Nghiem & Nghiem - [2013] FamCAFC 36

FAMILY COURT OF AUSTRALIA

NGHIEM & NGHIEM

[2013] FamCAFC 36

FAMILY LAW ─ APPEAL ─ PROPERTY SETTLEMENT ─ Contributions ─ Whether on the facts, as found by the Federal Magistrate, his Honour reached a conclusion which fell beyond the generous ambit of his discretion (see Norbis v Norbis (1986) 161 CLR 513) ─ Where nothing emerging from the Federal Magistrate’s contribution analysis, combined with the absence of findings of fact in relation to the nature and quality of the wife’s contributions during cohabitation, and subsequent to its cessation, in the Court’s view, provided a reasonable basis for concluding that such a discrepancy was reasonably open to his Honour ─ Where the Court concluded that, whilst a substantial disparity was undoubtedly appropriate, his Honour’s finding exceeded the generous ambit of his discretion ─ Appellate intervention enlivened ─ Appeal allowed ─ Discretion of the Federal Magistrate re-exercised.

FAMILY LAW ─ APPEAL ─ COSTS ─ Appeal successful ─ Order made for costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).

Family Law Act 1975 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

Abalos v Australian Postal Commission (1990) 171 CLR 167
Browne v Dunn (1893) 6 R 67
CDJ v VAJ (1998) 197 CLR 172
Dearman v Dearman (1908) 7 CLR 549
De Winter v De Winter (1979) 23 ALR 211
Edwards v Noble (1971) 125 CLR 296
Fox v Percy (2003) 214 CLR 118
House v The King (1936) 55 CLR 49
Kardos v Sarbutt (2006) 34 Fam LR 550
Norbis v Norbis (1986) 161 CLR 513
Pierce and Pierce (1999) FLC 92-844
SSHontestroom v SS Sagaporack [1927] A.C. 37
Stanford v Stanford [2012] HCA 52

APPELLANT:

Ms Nghiem

RESPONDENT:

Mr Nghiem

FILE NUMBER:

PAC

4720

2010

APPEAL NUMBER:

122

2012

DATE DELIVERED:

14 March 2013

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Coleman J

HEARING DATE:

14 March 2013

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

31 August 2012

LOWER COURT MNC:

[2012] FMCAfam898

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Dura

SOLICITOR FOR THE APPELLANT:

Harris Freidman

THE RESPONDENT:

In person

Orders

That the appeal be allowed.
That in order 1 of the orders made by FM Dunkley on 31 August 2012, the figure of $183,252 be substituted where the figure of $125,920 appears.

it is noted:

That the period of 60 days in order 1 of the orders made by FM Dunkley on 31 August 2012 is to run from today’s date.
That in order 3 the figure of $277,078 be substituted where the figure of $334,078.81 appears.
That in order 9 the figure of $41,092 be substituted where the figure of $29,351 appears.
That order 5(d) of the orders of FM Dunkley be amended by substituting 65% for 75% and 35% for 25%.
That the Court grants to the Appellant Wife a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Appellant Wife in respect of the costs incurred by the Appellant Wife in relation to the appeal.
That the Court grants to the Respondent Husband a costs certificate pursuant to the provisions of s.6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Respondent Husband in respect of the costs incurred by the Respondent Husband in relation to the appeal.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nghiem & Nghiem has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 122 of 2012

File Number: PAC 4720 of 2010

Ms Nghiem

Appellant

And

Mr Nghiem

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

introduction

By Notice of Appeal filed on 25 September 2012, Ms Nghiem (“the wife”), appealed against orders made by Dunkley FM on 31 August 2012 in proceedings between the wife and Mr Nghiem (“the husband”) pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
The orders of the learned Federal Magistrate provided for a 75/25 per cent division of the property of the parties as found by his Honour, such division favouring the husband over the wife. In lieu of those orders, the wife sought an order that she receive 65 per cent of the property of the parties to the marriage, albeit such property was, in ways which will become apparent, materially greater in net value than the net value of the property of the parties to the marriage found by his Honour.
The husband who has at all material times been unrepresented and assisted by an interpreter has valiantly resisted the wife’s appeal and sought to maintain the orders of the learned Federal Magistrate.
The appeal falls within a commendably narrow compass.

