Nemeth, F. and Nemeth, L.M.

[1987] FamCA 12

In the marriage of NEMETH, F. and NEMETH, L.M.

(1987) FLC ¶91-844

Full Court of the Family Court at Sydney.

Judgment delivered 22 May 1987.

Before: Evatt C.J., Smithers and Baker JJ.

Evatt C.J., Smithers and Baker JJ.: This is an appeal against the order of Nygh J. made on 17 June 1986. His Honour ordered the husband to pay to the wife the sum of $450,000 by way of property settlement. The husband has appealed against this order.

The parties had commenced cohabitation in late 1969 or early 1970 when the wife was 18 and the husband about 45. They married on 29 April 1978, and a child, A, was born on 24 August 1980. The parties separated on 20 July 1983. No application for dissolution of marriage is pending. The wife is now 34 and the husband 61.

When cohabitation commenced the wife:

``was working as a waitress and apprentice hairdresser and had no professional or trade skills. The husband was at that time an established businessman and property developer.''

After cohabitation commenced, the wife helped the husband in various ventures. His Honour found that she gave considerable assistance in the running of the Lido Night Club in Melbourne for some weeks. She later, his Honour found, helped in the management of the Lido Motel at Kings Cross for up to eight months. The general finding was that:

``the wife did give practical and clerical assistance from time to time during the period 1970-1980 in the husband's various enterprises, but that she was not involved, as she claimed, in the planning and execution of the husband's business deals.''

His Honour found that the husband was a generous provider during the marriage and that in addition to the $500 provided nominally as her salary, he met other household and clothing expenses:

``apart from this, she was not paid as such for the assistance given by her in the husband's business.''

[Their Honours then referred to facts irrelevant to this report and continued:]

His Honour found the total assets of the company and trust under the control of the husband to be $11,436,428 and the value of his interest after allowing for liabilities, to be $2,684,140.

Taking into account other assets beneficially owned by the husband, the total value of his assets was found to be $3,646,066 and his taxable income was $18,000 per annum.

His Honour adopted the global approach to assessing the contribution of the parties rather than considering each item in turn. On this basis he found that at the time of the marriage the husband was possessed of substantial wealth, that the wife made no direct or indirect financial contribution to the acquisition of the properties owned by the husband, that she brought no funds into the marriage and that she did not contribute any outside earnings. Her contribution was limited to labour in various ventures, to management of the Lido Motel, and to the management of the Hampton Court Hotel. The periods in question were of limited duration. His Honour found as follows:

``The wife made no direct or indirect financial contribution to the acquisition of those properties. She brought no funds into the marriage and she did not contribute any outside earnings. She did make a contribution in labour to various ventures of the husband, most notably to the night clubs he ran in Melbourne pre-marriage in the early 1970's, to the management of the Lido Motel (together with Paul Nemeth) for eight months in the mid 1970's and finally at the end of that decade to the management of the Hampton Court Hotel. In each case the contribution was not persistent, but limited to a few weeks in the case of the night clubs, eight months in the case of the Lido Motel and approximately 1½ years in the case of the Hampton Court Hotel. The husband's wealth was built up through his funds and his business acumen and any suggestion by the wife that she contributed thereto by her advice could not be sustained. In my view the wife's contribution to the maintenance and preservation of the husband's assets must be considered as marginal.

More substantial is her contribution as a homemaker and parent. The husband had no complaint of her in that role. Until 1980 the relationship was childless and in my view each of the parties derived great benefit from that relationship. The wife travelled much with the husband and received generous treatment from him. She was a competent and charming companion, entertaining his business associates and she took the trouble to acquire a fluent knowledge of the Hungarian language. After 1980 when the child was born, the burdens fell more unequally on the wife and following the separation she has found herself without the ample financial support and benefits which were previously forthcoming. She receives a modest amount of maintenance for the child A which clearly does not allow for her expense of housing the child.''

His Honour found that it was not necessary to assess the wife's contribution as a percentage of the joint assets of the parties, as this would be arbitrary in a case such as this, where the husband started with substantial assets and the wife's contribution for much of the marriage lay outside the business of the husband.

He fixed on the sum of $450,000 as a just and equitable recognition of the wife's marginal contribution under para. (a) and (b) of sec. 79(4) and her more substantial contribution under para. (c):

``It constitutes just over 12% of the husband's total assets as found by me.''

His Honour did not consider that any adjustment was needed for para. (d), (e) and (f) of sec. 79(4):

``So far as the wife is concerned, the sum of $450,000 would amply cover her needs. She has chosen to work in [her de facto spouse's] business without salary, but there is no suggestion that she is unable to maintain herself. She may use the sum as she pleases, but if the net amount remaining after payment of her debts is fully invested, at current rates of interest, it would even after the payment of income tax leave her with a decidedly above average income.''

