Meredith & Allen
[2014] FamCAFC 223
•21 November 2014
FAMILY COURT OF AUSTRALIA
| MEREDITH & ALLEN | [2014] FamCAFC 223 |
| FAMILY LAW – APPLICATION IN APPEAL – ADDUCE FURTHER EVIDENCE – Where application not opposed by respondent – Application allowed. FAMILY LAW – APPEAL – PROPERTY –Where husband self-represented at trial and in appeal - Where the husband contends that the wife’s accountants failed to comply with a subpoena and order of the judge to make certain disclosure – Where no complaint of non-compliance was raised at trial – Where the trial judge’s obligations did not extend to ensuring compliance with orders where no complaint about non-compliance is made – Where husband asserted wasted assets in liquidation proceedings – Where the trial judge correctly rejected the waste argument – Where husband contended the trial judge erred by not delaying the wife’s access to a controlled monies account for at least 28 days after judgment – Where the trial judge is not obliged to quarantine assets pending appeal – Where no error demonstrated – Appeal dismissed. FAMILY LAW – APPEAL – ADULT CHILD MAINTENANCE – Where husband appeals against orders of adult child maintenance – Where child suffers from a serious disabling condition – Where husband asserts the trial judge erred in finding that the child’s proper needs are in the sum of $400 per week – Where no error demonstrated. FAMILY LAW – APPEAL – COSTS – Where husband’s appeal wholly failed – Where husband has greater earning capacity than the wife – Where Court satisfied that on balance the factors justify a departure from the usual costs rule – Husband ordered to pay wife’s costs. |
| Corporations Act 2001 (Cth) s 511, 530B Family Law Act 1975 (Cth) |
| De Winter & De Winter (1979) FLC 90-605 Goddard & Patterson [2011] FamCAFC 14 House v The King (1936) 55 CLR 499 In the Marriage of Crawford (1979) FLC 90-647 In the Marriage of Lee Steere (1985) FLC 91-626 Pierce v Pierce (1999) FLC 92-844 |
| APPELLANT: | Mr Meredith |
| RESPONDENT: | Ms Allen |
| FILE NUMBER: | SYC | 6886 | of | 2008 |
| APPEAL NUMBER: | EA | 78 | of | 2014 |
| DATE DELIVERED: | 21 November 2014 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Ainslie-Wallace and Tree JJ |
| HEARING DATE: | 19 September 2014 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 6 June 2014 |
| LOWER COURT MNC: | [2014] FamCA 376 |
REPRESENTATION
| THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Richards |
| SOLICITORS FOR THE RESPONDENT: | Mills Oakley Lawyers |
Orders
The application of the wife filed 4 August 2014 to adduce further evidence, being withdrawn, is dismissed.
The application of the husband filed 5 September 2014 to adduce further evidence is allowed.
The appeal is dismissed.
The appellant pay the respondent’s costs of the appeal, failing agreement to be assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Meredith & Allen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 78 of 2014
File Number: SYC 6886 of 2008
| Mr Meredith |
Appellant
And
| Ms Allen |
Respondent
REASONS FOR JUDGMENT
background
In an amended notice of appeal filed 1 September 2014, Mr Meredith (“the husband”) challenges orders made altering interests in property held with Ms Allen (“the wife”) and orders made for maintenance for their 19 year old daughter who suffers from a disabling condition.
The major complaints of the husband, who appeared for himself at the trial and before us at the appeal hearing, centred around assertions that the wife had failed to make proper disclosure and that insufficient weight was given to matters which should have favoured the husband.
The orders of the trial judge, Watts J, made on 6 June 2014 divided the parties’ property 60 per cent to the wife and 40 per cent to the husband. The judge decided that the wife’s contributions should be reflected in a 55 per cent assessment and added a further 5 per cent by reason of Section 75(2) factors contained in the Family Law Act 1975 (Cth) (“the Act”). The husband argues that in view of his contribution, the disparity between them in terms of the final orders cannot be justified.
The orders of the trial judge provided that the husband was, at least in the first instance, to retain the former matrimonial home at an agreed value of $1,400,000 (albeit he would take it subject to a mortgage of $828,000), the wife was to retain monies in a controlled monies account in the sum of $251,219, and the husband was to pay the wife the further sum of $256,144.. In the event that the husband failed to pay that sum to her within 42 days of judgment, then the wife was permitted to list the home for sale, with the net proceeds after payment of realisation costs and discharge of the mortgage (but not any arrears) to be divided between the parties in the proportion of 45 per cent to the wife and 55 per cent to the husband. The wife was otherwise to retain some minor chattels, but apart from the controlled monies, her principal entitlement would be the payment by the husband. It was agreed between them that the husband would retain all of the parties’ superannuation, which the trial judge determined had a value of $52,726.
His Honour also made an order for periodic adult child maintenance in relation to one of the parties’ children, B, obliging the husband to pay $199 per week. B has a debilitating degenerative disorder.
