LIDDELL & LIDDELL
[2018] FamCAFC 3
•12 January 2018
FAMILY COURT OF AUSTRALIA
| LIDDELL & LIDDELL | [2018] FamCAFC 3 |
| FAMILY LAW – AMENDED NOTICE OF APPEAL – PROPERTY – Where the appellant complains that the trial judge failed to include in the asset pool a number of assets and liabilities and that an item of real estate was included at an incorrect value – Where the respondent contends that the errors are de minimus and do not justify allowing the appeal – Where some of the amounts involved can be considered individually de minimus that is not the case when all of the amounts the subject of the errors are considered – Where the trial judge failed to give reasons for excluding certain liabilities – Where there is merit in the grounds of appeal – Appeal allowed. FAMILY LAW – RE-EXERCISE THE DISCRETION – Where both parties urge the court to re-exercise the discretion – Where the respondent foreshadowed presenting further evidence in relation to drawdowns by the appellant from the equity in the former matrimonial home to meet a shortfall in the mortgage of an investment property – Where it is clear that this evidence was before the trial judge, findings were made in relation to it, there was no cross-appeal and it is not therefore open to the wife to seek to re-present this evidence – Where it is appropriate for the court to re-determine the matter – Discretion re-exercised. FAMILY LAW – COSTS – Where at the hearing of the appeal the appellant informed the court that if the appeal was allowed he would seek costs on an indemnity basis based on certain offers of settlement – Orders made providing for the parties to file and serve written submissions on the question of costs. |
| Family Law Act 1975 (Cth) |
| Dent & Porter [2013] FamCAFC 164 |
| APPELLANT: | Mr Liddell |
| RESPONDENT: | Ms Liddell |
| FILE NUMBER: | ADC | 1985 | of | 2014 | |
| APPEAL NUMBER: | SOA | 102 | of | 2016 |
| DATE DELIVERED: | 12 January 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 8 May 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 28 October 2016 |
| LOWER COURT MNC: | [2016] FCCA 2751 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Horvat |
| SOLICITOR FOR THE APPELLANT: | Adelaide Family Law |
| COUNSEL FOR THE RESPONDENT: | Mr Anderson |
| SOLICITOR FOR THE RESPONDENT: | Angela Ferdinandy |
Orders
The appeal be allowed.
Order (17) of the orders made on 28 October 2016 be set aside and in lieu thereof the following order be made:
Subject to the transfer to the wife of the husband’s interest in the former matrimonial home, the wife pay to the husband the sum of ONE HUNDRED AND SIXTY FIVE THOUSAND SIX HUNDRED DOLLARS ($165,600) within sixty (60) days of the date hereof.
Within twenty-one (21) days of the date hereof the appellant husband file and serve written submissions in relation to the question of costs.
Within fourteen (14) days of the receipt of the written submissions the respondent wife file and serve written submissions in response.
Within seven (7) days of the receipt of the submissions in response the appellant husband file and serve written submissions in reply.
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 Liddell & Liddell 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).
|
Appeal Number: SOA 102 of 2016
File Number: ADC 1985 of 2014
| Mr Liddell |
Appellant
And
| Ms Liddell |
Respondent
REASONS FOR JUDGMENT
Introduction
By Amended Notice of Appeal filed on 21 April 2017 Mr Liddell (“the husband”) appeals against one of the orders for property settlement made by Judge Brown of the Federal Circuit Court of Australia on 28 October 2016.
The appeal is opposed by Ms Liddell (“the wife”).
On 13 April 2017 the husband filed an Application in an Appeal seeking leave to adduce further evidence.
The issues in the appeal are within relatively short compass. The husband complains that the trial judge failed to include in the net asset pool a number of assets and liabilities, and that he included in that pool the incorrect value of an item of real estate.
The assets the subject of the complaint were the husband’s motor vehicle and the wife’s motor vehicle. The liabilities were as follows:
a)A line of credit in the sum of $30,261 secured over an investment property at Suburb N (Ground 1a).
b)An ANZ investment account in the sum of $1,051 (Ground 1b).
c)A UK Bank account in the sum of $1,470 (Ground 1c).
d)A car loan secured over the husband’s motor vehicle in the sum of $18,700 (Ground 1d).
As to the incorrect value, the agreed value of an investment property in the United Kingdom was $363,071 but his Honour included that property in the net asset pool at $368,071 (Ground 4).
During the hearing of the appeal, the husband conceded that there was no error by the trial judge in relation to the exclusion of the two motor vehicles and the car loan secured over the husband’s motor vehicle. For her part, the wife conceded that the trial judge had failed to include the two small liabilities, namely the amounts of $1,051 and $1,470 respectively, but submitted that that error was de minimus, and does not justify allowing the appeal.
I also record that in his summary of argument the husband sought to argue that a CGT liability that he apparently incurred upon the sale of an investment property at Suburb C following his Honour’s decision, should now be included in the liabilities. Understandably, that request was opposed by the wife, and during the hearing the husband conceded that the further evidence that he sought to present allegedly establishing this liability could not be admitted. On that basis I dismissed that part of the husband’s Application in an Appeal seeking to adduce that further evidence. Thus, the husband’s argument in this regard cannot succeed.
I pause to indicate that by consent the other evidence sought to be adduced by the husband, namely the balance sheets that were before the trial judge, were admitted as further evidence.
The issues left for consideration are whether his Honour erred in failing to include in the liabilities the line of credit of $30,261, and the two small accounts. There is also the question of the incorrect value applied by his Honour in relation to the United Kingdom investment property.
