Nan & Nan
[2022] FedCFamC1A 180
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Nan & Nan [2022] FedCFamC1A 180
Appeal from: Nan & Nan [2022] FedCFamC2F 645 Appeal number(s): NAA 136 of 2022 File number(s): ADC 4222 of 2019 Judgment of: TREE J Date of judgment: 7 November 2022 Catchwords: FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Where the husband challenged the value attributed to the husband’s company by the primary judge – Whether the finding of the value of the company was reasonably open on the evidence – Where the primary judge’s inference and finding of fact about the value of the company was supportable by the evidence – No error established – Appeal dismissed – Costs ordered in favour of wife.
FAMILY LAW – APPEAL – PARENTING – Where the wife conceded error on the part of the primary judge in respect of one parenting order – Where the parties consented to a variation of that order – Error established – Order varied by consent.
Legislation: Evidence Act 1995 (Cth) s 128
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 36
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Number of paragraphs: 30 Date of hearing: 31 October 2022 Place: Cairns (via video link) Counsel for the Appellant: Mr Lindsay Solicitor for the Appellant: Sekhon Lawyers Counsel for the Respondent: Mr Anderson Solicitor for the Respondent: Adelaide Family Law ORDERS
NAA 136 of 2022
ADC 4222 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR NAN
Appellant
AND: MS NAN
Respondent
order made by:
TREE J
DATE OF ORDER:
7 november 2022
THE COURT ORDERS THAT:
1.By consent, the Application in an Appeal filed 13 October 2022 is granted, and the affidavit of Mr B filed 13 October 2022 will be admitted into evidence in the appeal.
2.Save that paragraph 11(a) of the Orders of the primary judge be discharged and in lieu thereof it be ordered by consent that:
(a)each of the parties be at liberty to travel overseas with the child on not more than 2 occasions per year unless otherwise agreed between the parties;
the appeal is otherwise dismissed.
3.Within 28 days, the appellant is to pay the respondent’s costs in the sum of $7,128.68.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Nan & Nan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
introduction
Mr Nan (“the husband”) appeals from some of the final parenting and property settlement orders made by the primary judge on 20 May 2022 in proceedings between him and Ms Nan (“the wife”).
At the hearing of the appeal, the wife conceded the contended error on the part of the primary judge in relation to the only impugned parenting order, and consented to a varied order being made in the terms substantially as sought by the husband in his Further Amended Notice of Appeal. However the wife opposed the appeal insofar as it related to the property division.
For the short reasons that follow (there being no question of general principle raised by the appeal – s 36(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth)), other than in relation to the parenting order, the appeal will be dismissed.
background
The husband was born in Country C in 1980 and is presently aged 42 years. The wife was born in Country C in 1983 and is presently 39 years.
The parties were married in 2008, migrated to Australia in 2009, and separated here in October 2018.
There is one child born to the parties’ relationship, who is now 9 years old. As a result of the primary judge’s orders, the child lives mainly with the mother and spends five nights per fortnight with the father. No challenge to those arrangements is made by this appeal.
As found by the primary judge, the property of the parties’ relationship consisted of the former matrimonial home, the husband’s share in a property he purchased post separation with family members, the husband’s interest in his company Company D (“the company”), the parties’ bank accounts and their superannuation. This appeal only challenges the value attributed to the company by the primary judge.
application in an appeal
By Application in an Appeal filed 13 October 2022, the husband sought that I receive further evidence in the appeal, comprising an affidavit of Mr B also filed 13 October 2022. The wife did not oppose that application, and hence that affidavit will be admitted into evidence.
the parenting appeal
Ground 1 of the Further Amended Notice of Appeal filed 23 August 2022 provides as follows:
1.The Learned Trial Judge erred in making an order (Order 11a) providing liberty to the parties to remove the child from the Commonwealth for overseas travel for the child on not more than one occasion every 2 years for each party unless otherwise agreed, in that she gave no or in the alternative no adequate reasons for such decision save at [56]) where she indicated that in making Orders relating to the exercise of parental responsibility as proposed by the wife in relation to that topic she relied only upon:-
a.the absence of any evidence indicating a negative impact upon the child if the order were made; and
b.that the child would be living in the primary care of the wife.
(As per the original)
As indicated, the wife conceded that the primary judge erred as that ground contends. Notwithstanding that concession, I must be satisfied of error for myself.
The obligation to give reasons is well established. In Bennett and Bennett (1991) FLC 92-191 at 78,266, the Full Court adopted the following test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)justice is not seen to have been done.
