LEM & NISHINO
[2020] FamCAFC 12
•24 January 2020
FAMILY COURT OF AUSTRALIA
| LEM & NISHINO | [2020] FamCAFC 12 |
| FAMILY LAW – APPEAL – PROPERTY – Appeal against final property settlement orders – Assessment of the parties’ respective contributions to the redevelopment of property – Where there is no merit in any of the grounds of appeal – Where the primary judge’s findings were open on the evidence – Appeal dismissed. FAMILY LAW – APPEAL – Applications to adduce further evidence – Where applications did not meet the requirements for the receipt of further evidence – Applications dismissed. FAMILY LAW – APPEAL – COSTS – Where the wife sought her costs against the husband – Where the husband was wholly unsuccessful in the appeal – Where there were circumstances to justify a costs order – Husband to pay the wife’s costs of and incidental to the appeal in a fixed sum. |
| Family Law Act 1975 (Cth) ss 79, 93A, 117 |
| CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 |
| APPELLANT: | Mr Lem |
| RESPONDENT: | Ms Nishino |
| FILE NUMBER: | PTW | 1034 | of | 2011 |
| APPEAL NUMBER: | WEA | 34 | of | 2018 |
| DATE DELIVERED: | 24 January 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Strickland, Aldridge & Duncanson JJ |
| HEARING DATE: | 7 May 2019 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 6 September 2018 |
| LOWER COURT MNC: | [2018] FCWA 177 |
REPRESENTATION
| THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr O’Brien |
| SOLICITOR FOR THE RESPONDENT: | Patrick Legal |
Orders
The appeal be dismissed.
The husband pay the costs of the wife of and incidental to the appeal fixed in the sum of $11,000.
Note: The form of the order is subject to the entry of the order in the Court's records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Lem & Nishino has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court's Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WEA 34 of 2018
File Number: PTW 1034 of 2011
| Mr Lem |
Appellant
And
| Ms Nishino |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of Notice of Appeal filed on 25 September 2018, Mr Lem (“the husband”) appeals against final property settlement orders made by a judge of the Family Court of Western Australia on 6 September 2018, in proceedings between the husband and Ms Nishino (“the wife”). The wife opposes the appeal.
The primary judge found that the total value of the assets of the parties including a notional addback was $1,670,752. In addition, the wife had superannuation of $62,000 and the parties had a joint debt to the estate of the wife’s father in the sum of $69,000.
The primary judge concluded that the overall assessment of contributions favoured the wife in the proportions of 60 per cent to 40 per cent, in accordance with s 79(4)(a)–(c) of the Family Law Act 1975 (Cth) (“the Act”). No adjustment was made pursuant to s 79(4)(d)–(g) of the Act, and accordingly, the primary judge made orders based on those proportions.
Although the husband appeals against all orders made on 6 September 2018, he is primarily concerned with Orders 5 and 6, which provided for an amount of $350,000 owing to the parties by the wife’s son to be paid in the sum of $340,044 to the wife and $9,956 to the husband. The husband seeks that that be varied so that the parties each be paid one half of that amount.
Background
The husband was born in 1954 and the wife was born in 1956. The parties met in 1996 and married in 1998. The parties disagreed as to the date of separation, but the primary judge found that nothing turned on that. The parties divorced in August 2011. The wife has an adult son from a previous relationship, X, who was adopted by the husband in 2008.
The wife commenced property settlement proceedings in 2011. Property settlement orders were made on 18 February 2014 by an Acting Magistrate. The husband appealed those orders which were subsequently set aside by consent. At the rehearing, the primary judge made final property settlement orders dividing the parties’ property in the proportions set out above.
Applications in the appeal
The husband filed two Applications in an Appeal to adduce further evidence in the appeal. The first application to adduce further evidence filed on 29 January 2019, sought the following orders:
1.To Permit the evidence for cost to the Builder D Company and the final payment for the construction of the 3 Town [Houses] at B Street, City C ( This is not new evidence, only filed missing in the Appeal Book )
2.To Permit the more ditiled Trail Affidavit filed in my Appeal Boook (This is not new evidence only a more detiled Affidavit.)
(As per the original)
For reasons which follow, we dismissed the husband's application filed on 29 January 2019.
The husband conceded that the statements as to the construction costs of the property at B Street, City C (“the B Street property”) and the statement as to the final payment to the builder, D Company, was evidence which was before the primary judge. In this respect, the husband’s application to adduce further evidence was unnecessary.
