MIB v JAP
[2019] WASCA 175 (S)
•15 NOVEMBER 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: MIB -v- JAP [2019] WASCA 175
CORAM: MURPHY JA
BEECH JA
VAUGHAN JA
HEARD: 24 OCTOBER 2019
DELIVERED : 8 NOVEMBER 2019
FILE NO/S: CACV 105 of 2018
BETWEEN: MIB
Appellant
AND
JAP
Respondent
ON APPEAL FROM:
Jurisdiction : FAMILY COURT OF WESTERN AUSTRALIA
Coram: MORONI AJ
File Number : PTW 4280 of 2016
Catchwords:
Family law - Property orders - De facto relationship - Whether judge erred in evaluation of the contributions made by each party - Turns on own facts
Legislation:
Family Court Act 1997 (WA), s 205ZG
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | M R Berry SC |
| Respondent | : | J B Hedges SC |
Solicitors:
| Appellant | : | Carr & Co |
| Respondent | : | O'Sullivan Davies Lawyers |
Case(s) referred to in decision(s):
Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301
Bondelmonte v Bondelmonte [2017] HCA 8; (2017) 259 CLR 662
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424
Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197
Dodds v Kennedy [2011] WASCA 32
H v P [2011] WASCA 78
House v The King [1936] HCA 40; (1936) 55 CLR 499
Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605
Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513
Proudlove v Burridge [2017] WASCA 6; (2017) 79 MVR 257
Smart v Power [2019] WASCA 106
Williams v Minister Aboriginal Land Rights Act 1983 [2000] NSWCA 255; [2000] Aust Torts Reports 81-578
JUDGMENT OF THE COURT:
Introduction
The appellant, Ms B, and the respondent, Mr P, were in a de facto relationship from 2005 to 2014. After the relationship ended, both parties sought orders under pt 5A of the Family Court Act 1997 (WA) so as to sever their financial relationship. Their assets had a total value of just under $4 million. Mr P sought orders with the effect of dividing the net property and superannuation interests equally; Ms B sought a 70:30 division in her favour.
The primary judge ordered that the net property and superannuation interests be divided 55:45 in Ms B's favour.
Ms B appeals against that decision on a single ground with seven particulars. The ground attacks the judge's evaluation of the contributions made by the parties as being of equal value. All of the particulars attack intermediate findings of fact or observations, made by the primary judge in the course of that evaluation, concerning three assets. Particulars 1 ‑ 6 concern findings of fact and observations made in respect of a construction company (referred to as 'BDC'), a company of which Mr P was, at the time of trial, the sole director and shareholder. Particular 7 concerns findings of fact and observations made in relation to Ms B's portfolio of ASX listed shares and a property registered in her sole name.
For the reasons that follow, in our opinion, Ms B has not demonstrated any ground for interfering with the primary decision.
Factual background
The following facts were found by the primary judge and are not disputed on appeal.
Ms B and Mr P were in a de facto relationship from mid-2005 to September 2014.[1]
[1] P v B [2018] FCWA 200 (primary reasons) [18] - [19].
At the time of trial, Ms B was 56 years old and Mr P was 49 years old. Ms B was a casual part-time administration assistant who worked about 15 hours a week and lived in rental accommodation in Albany. Mr P was a registered builder and full-time director of BDC. He lived in rental accommodation in Booragoon.[2]
[2] Primary reasons [16] - [17], [22].
Ms B has a daughter born on 16 June 1991 and a son born on 8 April 1993, both of whom lived with the parties for part of the de facto relationship.[3]
[3] Primary reasons [20], [119]; ts 11, 66; GAB 3, 220.
By way of overview, the parties each owned property of significant value when the relationship commenced. During the de facto relationship, the parties bought and sold several properties, Mr P operated BDC and Ms B inherited substantial sums of cash from her late father.[4] The primary judge summarised the position as follows:[5]
After the de facto relationship commenced the parties began to intermingle their finances. They embarked on an ambitious investment program and had recourse to substantial bank debt facilities secured over properties they acquired and over properties standing in the sole name of [Ms B]. There was a common intention to maximise their wealth for their joint benefit and future financial security.
[4] Primary reasons [21] - [22].
[5] Primary reasons [89].
Statutory framework
Part 5A of the Family Court Act 1997 (WA) (the Act) deals with de facto relationships.
On an application for property settlement between de facto partners, the considerations to be taken into account by the court are prescribed by s 205ZG of the Act.[6] Section 205ZG(1) provides:
In proceedings with respect to the property of de facto partners, or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the partners to make, for the benefit of either or both of the partners or a child of the de facto relationship, such settlement or transfer of property as the court determines.
The court must not make an order under s 205ZG(1) unless it is satisfied that, in all the circumstances, it is just and equitable to make the order (s 205ZG(3)).
[6] FDR v JDL [No 2] [2016] WASCA 231 [25].
Section 205ZG(4) of the Act provides that, in considering what order (if any) should be made in proceedings with respect to the property of de facto partners, the court must take into account matters there stipulated. Relevantly, those matters are:
(1)the financial contribution made directly or indirectly by or on behalf of a de facto partner to the acquisition, conservation or improvement of any property of the de facto partners or either of them (s 205ZG(4)(a));
(2)the contribution, other than a financial contribution, made directly or indirectly by or on behalf of a de facto partner to the acquisition, conservation or improvement of any property of the de facto partners or either of them (s 205ZG(4)(b));
(3)the contribution made by a de facto partner to the welfare of the family constituted by the de facto partners and any children of the de facto partners, including any contribution made in the capacity of homemaker or parent (s 205ZG(4)(c)); and
(4)the matters referred to in s 205ZD(3) so far as they are relevant (s 205ZG(4)(e)).
The matters referred to in s 205ZD(3) of the Act which are relevant for present purposes are:[7]
(1)the age and state of health of each of the de facto partners (s 205ZD(3)(a));
(2)the income, property and financial resources of each of the de facto partners and the physical and mental capacity of each of them for appropriate gainful employment (s 205ZD(3)(b));
(3)commitments of each of the de facto partners that are necessary to enable the partner to support himself or herself (s 205ZD(3)(d)(i));
(4)a standard of living that in all the circumstances is reasonable (s 205ZD(3)(g)); and
(5)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account (s 205ZD(3)(o)).
[7] Primary reasons [158].
