Lam and Ram

[2005] FamCA 1170

[2005] FamCA 1170

FAMILY LAW ACT 1975

IN THE FULL COURT       

OF THE FAMILY COURT OF AUSTRALIA             Appeal No. EA 101 of 2004

File No. NCF 2619 of 2002

AT SYDNEY  

BETWEEN:

LAM

Appellant/Wife

- and -

RAM

Respondent/Husband

REASONS FOR JUDGMENT

CORAM:Kay, Holden and Boland JJ

BY WAY OF WRITTEN SUBMISSIONS

DATE OF JUDGMENT:             6 December 2005

SUBMISSIONS RECEIVED FROM:       

Curtis Delaney Gray Solicitors, 12 Pitt Street, Singleton NSW 2330, DX 7062 Singleton NSW on behalf of the Appellant Wife.

Whitelaw McDonald & Associates Solicitors, Suite 5, 76 Park Street, Kotara NSW 2289, DX 7952 Newcastle NSW on behalf of the Respondent Husband.

APPEAL SUMMARY

MATTER:LAM and RAM

APPEAL NUMBER:  EA 101 of 2004 (NCF 2619 of 2002)

CORAM:Kay, Holden and Boland JJ

DATE OF HEARING:  By way of written submissions

DATE OF JUDGMENT:  6 December 2005

CATCHWORDS:               

APPEAL – appeal allowed resulting in even distribution of assets rather than 65:35 as found by trial Judge – written submissions received from each party relating to the size of the pool of assets to be divided – dispute over appropriate allowances to be made in relation to the monies taken by the National Australia Bank and monies expended by the husband in preparing the home for sale – whether to remit on issues in contention – proportionality – costs of remitting disproportionate to money in dispute – with parties’ consent Court prepared to strike a position at the mid-point between the parties’ submissions being $98,375 – without consent to be remitted on limited issues – the minimum amount the wife will be entitled to receive is $92,500

Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033; (2000) 26 Fam LR 237

[T] and [D-T] [2003] FamCA 601

Husband cause the sum of $98,375 to be paid to the wife by consent otherwise husband cause the sum of $92,550 to be immediately paid to the wife and the matter remitted for limited re-hearing.

1. We heard an appeal in this matter on 6 April 2005 and delivered judgment on 13 September 2005. 

1. The appeal concerned property orders made by Cohen J on 27 August 2004.  The trial Judge had determined that there was a pool of assets worth approximately $270,000 and that they should be divided as to 65 per cent to the husband and 35 per cent to the wife.  His Honour’s determination of the size of the pool to be divided between the parties included findings relating to the debts of the parties secured against the former matrimonial home.  His Honour determined those debts to be:

Mortgage  $152,000

Second mortgage  $  93,646

Business overdraft account            $  50,000

Total  $295,646

1. The home was sold pursuant to the orders of the court and the debt was crystallised.  It was common ground at the appeal before us that the total amount taken by the bank from the proceeds of sale was $329,486.11 made up as follows:

   Business cheque account               $32,114.98
   Flexiplus mortgage account          $151,831.18
   Personal loan account  $23,563.25
   National tailored home loan            $98,921.00
   National flexi account  $22,785.70

   Bank charges  $270.00

   __________

   $329,486.11

2. In allowing the appeal we determined that the trial Judge had not made an adequate adjustment in favour of the wife having regard to the s 75(2) considerations.  We indicated that we thought an appropriate result was an even division of the pool of assets as found by the trial Judge rather than the 65/35 division as ordered.

1. The parties were each given leave to make submissions relating to the size of the pool of assets to be divided having regard to the monies that were taken by the National Australia Bank and claims by the husband for further allowance for monies expended by him in preparation of the home for sale.  We said:

“111.   Before us the husband indicated that in the event the appeal was allowed he wished to have the opportunity to put material before us in respect of costs he asserts were incurred to prepare the matrimonial home for sale and otherwise relevant to the sums paid to the NAB.  In the light of the decision of Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-300 (sic); (2000) 26 Fam LR 237, we propose to allow the husband to put further material before us, limited to matters relating to the costs incurred for the sale of the house and in respect of the sum deducted by the NAB, principally the business cheque account debt in the sum of $32,114.98 and the flexi account in the sum of $22,785.70.”

1. We have now received submissions from each party.  The husband’s submissions are supported by an affidavit annexing bank statements and receipts for work that he asserted has been carried out preparing the home for sale.  The statements also include details of loan repayments, utilities and other expenses associated with the home and the husband’s business.

