Landon & Landon
[2021] FedCFamC1A 42
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTIONLandon & Landon [2021] FedCFamC1A 42
Appeal from: Landon & Landon [2021] FCCA 1192 Appeal number(s): EAA 168 of 2020 File number(s): WOC 117 of 2019 Judgment of: ALDRIDGE, MCEVOY & ALTOBELLI JJ Date of judgment: 20 October 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from final orders adjusting the parties’ property interests 56/44 per cent in the respondent’s favour – Where the parties sought orders be made by consent to revise final orders – Where the primary judge erred in assessing the parties’ respective contributions resulting in a significantly greater adjustment in the respondent’s favour than was appropriate – Where primary judge erred in failing sufficiently to provide reasons for the findings in relation to contributions – Where the primary judge’s discretion miscarried – Where the primary judge provided reasons six months after pronouncing final orders – Where it is undesirable for orders to be made without reasons for judgment absent circumstances of urgency – Appeal allowed – Discretion re-exercised in accordance with parties’ agreement – Costs certificates ordered for both parties in relation to the hearing of the appeal. Legislation: Family Law Act 1975 (Cth) ss 75, 79
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9
Cases cited: Bonnici & Bonnici (1992) FLC 92-272; [1991] FamCA 86
DL v The Queen (2018) 266 CLR 1; [2018] HCA 26Sargent & Selwyn (2017) FLC 93-812; [2017] FamCAFC 228
Number of paragraphs: 16 Date of hearing: 20 October 2021 Place: In Chambers Counsel for the Appellant: Mr Othen Solicitor for the Appellant: Rossi Simicic Lawyers Counsel for the Respondent: Mr Sansom SC Solicitor for the Respondent: Heard McEwan Legal ORDERS
EAA 168 of 2020
WOC 117 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS LANDON
Appellant
AND: MR LANDON
Respondent
ORDER MADE BY:
ALDRIDGE, MCEVOY & ALTOBELLI JJ
DATE OF ORDER:
2O OCTOBER 2021
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The orders made by the primary judge on 27 November 2020 are set aside.
3.Each of the parties to the appeal bear their own costs.
4.The Court grants to the appellant a costs certificate pursuant to 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 her in relation to this appeal.
5.The Court grants to the respondent a costs certificate pursuant to 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 him in relation to this appeal.
BY CONSENT IT IS FURTHER ORDERED THAT:
6.In lieu of the orders made by the primary judge on 27 November 2020, there be the following orders.
7.In these orders, the following definitions apply:
(a)“Suburb C Property” means the property situate at B Street, Suburb C in the State of New South Wales being the whole of the land contained within Folio Identifier … .
(b)“ANZ Joint Facility” means the overdraft facility in the names of Ms Landon and Mr Landon trading as Company D, Account Number …65.
(c)“ATO Debt” means the wife’s personal indebtedness to the Australian Taxation Office including all General Interest Charges, penalties, administration fees or other costs imposed by the Australian Taxation Office recoverable by that agency in relation to the wife's Client Account (TFN …; ABN …) from time to time.
(d)“Suburb F Property” means the property at E Street, Suburb F in the State of New South Wales being the whole of the land contained in Folio Identifier ….
(e)“Insurance Payment” means the money paid to the wife by G Insurance pursuant to a General Assessment by the State Insurance Regulatory Authority in the matter of Landon v G Insurance dated 22 January 2020.
8.Within twenty-one (21) days of the date of these orders (“the due date”) the husband shall do all acts and things necessary to pay to the wife, or as she may direct in writing, the sum of $210,000 (“the principal sum”).
9.In the event that the husband fails or is unable to comply with Order 8 by the due date, then within seven (7) days thereafter the husband shall take all necessary steps and execute all necessary documents to cause the Suburb F property to be sold by private treaty at the first instance at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of New South Wales or their nominee and that the proceeds of the said sale be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to discharge the mortgage in favour of Lender A;
(c)Payment to the wife, or as she may direct in writing, of the principal sum or such other amount that might be outstanding pursuant to Order 8; and
(d)Payment of the balance then remaining to the husband, or as he may direct in writing.
