James & Snipper - [2018] FamCAFC 235

FAMILY COURT OF AUSTRALIA

JAMES & SNIPPER AND ANOR

[2018] FamCAFC 235

FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Treatment of tax debt – Where the husband challenged the wife’s credibility – Where the trial judge gave adequate consideration of matters under s 79(4) – Where the trial judge gave adequate reasons to justify making an adjustment under s 75(2) – Where no error on part of the trial judge demonstrated – Where no merits to grounds of appeal – Appeal dismissed.

FAMILY LAW – APPEAL – CHILDREN – Where the father appealed against an order providing for the children to spend time with him for one discrete period of 24 hours each fortnight – Where the father contended the trial judge intended to make an order providing for him to immediately spend three nights each alternate weekend with the children – Where no merit to ground of appeal.

Family Law Act 1975 (Cth) ss 75(2)(b), 75(2)(h), 75(2)(k), 79(4)(d), 79(4)(e), 79(4)(f), 79(4)(g)
Family Law Rules 2004 (Cth)

Abalos v Australian Postal Commission (1990) 171 CLR 167; [1990] HCA 47
DL v The Queen (2018) 356 ALR 197; [2018] HCA 26
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Sahrawi & Hadrami (2018) FLC 93-857; [2018] FamCAFC 170
Snipper & James and Ors [2018] FamCA 7
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; [1999] HCA 3
Steinbrenner & Steinbrenner [2008] FamCAFC 193

APPELLANT:

Mr James

1ST RESPONDENT:

Ms Snipper

2ND RESPONDENT:

Commissioner of Taxation

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid New South Wales

FILE NUMBER:

SYC

1913

2012

APPEAL NUMBER:

EAA

2018

DATE DELIVERED:

3 December 2018

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Sydney

JUDGMENT OF:

Ainslie-Wallace, Aldridge & Austin JJ

HEARING DATE:

12 September 2018

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

12 January 2018

LOWER COURT MNC:

[2018] FamCA 7

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Eardley

COUNSEL FOR THE 1ST RESPONDENT:

Mr Batey

SOLICITOR FOR THE 1ST RESPONDENT:

Harris Freidman Lawyers

COUNSEL FOR THE 2ND RESPONDENT:

Mr Kasep

SOLICITOR FOR THE 2ND RESPONDENT:

Commissioner of Taxation

THE INDEPENDENT CHILDREN’S LAWYER:

Did not participate

Orders

The appeal is dismissed.
The respondent shall file and serve her written submissions on costs within 21 days of the date of these orders.
The appellant and the second respondent shall file and serve their written submissions in reply within 42 days of the date of these orders.

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 James & Snipper and Anor 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 SYDNEY

Appeal Number: EAA 27 of 2018
File Number: SYC 1913 of 2012

Mr James

Appellant

And

Ms Snipper

First Respondent

And

Commissioner of Taxation

Second Respondent

And

Independent Children’s Lawyer

REASONS FOR JUDGMENT

AINSLIE-WALLACE & ALDRIDGE JJ

The relevant background facts are set out in the primary judgment of Watts J and do not need repeating (Snipper & James and Ors [2018] FamCA 7). We have had the advantage of reading the draft reasons for judgment of Austin J and agree with his conclusion as to the disposition of the appeal; however, we wish to give separate consideration to the grounds of appeal.

The parenting ground

In broad terms, the primary judge made orders that the children live with the wife, that she have sole parental responsibility subject to some qualifications which are not relevant here, and providing for the time to be spent between the children and the husband.
Although the Notice of Appeal challenged several of his Honour’s orders as to the time to be spent by the children with the husband, ultimately only one challenge was pressed by the husband, namely that against Order 6.1 (Ground 2). That order provided that the children spend time with the husband from 9 am each alternate Sunday until 9 am before school on Monday.
The husband contends that the primary judge ignored relevant evidence which, had his Honour taken it into account, would have led him to make an order that the children spend each weekend with the husband from Friday after school until Monday morning.
The relevant evidence was said to be that of Dr Y, the expert who prepared a report for the primary judge on the parenting issues. In the report, which was released on 3 December 2016, the expert made recommendations as to the time that the children should, in his opinion, spend with the husband. Subsequent to the release of the report, in February 2017, an interim order was made in accordance with Dr Y’s recommendation at paragraph 703.1. Order 6.1 ultimately made by his Honour is in the same terms as the interim order.
The husband’s position at trial was that the children should spend 50 per cent of their time with him, while the Independent Children's Lawyer recommended that the interim order be maintained.
It is of some assistance to set out Dr Y’s conclusion, which sits under the heading “Recommendations” at page 53 of the report, to give context to the argument:
703. The children spend time with the [husband] that is regular, but well less than 50% time, incorporates clear orders that limit paternal coercive behaviours, and that at least initially occurs in the general presence of another adult who understand the orders limiting such behaviours and whom the court can trust to respect such orders.
703.1An example of the same would be for the children to spend one weekend day with the [husband] per fortnight.
…
Dr Y was cross examined on behalf of the husband to the effect that it would be in the children’s best interests if they were to spend two days each weekend with the husband. This was rejected by the expert who said that his recommended one day per alternate weekend was “proportionate to [the children’s] needs and [the husband’s] capacity” (Transcript, 20 July 2017, p 437 ln 23-24).
Against this evidence, it was argued that his Honour’s order was an error in the exercise of his discretion and was “plainly wrong”. It was said that the expert’s evidence “does not exclude the children spending time with the [husband] from completion of school on Friday to 9.00am on Monday” (Husband’s Summary of Argument filed 29 June 2018, paragraph 51).
Whatever interpretation the husband may have wished to place on the recommendation Dr Y made at paragraph 703.1 of his report, Dr Y’s answers in oral evidence to the propositions put to him by the husband’s counsel made his position beyond argument – that is, that there was no scope for more weekend time.
The husband also submitted that the primary judge had, in fact, determined that the children should spend time with him every second weekend from the completion of school on Friday afternoon to Monday mornings (see at [231] of his Honour’s reasons). We reject that submission. When his Honour’s reasons are read as a whole, that paragraph is clearly a reference to Order 6.8.1 (which provided that the children upon turning 14 may choose to spend more time with their father up to a maximum time being from after school on Friday to before school on Monday each alternate weekend). His Honour’s reasons at [231] do not refer to the challenged order, Order 6.1.
His Honour’s order, based on that evidence, was well open to him and there is no substance in this challenge.

The financial grounds

As discussed in the reasons of Austin J, the primary judge found that the parties’ combined debt to the Australian Tax Office (“ATO”) eclipsed the value of their net property. The husband’s tax debt was, at the time of the hearing, in the order of $2.01m and that of the wife about $113,000. His Honour determined that the wife should repay her debt to the ATO and contribute $200,000 to the husband’s debt to the ATO.
The ATO intervened in the proceedings and made submissions in relation to the appeal, supporting only the husband’s challenges found in Grounds 7 and 10.

