KK AND RP

FAMILY COURT OF AUSTRALIA

KK AND RP

[2006] FamCA 946

APPEAL – PROPERTY - From orders of Federal Magistrate – Whether Federal Magistrate denied procedural fairness to husband – Whether incorrect weight afforded to parties’ respective contributions, whether adjustment under s 75(2) was appropriate – Federal Magistrate found parties had minimal, or no assets, and made no finding of undisclosed assets - No property which could be subject of adjustment under s 79 – Federal Magistrate ordered a lump sum payment of $60,000 to the wife – Whether appropriate to charge property of second respondent as security for payment – No proper basis for order for security - Appeal allowed.

APPLICATION – To adduce further evidence – First category of evidence sought to be adduced by husband inadmissible in form and should not be admitted – Child support material sought to be adduced by husband available to husband at time of trial and husband failed to demonstrate relevance of material – Material should not be admitted – Husband sought to adduce Financial Statement – Financial Statement untested and should not be admitted – Material sought to be adduced by second appellant does not demonstrate error on the part of the Federal Magistrate and should not be admitted.

COSTS – Error of law on part of Federal Magistrate found – Appropriate to grant certificates to both parties under the Federal Proceedings (Costs) Act 1981 (Cth) for the appeal and in respect of retrial.

Family Law Act 1975 (Cth), ss 75(2), 79, 94AAA(3)
Federal Proceedings (Costs) Act 1981 (Cth)
Family Law Rules 2004

Barrak and Ors and Barakat (2005) FLC 93-234
CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828
Chang v Su (2002) FLC 93-117
Clauson and Clauson (1995) FLC 92-595
Davut and Raif (1994) FLC 92-503
De Angelis and De Angelis (2003) FLC 93-133
Ferraro and Ferraro (1993) FLC 92-335
Gronow v Gronow(1979) 144 CLR 513
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
House v The King (1936) 55 CLR 499
Johnson v Johnson (No 3) (2000) FLC 93-041
Lee Steere and Lee Steere (1985) FLC 91-626
Norbis v Norbis (1986) 161 CLR 513
Prpic and Prpic (1995) FLC 92-574
Re F: Litigants in Person Guidelines (2001) FLC 93-072
Weir and Weir (1993) FLC 92-338
White and Tulloch v White (1995) FLC 92-640
Whitely and Whitely (1996) FLC 92-684

FIRST APPELLANT: KK

SECOND APPELLANT: SK

RESPONDENT: RP

FILE NUMBER: PAM 3234 of 2003

APPEAL NUMBER: EA 144 of 2005

DATE DELIVERED: 29 September 2006

PLACE DELIVERED: Sydney

JUDGMENT OF: Boland J

HEARING DATE: 28 March 2006, 26 May 2006, written submissions 16 June 2006, 11 July 2006 and 14 July 2006

LOWER COURT JURISDICTION:                   Federal Magistrates Court of Australia
LOWER COURT JUDGMENT DATE:             30 November 2005
LOWER COURT MNC:  [2005] FMCAfam 645
REPRESENTATION:
APPELLANT:  Mr KK appeared on his own behalf
COUNSEL FOR THE RESPONDENT:            Mr Battley

SOLICITORS FOR THE RESPONDENT: McDonnell Schroder

Orders

The appeal is allowed.
The orders of Federal Magistrate Scarlett of 30 November 2005 be set aside.
The matter be remitted for rehearing before a Federal Magistrate other than Federal Magistrate Scarlett as soon as possible.
That the appellant be granted a costs certificate in relation to the costs of the substantive appeal pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.
That the respondent be granted a costs certificate in relation to the costs of the substantive appeal pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by them in relation to the new trial ordered.

FAMILY COURT OF AUSTRALIA AT SYDNEY

APPEAL NUMBER: EA 144 of 2005

FILE NUMBER: PAM 3234 of 2003

First Appellant

And

Second Appellant

And

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

By amended Notice of Appeal KK (‘the husband’) and his mother, SK, (‘Mrs SK’) appeal orders made by Scarlett FM at the conclusion of defended property proceedings between the husband, Mrs SK and RP (‘the wife’) under s 79 of the Family Law Act1975 (Cth) (‘the Act’). An application by the wife for spousal maintenance was dismissed by the Federal Magistrate.
The Federal Magistrate’s orders provide that the husband pay to the wife the sum of $60,000.00 by way of settlement of property, and that the payment be secured upon the title to the E Street property, (‘the E Street property’). The E Street property is registered in the names of the husband and Mrs SK (whom for convenience I shall refer to as ‘the appellants’ when I refer to them jointly) as tenants in common in equal shares.
The husband was unrepresented at the trial before the Federal Magistrate, and was unrepresented on the appeal. Mrs SK, although named in the wife’s application as a respondent, did not file a Response. She appeared before the Federal Magistrate as a witness in the husband’s case. The wife was represented by Mr Battley of counsel both before his Honour and on the appeal.
The amended Notice of Appeal contains a mixture of purported grounds and submissions. However, during the course of the appeal hearing I was able to discern the broad thrust of the husband’s complaints about the Federal Magistrate’s reasons for judgment.
In general terms, the husband asserts a failure by his Honour to assist him as a self represented litigant, and in particular, by failing to explain the process of tendering subpoenaed documents, which the husband asserts rebut the wife’s evidence that she was not living in a de facto relationship at the date of the trial.
The husband also asserts that his Honour failed to give appropriate weight to his financial contributions throughout the marriage, and that he gave disproportionate weight to the wife’s financial and non financial contributions throughout the parties’ very short marriage.
The husband asserts the Federal Magistrate assessed the parties’ contributions against findings of a negative pool of assets and liabilities, incorrectly found the husband had a substantial financial resource in the E Street property, and was in error in ordering a payment of $60,000.00 given his Honour’s finding of a ‘negative’ pool of property.
No cross appeal has been filed by the wife. Whilst the wife seeks to uphold the orders made by his Honour, in written submissions filed by her counsel she asks for the following orders to be made:
‘(1) The appellant/s appeal is dismissed.
(2)The orders made by the learned Magistrate on 30 November 2005 are affirmed.
(3)The finding of the learned Magistrate that the appellant,[KK], did not hold a beneficial interest in the property at [E Street property], is quashed.
(4)The appellant/s is/are to pay the appeal costs of the respondent, as taxed or agreed.’
I will return to the wife’s submissions, and the orders she seeks, later in these reasons.
I am hearing this appeal as a single judge of the Appeal Division pursuant to arrangements made under s 94AAA(3) of the Act.

