LAYTON & LAYTON - [2014] FamCAFC 126

FAMILY COURT OF AUSTRALIA

LAYTON & LAYTON

[2014] FamCAFC 126

FAMILY LAW – APPEAL – PROPERTY – ADEQUACY OF REASONS – Where the appellant husband submits that the Federal Magistrate’s reasons were inadequate – Where the Federal Magistrate refused to “add back” an amount of $50,000 into the asset pool for a personal loan – Where the Federal Magistrate disregarded that the respondent wife had apparent sole use of the loan – Where no weight was given to a purported loan agreement between the parties – Where the Federal Magistrate’s reasons do not support the conclusion reached in relation to the property to which the percentage distribution (arrived at on the basis of contributions and s 75(2) factors) was to be applied – Appeal allowed.

FAMILY LAW – APPEAL – COSTS – Where no order for costs made - Where the appeal has succeeded on a point of law – Both parties to receive certificates for the appeal and rehearing.

Family Law Act 1975 (Cth)
Federal Proceedings Costs Act 1981 (Cth)

Bevan & Bevan (2013) FLC 93-545
Farmer & Bramley (2000) FLC 93-060
Omacini & Omacini (2005) FLC 93-218
Stanford & Stanford (2012) 247 CLR 108
Steinbrenner & Steinbrenner [2008] FamCAFC 193

APPELLANT:

Mr Layton

RESPONDENT:

Ms Layton

FILE NUMBER:

BRC

3517

2011

APPEAL NUMBER:

2012

DATE DELIVERED:

17 July 2014

PLACE DELIVERED:

Sydney

PLACE HEARD:

Brisbane

JUDGMENT OF:

Finn, Strickland & Ainslie-Wallace JJ

HEARING DATE:

5 August 2013

LOWER COURT JURISDICTION:

Federal Magistrates of Australia

LOWER COURT JUDGMENT DATE:

20 July 2012

LOWER COURT MNC:

[2012] FMCAfam 723

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Thiele

SOLICITOR FOR THE APPELLANT:

Rhonda Sheehy & Associates

COUNSEL FOR THE RESPONDENT:

Dr Brasch with Ms Minnery

SOLICITOR FOR THE RESPONDENT:

Family Law Group Solicitors

Orders

The appeal be allowed.
The orders made by the Federal Magistrates Court on 20 July 2012 be set aside.
The property proceedings be remitted to the Federal Circuit Court for rehearing by a judge other than Judge Turner.
There be no order for costs.
The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 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 the appellant husband in respect of the costs incurred by the appellant husband in relation to this appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 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 the respondent wife in respect of the costs incurred by the respondent wife in relation to this appeal.
The Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (Cth)…

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.

Continue reading LAYTON & LAYTON

Details

AGLC: LAYTON & LAYTON [2014] FamCAFC 126
Case: [2014] FamCAFC 126
Decision Date

CaseChat Overview and Summary

In the case of Layton & Layton, the Full Court considered the appropriate division of assets between the parties, with a particular focus on the wife's use of a $50,000 loan and whether it should be notionally added back into the asset pool. The wife had obtained the loan during the marriage, primarily to assist with her son's legal costs related to criminal proceedings, but some of the funds were also used for other purposes. The husband argued that the wife had failed to disclose the use of these funds and that the loan should be notionally added back as it fell within the categories outlined in Omacini & Omacini. The court examined the circumstances under which such notionally adding back is appropriate, considering cases involving legal fees, premature distributions, and reckless conduct.

The court highlighted that it is at the discretion of the trial judge whether to notionally add back monies, and that it should be the exception rather than the rule. The court also cautioned against including post-separation expenses as add-backs. In this case, the court found that the $50,000 loan did not fall within the established categories for add-backs, as there was no evidence of wastage or reckless conduct by the wife. Furthermore, the court determined that an agreement signed by the wife and husband regarding the loan was not binding due to its vagueness and lack of legal advice. The court concluded that the wife's use of the loan funds should not be disregarded in the property division, although it found that the lack of disclosure did not impact the overall outcome.

The court's reasoning demonstrated a careful consideration of the relevant legal principles and the specific circumstances of the case. The outcome was that the $50,000 loan should not be notionally added back to the asset pool, and the wife's use of the funds was considered in the property division. This decision provides guidance on the application of add-back principles in family law cases, particularly concerning loans obtained during the marriage.

Orders

Orders of the court

Full text does not contain this section.

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

In refusing to “add-back” the $50,000 as a notional asset of the wife, her Honour said: 22.The Full Court in Omacini & Omacini (2005) FLC 93-218 outlines three categories of cases where it is appropriate to notionally add back to the pool of assets that no longer exist namely:a)Where matrimonial monies have been used to pay legal fees (see DJM & JLM (1998) FLC 92-816);b)Where there has been a premature distribution of assets (see Townsend & Townsend (1995) FLC 92-569);c)Where a party has embarked on a course of conduct designed to reduce the value of an asset or where a party has acted recklessly, negligently or wantonly in respect to an asset (see Kowaliw & Kowaliw (1981) FLC 91-092). 23.In Wilde & Wilde [2007] FamCA 1044 the Full Court at [184] states: “that it is at the discretion of the trial judge as whether monies are to be notionally added back into the pool and that it should be the exception rather than the rule.”24.At [185] the Full Court cautioned against including, as a general rule, monies expended by parties post separation on reasonable living expenses as add-backs.Conclusion 25.I find that the $50,000 loan acquired for the benefit of the wife and her son is not an amount that can be notionally added back to the asset pool for the following reasons:a)The loan was obtained during the marriage with the knowledge of both parties;b)The loan was acquired primarily to assist the wife with her son’s legal costs associated with his criminal proceedings, although some of the monies were used by the wife for other purposes;c)The evidence does not establish that there has been wastage by the wife of any of the $50,000;d)Weight cannot be given to agreement signed by the wife and the husband in September 2006 whereby the wife agreed to take full responsibility for the loan as it is undated, unwitnessed, vague and prepared and signed in the absence of legal advice;e)The loan was paid out from the sale of the [A] property; andf)The loan does not fall within any of the categories of add-backs as set out in Omacini & Omacini. As to the claim made by the husband that the wife had not disclosed the use made by her of the loan of $50,000, it will be recalled that the only conclusions reached by her Honour concerning claims made before her concerning non-disclosure by either party were as follows: 83. The fourth issue is disclosure.84.Again like most matters disclosure was either not fully forthcoming or late.85.I find that the lack of disclosure however was not an issue that impacted on my ability to make a just and equitable property division in this matter. We are able to say at this point that we have not been persuaded that these conclusions by her Honour concerning claims of non-disclosure at least in so far as they related to the wife’s use of the loan funds were not open to her. We do, however, consider that there is substance in the complaint that her Honour’s reasoning was inadequate in relation to the approach which she adopted to the wife’s use of those loan funds; that approach was, in effect, to disregard totally in her determination of this property division the fact that the wife had apparently had the sole use of those loan funds.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.