Grounds 7 and 1

These grounds, albeit in different contexts, challenge the primary judge’s conclusions about the wife’s income and financial resources.
Ground 7 contends that the primary judge erred in his determination of the wife’s income and Ground 1 challenges the primary judge’s failure to find that the wife’s evidence was not credible.
The basis of the argument on both grounds concern, in large part, the wife’s directorship of a company called A Pty Ltd (“the Company”).
For some years before the trial, the wife had been one of two directors of the Company. It employs about 11 people.
The wife said that she had not drawn a salary from the company nor had she been paid any income for her work with the company. The company accounts showed accumulated funds standing to the company’s credit which the wife said were reserved to pay employee entitlements.
An expert was engaged to value the Company. In order to prepare the valuation, the expert was provided with all of the relevant books and records of the Company. In order to derive a value for the Company, the expert considered that the accounts should be adjusted to include an appropriate figure for the wife’s remuneration to reflect the work performed by her in the company. He concluded in his report dated 12 July 2017 at page 18 that given the work that the wife did, the appropriate remuneration would be $52,860 salary with $5,022 being paid as superannuation. The evidence of the expert was not challenged by either the husband or the ATO.
It was not contended that the wife’s evidence was wrong; that is, it was not suggested to her that she did in fact draw any remuneration from the Company.
His Honour accepted the expert’s assessment of the wife’s reasonable remuneration and took it into account in considering the matters to which

s 79(4)(d) to (g) of the Family Law Act 1975 (Cth) (“the Act”) refer (at [289]).
Returning then to the challenge in Ground 7, it was contended by the husband and the ATO that the primary judge erred in accepting the wife’s evidence as to her finances and that the wife’s evidence in this regard was unreliable because she had failed to make full disclosure. It is this aspect, the asserted failure to make full disclosure, that relates to Ground 1.
At [28] and [29] of his reasons, the primary judge made general findings as to the credibility of the parties. It was argued that the primary judge should have found that the wife’s evidence was not worthy of acceptance because she had failed to make financial disclosure. In our view this ground is misguided and misconceived. However, we set out his Honour’s conclusions:
Wife
28. The wife gave her evidence in a more straightforward manner than the husband but there were occasions where I found it difficult to accept some of the things the wife said, although I did not form the impression she was setting out to deliberately deceive.
Husband
29. The husband on the whole wished to qualify most answers that he gave by giving an extensive background that may or may not have been relevant to the question that was actually being asked. On many occasions the husband did not respond directly to a question being asked until it was re-put. I did not accept the husband’s answers on a number of matters as being credible (for example his explanation in respect of the Mother’s Day breakfast (discussed below)) and there were many answers that the husband gave that were the product of his own perceptions and attitudes which coloured his memory as to what had occurred.
We first observe that the resolution of the evidentiary issues in this case did not appear to rest, either wholly or in part, on issues of the parties’ credibility or believability and for that reason, his Honour’s conclusions at [28] and [29] were immaterial to his final determination.
However, dealing with the husband’s contention, it was first argued that his Honour ought to have found that the wife was not a credible witness because she did not disclose her ability to draw an income from the Company. As we have said, it was not suggested that the wife’s evidence that she did not draw a salary was false, but rather that the expert’s assessment was that were she remunerated, a proper salary would be in the order of $52,860. There being no evidence that the wife had, in the relevant period, drawn a salary or other income from the Company, and indeed that position was contrary to the proposition put to her in cross-examination by the husband’s counsel (Transcript, 17 July 2017, p 82 ln 14-39), there can be no support for the contention that, in this regard, the wife failed to make proper disclosure of her income.
However, the husband further contended that the wife’s evidence was unreliable because she did not produce documents sought from her by the ATO in May 2017 (with the hearing to commence in mid-July). Despite efforts in

cross-examination by both counsel for the ATO and the husband, at its highest, the evidence of the wife was that the request for the documents went to her lawyer and she did not know why the documents were not produced (Transcript, 17 July 2017, p 33-34 and 59). She denied that she had deliberately ignored the documents (Transcript, 17 July 2017, p 32). His Honour made no finding that she did.
Much time was spent on the question of why the documents were not produced by the wife or on her behalf. In submissions on this point, the ATO submitted that the documents would have allowed it to challenge the wife on her assertion that the money was kept for employee entitlements, although quite how and to what effect that would have on the ultimate outcome was unspecified. However, counsel for the ATO conceded during the hearing of the appeal that no further attempt was made to secure the documents. The wife said in her evidence that her sister, the Company accountant, had the relevant books and records and her sister was then present in Court. No application of any kind was made to the primary judge seeking to obtain the records sought. Rather, the matter was left unresolved.
We point out, however, that there is a significant difference between his Honour making the finding that the Company can remunerate the wife to a particular level and the contention of the husband and the ATO that in some way, the wife had failed to disclose information.
For the husband, it was argued that the wife’s evidence was unreliable because she had not produced the documents and/or perhaps because she did not give a satisfactory explanation as to why the reserves were held against employee entitlements.
As we have said, his Honour accepted the expert’s opinion as to what would be a reasonable remuneration for the wife if the company was to pay her for the time she expended, and took it into account.
It is important to understand that neither counsel for the husband or the ATO questioned the expert on his report and it seems difficult to argue that the explanation that the wife gave, absent any other evidence, was unsatisfactory.
His Honour found that while there were some, unspecified, aspects of the wife’s evidence that he found “difficult to accept”, she did not set out “to deliberately deceive” (at [28]). That conclusion was entirely open on the evidence and there is thus no foundation in the challenge to that finding.
Finally to put the matter beyond doubt, his Honour said in the course of considering the matters to which s 75(2) of the Act relate said of the wife’s earning capacity:
289. … As between the husband and wife (and not taking into account the criticisms the [Commissioner] has made of the wife’s financial disclosure) I adopt $52,860 gross as an appropriate indication of the wife’s earning capacity.
(Emphasis added)
This ground is not made out. His Honour clearly rejected the argument that the wife had failed to make disclosure. Thus the foundational premise for the challenge, that his Honour erred in determining the wife’s income from the Company as a future financial resource, was not established and so far as the challenge to his Honour’s adoption of the amount posited by the expert is concerned, it is not made out.
The husband’s counsel submitted as further evidence of the wife’s failure to make full financial disclosure that the wife did not file evidence of her mother’s financial worth. It was argued that this made the wife’s evidence unreliable. As with the submissions generally on this point, no attempt was made to indicate why it would make the wife’s evidence unreliable and why, in circumstances where it was agreed that the wife’s mother had advanced her significant amounts of money in the past, it could possibly be relevant to a fact in issue.
In any event, there are at least two difficulties with the submissions as to credit. First, whilst a failure to give proper disclosure may be relevant to assessment of credibility, it does not follow that any non-disclosure must lead to an adverse credit finding. This is particularly in this case where the relevant company information had been made available to the expert and was easily available to the parties, if by no other means than through the expert’s report.
Secondly, if it was assumed as part of the challenge, a trial judge is not obliged to make general credit findings (see Sahrawi & Hadrami (2018) FLC 93-857 at [58]-[65]).
There is no substance in the challenge to his Honour’s findings as to the wife’s credibility.
Grounds 1 and 7 fail.

Grounds 10, 11 and 12

As has been indicated, the primary judge ordered the wife to contribute $200,000 towards repayment of the husband’s debt to the ATO.
To give some context to these grounds, it is helpful to set out parts of his Honour’s reasons.
His Honour at [260] set out a table showing the husband’s tax liabilities. He noted that of the $2.01m then owing in tax, some $604,111 was accumulated during the marriage. A significant sum, $1.07m, was accumulated after separation. The primary judge found that that the pre-separation tax liability of the husband was in the order of $772,918 being the husband’s tax liability before separation of $604,111 together with interest of $168,807 (at [305] and [321]).
The primary judge concluded that the wife should meet her tax debt of about $113,000 (at [315]). Turning to the husband’s debt, his Honour noted that the ATO sought that the wife contribute $600,000 to the husband’s overall tax debt (at [316]).
His Honour took into account that the wife received a substantial benefit from the husband’s post separation income.
His Honour concluded that it was just and equitable to require the wife to contribute $200,000 to the husband’s tax debt. His Honour reflected on how he arrived at that figure at [323], finding it to be 10 per cent of the husband’s debt and 16.3 per cent of the wife’s assets and it amounted to 18 per cent of the net assets available to the wife after payment of her own tax debt to the ATO.