Primary decision
The primary judge stated that each of the parties sought final orders under s 205ZG(1) of the Act. What separated the cases of the parties was not whether any further s 205ZG(1) orders should be made, but, rather, what form of further s 205ZG(1) orders should be made. In those circumstances, the primary judge found that it would be just and equitable to make an order under s 205ZG(1) of the Act.[8]
[8] Primary reasons [26] - [29].
His Honour approached the task prescribed by s 205ZG(1) by reference to the following four-step process:[9]
(1)identification of the assets and liabilities of the parties and of their legal and equitable interests in such assets;
(2)assessment of the contributions made by each of the parties in terms of s 205ZG(4)(a) - (c) of the Act;
(3)assessment of the factors set out in s 205ZG(4)(d) - (g) of the Act, including those matters provided in 205ZD(3), insofar as they were relevant; and
(4)consideration of whether the implementation of the proposed final orders would effect a just and equitable outcome in all the circumstances.
[9] Primary reasons [30].
In the course of this four-step process, the primary judge made findings in relation to a number of assets, liabilities and contributions. It is not necessary to detail all aspects of the judge's findings. There is no challenge to steps (1), (3) or (4). The finding the subject of this appeal is step (2), namely his Honour's conclusion that the parties' contributions should be treated as of equal value. The ground is framed by reference to particulars which relate to three specific assets, namely:
(1)BDC;
(2)a property in Broome (the Broome property); and
(3)Ms B's portfolio of ASX listed shares.
Step (1): assets and liabilities of the parties
Mr P was BDC's sole director and shareholder. A single expert, engaged by both parties and not required by either party for questioning,[10] valued Mr P's shareholding in the company at $1,168,000 as at 30 June 2018. This valuation of BDC was conducted on a net tangible asset backing basis.[11] It was common ground at trial that $1,168,000 was the value of Mr P's shareholding in BDC, subject to adjustment up or down if the sale of a particular property in which BDC had an interest netted more or less than its valuation.[12]
[10] Primary reasons [14] ‑ [15].
[11] Primary reasons [44] - [46].
[12] Primary reasons [55].
It was also common ground at trial that:
(1)the value of the Broome property, of which Ms B was the sole registered proprietor, was $450,000;[13] and
(2)the value of Ms B's portfolio of ASX listed shares was $83,501.[14]
[13] Primary reasons [35], [57].
[14] Primary reasons [58](e).
Having made findings as to all assets and liabilities, the primary judge found that the total value of the property interests of the parties was an estimated $3,864,181.[15]
[15] Primary reasons [72].
There is no challenge to any of the judge's findings as to the identity or value of the parties' assets and liabilities.
Step (2): contributions of the parties
The primary judge stated that the task for a court, in assessing the contributions of the parties, is to stand back and take into account all of the contributions, of all relevant types, made over the whole of the relevant period.[16] In the present case, his Honour considered that this task involved analysing the starting financial position of each party in mid-2005 and then taking into account and evaluating, in a broad manner, those contributions of each relevant type made between mid‑2005 and September 2018.[17] His Honour stated that counsel agreed that a global approach should be taken to the assessment of contributions overall.[18]
[16] Primary reasons [76].
[17] Primary reasons [78].
[18] Primary reasons [79].
There is no challenge to the general approach outlined by the primary judge.[19]
[19] Appellant's submissions [4]; appeal ts 5 - 6.
The primary judge noted that it was common ground that when the de facto relationship commenced:
(1)Mr P held 50% of the issued shares in BDC, a shareholding worth $50,000;[20]
(2)Ms B was the sole registered proprietor of the Broome property;[21] and
(3)Ms B held ASX listed shares worth about $20,000.[22]
[20] Primary reasons [80](a), [82]. The other 50% was then held by Mr P's business partner: GAB 6, [37](b).
[21] Primary reasons [84](a)(i).
[22] Primary reasons [84](d).
The primary judge also referred to other assets held by Ms B and Mr P at the commencement of their relationship and the eventual disposition of those assets.[23]
[23] Primary reasons [80] - [81], [84] - [87].
His Honour considered that after the de facto relationship commenced the parties formed what might fairly be described as a true economic partnership; they borrowed heavily together and they invested heavily together.[24] His Honour explained:[25]
[Ms B] was employed by [BDC] for a significant period of time as a bookkeeper. Importantly, she allowed properties registered in her name to be used as security for borrowings undertaken by [BDC]. The parties presented in the trial as highly motivated and hard-working individuals. It is likely that when the relationship was intact each party fulfilled the role expected of him/her by the other party. Neither party made any criticism of the work ethic of the other party.
[24] Primary reasons [92] - [93]. See also [89].
[25] Primary reasons [93].
The primary judge noted that Ms B's father passed away on 3 August 2008 and that Ms B received, as a beneficiary under his will, cash of almost $500,000, a half-share in a farming property (later realised for $924,050)[26] and a parcel of various ASX listed shares worth, in total, just over $50,000.[27]
[26] Primary reasons [98].
[27] Primary reasons [94], [97](b).
His Honour summarised the competing cases of the parties as follows:[28]
[Ms B's] case is, in essence, that the inequality in starting financial positions favouring her case and the extent of the inheritance she received from her late father's estate are compelling circumstances which should lead to a finding that she has made s 205ZG(4)(a)-(c) contributions of much greater value than those made by [Mr P].
For his part, [Mr P] does not deny that [Ms B] commenced the relationship with property of greater value than he introduced and he does not deny that [Ms B's] inheritance was substantial and was used for joint benefit.
However, it is [Mr P's] case that his initial contributions were still significant and that the financial contributions he made during the relationship were out of the ordinary. He argues that, together, those factors balance out all of those direct financial contributions made by [Ms B].
[28] Primary reasons [100] - [102].
In relation to BDC, the primary judge stated:[29]
[29] Primary reasons [103] - [110], [112] - [113], [116].
[103]… [Mr P] points to the evidence that he held a 50% interest in [BDC] which has, over time, grown in value from $50,000 to the provisionally agreed current value of $1,168,000.
[104]Moreover, [Mr P] points to the evidence of very high levels of income generated by [BDC] which, it is accepted, were used to service debt and otherwise for the joint benefit of the parties generally.
[105]At paragraph 131 of [Mr P's] trial affidavit there is a table setting out the profit before income tax generated by [BDC] for the financial years ended 30 June 2006 - 2015 (inclusive). This part of [Mr P's] evidence was not challenged and so is accepted in its entirety.