As to the more detailed trial affidavit, the husband said that the wife filed an additional affidavit, but he did not respond to it because his lawyer was focussed on the value of his land and told him that anything else does not matter.
The primary judge noted at [21] that “[t]he husband did not seek to lead any evidence in-chief to update his trial affidavit.”
The husband’s complaint that his lawyer did not carry out his instructions is not a basis for additional evidence to be received by the Court.
The husband sought and was granted leave to file and rely on his second application to adduce further evidence, received on 17 April 2019, which sought the following orders:
1.To Permit the evidence for the buy and sale price of E Street, Suburb G to show the increse of the property as per marked increse and the mayor renovations i made to the propety.
2.To Permit the bank statement showing transaction on disputed share tradings.
3.To Permit the affidavit of Ms H and Ms J for re filing. the affidavit’s were accepted by the Judge
4.To Permit the photo of E Street showing the work shed . the wife stated the shed is 6x6 feet, i stated it is 6x6 meters, a difference in value of estimated $ 20,000
(As per the original)
The husband did not pursue Order 3, but he sought to have the balance of the orders made, such that the Court receive that additional evidence.
For the reasons which follow, we dismissed this application.
The husband sought to rely on a property sales report for the wife’s father’s property at E Street, Suburb G (“the E Street property”). The purpose of doing so, was to demonstrate the increase in the value of the E Street property, which the husband asserted was not from market forces alone, but was attributable to the improvements he made to the E Street property. However, the property sales report is not probative of the increase in value of the E Street property or the reason for that increase.
The husband sought to rely on a bank statement in his name for the period from 19 September 2001 to 19 December 2001. The husband submitted that this statement was required because the primary judge did not take into account that the wife transferred $150,000 worth of shares into her account and the money disappeared.
At best, the bank statement demonstrates that an amount of $66,729.15 was credited to the account on 18 October 2001. There is no indication as to the source of those funds. The bank statement was not put to the wife in cross-examination. It does not demonstrate the asserted share transfers.
The husband sought to rely on a photograph of the E Street property. He said that the wife stated that he built a shed which was 6 foot by 6 foot, when in fact the shed was 6 metres by 6 metres. The photograph contains no measurements. It is not probative of the size of the shed.
The husband said he carried out major renovations to the E Street property, whereas it seems on the basis of the evidence before his Honour, they comprised minor repairs. The wife valued the work carried out by the husband at only $3,800. The wife’s evidence was corroborated by that of her son, which was not challenged. The husband did not put the photograph to the wife in cross-examination.
The Court has a discretion under s 93A(2) of the Act to receive further evidence on appeal. The Court’s discretion must be exercised judicially and the evidence must be relevant and admissible according to the usual rules of evidence (CDJ v VAJ (1998) 197 CLR 172 (“CDJ v VAJ”) at 203). The husband’s application does not meet the requirements for the receipt of further evidence as set out in CDJ v VAJ.
The Appeal
Six grounds of appeal are set out in the Notice of Appeal filed on 25 September 2018.
Ground 6 relates to three pages of narrative which were attached to the Notice of Appeal. They contain the husband’s calculations which he asserted should have been made. They do not constitute a ground of appeal. The husband agreed that we should treat them as information to be taken into account as part of his Summary of Argument.
Ground 5 complained that the costs order made by an Acting Magistrate following the first trial should not have been made. Plainly, that ground of appeal is misconceived. An order made in relation to the first trial cannot be the subject of an appeal against the orders made by the primary judge in the second trial.
That leaves Grounds 1–4 inclusive.
Grounds 2, 3 and 4 are self-explanatory but Ground 1 is entirely unclear. Further, the husband’s Summary of Argument does not assist. It did not comply with Practice Direction No 1 of 2017, in that it did not set out the grounds of appeal and provide a statement of the arguments relied on in relation to each ground of appeal. It comprised a narrative which appeared to traverse in no particular order the various complaints that the husband makes about his Honour’s orders and reasons for judgment and it was impossible to follow or make any sense of it. Unfortunately, the husband’s oral submissions at the hearing of the appeal were no better. Thus, doing the best we can, we address Grounds 1–4 as follows.
Ground 1 – “The distribution of the family assets and the claim money is owed for development of B Street is in error. The claim [that] money is owing for development is wrong”.
As it reads, this ground asserts two errors. First, that “[t]he distribution of the family assets” is an error, and secondly, the claim that money is owed or is owing for the development of the B Street property is an error and is wrong.