CONDUCT OF THE APPEAL

Before I commence my reasons, it is appropriate to say something about the manner in which this appeal was conducted. I conducted a procedural hearing on 23 January 2006 and made orders and directions to enable the appeal to be heard. Those orders included the following:
‘1.     That the Appellant Husband is to file and serve any amended grounds of appeal on or before 14 February 2006.
2.      That the Respondent Wife is to file and serve any cross appeal on or before 28 February 2006.
3.      That on or before 3 March 2006 the Appellants file and serve a list of the documents that were before Federal Magistrate Scarlett upon which the Appellants seek to rely.
4.      That on or before 3 March 2006 the Appellants obtain those parts of the transcript of evidence of the hearing before the Federal Magistrate which may be relevant to the appeal and provide copies of such transcript to the Court and to the Respondent.
5.      That the Appellants file and serve a written Summary of Argument and List of Authorities (if any) on or before 10 March 2006.
6.      That the Appellants file and serve any application to lead further evidence and any material in support thereof on or before 10 March 2006.
7.      That the Respondent file and serve a list of any further documents that were before the Federal Magistrate, not included in the Appellant's list, upon which she seeks to rely, together with a written Summary of Argument and a List of Authorities (if any) on or before 24 March 2006.
8.      That the respondent file and serve any application to lead further evidence (if any) and any material in support on or before 24 March 2006.’
At the procedural hearing I made the following notations:
‘1.The Appellant Husband asserts the transcript provided by the National Transcription Service is an incomplete transcript of the proceedings before Federal Magistrate Scarlett on 30 November 2005.
2.The Appellant Husband was advised today of the facility available to obtain a CD of the transcript or alternatively to arrange with the Registry Manager to listen to a tape of the transcript.
3.The Appellant Husband is to provide to the Associate to the Honourable Justice Boland a copy of his letter of complaint to the National Transcription Service.’
Pursuant to the orders the appeal was listed for hearing on 28 March 2006 at 10.00 am.
Notwithstanding the husband prima facie complied with all the directions made at the procedural hearing, the respondent’s solicitors did not file any outline of argument or list of authorities, nor did they challenge the list of documents provided by the husband on 3 March 2006. Suffice it to say the list provided by the appellants was not a list of documents which were before the Federal Magistrate, and did not comply with the directions made on 23 January 2006.
On or about 15 March 2006 the husband caused a medical certificate to be forwarded to the Federal Magistrates Court stating he was ‘medically unfit to attend court due to medical reasons and attached medical certificate’. A copy of the husband’s letter was received by the Court on 22 March 2006. On 27 March 2006 the wife’s solicitors wrote to the Appeals Registrar and advised they had received correspondence from the husband and did not consent to an adjournment of the appeal.
On 28 March 2006 the husband appeared in person, as did Mrs SK, and the wife was legally represented. As I have already noted no written submissions had been filed by the wife in accordance with earlier orders, presumably on the basis that the matter would not proceed on 28 March 2006 due to the husband’s asserted inability to attend Court.
Mrs SK appeared on the appeal. No interpreter was available, but through the husband she declined to have the proceedings adjourned until an interpreter could be provided, and sought to have the husband conduct the appeal on her behalf.
The husband presented his oral submissions in support of the appeal, as did the wife’s counsel. However, because the wife had not provided written submissions, to afford procedural fairness to the wife, who anticipated an adjournment application, and because the appellants’ grounds of appeal were not properly identified in the amended Notice of Appeal nor was complete transcript provided, I made further directions as follows:
‘1.That the Respondent Wife file and serve any written submissions together with transcript on which she intends to rely by 4.00 pm Tuesday 2 May 2006.
2.   That the Appellant Husband file and serve any written submissions, if any, in reply by 4.00 pm Tuesday 16 May 2006.
3.   Leave granted to restore for further directions to Boland J (or if not reasonably available to another member of the Appeal Division) upon three (3) days notice in writing to the other party and to the Appeals Registrar in the Sydney Registry.
4.   Liberty granted to the Respondent Wife’s solicitors to have access to the exhibits which were before Federal Magistrate Scarlett on application to the Appeals Registrar.’
At the request of the wife’s solicitors, the matter was relisted before me on 26 May 2006. On that date the husband advised me he had obtained the whole of the transcript of the proceedings. The wife sought an extension of time in which to file her submissions. Accordingly I made orders as follows:
‘1.That the appellant Husband provide the whole of the transcript of proceedings before Federal Magistrate Scarlet [sic] on 21 May 2004, 7 September 2004, 28 September 2004 and 5 April 2005 to the respondent Wife’s solicitors at their [B] office on or before the close of business Friday 26 May 2006.
2.   That the appellant Husband provide the whole of the transcript of proceedings before Federal Magistrate Scarlet [sic] on 21 May 2004, 7 September 2004, 28 September 2004 and 5 April 2005 to the Appeals Registrar of the Sydney Registry on or before 4.00 pm on Monday 29 May 2006.
3.   I discharge orders 1 and 2 of the orders made 28 March 2006.
4.   The respondent Wife file and serve written submissions in relation to the appeal with the Appeals Registrar of the Sydney Registry on or before
4.00 pm 16 June 2006.
5.   The appellant Husband file and serve any written submissions in reply with the Appeals Registrar of the Sydney Registry on or before 4.00 pm 7 July 2006.’
Written submissions were subsequently filed as follows:
(a) submissions from the wife dated 16 June 2006;
(b) a document entitled ‘Response for submissions by the Appellant in Response to submissions of the wife respondent dated 19 June 2006’ undated and filed 11 July 2006;
(c) a second document entitled ‘Response for submissions by appellant in response to submissions of wife respondent dated 19 June 2006’ undated and filed 11 July 2006; and
(d) a third document entitled ‘Response for submissions by the appellant in response to submissions of wife respondent dated 19 June 2006’ undated and filed 14 July 2006.
I will discuss the nature and status of the submissions later in my reasons. It is sufficient to note at this stage that the husband’s submissions were not filed in accordance with my orders, and neither party’s submissions comply with the provisions of the Family Law Rules 2004 (‘the rules’).

THE FURTHER EVIDENCE APPLICATION

On 9 March 2006 the appellants filed an application to adduce further evidence as annexed to the husband’s affidavit sworn 9 March 2006. The husband also sought, without objection, that the affidavit of Mrs SK sworn 3 December 2004 should be treated as part of the appellants’ further evidence application. Mrs SK’s affidavit annexed a copy of her Will dated 15 November 2004, a copy of a draft Power of Attorney, a memorandum of costs and disbursements from AD & D, Solicitors dated 17 April 2003, part only of a letter from the solicitors, and a copy Will of Mrs SK dated 12 May 1995. It is unclear from the transcript whether this affidavit was in fact before Scarlett FM on 5 April 2005. I refer to the affidavit again later in my reasons.
The wife reserved her position in respect of the admission of the new evidence at the hearing.
In CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828 the High Court discussed the circumstances in which an appellate court may exercise its discretion to admit further evidence. At paragraph 109 McHugh, Gummow and Callinan JJ said:
‘109. One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.’
Their Honours also said:

‘111. … Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.’