[106][Mr P] places particularly heavy reliance on the evidence of the very high levels of gross profit generated by [BDC] in the financial years ended 30 June 2011 - 2014 (inclusive).
[107][Mr P] explained that, during these particular years, [BDC] was the successful tenderer in relation to a number of very lucrative government building contracts in the Broome area. Those contracts have now ended and are unlikely to be replaced by similar contracts.
[108]Over the four financial years in question, [BDC] generated a total profit, before tax, of $6,604,961. This is obviously a very substantial figure.
[109]So, assuming that company tax at the rate of 30% was paid in each of those four financial years, the total after tax profit generated by [BDC] in those four years was $4,623,472. This is still a very large figure.
[110]Although [BDC]'s profits in the financial years ended 30 June 2006 and 2009 were quite modest, it has to be said that, considered in combination, [BDC] was also very profitable in the financial years ended 30 June 2007, 2008 and 2015.
…
[112]Although [Ms B] was a paid employee of [BDC] for several years and she allowed her property to be used as security for [BDC]'s borrowings, the evidence overwhelmingly indicates that the financial performance of [BDC] is largely a function of the application of the trade and other skills of [Mr P]. That is, it is reasonable to treat the profits generated by [BDC] as being mainly attributable to the efforts and knowledge of [Mr P]. It was not a part of [Ms B's] case that, operating alone, she would have had the expertise and experience to conduct the type of business which has been carried out by [BDC], particularly in those four extremely profitable financial years referred to above.
[113]Moreover, it ought not be overlooked that the successful operations of [BDC] enabled substantial payments into the superannuation accounts of each of the parties, that is, payments over and above [BDC]'s liability under the superannuation guarantee levy arrangements. The current reasonably substantial superannuation account balances of the parties are to a significant extent a product of payments made by [BDC].
…
[116][Mr P] was able to cause some of the resources of [BDC] to be used for the personal benefit of the parties, for example, by carrying out building maintenance on the homes occupied by the parties and on at least one of the investment properties. [BDC] also carried out some work at the [Broome] property and its employees provided administrative support to the parties personally. (emphasis added)
Particulars 1, 5, 6 and 7(d) challenge various parts of the judge's reasoning in this passage.
In considering the parties' closing submissions, the primary judge referred to BDC, the Broome property and Ms B's ASX listed shares. His Honour observed:[30]
[122]For her part, [Ms B] contends that considerable weight should be placed on the circumstance that many of the valuable items of property in the pool were introduced by her at the outset. That is, the [Broome] property was owned outright by [Ms B] when the de facto relationship formed and her parcel of ASX listed shares is comprised of stocks she either owned when the parties began to live together or were inherited from her late father.
[123]However, whilst that is true, it can also be said that [Mr P] introduced his shareholding in [BDC] and that asset, on its own, now comprises about 25% of the total value of the pool.
[124]On reflection, it is considered that there is merit in the submission of [Mr P's] counsel to the effect that, in the particular circumstances of this case, not much weight should be placed on the fact that some of the items of property owned from the outset remain intact. That is, it is accepted that it is reasonable to say that the current composition of the asset pool is to a large degree a matter only of historical accident. A number of assets have been bought and sold and some have been retained. It is highly unlikely that the parties commenced their de facto relationship with an intention to keep assets away from the reach of the other in the event of the relationship breaking down. They did, from time to time, what they thought was commercially sensible to do.
[125][Mr P] has built the value of his shareholding in [BDC] to a very substantial level, with the assistance of [Ms B]. For her part, [Ms B] has simply retained the [Broome] property and ASX listed shares because they have provided capital growth and a reasonable level of income. The [Broome] property was, for a very long time, leased out at a fairly high rent. (emphasis added)
Particulars 6 and 7 challenge some of the judge's reasoning in this passage.
[30] Primary reasons [122] - [125].
His Honour noted that the parties shared an ANZ equity line of credit, which was secured against the Broome property.[31] The judge found that there was a substantial amount of jointly earned income paid into the line of credit account and that substantial joint expenses were paid from it. The parties also calculated the amount of money they paid and withdrew separately from each other over the period from 1 September 2014 to 30 June 2016. Adopting Ms B's more conservative calculations, his Honour found that Mr P paid $88,193 more into the line of credit than he withdrew whereas Ms B withdrew $47,521 more than she paid in, which his Honour characterised as 'a significant factor favouring the case of [Mr P]'.[32]
[31] Primary reasons [35], [126](a)
[32] Primary reasons [128] - [134].
After dismissing a further argument of Ms B that Mr P had enjoyed a higher standard of living than her post-separation, the judge returned to the issue of the joint equity line of credit. His Honour stated that '[t]he significance of the evidence about the payments into and out of the joint line of credit is that it is part and parcel of [Mr P's] case that he has contributed post-separation by continuing to work full-time in the business operated by [BDC] and has, by and large, used the profits so generated for joint benefit'.[33] This observation is challenged in particular 4.
[33] Primary reasons [143].
The primary judge stated that it was necessary at this point to move from the qualitative evaluation of contributions to a quantitative reflection of such evaluation; in other words, it was necessary to take the 'leap' from words to figures.[34] His Honour noted again that the parties' de facto relationship was 'a true economic partnership'.[35] His Honour then analysed and quantified the contributions of Ms B and Mr P in the following way:[36]
[147][Ms B] received an inheritance which, very broadly, provided a capital injection of about $1,475,000. In addition, [Ms B] injected a further $710,000 or so (net of capital gains tax) from the sale of [two other properties]. Given the very nature of an inheritance from a very close family member, it is not difficult to understand how, from a psychological viewpoint, [Ms B] would be minded to seek to 'quarantine' her inheritance. Her approach is perfectly understandable.
[148]That said, to be fair to [Ms B], her counsel correctly acknowledged in his closing submissions that it would be an error for a court to evaluate [Ms B's] direct financial contributions on the basis that she should have 'dollar for dollar' reimbursement out of the asset pool before any consideration is given to [Mr P's] entitlement.
[149]From [Mr P's] perspective, he did commence the relationship with significant net equity in a property and, most importantly, he held a 50% interest in [BDC] which has grown into a 100% interest valued at over $1 million.