background

Some background to the proceedings at first instance and to the appeal to this Court is instructive. The matters of background of relevance find expression in paragraph 17 of the reasons for judgment of the learned Federal Magistrate. For present purposes at least, none of those matters is controversial.
The learned Federal Magistrate concluded, for reasons which he articulated, that the contributions of the parties rendered an apportionment of 85 per cent to the husband and 15 per cent to the wife to be appropriate. To those entitlements, his Honour made adjustments pursuant to s 75(2) by 10 per cent in favour of the wife. Each of the contribution and s 75(2) conclusions of the learned Federal Magistrate have been challenged in the appeal.

the appeal

The learned Federal Magistrate found the property of the parties to the marriage to be worth $690,079.53 net. The findings which his Honour made in relation to the property and superannuation interest which gave rise to that figure, are not controversial in the appeal as far as they go.
Three or four of the six grounds of appeal agitated on behalf of the wife related to the learned Federal Magistrate’s refusal to include notionally, as it necessarily would have been, three interests in real estate in Vietnam, the value of which in Australian dollars was not in doubt. The relevant sums were $81,802, $60,606 and $92,250.
In essence, at trial a hotly controversial issue was whether, as the wife asserted, the husband had an equitable or other beneficial interest in those properties worth that sum or those sums, or whether, as the husband asserted, he had no such beneficial or equitable interest. It was fairly conceded by learned Counsel for the wife that if he were successful in demonstrating that the learned Federal Magistrate erred by not including the three sums to which reference has been made with respect to the Vietnamese real estate, two sums each of $20,000 appearing as add backs at Appeal Book page 28 paragraph 73, would have to be removed, as to not do so would be to double count the property of the parties by $40,000.
The submissions on behalf of the wife acknowledged that the learned Federal Magistrate had in fact added back two sums which the husband undoubtedly provided to relatives in Vietnam, each in the sum of $22,000 during the parties’ cohabitation. The more vexed question is whether, as submitted by Counsel for the wife, his Honour erred in failing to find on the evidence before him that the husband either beneficially owned the Vietnamese real estate assets to which reference has been made, or that if his Honour did not err in so finding, that his Honour erred in failing to find that the husband had made material non-disclosures or miss-disclosures of his true financial position, thereby enabling the learned Federal Magistrate to proceed to deal with the husband’s interests without “undue caution”, an expression which emerges from a number of authorities to which learned Counsel for the wife referred the Court.
The submissions of learned Counsel for the wife in relation to this topic, particularly by reference to inconsistencies in the evidence of the husband and witnesses called in his case, comfortably establish that the learned Federal Magistrate’s findings with respect to this topic were not the only findings which his Honour might have made. His Honour could well, on the evidence before him, for the reasons submitted by Counsel for the wife, have made findings substantially in the terms asserted on behalf of the wife, that is to say the wife’s primary position. On the evidence before the learned Federal Magistrate, it was open for his Honour to find on balance that the husband did beneficially own or have an equitable interest in the Vietnamese real estate.
As the authorities make clear, however, and as learned Counsel for the wife readily acknowledged, the test is not whether other findings differing from those made by the lower court were reasonably open, but whether it has been demonstrated that the findings which were in fact made in the lower court were not reasonably open to his Honour (see Edwards v Noble (1971) 125 CLR 296). As the authorities have both in the High Court in this country and in the tradition of the common law of England long recognised, and as Kirby J has cautioned in a number of authorities, this Court must be cautious when invited to intervene in response to challenges of this kind.
The learned Federal Magistrate had what the common law refers to and the High Court has also regarded as the “trial judge’s advantage”. That advantage was even greater in this case where a number of witnesses, if not all, gave evidence through interpreters. His Honour was alive to the difficulties presented by the evidence before him in the way in which it undoubtedly was, as paragraph 58 of his reasons for judgment makes clear. This Court must not intervene unless it is demonstrated that the trial judge palpably misused, to adopt the language of the authorities, the advantage which his Honour undoubtedly had over this Court of having seen the witnesses and heard their evidence (see Dearman v Dearman (1908) 7 CLR 549, SSHontestroom v SS Sagaporack [1927] A.C. 37, Abalos v Australian Postal Commission (1990) 171 CLR 167 and Fox v Percy (2003) 214 CLR 118).