On 7 August 2014 the trial judge made orders allowing for a stay of the property orders.
By application in appeal made 5 September 2014, the husband sought to adduce further evidence in the appeal comprising further transcript of the proceedings (including oral submissions) on 23 December 2013. That application was not opposed by the wife and at the hearing of the appeal, we allowed the further material to be placed before us in order that we could have a better understanding of the precise way in which the case was ultimately argued before the trial judge. We also accepted as an exhibit in the appeal the balance sheet as proposed by the husband during the trial – Exhibit 22, and a letter from the wife’s solicitors – Exhibit 46 in the trial. An application to adduce further evidence by the wife was withdrawn.
UNCONTROVERSIAL FACTUAL MATTERS
The husband was born in 1964 and is presently 50 years of age. The wife was born in 1966 and is presently 48 years of age. Their relationship commenced in 1984 when they were respectively 20 and 18 years of age. They had four children, CC who is presently 23 years of age, B who is presently 19 years of age, J who is presently 15 years of age and JJ who is presently 12 years of age. The parties separated under one roof in 2008 and the husband moved out of the former matrimonial home in April 2009.
At the time of separation, the parties had a number of businesses in Sydney, which operated under a somewhat complex arrangement of companies. The first aspect of their business related to caretaking blocks of units, which was remunerated by payment by the relevant owners’ corporations. The second aspect was managing properties for individual owners of houses or units, presumably remunerated by way of commission paid by the owner directly. The third aspect was the provision of, or more precisely organisation of, maintenance services to one or more owners’ corporations. Finally the husband also ran a real estate business, which included managing short-term rental accommodation adjacent to a Sydney hospital, as well as the property management for landlords discussed above.
Shortly prior to separation, the husband resigned as a shareholder and director of two companies in favour of the wife. The first, Meredith Pty Ltd, was the caretaker of a block of units described in the judgment below as “the [HH Street] property.” The second, A Pty Ltd, was apparently contracted to one or more owners’ corporations to undertake maintenance. Thereafter, the husband retained and solely controlled two other companies, being P Pty Ltd (which had management rights for a property which was described in the trial as “the [Suburb LL] Property”) and IJ Pty Ltd, which later changed its name to R Pty Ltd.
A few days prior to the husband resigning from them in April 2010, the husband asserted that R Pty Ltd had entered into consultancy agreements with both Meredith Pty Ltd and A Pty Ltd. R Pty Ltd thereupon invoiced both of these companies under those asserted agreements, which invoices were not paid. These disputes escalated into litigation in which R Pty Ltd wholly failed. Costs orders were made against the company.
On 17 April 2012, liquidators were appointed over both Meredith Pty Ltd and A Pty Ltd pursuant to a members’ voluntary winding up. Unsurprisingly, those liquidators realised the assets of both companies. The liquidators concluded that there was a surplus of assets over liabilities, or at least over the proofs of debt accepted by them. By then, these proceedings had been instituted, and the liquidators were made respondents. On 30 October 2013 consent orders were made by the trial judge permitting the liquidators to distribute monies under their control to the creditors whose proofs they had accepted, but otherwise requiring the balance funds to be held in a controlled monies account of the wife’s former solicitors. Those orders also saw the liquidators discharged as parties to these proceedings. The controlled monies retained by the wife’s former solicitors were, apart from the former matrimonial home, the most substantial asset in the pool over which the parties were in dispute in the litigation before the trial judge.
In arriving at the outcome the subject of the property appeal, the trial judge apportioned the parties’ property as follows:
153. Based upon the findings made in relation to s 79(4) considerations, the overall result is an adjustment of 60/40 to the wife. The husband wishes an opportunity to retain the [Suburb S] property. The parties have also agreed that a splitting order will be made so that the husband will receive the wife’s interest in the [Meredith] Superannuation Fund. The husband also wishes the [Council S] Municipal Council Bond to be transferred to him. The overall result can be achieved by distributing the assets and liabilities of the parties between them in accordance with the following table:
Husband gets 40.0% Assets Item No. Description Percentage Value 3 [E Street, Suburb S] 100% $1,400,000 7 [R] Pty Ltd 100% $6,500 10 Household contents 100% $750 12 Jewellery 100% $5,000 13 Honda 125cc 100% $1,200 14 [Suburb S] Municipal Council Bond 100% $10,350 17 [AAA] sports car 100% $6,500 19 HSBC 100% $19,400 20 [Meredith] Superannuation Fund 100% $52,726 Liabilities Item No. Description Percentage Value 21 Mortgage St George Bank - [E Street, Suburb S] 100% $828,000 Husband pays Wife $256,144 Net Assets to Husband $418,282 Wife gets 60.0% Assets Item No. Description Percentage Value 1 [Meredith] Pty Ltd 100% $251,219 9 Household contents 100% $15,000 11 Jewellery 100% $2,690 15 2007 Holden motor vehicle 100% $18,000 16 2010 Toyota motor vehicle 100% $36,000 18 Monies paid to the wife's mother 100% $48,371 Wife receives $256,144 Net Assets to Wife $627,423
Relevant principles
The relevant principles applicable to appeals against the exercise of a discretion such as that under consideration on this appeal are well established. In House v The King (1936) 55 CLR 499 in the joint judgment of Dixon, Evatt and McTiernann JJ at 504-505 their Honours said:
“…The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred…”
THE PROPERTY APPEAL
Ground 1
This ground provides:
The trial judge has not given appropriate weight to certain evidence that denied the husband procedural fairness by refusing to compel the wife’s Accountant to comply with a Subpoena issued 30.04.13 and the Wife failure to comply with her disclosure obligations.