Here, the entirety of the primary judge’s reasons for the restriction imposed on the parties’ ability to take the child overseas was at [56], where she said:
56.Neither party adduced any evidence in relation to the other, very minor differences between their positions with respect to parenting, which related to the duration and frequency of overseas travel and who is to retain the child’s passport. In the absence of any evidence of any likely negative impact on [the child’s] best interests of doing so, in light of the fact that [the child] will be living in the primary care of his mother, I will make orders in accordance with her proposal.
It is simply not possible to discern any reason for the restriction on the frequency of the child’s travel overseas from that paragraph. If her Honour were saying that a lack of negative impact equated to it being in the child’s best interests, then not only is the reasoning deficient, but justice is not able to have been seen to be done. Error is therefore established.
The parties sought that I re-exercise that aspect of the Court’s discretion as they agreed. I am content to so proceed, and will make the proposed varied order by consent.
the property appeal
Ground 2 of the Further Amended Notice of Appeal provides as follows:
2.The Learned Trial Judge erred in including the sum of $192,143.00 representing the value of [the company] referred to in a 2021 draft financial statement submitted to the NAB) in the asset pool available for distribution between the parties. In particular she:
a.made findings (at [95]-[96]) as to the wife’s belief and assertions that such funds existed and the lack of knowledge on her part that the husband contended they did not exist, when there was no or no adequate evidential basis for her Honour making such findings;
b.made a finding (at [96]) that the husband’s trial affidavit filed 10 April 2022 did not include any challenge to the wife’s affidavit evidence as to the existence of the monies and gave weight to such finding without having any regard to the circumstance of his not having at that time having been granted a s 128 Certificate at that point;
c.drew inferences and made findings (at [98]) as to NAB’s reliance on the representations contained in the draft financial statement in advancing monies to the husband when there was no or no adequate evidential basis for doing so when there were many other reasonable inferences available to be drawn by her on the evidence in explanation of the advance;
d.at [99], applied the so-called “Elias principle” in making a finding that that “it is not appropriate” to permit the husband to make assertions to the NAB as to “financial status” of his company and to contend before the Court that it had no value, when no occasion arose for the application of such principle, given:-
i.the wife did not contend at the close of the evidence that it had any such value;
ii.there was no evidence that NAB had suffered or would suffer any loss on account of the representations contained in the financial statement;
iii.even if the NAB had suffered any such loss, which is denied, it had and continues to have its own remedies;
e.made the finding referred to in 4. above (at [99], that “it is not appropriate”) when such finding does not disclose any or any adequate process of reasoning on the part of the Learned Trial Judge justifying the application of the so-called “Elias principle”;
f.failed to identify anywhere in [87]-[100] of her Reasons, which (if any) of the considerations identified by Chisolm J in Jordan and Jordan as relevant to a determination to apply the so- called “Elias principle” in Family Law cases, she had regard to in applying such principle; and
g.relied upon Goldstein J’s own reliance in Elias and Elias upon the English Court of Appeal authority (identified at footnote 31 of her Judgement) when such authority has subsequently been overruled (see Tinsley v Millighan [1993] UKHL 3).
(As per the original)
Although seven separate challenges are made by this ground, (a) and (b) were not pressed and the balance were, in effect, argued cumulatively, it being conceded by the husband that they all “deal with the one underlying error in [the judgment of the primary judge] namely that there was no or no adequate evidential basis for the Court to find that the assets held by the company as included in the pool of assets on which Her Honour based her orders in fact existed” (husband’s Summary of Argument filed 4 October 2022, paragraph 14).
A little additional background is necessary to understand the challenges made by this ground.
Including superannuation, the primary judge concluded that the value of the pool of property for division was $564,265.44 (at [135]). Part of that sum was $192,143, which her Honour found was the value of the company.
At trial, the wife had contended that the company had the value ultimately found by the primary judge, whereas the husband contended its value to be nil.
The primary judge dealt with that dispute at [87]–[100] of her reasons.