The appeal

There were a number of grounds of appeal relating to the exercise of discretion; in addition, the appellant sought to admit fresh evidence. There was also an appeal against the order for costs.

The first matter to consider is the question relating to the fresh evidence.

The appellant's counsel sought leave to tender fresh evidence which he submitted had become available after the hearing had concluded. In support of the said application senior counsel for the husband tendered an affidavit by the husband's accountant sworn 20 October 1986 which alleged that since the date of the hearing of the wife's application for settlement of property there had been a dramatic increase in the amount owing to the mortgagee in respect of a loan agreement entered into by one of the husband's companies. The nature of the fresh evidence in essence was that due to currency changes which have affected the Australian dollar and the Swiss franc in recent times the liability in respect of the overseas mortgage loan which his Honour found to be $6,932,500 on 17 June 1986 when judgment was delivered had increased to $9,415,064 by 17 October 1986.

Particulars of the mortgage transaction were fully set out in a document which was tendered in evidence before his Honour as exhibit ``N''. That document provided for a loan by a banking corporation to Hampton Court Hotel Pty. Ltd. of the equivalent of $A5,000,000 which was to be made available initially in the currency or currencies nominated by the borrower in the Notice of Drawing which was Appendix ``A'' to the loan documents.

The Notice of Drawing which was dated 7 June 1983 provided that on the draw down date which was nominated as being 15 June 1983 the equivalent of $A5,000,000 was to be loaned to Hampton Court Hotel Pty. Ltd. in Swiss francs.

Paragraph 2.04 of the loan agreement provided that the principal sum was ascertainable by applying the bank's spot rate of exchange for the purchase in the Singapore foreign exchange market of the relevant alternative currency or currencies at 11 a.m. (Singapore time) on the day two banking days prior to the drawn down date.

Paragraph 3.01 provided that each interest period in respect of any advance was of six months' duration unless the borrower by notice in writing to the bank's Singapore branch given not later than five banking days prior to the commencement of an interest period, specifying that the interest period is to be of three months' duration.

It is relevant in our view to set out the amounts which were outstanding in respect of the said loan at the relevant periods and we now do so as follows:

(a) 16 April 1986

His Honour accepted the submissions of the husband that as at 16 April 1986 the amount outstanding pursuant to the terms of the said loan when converted to Swiss francs in accordance with the provisions of the loan agreement was $4,934,500.

It is not clear what exchange rate was used concerning the latter calculation but in the Appeal Book there appears a figure of 9,382,500 Swiss francs said to be owing by Hampton Court Hotel Pty. Ltd. The subject document is a schedule prepared by the husband's accountant which purports to set out the real values of the various companies in the Nemeth group. The schedule sets out an exchange rate of 1.3152 Swiss francs to $A2 but clearly this is an error and should have read 1.3152 Swiss francs to $A1 otherwise the mortgage indebtedness of Hampton Court Hotel Pty. Ltd. to the banking corporation would amount to $12,339,864.

(b) 17 June 1986

On 17 June 1986 the day upon which his Honour delivered judgment the relevant conversion rate was $A1.1023 for each Swiss franc. The liability in respect of the said loan was therefore calculated to be $8,527,624.

(c) 17 October 1986

On 17 October 1986 the conversion rate was $A0.9984 for each Swiss franc which increases the amount outstanding in respect of the said loan at that time to the sum of $9,415,064.

The essence of the argument which the appellant's counsel put to us was that because the indebtedness in respect of the Hampton Court Hotel Pty. Ltd. loan from the banking corporation has increased from $A6,934,500 as at the date of the hearing to $9,415,064 as at 17 October 1986, a dramatic down turn has occurred in respect of the husband's overall financial position. It was submitted that the present liability to the bank substantially reduces the value of the property which his Honour found the husband to have possessed and upon which he calculated the amount which the husband was ordered to pay the wife by way of settlement of property. The fresh evidence which the appellant seeks to adduce is not evidence of facts which existed at the time of the hearing but rather of a change in the circumstances of one of the parties after the hearing.

It is necessary for us to consider the various authorities in relation to the tender of fresh evidence after a hearing has concluded, both in Australia and in England, in some detail.

