficient weight to the fact that the appellant was unrepresented and that she opposed the orders the respondent sought. The appellant submitted that these matters taken together meant that the primary judge was in error when proceeding with the trial on 15 June 2018 in the absence of the appellant.
The primary judge was aware that the appellant was without legal representation ([5] and [6]). The primary judge was also well aware, as a result of the appellant’s conduct throughout the proceedings, that she was seeking a greater share of the matrimonial property than her then legal interests, and therefore she was opposed to any order depriving her of her then interest as joint tenant in G Street.
The prejudice to the appellant of permitting the respondent to proceed as if the proceedings were undefended was of her own making, was the subject of exchanges between the appellant and the primary judge on 14 June 2018 and was comprehensively addressed in the separate reasons given by the primary judge on 19 June 2018 for refusing the appellant’s adjournment application on 14 June 2018. As already mentioned, the order refusing the appellant’s adjournment application is not the subject of this appeal.
At [17], the primary judge summarised his findings in the separate judgment for refusing the adjournment as follows:
17. As also noted in the reasons for rejecting the adjournment, the [appellant] was unable to tell the court when she would be ready to proceed. I held that any adjournment was therefore futile as it would be unlikely that she had any clear plan to resolve her own dilemma. Returning then to the [respondent’s] application to proceed in the absence of the [appellant], there is no indication of the [appellant’s] intention to comply with orders. There is no indication that she intended to participate through having solicitors and counsel.
As discussed above, counsel for the appellant conceded, and we agree, that the appellant had the opportunity to file evidence in support of her application for a property settlement order but deliberately did not do so.
There is no merit in Ground 1A.
Ground 2
The appellant asserted that the primary judge made the following factual errors:
a)That there was a mortgage over G Street; and
b)That the appropriate value of G Street, when considering what orders to make, was at the date of acquisition.
Did the primary judge find that there was a mortgage over G Street?
As to the appellant’s assertion that the primary judge found that there was a mortgage over G Street, the primary judge said at [48], [49] and [105]:
48.The parties had not lived together in any sense of a committed relationship when in April 2014, the [respondent] purchased G Street. It was bought for $2.2 million and the funds were provided by the [respondent] and borrowings from the ANZ Bank. With the [appellant] not in paid employment, the obligation fell to the [respondent].
49.G Street is now unencumbered. When acquired, the [respondent] said the [appellant] “insisted” that she have an interest. He provided that with a 10% interest as a tenant in common. That becomes relevant for purposes to which I shall return as I consider that this should be seen as a gift by the [respondent].
…
105.Offset against [the respondent’s 10 per cent gift to the appellant] however is the fact that there was a mortgage so to that extent, the 10 per cent could not be seen as $220,000. That was not the equity at the time of the acquisition. In addition, subsequent to its acquisition, the property has been renovated at the [respondent]’s expense and never lived in by the [respondent] and [appellant] together.
The respondent’s evidence at paragraph 113 of his trial affidavit was that the acquisition of G Street:
…was solely funded by [the respondent] in part from borrowings from the ANZ Bank arranged through the Trust. The title to the property, however, is unencumbered and the ANZ Bank has a mortgage secured over another property…
There is no finding in [48] that the borrowings to acquire G Street were secured against that property nor was there a finding at [105] that the mortgage used to secure the money to acquire G Street was registered against that property. Counsel for the appellant agreed that [48] and [49] could be read in a way that was consistent with the respondent’s evidence at paragraph 113 of his trial affidavit. We accept the respondent’s submission that the word “mortgage” in [105] may be read as synonymous with the word “borrowing” in [48] rather than taken in the strict sense as meaning an encumbrance registered on the title of G Street.
We therefore find there is no error in the reasons relating to the borrowing taken by the respondent at the time of the acquisition of G Street. In any event, if there is an error in [105], it is not material as it is not controversial that the respondent borrowed funds to acquire the property.
Was the timing of the valuation incorrect?
