Karlsson & Karlsson
[2020] FamCAFC 207
•25 August 2020
FAMILY COURT OF AUSTRALIA
| KARLSSON & KARLSSON | [2020] FamCAFC 207 |
| FAMILY LAW – APPEAL – PROPERTY – LEAVE TO APPEAL – Summary dismissal – Where the primary judge summarily dismissed the appellant husband’s application to set aside property settlement consent orders – Weight challenges – Allegations of denial of procedural fairness and bias – Reasons given in short form pursuant to s 94(2A) of the Family Law Act 1975 (Cth) – Findings open to the primary judge – Error of fact immaterial to the ultimate result – No error of law established – Leave to appeal dismissed – Husband to pay the respondent wife’s costs of the appeal in a fixed sum. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Adduce further evidence – Where the application was sent the evening before the appeal hearing – Where the wife did not have sufficient time to consider and make submissions on the application – Husband seeking to re-litigate questions of fact before the primary judge – Application dismissed. |
| Family Law Act 1975 (Cth) ss 45A, 79A, 94(2A), 94AA, 106A, 117 |
| Bigg v Suzi (1998) FLC 92-799; [1998] FamCA 14 Bretton & Bondai [2013] FamCAFC 168 CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 De Winter and De Winter (1979) FLC 90-605 Ebner & Pappas (2014) FLC 93-619; [2014] FamCAFC 229 Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54 Kennedy & Thorne (2016) FLC 93-737; [2016] FamCAFC 189 Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541; [1996] HCA 14 Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 ; [2013] VSCA 158 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 Pelerman v Pelerman (2000) FLC 93-037; [2000] FamCA 881 Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Wernham & Campagnola [2012] FamCAFC 137 |
| APPELLANT: | Mr Karlsson |
| RESPONDENT: | Ms Karlsson |
| FILE NUMBER: | SYC | 8036 | of | 2017 |
| APPEAL NUMBER: | EAA | 26 | of | 2020 |
| DATE DELIVERED: | 25 August 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney (via video link) |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 21 July 2020 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 29 January 2020 |
| LOWER COURT MNC: | [2020] FCCA 144 |
REPRESENTATION
| THE APPELLANT: | Mr Karlsson (Litigant in person) |
| THE RESPONDENT: | Ms Karlsson (Litigant in person) |
Orders
The Application for leave to appeal the orders made by a judge of the Federal Circuit Court on 29 January 2020 is refused.
The Application in an Appeal to adduce further evidence dated
20 July 2020 is dismissed.
The appellant husband to pay the respondent wife’s costs in relation to the appeal fixed in the amount of $5,672, such sum to be paid to the wife directly from the funds presently held in a controlled money account by C Lawyers and be paid before any payment out of those funds to the husband.
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 Karlsson & Karlsson 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 26 of 2020
File Number: SYC 8036 of 2017
| Mr Karlsson |
Appellant
and
| Ms Karlsson |
Respondent
REASONS FOR JUDGMENT
On 29 January 2020, a judge of the Federal Circuit Court summarily dismissed an application brought by Mr Karlsson (“the husband”) pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) seeking to set aside an order made on 4 September 2017 (“the September 2017 orders”). The order sought to be set aside was one of a suite of orders made over a number of years to give effect to an agreement about property settlement as between the husband and Ms Karlsson (“the wife”).
Having summarily dismissed the husband’s application, the primary judge then made orders implementing the September 2017 orders.
The husband appeals those orders. Because the orders sought to be appealed are interlocutory in nature, the husband requires leave to prosecute the appeal (see s 94AA of the Act; Ebner & Pappas (2014) FLC 93-619 at [29]–[32]).
The test for granting leave to appeal involves satisfaction of two matters, first whether the decision sought to be appealed is attended by sufficient doubt to warrant it being reconsidered by the Full Court and secondly whether if leave were not granted a substantial injustice would result (Medlow & Medlow (2016) FLC 93-692 at [57]).
Background
Some uncontentious background to the matter, taken from the primary judge’s decision and the evidence before her is necessary to aid the understanding of the issues argued on the appeal.
The parties married in April 2001, separated in December 2015 and were divorced in 2017.