[150]The evidence of the profits generated by the company is compelling. As noted above, in one four year block, [BDC] generated a total after tax profit of over $4.6 million. Whilst one or two years were quiet, [BDC] in the other years still produced very respectable results.
[151][Mr P] has continued to operate [BDC] since the end of the de facto relationship, and, even on [Ms B's] own calculations, he has, via [BDC], serviced the line of credit debt to a significantly greater degree than [Ms B].
[152]Apart from the largest of the individual financial contributions referred to above, which occupied most of the focus of the parties in the trial, it needs to be remembered that each party made a host of other important contributions. Each party worked hard for the common good and each contributed to the extent expected of him/her by the other party.
Particulars 2, 3 and 6 challenge aspects of the primary judge's reasoning in this passage.
[34] Primary reasons [145].
[35] Primary reasons [146].
[36] Primary reasons [147] - [152].
Ultimately, the primary judge found that the contributions made by the parties were of equal value.[37] That conclusion is challenged by the sole ground of appeal.
Step (3): s 205ZD(3) factors
[37] Primary reasons [153].
The primary judge considered, in respect of s 205ZG(4)(d) of the Act, that no order likely to be made would have any material impact upon the earning capacity of either party.[38] His Honour did not refer to s 205ZG(4)(f) ‑ (g) of the Act. As to s 205ZG(4)(e), his Honour considered that the matters in s 205ZD(3) relevant to Ms B and Mr P's case were sub-paragraphs (a), (b), (d)(i), (g) and (o), set out at [13] above. It is not necessary to set out the judge's findings in detail.
[38] Primary reasons [155].
Ultimately, his Honour concluded that there was 'clearly a case for an adjustment in [Ms B's] favour to reflect both her lesser superannuation interest and her inferior earning capacity'.[39] His Honour continued:[40]
However, whenever a court makes an adjustment at this stage of the four-step process it must also be mindful of the actual dollar effect of such an adjustment. This is particularly so in cases, such as this case, where the asset pool is quite substantial.
On reflection, it has been determined that there should be an adjustment in [Ms B's] favour to the extent of 5% of the total value of the pool.
In reaching this conclusion it must be emphasised that the decision to adjust by 5% was not made in isolation. It is very much linked to the finding that the contributions of the parties of all relevant types should be found to carry equal value. It should not be assumed that if a more favourable finding, from [Ms B's] perspective, was made on the subject of contributions then an adjustment in her favour of 5%, or any adjustment at all, would necessarily have been made.
Step (4): just and equitable outcome
[39] Primary reasons [186].
[40] Primary reasons [187] - [189].
The primary judge considered that, in all of the circumstances, a 55:45 division of the parties' property interests in Ms B's favour would effect a just and equitable outcome for the parties.[41] His Honour's orders reflected this apportionment.
[41] Primary reasons [190], [197].
Ground of appeal
The appellant's case, as filed, contained seven grounds of appeal. All of those grounds related to particular aspects of the judge's reasoning and findings as to the parties' contributions, but none of them challenged the judge's critical conclusion, at reasons [153], that the parties' contributions should be considered to carry equal value. In the course of argument, the appellant accepted, in effect, that this was so, seeking and obtaining leave to amend the grounds of appeal.[42] After the amendment, there is a single ground of appeal. That ground contends that the primary judge erred in assessing contributions equally at reasons [153], and thereby the primary judge's discretion miscarried. The ground relies on seven particulars, constituted by what were originally the seven grounds of appeal.
[42] Appeal ts 13, 17 - 18, 19.
We will set out the particulars later in these reasons. Broadly speaking, the effect of the particulars is as follows:
(1)Particulars 1 - 4 contend that the primary judge failed to take into account BDC's financial losses in the three financial years post-separation.
(2)Particular 5 contends that the primary judge erred in fact or alternatively failed to give adequate reasons in finding that the financial performance of BDC was largely a function of the application of Mr P's trade and other skills.
(3)Particular 6 contends that the primary judge failed to adequately identify and evaluate Ms B's direct and indirect financial contributions to BDC.
(4)Particular 7 contends that the primary judge erred in assessing the materiality of Ms B's initial contributions of the Broome property and the ASX listed shares.
The nature of the appeal
A decision made under s 205ZG(1) of the Act, like a decision made under s 79 of the Family Law Act (Cth), is a discretionary decision to which the principles in House v The King[43] apply.[44] The appellant accepted,[45] and it was not in dispute in this case, that those principles also apply to the judge's evaluative decision as to the parties' respective contributions for the purposes of s 205ZG(4)(a) ‑ (c).
[43] House v The King [1936] HCA 40; (1936) 55 CLR 499.
[44] Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605, 610, 621 - 622, 634; Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513, 517 - 518, 535; Bondelmonte v Bondelmonte [2017] HCA 8; (2017) 259 CLR 662 [31].
[45] Appeal ts 3, 27.
The weight to be given to particular considerations is generally a matter for the court exercising the discretion. An appellate court will not interfere with an exercise of judicial discretion on the basis of a failure to give adequate weight to a relevant consideration unless it can be shown that the failure really amounts to a failure to exercise the discretion actually entrusted to the court.[46]
[46] Mallet (614); Dodds v Kennedy [2011] WASCA 32 [4].
Even if the judge's evaluative decision as to the parties' respective contributions for the purposes of s 205ZG(4)(a) ‑ (c) were regarded as an inference of fact, which is not sufficiently analogous to a discretionary decision so as to attract the principles in House v The King, it would nevertheless be one depending upon inferences drawn, or characterisations made, by the primary judge. It would thus be one to which the observations in Williams v Minister Aboriginal Land Rights Act 1983[47] apply. In that case, Heydon JA (Spigelman CJ & Sheller JA agreeing) said, in relation to appellate challenges of that kind that an appeal court:[48]
[I]s in the same position as that ascribed to the Full Federal Court in Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359 at 369 per Beaumont and Lee JJ:
'... the court is not obliged to proceed to make new findings of fact on all relevant issues and discharge the judgment appealed from if those findings differ from those of the trial judge and do not support the judgment. The court must be satisfied that the judgment of the trial judge is erroneous and it may be so satisfied if it reaches the conclusion that the trial judge failed to draw inferences that should have been drawn from the facts established by the evidence. The court is unlikely to be satisfied if all that is shown is that the trial judge made a choice between competing inferences, being a choice the court may not have been inclined to make but not a choice the trial judge should not have made. Where the majority judgment in Warren v Coombes [(1979) 142 CLR 531] (at 552‑553) states that an appellate court must not shrink from giving effect to its own conclusion, it is speaking of a conclusion that the decision of the trial judge is wrong and that it should be corrected. (See also Edwards v Noble (1971) 125 CLR 296, per Barwick CJ (at 304), per Menzies J (at 308‑309) and per Walsh J (at 318‑319).)'