In Corbett v. Corbett (1953) P. 205, Lord Evershed M.R. said at p. 209:

``It is not in doubt that in general the rule of this court laid down long ago in Shedden v. Patrick, and since followed in many cases, is briefly this, that it being in the public interest that there should be an end of litigation, fresh evidence on appeal will not be permitted unless two conditions are satisfied: the first is that the new evidence was not available to the party seeking to use it at the trial, or that reasonable diligence would not have made it so available; the second condition is that the fresh evidence, if true, would have had, or would have been likely to have had, a determining influence upon the decision in the court below.''

In Ladd v. Marshall (1954) 3 All E.R. 745, Denning L.J. held on p. 748:

``In order to justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial: second, the evidence must be such that, if given, it would probably have an important influence on the result of the case, although it need not be decisive: third, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, although it need not be incontrovertible.''

See also Mullholland & Anor v. Mitchell (1971) A.C. 666 in which Lord Hodson at p. 674 said:

``By our law, unlike that of many other countries, the maxim interest reipublicae ut sit finis litium is, in the usual case, strictly followed. Damages are, accordingly, assessed once for all at the time of the trial notwithstanding that in many cases, and this applied especially to cases of personal injury, uncertain matters have to be taken into account. The court has to make the best estimate it can as to the future life of the injured person, not only as to his prospects of recovery or improvement but also, as in this case, as to the cost of caring for him either in his own home or in an institution suitably equipped to deal with his condition. This is the function of the court. Thereafter, to repeat the words of Lord Loreburn L.C. in Brown v. Dean (1910) A.C. 373, 374: `When a litigant has obtained a judgment in a court of justice,... he is by law entitled not to be deprived of that judgment without very solid grounds;...'

The fundamental principle, however, cannot be absolutely preserved, and the rules of court provide, and have so provided in substance since 1883, that the Court of Appeal shall have power to admit further evidence on questions of fact. As to matters arising before trial the practice recommended to be followed is to be found stated in the judgment of Denning L.J. in Ladd v. Marshall (1954) 1 W.L.R. 1489, 1491, where the dictum of Lord Loreburn was applied and amplified.

R.S.C. Ord. 59, r. 10(2), in its present form reads as follows, so far as material to the present case:

`The Court of Appeal shall have power to receive further evidence on questions of fact... but, in the case of an appeal from a judgment after trial or hearing of the cause, or matter on the merits, no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds.'

I have emphasized the words in brackets.

The Court of Appeal is thus given an unfettered discretion to receive further evidence in a case such as this where there has been, and this is not denied, a dramatic change of circumstances after the date of the trial.''

The decision of the High Court in Fredericks v. May (1973) A.L.J.R. 362 was concerned with the discovery of fresh evidence in a motor vehicle collision case in which the trial Judge entered judgment for the defendant at the conclusion of the hearing. Gibbs J. at p. 368 said:

``The rules as to the conditions upon which a new trial may be granted on the ground of the discovery of fresh evidence have been discussed by this Court on a number of occasions: Orr v. Holmes (1948), 76 C.L.R. 632; Commissioner for Government Tram and Omnibus Services v. Vickery (1952), 85 C.L.R. 635; McCann v. Parsons (1954), 93 C.L.R. 418; Council of the City of Greater Wollongong v. Cowan (1955), 93 C.L.R. 435; McDonald v. McDonald (1965), 113 C.L.R. 529. For present purposes it is enough to refer to the following summary of the rules given by Denning L.J. (as he then was) in Ladd v. Marshall (1954) 1 W.L.R. 1489, at p. 1491, in a passage more recently cited with approval in Skone v. Skone (1971) 1 W.L.R. 812, at p. 815:

`To justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible'.

Perhaps it ought to be added that in some of the judgments in this Court the second of Lord Denning's propositions has been more stringently stated. However, Dixon J. (as he then was) in Orr v. Holmes (supra), at pp. 641-642, drew attention to some of the variations in phraseology used in stating the rule, and said, at p. 642:

`No doubt some of the foregoing expressions are susceptible of a weaker application than others of them. But the evident purpose of all of them is to ensure that new trials will not be granted because of fresh evidence unless it places such a different complexion upon the case that a reversal of the former result ought certainly to ensue. The fact which the new evidence tends to prove, if it does not itself form part of the issue, must be well nigh decisive of the state of facts upon which the issue depends. The evidence must be so persuasive of the existence of the fact it tends to prove that a finding to the contrary, if it had been given, would, upon the materials before the court, appear to have been improbable if not unreasonable.'''

The appellate jurisdiction of the Family Court stems from sec. 93A which provides, inter alia, that subject to sec. 96, in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact, and in its discretion, to receive further evidence upon questions of fact, which evidence may be given by affidavit, by oral examination before the Family Court or a Judge or in such other manner as the Family Court may direct.

