Phe & Leng
[2019] FamCAFC 17
•8 February 2019
FAMILY COURT OF AUSTRALIA
| PHE & LENG | [2019] FamCAFC 17 |
| FAMILY LAW – APPEAL – PROPERTY – Where the primary judge’s finding that a loan existed between the respondent and the respondent’s father was open on the evidence – Whether the primary judge erred by failing to rule that evidence supporting the existence of the loan was a privileged communication and therefore inadmissible pursuant to s 131(1) of the Evidence Act 1995 (Cth) – Discussion of s 131(2)(g) of the Evidence Act 1995 (Cth) – Where a broader interpretation of s 131(2)(g) of the Evidence Act 1995 (Cth) is to be preferred – Where s 131(2)(g) of the Evidence Act 1995 (Cth) excluded any possible claim of privilege and the communication was admissible – Whether the primary judge appropriately assisted the appellant as to the admissibility of evidence in accordance with Re F: Litigants in Person Guidelines (2001) FLC 93-072 – Where the primary judge complied with Guideline 6 and adequately provided general advice to the appellant regarding the inadmissibility of evidence – Where the primary judge failed to comply with s 132 of the Evidence Act 1995 (Cth) and Guideline 7 and inform the appellant of a possible claim of privilege under s 131(1) of the Evidence Act 1995 (Cth) – Whether this failure to comply with s 132 of the Evidence Act 1995 (Cth) and Guideline 7 was such a failure and denial of procedural fairness as to call for appellate interference – Where the wife was not deprived of the possibility of a successful outcome – Whether the primary judge erred in the treatment of the respondent’s legal fees and associated liabilities – Where there was no error in the primary judge’s treatment of the respondent’s legal fees –Whether the primary judge erred by failing to make findings in the appellant’s favour pursuant to Weir and Weir (1993) FLC 92-338 – Where the appellant was unable to demonstrate deliberate non-disclosure by the respondent – Where there was no error in the primary judge’s exercise of discretion – Where none of the grounds of appeal were made out – Appeal dismissed – No order as to costs. |
| Acts Interpretation Act 1901 (Cth) s 15AA |
| Atlas Financial International Ltd v Nortbale Pty Ltd [2011] NSWSC 815 Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd(No. 2) (2011) 193 FCR 479; [2011] FCA 276 Bloss Holdings Pty Ltd v Brackley Industries Pty Ltd [2005] NSWSC 756 Brown v Commissioner of Taxation (2001) 187 ALR 714; [2001] FCA 596 Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633 De Winter and De Winter (1979) FLC 90-605 Edwards v Transport Accident Commission [2013] VSC 557 Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190 Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 House v The King (1936) 55 CLR 499; [1936] HCA 40 Johnson and Johnson (1997) FLC 92-764; [1997] FamCA 32 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 Mills v Meeking (1990) 169 CLR 214; [1990] HCA 6 Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40 Mulkearns v Chandos Developments Pty Ltd (No 4) (2005) 12 BPR 22,993; [2005] NSWSC 511 Nader v Sutherland Shire Council [2008] NSWCA 265 Payne v Rowe (2012) 16 BPR 30,869; [2012] NSWSC 685 Re F: Litigants in Person Guidelines (2001) FLC 93-072; [2001] FamCA 348 R v L (1994) 49 FCR 534 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (No. 3) (2004) 214 ALR 621; [2004] FCA 1570 Simply Irresistible Pty Ltd v Couper [2010] VSC 505 Slea Pty Ltd v Connective Services Pty Ltd [2017] VSC 232 SS Hontestroom v Sagaporack [1927] AC 37 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; [1999] HCA 3 Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54 Surridge & Surridge (2017) FLC 93-757; [2017] FamCAFC 10 Weir and Weir (1993) FLC 92-338; [1992] FamCA 69 |
| APPELLANT: | Ms Phe |
| RESPONDENT: | Mr Leng |
| FILE NUMBER: | PAC | 5236 | of | 2008 |
| APPEAL NUMBER: | EA | 13 | of | 2018 |
| DATE DELIVERED: | 8 February 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Alstergren CJ, Strickland & Watts JJ |
| HEARING DATE: | 13 August 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 15 December 2017 |
| LOWER COURT MNC: | [2017] FamCA 1040 |
REPRESENTATION
| THE APPELLANT: | In person |
| THE RESPONDENT: | In person appearing by telephone with the assistance of an interpreter |
Orders
The appeal be dismissed.
There be no order as to costs.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Phe & Leng has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 13 of 2018
File Number: PAC 5236 of 2008
| Ms Phe |
Appellant
And
| Mr Leng |
Respondent
REASONS FOR JUDGMENT
Introduction
On 15 December 2017, the primary judge made final orders and delivered reasons for judgment in property settlement proceedings between Ms Phe (“the wife”) and Mr Leng (“the husband”). The orders were to the effect that the wife was to receive 80 per cent of the parties’ net assets and the husband was to receive the balance of 20 per cent.
By way of Amended Notice of Appeal filed on 12 April 2018, the wife appeals the orders of the primary judge.
On 17 April 2018, the husband was ordered to file and serve a Summary of Argument and List of Authorities on or before 24 July 2018. The husband did not comply with this order.