That advantage, in part only, is gained by this Court from the transcript. It records what was literally said or what, whoever transcribed the tapes perceives or believes was said. His Honour was there. He saw and heard the witnesses. It has not, in this Court’s view, been established that the learned Federal Magistrate erred in the critical findings of fact identified by learned Counsel for the wife at paragraph 57 of the reasons for judgment. As is clear beyond doubt, that was by no means the only finding which was reasonably open to his Honour. He could have found differently, but it has not been demonstrated that his Honour had to find differently.
Even if the Court is wrong in its conclusion in this regard, nothing would change. When properly analysed, the evidence which his Honour was submitted to have erroneously failed to accept, or the findings which his Honour was asserted to have erroneously failed to make, were in reality hearsay upon hearsay and/or conclusions in relations to matters of law. They involved agency attributions which the evidence did not establish.
With respect to the ingenuity of the submissions of Counsel for the wife, and accepting that the evidence before the learned Federal Magistrate was curious and contained inconsistencies, even if contrary to this Court’s primary conclusion that appealable error in the findings of fact has not been demonstrated, the second limb of the fact as identified by the High Court in De Winter v De Winter (1979) 23 ALR 211 would not have been established. That is to say that the exercise of discretion could not be shown to have been based upon a material error of fact.
As the High Court also made clear in De Winter, notwithstanding that the result may have been “within the range”, if reached by a process that was flawed in principle, it could not stand, and that is certainly the present case. The reality is however, that even if the Court acceded to the submissions of Counsel for the wife and the decision of the Court below was disturbed on that basis, in the re-exercise of this Court’s discretion, making the findings which it is submitted that the learned Federal Magistrate erred in failing to find would not, given the absence of any evidence of contributions by or on behalf of the wife to the accretion in value of the $40,000 which the husband undoubtedly remitted to Vietnam and the other circumstances of the case result in the wife’s entitlement being enhanced in the re-exercise of the Court’s discretion.
The Court is thus not moved to accede to the group of challenges directed to the identification of quantification of the property of the parties to the marriage.
The second challenge to the learned Federal Magistrate’s decision relates to his Honour’s finding that the contributions of the parties favoured the husband by 85 per cent to the wife’s 15 per cent. This challenge falls within what might be described as the last limb of House v The King (1936) 55 CLR 49, or, as Kirby J has more recently explained it in CDJ v VAJ (1998) 197 CLR 172, the “plainly wrong challenge”.
It is not submitted, as the Court understands the contentions of learned Counsel for the wife, that his Honour erred in principle or, save to the extent which has just been discussed, made a material error of fact in exercising his discretion. What is submitted is that on the facts, as found by the learned Federal Magistrate, and acknowledging the undoubtedly broad ambit of his Honour’s discretion, as Sir Gerard Brennan discussed in Norbis v Norbis (1986) 161 CLR 513, the learned Federal Magistrate reached a conclusion which fell beyond the generous ambit of that discretion.
Necessarily, the husband’s case must be that, although this Court and other trial courts may well have awarded the wife more than the learned Federal Magistrate did, the wife could not demonstrate that the outcome of the case before his Honour exceeded the generous ambit of his discretion.
It is tolerably clear from his Honour’s contribution analysis at Appeal Book page 29, paragraphs 74 to 82 inclusive, that the substantial imbalance in contributions was referable to two major factors. The first of those was that the husband brought to the marriage an unencumbered property. As decisions such as the New South Wales Court of Appeal’s decision in Kardos v Sarbutt (2006) 34 Fam LR 550 and the Full Court of this Court in Pierce and Pierce (1999) FLC 92-844 make clear, the impact of that initial contribution was not just its monetary value at the time of the commencement of cohabitation. The evidence before the learned Federal Magistrate was that the property was, in 1997 when the parties married, worth between $215,000 and $230,000. It was then undoubtedly unencumbered.