In that regard, the evaluative nature of the finding as to the parties' contributions, based on the whole of the evidence, gives rise to a degree of appellate caution, given the trial judge's advantage in hearing the evidence and receiving the evidence in its entirety over a longer period.[49]
[47] Williams v Minister Aboriginal Land Rights Act 1983 [2000] NSWCA 255; [2000] Aust Torts Reports 81-578 [60].
[48] Williams [60]. This passage has been applied many times by this and other courts. See H v P [2011] WASCA 78 [43] ‑ [44]; Proudlove v Burridge [2017] WASCA 6; (2017) 79 MVR 257 [127] and the cases there cited.
[49] Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 [24] ‑[29]; Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301 [7] ‑ [10], [47] ‑ [51]; Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197 [116] ‑ [118]; Smart v Power [2019] WASCA 106 [103], [106].
The outcome of the appeal
The sole ground of appeal challenges the judge's finding that the parties' contributions were of equal value. Thus, the appellant must show appellable error in that finding. In order to do that, the appellant must:
(1)make good one or more of the specific complaints in particulars 1 ‑ 7; and
(2)demonstrate that such specific complaints as are made good were material to the judge's conclusion of equal contributions, thus justifying appellate interference with it.
For the reasons that follow, the appellant fails at the first hurdle - none of the specific complaints in particulars 1 ‑ 7 has been made out. Further, and in any event, none of the complaints has been shown to be material to the judge's ultimate conclusion of equal contributions.
Particulars 1 - 4: failure to consider BDC's post‑separation losses
Particulars 1 - 4 are in the following terms:
1.The primary judge erred in failing to take into account materially relevant evidence when assessing the weight to be attached to the profits before income tax of [BDC], at reasons [105] - [110], by failing to consider the profits before income tax of [BDC] for the financial years ending 30 June 2016 (loss of $637,772), 30 June 2017 (loss of $735,463) and 30 June 2018 (loss of $56,108).
2.The primary judge erred in fact in finding, at reasons [150], 'Whilst one or two years [profit] were quiet, [BDC] in the other years still produced very respectable results' without reference to the financial years ending 30 June 2016, 30 June 2017 and 30 June 2018.
3.The primary judge erred in failing to take into account materially relevant evidence when discussing the operations of [BDC] since the end of the de facto relationship (September 2014), at reasons [151], by failing to refer to the financial years ending 30 June 2016, 30 June 2017 and 30 June 2018.
4.The primary judge erred in fact in finding, at reasons [143] [and read with reasons [126] onwards, that from 1 September 2014 until 30 June 2016] [BDC] '… has, by and large, used the profits so generated for joint benefit' without reference to or analysis of the losses incurred in the financial years ending 30 June 2016, 2017 and 2018.
In broad summary, particulars 1 ‑ 4 all complain that the primary judge failed to take into account BDC's financial losses in the three financial years following the parties' separation. It is not in doubt that the evidence before the primary judge established that BDC suffered financial losses in those years in the sums of $637,772 (2015/2016), $735,463 (2016/2017) and $56,108 (2017/2018).[50]
[50] GAB 120, 124, 132, 136, 441, 445.
By way of preliminary observation, particulars 1 and 3 are each framed as a failure to 'take into account materially relevant evidence'. Similarly, as will be seen, particulars 6 and 7 are each framed as a failure to 'take into account' certain evidentiary material. Ms B submits that, for the purposes of establishing House v The King error, a failure to take into account materially relevant evidence is a failure to take into account a relevant consideration.[51]
[51] Appeal ts 5.
In our view, particulars and submissions framed in this way blur the distinction between two different species of appellable error in a discretionary decision. The first is where the judge mistakes the facts; in other words, where there is an error in the judge's fact‑finding. Whether such an error is demonstrated invites attention to the judge's consideration and evaluation of the evidence relating to the impugned finding (or to the finding which it is contended the judge should have made). The second is the failure to take into account a relevant consideration. That involves the decision‑maker excluding from consideration a fact, circumstance or consideration that is (mandatorily) relevant to the discretion being exercised. It is difficult to see any of particulars 1, 3, 6 and 7 as a complaint of that character. In any event, as explained below, assessed on their own terms, the particulars fail on their merits.
Ms B's submissions
Ms B submits that in assessing the parties' contributions, the primary judge failed to refer to BDC's losses in the three financial years post-separation. She refers to the judge's identification of the necessary task of assessing contributions from mid‑2005 until September 2018.[52] She also points to the judge's reference to profits generated post-separation, submitting that the evidence does not disclose such profits having been made.[53]
[52] Appeal ts 5 - 6, referring to primary reasons [78].
[53] Appellant's submissions [9]; appeal ts 8; particular 4, all referring to primary reasons [143].
She submits that the judge must be taken to have failed to take into account the significant losses by the business post-separation.[54] Further, the judge failed to explain why such weight was placed on the financial years from 2011 to 2014 in light of the subsequent losses.[55]
[54] Appellant's submissions [10]; appeal ts 7, 8.
[55] Appellant's submissions [10].
In support of particular 4, Ms B submits that the judge referred to BDC's 'very respectable results' in the 'other years' (being the years apart from 2011 to 2014), indicating that he overlooked the significant losses in the 2016, 2017 and 2018 financial years.[56]
Disposition
[56] Appellant's submissions [14].
In our view, reading the judge's reasons as a whole, it cannot be said that he failed to take into account BDC's losses in the 2016, 2017 and 2018 financial years.
The judge acted upon the opinion of the single expert, whose opinion was not challenged by either party. The expert referred to, and relied upon, BDC's trading losses in the 2016, 2017 and 2018 financial years. He observed that BDC's earning forecast was uncertain because of those losses, and therefore BDC should be valued on the basis of net assets rather than future maintainable earnings.[57] The judge noted that the expert valued BDC on a net tangible asset backing basis.[58] The judge's reliance on the expert report, and his reference to the basis upon which the expert valued BDC, indicates that he was cognisant of BDC's losses in the 2016, 2017 and 2018 financial years.