Further, their Honours noted that the Full Court would in parenting cases more readily admit further evidence which was not in dispute, and noted other limitations on such evidence saying:

‘115. … In most cases concerned with parenting orders that means that it should only be exercised in favour of the receipt of the further evidence if that evidence is not only relevant to the welfare of the children but is also admissible according to ordinary principles or by statute, and if there is no reason apparent to the Full Court of the Family Court for believing that the evidence is not credible.’

Noting that the discretion to be exercised in determining whether or not to admit further evidence must be exercised judicially, their Honours considered the question of failure to adduce evidence which was available at the date of the hearing before a primary judge and said:
‘116. The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case. Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion. In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance. No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section.’

Categories of further evidence

The first category of evidence sought to be adduced by the husband relates to medical certificates, hospital notes and a pathology report. The medical certificates were not annexed to an affidavit of the treating doctor. The hospital notes and the pathology report were not produced as business records under subpoena. In these circumstances the documents are inadmissible in form and should not be admitted. Similar inadmissible medical records were properly rejected by the Federal Magistrate at the hearing.
The husband also seeks to adduce evidence of documents received by him from the Child Support Agency which predate the hearing. There is no suggestion these documents were not available to the husband to tender to his Honour at the trial. The husband failed to show how these documents could be relevant to the appeal, particularly as he did not dispute his Honour correctly recorded the amount of child support being paid at the date of the hearing.

The husband also sought to adduce a Financial Statement sworn 6 February 2006 to which he annexed correspondence and documents relating to asserted present debts.
Mrs SK’s further evidence application is particularised above. The dates of the documents sought to be adduced must be considered in the light of the hearing dates. The hearing before the Federal Magistrate occurred on 21 May 2004, 7 and 28 September 2004, and concluded with submissions on 5 April 2005. Judgment was delivered on 30 November 2005. Mrs SK seeks now to rely on a Will made on 15 November 2004, that is, shortly after the evidence in the matter concluded. There is no copy of the executed Power of Attorney referred to in the solicitors’ account annexed to her affidavit and the correspondence referred to is undated and incomplete.

Conclusions – further evidence application

I have already noted the husband’s medical evidence is inadmissible in its present form. Further I have noted the availability of the child support material at the time of the hearing. I do not find these documents should now be admitted.
Whilst the husband’s Financial Statement may be relevant if the appeal is allowed, it is untested. In accordance with the principles set out above I do not find it should be admitted on the appeal.
Mrs SK’s material, excluding her will executed in 1995, does not of itself demonstrate error on the part of the Federal Magistrate, and should not be admitted on the appeal. I will however return later to discuss the Federal Magistrate’s findings in respect of the E Street property and his subsequent orders.

RELEVANT BACKGROUND

The relevant background history of the parties is set out in the Federal Magistrate’s reasons for judgment.
The husband and wife were married in Australia on January 2000 in a civil ceremony at a temple in western Sydney. The parties’ marriage was an arranged marriage, and the parties did not cohabit immediately after the marriage ceremony.
The day following the marriage the wife returned to a South Pacific Island where she lived with her mother until May 2000 when she returned to Australia and lived with her brother. A traditional Hindu wedding service took place in June 2000 whereafter the parties commenced living together as husband and wife in the E Street property.
The parties separated in May 2001 when the wife left the E Street property. During the short period of the marriage the husband engaged in full time work at a Hospital, and subsequently for about three or four months before separation, engaged in employment as a courier driver. At the date of the hearing the husband was unemployed.
During the marriage the wife engaged in a limited amount of casual work. When the parties separated the wife was approximately two months pregnant.
The husband and wife’s only child R, was born in January 2002.
The appellants are registered proprietors as tenants in common of the E Street property.
The E Street property was valued by a registered valuer for the purposes of the proceedings and found to have a current value of $470,000.00 as at February 2004. The E Street property was purchased in 1995 in the names of Mrs SK and her son Mr AK (‘Mr AK’) at a purchase price of $157,000.00.
In 1997 Mr AK was removed from the title and the husband became a co-owner of the property and a joint mortgagor. Between May 1997 and February 1998 the husband made payments of $500.00 per fortnight to Mrs SK’s loan account with the mortgagee bank. She asserted this was for his rent and living costs.