It would seem, therefore, that the Full Court of the Family Court has the same jurisdiction as the Court of Appeal in England to receive further evidence in a case where there has been a dramatic change of circumstances after the date of the trial, but in the case of the Court of Appeal other evidence may only be admitted on special grounds. To that limited extent, therefore, the reasoning in the English authorities may be distinguished from the reasoning in the authorities in this country.

Although Gibbs J. in Fredericks v. May (supra) approved the passage in Orr v. Holmes (supra) cited above he nevertheless drew attention to the fact that the High Court had on occasions stated the second of Lord Denning's propositions in Ladd v. Marshall (supra) somewhat more stringently and suggested that for the purposes of that case Lord Denning's dicta was apposite.

The Full Court of the Family Court in cases such as Cantarella and Cantarella (1976) FLC ¶90-056 and Banh and Banh (1981) FLC ¶91-010 applied the reasoning of the High Court in Orr and Holmes (supra) that is to say:

(a) the evidence must not have been available at the time of the trial,
(b) it was not obtainable by reasonable diligence,
(c) that had such evidence been available it would have been likely to affect the findings of the trial Judge.

In applying the above principles to the facts which were before us in the appeal we must give close consideration to the nature of the fresh evidence now sought to be adduced in the light of the evidence which was before his Honour in the course of the trial.

That evidence leads us to conclude that the husband was a successful businessman who, by dint of his business acumen and entrepreneurial expertise, had amassed substantial assets and was in receipt of a significant income. When the loan was negotiated with a banking corporation in March 1983 for the Swiss franc equivalent of $A5,000,000 the husband obtained the benefit of a very low rate of interest, certainly much lower than the normal rates of interest which would have been otherwise obtainable in Australia at that time. It must have been apparent, in our view, to a man of the husband's business experience that there were risks involved in borrowing substantial sums of money with the repayment thereof to be made in a foreign currency.

It is significant, in our view, to recall that the Hampton Court Hotel Pty. Ltd. from the time that the loan was made had the right, pursuant to the terms of the loan agreement to repay the whole of the advance on any interest payment date upon the giving to the bank of not less than 30 days prior irrevocable notice of its intention to do so, provided that should repayment be made within two years of the date of the making of the advance, the borrower was required to pay the bank a fee of one-half of one per cent of the amount to be paid in the currency of the pre-paid advance.

The loan agreement provides for the borrower to repay the amount of the loan by three instalments, one such instalment being payable on each maturity date as provided in the schedule to the agreement. A perusal of the loan agreement leads us to conclude that the liability for repayment is as follows:

15 June 1986        $A500,000
     15 June 1987        $A500,000
     15 June 1988      $A4,000,000

It can readily be seen, therefore, that as at the date of the hearing there was no legal obligation on the part of the company at that time to repay the loan and the only obligation which has come into existence since that time was the requirement to pay the sum of $500,000 on 15 June 1986.

The difficulty we have with the appellant's submissions relates to the fact that it is impossible to forecast what amount Hampton Court Hotel Pty. Ltd. will ultimately have to pay to the banking corporation in order to discharge the mortgage. There may be differences in the exchange rate between the Australian dollar and the Swiss franc both upwards and downwards during the intervening period. It is essential, in our view, for there to be finality in relation to legal proceedings. If we were to receive fresh evidence from the husband the ultimate result would almost inevitably be an order for a new trial. It would be quite inappropriate in our view in such circumstances, to ignore the possibility of other changes having occurred since the trial before his Honour which might alter the net worth of either or both of the parties. If the husband's altered mortgage liability is to be taken into account then the value of all of the assets and liabilities of the parties must be ascertained at the time of any such retrial. A further difficulty in receiving the fresh evidence and ordering a retrial is that a subsequent judgment might be susceptible of another appeal. Given the possibility of further significant changes in the relevant rate of exchange, whether upwards or downwards at the time of the hearing of the next appeal, there might again be the prospect of a further retrial.

The husband in borrowing a substantial sum of money repayable in a foreign currency, in our view, knew or ought to have known the risks involved. In any event he had the right, as we have said, to discharge his liability to the bank upon the giving of the appropriate notice at any time and what has occurred since the making of the loan was, in our view, a commercial risk which every person or corporation must accept when borrowing moneys repayable in a foreign currency.

Given the desirability, as we have said, for there to be finality in litigation and the inability to forecast the amount which the company will ultimately be called upon to pay to the bank in discharge of the mortgage, we do not think it either appropriate or desirable to allow the husband to adduce the fresh evidence as sought in his application.