As to the first alleged error, it is entirely unclear what is meant by “[t]he distribution of the family assets”. A possibility is that it relates to the actual orders made by his Honour and in his oral submissions the husband indicated that he was there referring to the 60 per cent/40 per cent division of the assets as determined by his Honour. However, neither in this ground of appeal nor in the written or oral submissions was the husband able to tell us what the actual error was, and accordingly, we can take that complaint no further.
As to the second alleged error, his Honour made no finding that there was money owed or owing in relation to the development of the B Street property. Indeed, as the husband says, the money for the redevelopment is accounted for and all the money borrowed for the same has been repaid.
The loans obtained from the wife’s father for the purpose of the redevelopment of the B Street property have been repaid, and for example, the amount of $154,733 lent to the parties by the wife’s father was deducted from the wife’s inheritance from her father’s estate. Further, the mortgage debt over the property was also discharged from that inheritance.
Finally, the only outstanding liability that his Honour included in the schedule of assets and liabilities, was an amount of $69,000 owed to the wife’s father, but his Honour found that that amount was lent to the parties to purchase shares and had nothing to do with the redevelopment (at [55]–[58]).
Thus, to the extent that we can understand what this ground of appeal is about, we find that it has no merit.
Ground 2 – “The contribution for the development of B Street, City C is greater for the [h]usband and not for the [w]ife”.
This ground of appeal challenges the primary judge’s findings in relation to the respective contributions of the parties to the redevelopment of the B Street property.
The husband owned the B Street property unencumbered prior to the commencement of cohabitation with the wife, although it had not been redeveloped.
As at 10 January 1998, the B Street property had a value of $120,000. That value increased thereafter, such that some 10 years later, as at February 2008, it was $900,000. The evidence of the valuer was that the increase was attributable to a property boom and rezoning, which enabled redevelopment. The value of the property was land value only.
It was not in dispute before the primary judge that the total cost of the B Street property redevelopment was $967,066 (Transcript 9 May 2019, p.85 line 18).
The husband submitted that the wife had only her inheritance and the sale proceeds of her property at F Street, Suburb G (“the F Street property”) to contribute to the construction costs and that the rest of the funds for the construction costs were borrowed. However, the husband submitted that the sale proceeds of the F Street property should be considered a joint contribution. The husband compared that to his own property, including the B Street property itself, funds of $70,000, shares of $150,000 and the value of the family trust of $110,000. The husband asserted that his contribution to the redevelopment of the B Street property was, therefore, much higher.
The primary judge did not accept the husband’s evidence in relation to his savings and shareholdings. His Honour found at [74]:
Given my findings as to his credibility generally, and the casual way in which he amended his initial claim as to his shareholdings and savings at the relevant date from $100,000 to $50,000, I am not prepared to accept the husband’s evidence in relation to those savings and shareholdings.
The husband asserted that he carried out major renovations to the F Street property which increased the value of the property and yet he was not “credited” for any of the gain, which he said should be treated as a joint contribution.
The wife owned the F Street property unencumbered at the commencement of the relationship. It had been purchased in 1991 for $149,000.
The primary judge found at [76]:
… The property was sold, after some minor improvements had been made to it during cohabitation, in April 2006 for $435,000. After payment of expenses of sale and the like, the wife received net proceeds of $414,811 in July 2006. There was no admissible evidence to support the wife's estimate of the value of the F Street property as at the commencement of cohabitation, nor was there any evidence as to any value that may have been added by the minor improvements made during cohabitation.
The husband’s evidence as to his work at the F Street property was disputed at trial by the wife and her son.
In his affidavit filed on 1 April 2016, the wife’s son deposed as to the renovations to the F Street property as follows:
45.When we were living at F Street [the wife] made some improvements to the property. The improvements were relatively minor. I recall that [the husband] did help with the improvements.
46.I am aware of an affidavit that [the husband] has filed in the Family Court on 27 April 2011 (“the April affidavit”). I am aware at paragraph 26.1 that [the husband] says that he undertook extensive renovations to F Street. I do not agree with this. I do not agree that he installed new floor-boards, a new kitchen, that 90% of the home was repainted, or that he re-attached the kitchen ceiling. There were definitely no extensive renovations done at F Street. There were some minor improvements made and some general maintenance done from time to time at F Street. I definitely do not remember any extensive renovations being undertaken as described by [the husband] in his April affidavit.
This evidence was not challenged.