THE FEDERAL MAGISTRATE’S REASONS FOR JUDGMENT

The Federal Magistrate noted the wife’s original application filed 28 October 2002 sought a division of the husband and wife’s property in equal shares. His Honour noted that the husband, in his Response, sought an order that the wife should pay him the sum of $9,000.00 representing a one half share of jewellery he asserted the wife had taken when the parties separated.
Having set out the parties’ background, his Honour recorded the issues before him as follows:
‘4.      The issues between the parties are:
a)   the extent of the husband’s interest in the home in which he lives with his parents, including the Second Respondent, at [E Street property];
b)   the extent of the Second Respondent’s interest in the home at [E Street property]; and
c)   the weight to be given to the husband and wife’s contributions to the matrimonial property.’
Thereafter his Honour set out the evidence before him, and also set out a number of authorities on the applicable law to determination of proceedings under s 79 of the Act.
Having noted the first step to be undertaken ‘is to ascertain the value of the matrimonial assets’ his Honour turned to consideration of the E Street property. He noted pursuant to a mortgage to St George Bank the amount due and owing to the mortgagee was $116,216.87 as at June 2004.
Thereafter the Federal Magistrate set out the husband’s financial position as disclosed in his Financial Statement. He said the husband disclosed assets totalling $300.00 and liabilities of $51,081.40.
His Honour then set out the husband’s asserted liabilities as follows:
‘a)     Income tax financial year 30 June 2004                 $5,306.94
b)       Income tax for previous years  $9,447.92
c)       Qantas Telstra Visa Credit card  $2,887.35
d)       Shell MasterCard  $4,249.26
e)       His former solicitor’s costs  $6,581.57
f)       Other debts  $37,313.22
TOTAL  $65,786.26’
His Honour referred to the wife’s Financial Statement and noted she disclosed assets totalling $5,000.00, being clothes and jewellery worth $2,000.00 and a bank balance of $3,000.00. The wife was noted to have no debts.
Notwithstanding that the wife’s counsel asserted that the wife did not accept the veracity of any of the debts of the husband, the Federal Magistrate said ‘[w]hilst I have some reservations about the accuracy of the amounts disclosed by the husband, I am not persuaded that I should disregard the debts that the husband claims’. Summarising the position of the husband and wife, his Honour said “[l]eaving aside the [E Street property], the wife appears to have assets to the value of $5,000.00 whilst the husband appears to be insolvent. Against his claimed assets of $300.00 he has debts of $65,786.26, leaving him with a minus total of $65,486.26’.
Having recorded he had ‘some doubts about the credibility of the husband’s evidence’ his Honour said he did not doubt the truthfulness of the evidence of Mrs SK or Mr AK.
His Honour concluded ‘[i]n my view, the respondent husband does not have a beneficial interest in the home at the [E Street property], but holds his half share as a trustee for the second respondent’. Having referred to the terms of Mrs SK’s Will his Honour concluded ‘[i]t seems to me that the [E Street property] home should more accurately be classified as a financial resource available to the husband rather than a matrimonial asset’.
The Federal Magistrate then considered the contributions of the parties, noting the marriage was a short one of ‘just over sixteen months’.
His Honour set out the contributions asserted by the wife as well as the wife’s complaints of domestic violence. He also referred to the husband’s assertions, which he noted were denied by the wife, that she retained items of jewellery from his side of the family when they separated.
The husband was noted to pay child support of $21.67 per month. His Honour recorded ‘[h]e said that he paid that amount out of some cash he kept under the bed. He told the Court that he had about $300.00 or $400.00 there’.
Thereafter his Honour set out his assessment of the contributions of the parties but determined it was not appropriate to take into account the husband’s conduct as having a ‘significant adverse impact upon her [the wife’s] contribution to the marriage, although it may well have made her contributions somewhat more arduous than they might have been’.
His Honour concluded as follows:
‘In my view, the contributions over the short period of time the parties were together favour the husband over the wife by 60% to 40% in respect of what is a very small pool of matrimonial assets’ (my emphasis).
Thereafter his Honour referred to relevant factors under s 75(2) and made a finding that the husband ‘appears to be in good health’. He also found that Mrs SK was aged 69 years.
His Honour concluded that the wife, who was in receipt of Centrelink benefits at the date of the trial, had ‘no prospects of obtaining gainful employment for the near future or in the medium term’. He also found she had no superannuation or other financial resources.
Turning to the husband’s earning capacity his Honour noted ‘[t]he husband has had a history of employment and worked during the marriage. I am satisfied that he has a capacity for gainful employment but he has chosen not to work at this stage because of the current proceedings’. His Honour went on and said:
‘The husband has a financial resource, being the [E Street property] home, which he can expect to receive out [sic] of after his parents die. His mother has annexed a copy of her will, showing that she leaves her estate to her husband but, if he were to predecease her, to the respondent husband. I regard this as a significant financial resource, as the husband is already living in the house rent-free. As his name is on the title, it cannot be transferred without his consent.’
His Honour discussed the wife’s responsibility for the care of the parties’ only child and concluded:
‘There is, however, no rule or principle that a party who has the care and control of a child could, by that matter alone, receive the greater proportion of the property settlement. It is a factor to be taken into account, weighed against all other matters which the court is required under the Act to take into account for making an order for alteration of property interests (Mallet v Mallet (1984) 156 CLR 605; 52 ALR 193; 9 Fam LR 449; FLC-507).’
Having recorded the husband paid a nominal amount of child support, his Honour noted that the husband was not in receipt of any pension or benefit. He also noted that neither party had entered into another relationship. His Honour then concluded:
‘In my view, bearing in mind the minimal assets but the husband’s significant financial resources and expectations, and taking into account the unlikelihood, in my mind, of the husband providing any more for the child than the bare minimum that he is obliged to do, I am satisfied that it is appropriate to order a lump sum payment to the wife to give her some ability to provide a home for the child. She will not be able to buy a house of her own.’ (my emphasis).
His Honour thereafter noted a sum of $60,000.00 together with interest, when paid, ‘would be an appropriate figure’. He further concluded ‘[i]t should be secured on the title to the [E Street property]’.
His Honour then turned to consider whether the orders he proposed were in all the circumstances just and equitable. His Honour concluded:
‘The unusual aspect of this case is that the wife had saved some cash, but had little else except some household goods. The husband provided figures that if one were to believe them, would show that he is insolvent. I am less than satisfied that the husband has been entirely frank in his disclosures of his financial position. In his submissions to the court on the final day of the hearing, he referred to the fact that he had not produced documents relating to his financial circumstances as counsel for the wife had sought him to do. He explained this by saying:
“The reason is that you didn’t give me what I asked for. I choose not to produce documents unless the applicant produced documents”.’ (footnotes omitted)
His Honour then referred to the requirement that each party should make a full and frank disclosure of their financial position. His Honour said ‘[t]he husband has made it clear that he is committed to giving the wife as little as possible. That seems to include not working to gain income or assets, but allowing himself to be more or less supported by his parents’. Having referred to the husband’s status at one stage as an illegal immigrant his Honour said ‘[t]o my mind, the only way that the wife will receive any settlement is for a lump sum to be ordered, secured on the [E Street property].’

THE AMENDED GROUNDS OF APPEAL

The grounds of appeal are as set out in the husband’s amended Notice of Appeal filed 9 February 2006. As I have already noted the purported grounds are in parts unintelligible. However at the hearing I was able to identify the broad thrust of the husband’s complaints.