Ground 10

In this ground, the husband contends that his Honour failed to adequately expose his reasons for arriving at the figure of $200,000 to be contributed by the wife towards the husband’s tax debt and further that to arrive at that figure represents an error in the exercise of his Honour’s discretion.
We do not accept that his Honour failed to expose his reasoning in coming to that figure. It is important to recall what was said by Coleman J in Steinbrenner & Steinbrenner [2008] FamCAFC 193 (at [234]):
Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective. In this Court’s view this is not such a case.

So too in this case, the primary judge’s reasoning process is well exposed, including in particular his Honour’s reflection as to how and when the tax debt was incurred and the other financial matters to which he referred. For the same reasons we do not accept that his Honour’s conclusion reflects an error in the exercise of his discretion.

Ground 11

This ground contends that the primary judge was wrong in concluding that the husband would be able to negotiate terms of payment of his tax. His Honour said:
320. As discussed during the hearing, the husband is 46 years of age. His evidence is that he has always worked for Company C, he likes his job and he doesn’t have to retire until he is 60 years of age. He envisages that he will be employed at Company C as a senior executive for the next 14 years. Without taking into account accruing interest, if the Commissioner entered into an arrangement over a 15 year period to receive payment of the outstanding debt then I could see no reason why even after the husband had fulfilled his child support responsibilities the debt could not be paid off particularly when one has regard to increases the husband may receive in his remuneration in the next 14 years. I was left uncertain at the end of the evidence given by the Commissioner as to whether or not the Commissioner would consider such an arrangement as a realistic one.
The challenge to this finding is not so much that the husband is able to negotiate with the ATO as to terms by which he can repay his tax; rather the challenge is to his Honour’s finding that the husband would be able to make such repayments over the next 14 years of his working life. It was argued that this finding was against the evidence of an employee from the ATO which was to the effect that the ATO would negotiate terms for repayment only over a period of three years.
His Honour referred to the evidence about the ATO’s approach to payment arrangements, commenting that the evidence was “unsatisfactory” as to why such terms were limited to three years. His Honour concluded at [319] that no “satisfactory explanation” was given as to that limitation.
In evidence on this matter, the ATO’s witness was asked to consider, given the husband’s employment and the number of years until he retires, whether terms for repayment longer than three years was possible. She said:
Well, we can certainly look at that within our scope for recovery. What we’ve looked at in this scenario is what sort of recovery the Commissioner ..... bankrupting [the husband], what would be the return under that scenario versus a long-term arrangement to get payment in full. We certainly wouldn’t ..... out but we certainly have to consider all the facts of the matter.
(Transcript, 19 July 2017, p 286 ln 31-35)
There is here then clear support for his Honour’s conclusion that it was possible for the husband to negotiate a longer repayment term than three years.

Ground 12

This ground challenges his Honour’s conclusion as to the wife’s contribution to the husband’s tax debt, contending that his Honour failed to take into account the husband’s capacity to make payments on the remaining debt.
This challenge is without foundation and is not made out. The primary judge’s finding at [320], together with his other findings as to the husband’s financial capacity, clearly reflect his Honour’s assessment of the husband’s ability to pay what remains of his tax debt.

Ground 5

It was asserted in this ground that the primary judge erred in finding that the husband’s present partner, Ms T, represented a financial resource to his benefit.
His Honour said:
291.The wife has her mother as a major financial resource. Less significantly, Ms T is a financial resource for the husband.
It was the husband’s contention that his Honour should have found, to the contrary, that Ms T was not a financial resource for the husband. It was argued that the evidence before the primary judge was that Ms T was not then working and had not worked since the end of 2016 (the trial took place in July 2017). The wife submitted that Ms T when last employed earned in the region of $128,000. Ms T said in her oral evidence that she shares a property with the husband and has offered to contribute to rent in the order of $195 per week but he has refused that offer (Transcript, 19 July 2017, p 315 ln 9). She further said that she intended to recommence work as soon as possible.
The finding was open to his Honour on the evidence. During the appeal hearing counsel for the husband conceded that the finding had little materiality to his Honour’s ultimate conclusion, a concession which was properly made.
This ground is not made out.

Ground 6

This ground challenges the primary judge’s conclusions about the wife’s knowledge of and acceptance of the husband’s gambling.
His Honour said:
294. The husband expended substantial monies on gambling. The husband acknowledges that from about 1992 gambling took place which at times was at a significant level. Whilst the husband asserts this activity was undertaken by both parties, I find the wife was not a significant participant. Between 2002 and 2007 the frequency of his gambling ebbed and flowed in terms of volume and quantum. In 2008 and 2009 the husband’s gambling intensified but subsided after 2010. The husband has refrained from gambling since January 2012. The waste committed by the husband by way of gambling is in a sum well in excess of $1 million (including withdrawing $78,000 from the self-managed superannuation fund). I am unable to better quantify the amount lost.
This finding was open to his Honour on the evidence. The wife denied the suggestions put to her by the husband’s counsel that she had participated in and accepted the husband’s gambling. His Honour clearly accepted her evidence in preference to that of the husband.
Underlying this ground, as with many of the other grounds, is a complaint that the primary judge’s assessment of the evidence did not favour the husband’s position. The assessment of the weight to be given to evidence and of which evidence is to be preferred is a matter quintessentially for a primary judge and there exists a considerable hurdle before there will be appellate interference (Gronow v Gronow (1979) 144 CLR 513 at 519-520). No foundation for such intervention has been established.

Ground 9

This ground challenges the primary judge’s conclusion as to the how the parties’ respective contributions were reflected as a percentage of the net property of them or either of them. It was argued that his Honour, having concluded that the contributions of the parties over the course of the marriage were equal, erred in failing to give adequate reasons for his ultimate conclusion that the wife should receive 95 per cent of the net property.
First, this submission ignores the entirety of his Honour’s conclusion at [284] and at [285] where his Honour said:
284. …Without considering what the wife brought in from outside the marriage, I find the contributions of the parties from their own exertion over the 21 years of their relationship and marriage and post-separation, are equal.
285. However, taking into account the wife’s financial contribution from outside the marriage and based on all contributions, the existing net assets before taxation liabilities should be divided between the husband and the wife 80/20 in the wife’s favour.
Further, his Honour proceeded to consider the matters to which s 75(2) of the Act refer and concluded that there should be a further adjustment to the effect that the wife would receive 95 per cent of the net available assets.
We do not accept the submission that his Honour’s reasons were in anyway deficient and there is no merit in this ground.

Conclusion

In our view, the appeal should be dismissed.