The orders of 28 June 2016
The parties reached agreement about the disposition of their property, and consent orders were made in a Local Court on 28 June 2016 (“the June 2016 orders”). The orders relevantly provided that a property owned by the parties at Suburb B (“Property B”) be sold and from the net proceeds of sale, after discharge of the mortgage and other adjustments, 60 per cent of the balance then remaining be paid to the wife, as well as a further payment of $94,000, with the balance to be paid to the husband.
The orders then provided that simultaneously with the settlement of the sale of Property B, the husband do all acts necessary to discharge the mortgage against a second property owned by the parties (“Property A”) and the wife would then transfer her interest in Property A to the husband.
Property A was an investment property of the parties and had been a source of income to them. It was never the parties’ principal place of residence although after separation the husband moved into the property, living there until required to vacate the property to enable it to be sold.
The orders also provided for superannuation splitting with a base amount of $147,000 from the husband’s superannuation fund.
Property B was sold shortly before the June 2016 orders were made.
The husband required finance to enable him to discharge the mortgage on Property A in accordance with the orders. He encountered difficulties in obtaining the finance, it seems through the bank’s requirements that he produce relevant tax returns and the like.
By August 2016, the husband had not obtained the finance necessary to comply with the June 2016 orders.
On 29 September 2016, with the mortgage over Property A still not discharged, the wife brought proceedings pursuant to s 79A of the Act seeking to set aside the June 2016 orders (I assume to the extent to which they had not already been executed) and in lieu, sought orders that the husband pay her $80,000 and that the wife would transfer her interest in Property A to the husband once he had discharged the mortgage, then in joint names, held on that property.
It is relevant to note that at this time, the order sought by the wife still contemplated the husband being able to secure the necessary finance to discharge the mortgage and retain the property. The husband was still attempting to obtain the necessary finance.
The orders of 23 February 2017
The wife’s application of September 2016 came before the court on 23 February 2017. By this time, the wife had also filed an application seeking to enforce the June 2016 orders.
However, on 23 February 2017 the parties reached agreement and consent orders were made (“the February 2017 orders”) which provided that the husband would forthwith transfer his interest in Property A to the wife, sign all documents necessary to discharge the mortgage over the property and give vacant possession of the property to the wife who would put the property on the market for sale.
Order 6 of those consent orders set out the disposition of the sale proceeds as follows:
a)agent’s commission;
b)auction fees;
c)solicitor’s fees arising from the sale;
d)amount required to Westpac Banking Corporation to discharge the mortgage secured over the property in the joint names of the parties;
e)any rate adjustments to the local Council;
f)any sums outstanding to the wife with respect to the enforcement of such orders; and
g)the husband the remainder.
If the husband failed to sign documents necessary to give effect to the orders, then a Registrar of the Federal Circuit Court was empowered to sign on his behalf.
Finally, the operation of the orders was stayed until 6 April 2017, in order to provide the husband further time to arrange finance sufficient to retain the property and discharge the mortgage.
The husband was ordered to pay the wife’s costs of that application of $4,000 within 42 days.
No provision was made in these orders for the payment of any Capital Gains Tax (“CGT”) that might accrue after the transfer of the property to the wife and its consequential sale.
Correspondence ensued between the parties’ legal representative, the tenor of which was that the husband was seeking more time in which to obtain the necessary finance and the wife was seeking details of the husband’s mortgage broker. Neither the finance nor the details of any mortgage broker was forthcoming.
In June 2017, the wife’s solicitor requested the husband sign a transfer of the property to enable its sale. Further correspondence between the solicitors ensued.
On 11 July 2017, the wife applied for an order that a Registrar of the Federal Circuit Court sign the transfer of Property A to her on behalf of the husband pursuant to s 106A of the Act and Order 7 of the February 2017 orders. That order was made on 20 July 2017. The husband was not present but was represented by a solicitor. On that day the wife took possession of Property A and changed the locks. The husband had been living in that property.
Further delays were caused by the wife’s inability to obtain the necessary consent of the bank to enable her to transfer the title of Property A into her sole name.