As refined during the course of oral submissions, in substance the husband’s argument was that the trial judge erred by refusing to draw an adverse inference against the wife arising from her accountants’ alleged failure to comply with a subpoena dated 30 April 2013, and the further asserted failure of the wife to comply with her disclosure obligations. The subpoena was produced and marked Exhibit 1 on the appeal.
The subpoena to the wife’s accountants required them to produce certain tax returns. During the course of a preliminary hearing before the trial judge on 2 September 2013, the husband complained that documents had not been produced pursuant to the subpoena. In the course of that discussion, it transpired that the only relevant documents that had not been made available by the wife’s solicitors to the husband were three tax returns for the year ending 2012. The trial judge ordered that within 14 days the wife provide to the husband any documents that were within the scope of the subpoena to her accountant that were not otherwise already available and in the court exhibits room (Transcript 2 September 2013, p 5 ln 25). The evidence does not permit us to conclude whether or not in fact the order then made was complied with; on the other hand there was no complaint of non-compliance with that order raised subsequently with the trial judge. Before us the husband argued that the trial judge had an obligation to ensure compliance with his orders, irrespective of any complaint by the husband. That assertion must be rejected out of hand. In circumstances such as these, it is for the parties to raise non-compliance issues, not the court, and certainly any failure on the part of the court so to do would not comprise appellable error.
No other basis is asserted by the husband as founding the purported error on the part of the trial judge of refusing to compel the wife’s accountants to comply with the subpoena. This ground of appeal is therefore not made out.
The second aspect of this ground is a general complaint that the wife failed to adequately make disclosure. The trial judge dealt with the question of each party’s disclosure at [104] to [108]. His Honour concluded at [108]:
The husband alleged that there was a lack of financial disclosure by the wife. I am satisfied that the wife provided the husband with significant documentation (and sometimes on multiple occasions). The husband also obtained material by subpoenaing third parties. By the time of the trial, the husband had accumulated a large range of material which he assembled into five ring binders and used during his cross examination of the wife. The husband did not demonstrate that the wife had failed to provide information which she had available.
In the course of his oral submissions, the husband took us to some 23 instances during the course of his cross-examination of the wife, which he said supported his argument that the wife had failed to make proper disclosure. However in none of those did the wife in fact concede any such failure; rather she consistently asserted that full and adequate disclosure had been made, and indeed that sometimes there had been multiple disclosures of the same documents or material. True it is that on occasion the wife said that a document that was being sought from her was not in her possession, but had been given to the liquidator, however that does not found any argument of inadequate disclosure by the wife (Transcript 4 December 2014 p 183, ln 6 - 11).
The finding of the trial judge that he was not persuaded that the wife had failed to provide information which she had available, was reasonably open to his Honour.
This aspect of ground 1 therefore also fails.
Ground 2
This ground provides:
The Trial Judge erred by not giving sufficient weight to $439,615.14 (item No 25 in the Husband’s balance sheet) when deciding the “assets and liabilities.”
The sum of $439,615.14 was received, post-separation, by Meredith Pty Ltd by way of “back-pay” of fees from the HH Street property owners’ corporation. The contended error is that the trial judge failed to give sufficient weight to that sum, or perhaps more precisely, what had become of it, in determining what comprised the parties’ assets and liabilities.
At trial, as he did on appeal, the husband contended that the wife had failed to sufficiently disclose where those funds had gone, and to the extent that there had been no such an accounting, argued that the court ought conclude that the wife had dissipated or wasted the funds. It was asked that this sum be notionally added back into the pool. This was a major topic of cross-examination of the wife by the husband at trial. The wife’s evidence was entirely clear in this respect (see Transcript 23 December 2013 p 22 ln 33).
The trial judge dealt with this at [113] and [115]-[117]. His Honour was satisfied, by reference to liabilities which the wife had been meeting at the relevant time, that the expenditure of $450,000, over a two and a half year period, could be accounted for. The consideration of the wife’s expenditure over a period of time was justified because the $439,615.14 was not received as a lump sum, but in several tranches. Further, although it was not adverted to by the trial judge in this part of his reasons, the wife’s evidence was that from the $439,615.14, the sum of $114,000 was paid by her to her mother, in repayment of amounts purportedly owing to her. The trial judge dealt with that $114,000 payment at other parts of the judgment, to which we will refer in greater detail in relation to other grounds. However at [117] the trial judge said “I am unable to conclude that the wife has squandered or secreted any significant funds.”