AUSTIN J

On 12 January 2018, Watts J made orders between the applicant wife (“the wife”) and the respondent husband (“the husband”) determining their multiple disputes over the care of their children, the adjustment of their property interests, spousal maintenance, and child support.
The Commissioner of Taxation (“the Commissioner”) successfully intervened in the proceedings, though he was designated as the second respondent rather than as the intervener. He was interested in the adjustment of the spouses’ property interests because they were both indebted to him – the wife for $113,161 and the husband for $2,013,218 – and those liabilities were greater than the spouses’ combined net assets, which were found to be worth $1,284,142.
The husband appealed against selected orders of the trial judge and the wife resisted the appeal. The Independent Children’s Lawyer was only interested in the appealed parenting order, but she filed a Submitting Notice and did not appear for the appeal. The Commissioner supported the husband’s appeal in relation to the property adjustment orders, but only in respect of two discrete grounds.
For the reasons which follow, the appeal should be dismissed and liability for costs should be determined later.

The Appeal

The husband’s appeal challenged the trial judge’s orders in three respects.
The first challenge (Grounds 2, 3 and 4) concerned the order which provided for the children to spend time with the husband for one discrete period of 24 hours each fortnight (Order 6.1). During the appeal, leave was sought and granted to amend the Notice of Appeal to incorporate Orders 6.5 and 6.7 as decrees which were also the subject of the appeal. The amendment was initially necessary because Ground 3 was directed to Order 6.7 and Ground 4 was directed to Order 6.5, though the amendment became otiose because, as the appeal proceeded, the husband eventually abandoned Grounds 3 and 4.
The second challenge (Grounds 1 and 5-12 inclusive, though Ground 8 was later abandoned) concerned the property adjustment orders, which resulted in the wife’s retention of the former family home (subject to her discharge of the mortgage registered over it), her ownership of the husband’s shareholding in a corporation and her indemnity of him against any liability to the corporation, and her payment of $200,000 in partial satisfaction of the husband’s tax debt to the Commissioner (Orders 20, 21, 22, 23 and 28). The Commissioner joined in the attack on Order 28 which required the wife to contribute only $200,000 in partial satisfaction of the husband’s tax debt, which sum he considered to be too little. He had argued for an order which required the spouses, either individually or collectively, to pay $600,000 in partial satisfaction of the husband’s tax debt.
The third challenge (Ground 13) concerned the order made by the trial judge under the Child Support (Assessment) Act 1989 (Cth) varying the annual rate of child support payable by the husband to $101,608, as from the date of the orders (Order 31). This ground was abandoned during the hearing of the appeal so no more need be said about it.

The parenting order

The spouses commenced cohabitation in 1990 and were married in 1994. They have three children, who were respectively aged between eight and 15 years at the time the orders were made.
The spouses separated in November 2011 and so, at the time of trial in July 2017, they had been separated for nearly six years. During that time, the wife and children continued to live in the former family home.
After separation, the children began to spend Sundays and, later, Sunday nights, with the husband. From mid-2012, the time spent by the children with the husband expanded modestly and they occasionally stayed with him during holidays (at [63], [68], [69], [72], [74]). The husband commenced proceedings seeking parenting orders in January 2013.
In April 2013, with the spouses’ consent, final orders were made under Part VII of the Family Law Act 1975 (Cth) (“the Act”) providing for the children to spend alternate weekends with the husband (from Thursday afternoon until Monday morning) and for half of each school holiday period (at [75]). Notwithstanding the intended finality of those orders, the spouses revived their dispute over the children while the proceedings were still live in respect of their property dispute. The spouses and the Independent Children’s Lawyer all contended the parenting orders should be changed and the trial judge found it would be in the children’s best interests to do so (at [112]).
By early 2015, reports were made to the child welfare authority alleging assaults upon and injuries suffered by the children while in the husband’s care (at [83], [84]), following which the spouses’ co-operation over the children began to disintegrate.
In February 2017, the report of the single expert psychiatrist was released to the spouses and the order formerly made in April 2013, regulating the time spent by the children with the husband, was suspended. Very shortly thereafter, fresh interim orders were made confining the time spent by the children with the husband to one day and night each fortnight (from Sunday morning to Monday morning) in the presence of either the husband’s new partner or the paternal grandmother (at [103], [106]). Supplementary orders were made for the husband to attend upon a psychologist, which he duly did (at [103], [107]). The husband’s appointments with the psychologist continued until shortly before the trial in July 2017.
The interim orders made in February 2017, which constricted the time and circumstances under which the children spent time with the husband, were a direct response to the single expert’s (then untested) opinion that there was “a high risk of emotional abuse of the children in the husband’s care” (at [113], [114]). Once the evidence was tested at trial, the trial judge found the interim orders had successfully taken some of the pressure off at least the two eldest children (at [120], [133], [134]), but the youngest child still needed “equine therapy” to help him deal with his “ang[er] and fairly hostile reactions” (at [137]).
The husband contended the wife exerted “undue influence over the children” and “manipulated them” to resist spending more time with him (at [148], [177]), but that was not the single expert’s opinion. The single expert considered there was no evidence of “parental alienation” and the children’s resistance to the husband was “part of [their] lived experience” with him (at [151], [177]). He interrogated the children’s therapists and their opinions were the same (at [187]). The trial judge accepted that evidence to be correct (at [189]). The single expert was confident the wife would respect the children’s wishes if they expressed the desire to see more of the husband (at [146]).
The trial judge accepted the single expert’s opinion and found the husband took a “very actuarial approach” to the time the children should spend with him (at [156]) and he had “slightly exaggerated” the benefit he received from the psychological therapy he was earlier ordered to undertake (at [162]). The husband contended he developed more insight after the interim orders were made in February 2017, but the trial judge was unconvinced of it by the evidence (at [178]). Significantly, the husband failed to file any affidavit by his treating psychologist, despite being given leave to do so (at [164]), which meant there was no expert evidence to corroborate his opinion about his improvement under therapy. The single expert’s opinion, that the husband “lacks reflective capacity and a capacity for empathy” because he failed to understand how the children were distressed by his behaviour and how his behaviour was disruptive to their relationships with him, remained uncontradicted (at [207]).
The trial judge found:
173.Ironically, the evidence since the orders were changed in February 2017 indicates that the best chance of the children having a meaningful relationship with their father is to ease the intensity of the pressure upon them and put some distance between the children and their father. Creating that buffer zone so that the children are in a position where they feel that they are not in the former coercive or partisan position, is in the children’s best interests. [The middle child’s] therapist reported to [the single expert] that her experience of the new arrangement was significantly better than what preceeded [sic] it. [The eldest child’s] therapist also reported that things had been better since the February 2017 orders…
174.[The single expert] opines that the risk of emotional or physical abuse of [sic] neglect in the husband’s care is significant…[The single expert] says the husband’s behaviours “have amounted to a pattern of significant emotional abuse of all three children”…
The trial judge concluded the interim orders made in February 2017 had been “a change for the better”, as the pressure which all three children had been under was relieved by those orders (at [180], [186], [198]). The trial judge considered he needed to act protectively when making the orders, given the “impact of past behaviour of the husband…on each of the children” (at [218]).
The single expert recommended the children should spend time with the husband regularly, but for considerably less time than the “equal time” for which the husband advocated. The wife and the Independent Children’s Lawyer both sought an order perpetuating the arrangement, under which the children spend time with the husband for one period of 24 hours each fortnight, and, since the single expert could not envisage any “extension or change in frequency” of the time spent by the children with the husband until they attained 14 years of age (at [226]), the trial judge made an order to that effect (Order 6.1).
In accordance with the single expert’s recommendation, the trial judge also ordered that the time spent by the two youngest children with the husband over the next 12 months must occur in the presence of another adult (at [227], [230]), though that particular order was not the subject of appeal (Order 8).

