Perna & Perna

[2024] FedCFamC1A 183

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Perna & Perna [2024] FedCFamC1A 183

Appeal from:

Perna & Perna (No 2) [2024] FedCFamC2F 424

Appeal number:

NAA 101 of 2024

File number:

DUC 457 of 2020

Judgment of:

MCCLELLAND DCJ

Date of judgment:

15 October 2024

Catchwords:

FAMILY LAW – APPEAL – Property – Limited evidence available to the primary judge – Where no retrospective valuation of the farming property was conducted by an appropriately qualified expert –– Consideration of s 79 of the Evidence Act 1995 (Cth) – Where the factual error was material to the outcome of proceedings – Appeal allowed – Orders of the primary judge set aside – Matter remitted for rehearing before a judge other than the primary judge – Costs certificate granted to the appellant.

Legislation:

Evidence Act1995 (Cth) ss 76, 79

Family Law Act 1975 (Cth) ss 75, 79

Federal Proceedings (Costs) Act 1981 (Cth) s 9

Cases cited:

Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49

De Winter and De Winter (1979) FLC 90-605

Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154

House v The King (1936) 55 CLR 499; [1936] HCA 40

Jabour v Jabour (2019) 59 Fam LR 475; [2019] FamCAFC 78

McDonald v Queensland Police Service [2018] 2 Qd R 612; [2017] QCA 255

Watton v Mac Taggart [2020] NSWSC 1233

Number of paragraphs:

47

Date of hearing:

29 August 2024

Place:

Sydney

Counsel for the Appellant:

Dr Barnett SC

Solicitor for the Appellant:

King Cain

Counsel for the Respondent:

Mr O’Reilly

Solicitor for the Respondent:

Campbell Paton Taylor

ORDERS

NAA 101 of 2024
DUC 457 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR PERNA

Appellant

AND:

MS PERNA

Respondent

ORDER MADE BY:	MCCLELLAND DCJ
DATE OF ORDER:	15 OCTOBER 2024

THE COURT ORDERS THAT:

1.Appeal NAA 101 of 2024 is allowed.

2.Orders of the Federal Circuit and Family Court of Australia (Division 2) made on 5 April 2024 are set aside.

3.The matter is remitted for rehearing to a judge of the Federal Circuit and Family Court of Australia (Division 2), other than the primary judge.

4.The appellant is granted a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of this Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to Appeal NAA 101 of 2024.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Perna & Perna has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

MCCLELLAND DCJ:

1. On 5 April 2024, a judge of the Federal Circuit and Family Court of Australia (Division 2) (“the primary judge”) made final property orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). By Notice of Appeal filed on 29 April 2024, later amended on 10 July 2024, the husband seeks that these orders are set aside, that the matter is remitted for rehearing to a judge, other than the primary judge in the Federal Circuit and Family Court of Australia (Division 2) and orders as to the costs of his appeal. The wife seeks that the appeal be dismissed.

2. Throughout the course of the marriage, the parties had ownership of and farmed two properties in Town B, New South Wales referred to by the parties as “Property C” and “Property D”. The major assets in the pool were these two rural farming properties, which had been intergenerationally farmed and owned by the wife’s side of the family.  

3. The appeal has been upheld on the basis that, in the absence of admissible evidence from an appropriately qualified expert as to market value, the learned primary judge found that Property D was sold by the wife’s parents to the parties, and other relatives at 20 per cent below market value. This was material to the outcome of the proceedings because the primary judge made a property adjustment order in favour of the wife largely as a result of contributions in the form of the generosity of the wife’s parents to the parties.

   BACKGROUND

4. For the purpose of this appeal, I provide the following brief outline of facts and contentions insofar as they are relevant to the issues that require determination in the appeal.

5. The appellant, Mr Perna, was born in 1969 and is currently 55 years of age. The respondent, Ms Perna, was born in 1968 and is currently 56 years of age. There are two adult children to the relationship. In circumstances where the parties have each commenced proceedings, the wife at first instance and the husband on appeal, it is convenient to refer to the parties as the husband and wife.  

6. The parties married in 1991 and separated on a final basis in 2019.

7. At first instance, the parties agreed that the combined property pool, including superannuation, was $12,263,409. In accordance with the parties’ agreement to do so, the primary judge took a two pool approach (at [22]). The first pool comprised of the assets and liabilities that the parties acquired during their relationship. In regard to this pool, the primary judge found that the wife would receive 54 per cent and the husband would receive 46 per cent based on the finding that, having regard to the matters set out in s 79(4) of the Act, the wife had made a superior contribution in the form of the generosity of her parents to the parties (at [62]).