[Their Honours then referred to grounds of appeal irrelevant to this report and continued:]

Grounds 1, 2, 3 and 10 dealt with the parties' contributions particularly the pre-marriage contributions.

1. That he gave insufficient weight to the fact that the husband had substantial wealth at the time of the marriage.
2. That too much weight was given to the wife's contribution as homemaker and parent.
3. That his Honour did not differentiate between the nature and quality of the contribution made by the wife during the period of cohabitation prior to marriage and to the contribution made by her after marriage, and thus ignored the obligations imposed on the Family Court by sec. 43.
10. That his Honour erred in fact and in law by failing to express the general extent to which each party contributed to the acquisition, maintenance and preservation of assets and by failing to find that the wife during marriage as distinct from during cohabitation made no contribution whatever to the business assets of the husband, and by failing to find that the wife's sole contribution during marriage as distinct from cohabitation was related as a parent and homemaker to the matrimonial home.

As mentioned, the parties' cohabitation commenced in 1969/1970 and the marriage took place on 29 April 1978. The child was born on 24 August 1980 and the parties separated on 20 July 1983.

His Honour's reasons for decision make no distinction between the contribution made by the wife before the marriage and that made after the marriage. He dealt with contribution in several passages, of which the following is an example:

``The wife made no direct or indirect financial contribution to the acquisition of those properties. She brought no funds into the marriage and she did not contribute any outside earnings. She did make a contribution in labour to various ventures of the husband, most notably to the night clubs he ran in Melbourne pre-marriage in the early 1970's, to the management of the Lido Motel (together with Paul Nemeth) for 8 months in the mid 1970's and finally at the end of that decade to the management of the Hampton Court Hotel. In each case the contribution was not persistent, but limited to a few weeks in the case of the night clubs, 8 months in the case of the Lido Motel and approximately 1½ years in the case of the Hampton Court Hotel. The husband's wealth was built up through his funds and his business acumen and any suggestion by the wife that she contributed thereto by her advice could not be sustained. In my view the wife's contribution to the maintenance and preservation of the husband's assets must be considered as marginal.

More substantial is her contribution as a homemaker and parent. The husband had no complaint of her in that role. Until 1980 the relationship was childless and in my view each of the parties derived great benefit from that relationship. The wife travelled much with the husband and received generous treatment from him. She was a competent and charming companion, entertaining his business associates and she took the trouble to acquire a fluent knowledge of the Hungarian language. After 1980 when the child was born, the burdens fell more unequally on the wife and following the separation she has found herself without the ample financial support and benefits which were previously forthcoming. She receives a modest amount of maintenance for the child A which clearly does not allow for her expense of housing the child.''

The submission was that under sec. 79(4)(c) the Court could not consider contributions made before the marriage, and that a party seeking a transfer of or interest in property on the basis of such contributions would have to rely on any remedies provided by State law.

As to the second point, it is true that under the law of New South Wales a party to a de facto relationship of a certain duration may be able to claim an interest in certain property legally owned by the other party. However, once parties are married proceedings between them with respect to the property of either of them, which arise out of the marital relationship constitute a ``matrimonial cause'' (sec. 4). Such a proceeding must be brought under the Family Law Act (sec. 31, 39). While it is not necessary to decide whether parties could in any circumstances litigate their property rights under State law once they are married, it is hard to envisage a situation in which those proceedings could not be said to ``arise from the marital relationship of the parties''. Certainly, in the case of the present parties whether the wife were to seek a declaration of rights or an interest based on her contributions, it seems clear that her claim, in its totality must necessarily be seen as arising from the marital relationship; the factors occurring since the marriage could not be severed from those occurring before the marriage. There would be little sense in attempting to make a declaration or determination of her interests as at the date of the marriage.

The essential question is, however, whether sec. 79(4)(c) enables the Court to take into consideration contributions which occurred before the marriage. Paragraph (c) is in these terms:

``79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account —

(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;''

It can be noted that a ``party to a marriage includes a reference to a person who was a party to a marriage that has been dissolved or annulled''. This could imply that the terms ``party to the marriage'' or ``parties to the marriage'' serve to identify the parties rather than to fix the period of the marriage as the only period during which a relevant contribution might be made.

This view is reinforced by a consideration of the other paragraphs of sec. 79(4). For example, one party may in fact make a direct financial contribution to the acquisition of property of one or both parties before marriage. This is a common enough occurrence.

The appellant's submission was that anything that was done, or any contribution made before marriage would fall to be determined according to the rules of law and equity. A party who made a pre-marriage contribution of a kind which did not give rise to legal or equitable rights would not, in accordance with the submission, be able to rely on that contribution in proceedings under sec. 79.

