APPEAL – Property – whether the orders made reflect the findings in the judgment – practical effect of the orders – whether errors can be corrected under slip rule – whether trial Judge erred in failing to include capital gains tax as a liability of the parties – admissibility of expert evidence on calculation of capital gains tax – whether trial Judge failed to give sufficient weight to the husband’s initial financial contributions – whether trial Judge erred in ordering the sale of an investment property adjoining the matrimonial home rather than acceding to the husband’s proposed order that this property be transferred to him – whether trial Judge erred in ordering that the wife receive a fixed monetary adjustment from the husband without regard to the sale price of the investment property.
Rhoden v Wingate [2002] NSWCA 165 Nolan and Ingram (1984) FLC 91-585 Ahmad and Ahmad (1995) FLC 92-571 Prince and Prince (1984) FLC 91-501 Biltoft and Biltoft (1995) FLC 92-614 Waters and Jurek (1995) FLC 92-635 Hickey and Hickey and Anor (2003) FLC 93-143 [S] and [S] [2000] FamCA 262
Appeal allowed.
Introduction
BRYANT CJ and BOLAND J: This is an appeal by the husband against orders made by Faulks J, as he then was, on 27 February 2004 in relation to proceedings commenced by the husband pursuant to the provisions of s.79 of the Family Law Act 1975 (“the Act”).
The effect of the trial Judge’s orders was that the parties’ substantial net assets of $10,643,419 should be divided as to 53% to the husband and 47% to the wife. In formulating orders to give effect to his judgment the…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Noetel & Quealey [2005] FamCA 677
Case
[2005] FamCA 677
Decision Date
CaseChat Overview and Summary
This matter concerned an appeal regarding the division of property, specifically focusing on the treatment of potential capital gains tax (CGT) liabilities. The husband argued that the trial judge erred by failing to account for CGT implications when making property orders, while the wife contended that the husband had failed to adduce sufficient admissible evidence to support such considerations.
The central legal issues before the court were whether the husband's prior evidence, including probate statements and market appraisals, was admissible to establish potential CGT liabilities, and if so, how those liabilities should be factored into the property settlement under sections 79 and 75(2) of the relevant legislation. The court was required to determine the onus of proof for demonstrating CGT liabilities and whether the trial judge was entitled to speculate on the timing and quantum of such taxes in the absence of clear evidence.
The court considered the admissibility of the husband's evidence under sections 77 and 190 of the Evidence Act 1995 (Cth), as well as section 69. It was argued that the husband's failure to present admissible evidence regarding the quantum of CGT meant the trial judge could not make assumptions about its impact. The wife maintained that the husband had rejected a proposal to sell the inherited properties and had not demonstrated an intention or need to sell other investment properties, thus crystallising a CGT liability. Consequently, the wife argued there was no basis for the court to consider potential CGT liabilities.
The court ultimately found that the husband had not discharged the onus of proving the admissibility and quantum of potential CGT liabilities. The trial judge was therefore not in a position to speculate on these matters when making property orders. The appeal on this ground was dismissed.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
It is submitted that the husband’s prior evidence, being contained in the probate statement is admissible pursuant to s.77 of the Evidence Act 1995 (Cth) (“the Evidence Act”), or “in the alternative pursuant to s.190 of the Evidence Act with a limit of its use to the above purpose pursuant to s.136. In the alternative, it will be submitted the market appraisals are admissible pursuant to section 69 of the Evidence Act”. Counsel for the husband further submitted, for the purpose of the re-exercise of the discretion, if we accept the husband’s evidence “of the acquisition cost of the inherited properties”, and because we have evidence of the current values of those properties, we can either deduct a “notional” sum from each party’s CGT affected properties, in effect, “neutralising” the effect of CGT, or by making an adjustment in the husband’s favour under s.75(2)(o) of 3% as set out in the husband’s case summary document. Counsel for the husband rejected the assertion made on behalf of the wife that the onus to prove the quantum of the CGT liability rested with the husband, and said because CGT accrues and is incurred by operation of law that neither party should bear an onus. He finally submitted that as the parties at the date of trial had seven investment properties, of which the fourth property was to be sold, with the wife retaining four investment properties (referred to as five in the submission) two of which did not attract the incidence of CGT, and the husband retaining two properties both subject to CGT, the overall result was unfair because the orders did not provide the same degree of flexibility to the husband as was afforded to the wife. When sold he submitted the wife could realise, without penalty, the substantial part of her property portfolio and the same flexibility was not afforded to the husband.(b) the wife’s submissions The principal thrust of the submissions made by the wife in respect of the CGT issue is that, as the husband failed to adduce admissible evidence before the trial Judge, in the absence of such evidence the trial Judge could not speculate for the purposes of s.79 and s.75(2) when CGT would crystallise, its quantum and the impact of such tax on either party. In summary, it is submitted that the basis of the husband’s appeal in respect of the CGT issue is flawed because the evidence disclosed the husband rejected a proposal by the wife to sell the inherited properties. Further that there was no evidence of any intention by the husband to sell the investment properties thus crystallising a CGT liability or any need for him to do so by reason of his access to other assets, and there was no admissible evidence of the amount of CGT payable in the event of a sale. Thus it is submitted in these circumstances there is no basis that the Court could, or should, have taken into account potential CGT liabilities of the husband. The wife’s submissions relating to the admissibility of expert evidence note the concession at trial that CGT calculations were based on market appraisals, the tender of which was rejected, on the basis of unfairness. It is further submitted the only relevance the market appraisals could have would be to establish the value of the properties in 1990 and that s.77 of the Evidence Act does not apply. Further, it is submitted there was no argument before the trial Judge based on s.190 of the Evidence Act nor any evidence relevant to s.190(4). The submissions based on admissibility in reliance on s.69 are opposed, also on the basis that no reliance was placed on this section before the trial Judge.