8. The second pool comprised of the funds the wife was to receive from the estate of the wife’s late father and the equity of the property the wife acquired after the parties’ separation. The primary judge found the husband had made no contributions to this pool and the wife should retain 100 per cent of its contents (at [63]).

9. The overall contributions finding was, however, offset by a 1 per cent adjustment in favour of the husband pursuant to s 75(2) of the Act. This was because the primary judge acknowledged that the husband would face some challenges in building a new farming enterprise in circumstances where orders were made for the wife to retain both farming properties. This was in circumstances where the primary judge accepted that was the husband’s intention post-separation (at [73]–[74]).

   Acquisition and disposal of property interests during the parties’ relationship

10. The acquisition and disposal of property interests at the commencement and during the parties’ relationship are set out below:

    (a)In 1988, the husband purchased a rural property at Town E (“Property F”) for $98,000, using savings and a bank loan of $80,000. The husband derived an income from farming work, the proceeds of which were used to repay the bank loan.

    (b)At the time of marriage, the husband contends he had assets including some equity in Property F as he had repaid $37,500 of the bank loan, over 1,500 farming animals and plant and equipment.

    (c)At the commencement of the relationship, the wife contends she had $10,000 in savings.

    (d)Following the marriage in 1991, the parties began working together on the farming enterprise at Property F. Eventually, the parties became engaged in a joint partnership for the purposes of the farming enterprises on various rural properties, which continued throughout their relationship and for some time after the parties separated.

    (e)In 1994, Property F was sold for $230,000. The net proceeds of sale from Property F were applied together with a loan from the wife’s father in the sum of $100,000 to purchase a property (“Property C”) from the wife’s parents in the sum of $251,200. As a condition of purchasing Property C, the wife’s father required the parties to enter into deeds granting a license for water supply from Property C to his adjoining property and a Right of Pre-Emption.

    (f)In 2001, the parties purchased a further parcel of land from a property adjoining Property C in the sum of approximately $130,000. The purchase was able to be made entirely from funds from the parties’ farming partnership.

    (g)In 2004, the parties purchased a farming animal with the assistance of $50,000 of borrowed funds from the wife’s father.

    (h)In 2009, the wife’s father offered his three children a property located at Town G, NSW (“Property D”) in the amount of $1,462,156. The wife and her two siblings purchased Property D as tenants in common in equal shares, with vendor finance from the wife’s father in the sum of $1,169,725. The parties are in dispute about the exact terms of the purchase and finance from the wife’s father including whether there was a discount from the fair market value.

    (i)In or about 2011, the husband contends he received an inheritance of $27,000 from the estate of his late mother which he purports to have deposited into the parties joint bank account.

    (j)In 2012, the parties jointly purchased the wife’s sister’s one third share of Property D in the amount of $507,893. After this acquisition, Property D was held one third jointly between the parties, one third solely by the wife and one third by the wife’s brother.

    Post-separation events

11. After the parties’ separation in 2019, the wife vacated the rural properties and rehoused herself in a nearby township. The husband continued to live at one of the rural properties.

12. In the period post-separation, the parties attempted to continue to operate the farming enterprise jointly. The husband mainly tended to the hands-on farming duties and the wife attended to bookwork. The parties dispute the extent of work that the wife performed for the farming enterprise in this post-separation period.

13. The attempts to continue jointly running the farming enterprise caused conflict between the parties. This is evidenced by an application being made for an Apprehended Domestic Violence Order against the wife for the protection of the husband in 2019. That application was dismissed at a hearing in 2020.  

14. Both parties received various ad hoc transfers of cash from bank accounts or payments from the partnership in the post-separation period.

15. Sometime in 2020, the parties ceased working together in their farming partnership. In late 2020 or early 2021, the husband distributed the sum of $20,000 each to the wife and himself from the partnership account.

16. The wife commenced proceedings for property settlement orders in October 2020 and the matter was set down for final hearing commencing on 8 August 2022. The final hearing was unable to be completed in the allocated two days for a number of reasons set out by the primary judge at [7] and summarised below:

    (a)The death of the wife’s father in the days leading up to the final hearing complicated the hearing in circumstances where evidence needed to be lead about the probate of the wife’s father’s estate.

    (b)The valuation of both farms was disputed due to valuation opinion evidence concerning Property D, particularly if the water licence attached to Property C was held by a person who had no interest in Property D.