Ground 2

Order 6.1 provided for the children to spend time with the husband for 24 hours each alternate weekend (Sunday morning to Monday morning). The order was eventually attacked by the husband on the solitary basis that the trial judge should instead have made an order for the children to spend time with him for three nights each alternate weekend (Friday afternoon until Monday morning).
Notably, an order which required the children to spend time with the husband for three nights each fortnight was not propounded by anybody at trial, at which time the positions were polarised. The Independent Children’s Lawyer and the wife both proposed the continuation of the interim order, which required the children to spend only one night each alternate weekend with the father (Sunday morning to Monday morning), whereas the husband proposed an order that the children live between the spouses for equal time.
The trial judge opted to endorse the joint proposal of the Independent Children’s Lawyer and the wife but, in reliance upon the opinion evidence of the single expert, made further orders which opened up the chance of the children spending more time with the husband upon the future fulfilment of certain conditions, including the children’s attainment of 14 years of age (Order 6.8). That order envisaged the alternate weekend visits then expanding to start on Friday afternoon and end on Monday morning.
As already mentioned, the trial judge also imposed an order (Order 8) which requires either the husband’s new partner or the paternal grandmother to be present whilst ever the children spend time with the husband under the operation of Order 6.1. At trial, it was mooted whether or not that order should also extend to cover any expanded time the children spend with the husband under Order 6.8. The trial judge decided against it, which decision favoured the husband.
In the context of discussion in the reasons about the confinement or extension of Order 8, the trial judge said:
231.The husband sought that this order as sought by the Independent Children’s Lawyer be amended so that the time is from the completion of school on Friday to 9am Monday morning. I think there is merit in this as it would then marry up to the time the other children are spending with the father.

The meaning of the paragraph is not entirely clear, but the husband contended it should be construed to mean the trial judge actually intended to make orders providing for the children to immediately spend three nights each alternate weekend with him and so the failure to make an order to that effect was an error. The submission is rejected because such an interpretation is repugnant to the extensive discussion about the confinement of the children’s visits with him to one night each fortnight, at least until other conditions are fulfilled, consistently with the evidence given by the single expert in his expert report and then orally in cross-examination. Rather, the paragraph is more probably a reference to the possible extension of Order 8 to cover the time spent by the children with the father under Order 6.8, not just Order 6.1, which idea the trial judge subsequently rejected because Order 8 was ultimately made in terms which confined its operation to only Order 6.1. On that basis, there is no merit in this ground.

The property adjustment order

Placing the spouses’ debts to the Commissioner to one side momentarily, the trial judge found the spouses’ property had a net value of $1,284,142. The combined value of their debts to the Commissioner was $2,126,379, so their overall combined financial position was in net deficit by $842,237 (at [254], [255]).
The wife argued for some money spent by the husband to be notionally added-back as his property, but the trial judge declined to do so and instead decided to take the expenditure into account pursuant to s 75(2) of the Act (at [256], [257]).
The trial judge found the spouses’ contribution-based entitlements were “80/20 in the wife’s favour” (at [285]), which conclusion followed from the findings of their equal contributions through exertion and the wife’s financial contribution of “about $2.5 million” from outside the marriage (at [283]-[284]).
The trial judge then found it was just and equitable to make an adjustment in the wife’s favour of “around 15 per cent” on account of the factors within s 75(2) of the Act (at [298]). Those factors were, in summary:
(a)The husband’s current income being $589,000 gross per annum (at [288]) and, by comparison, the wife’s earning capacity being only about $52,860 gross per annum (at [289]);
(b)The wife’s continued role as “major care giver” of the children (at [290]);
(c)The wife’s mother being a “major financial resource” for her (at [291]) and the husband’s new partner being a “less significant” financial resource for him (at [291]);
(d)The husband’s expenditure of about $303,000 on legal fees from his post-separation earnings (at [256], [257], [292]) and, comparably, the wife’s expenditure of approximately $300,000 on Supreme Court litigation, which the trial judge described as an “unsuccessful frolic” (at [293]);
(e)The husband’s waste of “substantial monies” on gambling, which the trial judge quantified at “well in excess of $1 million” (at [256], [257], [294]);
(f)The husband’s ongoing liability for child support (at [295]); and
(g)The spouses’ respective liabilities to the Commissioner (at [296]).
Consequently, with the adjustment, the wife would receive 95 per cent of the spouses’ net assets, exclusive of the debts due to the Commissioner (at [299]). Such notional division would leave the wife holding assets with a net value of $1,226,442 and the husband holding assets with a net value of $57,700, but the trial judge then had to and did turn his attention to what must be done with the tax debts owed by the spouses to the Commissioner.
The trial judge noted the Commissioner’s correct concession there was no rule of priority as between the spouses and the Commissioner in relation to the property which was available for division. The rights of all had to be “balanced and taken into account” (at [302]).
The trial judge ordered the wife to pay the full amount of her debt to the Commissioner, amounting to $113,161, from her share of the net property within three months (Order 27). That order was not the subject of appeal. The trial judge also ordered the wife to pay $200,000 to the Commissioner in partial discharge of the husband’s debt (Order 28), which order was the subject of appeal.
Both the husband and the Commissioner had proposed that a greater proportion of the husband’s debt to the Commissioner be paid from the available assets. The Commissioner sought that $600,000 be paid off the debt, whereas the husband proposed an even greater amount. The husband proposed the sale of both the family home and his corporate shareholding and then use of the net sale proceeds of each asset to pay the wife’s tax debt and defray his tax debt. His proposal, by reference to the agreed values of those two assets, would likely have entailed the payment of not less than $1.2 million to the Commissioner from the spouses’ assets, of which about $1.1 million would have been applied to reduce his liability. The effect of the Commissioner’s proposal would have been to leave the wife with net assets of about $500,000. The effect of the husband’s proposal would have been to leave the wife with only her household contents and about $10,000 in savings, but with a debt to her mother of about $81,000.
The property adjustment orders were attacked by the husband on the basis the trial judge:
(a)Should have found the wife was not a credible witness (Ground 1);
(b)Erred by finding his new partner was a financial resource (Ground 5);
(c)Erred by finding the wife was not a significant participant in his gambling activities (Ground 6);
(d)Erred in the finding made about the wife’s “level of income” (Ground 7);
(e)Erred by mistakenly dividing the property between the spouses in unequal proportions when a finding of equal contributions was made, and further, by failing to provide adequate reasons for that outcome (Ground 9);
(f)Failed to give adequate reasons for ordering the wife to only pay $200,000 towards his tax debt due to the Commissioner (Ground 10);
(g)Erred by finding he could negotiate the payment of his tax debt to the Commissioner by instalments over many years instead of only three years (Ground 11); and
(h)Erred by failing to consider his capacity to pay the remainder of his tax debt to the Commissioner if the wife was required to only pay $200,000 instead of some higher amount to defray his debt (Ground 12).
The Commissioner supported Grounds 7 and 10, but disavowed the other grounds of appeal.