The primary judge found that the renovations carried out to the F Street property were “minor” (at [76]).
The primary judge found that prior to the wife’s father’s death, the wife’s father had provided considerable financial assistance to the parties, and the primary judge said this at [88]:
Quite apart from the direct contribution of the net amount inherited, the husband conceded that the parties could not have redeveloped the B Street property without the loans provided by the wife's father, which were (with one exception only) interest-free.
As to the wife’s inheritance, the sum of $154,773 was withheld from the monies otherwise due to her, in repayment of a consolidated loan from the wife’s father plus interest. The primary judge found that this amount discharged what would otherwise have been the liability of the parties to the wife’s father.
As to the parties non-financial contributions, the primary judge found at [92]:
Both parties made non-financial contributions both in the home and in labour at the various properties. The husband sought to maximise the impact of his physical work at the B Street property in particular, disputing the wife’s evidence in that regard, but, as already noted, he did not require [the wife’s son] for cross-examination and his evidence was accordingly unchallenged. I accept that the husband has overstated the extent of his own contributions of that nature and understated those of the wife and, for that matter, [the wife’s son].
The primary judge’s findings were all open to his Honour on the evidence. Thus, the husband has not established that his Honour erred in his assessment of the respective contributions of the parties to the redevelopment of the B Street property. Accordingly, this ground of appeal must also fail.
Ground 3 – “The value of B Street cannot be smaller as 30 [per cent] according to the expert valued. The expert valuation is $900,000 at the start of the development”.
Given what his Honour said at [100]–[101], it seems that the husband is suggesting in this ground of appeal that his Honour should have proceeded on the basis of the relevant value of the B Street property being $600,000, namely, 30 per cent less than the value of $900,000 as at February 2008. However, this submission is not supported by any evidence that was before his Honour, and thus, there is no merit in this ground of appeal.
Ground 4 – “Money held in the [w]ife's bank account, after all payment was made for the development of B Street, City C, was not included in the settlement” (Emphasis omitted).
Here, the husband asserts that the wife held money in her bank account after the development of the B Street property had been paid and that the funds held by her were not disclosed in her financial statement and, therefore, not taken into account by the primary judge.
The husband has not established that the wife had undisclosed funds which were not taken into account. He asserted this, but the wife denied it. In that regard, the primary judge found at [31] that “where the evidence conflicted, [his Honour] preferred the evidence of the wife and her witness to that of the husband”.
There is no merit in this ground of appeal and the ground must fail.
Conclusion
Having found no merit in any of the grounds of appeal, the appeal must be dismissed.
Costs
At the conclusion of the hearing of the appeal, we sought submissions from the parties as to the question of costs, depending on the result of the appeal.
In the event that the appeal was dismissed, the wife sought an order for costs in the sum of $11,000 on the basis that the husband would have then been wholly unsuccessful. The husband opposed the order for costs sought by the wife.
As to whether there should be an order for costs, s 117(1) of the Act provides that each party to proceedings shall bear his or her own costs. However, pursuant to s 117(2) of the Act, if the Court is of the opinion that there are circumstances that justify it doing so, the Court may, subject to s 117(2A) of the Act, make such orders as to costs as it considers just. Section 117(2A) of the Act provides as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
Apart from s 117(2A)(e) of the Act, the only other subsection that is relevant to be considered here is s 117(2A)(a), namely, the financial circumstances of the parties. Indeed, the husband says that he opposes any order for costs on the basis that he could not afford to meet the same without selling the property that he owns.
The wife is in receipt of an income of around $10,000 a year by way of share dividends. Pursuant to the orders made on 6 September 2018, the wife will have Unit 3, B Street, City C and will receive the sum of $340,044 from a debt owed by her son.
The husband will have Unit 1, B Street, City C valued at $600,000 by the primary judge, although the husband said a real estate agent appraised it at about $500,000. The property is unencumbered. The husband is an invalid pensioner in receipt of pension payments of approximately $890 per fortnight, and he is entitled to receive the sum of $9,956 from the wife’s son pursuant to the orders.
The fact that the husband has been wholly unsuccessful in his appeal provides a circumstance that justifies the making of an order for costs, and the financial circumstances of the parties, and in particular of the husband, do not change that outcome.
We are satisfied that the husband is able to meet the order for costs sought by the wife, and we propose to make that order.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Aldridge & Duncanson JJ) delivered on 24 January 2020.
Associate:
Date: 24 January 2020
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