10.In the event that the property fails to be sold by private treaty within a period of four (4) months of the date hereof, then the husband shall take all necessary steps and execute all necessary documents to cause the Suburb F property to be sold by auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of New South Wales or their nominee and that the proceeds of the said sale be in accordance with Order 9 above.
11.Pending the husband’s compliance with Order 8 above and/or pending the settlement of the sale of the Suburb F property, the husband shall be restrained from doing any act or thing to further encumber the property, draw down on the mortgage or overdraft facility and/or do any other act or thing to increase the level of indebtedness secured over the Suburb F property and/or assign or transfer his interest in the property SAVE AND EXCEPT FOR to make the payment pursuant to Order 8.
12.The Court allocate, as required by s 90XT(4) of the Family Law Act 1975 (Cth) (“the Act”), a base amount of $30,000.00 to the wife out of the husband's interest in Super Fund EE (member number: …).
13.Pursuant to s 90XT (1)(a) of the Act whenever the Trustee of the Super Fund EE makes a splittable payment out of the husband's interest in the Fund the Trustee shall:
(a)Pay to the wife, or her administrators, executors, beneficiaries, heirs or assigns, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”); and
(b)Make a corresponding reduction in the entitlement the husband would have had in Super Fund EE but for this order.
14.Order 12 has effect from the operative time (“the operative time”).
15.The operative time pursuant to Order 14 hereof is four (4) business days after service of the sealed orders on the Trustee.
16.The Trustee of Super Fund EE shall do all acts and things and sign all such documents as may be necessary so that, in accordance with the obligations set out under the Act and the Regulations, the Trustee can calculate the entitlement of, and make payment to, the wife in accordance with Order 12 of these orders.
17.This order binds the Trustee of Super Fund EE.
General Provisions
18.Except as provided by any order to the contrary in these orders, the wife shall retain all her right, title and interest in:
(a)The Suburb C property;
(b)The Insurance Payment (to the extent it may not be incorporated into the value of the Suburb C property);
(c)All monies held in any bank account standing in her name or held for her benefit;
(d)All superannuation interests standing in her name or to her benefit;
(e)H Motorcycle (NSW Registration …);
(f)Motor Vehicle 1 (NSW Registration …); and
(g)All furniture, household furnishings, or other chattels currently in her possession or control.
19.Except as provided by any order to the contrary in these orders, the husband shall retain all right, title and interest in and to the following property:
(a)The Suburb F property;
(b)All monies held in any bank account standing in his own name or held for his benefit;
(c)All superannuation interests standing in his name or to his benefit;
(d)Motor Vehicle 2; and
(e)All furniture, household furnishings, or other chattels currently in his possession or control.
ANZ Joint Facility
20.Within twenty-eight (28) days of these orders, the husband shall do all acts and things to discharge the Joint ANZ Facility.
21.Within seven (7) days of receiving a request in writing from the husband, the wife shall do all acts and things and sign all documents and give all authorities to the ANZ as required to close the ANZ Joint Facility.
Releases and Enforcement
22.Except as otherwise provided in these orders, each party shall be solely liable for any personal loan, credit card liability or other debt, including any taxation liability (and the wife’s ATO Debt), which is standing in their name or to their account and shall indemnify and keep indemnified the other party for such liability.
23.From the date of these orders, each party shall indemnify and keep the other indemnified against all or any manner of action or demand whatsoever both at law and in equity which that party may now have or at any time in the future may have, howsoever arising and for abundant clarity:
(a)The wife shall wholly indemnify the husband against any action or demand relating to the ATO Debt; and
(b)Each party may rely on this order as a defence to any such claim or demand whether such demand or claim is the subject of judicial, quasi-judicial or administrative action or proceedings including in relation to the indemnification of that party’s costs in such a matter.
24.The parties shall each do all acts and things and sign all documents, give all approvals and authorities as necessary to give effect to these orders.
25.In the event that either party fails to execute any document necessary to give effect to these orders, the Registrar of the Federal Circuit and Family Court of Australia at Wollongong be appointed pursuant to s 106A of the Act to execute the document on behalf of the party who refuses or neglects to execute it and do all acts and things necessary to give force and effect to these orders AND FURTHER the party refusing or neglecting to execute the document or documents pay the costs of the other party on a solicitor-client basis in relation to obtaining the Registrar's signature.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Landon & Landon has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE, MCEVOY & ALTOBELLI JJ:
INTRODUCTION
By a Further Amended Notice of Appeal filed 23 August 2021, Ms Landon (“the appellant”) appealed against final property settlement orders made by a judge of the Federal Circuit Court of Australia on 27 November 2020. She and the husband, Mr Landon (“the respondent”), had sought an alteration of their property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) following the cessation of their marriage. The respondent had resisted the appeal.