[57] Expert report of Duncan Calder dated 4 September 2018, GAB 330, 343 - 345.
[58] Primary reasons [46].
Particular 1 challenges the judge's reasoning at [105] ‑ [110], set out at [28] above. Those paragraphs must be read in their context. In them the judge was considering, and responding to, Mr P's evidence concerning profits generated in the financial years ending 2006 to 2015 inclusive, with particular focus on the financial years ending 2011 to 2014, in which high levels of gross profit were generated. The years 2006 to 2015 were evidently focused on by Mr P as the years in which the parties were in their relationship. He contended that the cash flow generated by BDC's trading sustaining the profits made by the company and paid to Mr P as dividends or loans, contributed substantially to the parties during the period of their relationship. The judge accepted that submission, as was well open to his Honour. BDC's losses in subsequent years did not detract from, or bear on, this conclusion. While BDC's profits were distributed to the parties and thus gave rise to contributions, the same is not true of its losses. The losses remained in BDC; they did not become the parties' losses. The only effect of BDC's losses upon the parties was their effect on the value of BDC. As already noted, that was not overlooked by the judge. The judge's failure to mention the subsequent losses in this context does not reveal error.
Each of particulars 2 and 3 impugns a single paragraph of the reasons: respectively, [150] and [151], set out at [32] above. Read in its context, what is said in [150] is evidently a reference to the matters outlined in [103] - [110]. For the reasons given in relation to particular 1, the absence of reference to BDC's losses in the 2016, 2017 and 2018 financial years does not reveal error.
Particular 3 complains that the judge failed to mention BDC's 2016 ‑ 2018 losses in observing, in [151], that Mr P had continued to operate BDC since the de facto relationship ended in September 2014 and had serviced the line of credit debt to a significantly greater degree than Ms B. There is no challenge to the judge's finding[59] that Mr P made a net positive contribution of almost $90,000 into the line of credit in the period 1 September 2014 to 30 June 2016, while Ms B made a net withdrawal of about $47,500.[60] That finding amply sustains the judge's finding at [151] that Mr P serviced the line of credit debt to a significantly greater degree than Ms B. Given the context of his Honour's remarks, and the point he was making, there was no occasion to mention BDC's losses. Particular 3 is without merit.
[59] Primary reasons [134].
[60] Appeal ts 9.
For similar reasons, there is no substance in the complaint made by particular 4. That particular criticises the judge's observation that '[t]he significance of the evidence about the payments into and out of the joint line of credit is that it is part and parcel of [Mr P's] case that he has contributed post‑separation by continuing to work full‑time in the business operated by [BDC] and has, by and large, used the profits so generated for joint benefit'.[61] Whether Mr P's contributions, by way of payments into the joint line of credit, were sourced from profits, or otherwise derived in the course of his full‑time work with BDC, was not material. What was material to the judge's assessment of the parties' respective contributions was the unchallenged finding as to the relative contributions to the line of credit in the period already referred to.
[61] Primary reasons [143].
For these reasons, there is no merit in the complaints the subject of particulars 1 ‑ 4.
Particular 5: failure to consider the impact of the economic boom
Particular 5 contends that the primary judge erred in fact or alternatively failed to give adequate reasons in finding, at [112], that 'the evidence overwhelmingly indicates that the financial performance of [BDC] is largely a function of the application of trade and other skills of the applicant … particularly in those four extremely profitable financial years'. Ms B notes that the judge identified that a major factor in BDC's performance was that it was the successful tenderer in relation to very lucrative government building contracts.[62] She submits that the judge failed to analyse that factor or the 'simple impact of the economic cycle'.[63]
[62] Primary reasons [107].
[63] Appellant's submissions [16] - [17]; appeal ts 22, 24.
This complaint misses the point. The judge's task was not to conduct an open‑ended inquiry into all factors that had contributed to profits made by BDC. The judge's task was simply to weigh the competing contributions of the parties. The impact of the economic cycle is not germane to that task. The judge was not required to refer to it in his reasons and it provides no logical basis to impugn his finding at [112].
Further, Ms B submits that, in making the finding at [112], the judge failed to consider, or adequately consider, the indirect financial contributions of the appellant to BDC, including permitting her property to be used as security for BDC's loan facilities.[64] This submission appears to mirror, or overlap with, the complaint made by particular 6 and is conveniently dealt with under the rubric of that particular.
[64] Appellant's submissions [16], [18] ‑ [23].
Particular 6: errors in assessing Ms B's contributions to BDC
Particular 6 is in the following terms:
The primary judge erred in assessing the materiality of [Mr P's] initial contribution of the shareholding in [BDC], at [123] and [149], by failing to adequately identify and evaluate [Ms B's] direct and indirect financial contributions to [BDC], in particular by failing to:
(a)attach sufficient weight to [Ms B's] bank guarantees and provision of security over real estate in which she had an interest, and the timing of the same, for the benefit of [BDC] (provision of security is mentioned at [112]).
(b)take into account that the joint equity line of credit, into which [Ms B] deposited inheritance funds and proceeds from the sale of real estate owned before the start of the de facto relationship or inherited during the de facto relationship, was used by [BDC] from time to time as an overdraft facility (use of these funds for joint purposes is mentioned at [96] and [99]).
(c)recognise that the single expert's valuation of [BDC] fell from $1,584,000 as at 30 June 2017 to $1,168,000 as at 30 June 2018 and was based in both cases upon net asset backing and not upon future maintainable profits (the valuation method was mentioned in a different context at [46] - [48]).
Ms B submits that 'viewing [122] and [123] as a snapshot', the comparison undertaken by the judge fails to consider that Ms B made substantial direct and indirect financial contributions to BDC, whereas Mr P made no or nominal contributions to Ms B's assets, namely the Broome property and the ASX listed shares.[65]
[65] Appellant's submissions [28].
No error is disclosed. Particular paragraphs of the reasons are not to be viewed 'as a snapshot'. Rather, the reasons must be read as a whole. Further, the substance of the particular is that the judge did not give enough weight to Ms B's contributions as subparticularised in (a), (b) and (c) of particular 6. The judge did not overlook Ms B's contributions to BDC. He noted that she was a paid employee of BDC for several years and that she allowed her property to be used as security for BDC's borrowings, describing the latter as important.[66] The judge also noted that, in building the value of his shareholding in BDC to a very substantial level, Mr P was assisted by Ms B.[67] The weight to be given to the parties' relative contributions was a matter for the judge. The assertion, in paragraph (a), of insufficient weight does not reveal appellable error, see [40] above. The same is true of Ms B's submission that the judge failed to give these matters their proper significance.[68]
[66] Primary reasons [93], [112]. See [25] and [28] above.