17. Between 9 August 2022 to 9 February 2024, the following events occurred:

    (a)The wife was informed that she was expected to receive funds from the estate of her late father in the amount of approximately $350,000; and

    (b)The wife purchased a property in Town B for $330,000. The wife has an estimated $94,000 in equity as at 9 February 2024.

18. The case was heard over 18 months with the final day of the hearing being listed on 9 February 2024 in circumstances where it took time for the parties to resolve the valuation issue detailed above and judgment had to be delivered in respect to granting the husband’s application to re-open evidence to rely on a further affidavit.

    GROUNDS OF APPEAL

19. The grounds of appeal are set out, as follows:

    1. The Primary Judge erred in failing to provide sufficient reasons including providing reasons regarding:-

    (a)The assessment of contributions pursuant to section 79(4) of The Family Law Act 1975.

    (b) The assessment of ‘future needs’ pursuant to section 75(2) of The Family Law Act 1975.

    (c) The assessment of the justice and equity of the orders as required by section 79(2) of The Family Law Act 1975.

    2. The Primary Judge erred in not dealing with the entirety of the property in the Orders including the Partnership.

    3. The Primary Judge failed to take into account relevant considerations including but not limited to:

    (a)Matters that went to the assessment of contributions pursuant to section 79(4) of The Family Law Act 1975.

    (b) Matters that went to the assessment of ‘future needs’ pursuant to section 75(2) of The Family Law Act 1975.

    (c) Matters that went to the assessment of the justice and equity of the orders as required by section 79(2) of The Family Law Act 1975.

    4.        The Primary Judge wrongly apprehended material factual matters.

    (As per the original)

20. For reasons which I set out below, I am satisfied that there is merit in the last Ground of Appeal.

    LEGAL PRINCIPLES – APPELLATE INTERVENTION

21. The onus is held by the appellant to show that there is some error in the decision under appeal, and that such error influenced the trial judge’s ultimate conclusion: McDonald v Queensland Police Service [2018] 2 Qd R 612 at [39]; De Winter and De Winter (1979) FLC 90-605 at 78-092.

22. As this is an appeal from a discretionary judgment, it is necessary for the husband to establish grounds that fall within the principles identified by the High Court in House v The King (1936) 55 CLR 499 at 504–505 (“House v The King”).

23. That is, appellate intervention may be required where the primary judge:

    (1)Acts upon a wrong principle; or

    (2)Allows extraneous or irrelevant matters to guide or affect the decision; or

    (3)Mistakes the facts; or

    (4)Fails to take into account a material consideration; or

    (5)Makes a decision that, upon the particular facts, is unreasonable or plainly unjust.

    CONSIDERATION

24. For reasons which I explain, I am satisfied that the appellant has established error identified in terms of the third category referred to in House v The King. In so finding, I note that the learned and conscientious primary judge was placed in a difficult position where he endeavoured to achieve a just and equitable outcome for the parties, but was required to do so in circumstances where the legal representatives of the wife failed to present admissible evidence as to the fair market value of Property D at the time of its sale from the wife’s parents to the wife and her siblings.

25. The finding of the primary judge in respect to the circumstances of that purchase were set out in his reasons for judgment, as follows:

    32. In 2009 the husband and wife, jointly with the wife’s sister and brother, purchased from the wife’s father, [Property D], for $1,462,156 which represented about a 20% discount on market value. Again the wife’s father provided vendor finance to help the parties.

26. In considering this issue, I note that it was conceded by counsel for the wife that the primary judge made an error in determining that the purchase price of Property D, being $1,462,156, was about 80 per cent of its fair market value.[1] The wife’s written submissions filed on 30 September 2022 stated, at paragraph 10, that the purchase price of Property D was “noted as $1,462,156 however the vendor finance provided was $1,169,725”. In other words, it was never contended that the market value of Property D was $1,827,695, which would be 100 per cent of the fair market value if $1,462,156 included a 20 per cent discount. The contention of the wife was that the market value, with no discount applied, was the sum of $1,462,156. It was the wife’s case, however, that requiring the wife and her siblings to pay the lessor sum of $1,169,725, by way vendor finance, was an act of generosity on the part of the wife’s father as that amount was 20 per cent below what was contended to be the market value at the time of the purchase.

    [1] Appeal Transcript 29 August 2024, p.46 lines 15–22.