1. We had hoped that the parties would be able to reach an agreement as to the size of the pool to be divided but unfortunately they remain in dispute about appropriate allowances to be made in relation to the monies taken by the National Australia Bank, and in relation to the monies expended by the husband in preparing the home for sale.

1. The husband claims that he has properly identified and accounted for all of the monies taken by the National Australia Bank and that the size of the pool should be adjusted accordingly.  In his written submissions he further claims a sum of $26,000 for monies “expended in preparing the home for sale and maintaining it (including mortgage payments and outgoings)”.  He says that this will reduce the pool to be divided between the parties by a total of $59,570 leaving a net pool of $210,862 for division.

1. The husband’s submissions that the pool of assets available for division should be fixed at $210,862 ignore the conceded evidence that the sale price of the home exceeded the sum anticipated by the trial Judge in determining the pool of assets.  Further they do not address the increase in liability incurred on the joint cheque account which was in overdraft of $1,230.18 at the date of hearing, and had increased to $22,785.70 at the date of settlement, substantially by funds being transferred to meet payments due under the Flexi-plus mortgage and home loan.

1. Cohen J proceeded on the basis that the property was worth $495,000 and that allowances should be made for debts due to the National Bank of $295,646, leaving an equity in the home of $199,354. It is common ground that the proceeds of sale after repayment of all the monies due to the National Australia Bank and after payment of agents’ fees and commissions and other expenses relating to the sale were $178,058.  This diminution would shrink the pool of assets as found by the trial Judge from $270,432 down to $249,136.  The additional amount claimed by the husband for expenses relating to the preservation of the property and its presentation for sale in the sum of $26,000 would leave the pool of assets to be divided, if that amount was allowed in full, at $223,136. 

1. In her submissions relating to the National Australia Bank debt the wife is prepared to concede all bar $20,308  being $6,947.80, which relates to five cheques drawn on the joint cheque account (which debt was never raised at trial) and $13,360 for cash withdrawals and cheques paid to the husband from the business cheque account.  In relation to the $26,000 claimed by the husband as relating to the expenses incurred by him in the preservation of the property and its presentation for sale, she is prepared to concede $12,043.14, submitting basically that any amounts claimed beyond that (apart from some small accounts) relate to the husband’s occupation of the former matrimonial home and not to the expenses necessary to prepare it for a sale. She does not concede the balance of the $26,000 (approximately $14,000) as claimed by the husband.

1. The size of the asset pool to be divided remains in issue to the extent of approximately $34,000. On the assumption that it is appropriate to divide the asset pool equally, the parties effectively remain $17,000 apart. 

1. It seems to us that whether or not the pool is ultimately found to be as little as $223,136 (the husband’s figure when adjusted for the increase in sale price), or as large as $257,400 (the wife’s figure), the factors that led us to conclude that an appropriate outcome of the proceedings is an equal division of that pool of assets would not vary.  Those matters were identified in paragraph 102 of the reasons for judgment we delivered earlier in these proceedings. 

1. We feel that we are left with limited choices at this stage.  One is to remit for limited hearing only the issues that remain in contention between the parties, namely:

·    how much of the joint cheque account debt should be shared between the parties or otherwise become the sole responsibility of the husband; 

·    whether the cash withdrawals and cheques totalling $13,360 from the business cheque account should be properly allowed as a joint liability of both of the parties; and,

·    whether the sums claimed by the husband that relate strictly to the costs incurred for the sale of the house should be allowed in the sum of $18,662 as particularised by the husband, or some lesser amount.

1. Such a limited hearing could presumably cost the parties $3-4,000 each.  We query whether a joint expense of the parties of $6-8,000 bears an appropriate proportion to the wife’s share of amount of money in dispute between them, namely about $17,000.

1. We would agree with observations of Finn and Holden JJ in [T] and [D-T] [2003] FamCA 601 where their Honours said:

“11.     An order for a new trial has been recognised as imposing an oppressive burden on a party successful at trial: Orr v Holmes & Another (1948) 76 CLR 632 at 640-1; Hoyt’s Pty Ltd v O’Connor (1928) 40 CLR 566 at 576. It has been described as “a most deplorable result not to be entertained upon any but the most solid grounds, as the only means of redressing a clear miscarriage [of justice]”: Dakhyl v Labouchere (1908) 2 KB 325 at 327.

12.      In this jurisdiction an order for a new trial is likely to be an oppressive burden to both parties, particularly because of the emotional involvement the parties have in litigation between spouses or former spouses. 