There were also issues about the husband having access to the property to enable him to remove his personal possessions and on 22 August 2017 he applied for orders to that effect which were made on 4 September 2017.
The orders of 4 September 2017
The matter came before the court on 4 September 2017 on which date the husband and the wife were each represented by counsel. The parties reached agreement and by consent, Order 6 of the February 2017 orders was amended to the following effect. To Order 6(f) the following words were added:
[6(a)]… and to the [wife] the amount of any tax liability attaching to the [wife], arising from her interest in [Property A] including but not limited to tax on the capital gain on [Property A] with such capital gain to be determined by [the wife’s accountant] acting on the wife’s instructions PROVIDED THAT the Husband is provided with full access to the communications regarding the determination by [the wife’s accountant] AND IN THE EVENT the Husband has a concern about the capital gain determination he has liberty to re-list on 28 days’ notice.
(As per the original)
The wife said that as the orders in their original form had not made provision for any liability she might accrue as a result of the property being sold, the amendment was necessary.
Two further amendments were made to the orders to provide for the wife to be paid the costs ordered in the February 2017 orders, and refunding to the wife the reasonable costs incurred by her in readying Property A for sale.
The wife sold Property A in September 2017 for $650,000. From the proceeds of the sale, after payment of the disbursements and discharge of the mortgage, a sum of $177,926.08 was paid into the trust account of the wife’s solicitors. Further, from that amount, the parties agreed to each receiving payments from that sum. The sum of $65,000 that remained was held in trust pending the resolution of the dispute between the parties as to which one of them was to be liable to pay the CGT on the sale of Property A.
Before passing to the applications before the primary judge, it is necessary to observe that after the making of the original consent orders in June 2016, on each occasion on which orders were made, the husband was legally represented, as was the wife.
The husband’s 79A application
On 7 June 2018, the husband, by Initiating Application, sought orders pursuant to s 79A of the Act that the consent order made on 4 September 2017 be set aside and he sought a further order that the whole of the sum, then held on trust for the parties, together with interest, be paid out to him. The husband contended that the CGT payable consequent on the sale of Property A be borne solely by the wife.
To found the application, the husband contended that from the outset of the negotiations between the parties leading to the orders of June 2016 and onwards, there had been fraud, duress and/or a suppression of evidence such that there was a miscarriage of justice.
In response, the wife sought that the husband’s application be summarily dismissed, an order ultimately made by the primary judge. It is against this summary dismissal that the husband now appeals.
Legal principles
The husband contends that in coming to her decision, the primary judge made various errors. He also argues that he was not afforded procedural fairness, denied natural justice and that her Honour’s dealing with the matter raised an apprehension of bias. Further, the husband challenges her Honour’s articulation of the law of duress.
Summary dismissal
Her Honour succinctly and carefully set out the principles relevant to summary dismissal (at [33]–[34]). Given however, the husband’s challenges, it is as well to set them out here.
The power to summarily dismiss an action must be rarely and sparingly used (see Pelerman v Pelerman (2000) FLC 93-037). The Full Court discussed the power of the court to summarily dismiss proceedings in Bigg v Suzi (1998) FLC 92-799 at 84,974–84,975 and adopted the articulation of the principles of Kirby J in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 (“Lindon”) at
544–545, which may conveniently be summarised thus:
·it is a serious matter to deprive a party of access to the courts and the power to do so should be rarely and sparingly used;
·the party seeking summary dismissal must show that it is clear on the face of the other party’s documents that the other party lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
·that a case appears weak and unlikely to succeed is of itself not sufficient to satisfy summary dismissal;
·if there is a serious legal question to be tried, then it should ordinarily be determined at a trial of the issues;
·where, notwithstanding a defect in the pleadings, if it appears that a party may have a reasonable cause of action which has not been put in proper form, a court will ordinarily allow that party to reframe the pleadings; and
·the “guiding principle” is doing what is “just”. In Lindon, Kirby J said at [545]:
If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
Her Honour proceeded to consider the question of summary dismissal pursuant to s 45A of the Act and noted that the court may order summary dismissal where it is satisfied that the claim has “no reasonable likelihood of success”.