27. That error on the part of the primary judge would not, in my view, be such that it justified appellate intervention as the relevant point was the identification of generosity on the part of the appellant wife’s parents which was found to be giving the purchasers, including the wife and her siblings, a benefit equivalent to a portion of the 20 per cent discount below the properties market value. In other words, the error made by the primary judge in determining that the market value was about $1,827,695 rather than $1,462,156 would not, in itself, have influenced the ultimate conclusion that the parties benefited from the generosity of the wife’s parents.

28. However, I accept, the contention of senior counsel for the husband that it was necessary for the primary judge to accurately identify the nature of the financial benefits provided by the wife’s parents to the parties.[2] This was in circumstances where the husband had accepted, at first instance, that there had been various acts of generosity by the wife’s parents but disputed the extent of that generosity and the extent to which the generosity was reciprocated and offset by benefits provided by the parties’ to the wife’s parents.

    [2] Appeal Transcript 29 August 2024, p.7 line 38 to p.8 line 11.

29. Senior counsel for the husband contended that the primary judge erred in determining that one act of generosity, extended by the wife’s parents to the wife, was the sale of Property D at 20 per cent less than market value. In that respect, it was contended that:

    (1)The transfer was an inter-family arrangement that occurred rather than a commercial arrangement without any documentation providing evidence of a market valuation.[3]

    (2)The wife was challenged in cross-examination in respect to her evidence that there had been a valuation of the property before it was purchased from her parents and no such valuation was ever provided.[4]

    (3)There was no single expert who had provided a valuation in circumstances where an expert is required in order to value real property.[5]

    [3] Appeal Transcript 29 August 2024, p.32 lines 30–31 and p. 69 lines 21–26.

    [4] Appeal Transcript 29 August 2024, p.32 lines 31–32.

    [5] Appeal Transcript 29 August 2024, p.32 lines 35–41.

30. Conversely, counsel for the wife contended:

    (1)It was open to the primary judge to accept the evidence, that the parties received Property D for a 20 per cent discount on market value.[6]

    (2)The husband’s sworn evidence at first instance conceded that the property was purchased for $1,462,156.[7]

    (3)The husband in cross examination accepted that the loan was reduced to $1,169,725 because the wife’s father gifted to them 20 per cent of the value.[8]

    (4)The primary judge had correspondence from the conveyancers acting on the sale and transfer of the property and the husband did not call them as witness in his case, nor did he seek to adduce any expert evidence on this issue.[9]

    [6] Appeal Transcript 29 August 2024, p. 44 lines 43–46. See also wife’s Amended Summary of Argument filed 19 August 2024, paragraph 21.

    [7] Wife’s Amended Summary of Argument filed 19 August 2024, paragraph 22. See also Appeal Transcript 29 August 2024, p.43 line 36 to p.44 line 8.

    [8] Wife’s Amended Summary of Argument filed 19 August 2024, paragraph 23.

    [9] Wife’s Amended Summary of Argument filed 19 August 2024, paragraph 24.

1. The consideration of these competing submissions is central to the outcome of this appeal. In doing so, I commence by noting that the husband accepted that the contract for the sale of the property specified the sale price as $1,462,156.[10]

   [10] Husband’s affidavit filed 3 June 2021, paragraph 116.

2. It is also the case that the husband accepted that the amount the parties were required to pay the wife’s parents was the lesser sum of $1,169,725, which is 20 per cent less than the amount of $1,462,156.[11]

   [11] Husband’s affidavit filed 3 June 2021, paragraph 118.

3. However, the contention that the husband conceded that the repayment amount represented a 20 per cent reduction on the market value of the property is not one that can reasonably be made on the evidence. The relevant transcript reference, cited at paragraph 23 of the wife’s Amended Summary of Argument filed on 19 August 2024, includes an acknowledgement that the contract for sale of the property specified the amount of $1,462,156. The husband, however, specifically contested that the amount, so specified, represented the market value of the property. The following extract from the page of transcript referred to by counsel for the respondent is instructive:

   [COUNSEL FOR THE WIFE:] You agree, don’t you, that the agreed sale price from [the wife’s father] … to each of the siblings … was $1,462,156?

   [THE HUSBAND:] If that’s what it is, yes.

   [COUNSEL FOR THE WIFE:] Right. And the loan that the parties – that the three siblings had to pay was reduced to $1,169,725 because [the wife’s father] gifted to them 20 per cent of the value?

   [THE HUSBAND:] Well, he says that, but I don’t know where it comes from.

   [COUNSEL FOR THE WIFE:] Well, you’ve seen the correspondence, haven’t you, from the solicitors who … conducted that?

   [THE HUSBAND:] … But there’s no value on it. He just plucked it out of the air.