The appellant asserted that the second factual error is contained in the statement made by the primary judge at [105]:
Offset against that however is the fact that there was a mortgage so to that extent, the 10 per cent could not be seen as $220,000. That was not the equity at the time of the acquisition…
The appellant asserted that in this paragraph the primary judge failed to find that the appellant’s 10 per cent interest in G Street was 10 per cent of $3,070,000 (the value at the date of the trial), i.e. $307,000. There is no basis in the passage upon which the appellant relied at [105] to assert that the primary judge made a finding that at the date of the trial the appellant’s legal interest in the gift of 10 per cent of G Street had a value of less than $220,000 rather than a value of $307,000. The primary judge at [105] was clearly referring to the value “at the time of the acquisition” and the contribution made at that time. The gross purchase price of G Street at acquisition was $2.2 million, so 10 per cent was $220,000. But given the respondent had borrowed monies to acquire G Street, the primary judge was correct in finding that 10 per cent of the equity was less than $220,000.
There is no merit in Ground 2.
Ground 3A
Ground 3A makes the same assertion of error as in Ground 3 but relies solely upon the evidence which was before the primary judge and not on any further evidence.
This ground asserts that the primary judge incorrectly concluded that the appellant placed pressure on the respondent to transfer a 40 per cent interest in G Street to her because the primary judge failed to take into account:
a)That there was no evidence that the transfer of 40 per cent could not be seen as a gift;
b)The respondent’s evidence that he acceded to the appellant’s every demand; and
c)The confirmation of the transfer in the Deed of Gift in March 2015 and in particular clause 8 of that deed.
In respect of contention a), there was evidence from the respondent capable of sustaining a finding that the transfer of 40 per cent could not be seen as a gift at paragraphs 116 to 118 of the respondent’s affidavit set out above. There is no basis for contention b), that the primary judge failed to take into account the respondent’s evidence that he acceded to the appellant’s every demand (see paragraph 46 of the respondent’s trial affidavit) when concluding that the appellant pressured the respondent at a vulnerable time.
In respect of contention c), the Deed of Gift signed by the parties in March 2015 was Exhibit H2 and provided that the respondent would pay to the appellant’s brother and sister an amount of $500,000 each if the appellant died before the respondent.
Clauses 7 and 8 of the deed were in the following terms:
7. The parties agree that this Deed will have no application in the event that:
(a) The Parties do not own [G Street] as joint tenants as at the date of [the appellant]’s death; or
(b) [The respondent] predeceases [the appellant].
8.(a) If the parties separated or divorced and [G Street] is still owned by the parties as joint tenants, any property settlement or Family Court proceedings will take into account any payment made or to be made under this Deed by [the respondent].
(b) The payment under 8(a) will be:
(i)$1 million, if [the appellant] and [the respondent] have any children together which [the respondent] is supporting financially whether part of any settlement or court proceedings or otherwise; or
(ii)half the value of [G Street] with a minimum of $1million if [the respondent] and [the appellant] do not have any children,
and such payment will be taken into account as part of the Property Settlement or Court proceedings.
(c) This clause 8 is intended to apply when the parties are separated or divorced and [the appellant] predeceases [the respondent] before a final property settlement is agreed or determined. It is not intended that [the respondent] pays twice under this Deed and then under any property settlement or proceedings.
(As per original)
The appellant asserted that the primary judge failed to take into account, when making the finding that the respondent was under pressure at a vulnerable time in December 2014, that he executed the deed in March 2015, which recorded and was based upon the fact that the parties were at that time the proprietors of G Street by way of a joint tenancy.
The primary judge was aware of the terms of the deed (see [54]–[57] and [65]). The primary judge set out the text of clause 7 at [56].
The appellant argued that the deed is tantamount to a re-conferral of the December 2014 transfer which the deed recognises and adopts and asserted that the deed exhibits a fixed, deliberate determination by the respondent to abide by the gift of joint tenancy at a time when there is no evidence or finding that any undue influence had continued to exist.
