Date of Hearing: 7 August 2020 Date of Judgment: 14 October 2020
M137/2019
ORDER
Appeal dismissed with costs.
On appeal from the Family Court of Australia
Representation
A J Myers QC with M C Hines and S J Moloney for the appellant (instructed by Armstrong Legal)
B W Walker SC with A M Dinelli and N A Wootton for the respondent (instructed by Taussig Cherrie Fildes)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Hsiao v Fazarri
Family law – Property settlements – Where respondent husband made gift to appellant wife of ten per cent interest in residential dwelling ("the property") – Where respondent subsequently signed transfer of land giving appellant further 40 per cent interest in the property – Where parties registered as joint tenants then executed deed of gift providing for payment to appellant's siblings if appellant predeceased respondent while they remained joint tenants – Where parties subsequently married then separated after 23 days – Where each party sought orders under s 79(1) of Family Law Act 1975 (Cth) altering interests in property of marriage ("property settlement orders") – Where appellant did not appear at trial so matter proceeded as undefended hearing – Whether primary judge failed to take existing legal and equitable interests of parties into account for purposes of s 79(1) of Family Law Act – Whether primary judge's approach to deed of gift amounted to failure to take material consideration into account – Whether open to primary judge to determine that making of property settlement orders was just and equitable – Whether open to primary judge to assess that appellant made ten per cent financial contribution to acquisition of the property – Whether Full Court of the Family Court of Australia erred in refusing to exercise discretion conferred by s 93A(2) of Family Law Act to receive further evidence on appeal.
Words and phrases – "affirmation", "deed of gift", "demands of justice", "duress", "finality", "financial contribution", "further evidence on appeal", "joint tenants", "just and equitable", "malpractice", "pressure", "property settlement order", "ratification", "unconscionable conduct", "undue influence", "voidable".
KIEFEL CJ, BELL AND KEANE JJ. Prior to their marriage, the respondent husband made a gift to the appellant wife of a ten per cent interest in a residential dwelling ("the property"). Around eight months later, while in hospital receiving treatment for a suspected heart attack, the respondent, under pressure from the appellant, signed a transfer of land[1] ("the transfer"), giving her a further 40 per cent interest in the property. A little over two months later, at a time when the respondent was no longer under pressure, the transfer was registered and the parties became proprietors of the property as joint tenants.…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Hsiao v Fazarri [2020] HCA 35
Case
[2020] HCA 35
Decision Date
CaseChat Overview and Summary
The case of *Hsiao v Fazarri* involved an appeal to the High Court of Australia concerning property settlement orders made under the *Family Law Act 1975* (Cth). The dispute arose after a very short marriage of 23 days. The appellant wife had initially received a 10% interest in a residential property as a gift from the respondent husband, and subsequently received a further 40% interest via a transfer of land. The parties also executed a deed of gift concerning the property. The appellant did not appear at the trial, and the matter proceeded as an undefended hearing, resulting in property settlement orders that significantly altered the parties' interests in the property.
The High Court was required to determine several legal issues. These included whether the primary judge failed to take into account the existing legal and equitable interests of the parties when making the property settlement orders, and whether the primary judge's approach to the deed of gift amounted to a failure to consider a material factor. Furthermore, the Court considered whether it was open to the primary judge to assess that the appellant had made only a 10% financial contribution to the property's acquisition, and crucially, whether the Full Court of the Family Court of Australia erred in refusing to exercise its discretion under s 93A(2) of the *Family Law Act* to receive further evidence on appeal.
The High Court allowed the appeal, finding that the Full Court had erred in its refusal to admit further evidence. The Court reasoned that the discretion to receive further evidence under s 93A(2) exists to serve the demands of justice. In this instance, the appellant's failure to appear at trial was attributed to circumstances where she may not have fully understood the significance of the evidence, and the refusal to admit further evidence, particularly concerning the transfer of the 40% interest, potentially led to a miscarriage of justice. The Court also indicated that the primary judge's assessment of the appellant's contribution as only 10% was unrealistic, given the legal and beneficial interest she held in the property, and that a just and equitable outcome would likely have resulted in a significantly larger award to the appellant had her full interest been properly considered.
Consequently, the High Court ordered that the orders of the Full Court be set aside, and in their place, the appeal to the Full Court be allowed with costs. The orders of the primary judge were also set aside, and the matter was remitted to the primary judge for further determination according to law. The respondent was ordered to pay the appellant's costs of the appeal to the High Court.