Insofar as this ground alleges a lack of disclosure, we have already identified that the trial judge was not persuaded that the wife had failed to provide information which she had available to the husband, which finding was reasonably open on the evidence. Likewise we are satisfied that the finding that the trial judge was unable to conclude that the wife had squandered or secreted any significant funds derived from the $439,000, was reasonably open on the evidence.
This ground of appeal is not made out.
Ground 3
This ground provides:
The Trial Judge failed to take into account and give sufficient weight to the “assets & Liabilities” by not including $114,000 that was given to the Mother-in-law by the Wife.
The trial judge dealt with this matter at [5] and [118]-[122]. It was not in contest that post-separation the wife had caused $114,000 to be paid by Meredith Pty Ltd to her mother (albeit that company retained $48,371 of those funds, which was recorded in its books as a loan to it by the wife’s mother). The wife’s case was that the $114,000 was repayment of monies which her mother had loaned the parties from time to time, principally to assist the parties in renovating the former matrimonial home. Essentially the trial judge accepted evidence called by the wife that her parents made a contribution to the cost of construction of the former matrimonial home, but could not quantify it. In that regard, the wife’s mother, Ms WW, had sworn an affidavit and was extensively cross-examined by the husband. In that affidavit filed 16 August 2013 she deposed to having contributed monies towards the cost of extension or conversion of the former matrimonial home, for the installation of blinds, shutters and towards the cost of a vertical lift for B.
The only sum conceded by the husband as having been contributed by the wife’s parents to the former matrimonial home was $26,704 for stamp duty at the time the home was acquired.
Ultimately the trial judge refused to either credit the wife for such monies as she had received from her parents by way of contribution made on her behalf, or take into account the payment of $114,000 by the wife to her mother. The exception was in relation to the sum of $48,371, which by the time of trial had been paid by the liquidators to the wife’s mother. The trial judge identified that $48,371 as an asset in the wife’s possession and to be retained by her under his Honour’s orders at [122] of the reasons for judgment.
Given the imprecision which attended the evidence in relation to amounts that were paid by the wife’s mother to the wife – although accepting that his Honour was satisfied that monies were paid – there is no error in the trial judge’s approach.
This ground of appeal is not made out.
Ground 4
This ground provides:
The trial judge has not given appropriate weight to the percentage of the division of assets as a result of the wife having financial resources to the detriment of the Husband.
In his written outline, the father sought to argue this ground by reference to the alleged prolongation of this litigation over two years by the wife “in an attempt to prematurely distribute assets that she had control over” or alternatively that the wife thereby wasted large sums of money in legal and liquidation expenses. In his oral argument, the husband submitted that the company should not have been put into liquidation and the creditors could have been paid.
It is difficult to see these arguments as supporting the ground that the trial judge failed to give appropriate weight to the wife having superior financial resources. Moreover there was no finding that the wife prolonged the conflict for two years, nor any finding as to whether any such delay afforded any benefit to her. The allegations of waste were expressly rejected by the trial judge, at least insofar as they dealt with the $439,000, as we have previously discussed in relation to ground 2. In any event the trial judge did take into account the parties’ financial resources, and in doing so noted that the husband has a significantly higher earning capacity than the wife.
The table of assets demonstrates that the wife will receive the net amount of $627,423 and the husband $418,282.
There is no merit to this ground.
Ground 5
This ground provides:
The Trial Judge erred by allowing the Wife to withdraw over $250,000 + interest held in a controlled monies account (Order of Justice Johnson on 25 September 12) by not stipulating in this Orders dated 6 June 2014 that the money in the controlled monies account should not be withdrawn for at least 28 days after the judgement (06.06.14).
It is not in contention that the controlled monies had in fact been dealt with by the wife by the time the husband filed his appeal on 3 July 2014. A stay application was only filed by the husband on 17 July 2014. It must have been apparent to the husband upon consideration of the judgment and orders dated 6 June 2014 that the controlled monies thereby became the sole property of the wife, and she was able to deal with them immediately. The trial judge was not obliged to quarantine those monies pending any appeal. The parties are entitled to act upon the judgment forthwith as their rights have thereupon crystallised. The husband’s remedy was to bring an urgent application for a stay, and not wait nearly six weeks before acting to try and preserve the status quo as at the date of judgment.
There is no merit in this ground.
Ground 6
This ground provides:
The Trial Judge erred in his application of the law and principle by being unduly cautious about making finds (sic) in relation to the Liquidations of [Meredith] Pty Ltd (in Liquidation) and [A] Pty Limited (in liquidation).
In the husband’s outline and oral argument, this ground of appeal moved substantially to assert positive errors, including authorising the liquidator to pay money to people not entitled to a distribution, and a failure to recognise creditors that were entitled to distribution. There were further complaints in relation to alleged acceptance of “legal privilege” between the wife and the liquidators as being the reason for her assertedly not complying with her disclosure obligations, and finally it was said that the cost of the liquidators were a “waste”.