In support of the submission it was put that when the parties lived together before marriage they may not have seen themselves as permanently committed to each other, and that it would be unfair to allow the ``contribution'' to have legal consequences just because they married later. If such a contribution were to be considered, it should be under para. (o) of sec. 75(2), and different considerations should arise. On the other hand, it could as easily be said that the marriage was undertaken in knowledge of what had gone before, that they each made a choice to marry and that it was a continuance of the relationship between the parties. The principle of affirmation by subsequent events is not a novel one. The legitimation of children is an example which illustrates the point aptly.

The decisions of the Court have not made a distinction between pre and post marriage contributions for the purpose of para. (a) and (b) of sec. 79(4). (Olliver and Olliver (1978) FLC ¶90-499; G and G (1984) FLC ¶91-582 at pp. 79,693-79,695.)

In Williams v. Williams (1985) FLC ¶91-628 the High Court held that a contribution made to the welfare of the family after cohabitation ceased could be taken into account under para. (c).

The issues canvassed before us were dealt with extensively in G and G, the reasoning of which we adopt.

This approach suggests that the term ``family constituted by the parties to the marriage and any children of the marriage'' is capable of being construed in the manner suggested above. Such a construction would accord with the realities of the situation often encountered in the Court, namely, that a period of cohabitation has preceded the marriage. It does not offend the notion of justice as between the parties, since entry into marriage is in a sense an affirmation of the previous relationship. It would be inconsistent with the legitimising of the children of the parties that the homemaker and parent contribution of a parent prior to marriage was excluded from the consideration of the Court. In principle there is nothing to require the exclusion of pre-marriage contributions.

It does not seem that public policy considerations would require a different approach. In New South Wales, and in other States, cohabitation or de facto relationships are accorded recognition, and certain consequences attach in regard to the property of the parties. Of course, it is possible that a person may, at the same time be making relevant contributions under sec. 79(4) in relation to a marriage and in relation to a de facto relationship which later becomes a marital relationship. However, this is not of itself a ground for refusing to recognise the contribution.

A final point is that the matter was not raised at the hearing. However, we considered that it should be dealt with.

[Their Honours then referred to other grounds of appeal irrelevant to this report and continued:]

Costs

An application was made by the wife seeking an order for costs and that issue was stood over by his Honour for argument following the delivery of judgment on the substantive issues.

Subsequently, the costs issue was argued by counsel and on 13 August 1986, after giving reasons, his Honour made orders as follows:

``1. That the husband pay the costs of the wife properly incurred in respect of the enquiry pursuant to O. 24 of the Family Law Rules and as to four-fifths of the costs properly incurred in the preparation for and the conduct of the hearing of the application of the wife for settlement of property and that the husband also pay the following: —

(i) the sum of $10,984 incurred to Mr Borthwick;
(ii) the sum of $6,540 incurred in respect of Colliers International;
(iii) the sum of $380 payable to P.L. Pickles and Company Pty. Ltd.; and
(iv) the sum of $1,900 payable to Mr G.W. Hayden.

2. That should the parties fail to agree on the amount payable within one (1) month of this date or in the case of an appeal from this order, within one (1) month of the date of the determination of such appeal by the Full Court of the Family Court the costs of the wife be taxed and that within one (1) month of the issue of a Certificate of Taxation the husband pay the amounts indicated in order number¹ herein together with the costs of the wife properly incurred of such taxation.''

The learned Judge gave a number of reasons for arriving at this decision applying, as he did, sec. 117 of the Family Law Act. He referred to the very large financial disparity between the parties and noted that this, on its own, might be a reason for awarding costs on the basis of the statement of Wilson J. in Mallett v. Mallett (1984) FLC ¶91-507. Next he relied upon the conduct of the parties in the case, concluding that there was not a full disclosure by the husband of his financial affairs as was required. See Oriolo and Oriolo (1985) FLC ¶91-653. The husband, his Honour concluded, did not comply with his positive obligation to set out, at an early stage in the proceedings, his financial position in a clear and comprehensive manner. He referred to a statement by the Deputy Registrar as to the lack of evidence provided by the husband in respect of a number of his assets and his lack of adequate co-operation in the financial enquiry held by the Deputy Registrar.

The learned trial Judge also relied upon the fact that the husband was wholly unsuccessful in relation to the application. His Honour said:

``The husband took the position that her application should be dismissed. This unbending position was only slightly modified in the final address made on his behalf before me. Again, the need to engage in meaningful negotiation has been stressed by the Full Court and most notably by the remarks of the Chief Judge and Gibson J. in Greedy and Greedy (1982) FLC ¶91-250 at pp. 77,382-77,383.''