There is no basis to suggest that the primary judge failed to take the deed into account when making findings about what had happened when the respondent signed the transfer in December 2014.
We refer to what we have earlier said about the conclusions the primary judge reached about the respective contributions each party made to the acquisition, conservation and improvement of G Street and that the primary judge made the property settlement order after consideration of all relevant evidence in light of the statutory requirements.
There is no merit in Ground 3A.
Ground 4
Ground 4 asserts that the finding of the respondent’s overwhelming contributions failed to take into account that the appellant had 50 per cent of the legal interest in G Street, or at worst, 10 per cent legal interest.
There is no basis for this assertion. The primary judge clearly took into account the legal ownership of G Street at the date of trial.
There is no merit in Ground 4.
Ground 4A
This ground asserts that the primary judge failed to take into account not only the effect of the property settlement order upon the appellant’s legal interests in G Street, but that the order also “deprive[d] her of the benefits of the deed under seal” without providing financial compensation.
As we have already said, there is no basis for an assertion that the primary judge failed to take into account the appellant’s legal interest in G Street prior to making the adjustive order.
The terms of clause 8 of the Deed of Gift are set out above. Both parties by way of the final orders which they sought, asked the Court to sever the joint tenancy of G Street. At [57] the primary judge correctly observed:
Because of the orders I intend to make, the parties will immediately no longer own the property as joint tenants. I propose to sever the tenancy by the orders and that brings the application of the deed to an end.
Nonetheless, the appellant contended that the primary judge erred in not having regard to clause 8 in the Deed of Gift and in depriving the appellant of her interest in G Street without her receiving at least half the value of the property.
Section 71A of the Act has the effect of providing that parties may enter into a financial agreement, pursuant to the provisions of Part VIII of the Act, that ousts the jurisdiction of a court exercising jurisdiction under the Act in respect of the financial matters to which the agreement applies. Parties cannot otherwise enter into an agreement that does so (see Sykes and Sykes, Dotch (1979) FLC 90-652; Woodcock v Woodcock (1997) FLC 92-739; Candlish and Pratt (1980) FLC 90‑819; Woodland and Todd (2005) FLC 93-217).
In Woodland and Todd (2005) FLC 93-217, the Full Court said at [38]:
Where parties enter into an agreement concerning property… the Court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing.
Whilst cognisant of the terms of the Deed of Gift, the primary judge was not bound by those terms when determining what was a just and equitable property settlement order. In any event, given the applications each party had made for final orders, clause 7 provided that the Deed of Gift had no application.
There is no merit in Ground 4A.
Ground 5
Ground 5 asserts that there was no basis upon which the Court could be satisfied that the orders made were just and equitable and the Court’s discretion under s 79 of the Act had miscarried.
As these are not competent grounds of appeal they have no merit.
Ground 6
Ground 6 is in the following terms:
Further owing to non-disclosure of material evidence and the giving of misleading evidence by the [respondent] at trial (as stated above), there should be an order that the [respondent] pay the [appellant]’s costs of the proceedings below.
First, this is not a competent ground of appeal. Secondly, the appellant’s Amended Summary of Argument makes clear that this ground “depends on findings made as a result of any further evidence received by this Court” and that application has been unsuccessful.
There is no merit in Ground 6.
Other oral submissions
Whilst counsel for the appellant, in oral submissions, submitted that the primary judge had failed to provide adequate reasons as to his consideration of the Deed of Gift and how he had taken the 50 per cent transfer by the respondent to the appellant in G Street into account, he agreed that there was no such ground articulated in the Further Amended Notice of Appeal and accordingly, we do not have any regard to that submission.
Conclusion
Given that no ground of appeal has been successful, the appeal shall be dismissed.
Costs
Although the appellant has been wholly unsuccessful, the respondent has assets in excess of $12 million and the appellant, in comparison, has minimal wealth. There will be no order as to costs.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Kent & Watts JJ) delivered on 5 March 2019.
Associate:
Date: 5 March 2019
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Appeal
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Property
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Admissibility of Evidence
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