13.      New trials are not granted lightly by appeal courts.  They should not be ordered unless the interests of justice require that there be a new trial: Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 at 444; Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 580 per Jordan CJ. In the exercise of the power to order a new trial the court must be governed by the over riding purpose of reconciling the demands of justice with the public interest that there be an end to litigation: McCann v Parsons (1954) 93 CLR 418; Commonwealth Bank of Australia v Quade & Others (1991) 178 CLR 134 at 141.”

1. The other alternative is for us to attempt an analysis of the evidence as it has been presented to us and endeavour to draw our own conclusions about it.  The obvious advantage is that it will not involve any further expense on behalf of the parties but the disadvantage is that the evidence that we have is fairly sparse and it is mainly assertion and counter-assertion.

1. We think the dispute is even narrower than that defined above. The leave we granted to the husband was restricted to putting further material before us limited to the matters relating to the costs incurred for the sale of the house whilst the husband’s claim includes costs in maintaining the home, and material about his asserted present financial position. 

1. The husband claimed a total of $26,000 of which $13,646 and $4,976 were said by him to be costs that directly relate to the preparation of the property for sale and indirectly relate to the sale.  Those sums total $18,622.  The balance of monies claimed to make up the $26,000, which are not particularised, can properly be catagorised as holding costs which were not the subject of the leave that we granted.  By immediately discounting the husband’s claim by the sum of approximately $7,400, being the non particularised expenses, the amount in dispute between the parties is reduced to $26,600 of which the wife would be entitled to half.

1. On the material presently available to us we would be prepared to allow the husband credit for $3,611, being the cheques drawn on the joint account that he has particularised that appear to relate to the presentation of the former matrimonial home for sale. There remains doubt about cheque 1914 presented 9 November 2004 in the sum of $3336.

1. This leaves the maximum size of the pool as claimed by the wife at approximately $253,789 ($257,400 less $3,611) as against the best result the husband can hope for at approximately $230,500.  This leaves a gap between the opposing submissions of about $23,300 to which the wife is entitled to one half.  The amount in dispute thus appears to be approximately $11,650. 

1. The costs of resolving that dispute appear to us to be disproportionate with the amount in dispute.  The issue of proportionality of costs to the amount in dispute is well recognised by courts.  Spigelman CJ's article The Qualitative Dimension of Judicial Administration (1999) 4 TJR 179 at 186 notes:

"...courts must be sensitive to the extent to which their procedures impose cost on parties.  The cost of litigation remains the single most significant, and apparently intractable, problem in the administration of justice.  It lies at the heart of the access to justice debate.  We are all aware of the frequency with which there appears to be no rational or reasonable proportion between the costs of particular litigation and the amount in dispute.” 

Accordingly, rather than remit the matter for retrial or call for any further submissions relating to the resolution of such a small aspect of the dispute, given the broad adjustive nature of the jurisdiction we are exercising, we would, with the consent of the parties, be content to strike a position at the mid-point between the parties’ submissions and determine that for the purposes of making an appropriate adjustment as between the parties the pool of assets should be determined to be approximately $242,150.  The wife’s share of that pool of assets is $121,075.  She already has $22,700 and should be entitled to receive a further $98,375.

1. In the event that one or both parties refuse consent to the final orders as proposed by us, regrettably, a re-trial limited to the issues defined in paragraph 14 will be necessary. In any event the minimum amount the wife will be entitled to receive is $92,500 being one half of the sum of $230,500 identified in paragraph 21 above less the sum of $22,700 for assets she already holds.

Costs

1. As we indicated in the original judgment we delivered in this matter the parties conceded before us that in the event that the appeal was allowed it would be appropriate that they be granted certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). As we propose to allow the appeal we will grant the certificates relating to the appeal when the matter is finally concluded.

Orders

1.        The appeal be allowed.

2.        That Order 5 of the orders made by the Honourable Justice Cohen on 27 August 2004 be set aside.

3.        That within 7 days the parties advise the Appeals Registrar at Sydney in writing whether they will consent to orders providing:

“That from the proceeds of sale of the parties’ former matrimonial home…presently held on trust by the husband’s solicitors there be paid to the wife the sum of $98,375.

That the balance of the said account be paid to the husband.”

4.       In the event either party refuses within 14 days to consent to an order that the husband cause the sum of $98,375 to be paid to the wife, then the husband shall cause the sum of $92,550 to be immediately paid to the wife and the matter shall be otherwise remitted for hearing before a Judge other than Cohen J, limited to the issues identified in paragraph 14 of these reasons for judgment.

I certify that the preceding 24 paragraphs
are a true copy of the reasons
for judgment delivered by
this Honourable Full Court.



Associate