Ground 1

In respect of the spouses’ credibility, the trial judge observed:
Wife
28.The wife gave her evidence in a more straightforward manner than the husband but there were occasions where I found it difficult to accept some of the things the wife said, although I did not form the impression she was setting out to deliberately deceive.
Husband
29.…I did not accept the husband’s answers on a number of matters as being credible…
The husband contended the trial judge erred in making the findings about the wife’s credibility (at [28]), given his assertions about her lack of candour in some particular respects.
The inherent fallacy of this ground of appeal is the husband’s assumption the trial judge unconditionally found the wife to be credible, when his Honour did not. The trial judge only found her evidence tended to be more reliable than the husband’s; not that she was credible in all respects. Self-evidently, some aspects of the wife’s evidence caused the trial judge some disquiet. In that respect, to amplify this ground, the husband specifically referred to the wife’s alleged failure, as a director, to provide full and frank disclosure about the financial circumstances of a related corporation and to admit the personal financial assistance she was liable to receive, when needed, from her mother.
Contrary to the husband’s submissions on appeal, the trial judge actually adopted the arguments he made at trial on some issues and rejected the wife’s contrary evidence. For example, in relation to the corporation of which the wife is a director, the trial judge did not accept her evidence that funds of about $516,559 which were accumulated within the corporation were being held back to cover expenses, such as employee emoluments, and she was therefore unable to remunerate herself. It was found she could have remunerated herself at the rate of $52,860 gross per annum. The trial judge also found the wife’s mother was a substantial financial resource for her, even though the wife did not concede it.
The trial judge was at liberty to accept all, some or none of the wife’s evidence. Witnesses can lie or be honestly mistaken in respect of some aspects of their evidence, but still have other aspects of their evidence accepted as truthful and accurate. The impeachment of some portions of a witness’ testimony is not a licence or mandate to reject the remainder of that witness’ evidence as unreliable, as the husband seemed to wrongly assume. As was open, his Honour appears to have accepted most, but not all, of the wife’s testimony. No aspects of the wife’s evidence to which our attention was drawn afforded a sufficient basis to contend the whole of her evidence should have been rejected as incredible.
While the husband correctly accepted the proposition that appeal courts must respect the advantage enjoyed by trial judges in seeing and hearing the witnesses give their evidence, he paid insufficient regard to the allied proposition that the findings of trial judges about the credibility of witnesses should only be disturbed on appeal when such findings are glaringly improbable (see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; Abalos v Australian Postal Commission (1990) 171 CLR 167).
Given some aspects of each spouse’s testimony were rejected, the trial judge’s expression of conditional preference for the wife’s evidence over the husband’s was not a glaringly improbable conclusion. There was insufficient basis for the husband to contend the conditional acceptance of the wife’s evidence was so fatally flawed as to warrant the disturbance of any of the appealed orders.

Ground 5

In the reasons for judgment, the trial judge stated:
291.The wife has her mother as a major financial resource. Less significantly, [the husband’s new partner] is a financial resource for the husband.
The husband contended the trial judge erred in making the finding about his new partner being a financial resource for him because it was not open on the evidence. He contended the finding was not open because, at the time of the trial, his new partner “was not working and had minimal assets and savings”.
While that submission might have been literally correct in so far as it related to her unemployment and her modest savings, it failed to acknowledge the overall reality of the situation. The uncontroversial facts were:
(a)His partner owned two encumbered parcels of real property, the rental income from which was sustaining the mortgage repayments;
(b)She offered to contribute $195 per week to the rental expense of the townhouse residence she shared with the husband, but he refused her offer;
(c)She was employed in a well-remunerated position, from which she voluntarily resigned only six months before the trial, thereby foregoing income of $128,000 per annum; and
(d)She conceded there was no reason she could not return to the same kind of work in management within the health care sector and it was her intention to interview for a number of job vacancies.
In the face of such evidence, it was plainly open for the trial judge to find the husband’s new partner could afford him some level of financial assistance should it be needed. The trial judge did not attempt to quantify the assistance the husband could call upon as the evidence did not reasonably permit it. Correctly, the trial judge found the husband’s new partner was a less significant financial resource to him than the wife’s mother was to her.
In any event, the husband’s counsel conceded the finding was not material so, even if the finding had been wrong, it was an error without consequence.

Ground 6

One issue in the proceedings was the husband’s waste of money on gambling.
In relation to that issue, the trial judge found:
294.The husband expended substantial monies on gambling. The husband acknowledges that from about 1992 gambling took place which at times was at a significant level. Whilst the husband asserts this activity was undertaken by both parties, I find the wife was not a significant participant…The waste committed by the husband by way of gambling is in a sum well in excess of $1 million (including withdrawing $78,000 from the self-managed superannuation fund). I am unable to better quantify the amount lost.
The husband contended the trial judge erred in finding the wife “was not a significant participant” in the gambling. He contended the factual mistake was material because the gambling waste was attributed exclusively to him and was a feature of the evidence which influenced the quantum of the adjustment in the wife’s favour under s 75(2) of the Act.
In cross-examination, the wife admitted she was present with the husband at casinos “on a few occasions” while he gambled, but he “wasn’t gambling large amounts” on those occasions, which she clarified to be no more than a few hundred dollars (Transcript, 17 July 2018, p 50 ln 25-29). She denied she gambled herself. She denied she went with the husband on trips to City QQ on more than 50 occasions to gamble, as he alleged. She denied she accompanied him to the City RR casino as a “core part of [her] social outings” throughout the marriage, as was put to her in cross-examination (Transcript, 17 July 2018, p 99 ln 17-19). The wife deposed she accompanied the husband and their friends to casinos “on about 20 social occasions”, but in cross-examination she conceded it was “maybe 30 or 40” occasions over the 21 years of their relationship (Transcript, 17 July 2018, p 105 ln 6). The trial judge did not find that inconsistency in her evidence to be particularly important and there was no reason he ought to have.
The husband contended on appeal that the wife’s denials of her participation in, or at least her knowledge of, his gambling should be rejected as untrue because she was “not a witness of credit”. For reasons earlier canvassed, the trial judge accepted some parts of her evidence, but rejected other parts. Relevantly for present purposes, the trial judge accepted as truthful her denials about knowledge of or participation in the husband’s gambling activities and found she was “not a significant participant”. It was open for the trial judge to reach that finding, in which event the ground of appeal fails, since the husband realised it could only succeed if the wife’s evidence on the issue was rejected as false.