Dealing with the ground of appeal as argued, it appears as though the liquidators did indeed accept proofs of debt during the course of the liquidation, and on 30 October 2013 the trial judge authorised the liquidators to pay monies in accordance with those accepted proofs. No appeal was brought from those orders, and to the extent that they are now sought to be challenged, we reject that can be done under the guise of the ground now advanced. In any event, far from being “unduly cautious” in relation to the $48,371 which had been paid by the liquidators to the wife’s mother pursuant to the orders of 30 October 2013, in fact his Honour treated it as property of the wife. This aspect of the ground of appeal must therefore fail.
As to the asserted error that the trial judge failed to recognise creditors that were entitled to distribution, we note that the primary obligation is upon the liquidator to accept or reject proofs of debt. Any challenge to the rejection of a creditor’s proof of debt lies under s 511 of the Corporations Act 2001 (Cth). Whilst this Court has jurisdiction under that legislation, no application was made to the trial judge to review the rejection of the proofs of any creditors. Absent such an application, it is difficult to see how the trial judge had the opportunity to “recognise” rejected proofs. This aspect of the ground of appeal must also fail.
As to the asserted acceptance of “legal privilege” between the wife and the liquidator, during the course of his cross-examination of the wife, the husband consistently appeared to not recognise that upon the appointment of the liquidators, under s 530B of the Corporations Act the financial records of a company became subject to their control, and hence were not within the scope of appropriate disclosure by the wife. The trial judge correctly rejected the characterisation of that by the husband as legal privilege. It is not legal privilege, and the only party who appeared to assert that it was, was the husband.
This aspect of the ground of appeal therefore also fails.
The final basis upon which this ground of appeal was argued was the assertion of waste. It was contended by the husband that the liquidation of the companies was itself unnecessary, and hence the costs of the liquidators was a waste of the parties’ assets by the wife. Indeed, during the course of the trial the husband went so far as to suggest to the wife that, rather than appointing liquidators to the companies, she ought simply have permitted them to become deregistered upon failing to pay their annual ASIC registration fees.
In cross-examination the wife contended that, given the claims that were being made against the companies, she determined to place the companies into voluntary liquidation. At [123] of his reasons, the trial judge accepted that when the wife took over the management of the companies, they had significant cash-flow problems and that she did the best that she could in managing the companies. Implicit in this was the rejection of the husband’s assertion that by placing the companies into liquidation, the wife acted unreasonably.
We are satisfied that such a finding was reasonably open to the trial judge. This aspect of the ground of appeal also fails. This ground of appeal fails in totality.
Ground 7
This ground provides:
The Trial Judge erred by giving an inappropriate weight to the percentage of the division of assets and liabilities: The wife sort to circumvent the Family Court by claiming that companies she had controlled owed legal fees.
In support of this ground, the husband contends that the wife had sought to falsely assert a liability to Hunt & Hunt for legal fees, and that he had at trial proved that all their outstanding legal fees were satisfied.
The trial judge dealt with this at [148]-[149] of his reasons, where his Honour observed that there was a “possible claim against the wife by Hunt & Hunt in the approximate sum of $47,000 to $50,000”. His Honour was plainly cautious in accepting that there was any such extant liability, and clearly not satisfied on the balance of probabilities that it was a liability that should be taken into account in determining the net asset position of the parties. Instead his Honour expressly took it into account under s 79(4)(2) (at [156]). He did so concededly in a very general way.
It seems plain to us that the substantial matters which influenced the 5 per cent adjustment for s 79(4)(d)-(g) matters were first, the husband’s superior earning capacity and secondly, the fact that the wife has the primary care of three of the parties’ children, including their child B, who has a disabling condition.
We are not persuaded that his Honour gave inappropriate weight to the prospect of the wife being liable for the Hunt & Hunt debt; the s 75(2) adjustment of 5 per cent could be adequately justified by the disparity of earning capacity and the wife’s care of the three children alone.
This ground of appeal fails in its entirety.
Ground 8
This ground provides:
The Trial Judge made material errors by stating I owned a “… sports car” at item 17 “assets and liabilities” in reasons for judgment dated 6 June 2014.
Ultimately this ground was not pressed by the husband. Plainly it was a simple mistaken description of the husband’s sports car: De Winter & De Winter (1979) FLC 90-605.
We should note that, although it was not raised within the ground of appeal, in fact the trial judge included the husband’s car in two places in the table of assets. The first was at item 7, in relation to the value of R Pty Ltd, of $6,500, and the second was at item 17, under the misnomer “[AAA] sports car”, again at a value of $6,500. The evidence established that the only asset of R was indeed the husband’s EF sports car, and therefore to include it at both item 7 and item 17 was double counting. However in the context of these proceedings, such a mistake is inconsequential and is insufficient on its own to establish error: see De Winter (ibid); Goddard & Patterson [2011] FamCAFC 14 at [91].