Although the appellant raised several grounds of appeal, the focus of her challenge was on what were said to be demonstrable errors on the part of the primary judge in the approach her Honour adopted to the assessment of the parties’ respective contributions, resulting in a significantly greater adjustment in the respondent’s favour than was appropriate. The appellant also contended that her Honour had failed to provide adequate reasons in relation to the contribution findings, and that her Honour had erred in the findings as to the value of the appellant’s interest in certain real property.
The appeal was listed for hearing on 13 October 2021. However on 12 October 2021 the Court was informed that the parties had resolved the appeal and sought that orders be made by consent allowing the appeal and substituting revised orders to be made pursuant to s 79 of the Act. Orders were also sought for costs certificates pursuant to ss 6 and 9 of the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”).
For the reasons that follow we consider that there were demonstrable errors of law in the approach adopted by the primary judge to the assessment of the parties’ respective contributions, and that this did result in a significantly greater adjustment in the respondent’s favour than there should have been. We also consider that her Honour’s reasons, although detailed in certain respects, failed sufficiently to expose her Honour’s path of reasoning and provide an explanation of her Honour’s findings in relation to the parties’ respective contributions. This deficiency also constituted an error of law. The appeal will thus be allowed. Insofar as the parties’ agreed orders are otherwise concerned, we are satisfied in all the circumstances that orders substantially in these terms are appropriate.
THE CONTRIBUTION FINDINGS AND THE PRIMARY JUDGE’S REASONS
The parties commenced their relationship in 2006, were married in 2014, and physically separated in June 2017. They divorced on 15 April 2019. There are no children of the relationship however the appellant has three children from a previous relationship and the respondent has two children from a previous relationship. Although the children were young when the parties commenced their relationship, they are now all adults. The appellant is now in a relationship with another person.
The primary judge carefully identified the property pool and made findings about the various assets, addbacks and liabilities in dispute, ultimately concluding (at [133]) that the parties’ net assets, including superannuation, totalled $1,545,134. Significantly however, in May 2020 the appellant had purchased a property with her new partner. Her Honour found that the appellant’s interest in this property comprised about 43 per cent of the net value of the property pool. For the purposes of procuring this property with her new partner the appellant applied almost the entirety ($668,000) of a compensation payment of $669,484.11 that she had received post-separation as a result of being injured in a serious motorbike accident in November 2014. Her Honour found that but for a modest contribution made to this compensation award by the respondent, the award was a contribution made by the appellant (at [357]).
However notwithstanding this very substantial financial contribution by the appellant, her Honour determined (at [249]) that the respondent’s financial contributions outweighed the appellant’s and warranted an adjustment in his favour, which her Honour later assessed at 18.5 per cent (at [255]), apparently from a position of equality. Her Honour assessed that the parties’ contributions to the welfare of the family up until the appellant’s motorbike accident as equivalent, and not warranting an adjustment in favour of either party (at [253]), and considered that there should be a slight adjustment in favour of the respondent for his contribution to the welfare of the family after the accident as reflected in his contribution to the appellant’s compensation award (at [254]).
As will be apparent, an express finding that the appellant has made a financial contribution of 43 per cent of the net value of the property pool, together with a finding of equivalence in contributions to the welfare of the family up until the appellant’s motorbike accident and but a slight adjustment in favour of the respondent after the motorbike accident, cannot logically produce a contribution finding of 31.5 per cent to the appellant and 68.5 per cent to the respondent. As the appellant submitted, on the basis of the primary judge’s findings, and assuming that the appellant made no other financial contributions at all, she ought to have received all or most of the amount of her compensation payment by reason of contributions alone (see Bonnici & Bonnici (1992) FLC 92-272 at 79,020). This would have meant a contribution finding in her favour of approximately 43 per cent. In fact, the appellant received far less than this: 31.5 per cent of $1,545,134, being $486,717 (prior to a 12 per cent adjustment by reason of the factors in s 75(2) of the Act).