Discussion
Ground 1a – The line of credit
There is no doubt that his Honour was aware of this liability because he referred to it specifically at [253], yet he failed to include it in the pool of net assets (at [404]), and importantly gave no reasons for excluding it (Ground 3).
The wife has attempted to suggest that his Honour took a “broad brush approach” to assessing the assets and liabilities of the parties, and his Honour simply left this as a liability for the husband to meet. Further, the wife says that that is justified because she has had to bear the effect of the husband being able to draw down on the equity in the former matrimonial home at Suburb M, and that has benefitted the husband.
The difficulty with this submission is that although his Honour determined at trial not to include as a notional asset the amount of the husband’s drawdowns (at [258]), he did not then relate that to his failure to include the line of credit as a liability.
Finally, I note that the wife submits that the amount involved is not “significant enough to warrant … appellate intervention”; i.e., it is de minimus (Dent & Porter [2013] FamCAFC 164 at [67] – [69]). As always though, whether an error is de minimus is a matter of degree, and here, given the other errors made by the trial judge, I am not disposed to disregard this error.
In the circumstances I find that this ground of appeal has merit. His Honour simply provided no reasons for failing to include the line of credit as a liability.
Grounds 1b and 1c – The ANZ and UK Bank accounts
Despite the concession referred to above, the wife maintains her opposition to these grounds being successful. Apart from the de minimus argument, the wife in effect repeats her submission that the trial judge took a “broad brush approach” in excluding these liabilities. She also points to the trial judge not including the parties’ personal bank accounts in the net asset pool, and the UK account being an account with a variable balance.
They may be plausible arguments, but they are speculative as to why his Honour failed to include the two accounts. The fact of the matter is the trial judge was aware of these liabilities from the balance sheets tendered by the parties, but he gave no reasons for excluding them, and I cannot second-guess his Honour.
As for the de minimus argument, plainly these are relatively minor amounts, but that is not the case when all of the liabilities excluded without reason are considered.
These grounds also have merit.
Ground 4 – The UK property
It is patently obvious that this is a typographical error by his Honour which needs to be corrected. If it had been the only issue here then it could have easily been corrected by applying the slip rule, but because there are other issues in the appeal, it can be corrected in that context.
The wife again raises the de minimus argument, but that is not the point here.
I find there is merit in this ground of appeal.
Conclusion
Having found merit in Grounds 1, 3 and 4, the appeal must be allowed.
The question then becomes whether the proceedings should be remitted for rehearing, or whether I am able to re-determine the same. Both parties urge me to do the latter, and I consider that it would be appropriate for me to do that if no further evidence was sought to be presented by the parties. In that regard though the wife foreshadowed that she would want to present evidence in relation to the drawdowns made by the husband from the equity in the former matrimonial home at Suburb M to pay the shortfall in the mortgage on the Suburb N property, and in relation to the rent the husband has received for that property. The express purpose of presenting that evidence would be to balance out the line of credit of $30,261 such that either the husband would remain solely liable for that and it would not be taken into account, or if not, then the drawdowns and the rent received would be added back into the pool of assets. However, it would not be open for the wife to attempt to do that. Plainly, the evidence referred to was before the trial judge, and his Honour made findings in relation to it, for example at [258], and there was no cross-appeal filed by the wife. Accordingly, there would be no basis to interfere with those findings by the trial judge, and I proceed on the basis that no further evidence would be presented.
In these circumstances, re-determining the matter becomes a case of adjusting the net pool of assets, applying the same percentage division as determined by his Honour, adjusting where necessary the value of the assets each party is to retain and the liabilities they are to be responsible for, and arriving at the amount that is to be paid by the wife to the husband. In his Honour’s orders that amount was $143,000 (order (17)), and that is the order appealed against.
The calculations are as follows:
a)The total assets as identified by his Honour at [404]:
$1,468,871
Less$ 5,000 (the adjustment to the value of the United Kingdom property)
Total assets$1,463,871
b)The total liabilities as identified by his Honour at [404]:
$774,981
Add$ 30,261 (line of credit)
$1,051 (ANZ account)
$1,470 (UK Bank account)
Total liabilities $807,763
c)Net assets - $656,108
d)Thirty-nine per cent to husband - $255,882.12
e)The assets the husband retains:
United Kingdom property $363,071
Suburb N property $435,000
Total value $798,071
f)The liabilities the husband is responsible for:
Suburb N mortgage $407,000
UK mortgage $267,981
Line of credit $ 30,261
ANZ account $ 1,051
UK Bank account $ 1,470
Total amount $707,763
g)The husband retains net assets of $90,308, and therefore the wife is required to pay to the husband:
$255,882.12
Less$ 90,308.00
Total$165,574.12
Rounded off to $165,600
As to payment of the said sum, his Honour provided for the amount of $143,000 to be paid contemporaneously with the transfer by the husband to the wife of his interest in the former matrimonial home at Suburb M, and which was to be effected within 60 days of the date of the orders, but I have not been told anything about whether the orders have been executed in part or in whole. Thus, I propose to order that subject to the transfer to the wife of the husband’s interest in the former matrimonial home at Suburb M, the wife pay to the husband the sum of $165,600 within 60 days of the date hereof.
In his Amended Notice of Appeal and highlighted in his summary of argument the husband sought the sale of the former matrimonial home in default of payment of the new amount by the wife.
His Honour made no such order, and no evidence was put before this Court in support of now making that order. Accordingly, I do not propose to do so.
costs
At the hearing I was informed that if the appeal was allowed, then there would be an application by the husband for costs on an indemnity basis based on certain offers of settlement. Thus, I will now provide for written submissions to be filed on the question of costs.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 12 January 2018.
Associate:
Date: 12 January 2018
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