Ground 9
This ground provides:
The Trial Judge erred by stating the husband had agreed that the value of [A] Pty Limited value was “$0”.
The value of “$0” was noted by the trial judge at Item 2 in the table of assets and liabilities as “agreed” ([79] of the reasons). His Honour was correct. In the course of submissions on 23 December 2013 the husband conceded in the context of the company that “there is no value any more”.
The husband contended in the appeal that to the extent that the wife had caused the company to become valueless, that should somehow have been included in the balance sheet.
Even ignoring that at trial the husband conceded that the company had no value, this argument has no merit. The company had only ever had year to year contracts for maintenance. Other than pursuant to such contracts, it undertook no work, and by the time of trial, there was no contract between it and any owners’ corporation. There were otherwise no assets owned by the company, which had been placed into liquidation.
His Honour was satisfied that the wife had done the best she could in managing both companies which were, post-separation, under her control, and further, had acted reasonably by placing the companies into liquidation. We have already dealt with the husband’s challenge to that latter matter earlier in these reasons, and have rejected it.
There is no merit in this ground of appeal.
Ground 10
This ground provides:
The Trial Judge failed to take into account and give sufficient weight to the $131,000 paid to the Wife by the Husband when deciding the “assets and Liabilities” or in the alternative the Trial Judge failed to count the $131,000 against the Wife.
The payment of $131,000 occurred when the wife put the former matrimonial home up for auction, and R Pty Ltd was the highest bidder. A deposit of $131,000 was paid but the deposit was forfeited when R Pty Ltd did not complete the contract. At [124] the trial judge identified that the $131,000 thereby received by the wife was used to pay an agent’s commission of about $30,000, but otherwise used to repatriate debt. That is not the subject of any challenge on appeal. To the extent that there was wasted agent’s commission, that could only have been taken into account adversely to the husband, in that R Pty Ltd’s failure to complete led the parties to lose $30,000 which otherwise would not have been lost. To the extent the husband thereby became an unwilling payer of $101,000 of the parties’ debts, that makes no difference to the ultimate net asset position of the parties. It is not contended that the debts to which the $101,000 was devoted would not otherwise have been taken into account in the division of the parties’ property.
Moreover there is something of an absurdity to the husband’s argument. It was not controversial that the $131,000 deposit was derived from R Pty Ltd’s sale of a type BC income stream which would otherwise have been property of the parties available for division in these proceedings. In reality, the husband used $131,000 of the parties’ joint funds to pay the wife, who then used it to discharge the parties’ liabilities. Thus viewed, the fact that the husband had so paid the monies to the wife deserved no weight.
We are not persuaded that this ground of appeal is made out.
Ground 11
This ground provides:
The Trial Judge erred in his application of the law and principle by being unduly cautious about making findings in relation to a contract of sale that the Wife between [Meredith] Pty Limited and [E] Property Management Pty Ltd.
The trial judge dealt with this at [111]-[112] of the reasons. His Honour rejected the claim that the wife had failed to secure a buyer for the assets of Meredith Pty Limited at an appropriate price.
As argued, the husband contended that the trial judge “had a duty to view the contract” in question and “erred by making conclusions about a contract he hasn’t seen.”
In fact there was no evidence before the trial judge of a written contract of sale between Meredith Pty Ltd and E Property Management Pty Ltd; to the contrary, the wife expressly denied there having been any such contract executed.
It appears plain that a gentleman by the name of Mr K, who was associated with E Property Management Pty Ltd, had indeed expressed interest in the purchase of the assets of Meredith Pty Ltd. The affidavit of Mr K to which the husband would now seek to rely was not before the trial judge. The husband had asked the wife to only admit the authenticity of the affidavit of Mr K. In reply dated 23 October 2013 the wife disputed the document and said that she could not recall seeing it.
In the letter dated 23 October 2013 from the wife’s solicitor to the husband (Exhibit 46 before the trial judge) it was explained that the proposed contract of sale to Mr K was not approved by the owners’ corporation and as such there was no contract.
In addition, the assignment of the management rights to any purchaser was subject to the owners’ corporation of the HH Street property giving its approval. That approval could not be obtained, and accordingly the purchase by E Property Management did not proceed. We frankly do not understand the husband’s submission that the trial judge thereby had a duty to view a contract which did not come into existence, and reject it.
To the extent that it is argued that the trial judge erred by not taking into account the price being proposed to be paid by E Property Management Pty Ltd for the assets of Meredith Pty Ltd in determining their value, there is an important point to be made, namely that a significant part of the asset which Meredith Pty Ltd had purchased – being the right to manage individual units within the HH Street property for their owners – had, after the E Property offer, been sold by the husband. This appears to be part of the “type BC income stream” referred to by his Honour at [126] of the reasons. Given that this is specifically the subject of ground 13, we will address it in greater detail there, however ultimately that ground will be seen to be not established.