By way of comparison, the respondent’s contributions outside of personal exertion were found by the primary judge to have amounted to some $393,000 (at [142], [183] and [190]). As the appellant submitted, these contributions fall well short of the appellant’s contribution of the compensation payment after separation, with only a modest contribution by the respondent to it.
It is clear therefore that in relation to these matters alone the primary judge took the wrong approach to the assessment of contributions, and her Honour’s discretion plainly miscarried. As the appellant submitted, her Honour’s contribution findings were illogical and disconnected from the findings of fact made. Insofar as the Court awarded the appellant a 12 per cent adjustment by reason of s 75(2) factors, this was not the subject of appeal or cross-appeal. However this adjustment was unrelated to the imbalance in wealth produced by the erroneous contributions assessment. It was based on a finding that the respondent has a larger earning capacity than the appellant, and that a sum of $120,000 was prematurely distributed to the respondent which entitled the appellant to a s 75(2)(o) adjustment. For these reasons, as the appellant submitted, the substantial s 75(2) adjustment cannot save the judgment.
We accept that by reason of the appellant’s greater contributions, and the applicable s 75(2) factors, a proper exercise of discretion could not have produced an allocation to the appellant of 44 per cent of the parties’ total net assets including superannuation. For these reasons the appellant has demonstrated appealable error. In these circumstances it is unnecessary for us to consider the appellant’s submission that her Honour erred in the findings as to the value of the appellant’s interest in the property she purchased with her new partner.
In addition, and perhaps unsurprisingly in the circumstances, consideration of the primary judge’s reasons in relation to contributions do not explain, or even attempt to explain, why her Honour found that the respondent’s contributions outweighed the appellant’s and warranted an adjustment in his favour (see at [249] and [255]). As has frequently been observed, it is of fundamental importance that a judge’s findings and the ultimate conclusion reached are explained in a way that sufficiently exposes the path of reasoning. Failure to do so will constitute an error of law (see for example DL v The Queen (2018) 266 CLR 1 at [32]–[33] (Kiefel CJ, Keane and Edelman JJ), [130]–[131] (Nettle J)). Such an error is apparent in her Honour’s reasons in relation to contributions.
There is one further feature of the primary judge’s reasons which should be noted. The final hearing occurred on 21, 22 and 23 October 2020. On 27 November 2020 her Honour made orders altering the parties’ relevant property interests on the basis of the respondent’s proposed minute of orders. However her Honour’s reasons for judgment were not delivered until 31 May 2021, some six months after the orders were made. In these circumstances the appellant submitted that a six month delay is difficult to reconcile with a considered exercise of discretion to make orders in accordance with the respondent’s minute, particularly when the orders were made barely one month after the close of submissions. It was contended by the appellant that it is difficult to see how the assessment required by s 79(4) of the Act was undertaken with an open mind, and that the judgment was not written to a predetermined result.
In all the circumstances it is unnecessary for us to express any concluded view on this subject, however it is desirable to restate that absent a situation of real urgency it is generally not a desirable course to make orders without pronouncing reasons for judgment a short time later. Where reasons are delivered a considerable time after orders have been made there can be, as here, diminished confidence that the preparation of the reasons has directed the primary judge to the salient issues and that the important points have properly been taken into account (see Sargent & Selwyn (2017) FLC 93-812 at [68]–[84]).
THE PARTIES’ CONSENT ORDERS
As has been mentioned, having compromised the appeal the parties have agreed that this Court should re-exercise the discretion based on the findings made by the primary judge as to the property pool (at [133]). The parties agree that the appellant should receive 59 per cent and the respondent 41 per cent of the total net assets including superannuation. We are satisfied that an alteration of the parties’ property interests in this manner is appropriate. We are also satisfied that, the appeal having succeeded on a question of law, orders for costs certificates should be made pursuant to ss 6 and 9 of the Costs Act.
Save for minor typographical corrections there will be orders in accordance with the parties’ proposed minute as set out at the commencement of these reasons. The Court will order that the appeal is allowed.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, McEvoy & Altobelli. Associate:
Dated: 20 October 2021
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