When the wife commenced to live with the husband in 1969 or 1970 she ceased her previous employment and commenced to do work in various of the husband's businesses. In the judgment his Honour dealt with the extent to which she assisted in his enterprises and also contrasted this with the wife's original claims in this regard. His Honour found, and it was not the subject of any attack on appeal, that the wife's affidavit had significantly exaggerated these contributions. She was forced to qualify her claims in her viva voce evidence.

In the course of his judgment his Honour said:

``In determining the truth of these allegations I am hampered by the fact that the wife started off with obvious exaggerations of her role which I can only conclude were deliberate and not merely the product of confusion especially in view of the fact that no mention is made on her part of the frequent trips overseas during the period. On the husband's side there was a tendency to consistently underrate the contribution by the wife. Neither party deserves much credit in this regard. I find that the wife did give practical and clerical assistance from time to time during the period 1970-80 in the husband's various enterprises, but that she was not involved, as she claimed, in the planning and execution of the husband's business deals.''

By her application for an alteration of property interests, filed on 19 March 1984, the wife sought an order that the husband pay to her the sum of $5,000,000. On 18 April 1986 the wife filed an amended application seeking instead the sum of $2,000,000. The husband sought the dismissal of the wife's property claim in its entirety.

It was contended that the wife incurred more expense in her financial investigations of the husband than was warranted by the size of the order which she ought to have been entitled to expect. As to this it must be said that there was nothing to suggest that she would not at the outset have been entitled to expect a result in the vicinity of what was ultimately ordered. In any event a thorough examination of the husband's position with all its complexities was necessary before any reasonable view could have been taken as to the range of possible results, let alone be sufficient to enable the trial Judge to be in the position to make a responsible decision based on adequate evidence as to the facts.

One ground of appeal was that the substantial costs of an O. 24 enquiry ought not to have been allowed as all other means of investigation should have been exhausted before an enquiry was held. The short answer to this is that it was determined at the time that such an enquiry should be held and that the procedures appropriate vary with each case and are for the Court to determine in accordance with the rules. In any event, the husband cannot complain with any validity against a method which was found to be helpful, and which was necessary in large part by reason of his failure to provide appropriate evidence of his financial position. This ground of appeal must fail.

The appellant contended further that the wife's own shortcomings as to evidence, as found by the learned trial Judge and referred to above, called for her to receive less than four-fifths of the costs as ordered by the trial Judge. His Honour, as the trial Judge, obviously was very well placed to determine whether there should have been some apportionment of costs, and if so, what should have been its extent. Nothing has been shown as to why the proportion determined by his Honour was not appropriate. It was certainly well within the ambit of his discretion.

Again, the appellant argued that certain experts' fees should not have been allowed, or at any rate, that this issue should have been left to the taxing authority, as should have been the question of the proportion of the fees of each of these experts which should be paid by the appellant. This contention cannot be sustained as it was well within the discretion of the learned trial Judge to determine that issue, as he must have had some reasonable knowledge of the investigations conducted by these expert witnesses.

Ground 8 of the notice of appeal was that the husband could not have been said to have been wholly unsuccessful in the case, in that he was merely in the position of defending it. In argument it was said that this was demonstrated by the fact that, complete dismissal of the wife's claim, which it was the husband's contention should be the result, with no real modification throughout the case, was closer to the actual result than $5,000,000 or $2,000,000, as claimed by the wife. Not too much should be made of the precise expression used here by the learned trial Judge. The essence of the matter was the real lack of co-operation of the appellant as to the Court ascertaining his true financial position in clear breach of his obligations as laid down in Oriolo (supra). The reality was that the wife obtained an order for a substantial sum in the face of the husband's submission that there should be no order for any payment at all. This ground of appeal, if it can truly be categorized as such, cannot succeed.

The final ground was that:

``In the absence of any offer filed with the Court under Section 117C relevant to costs the Court ought not to concern itself on the issue of costs as to what offers or negotiations had occurred.''

In this connection, the argument was that (without prejudice) negotiations were not to be brought to the attention of the Court until the conclusion of the case. See Re Lusink; Ex parte Shaw (1980) FLC ¶90-884.