Procedural fairness grounds

The gravamen of the husband’s first area of complaint is that his Honour failed to properly assist the husband as a litigant in person, and in particular that he did not explain procedure to the husband to facilitate the calling of both oral and documentary evidence in support of his assertion that the wife was living in a permanent de facto relationship at the date of the trial.
The proceedings commenced before his Honour on 21 May 2004. On that day, the wife, as applicant, gave short evidence in chief and was cross examined by the husband. The matter was adjourned part heard until 7 September 2004. At the time of the adjournment the wife’s cross examination had not concluded and the Federal Magistrate made directions for the filing of further affidavit material. In the course of dealing with objections to additional material filed by the husband in respect of the wife’s asserted relationship, the husband said (transcript 7 September 2004, p 20, line 31) ‘We have subpoenaed that person to be in the Court, your Honour. So he must be (indistinct) thank you, your Honour’. During the wife’s resumed cross examination, the wife denied cohabiting with any person in her rented premises. The husband then addressed the following query to the Federal Magistrate:
‘Your Honour, Mr (indistinct) [RK] was subpoenaed to give evidence and documents. What happens about that, because that’s related to 3/28-32, your Honour.
FEDERAL MAGISTRATE: There was a subpoena issued, was there?
MR [KK]: Yes, there is a subpoena to give evidence and produce documents, your Honour. And that was person was also on notice to produce and Mr (indistinct) documents here.
FEDERAL MAGISTRATE: When did – so who is the person who was subpoenaed?
MR [KK]: Mr (indistinct) [RK], your Honour.
FEDERAL MAGISTRATE: I have some documents produced by RK(?).
MR [KK]: Mm hmm.
FEDERAL MAGISTRATE: You’re seeking access to that material?
MR [KK]: Yes, your Honour.
FEDERAL MAGISTRATE: It seems to me, Mr Battley, that you should have a look at it as well.
MR BATTLEY: May it please the Court. Thank you, your Honour.
FEDERAL MAGISTRATE: They seem to be copies of power bills and things. He was subpoenaed to give evidence. I see. Very well. Well, I release that material now. Perhaps you might want to look at that material from Mr [RK] over lunchtime, sir?
MR [KK]: Then I’ll come back to Auburn question relating to Mr [RK] after lunch, your Honour?’
During a later period in the cross examination the husband again referred to the subpoenaed material as follows:
‘MR [KK]: It’s from the subpoena, your Honour. I have the - - -
FEDERAL MAGISTRATE: Yes, but subpoenaing a document doesn’t put the material into evidence.
MR [KK]: So, what questions can I ask, then?
FEDERAL MAGISTRATE: If you want to ask a witness whether she is living with another person, you should ask her if she is living with another person.
MR [KK]: And the reply is no.
FEDERAL MAGISTRATE: There you go.
MR [KK]: The reply is no.
FEDERAL MAGISTRATE: Well, sir, I can’t tell you how to run your case. I’m not here to give legal advice.’
The matter resumed before his Honour on 28 September 2004. At the commencement of the resumed hearing the husband again raised the question of subpoenaed documents saying ‘[y]our Honour, I want to show – I’ve got a subpoenaed document (indistinct)’. When the proceedings were not concluded on 28 September 2004 the husband raised with his Honour the subpoena to give evidence to Mr RK. The following dialogue occurred between the Federal Magistrate and the husband:
‘MR [KK]: Yes, your Honour, but my issue is to subpoena [RK]; I need to subpoena him again, so I need time to do that, your Honour.
MR BATTLEY: Well, I object to that, your Honour.
MR [KK]: Because he’s given me all the documents that are 6 months old, 1 year old – we’re discussing what’s happening today. And he’s related to the other party as of today, so we want everything of today; not 6 months or 1 year old. Thank you, your Honour.
FEDERAL MAGISTRATE: Well, all right. The subpoenaed material will need to be returned to my associate this afternoon.
MR [KK]: Yes, I’ll do that just right now, but can I issue another one, your Honour?
FEDERAL MAGISTRATE: Well, you can take that up with the registrar, and I’ll deal with the admissibility of that on the next occasion.’
At the commencement of the adjourned proceedings on 5 April 2005 the husband again raised the issue of subpoenas. He made a similar request to the Federal Magistrate immediately after the luncheon adjournment saying:
‘MR [KK]: He is here. In the meantime, if you want, we can do the subpoenas.
FEDERAL MAGISTRATE: What do we have to do with the subpoenas, I thought you’d - - -
MR [KK]: No, we haven’t, your Honour.
FEDERAL MAGISTRATE: What do we have to do with them?
MR [KK]: View them, your Honour.
FEDERAL MAGISTRATE: Well, you may certainly view them.
MR [KK]: Yes, your Honour, (indistinct).
FEDERAL MAGISTRATE: Yes. And - - -’
At the conclusion of the evidence the husband again raised the issue of subpoenas and sought to recall the wife saying:
‘MR [KK]: I’ve got a couple of questions for the applicant actually – for these subpoenas actually.
FEDERAL MAGISTRATE: Well, why is this - - -
MR [KK]: I’m after the combined income of the applicant, your Honour; just the applicant’s income. The applicant has an income and I’ve got subpoenas here, and that’s all I’ve - - -
FEDERAL MAGISTRATE: Well, I’m not prepared to allow any further cross-examination at this stage. The applicant’s already given her evidence, Mr [KK].
MR [KK]: Yes, but I didn’t ask all these questions because I was waiting for the subpoenas to come out.
FEDERAL MAGISTRATE: I’m sorry - - -
MR [KK]: Thank you, your Honour.
FEDERAL MAGISTRATE: - - - but unless you’re proposing to lead evidence in reply, Mr Battley, I’d be surprised if you were, but - - -
MR BATTLEY; No, I’m not, your Honour.
FEDERAL MAGISTRATE: Yes, well, then there will be no further cross-examination.’
The Full Court in Re F: Litigants in Person Guidelines (2001) FLC 93-072 enunciated guidelines to assist judicial officers in hearing cases involving self represented litigants.
At paragraph 224 their Honours Nicholson CJ, Coleman and O’Ryan JJ noted:
‘224. We do not disagree with the formulation of the Full Court in Johnson as to the reasons why it is usually undesirable for the judge to give legal advice, particularly, when it is of a strategic nature. We do, however, think that there can be circumstances where the requirement to conduct a fair trial requires a Judge to give assistance of a legal nature to a litigant in person even though such assistance may risk compromising the appearance of impartiality and neutrality from the perspective of the other side.’ (original emphasis).
Thereafter, having noted potential misuse of the guidelines, their Honours restated, as modified by them, the guidelines from Johnson v Johnson (No 3) (2000) FLC 93-041. At paragraph 253 their Honours set out the reformulated guidelines. I find it is appropriate to repeat that reformulation here:
‘253.    Finally, we think it useful to list the set of guidelines as altered by our       consideration of them above.
1.   A judge should ensure as far as is possible that procedural fairness is afforded to all parties whether represented or appearing in person in order to ensure a fair trial;
2.   A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses;
3.   A judge should explain to the litigant in person any procedures relevant to the litigation;
4.   A judge should generally assist the litigant in person by taking basic information from witnesses called, such as name, address and occupation;
5.   If a change in the normal procedure is requested by the other parties such as the calling of witnesses out of turn the judge may, if he/she considers that there is any serious possibility of such a change causing any injustice to a litigant in person, explain to the unrepresented party the effect and perhaps the undesirability of the interposition of witnesses and his or her right to object to that course;
6.   A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to inquire whether he or she so objects. A judge is not obliged to provide advice on each occasion that particular questions or documents arise;
7.   If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights;
8.   A judge should attempt to clarify the substance of the submissions of the litigant in person, especially in cases where, because of garrulous or misconceived advocacy, the substantive issues are either ignored, given little attention or obfuscated. (Neil v Nott (1994) 121 ALR 148 at 150);
9.   Where the interests of justice and the circumstances of the case require it, a judge may:
·draw attention to the law applied by the Court in determining issues before it;
·question witnesses;
·identify applications or submissions which ought to be put to the Court;
·suggest procedural steps that may be taken by a party;
·clarify the particulars of the orders sought by a litigant in person or the bases for such orders.
The above list is not intended to be exhaustive and there may well be other interventions that a judge may properly make without giving rise to an apprehension of bias.’

An examination of the transcript reveals that his Honour did not set out the procedure to be adopted by him in hearing the case. It is apparent from a reading of the transcript that the adjournment of the matter over four hearing days from 21 May 2004 to 5 April 2005 caused the proceedings to become disjointed. However, it is clear from the extracts of the transcripts set out by me above, that at all times the husband made it clear that he wished to call Mr RK and to tender documents to the Court which supported his assertion that the wife was living in a de facto relationship with Mr RK.
I am satisfied there is merit in the husband’s assertions in respect of procedural fairness. The husband was not afforded the benefit of a general outline by the Federal Magistrate of the manner in which he proposed to conduct the proceedings, nor did his Honour clarify with the husband procedural steps that he may have taken in respect of the subpoenas issued. I am satisfied these matters affected the husband’s ability to properly conduct his case. Accordingly I find merit in ground 1.