[67] Primary reasons [125].
[68] Appeal ts 27.
The judge found that:
(1)Mr P worked full-time as managing director of BDC at all material times;[69]
(2)Mr P had, while Ms B did not have, the expertise and experience to conduct BDC's business;[70] and
(3)Ms B was employed for a period of several years as bookkeeper and allowed property registered in her name to be used as security for BDC's borrowings.[71]
[69] Primary reasons [83].
[70] Primary reasons [112].
[71] Primary reasons [93], [112].
Ms B did not point to any evidence as to the extent to which BDC's funding of its construction work depended upon the guarantee and security provided by Ms B. It may be inferred that the guarantee and security would have assisted in BDC's funding arrangements in connection with its construction work. But the question for the judge, having heard all the evidence, was (relevantly at this point) to determine the degree to which the respective contributions of the parties contributed to the financial performance of BDC. That in itself was, on the evidence in this case, an evaluative judgment. In order to challenge the finding, Ms B must establish that the judge's finding was wrong and should be corrected.[72]
[72] See [41] above.
No error has been established in relation to the judge's finding that the financial performance of BDC was, in all the circumstances, largely a function of the application of Mr P's trade and other skills.
Ms B also submits that the judge overlooked her contributions to BDC made indirectly through her payments of substantial sums into the parties' joint equity line of credit, enabling the acquisition of joint properties which, in turn, were used as security for BDC.[73]
[73] Appellant's submissions [21] - [23]; appeal ts 26 - 29.
There is no merit in these submissions. The judge noted, and placed appropriate weight upon, Ms B's payments of substantial sums into the joint line of credit, those sums having been received under her father's will or as proceeds from the sale of assets.[74] As already mentioned, the judge found that the parties formed an economic partnership during their relationship, embarking on an ambitious investment program with the common intention of maximising their wealth for their joint benefit and future financial security.[75] In that context, the judge was not required to give Ms B further credit for her payments into the joint line of credit by bringing them to account as a contribution to BDC. In any event, to the extent that her payments may be seen as an indirect contribution to BDC in enabling it to continue to conduct its business, they provide no sufficient basis for this court to conclude that the judge's finding that BDC's performance was mainly attributable to the efforts and knowledge of Mr P was erroneous and should be corrected.
[74] Primary reasons [95] - [101], [147].
[75] Primary reasons [89], [92].
For these reasons, there is no merit in particular 6.
Particular 7: errors in assessing the significance of Ms B's contributions of the Broome property and the ASX listed shares
Particular 7 is in the following terms:
The primary judge erred in assessing the materiality of [Ms B's] initial contributions of the unencumbered property at [Broome] and the ASX shares (as supplemented by inheritance) at reasons [122] - 125]:
(a)by failing to take into account that these two categories of property comprised 13.8% of the net property of the parties as identified at reasons [72].
(b)by failing to take into account that [Broome] was used as security for the parties to acquire further joint property and still remains as security (trial exhibit 2).
(c)by failing to take into account that [Mr P] made no material financial contributions to the acquisition, conservation or improvement of the ASX shares.
(d)by failing to take into account, at reasons [116], that [Mr P's] indirect financial contributions to [Broome] through [BDC] were quantified by [Mr P] at $25,886.
(e)by taking into account irrelevant considerations such as 'the current composition of the asset pool is to a large degree a matter only of historical accident' (reasons [124]) and 'It is highly unlikely that the parties commenced their de facto relationship with an intention to keep assets away from the reach of the other in the event of the relationship breaking down' (reasons [124]) and the parties formed 'a true economic partnership' (reasons [92] and [146]).
(f)by failing to take into account, in reasons [125], that the 'fairly high rent' earned by [Ms B] from the leasing of [Broome] was deposited into the joint equity line of credit from 2005 until November 2015 and used for joint purposes, especially when the relevant paragraph from [Ms B's] trial affidavit was referred to, in a different context, at reasons [170].
(g)by failing to take them into account in the 'quantitative reflection' of the evaluation of contributions (reasons [144] - [145]) at reasons [147].
Ms B emphasises the value of the Broome property and ASX listed shares in proportion to the total asset pool, being 13.8% of the pool.[76] She says that Mr P made a minimal contribution to the Broome property through BDC ($25,886) and no contribution to the ASX listed shares.[77] She submits that irrelevant considerations, described in particular (e), tainted the primary judge's view of these contributions.[78] She further submits that the primary judge failed to refer to the Broome property and ASX listed shares when his Honour was conducting his quantitative reflection.[79] Ultimately, Ms B submits that this culminated in the primary judge erroneously assessing the materiality of Ms B's contributions in respect of the Broome property and the ASX listed shares.[80]
[76] Appellant's submissions [30]; appeal ts 31, 32.
[77] Appellant's submissions [30] - [31].
[78] Appellant's submissions [32].
[79] Appellant's submissions [33].
[80] Appellant's submissions [29].
Paragraphs (a) - (d) of particular 7 assert that the judge failed to take into account the various matters there stated. In our view, it cannot be concluded that the judge failed to take these matters into account. As to (a), the judge set out the respective values of the various assets.[81] There is no reason to suppose that he lost sight of this in his analysis of the parties' contributions. Contrary to what is asserted in (b), the judge noted that, for the purposes of their ambitious investment program, the parties had recourse to substantial bank debt facilities secured over both the properties they acquired and properties standing in Ms B's sole name, the latter evidently referring to or encompassing the Broome property.[82] As to (c), the judge recorded that Ms B's ASX listed shares were held by her at the commencement of the relationship,[83] or inherited by her from her father.[84] The judge did not need to spell out the obvious corollary that Mr P had made no material financial contributions to the acquisition, conservation or improvement of the shares. As to (d), there is no reason to suppose that, in making a general observation as to a contribution made from BDC's resources to the Broome property, the judge overlooked the amount in which they had been quantified.
[81] Primary reasons [72].
[82] Primary reasons [89].
[83] Primary reasons [84](d).
[84] Primary reasons [97](b).