In the passage quoted earlier, his Honour was pointing to the generally unhelpful attitude of the appellant rather than seeking information as to negotiations before the case concluded. His Honour was emphasising the determination showed by the husband in ensuring that any result achieved by the wife would be won only the hard way. There would be no opportunity for her to achieve a result without a trial which went right to judgment. The case of Greedy (supra) makes it clear that it can be a relevant factor in relation to costs that a claim is denied completely, rather than that an appropriate alternative order be submitted. The remarks of the learned trial Judge in this connection did not, by any means, appear to be the cornerstone of his decision. Nevertheless, it has not been shown that these remarks were inappositive in the light of Greedy (supra).

His Honour summarised the husband's attitude in the litigation as being one of saying to the wife:

``Go and find out for yourself.''

Because of this attitude the wife was obliged to engage expert professional persons to make extensive investigations, and, in the light of the great complexities of the husband's affairs, the resultant cost to her was substantial. The learned trial Judge said:

``I do not think that the argument that if the husband had made full disclosure she would have still hired experts is one that could be used as an excuse on behalf of the husband.''

His Honour allowed the claim in respect of these witnesses except for $6,540. He allowed the costs of the O. 24 enquiry, the report being admitted into evidence and being of considerable benefit in his Honour's view. Otherwise he ordered that the wife should have four-fifths of her costs as taxed on a party and party basis in accordance with O. 38 r. 3.

In his reasons for decision as to costs, as well as in his earlier reasons, the learned trial Judge pointed to the wife's initial inaccurate evidence as to her contributions to the husband's business activities. It was for this reason that, dealing with the costs issues other than in respect of the enquiry and the expert witnesses, he allowed the wife only four-fifths of her costs.

It was submitted that the circumstances of the case were not such as to call for a costs order, that the wife's liability, as to costs had already been taken into account in assessing her position in relation to the property order, and that disparity in the financial position of the parties was not of itself sufficient to justify the costs order. This latter argument simply cannot be sustained when one compares the financial discrepancy between the parties in this case and those in the High Court case of Mallett (supra). Wilson J. with whom the other Justices of the High Court agreed, stated that the trial Judge's approach that it was relevant on the question of costs that the wife was in a much less powerful position than the husband financially was ``plainly within the range of a sound discretionary judgment''. Here there was an even bigger discrepancy than there was in Mallett.

We are of the view that the reasons for judgment of the learned trial Judge did not involve the taking into account of the wife's liability for legal costs in the case both in arriving at his decision as to alteration of property interests and in determining the costs question. The learned trial Judge in his reasons for judgment on the substantive issue was, in our view, merely stating the claim of the wife that she had incurred costs of $38,000 and that there was an estimate of a costs liability of a further $20,000. His Honour did not take these figures as being established, let alone use them as a basis to determine what was the asset position or net worth of the wife.

There was no real matter of principle argued in relation to the costs appeal. It was not shown that the learned trial Judge acted upon any error in law. He had regard to the provisions of sec. 117 of the Family Law Act and did not disregard any of the relevant authorities. The points raised by the appeal were basically to the effect that his Honour's discretion miscarried. The finding that the husband had failed to comply with his obligation as to disclosure was certainly not shown to be wrong. The undisputed facts indeed lead to the clear conclusion that he was right.

In all of the circumstances, given also the husband's general approach to the litigation, the complications of his financial affairs, his considerable wealth, and the great financial disparity between him and the wife, the decision as to costs was well within the ambit of discretion. It is indeed quite inappropriate in this jurisdiction that a party should approach a case in the manner of the husband here. See Greedy and Oriolo (supra) and the cases referred to therein.

The decision in Oriolo shows that it is fundamental to the operation of the Family Law Act in financial cases that there should be this obligation to make a full and frank disclosure of all matters relevant to the ascertainment of the financial position of each party, over and above mere compliance with the rules. There is a positive obligation on a party to set out at an early stage his financial position in a clear and comprehensive manner. This includes evidence as to the value of his assets and not merely a recital as to what they are. It is not enough to argue, as the appellant did in this case, that he had disclosed his assets (which he did eventually), and that it was for the wife to provide valuations as to them. In particular this is not appropriate in the light of the complications attached to the ascertainment of values. The Family Law Act demonstrates by its terms that it is aimed at early resolution of disputes, where this is possible. Inadequate disclosure almost inevitably prevents there being a properly based approach to the question of settlement. Where the case goes to trial inadequate disclosure may lead to delays, sometimes requiring adjournment; invariably it leads to more protracted and costly proceedings. The failure of a party to be completely open and forthcoming as to his or her financial position, should always place that party at risk in relation to an order for costs.

There was no proper basis for this appeal against the order for costs, particularly in view of the wide discretion of the trial Judge in this area. The appeal was without merit and should be dismissed.

Conclusion

For all the above reasons we dismiss the appeal.