   (Transcript 8 August 2022, p.47 lines 5–17)

4. It is clear from that passage that the market value of Property D, at the time of its sale from the wife’s parents to the wife and her siblings, was a contested issue in the proceedings.

5. The wife carried the onus of establishing that price was 20 per cent below market value. This necessarily meant being in a position to prove the market value of Property D at the time of its sale in 2009. The husband was under no onus to disprove the assertion as to market value.

   APPLICATION OF THE LAW

6. These are property proceedings where the rules of evidence apply. Section 76 of the Evidence Act1995 (Cth) (“the Evidence Act”) provides that, unless an exception applies, “[e]vidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed”. This includes an opinion as to the value of real estate.

7. A relevant exception to the exclusion of opinion evidence is that which relates to expert evidence as set out in s 79 of the Evidence Act. That section allows for the admission of an expert opinion if the person providing the opinion has specialised knowledge based on their training, study or experience.

8. In Watton v Mac Taggart [2020] NSWSC 1233, Ward CJ in Eq, as her Honour then was, held that evidence of the value of real estate is inadmissible unless provided by an appropriately qualified expert (at [95]). In the circumstances of this case, her Honour’s analysis of relevant authority and explanation of principle is instructive, such that there is benefit in detailing the analysis in full:

   95. On this issue, it is relevant to note that, in order to fall within the exception under s 79(1) of the Evidence Act, evidence must satisfy two conditions: first, the witness must have specialised knowledge based on his or her training, study or experience (Dasreef Pty Limited v Hawchar (2011) 243 CLR 588; [2011] HCA 21 (Dasreef) at [32]; Honeysett v The Queen (2014) 253 CLR 122; [2014] HCA 29 (Honeysett) at [23]); and, second, the opinion must be wholly or substantially based on that knowledge (Dasreef at [32]; Honeysett at [24]).

   96. In Honeysett (at [23]), it was suggested that reliance on acquisition of knowledge through a person’s subjective life experience would not satisfy the first of these conditions. It was said that specialised knowledge is to be distinguished from matters of common knowledge; that the person’s training, study or experience must result in the acquisition of knowledge; and that the concept of “knowledge” connotes more than “subjective belief or unsupported speculation” but that it “applies to any body of known facts or to any body of ideas inferred from such facts or accepted as truths on good grounds”.

   97. In Tuite v The Queen (2015) 49 VR 196; [2015] VSCA 148 at [73] the Court said that “[i]n assessing the admissibility of the evidence, the judge must, of necessity, ascertain and define with some precision the scope, and the limits, of the witness’s ‘specialised knowledge’”.

   98. In Dasreef, the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) said that “the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study, or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded” (at [37], quoting Heydon JA, sitting as his Honour then was in the Court of Appeal, in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 (Makita) at [85]). Their Honours later observed that “[a] failure to demonstrate that an opinion expressed by a witness is based on the witness’s specialised knowledge based on training, study or experience is a matter that goes to the admissibility of the evidence, not its weight” (at [42]).

   99. In the present case, what appeared to be suggested in the course of oral argument by [Counsel for the Defendant] was that mere ownership of a property in a particular location (in the case of the deceased) or searching to buy a property in a particular location at a particular time (in the case of [the Plaintiff’s daughter]) would amount to specialised knowledge sufficient to fall within the exception to the opinion rule in s 79 of the Evidence Act (having regard to the observation by the Full Court of the Family Court referred to above [Frederick & Frederick [2019] FamCAFC 87 at [39]] that the ordinary common experience of people is that where they own only a few significant assets such as cars and houses, they are well aware of the purchase price and have some knowledge, obtained from a variety of sources, about their value). I do not accept that one can draw a conclusion that a homeowner has specialised knowledge about property values solely from the fact of home ownership (and I do not read the Full Court of the Family Court as suggesting such a proposition – indeed, if it did that would fly in the face of what was said in Honeysett and Dasreef, which decisions are clearly binding on me).

   100. I do not cavil with the proposition that some weight might relevantly be placed in appropriate cases on an opinion held by a testator as to the value of his or her assets (or, as in the present case, as to the value of assets disposed of by the testator during his or her lifetime); but to suggest that this is specialised knowledge so as to support the admission of such evidence as lay opinion under s 79 of the Evidence Act seems to me to be extraordinary and I cannot accept that proposition.

   101. For the same reason, I cannot accept the suggestion that [the Plaintiff’s daughter] (whose evidence was in any event far from objective or impartial) had specialised knowledge of property values in the Glossodia area simply because she and her ex-partner had looked at acquiring property there some time ago.