From that, and other material, the following factual matters emerge:
(a)after separation, in February 2021, the husband purchased a property at Property E (“the property”) in his sole name, which purchase was in part funded by a mortgage over the property;
(b)the primary judge accepted that despite being the sole registered proprietor of the property, the husband only held a 56.4 per cent interest in it (at [82]);
(c)in August 2021, the husband sought to refinance the existing mortgage against the property, and to obtain a construction loan, both from the National Australia Bank (“NAB”);
(d)in support of that application, the husband provided NAB with a document prepared by his accountant which purported to be a “financial report for the year ended 30 June 2021” in relation to the company (“the financial report”);
(e)one part of the financial report was a balance sheet, which showed that there was equity in the company of $192,143, up from $86,005 in the previous financial year;
(f)on 24 August 2021, NAB offered to lend the husband $258,000 to refinance the existing mortgage over the property, and to further lend him a further $548,400 by way of a construction loan;
(g)the husband accepted both offers, although by the time of trial, the construction loan had only been drawn down to the extent of $51,150 (at [67]);
(h)before the primary judge, after having received a certificate under s 128 of the Evidence Act 1995 (Cth), the husband contended in evidence and submissions that the financial report was false (at [89]), and the company in fact had no value.
However the primary judge was less than satisfied with the husband’s oral evidence. At [91] she observed:
91.The Husband’s evidence in relation to these documents was unsatisfactory. He variously described the contents of the documents as “just figures”, “made up” and “all imaginary”. His manner when addressing these issues was flippant and dismissive. He did not appear to appreciate the seriousness of the conduct he was attributing to himself.
Later at [98] and [99] her Honour continued:
98.The inference to be drawn from the provision of finance under these circumstances is that the Husband was able to satisfy the bank that the contents of the documents he relied on in support of his finance application were accurate. Once the evidence had established that the Husband had, in order to obtain a financial benefit for himself, either lied to a major financial institution or was lying to this Court, it was up to the Husband to persuade me that it was his evidence before the Court that was truthful. He did not do so. Counsel for the Husband submitted that although the evidence reflected poorly on the Husband in terms of his conduct, he had been forthcoming about his wrongdoing and his credit remained unimpeached. I do not agree. The Husband’s evidence suggested that he is a person who is prepared to be untruthful when he perceives that to do so will bring him a benefit without significant regard to the seriousness of his actions.
99.There is another matter that is relevant to the question of the value to be attributed to [the company]. That is the Elias principle, which, as explained by Chisholm J in Jordan & Jordan is “a rule of family law that when people make representations of fact to third parties and gain advantage from so doing, they cannot in subsequent proceedings under s 79 of the Family Law Act lead evidence which contradicts those representations.” Though often applied in relation to assertions made to revenue authorities, the application of the rule is not limited to such circumstances. The Elias principle is not an inflexible rule and I am not bound to apply it. Nonetheless, I do not consider it appropriate in this case that the Husband be permitted to make assertions to the National Australia Bank as to the financial status of a corporate entity under his sole control and derive significant financial benefit therefrom, only to have this Court accept that the same entity is worthless. Having made an assertion that an asset under his control is of a particular value, he can hardly be heard to complain when that assertion is accepted by the Court.
(Emphasis added) (Footnotes omitted)
It was accepted by counsel for the husband and counsel for the wife that [98] and [99] were, in effect, “belt and braces” reasoning, and so long as either survived the challenges to them advanced in the appeal, the primary judge’s finding would be sufficiently supported.
Although counsel for the husband contended that implicitly the primary judge accepted that the husband had lied to NAB, in that the financial report was false, I simply cannot see any such indication in the reasons. Indeed to the contrary, it seems clear from the third and fifth sentences of [98] that her Honour was plainly not so satisfied. That then left the financial report as evidence of the value of the company as at 30 June 2021, which the primary judge was free to accept and act upon.
The test for whether a finding of fact can withstand appeal is whether it was reasonably open on the evidence (Edwards v Noble (1971) 125 CLR 296). Here it plainly was, given the husband’s failure to satisfy the primary judge that his oral evidence ought be accepted over the financial report.
So viewed, the five remaining challenges made under Ground 2 do not overcome the plain fact that the primary judge’s finding as to the company’s value was reasonably open to her. Specifically:
(a)the complaint advanced under Ground 2(c) at best attacks a peripheral aspect of the primary judge’s reasoning. In any event, the inference which the primary judge drew was self-evidently well open. The fact that other alternative inferences could have been drawn did not prevent the primary judge from drawing the inference she did;
(b)it is unnecessary to consider the so-called Elias principle raised by Grounds 2(d), 2(e), 2(f) and 2(g), as even if her Honour’s application of such a contended principle was incorrect, the finding of fact about the value of the company was otherwise supportable as her Honour explained at [98].
It follows that Ground 2 fails.
outcome
Save that the appeal partly succeeds insofar as it related to one slender aspect of the parenting orders, it will be dismissed.
costs
In the event the property appeal failed, counsel for the husband conceded he could not oppose an order that the husband pay the wife’s costs in the sum claimed of $7,128.68. That should be payable within 28 days.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 7 November 2022
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