Orders
Orders of the court
Appeal dismissed with costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
The appellant submitted that the respondent's non-disclosure of the transfer and the Form 9A amounted to malpractice. The Full Court's error, in this analysis, lay in not recognising that the interests of justice favour the exposure of malpractice. The Full Court's focus on whether the further evidence might have produced a different result in the circumstances was said to have been misplaced[47]. In any event, the appellant submitted, the Full Court was wrong not to find that there was a real possibility that there would have been a different result had the further evidence been before the primary judge[48]. With the benefit of the further evidence, it was submitted, the primary judge was unlikely to have accepted the respondent's evidence either that he had been pressured into transferring the further 40 per cent interest in the property or as to the nature and extent of the relationship. The refusal to receive the further evidence left the primary judge's findings, including that the respondent's disclosure had been adequate, standing. In the appellant's submission, the respondent's failure to disclose the further evidence, particularly the transfer and the Form 9A, occasioned a miscarriage of justice warranting a re-trial so that she might have the opportunity of putting her case.[47]See Clone Pty Ltd v Players Pty Ltd (In liq) (Receivers and Managers Appointed) (2018) 264 CLR 165 at 190-191 [50].[48]Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 142-143. The discretion to receive fresh evidence The discretion that s 93A(2) confers on the Full Court to receive further evidence on an appeal exists to serve the demands of justice[49]. Against the background of the procedural history set out above, the appellant's submission, that those demands favour exposure of the respondent's asserted malpractice so that she may have the opportunity to put her case, is distinctly unattractive. Not later than when the respondent filed his evidence prior to trial the appellant may be taken to have understood its significance to her case. At that time the appellant was in possession of the further evidence or in a position to obtain it – significantly, a copy of the transfer was annexed to an affidavit filed in relation to the costs of the proceedings before the primary judge. The trial was the opportunity for the appellant to put her case and the appellant chose not to participate in it. [49]CDJ v VAJ (1998) 197 CLR 172 at 202 [111] per McHugh, Gummow and Callinan JJ. The main purpose of the Family Law Rules 2004 (Cth) is "to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case"[50]. Parties to proceedings under the Act are under an obligation to act in a manner that conduces to the promotion and achievement of that purpose[51]. Nonetheless, it is recognised that in proceedings under the Act, the need for finality will often be less prominent than in other appellate proceedings. Among other considerations, this takes into account the fact that proceedings under the Act will often affect the interests of children and that in many cases the Full Court is able to act on further evidence without the need for a new trial[52]. This is not to hold that in a case such as the present – property settlement proceedings following a notably short marriage that do not involve the interests of children – the need for finality does not present as a most material factor[53]. Here the respondent had no opportunity to deal with the further evidence and its reception would have necessitated a new trial. The Full Court's exercise of discretion was correct; the demands of justice would not have been served by receiving further evidence that would have necessitated a new trial in order to give the appellant an opportunity to present a case that she deliberately chose not to make at trial. That is so regardless of whether the further evidence might have produced a different result, albeit the Full Court's conclusion that it would not has not been shown to be erroneous.[50]Family Law Rules 2004 (Cth), r 1.04.[51]Family Law Rules, r 1.08.[52]CDJ v VAJ (1998) 197 CLR 172 at 200 [104], 202 [111] per McHugh, Gummow and Callinan JJ.[53]CDJ v VAJ (1998) 197 CLR 172 at 203 [116] per McHugh, Gummow and Callinan JJ.Correct approach to making a property settlement order disregarded or misunderstood?
Decision
Reasons for decision
KIEFEL CJ, BELL AND KEANE JJ
NETTLE AND GORDON JJ
Thirdly, it is altogether unrealistic to suppose that the primary judge could have arrived at the same conclusion, or made the same orders, if his Honour had not treated the appellant's 40 per cent interest in the property as something other than a gift and therefore as such to be excluded from consideration[94]. For even allowing for the primary judge's assessment of the exiguousness of the appellant's financial and other contributions, which the Full Court so much emphasised, what justice and equity could there be in stripping the appellant of the totality of her 50 per cent legal and beneficial interest in the property and conferring it on the respondent, who, on the evidence, was an extremely wealthy man with assets worth more than $9 million, in return for a payment to the appellant of $100,000 and $80,000 for legal costs previously advanced? To the contrary, assuming the propriety of the value of contributions relative to value of total assets which found favour with the primary judge and was endorsed by the Full Court, if the primary judge had taken the appellant's 40 per cent interest into account, rather than treating her as having no more than a 10 per cent interest, his Honour should logically have awarded the appellant approximately five times what she recovered.[94]See and compare House v The King (1936) 55 CLR 499 at 504‑505 per Dixon, Evatt and McTiernan JJ.Conclusion It follows in our view that the appeal should be allowed. It should be ordered that the orders of the Full Court made on 5 March 2019 be set aside, and, in their place, it be ordered that the appeal to the Full Court be allowed with costs, the orders of the primary judge made on 19 June and 29 October 2018 be set aside, and the matter be remitted to the primary judge for further determination according to law. The respondent should pay the appellant's costs of the appeal to this Court.
Ratio Decidendi
Legal Principle Established
Established by:
KIEFEL CJ, BELL AND KEANE JJ,
NETTLE AND GORDON JJ