Indeed, recent authority has preferred to apply the test of “no reasonable likelihood of success” rather than “doomed to fail” (see Spencer
v Commonwealth of Australia (2010) 241 CLR 118 where the High Court discussed the “bound to fail” test and Bretton & Bondai [2013] FamCAFC168 at [59]–[60]).
That is not to say that the power should not, as Lindon said, be exercised sparingly and rarely, but that it will be exercised where it is clear that there is no real question to be tried (see Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd (2013) 42 VR 27 at [35]).
In determining the husband’s claim that the process of making the impugned order was infected with fraud, duress and suppression of evidence, the primary judge took the husband’s case at its highest (at [61]).
Section 79A
The husband’s case was, as I have said, brought pursuant to s 79A of the Act. Section 79A(1) provides:
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
…
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order…
However, what was said in Wernham & Campagnola [2012] FamCAFC 137 at [23] is to be borne in mind:
As is well-known, s 79A of the Act is not a provision which is intended to, or operates as an avenue of redress for a party who has, or believes he or she has, in the light of subsequent events, made a bad bargain. That is why, as the authorities reveal, there are cases, particularly where a long period has intervened between the making of the orders which give rise to the s 79A application and the s 79A application, for having a threshold determination (see Oastler (supra), and Patching (supra)). The trial Judge’s order accordingly, and in the interests of both parties, had the potential to facilitate a cheaper and more expeditious determination of the proceedings if the husband could not, by reference to events in, and surrounding the 1995 orders, demonstrate a possible basis for relief under s 79A.
In particular, the husband contended that there had been a miscarriage of justice in the making of the September 2017 orders by reason of duress and fraud by the wife and that the wife had defaulted in carrying out an obligation imposed on her in the September 2017 orders, such that she did not instruct her accountant to determine the CGT upon the sale of Property A, for over two years after the orders were made.
The primary judge’s consideration
Although the husband only sought to set aside one order of many made by consent, he contended that the whole process leading to the making of the September 2017 order was infected by a miscarriage of justice caused by the wife’s conduct.
Events leading up to and the making of the June 2016 orders
The husband complained that the wife prepared the application supporting the making of the consent orders in June 2016 and said that there were significant omissions relating to his financial and non-financial contributions.
Her Honour concluded that the husband was aware of the asserted deficiencies in the application for consent orders as related to his contributions at the time the orders were made and, indeed, her Honour referred to the husband’s evidence in which he said that he was aware of those deficiencies but nevertheless agreed “in good faith” to the making of the consent orders (at [62]).
Further, her Honour said that before the orders were presented to the court, the husband obtained independent legal advice and it was open to him to correct any asserted omissions before the application for consent orders was made, yet he did not (at [64]–[65] and [72]).
Most particularly, and this was in fact the theme of the husband’s complaints to the primary judge and on the appeal, there was no mention of CGT in the proposed orders. Her Honour noted that the husband said that the wife told him that CGT “was not a problem” and a transfer pursuant to family law orders would “extinguish any pre-existing liability” (at [59]).
The husband contended that at the time that the June 2016 orders were made, the wife knew of a CGT liability on Property A but did not disclose it to him.
The primary judge dismissed the husband’s assertion about the CGT noting that this contention was at odds with his evidence that he knew he bore an onus to seek advice about the proposed orders and any CGT liability (at [64]) and that he had in fact obtained independent legal advice (at [65]).
It must be noted too that at this time, the parties’ intention was that the husband would retain the Property A.
Her Honour rejected the husband’s contention that the contents of the joint application for consent orders contained false information or was made through a fraudulent suppression of evidence or in any way gave rise to a miscarriage of justice (at [69]). Her Honour thus concluded that the husband had failed to demonstrate any matter impugning the making of the June 2016 orders (at [73]).
The making of the orders in February 2017
The husband too complained about the process by which further orders were made by consent on 23 February 2017 consequent on another application brought by the wife. The husband was legally represented on this occasion and her Honour concluded that notwithstanding his complaints about the shortness of time in which he had to prepare for that hearing, he did not instruct his lawyer to seek an adjournment (at [91], [94] and [101]). On this day, the husband and his lawyer, with the wife and hers, negotiated further consent orders. The husband contended that these circumstances amounted to “duress”, he contending that he had a “gun to [his] head” (at [93]).