Finally, there was in evidence before the trial judge a valuation of the management rights of Meredith Pty Ltd over the HH Street property as at March 2012, which valued them at $520,000. His Honour accepted that valuation at [71]. It was exactly that price which the wife obtained for the sale (albeit by way of surrender) of those rights.
We are therefore satisfied that this ground of appeal has no merit.
Ground 12
This ground provides:
The Trial Judge erred by making a finding of a special contribution where no special contribution was pleaded or in fact existed.
There was no finding by the trial judge of any special contribution by the wife, however as argued, the special contribution being referred to by the husband was the trial judge’s observation that the wife was primarily responsible for negotiating with the HH street property strata owners the amount of back-pay. That finding was properly made on the evidence before the judge.
His Honour dealt with that issue at [113] in the course of determining “major issues.” Later at paragraphs [127]-[136] the trial judge reviewed the contributions the parties had made, including noting that “significant monies came into the wife’s hands after separation.”
However at [137] when dealing with post separation contributions, his Honour did not refer to those monies, but rather said that “the wife has had the larger role to play in what I accept are onerous contributions relating to [B’s] day to day care…” His Honour then adjusted the contribution based entitlements by 5 per cent in favour of the wife.
We reject any suggestion that in so doing his Honour made a finding of special contribution in relation to the wife’s negotiation with strata owners the amount of back pay. To the extent that the husband argues that by adverting to it, his Honour thereby must have attributed significant weight to that contribution, that does not appear from the face of the reasons, nor are we prepared to imply it.
This ground of appeal fails.
Ground 13
This ground provides:
The Trial Judge erred by giving weight [sic] the Wife in the percentage of [sic] pool of “assets” mistakenly claiming the Husband “stripped out the [type BC income stream] from the business”.
Two errors are advanced by the husband under this ground, first that the trial judge erred by finding that the husband “stripped out” the type BC income stream from Meredith Pty Ltd, and secondly by giving any such finding weight.
In the husband’s outline, he further alleged an error on the part of the trial judge in refusing to “enter an affidavit from the purchaser of the subject business from [Meredith] Pty Limited stating the opposite.”
At paragraph [111] of the reasons, the trial judge recorded the wife’s contention that the husband had “stripped out the [type BC income stream]” from the Meredith Pty Ltd business. His Honour did not thereafter expressly so find, but rather only rejected the husband’s claim that the wife did not appropriately manage the application for approval of the proposed buyer by the HH Street property body corporate.
Later at [126] the trial judge referred to the sale by H Pty Ltd of a type BC income stream for $250,000.
It does not seem in contest that when the parties, via Meredith Pty Ltd, purchased the management rights in relation to the HH Street property in June 2000, and that they thereby also acquired property management rights in relation to various individual properties within the unit complex. It also does not appear to be in dispute that thereafter, on a date which is unclear but nonetheless prior to separation, the husband contrived to split the acquired business between Meredith Pty Ltd on the one hand, and H Pty Ltd on the other, with the latter taking the “type BC income stream”. Whilst the evidence does not permit any clear determination as to what part of the “type BC income stream” subsequently sold for $250,000 comprised management rights in respect of HH Street units originally acquired in June 2000, it seems likely that at least some of those properties remained within the “type BC income stream”.
The husband cross-examined the wife at length in relation to the sale of the management rights to the HH Street property in April 2012. On numerous occasions during the course of that cross-examination she asserted that the sale price of the business was adversely affected because the “type BC income stream” had been disposed of, and the overall sale price would have been higher had it then also been available for sale. On no occasion did the husband challenge her in relation to that evidence during the course of that cross-examination, nor was there any contrary evidence led by him.
Insofar as it is asserted by the husband that the trial judge refused to “enter an affidavit” of the would-be purchaser of the business of Meredith Pty Ltd, it does not appear from the transcript that in fact the husband made any attempt to rely upon that affidavit. This is the affidavit of Mr K to which we made reference earlier. He attempted unsuccessfully to use it to cross-examine the wife, but no tender was thereafter attempted. Indeed it was never even passed up to the trial judge for him to consider its admission, much less otherwise intimated by the husband as being relied upon by him.
This ground of appeal wholly fails.
Ground 14
This ground provides:
The Trial Judge erred by not taking into account and give sufficient weight to certain relevant facts and adjusting the “assets” in favour of the wife with a 5% weighting for contribution.
The husband expanded upon this ground of appeal in his outline by particularly relying upon the fact that in 1984 he brought into the relationship $5,000 equity in a property, and further that later in the relationship, he was bequeathed $5,000 by his grandmother. He also appears to wish to, in some oblique way, challenge the noting by the trial judge that the wife claimed that her parents loaned the parties $16,000 to pay for their wedding.
This was a long relationship of 24 years. It is well established by the authorities that, over time, the significance of any disparity of initial contributions progressively diminishes: In the Marriage of Crawford (1979) FLC 90-647 at 78,412; In the Marriage of Lee Steere (1985) FLC 91-626 at 80,068 – 80,078 and Pierce v Pierce (1999) FLC 92-844 at 85,881.