   102. Similarly, to the extent that reliance was sought to be placed on the Sales History report, the difficulty is that it is impossible on the face of that document to ascertain the attributes of the respective properties there sold so as to be able to form a view as to where, within the range of properties there listed, the Glossodia Property might fall. It cannot possibly be suggested that this evidence satisfies the test set out in Makita at [85], namely:

   85. In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be “wholly or substantially based on the witness’s expert knowledge”; so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight.

   103. When pressed on this in the course of oral submissions, [Counsel for the Defendant] was unable to suggest a basis on which that could be contended.

   104. Therefore, I am left with doubt as to what was the market value at the time of the transfer of the Glossodia Property and I do not consider it appropriate or instructive to speculate as to this. Whether or not a sale price was fixed that was less than market value at the time cannot here be determined…

9. Based on that helpful analysis which I respectfully accept and adopt, the primary judge was not in a position to determine the market value of Property D at the time of its sale from the wife’s parents to the wife and her siblings in 2009 in circumstances where the primary judge had not been provided with evidence from an appropriately qualified expert with specialised knowledge of the valuation of farming properties. In considering the impact of that error on the outcome of the proceedings, I note that the contributions of the parties are to be assessed holistically and it is an error to segment or compartmentalise the assessment of particular contributions: Dickons v Dickons (2012) 50 Fam LR 244 at [21] and Jabour v Jabour (2019) 59 Fam LR 475 at [61].

10. I accept the submission of counsel for the wife that, ordinarily, in undertaking the task of assessing contributions, it is unnecessary to place a precise value on any particular contribution, however it was necessary to do so in respect to Property D in this case.[12] This is because the finding by the primary judge that the property was sold to the wife and her siblings at 20 per cent less than market value was a significant finding in respect to his ultimate conclusion that the appellant and the respondent had benefited from the generosity of the wife’s parents. In that respect, the primary judge notes in his determination of s 79(4) of the Act that:

    53. That parties mutually benefited from the generosity of the wife’s father by acquiring [Property C] with vendor finance and [Property D] on favourable terms.

    54.      That generosity of the wife’s father was amplified by waiving a not       insignificant amount of that vendor finance.

    55.      The wife is to be credited by way of contributions for this generosity of her        father having regard to the principles in Gosper & Gosper even though the     property was jointly acquired.

    (Footnote omitted)

    [12] Appeal Transcript 29 August 2024, p.52 line 46 to p.53 line 21.

11. In those circumstances, the error was material to the assessment of the primary judge that the wife was entitled to a 4 per cent adjustment in her favour in respect to the first property pool as a result of contributions (at [62]), including the generosity by her parents as so found. On the agreed net assets of the first pool, being $11,819,409, that finding represented the amount of $472,776 or a differential between the parties of $945,553. Accordingly, I am satisfied that the error was material to the outcome of the proceedings, and on that basis, the appeal must be allowed.

12. As I have found merit in the fourth Ground of Appeal, in terms of the third factor identified in House v The King, it is unnecessary to consider the remaining grounds: see Boensch v Pascoe (2019) 268 CLR 593 at [7]–[8] (Kiefel CJ, Gageler and Keane JJ) and [101] (Bell, Nettle, Gordon and Edelman JJ).

    DISPOSITION AND ORDERS

13. In circumstances where the error in this appeal has been the absence of admissible evidence regarding the value of Property D at the time of its sale to the parties in 2009, I accept that it would be inappropriate for me to re-exercise discretion because I would be left with that same deficiency of evidence.

14. Accordingly, orders will be made as sought by the husband for the appeal to be allowed, for the orders made by the primary judge on 5 April 2024 to be set aside and for the matter to be remitted for rehearing to a judge of the Federal Circuit and Family Court of Australia (Division 2), other than the primary judge.

    COSTS

15. In this matter, I have found an error of law in terms of the third factor identified in House v The King.

16. In those circumstances, senior counsel for the husband, who has been the successful party in these proceedings, submitted that the appropriate order in respect to the costs of the appeal would be the granting of certificates pursuant to the provisions of the s 9 of the Federal Proceedings (Costs) Act 1981 (Cth).

17. I do not, however, make that same order in respect the wife’s costs in circumstances where it was the wife’s failure to present admissible expert evidence as to the value of Property D at the trial that led to error on the part of the leaned primary judge and where the consequence of that failure to do so was not acknowledged in this appeal.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland.

Associate:

Dated:       15 October 2024