Her Honour dismissed that assertion, noting that the husband was represented and his solicitor, presumably on his instructions, negotiated with the wife’s to reach the consent order, again, she presumed on the husband’s instructions.
Her Honour concluded that the matters of which the husband complained were regrettably commonplace in litigation and did not amount to “duress” as discussed by the Full Court in Kennedy & Thorne (2016) FLC 93-737 (“Kennedy & Thorne”). I note that the husband has challenged the primary judge’s reflection of the test for “duress” and said that the High Court in allowing the appeal in that matter had established a different test for duress than that used by her Honour. For reasons which follow, there is no foundation in this complaint.
In relation to these orders, that is, those made in February 2017, the husband also complained that no provision was made for payment of CGT. Again too, her Honour referred to the husband’s evidence that he knew he should seek his own legal advice about CGT and the effect of the orders, that he did not do so and further referred to his evidence that the CGT issue was a live one in his mind before the first orders were made in June 2016 (at [63]–[64]).
Her Honour said:
98. … I return to the Husband’s concession that he was aware that the obligation was upon him to seek advice in relation to both the orders and tax liabilities. The capital gains tax issue was one that he had considered in the course of negotiating the June 2016 consent orders and other than to say he relied on the information provided to him by the Wife, he does not explain why he did not seek advice on the issue at that time, or apparently at any point thereafter. He had access to a solicitor and had the opportunity to take advice on the issue when he attended on her on 22 February 2017 or at Court on 23 February 2017. The fact that he did not do so cannot be sheeted home to the Wife.
The February 2017 orders removed any prospect of the husband retaining the Property A. The husband contended that the wife’s application seeking an order pursuant to s 106A of the Act was unfair and pre-emptive because he was on the verge of obtaining finance, a submission rejected by the primary judge finding that even as late as 19 July 2017, a loan to the husband was only conditional and had not then been approved (at [117]).
Finally the husband contended that the wife sold the property under market value and attempted to call evidence to that effect, evidence which her Honour rejected as being largely inadmissible. The proposed evidence was from a person who made an offer to buy Property A who had, apparently, been told by the appointed real estate agent, who said that there was another potential buyer offering to pay $680,000 for Property A. It is immediately apparent why her Honour regarded this evidence as being inadmissible and, as she correctly observed, “there is no guarantee that the purchaser would have gone ahead with the purchase” and that the sale price ultimately achieved was $20,000 more than the witness had offered (at [124]–[125]).
Again, the primary judge rejected the husband’s contentions that the making of the orders in February 2017 arose through a miscarriage of justice. Equally, the primary judge did not accept the husband’s contention that the filing of the wife’s application in September 2016 which ultimately led to the making of the February 2017 orders was in some way fraudulent (at [69]).
The September 2017 orders
Turning then to Order 6(a) of the September 2017 orders, that which the husband challenged before the primary judge, the husband maintained that he had not been aware that there would be any CGT liability attaching to the sale of Property A to a third party. The primary judge rejected this contention and noted that the husband was informed by letter from the wife’s solicitor on 3 September 2017 of the amount of the CGT payable. The husband contended that no letter of that date had been written to him and this is the subject of a ground of appeal. However, in addition, her Honour noted that in the wife’s affidavit sworn on
1 September 2017 in support of the September 2017 application, she annexed a letter of advice from her solicitors which refers to obtaining advice on CGT (at [141]).
Her Honour noted that the September 2017 orders gave the husband liberty to re-list the matter on the issue of CGT of which he did not avail himself and despite his asserted concerns, he took no step to re-list the matter. Her Honour did not accept the husband’s explanation for why he did not re-list the matter (at [151]).
Finally, in dealing with the husband’s submissions about the CGT and the distribution of the net proceeds of sale of Property A, her Honour said:
130. It is clear that once [Property A] was sold to a third party purchaser, any exemption from capital gains tax was lost and the liability crystallised.
131. From that point, the parties were in dispute as to the amount of the liability and which of them should bear the cost of the liability.