Contribution assessment grounds

The second principal challenge to his Honour’s orders is directed to the weight afforded to the parties’ respective contributions, and the adjustment made under s 75(2). Integral to this challenge is his Honour’s determination of the property of the parties, and their percentage entitlements to that property.
I have already set out the Federal Magistrate’s findings in respect of the property of the parties. The husband, understandably, does not challenge the Federal Magistrate’s finding that he ‘does not have a beneficial interest in the [E Street property] home, but holds his half share as a trustee for the second respondent’. It is appropriate to note at this point in time that the wife has not filed any cross appeal against the Federal Magistrate’s orders, nor has she sought to rely on a Notice of Contention (in reliance on the High Court Rules 2004 there being no provision in Chapter 22 of the rules for such Notice). I have already adverted to the fact in submissions made by her counsel, the wife seeks that the ‘finding of the learned Magistrate that the appellant, [KK], did not hold a beneficial interest in the [E Street property], is quashed.’ The wife’s counsel does not set out the basis on which such order could be made. I discern its only potential relevance could be if the appeal was upheld, and I was to re-exercise the discretion of the Federal Magistrate. This however is not what is sought by the wife, who seeks the dismissal of the appeal.
There is no challenge by the appellant to the assets and liabilities as found by the Federal Magistrate. His Honour’s findings as to the assets and liabilities of the parties at the date of hearing were not set out in a consolidated tabular form in his reasons for judgment. I find it useful to do so, as it starkly identifies the position of the parties as found by his Honour:

Assets of the parties

Clothing and jewellery W $2,000.00

Cash W $3,000.00

Household goods H $300.00

Total joint assets $5,300.00

Liabilities

Income tax (30.6.04) H $5,306.94

Income tax for previous years H $9,447.92

Qantas Telstra Visa Card H $2,887,35

Shell Mastercard H $4,249.26

Former solicitor’s costs H $6,581.57

Other debts H $37,313.22

Total liabilities $65,786.26

Total nets assets and liabilities ($60,486.26)

The approach to the determination of an application under s 79 is well established by authority (see Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Whitely and Whitely (1996) FLC 92-684).
Section 79(2) provides:

‘The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.’

A judicial officer is required, in considering what order, if any, to make, to take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s 79(4), the effect of any proposed order upon the earning capacity of either party to the marriage (see s 79(4)(d)), the matters referred to in s 75(2) so far as they are relevant; any other order made under the Act affecting a party to the marriage or a child of the marriage and any child support under the Child Support (Assessment) Act 1989 (Cth) that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage.
The Full Court in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 re-affirmed the approach to be taken in determining property cases:
‘39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s. 79. That approach involves four inter- related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC ¶91-626; Ferraro and Ferraro (1993) FLC ¶92-335; Davut and Raif (1994) FLC ¶92-503; Prpic and Prpic (1995) FLC ¶92-574; Clauson and Clauson (1995) FLC ¶92-595; Townsend and Townsend (1995) FLC ¶92-569; Biltoft and Biltoft (1995) FLC ¶92-614; McLay and McLay (1996) FLC ¶92-667; JEL and DDF (2001) FLC ¶93-075 and Phillips and Phillips (2002) FLC ¶93-104.’ (my emphasis).
In his assessment of the parties’ contribution based findings the Federal Magistrate found during the parties’ very short marriage:
·the wife provided the major contribution as homemaker;
·that post separation the wife made the major contribution as the parent of the parties’ only child;
·the husband provided the major financial contribution during cohabitation as the income earner; and
·that the use of the E Street property for the parties’ residence was a contribution by and/or on behalf of the husband.
Significantly, his Honour did not find the wife’s contribution based entitlements should be increased by reason of her assertions of domestic violence perpetrated on her by the husband, although expressing some doubts about the credibility of the husband, and that he was ‘less than satisfied that the husband has been entirely frank in his disclosures of his financial position’. His Honour said ‘[t]he husband has made it clear that he is committed to giving the wife as little as possible. That seems to include not working to gain income or assets, but allowing himself to be more or less supported by his parents.’ His Honour did not find the husband had a beneficial interest in the E Street property, but rather totally accepted the evidence of Mrs SK, and Mr AK about the equitable ownership of that property.
The first challenge by the husband is to the weight attributed by his Honour to the parties’ respective contributions.
The challenge to the exercise of discretion and limits on appellate court interference are well known. In Gronow v Gronow(1979) 144 CLR 513 Stephen J said at 519:
‘The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight.’
In House v The King (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ said at 504-5:
‘The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.’
It is clear that a judicial officer assessing contributions under s 79 is not limited to an assessment referable to a particular asset (see Norbis v Norbis (1986)
161 CLR 513 per Mason and Deane JJ at 523), but there is a requirement either on an asset by asset or global approach under s 79(4)(a) to ‘know the circumstances in which assets were acquired and the general extent of each party’s contribution to them’ as well as assessing contribution under s 79(4)(b) and (c) and to express the contribution findings as a percentage of the net property. In this case, the Federal Magistrate’s assessment of the contributions under s 79(4)(a), (b) and (c) made by the parties was not made with reference to a percentage of any property of the parties. I am unable to reconcile the lack of findings of any property of the parties, other than ‘a very small pool of matrimonial assets’, with the pool available for division demonstrated in the above table. On his Honour’s finding the parties had minimal assets (in reality no net assets having regard to the table in paragraph 80) but outstanding debts. These findings precluded, absent a finding of undisclosed assets which could not be precisely identified, there was any property which could be subject of adjustment under s 79. Accordingly the grounds relating to assessment of contribution must succeed.
I turn for completeness to the question of undisclosed assets, and the asserted financial resource of the husband.
It was not the wife’s case before the Federal Magistrate, or before me, that the husband had any other significant property other than his interest in the E Street property. Whilst the Federal Magistrate found the husband had a substantial financial resource in the E Street property (a matter to which I will return), he did not, understandably in the circumstances, find the wife’s application was a matter which required adjournment under s 79(5) on the basis there was likely to be a significant change in the husband’s financial circumstances (that is if and when his interest in the E Street property vested).
It is clear from his Honour’s reasons that, at its highest, the evidence supported the findings, as in fact were made, that the husband had not undertaken work or acquired assets as such action may, if assets had been acquired, have led to an award in the wife’s favour.
It is not in doubt, in an unusual case, a judicial officer may make an order which exceeds the disclosed assets of the parties. The principles applicable in such cases are conveniently set out by reference to earlier decided cases, in the judgment of Kay and Dawe JJ (with whom Finn J agreed) in Chang v Su (2002) FLC 93-117 at paragraphs 67 - 70. I find it is useful at this point to set out the principles referred to in Weir and Weir (1993) FLC 92-338 at 79,593 – 79,594 (which their Honours extracted in Chang v Su (supra)):
‘It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It is true that in the case of Monte and Monte (1986) FLC ¶ 91-757, the Full Court said that to found jurisdiction under s. 79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identify and value.
We confess to some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.’
In contrast to Chang v Su (supra) where the trial Judge said that she was unable to make findings about the husband’s assets at the date of trial, but had regard to earlier disclosure of assets by the husband to immigration authorities, and found the order she proposed was just and equitable in the circumstances, his Honour made no findings of undisclosed assets, or impossibility of ascertaining the pool of assets available for division.
Nowhere does the transcript indicate that it was ever put to the husband in cross examination that he had assets he had failed to disclose, and in closing submissions counsel for the wife made it clear the wife’s case was not one asserting non-disclosure by the husband. He said ‘[n]otwithstanding that, in my respectful submission, and, your Honour, one’s not running a non-disclosure case vis a vis Syngen v Syngen(?) or those other cases that established a principle in (indistinct)’ (transcript 5 April 2005, p 57, line 37).
The wife’s case was predicated on the basis the Federal Magistrate should accept the husband had an interest in the E Street property, subject to the mortgage, that his Honour should ‘add back’ $9,000.00 of the husband’s superannuation which he had accessed, but ignore the cash sums which the husband disclosed he had kept under the bed and which had reduced from around $8,000.00 to $300.00. The wife’s counsel submitted her contributions should be assessed at 40 per cent of a pool comprising the assets particularised above, and a further adjustment should be made in her favour under s 75(2) of 20 per cent principally by reason of her care of the parties’ child, and the low quantum of child support paid by the father.
Before me in his submissions the appellant’s counsel submitted the property and financial resources of the husband were as follows:

‘Property
Appellant’s one-half equity in [E Street property]              $176,891.00
Less  $65,486.00
Net property pool  $111,405.00
Financial Resource
Other half of [E Street] property  $176,891.00’
(footnotes omitted)

As the Federal Magistrate’s findings:
·       do not include a finding the husband had other undisclosed assets;
·       include a finding that the husband had no interest in the E Street property; and
·       as demonstrated above in the table in paragraph 80 the parties’ had no assets but substantial liabilities,
it follows that the order the husband pay the wife the sum of $60,000.00 cannot stand and the appeal must be allowed.
For completeness, I turn to the question of his Honour’s finding that the husband had a significant financial resource in that on the death of Mrs SK, and if her husband predeceased her, the husband would inherit the E Street property. On the topic of Mrs SK’s Will the Federal Magistrate said:
‘24. The second respondent has annexed a copy of her will dated 12^th May 1995 to her affidavit. From the will it can be seen that she gives her entire estate to her husband BG, but, in the event that he fails to survive her for a period of 28 days, her entire estate would pass to the respondent husband. It seems to me that the home at [E Street] should more accurately be classified as a financial resource available to the husband rather than a matrimonial asset.’
It is difficult to discern from the transcript if the affidavit of Mrs SK sworn 3 December 2004 was before his Honour. Understandably the document is not listed in the outline of case document provided to the Federal Magistrate at the commencement of the hearing as the affidavit post dated the commencement of the hearing. The next Court date on the affidavit is shown as 10 January 2005. I do not have the benefit of any transcript of 10 January 2005, and the cover sheet for the judgment does not disclose any appearance by either party on that date. When the matter resumed before his Honour on 5 April 2005 the transcript reveals further unidentified affidavits had been filed shortly before the resumed hearing, and his Honour indicated he proposed to allow the husband to rely on those affidavits. It appears his Honour’s attention was not specifically directed to the affidavit sworn by Mrs SK on 3 December 2004. The affidavit was filed after Mrs SK had been cross examined on 28 September 2004, and there was no attempt to recall her for further cross examination. However, Mrs SK’s Will dated 12 May 1995 is not marked as an Exhibit, but it appears from the transcript she was cross examined on an unidentified affidavit which annexed a Will.
Mrs SK was crossed examined about a Will which appears to have been her Will dated 12 May 1995 (transcript 28 September 2004, p 15). This Will is an annexure to Mrs SK’s affidavit of 3 December 2004. It appears that Mrs SK was also cross examined about a letter dated 17 April 2003 from AD & D (a firm of which Mr S was principal). As there is some uncertainty about the affidavit on which Mrs SK was cross examined I set out the relevant cross examination in full:
‘INTERPRETER: Yes, definitely.
MR BATTLEY: If I said to you that those two pages constitute a will, does that assist you in identifying the document?
INTERPRETER: No, because my lawyer prepared it, so I don’t know. Somebody went with me to the office - - -
MR BATTLEY: Do you recall going to the office of a solicitor called Mr [S]?
INTERPRETER: [DS]?
MR BATTLEY: Yes.
INTERPRETER: Yes, I went.
MR BATTLEY: Thank you. On the second page, in English and crossed out, are certain words. Do you recognise that there are some lines there, ma’am, that are crossed out?
INTERPRETER: For what reason they have been crossed I don’t know.
MR BATTLEY: Thank you. I wonder if you could please put the question again, Madam Interpreter? Madam, do you accept that there are some words, some lines in English, that have been crossed out?
INTERPRETER: Yes.
MR BATTLEY: Madam Interpreter, I’m going to read out these words and then I’ll ask you to interpret them for the witness, please. The words crossed out are, “Signed by the testatrix [SK] as her last will and testament.” It would assist, Madam Interpreter, if you just read out that paragraph.
INTERPRETER: That whole paragraph?
MR BATTLEY: Yes, please. Do you accept, ma’am, that you executed that will? That is, that you signed that will without the benefit of it being translated in the presence of Mr [S], solicitor?
INTERPRETER: No. I had taken a translator with me. My daughter.’