The second factor which, undoubtedly, and properly, informed the learned Federal Magistrate’s decision with respect to contributions related to a 2007 redundancy payment of $142,000 which the husband received. Although his Honour may, the husband would contend, have misconceived exactly what was done with that money, it seems clear that his Honour properly took the most favourable view of that for the husband, in terms of how it was utilised, it having been, on balance, applied for one legitimate matrimonial purpose or another.
Obviously, the weight liable to be given to each of those capital contributions would be viewed differently from court to court, judge to judge, federal magistrate to federal magistrate, but in an endeavour to give some greater empirical validity to that figure, it is instructive to have regard to the period over which the husband was employed by a government corporation. It is a reasonable assumption that a redundancy payment would, in some way not revealed by the evidence, as far as this Court is aware, be, to some extent at least, referable to the years of service with, in this instance, the government corporation.
Approximately half the period of the husband’s employment with the government corporation coincided with his cohabitation with the wife. Approximately one half preceded the marriage. Whilst neither necessary nor accurate, to regard $70,000 as, notionally, a contribution of the husband at the date of marriage would, in the Court’s view, be a fair way to test, or fair figure to have regard to when testing whether the learned Federal Magistrate’s conclusion fell within or beyond a reasonable ambit of discretion. It is probable, although there is no evidence in this regard, that were the redundancy figure able to be analysed, this approach may be found to be, if anything, a little generous to the husband. But there is no evidence about that, and the Court cannot speculate.
It could, in broad terms, thus be suggested that, at the commencement of cohabitation, the husband had notional assets or entitlements of $285,000 to $300,000. The wife had nothing of significance. The effect of the learned Federal Magistrate’s conclusion with respect to contributions was that the husband be entitled to $586,500 and the wife to $103,500, a discrepancy or disparity of $483,000. Whilst it by no means follows from the authorities that an initial disparity of contributions of not more than $300,000 could not translate into a disparity a decade or so later of $483,000, with respect to his Honour, nothing emerging from his contribution analysis, combined with the absence of findings of fact in relation to the nature and quality of the wife’s contributions during cohabitation, and subsequent to its cessation, in this Court’s view, provides a reasonable basis for concluding that such a discrepancy was reasonably open to his Honour.
As is not in doubt, there is no question that the husband’s entitlement, by virtue of contributions, was far greater than that of the wife. The issue is by how much. The husband submitted that the wife’s contributions, both in terms of her utilisation of income she derived and her attention to household duties, was less than it ought to have been, and a factor which could or should have reduced her contribution-based entitlement. As the transcript would reveal, the Court went through the entirety of the cross-examination of the wife with the husband during the appeal.
With respect to the husband, nothing consistent with these two assertions emerged during cross-examination. Not insignificantly, the learned Federal Magistrate, on at least two occasions during cross-examination, pointed out to the husband that the failure to cross-examine the wife about controversial parts of her affidavit rendered it likely that his Honour would accept the wife’s version of those events. Having regard to the rule in Browne v Dunn (1893) 6 R 67, that was an entirely proper and appropriate direction for his Honour to have given. Not insignificantly, whilst not cross-examining the wife about these topics, as the transcript also reveals, the husband, searchingly, and with apparent skill, cross-examined the wife about a number of other topics.
With respect to the husband’s submissions, the Court is unable to find that the learned Federal Magistrate could or should have relied on the wife’s absence of contributions, or the assertedly deficient nature of them, in support of his finding with respect to contributions. Although his Honour does not appear to have expressly so found, it is a reasonable inference, from the reasons for judgment under the heading “Contribution Analysis” that his Honour regarded the contributions of the parties during cohabitation and subsequently, during which period the parties each made contributions in the way his Honour identified, as having been approximately equal, and that the contributions which resulted in substantial inequality of entitlement were those to which reference has earlier been made.