Thus the primary judge concluded that the husband’s case taken at its highest did not disclose a case under s 79A of the Act with any reasonable prospect of success and thus it was summarily dismissed.
The appeal
The husband appeared for himself on the appeal and drafted the Amended Notice of Appeal filed on 7 July 2020. There are nine asserted grounds. On that same date, he filed a Summary of Argument that addressed those grounds.
However, before addressing the asserted grounds, it should be observed that the focus of the husband’s appeal is on the CGT payable on the sale of Property A to a third party. It seems clear that the husband, while he acknowledged that CGT was payable on the transfer of Property A, has refused to pay it because the wife’s actions in selling Property A had “cost him hundreds of thousands of dollars” and it was “natural justice” that she should pay the CGT.
A clear theme running through the challenges to her Honour’s orders is the husband’s firm conviction that had he had but a few more month’s leeway, he would have been able to secure finance to buy out the wife’s interest in Property A and the wife’s sale of that property was unfair to him.
Lest it be unclear, the primary judge well understood the husband’s contention, indeed she noted that on 23 February 2017 the husband consented to orders which provided that he transfer Property A to the wife for the purposes of its sale and that he vacate the property within 14 days of the order (at [99]). The property was not sold until August 2017 and that sale was only achieved by the wife obtaining an order that the transfer document be signed on the husband’s behalf by a Registrar of the Court (at [108]).
Her Honour concluded:
111. By this time, the consent orders of June 2016 were over 12 months old. The Husband had been attempting to seek finance, without success. His affidavit appears to lay the blame for that squarely at the feet of the Wife however, the evidence indicates that the Husband’s failure to have completed tax returns together with apparent cash flow problems significantly hampered his efforts.
It is against that background that I turn to consider the grounds of appeal. In these proceedings, under s 94(2A) of the Act, this Court is entitled to give its reasons in short form in the event that the appeal is to be dismissed and if, in the opinion of the Full Court, the appeal does not raise any question of general principle. As these conditions are fulfilled here, I propose to give reasons in short form.
Challenges to fact finding
Of the nine asserted grounds, six grounds (Grounds 1–2 and 4–7) assert challenge to the primary judge’s findings of fact. The challenges in effect complain that the primary judge failed to make findings sought by the husband. Challenges to a primary judge’s findings of fact face a significant hurdle, it being necessary to show that there was no evidence on which those findings could be made. There was ample evidence to support her Honour’s findings in relation to the wife’s disclosures regarding CGT and the sale of Property A and indeed, the evidence drove those findings (see Edwards v Noble (1971) 125 CLR 296 per Barwick CJ at 304).
Mistake of fact
Ground 1 challenges a finding made by the primary judge in the course of discussing the husband’s understanding that CGT was payable on the sale of Property A.
Her Honour said at [133] that the wife’s solicitor had written to the husband on 3 September 2017 informing him that the CGT payable on the sale of Property A was approximately $37,000. The husband said that this was an error of fact, no letter of that date had been sent. It is tolerably clear that the date is a mere slip by her Honour because at [17], [23(a)], [147] and [149] her Honour noted that the letter was written on 13 September 2017.
However, there was abundant other evidence, including that of the husband, to support her conclusion that her Honour understood at all relevant times that CGT would be payable on any sale of Property A.
Her Honour’s mistake was immaterial to the ultimate result (see De Winter and De Winter (1979) FLC 90-605).
Procedural unfairness and apprehended bias
Two further grounds, while couched as a denial of procedural fairness and bias, are in fact challenges to her Honour’s fact finding (Grounds 8–9), and, it was entirely open to her Honour to make findings of fact in relation to all the challenges made by the husband.
Ground 8
This ground contends that the primary judge failed to afford the husband procedural fairness. However, the particulars of this ground are not, in truth, matters going to procedural fairness. For example in oral argument, the husband contended that if, during the hearing, the primary judge was of the view that the husband had not made out his case for miscarriage of justice based on duress, she ought to have informed him of that conclusion and permitted him to reframe his case by allowing him to make submissions as to unconscionable conduct. The balance of the challenge under this ground is in fact a challenge to her Honour’s conclusions of fact which were not those sought by the husband.