In summary, the evidence before the Federal Magistrate was:
·the husband was registered as a tenant in common as to a one half share in the E Street property;
·as at 28 September 2004 Mrs SK had executed a Will leaving her Estate to her husband, Mr BG, and in the event he predeceased her, to the husband;
·Mrs SK had attended on Mr S in April 2003 about executing a new Will, but had not given instructions for the preparation of such Will; and
·in April 2003 Mr S had on instructions prepared a general Power of Attorney in which Mrs SK appointed her son, Mr AK, and her daughter as her attorneys.
I turn then to consider whether his Honour was in error firstly in finding the husband had a substantial financial resource being his potential inheritance of the whole of the E Street property.
The Full Court has considered the weight to be afforded to a potential inheritance.
In White and Tulloch v White (1995) FLC 92-640 at 82,464 the Full Court said, in relation to evidence of a prospective inheritance:
‘It is ultimately a question of fact and degree. During the course of argument a number of obvious examples at each end of the spectrum were referred to. In a case where the testator had already made a will favourable to the party but no longer had testamentary capacity and there was evidence of his or her likely impending death in circumstances where there may be a significant estate, and where there was a connection to s. 75(2) factors, it would be shutting one’s eyes to realities to treat that as irrelevant. On the other hand, the bald assertion that one of the parties has an elderly relative who has property and is or is likely to benefit that party is so speculative that it would be inappropriate to contemplate it as relevant in a s. 79 determination, it being too remote to affect the justice and equity of the case in any worthwhile way.’
In De Angelis and De Angelis (2003) FLC 93-133 the trial Judge, having assessed the parties’ contribution entitlements to the identified pool of property, made a further adjustment of 10 per cent in favour of the husband on account of an anticipated inheritance by the wife from her mother and aunt. On behalf of the wife it was argued that the wife’s mother had testamentary capacity and could change her Will, and although the wife’s aunt, who was aged almost 90 years and suffering dementia lacked such capacity, thus prima facie assuring the inheritance would ultimately be received, that another beneficiary could challenge her Will. Lindenmayer and Finn JJ said at 78,246 to 78,247:
‘94.It was submitted by Counsel for the wife that there can be no relevance in a potential inheritance in property settlement proceedings unless it is clear on the evidence that the prospective testator lacks testamentary capacity to alter his or her will. Thus it was put that in this case the wife's expectation of inheriting her mother's property could not be given any weight. However, it had to be conceded on behalf of the wife that her expectation in relation to her aunt's will might be able to be taken into account, given the finding that her aunt lacked testamentary capacity, were it not for the finding that the parties’ son, P, might challenge the will.
95.The discussion by the Full Court in White and Tulloch v White (1995) FLC ¶92-640; (1995) 19 Fam LR 696 of this question of the treatment of anticipated inheritances in property settlement proceedings indicates that there is no absolute rule and that each case will depend on its own facts. However, we think it important to remember that the Court is required in exercising the jurisdiction under s 79 of the Family Law Act 1975 to accord justice and equity to both parties. The question therefore has to be asked whether, in the present case, it would be just and equitable to the husband for the Court to have ignored the probability that, in what could well be [a] very short period of time (given the ages of her aunt and mother), the wife could well be the owner of two properties having a combined value of almost the same amount as the value of the parties’ property currently available for distribution, and particularly in circumstances where the husband had been found to have done substantial improvement and maintenance work on both properties?
96.We consider that it would have been unjust to the husband to ignore this matter even if it was categorised only as a possibility and not a probability.
97.Furthermore, it has to be remembered that the trial Judge made only, at the maximum, a 10% adjustment in the husband’s favour on account of the wife’s expected inheritances. In other words, the husband received only about $53,000 on account of this matter (and indeed possibly less if his Honour intended that a part of that adjustment was on account of the support which the husband was giving to one of the adult children of the marriage and her family).
98.Most of the s 75(2) matters, and thus the adjustments made on account of them, are concerned with events in the future, and thus are by their nature speculative. These considerations are particularly relevant to the matter here under discussion. It is true that the wife’s mother may change her will again (particularly bearing in mind her history in this regard); it is true that the parties’ son may challenge, and successfully challenge, the will of the aunt; it is true that changes in social security law, or the costs of maintaining the aunt and the mother and/or their properties may ultimately erode the significant equity which they both currently have in their properties; it is also true that the appraisals of the value of the two properties in question relied on by the trial Judge may ultimately be shown to be unduly optimistic. But it is also true that within the very near future, the wife may own two properties totalling in value close to half a million dollars. Against the background of all these considerations, a payment to the husband of only $53,000 would have to be regarded, in our view, as a reasonable exercise of the discretion. And it is one which, on the re-exercise of the discretion, we would also make.
99.It will be clear, from what we have said, that we consider that it was open to his Honour, and in fact it was appropriate, to have regard to such estimates of value of the two properties which were available to him, and also, in the circumstances of this case, to place some weight on the work which the husband had done on the properties which the wife currently expects to inherit.’
There was evidence before his Honour about Mrs SK’s age (she was born in 1936). There was no evidence of Mr BG’s age, although there was evidence that he suffered from multiple medical conditions.
The Federal Magistrate did not make any findings about Mrs SK’s life expectancy, the likelihood of Mr BG surviving her and thus inheriting her legal and equitable interest in the E Street property, or the contingent nature of the husband’s potential inheritance. I accept it was open to his Honour to find that the husband had a financial resource in his rent free occupation of the E Street property, but I find some merit in the husband’s challenge to the Federal Magistrate’s finding, made without qualification, that the E Street property was a financial resource of the husband. However this asserted error could have had little relevance given his Honour’s findings about the parties’ net assets, as there were no assets out of which he could make an adjustment under s 75(2) in the wife’s favour for the husband’s financial resource.
It is clear that as I have found the Federal Magistrate’s assessment of contributions, not having been made in respect of identified assets, is flawed, the subsequent order providing the E Street property be used as security for payment of that order cannot stand. I am further satisfied, having regard to the essential nature of an equitable charge which requires legal and equitable ownership of property by a debtor giving such charge, the foundation to support such a charge was not present in this case (see discussion of the meaning of equitable charge in Barrak and Ors and Barakat (2005) FLC 93-234 at paragraphs 70 - 71).
Accordingly I am satisfied the appeal must be allowed.
As is apparent from my summary of the Federal Magistrate’s reasons, his Honour made credit findings about the husband, Mrs SK and Mr AK. Those findings underpinned his reasoning including his finding that the husband had no interest in the E Street property. In such circumstances I am precluded from re-exercising the discretion. Further there is an absence of necessary factual findings to enable me to re-exercise the discretion. Accordingly as I have found the appeal should be allowed it will be necessary for there to be a rehearing before a Federal Magistrate other than Scarlett FM.

COSTS

Neither party addressed in any significant way the issue of costs in their submissions. The wife did seek that the husband pay her costs as agreed or taxed (in fact now as assessed under Chapter 19 of the rules) and the appellants sought an order that the wife pay their costs including the costs of the appeal. As I have found error of law by the Federal Magistrate, I find it is appropriate to grant certificates to both parties under the Federal Proceedings (Costs) Act 1981 (Cth) both for the appeal, and in respect of the retrial.

I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Boland.

Associate:

Date: 29 September 2006

[2006] FamCA 946

29 September 2006

Key Legal Topics

Areas of Law

Administrative Law

Civil Procedure

Legal Concepts

Judicial Review

Jurisdiction

Standing

Procedural Fairness

Natural Justice

Assets of the parties
Clothing and jewellery	W	$2,000.00
Cash	W	$3,000.00
Household goods	H	$300.00
Total joint assets	$5,300.00
Liabilities
Income tax (30.6.04)	H	$5,306.94
Income tax for previous years	H	$9,447.92
Qantas Telstra Visa Card	H	$2,887,35
Shell Mastercard	H	$4,249.26
Former solicitor’s costs	H	$6,581.57
Other debts	H	$37,313.22
Total liabilities	$65,786.26
Total nets assets and liabilities	($60,486.26)