Ground 7

In 2003, the wife established a corporation using capital provided by her mother. The wife and her brother-in-law were the directors. The husband, the wife’s mother, and the wife’s brother-in-law were the three equal shareholders. The corporation conducted a business in which the wife worked as one of 11 employees.
The husband’s one-third shareholding in the corporation was valued as part of the property adjustment process, for which purpose a single expert was appointed to offer expert opinion evidence. He produced a report which was received in evidence and was not the subject of any dispute. The single expert was not required for cross-examination. The husband’s shareholding in the corporation was valued at $383,000, though he was indebted to the corporation for $208,990 (at [299]).
At the time of trial, the corporation had accumulated cash reserves of $516,559, but the wife was not being paid a wage or drawing any other income from the corporation for the work she did. In his report, the single expert opined the wife should have been reasonably remunerated by the corporation with an annual salary of $52,860 and superannuation contributions of $5,022. The trial judge relied upon that opinion evidence and adopted the figure of $52,860 as the wife’s appropriate level of annual gross income.
The husband and the Commissioner both submitted, though for different reasons, the trial judge erred by making the finding about the wife’s income or income-earning capacity because it was “unsafe” to do so. The husband submitted the trial judge should have found the wife’s income-earning capacity was higher, but the Commissioner submitted the trial judge should not have made any finding at all. Their submissions are rejected.
The husband contended the wife could cause the corporation to pay her a higher salary than $52,860 per annum because the corporation’s untapped cash reserves enabled it and she had the power to ensure it. Although the trial judge did describe the wife as the “controller of the company” (at [289]), she was only one director and, on the available evidence, she had no more power to lawfully exert control over the corporation than the other director and he might not have agreed to her payment of a higher salary. Regardless, the husband’s argument ignored several other salient considerations: first, if the wife did influence greater control over the corporation to ensure her payment of a disproportionately higher salary, it was open to him as a shareholder to obstruct it as oppressive corporate conduct; second, he did not challenge the single expert over the validity of his opinion that the appropriate remuneration for the wife’s role within the corporation was $52,860; third, the corporation’s cash reserves inflated the value of its shares, from which he derived benefit because he owned one-third of the corporation’s shares; and fourth, even if the wife’s income-earning capacity was moderately higher than was found, it was of little moment since it would still be way less than the husband’s annual income of $589,000. In final submissions, the husband’s counsel contended it would be correct to find the corporation could pay the wife a salary of “at least $5,000 per month”, which would extrapolate to not less than $60,000 per annum. The $7,140 difference between that figure and the figure found by the trial judge is immaterial in the scheme of things.
The Commissioner contended the trial judge should have abstained from making any finding at all about the level of the wife’s income-earning capacity, since he was precluded from testing her about it in cross-examination due to her failure to disclose financial information about the corporation. However, the trial judge understandably made the finding because the wife’s income-earning capacity was a material consideration under ss 79(4)(d), 79(4)(e), 75(2)(b), 75(2)(h) and 75(2)(k) of the Act when her applications for both property adjustment and spousal maintenance orders were contested.
The wife’s non-disclosure was quite confined, since it was admitted she gave proper disclosure in accordance with the Family Law Rules 2004 (Cth) and, furthermore, no procedural order was made during the litigation to expand her obligation of disclosure. Rather, the Commissioner wrote to the wife’s solicitors shortly before the trial requesting her to produce particular documents related to the corporation, which request she did not answer and the Commissioner omitted to enforce. While the wife’s non-disclosure in that respect should not be trivialised, the Commissioner’s failure to then compel the production of the documents he sought contextualises the asserted importance of the documents to him. He wanted the corporation’s general ledger, balance sheets, profit and loss statements, and cash flow statements for the preceding five years, but volumes of financial data pertaining to the corporation had previously been produced to the single expert, which data was identified in his expert report. It included the financial statements and tax returns for the preceding five years and a raft of other information provided by the spouses at the single expert’s request. Therefore, the Commissioner may not have had all the documents he wanted, but he was hardly bereft of material with which to work.

The Commissioner submitted the corporation should have been treated as a “significant financial resource of the wife”, though he did not meaningfully elaborate how such treatment of the corporation should reflect in the orders. If the Commissioner intended the submission to mean the wife’s use of the corporation as a “significant financial resource” would enable her to pay $600,000 instead of some lesser sum towards the husband’s tax debt, the submission was devoid of detail about how that sum was deduced as more appropriate than any other sum. But, in any event, consistently with the Commissioner’s submission, the trial judge did treat the corporation as the wife’s financial resource. His Honour accepted the wife was the “controller” of the corporation and, as part of the property adjustment, the husband’s shares in the corporation were transferred to her and she was ordered to indemnify him in relation to the debt he owed the corporation. The parties’ underlying expectation was the wife would continue to conduct the corporation’s business, as she had done for the past 14 years, and she could earn an income from it. The trial judge’s finding about the level of income the wife could and should earn from the corporation was entirely consistent with the single expert’s unchallenged evidence, which was the best evidence available. The trial judge made no error in making this finding.

Ground 9

The husband contended the trial judge erred by inconsistently finding the spouses’ contributions, by reference to s 79(4) of the Act, were equal but then dividing their property by giving the wife 95 per cent of it.
This ground and the submission made in support of it entail two fallacies.
First, there was no finding that the spouses’ contributions were equal. The trial judge found only the spouses’ contributions “from their own exertion over the 21 years of their relationship and marriage and post separation” were equal. It was the wife’s contribution of “about $2.5 million from outside the marriage” which led to the assessment of her contribution-based entitlement at 80 per cent of the spouses’ net property (at [283]-[285]).
Second, the wife’s 95 per cent share did not follow from simply the assessment of the spouses’ respective contributions. Rather, it followed from both the assessment of their contribution-based entitlements under s 79(4) and then the assessment of an adjustment of 15 per cent in her favour under s 75(2) of the Act.
The husband also contended the trial judge failed to give adequate reasons for the result but, as the Commissioner correctly submitted, that was a bare assertion. The husband failed to articulate in what way the reasons were deficient. The trial judge analysed the spouses’ contributions and explained his findings in relation to them (at [268]-[285]), then discussed the evidence as it applied to ss 79(4)(d) to (g) of the Act and explained the quantum of the adjustment in the wife’s favour (at [286]-[299]). The reasons were adequate.
Lastly, the husband submitted the trial judge should have included the spouses’ tax debts “in the calculation of the net asset pool” before applying the spouses’ proportional entitlements to the division of their net assets. That submission is rejected for several obvious reasons: it fell outside the ambit of the ground of appeal; it was not the husband’s application at trial; and the adoption of that course at trial would have meant the spouses artificially dividing net debt rather than net assets. Once the totality of the tax debts were factored in, the spouses’ debts exceeded their assets by $842,237.