Ground 9
The husband contends that the primary judge was biased by “cherry pick[ing]” evidence and again, the ground complains about her Honour’s fact finding. Those findings challenged in this ground were entirely open to her Honour and no error has been shown.
Duress
In Ground 3, the husband asserts that her Honour erred in her definition of “duress”. The basis of this alleged error was difficult to understand but it seems that the husband contended that the High Court in Thorne v Kennedy (2017) 263 CLR 85 (“Thorne v Kennedy”) articulated a different test to that on which her Honour relied and she thus erred. The husband was unable to point to what it was that the High Court said that threw doubt on the definition used by her Honour.
In relying on the Full Court decision in Kennedy & Thorne, the primary judge set out the test for duress there articulated as being “pressure exerted through ‘threatened or actual unlawful conduct’” (at [45]). Further, in Kennedy & Thorne the Full Court said that there needs to be “a finding that the ‘pressure’ was ‘illegitimate’ or ‘unlawful’” (at [71]).
In considering the appeal, the plurality of the High Court in Thorne v Kennedy said:
26 The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction. It does not require that the person’s will be overborne. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing “only too well” what he or she is doing...
(Footnotes omitted)
However, in the result, the High Court did not specifically consider the issue of duress nor did the decision cast doubt on the definition relied on by the primary judge, rather the High Court addressed the definitional overlap between duress and the concept of undue influence (Thorne v Kennedy at [30]). The High Court also noted:
57… It was also unnecessary for the primary judge to consider whether, for the purposes of the doctrine of duress, the pressure that Mr Kennedy exerted upon Ms Thorne was improper or illegitimate. These are matters within the domain of duress rather than undue influence…
(Emphasis added)
The husband sought to argue that his will was overborne because the wife “held his possessions to ransom”. This is a reference to a series of events in which the husband, living in Property A, claimed that the wife would not allow him to enter to retrieve the rest of his belongings.
What was said by the plurality in Thorne v Kennedy is particularly important here:
41In any case where a transaction is sought to be impugned by the operation of vitiating factors such as duress, undue influence, or unconscionable conduct, it is necessary for a trial judge to conduct a “close consideration of the facts ... in order to determine whether a claim to relief has been established”. On appeal, it is also essential for the appellate court to scrutinise the trial judge’s findings and assess any challenge to the trial judge’s conclusions in light of the advantages enjoyed by that judge.
(Footnotes omitted)
The primary judge here did exactly that; she carefully examined all of the circumstances surrounding the giving of the husband’s consent to the orders from time to time and concluded that he was not subject to duress. Those conclusions were entirely open to her Honour and in my view, drove the conclusion to which she came.
Leave to appeal
As I have earlier indicated, the husband needs leave to appeal against her Honour’s orders.
Leave to appeal will be refused, the husband having failed to establish that the judgment sought to be challenged is attended by sufficient doubt. Nor will any injustice accrue if leave is not given.
Application in an appeal
On the evening before the appeal was to be heard, the husband attempted to file an Application in an Appeal in which he sought orders for the issue of subpoenas and to adduce further evidence on the appeal. The application was supported by an affidavit of some 90 pages. Clearly enough, the wife had barely sufficient time to consider the document let alone be in a position to make submissions on it. So much of the application as sought the issue of subpoenas was refused. The lateness of the service of the purported additional evidence of itself is basis enough to refuse the application. However the documents on which the husband would adduce amount, in effect, to an attempt to re-litigate the questions of fact before the primary judge. They could not properly fall within the constraints to reception of further evidence on appeal as set out in CDJ v VAJ (1998) 197 CLR 172. Thus the application to adduce further evidence is dismissed.
Costs
The wife, although she acted for herself, sought an order for costs directly incurred in meeting the appeal. The costs refer to her taking advice in relation to the appeal and amount to $5,672. The appeal having been wholly unsuccessful (s 117(2A)(e) of the Act), she should have those costs and I will order that they be paid out of the balance of the sum held in the trust account of the wife’s solicitors and remaining from the proceeds of sale of Property A.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace delivered on
25 August 2020.
Associate: N. Srinivas
Date: 25 August 2020
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