The matters the subject of the complaint in paragraph (e) are not properly characterised as irrelevant considerations. They reflect the judge's inferences or conclusions, following his evaluation of the evidence as a whole. In our view, on the findings of fact made by the judge, the observations were well open to his Honour.
Paragraph (f) points to the judge's failure to mention the deposit by Ms B of the rent she earned from the Broome property into the joint equity line of credit. Reading the paragraph in its context, the failure to mention that fact falls well short of sustaining an inference that the judge failed to take it into account in his overall evaluation. In [125], the judge was expanding on the point made in the preceding paragraph as to the weight to be given to the fact that some of the items of property that were owned from the outset remained in the hands of that party. In that context, there was no occasion to mention that the rent was deposited into the joint equity line of credit. There is no reason to suppose that the judge overlooked that fact, particularly in light of the judge's description of the parties' relationship as a true economic partnership.
As to paragraph (g), it cannot be inferred that the judge failed to take any of the matters earlier referred to into account in conducting the 'quantitative reflection' of evaluating the parties' respective contributions.
Otherwise, Ms B's submissions in support of particular 7 do not rise above assertion or claims of weighting errors.
For these reasons, there is no merit in particular 7.
Conclusion
For the above reasons, nothing in any of particulars 1 ‑ 7 provides a basis to interfere with the judge's finding that the parties' contributions should be viewed as being of equal value. Consequently, the sole ground of appeal fails, and the appeal must be dismissed.
We would hear from the parties as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SL
Research Associate/Orderly to the Honourable Justice Beech
8 NOVEMBER 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: MIB -v- JAP [2019] WASCA 175 (S)
CORAM: MURPHY JA
BEECH JA
VAUGHAN JA
HEARD: 8 NOVEMBER 2019
DELIVERED : 8 NOVEMBER 2019
PUBLISHED : 15 NOVEMBER 2019
FILE NO/S: CACV 105 of 2018
BETWEEN: MIB
Appellant
AND
JAP
Respondent
ON APPEAL FROM:
Jurisdiction : FAMILY COURT OF WESTERN AUSTRALIA
Coram: MORONI AJ
File Number : PTW 4280 of 2016
Catchwords:
Procedure - Costs - Appeal from Family Court of Western Australia - Appeal wholly unsuccessful and wholly without merit - Whether circumstances justify departure from the presumptive position of no order as to costs
Legislation:
Family Court Act 1997 (WA), s 237
Result:
Costs order made
Category: B
Representation:
Counsel:
| Appellant | : | M R Berry SC |
| Respondent | : | J B Hedges SC |
Solicitors:
| Appellant | : | Carr & Co |
| Respondent | : | O'Sullivan Davies Lawyers |
Case(s) referred to in decision(s):
CDW v LVE [2015] WASCA 247 (S)
T v S [2015] WASCA 225 (S)
Trask & Westlake (Costs) [2015] FamCAFC 214
JUDGMENT OF THE COURT:
(This judgment was delivered extemporaneously on 8 November 2019 and has been edited from the transcript.)
There are many cases in which it has been assumed that appeals to this court are proceedings under the Family Court Act 1997 (WA) to which s 237 applies (see, for example, CDW v LVE[85] and the cases there cited). There is no reason to doubt the correctness of that assumption.
[85] CDW v LVE [2015] WASCA 247 (S) [4].
By s 237(1) of the Family Court Act, each party to proceedings under the Act is to bear the party's own costs, subject, relevantly, to subsection (2). However, by subsection (2), if this court is of the opinion that there are circumstances that justify it in doing so, this court may make an order departing from that position.
By s 237(3), in considering what orders should be made under subsection (2), the court must have regard to the matters therein set out in pars (a) ‑ (g) of that subsection:
(a)the financial circumstances of each of the parties to the proceedings; and
(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; and
(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; and
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of a court; and
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings; and
(f)whether a party to the proceedings has made an offer in writing to another 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.
The relevant principles are referred to in CDW and T v S.[86]
[86] T v S [2015] WASCA 225 (S).
The factors in pars (a), (c) and (e) are relevant for present purposes.
The appellant has been wholly unsuccessful in these appeal proceedings. In our view, the appellant's ground was wholly without merit. Moreover, none of the particulars in support of the ground had substance. The nature of the proceedings as an appeal is also relevant to the exercise of discretion. In Trask & Westlake (Costs),[87] the Full Court of the Family Court of Australia observed, in relation to the equivalent s 117 of the Family Law Act 1975 (Cth):
[W]hile costs do not 'follow the event' any more on an appeal than they do in any other proceedings (s 117(1)), it is often said that a party being wholly unsuccessful in an appeal, which by definition seeks to deny the other party the 'fruits of their judgment', can be of great significant.
[87] Trask & Westlake (Costs) [2015] FamCAFC 214 [4].
The appellant's conduct of the appeal counts in favour of an adverse costs order. First, the grounds of appeal in the appellant's case were flawed, in that they did not impugn the critical finding of equal contributions by the parties. This resulted in a very late amendment application, well into the hearing. Secondly, some of the central flaws in the appellant's case on appeal were identified in the respondent's written submissions. Notwithstanding that, the appellant pursued the appeal through to its hearing and determination.
We have also taken into account the financial circumstances of each of the parties, so far as they are known to us, as revealed by the primary decision. The result of the primary judge's order is that the appellant will receive a 55% share of the matrimonial property within the region of $4 million. No party sought to adduce any further evidence of the parties' financial circumstances.
We are satisfied in all these circumstances that it is justified to make an order departing from the position provided for in s 237(1), by making an order that the appellant pay the respondent's costs of the appeal.
At the hearing this morning, senior counsel for the appellant did not oppose the making of such an order, on the proviso that the costs should be set off against par 1(a) of Moroni AJ's orders in the primary proceedings. In all of the circumstances, we consider that qualification to be appropriate.
As to the question of fixing costs, there was no opposition to fixing the sum of $35,000 sought by the respondent. That, too, is an appropriate order.
The court makes the following orders:
(1)The appeal is dismissed.
(2)The appellant pay the respondent's costs fixed in the sum of $35,000, such sum to be set off against the money to be paid to the appellant, pursuant to par 1(a) of Moroni AJ's orders made 12 October 2018.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SL
Research Associate/Orderly to the Honourable Justice Beech
15 NOVEMBER 2019
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