Ground 10

The husband, supported by the Commissioner, contended the trial judge failed to give adequate reasons to explain why the wife was ordered to only contribute $200,000 and not some higher amount to the debt owed by the husband to the Commissioner.
The husband had accumulated debt of $2,013,218 to the Commissioner by June 2017. Although the wife contended she should not have to bear any proportion of his liability for that debt, the husband and the Commissioner both contended she should.
At trial, the husband made no submission – either in his written Case Outline or orally in final submissions – to explain or justify his application for both the former family home and his corporate shareholding to be sold and the net proceeds of each asset (which he expected would amount to about $1.2 million) applied towards payment of the spouses’ tax debts due to the Commissioner.
The Commissioner was content to receive much less than the husband proposed and he instead applied for the sum of $600,000 to be skimmed from the spouses’ assets and applied in part satisfaction of the husband’s debt. He contended the spouses should be jointly responsible for the husband’s pre-separation tax debt (at [305]). The Commissioner did not explicitly elaborate, either at trial or on appeal, how he settled on that particular figure, but it may be reasonably inferred from the evidence. The Commissioner obtained judgment against the husband for an amount of $881,482 in August 2014 (at [262]). At the time of trial, the judgment debt had been reduced to $604,111 by reason of “tax credits”, but interest of $168,807 had by then accrued to the judgment debt. The trial judge found much of the residual judgment debt was incurred by the husband prior to the spouses’ separation in November 2011 (at [260], [261]). Inferentially, the Commissioner’s claim for the part-payment of $600,000 correlated with the residual pre-separation debt of $604,111.
However, the designation of $604,111 as the pre-separation component of the husband’s overall tax debt was far from exact because the spouses separated in November 2011 and, on the evidence adduced by the Commissioner, the sum of $604,111 included some liabilities incurred by the husband up to October 2013. The unchallenged evidence adduced by the wife at trial revealed the quantum of the husband’s tax debt in June 2012 (well after separation) was only $300,541, in relation to which he had already entered into an agreement with the Commissioner to pay by instalments, upon which agreement he subsequently defaulted. So, if the wife’s joint responsibility for the husband’s pre-separation tax debt was to be the measure of her liability, it was logically her proportional liability for $300,541, rather than $604,111.
Alternatively, if the Commissioner did not adopt the figure of $600,000 because of its correlation with the similar figure of $604,111, then he gave no other principled reason at all for the figure he proposed. It was then just as arbitrary as he alleged was the lesser figure eventually chosen by the trial judge. The Commissioner conceded on appeal the figure he proposed was not computed mathematically, so arithmetical precision by the trial judge was similarly impossible.
It should not be overlooked that the wife bore no liability at all to the Commissioner for any part of the husband’s tax debt. The Commissioner was able to execute his judgment debt against the husband in any way he saw fit, but he voluntarily desisted from doing so. Instead, he chose to intervene and participate in the litigation before the trial judge involving the discretionary adjustment of the spouses’ property interests under Part VIII of the Act, looking for the spouses’ assets to be used, jointly and severally, to discharge or defray their debts to him. Any figure selected by the trial judge in the discretionary exercise of reaching a just and equitable result in the tripartite dispute was liable to have some quality of arbitrariness, but arbitrariness of the result was not the nature of the complaint pleaded in this ground of appeal. The underlying premise of this ground of appeal was that the trial judge failed to adequately explain why the sum of $200,000 was selected as the amount the wife should justly and equitably pay in partial satisfaction of the husband’s tax debt. The answer to that complaint requires advertence to the evidence and the trial judge’s reasons.
The trial judge took into account the money wasted by the husband on gambling during the marriage, but also acknowledged he only had the money to gamble so irresponsibly because he failed to pay his tax. The husband’s failure to pay tax also enabled the spouses to enjoy a handsome lifestyle and, even after separation, the husband still helped support the wife. The trial judge found she received “substantial benefit” from the husband’s post-separation earnings and so the Commissioner’s submission she had to take “the good with the bad” was accepted as correct (at [303], [305]-[314], [322]).
The wife argued the Commissioner was culpable by failing to enforce the judgment he obtained against the husband in August 2014 and by allowing the husband’s debt to continue to balloon, but the trial judge found only that “some little weight” could be placed on the submission the Commissioner should have been more proactive to enforce payment of the debt (at [317]).
Accession to the Commissioner’s application for the wife’s payment of $600,000 (in addition to the payment of her own tax debt of $113,161) would have required her to apply about two-thirds of the net value of the former family home towards payment of the spouses’ tax debts (at [302]) and she would not then have been able to retain the home in which she and the children lived, because she did not have the financial capacity to maintain the existing mortgage and raise the extra capital needed to meet a debt of that magnitude to the Commissioner. Evidently, the trial judge was disinclined to order the wife to pay an amount which would necessarily cause her to lose her home, but his Honour envisaged she would have to if she could not meet the payments ultimately ordered (at [324]).
The trial judge eventually settled on the figure of $200,000 as being payable by the wife to the Commissioner (at [323]), because that sum represented about 10 per cent of the husband’s entire tax debt and about 18 per cent of the wife’s assets (once she paid her own tax debt).
Thus, it can be seen the trial judge recognised the essential competing arguments of the wife and the Commissioner, then rationalised the amount payable by the wife to the Commissioner by reference to the evidence about the available assets and the financial effect upon the wife of the order requiring her to bear that portion of the husband’s debt. That process fulfilled the requirements of sufficient reasons in accordance with the authority cited by the husband (see DL v The Queen (2018) 356 ALR 197 at [33], [130], [131]). It was unnecessary for the trial judge to synthesise every fact and every submission to rationally explain the outcome.

Grounds 11 & 12

These two grounds were variations on the theme of attack upon the order requiring the wife to pay $200,000 towards the husband’s tax debt.
Ground 10 was about the adequacy of reasons, but these grounds were about an alleged mistake of fact underpinning the order (Ground 11) and whether the exercise of discretion miscarried because the order was not just and equitable (Ground 12).
When discussing the husband’s capacity to pay off the remainder of his tax debt to the Commissioner, the trial judge remarked (at [320]):
320.…the husband is 46 years of age…he likes his job and he doesn’t have to retire until he is 60 years of age. He envisages that he will be employed…for the next 14 years. Without taking into account accruing interest, if the Commissioner entered into an arrangement over a 15 year period to receive payment of the outstanding debt then I could see no reason why even after the husband had fulfilled his child support responsibilities the debt could not be paid off particularly when one has regard to increases the husband may receive in his remuneration in the next 14 years. I was left uncertain at the end of the evidence given by the Commissioner as to whether or not the Commissioner would consider such an arrangement as a realistic one.
The husband contended the trial judge erred by finding he could negotiate the payment of his liability to the Commissioner over the next 14 years, but the ground of appeal is misconceived because the trial judge made no such finding. Rather, the evidence left the trial judge uncertain about whether the Commissioner would be prepared to negotiate such an arrangement with the husband and his Honour found that, if it occurred, the husband might well be able to pay down the debt.
The Commissioner adduced evidence of his usual policy to only enter into agreements with debtors allowing instalment payments over three years but, in cross-examination, the Commissioner’s witness conceded any instalment proposal submitted by a debtor would be considered on its merits. Given the husband’s income, which was $589,000 gross per annum, and his apparent capacity to sustain substantial repayments over the remainder of his working life, the prospect of an agreement being struck for instalment payments to be made by him over a prolonged period was not categorically ruled out.
The husband contended it was not just and equitable for the trial judge to order the wife to pay only $200,000 off his tax debt because the trial judge failed to recognise his limited capacity to discharge the residue of the debt. The submission was incorrect because the trial judge did consider the husband’s capacity to repay the residue of the debt in future (at [320]); his Honour just reached a conclusion about his capacity with which the husband disagreed.
On appeal, the husband contended the wife should have been ordered to pay $772,918 off his tax debt, which figure the trial judge referred to in the reasons as tax on his earnings prior to the spouses’ separation (at [305], [321]), or at least the $600,000 sought by the Commissioner. However, it should be remembered the husband applied at trial for the use of about $1.2 million, derived from the sale of the spouses’ assets, to defray the tax debts, so there was substantial and unexplained disparity between his application at trial and his contention on appeal about what the trial judge should have done.
Under the trial judge’s orders, the wife had to pay $200,000 in partial discharge of the husband’s debt to the Commissioner, so the husband was left with residual debt of about $1.8 million. If the wife had been ordered to pay $600,000 instead of only $200,000 to the Commissioner, the husband would still have been left with residual debt of $1.4 million. He contended on appeal the trial judge should have positively found the Commissioner would only allow him a maximum of three years to repay the residual debt, but he conceded he could not repay even $1.4 million to the Commissioner within three years, let alone $1.8 million, so the appeal point was moot. It was pointless arguing over the justice and equity of the appealed order when the substitute order the husband contended on the appeal would be proper was, paradoxically, admitted by him to be just as unfair.

Conclusion and orders

Given the lack of merit in the grounds of appeal which were eventually pressed, the appeal should be dismissed.
In the event of the dismissal of the appeal, the wife foreshadowed her intended application for costs might be made against both the husband and Commissioner, though perhaps in different proportions. Unfortunately, the parties were not prepared with schedules of their party/party scale costs. Orders were therefore made for the spouses to file schedules of their scale costs, with which orders the spouses have since complied. However, in the face of uncertainty about whom the wife might seek costs against, I would order the wife to file and serve her submissions on costs within 21 days and the husband and the Commissioner to file and serve their submissions in reply within 21 days thereafter. The question of costs could then be determined on the papers in chambers, unless one of the parties requests that the matter be re-listed before the Court.

I certify that the preceding one-hundred and sixty (160) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge & Austin JJ) delivered on 3 December 2018.

Associate:

Date: 3 December 2018