Latham and Dillon and Anor - [2015] FCCA 755

FEDERAL CIRCUIT COURT OF AUSTRALIA

LATHAM & DILLON & ANOR

[2015] FCCA 755

Catchwords:
FAMILY LAW – Property – loan from a family trust to one of the parties – contributions – justice and equity.

Legislation:

Evidence Act 1995 (Cth), s.140

Family Law Act 1975, ss.75(2), 79

Limitation of Actions Act1974 (Qld), ss.10, 35(3)

Af Petersens and Af Petersens (1981) FLC 91-095
Biltoft and Biltoft (1995) FLC 92-614
Briginshaw v Briginshaw (1938) 60 CLR 336
Chidiac v Maatouk [2010] NSWSC 386
Clauson & Clauson (1995) FLC 92-595
Kennon v Spry [2008] HCA 56
Ogilvie and Adams [1981] VR 104
Stanford v Stanford [2012] 247 CLR 108
Sulo & Colpetti [2010] FamCA 493
Thornton & Thornton [2015] FamCA 92
Vadisanis & Vadisanis and Anor [2014] FamCAFC 97
Winston & Winston (No.2) [2013] FamCAFC 147

Applicant:

MS LATHAM

First Respondent:

MR DILLON

Second Respondent:

DILLON PTY LTD

File Number:

BRC 8616 of 2012

Judgment of:

Judge Howard

Hearing dates:

16, 17 February and 17 March 2015

Date of Last Submission:

17 March 2015

Delivered at:

Brisbane

Delivered on:

2 April 2015

REPRESENTATION

Solicitors for the Applicant:

Senior Legal

The First Respondent appeared in person

The Second Respondent appeared in person

ORDERS

That each party shall provide a copy of a proposed Final Order to each other party by 4:00pm on 9 April 2015.
That the parties shall attempt to reach an agreed position in relation to the wording of the Final Order (reflecting the Reasons for Judgment) and shall send a copy of same to the Court by no later than 4:00pm on 16 April 2015.
That in the event the parties are unable to reach an agreed position in relation to the wording of the Final Order (and send a copy of same to the Court) within the time frame stated in paragraph (2) – the matter shall be listed for Mention and each party shall attend personally along with their legal representative (if any) on a date to be fixed by the Court.

IT IS NOTED that publication of this judgment under the pseudonym Latham & Dillon & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 8616 of 2012

MS LATHAM

Applicant

And

MR DILLON

First Respondent

DILLON PTY LTD

Second Respondent

REASONS FOR JUDGMENT

Background

The Applicant in this case is Ms Latham. The Applicant was born on (omitted) 1962.
The Respondent husband is Mr Dillon. The Respondent husband was born on (omitted) 1960.
The parties (unless otherwise indicated the term “parties” refers to the wife and the husband) began a relationship in about (omitted) 2001. The parties became engaged on (omitted) 2003. The parties commenced cohabitation during 2003.
The wife says that cohabitation commenced straight after the engagement. The husband maintained that it wasn’t until mid-2004. But evidence disclosed during the trial (in particular exhibit 2) shows that the husband, at an earlier point in time, made it clear that he had…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] FCCA 755
Decision Date: 2 April 2015

CaseChat Overview and Summary

This matter concerned an application before Judge Howard. The parties, Latham and Dillon and an Anor, were engaged in a dispute regarding property settlement.

The court was required to determine whether it was just and equitable to make a property settlement order under section 79 of the relevant Act. This involved considering the existing legal and equitable interests of the parties in the property and whether those interests should be altered. The court also had to consider whether the power to make such an order was being exercised in accordance with established legal principles, rather than by unguided judicial discretion or assumptions about the division of marital property.

Judge Howard's reasoning, drawing on High Court authority, emphasised that the determination of whether an order is "just and equitable" requires an initial identification of the parties' existing legal and equitable interests. The court's broad power under section 79 is not unfettered but must be exercised according to legal principles, not by "palm tree justice" or assuming a right to property division. The court must avoid conflating the requirements of section 79(2) with the factors listed in section 79(4), ensuring a separate consideration of the just and equitable threshold.

The court made orders requiring each party to provide a proposed Final Order to the other by 9 April 2015, and to attempt to reach an agreed position by 16 April 2015. If agreement was not reached, the matter was to be listed for mention, with personal attendance required by both parties and their legal representatives.

Orders

Orders of the court

That each party shall provide a copy of a proposed Final Order to each other party by 4:00pm on 9 April 2015.

That the parties shall attempt to reach an agreed position in relation to the wording of the Final Order (reflecting the Reasons for Judgment) and shall send a copy of same to the Court by no later than 4:00pm on 16 April 2015.

That in the event the parties are unable to reach an agreed position in relation to the wording of the Final Order (and send a copy of same to the Court) within the time frame stated in paragraph (2) – the matter shall be listed for Mention and each party shall attend personally along with their legal representative (if any) on a date to be fixed by the Court.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Further examination of the High Court’s comments in Stanford (supra) is appropriate at this point in time. In particular I note:“36. The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition [see Mallet v Mallet [1984] HCA 21]. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be exercised in accordance with fixed rules"[Mallet v Mallet [1984] HCA 21], nevertheless, three fundamental propositions must not be obscured.”37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to "”altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order. 38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed [1956] HCA 71] that a power to make such order with respect to property and costs "as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong[1976] HCA 39:"The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down". 39. Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that "[c]ommunity of ownership arising from marriage has no place in the common law"[Hepworth v Hepworth (1963) 110 CLR 309]. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses" [Hepworth v Hepworth (1963) 110 CLR 309]. The question presented by s 79 is whether those rights and interests should be altered. 40. Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down"[R v Watson; Ex parte Armstrong [1976] HCA 39]. To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”