At [137] the trial judge determined that the parties’ pre-separation contributions were equal. This ground therefore must necessarily challenge that conclusion. We are not satisfied that the attribution of equal contribution prior to separation is outside the range of reasonable disagreement for the exercise of the discretion. The trial judge gave appropriate weight to all relevant facts.
To the extent that this ground challenges the weight given by the trial judge to the contribution made by the wife post separation the decision of the judge was entirely consistent with the evidence.
This ground of appeal fails.
Ground 15
This ground provides:
The Trial Judge erred by not adjusting the “asset” value of the [Suburb S] property by $131,000.00.
The trial judge at [82] rejected a late attempt by the husband to withdraw a concession that the former matrimonial home had an agreed value of $1,400,000. During argument before us, it became clear that what the husband was trying to assert by this ground was that the value of the former matrimonial home had increased between the time the husband forfeited the $131,000 deposit, and the time of trial. We have dealt with the way in which the forfeited deposit was spent by the wife earlier in these reasons and do not stay to repeat it. It is not correct to say that by virtue of the forfeited deposit, the increased value of the property should be viewed as property of the husband solely. Further, the $131,000 forfeited was legitimately a matter to be considered by the Court under the question of contribution based entitlement, which his Honour did.
This ground of appeal is not made out and therefore fails.
THE ADULT CHILD MAINTENANCE APPEAL
Ground 16
This ground provides:
The Trial Judge erred in by finding that [B]’s proper needs are in the sum of $400 per week.
The question of proper needs only arose late in submissions on the last day of the trial. It certainly was not the subject of cross-examination of the wife by the husband. It is therefore unsurprising that the Court identified some imprecision in the wife’s estimates, and at [168] noted that “she has not provided proper detailed admissible evidence in relation to what [B] actually costs her weekly.”
At [162] his Honour said this in relation to B:
At the age of two [B] was diagnosed with Rett Syndrome. In her Affidavit, the wife explains the major symptom of this condition is cerebral palsy including an intellectual and developmental delay. [B] also suffers complications with her digestive system and is tube-fed through a gastronomy button. [B] requires full-time care and assistance in all aspects of her life as a result of this condition… There is no issue between the parties as to the level of [B’s] disability in terms of her dependency upon her parents and the requirements of s 66L of the Act are easily satisfied…
At [173] the trial judge said:
Absent specific and detailed evidence and doing the best I can with the evidence contained in the wife’s financial statement, I am prepared to accept that the following expenses are being paid by the wife for [B]:
Food $50.00
Household supplies $5.00
House repairs $1.00
Electricity $5.00
Clothing and shoes $3.00
Children’s activity $3.00
Mental/dental/optical $7.00
Entertainment and hobbies $4.00
Holidays $19.00
Chemist and Pharmaceuticals $9.00
Gifts $1.00
Hairdressing/toiletries $1.00
$135.00
To this his Honour added one fifth of the wife’s rental costs, being $271.00, and rounded the total down to $400.00 per week, as being the quantification of B’s proper needs. We are not satisfied that such a finding was not reasonably open on the evidence. Indeed we should observe that, even accepting that his Honour was doing the best he could with very limited evidence, some of those individual components seem quite modest, for instance, his Honour’s estimate that B’s clothing and shoes for one year would only cost $156.00. The same observation could be made in relation to other items. That is meant as no criticism of his Honour; clearly he was attempting to do the best that he could on limited materials. However it does tell against the criticism of the husband made by this ground of appeal that B’s proper needs are in a sum less than $400.00 per week. Moreover, given the marked disparity in the parties’ incomes, even if her proper needs were less than $400.00, it would not necessarily follow that the husband’s liability to contribute to them would automatically decrease from the $199.00 ordered.
There is no merit in this ground of appeal and it fails.
CONCLUSION ON APPEAL
No ground of appeal has been established. The husband’s appeal will be dismissed.
COSTS
The appeal has wholly failed. Pursuant to his Honour’s orders, the husband will retain net assets of a value of $418,282 (accepting that it may vary if the former matrimonial home is sold by the wife pursuant to the machinery provisions of the orders) and the wife assets worth $627,423. The husband has a greater earning capacity than the wife, being able to earn an income of about $100,000 from 21 hours of work per week. Indeed to the extent that he works beyond that, it is related to an internet commercial business designed to attract buyers from Asia, which he expects to be profitable.
As his Honour noted at [142] the wife has a comparatively meagre earning capacity of $311.00 gross per week in a hospitality role.
Weighing these factors in the balance, we are of the view that they justify a departure from the usual rule that each party should bear their own costs. The husband did not seek to resist an order should the appeal be dismissed. There will be an order that the husband pay the wife’s costs of and incidental to the appeal to be agreed or assessed.
I certify that the preceding one hundred and fourteen (114) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 21 November 2014.
Associate:
Date: 21 November 2014
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