With respect to his Honour and the submissions of the husband, whilst a substantial disparity was undoubtedly appropriate, the Court concludes that his Honour’s finding exceeded the generous ambit of his discretion in the husband’s favour, thereby enlivening appellate intervention.
The s 75(2) challenge articulated on behalf of the wife, in the Court’s view, fails. It is not suggested that his Honour erred in principle in determining the s 75(2) adjustment. It is not suggested that his Honour failed to have regard to any relevant fact or circumstance. It is not suggested that his Honour had regard to irrelevant facts or circumstances. It is not suggested that his Honour made a material error of fact in the course of determining the s 75(2) adjustment.
His Honour identified, at Appeal Book page 3 paragraphs 83 to 89 inclusive, the factors which led him to conclude as he did. In this Court’s view, it was reasonably open to the learned Federal Magistrate, for the reasons which his Honour articulated, to conclude as he did.

Conclusion

Given the Court’s conclusion, his Honour’s decision, regrettably, cannot stand. Both parties have invited the Court to re-exercise his Honour’s discretion. Neither party has sought to adduce further evidence.

Re-exercise of discretion

With respect to both parties, whilst nothing turns on it, in this Court’s view, it was sensible and practical for the parties to invite this Court to re-exercise the discretion, rather than go through the expense and angst of another trial and, potentially, another appeal.
The reasons for judgment in relation to the appeal will leave little surprise in the mind of anyone listening when the Court indicates the extent to which it will alter the orders of the learned Federal Magistrate in re-exercising his Honour’s discretion.
This Court concludes that a 75/25 division, by reference to contributions, would, on the undisturbed findings of fact of the learned Federal Magistrate, and by reference to the undisturbed pool of property to which his Honour had regard, be a just and equitable division of the property of the parties, by reference to contributions.
Such a finding translates as $517,500 entitlement on the part of the husband, $172,500 on the part of the wife. That represents a disparity of $345,000. There is no empirical magic about that. It is, as his Honour’s decision was, reached in exercising an undoubtedly broad discretion.
It does, however, in this Court’s view, reflect not only the quantum of the husband’s initial capital contribution, but its impact, insofar as the husband’s introduced property at G provided a residence for the parties which was unencumbered for a period, then encumbered for a time, then again unencumbered, and also the impact on the family’s finances of the husband’s very substantial redundancy payment. It also recognises, as the decision in Pierce particularly reminds the Court that it must, the impact of other contributions made by the parties during their cohabitation, and subsequent to its cessation.
The Court would not adjust that entitlement further by virtue of s 75(2) of the Act. Is that a just and equitable alteration of the parties’ interests in property, having regard to the High Court’s decision in Stanford v Stanford [2012] HCA 52. The short answer to that, in the Court’s view, is that it is, insofar as the property being registered solely in the name of the husband, to fail to alter his interests in the property, albeit by giving him an option to retain the property would be unjust and inequitable. Whether in terms of s 79(2) of the Act such an apportionment is just and equitable the Court concludes that it is.
The Court’s conclusion results in the husband’s entitlement overall being substantially greater than the entitlement of the wife, at $448,500, compared with the wife’s $241,500. Conversely, it reflects the effect of a s 75(2) adjustment of 10 per cent, which translates as approximately $138,000, that is, $69,000 more to the wife, producing a corresponding $69,000 less to the husband, a total disparity of $138,000.
On balance, such an outcome, in the Court’s view, reflects a just and equitable recognition of substantial imbalance of contributions on the husband’s part, counterbalanced, to some extent, by the greater future needs and means components of s 75(2) on the part of the wife.
How this outcome is to be achieved is ultimately, thanks to the mathematical assistance of learned Counsel for the wife, and, the Court suspects, perhaps more of his instructing attorney, to occur this way.
Order 1 should be amended to substitute for the figure of $125,920, the figure of $183,252. It should be noted that the period of 60 days referred to in order 1 is to run from the date of this Court’s judgment. To do otherwise would be a nonsense. The husband would be given an option which he could not exercise.
In order 3, the figure of $334,078.81 is to be substituted by the figure $277,078.
Order 9, where the figure of $29,351 appears, which it does in two places, the figure to be inserted is $41,092. The orders of the learned Federal Magistrate need not otherwise be divided.
There will be a costs certificate for each party, pursuant to the relevant sections of the Federal Proceedings (Costs) Act 1981 (Cth).

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 14 March 2013.

Associate:

Date: 21.03.2013