On 2 August 2018, the husband filed an Application in an Appeal seeking an extension of time to file a Summary of Argument and for the hearing of the appeal to be postponed. This Court made orders on 6 August 2018 dismissing that Application.
The appeal was heard on 13 August 2018. The husband appeared via telephone with the assistance of an interpreter and was permitted to make oral submissions opposing the appeal.
For the reasons that follow, the appeal will be dismissed.
The Appeal
The Amended Notice of Appeal contains four grounds of appeal.
With respect to the wife, who represented herself at both the trial and the appeal hearing, the grounds were somewhat difficult to follow. The form and content of the wife’s Summary of Argument compounded these difficulties. The Summary of Argument was not structured around the grounds and contained various extraneous submissions.
Even though the wife made no application to file a further Amended Notice of Appeal, we will address the submissions in her Summary of Argument that went beyond the grounds of appeal where appropriate.
Ground 1
Ground 1 is:
The judgment put too much weight on the evidence of the witness Mr Leng Snr that impose great burden and unfairness to the outcome of the property proceeding. Loans to family member shall not be recognised without solid official prove. Surridge v Surridge [2017] FamCAFC 10.
(Errors and omissions in original)
The wife raised three complaints in relation to ground 1: that the primary judge failed to find that the husband’s father (“Mr Leng Snr”) lacked credibility; that the primary judge placed excessive weight on Mr Leng Snr’s evidence; and that the finding that the loan existed was not reasonably open on the evidence.
At trial, the husband and Mr Leng Snr asserted that the husband owed Mr Leng Snr $145,000. The wife denied that such a loan existed, and instead asserted that it was entirely the husband’s money.
The primary judge summarised Mr Leng Snr’s evidence regarding the loan as follows:
91. Mr Leng Snr said that he gave the husband approximately AU $148,000 for the purchase of the Suburb F property. He said he told the husband, “I’m your father. If you need, of course I will help. But you have to sign the paper. So once you have the money, you have to return the money back to me.” Mr Leng Snr said the husband must repay him the money once he sells the Suburb F property. Mr Leng Snr said that, if the Suburb F property is not sold, then the husband will have to find another way to repay the loan.
92. The money that was loaned to the [husband] was paid by way of three or four separate payments between February and November 2010. When asked whether he retained the remittance advices for those payments, Mr Leng Snr said that he asked the husband to make the payments on his behalf. He did not have any documentary evidence apart from a handwritten schedule of payments.
The primary judge addressed the issue of whether the loan existed in the following paragraphs:
109. The husband asserts that his father loaned him a total of approximately $145,000 to fund the purchase of the Suburb F property. In cross-examination, Mr Leng Snr said the total amount loaned to the husband for the purchase of the Suburb F property was approximately $148,000.
110. The money was transferred into an Australian bank account (ending in ...84) which was operated jointly by the husband and his father. The husband deposed that four separate sums of money were transferred into the account over a period of 10 months in 2010, a total of $148,076. The husband deposed that these funds were required in an Australian bank account for the purpose of his father’s visa application. Once the funds were no longer needed, the husband said his father directed him to pay $3,200 to his brother and retain the remaining funds (approximately $145,000) for the purchase of the Suburb F property. The husband said he assumed sole control over the joint account from that time.
111.In cross-examination Mr Leng Snr asserted that the money was his and the husband was required to repay those funds.
112. The settlement sheet for the Suburb F property (Exhibit M2) indicates that a sum of $104,093.45 was required by the conveyancer. A cheque for that exact sum was drawn from than Australian bank account N operated by the husband (account ending in ...48) on 24 March 2011. The settlement sheet shows that a deposit of $21,250 had been paid. There were some adjustments of rates and taxes specified on the settlement sheet. The total paid as evidenced on that document is $125,343. In addition to that sum required for the deposit and the settlement funds, payment of stamp duty would be required together with payment of legal costs on purchase.
113.The wife continued to assert that the money belonged to the husband, and was not a loan from the husband’s father, despite acknowledging in an email to the husband’s sister that the husband’s family contributed approximately AU $100,000 into the Suburb F property (Exhibit H6, which is an email in Chinese that the interpreter translated in Court). The wife said that the husband told her when they divorced that the money was his father’s, but she believes this was to stop her from accessing the asset.
114.The balance of probabilities test, which is applied by the Court to determine issues of fact, leads me to the conclusion that the husband does owe his father the sum of $145,000, which funds I accept were largely applied to acquire the Suburb F property.
Turning to the first of the three arguments raised in relation to ground 1, the wife asserts that Mr Leng Snr’s concession that he has a poor memory should have led his Honour to conclude that he was not a credible witness.
At times during his cross-examination, Mr Leng Snr struggled to recall certain events and timeframes. In order to evaluate the state of his memory and general credibility, his Honour asked Mr Leng Snr a series of questions (see Transcript 19 May 2017, p.11 line 45 to p.12 line 23).
His Honour embarked on this line of questioning of his own accord and at no point during the exchange, or at any other point during the trial, did the wife explicitly challenge Mr Leng Snr’s capacity to recall events. The wife is bound by the conduct of her case at trial and cannot raise new arguments on appeal: Metwally v University of Wollongong (1985) 60 ALR 68 at 71. As a result, there is no merit to this argument.
Before moving on from this aspect of ground 1, we note the following for completeness. It is clear that his Honour turned his mind to the state of Mr Leng Snr’s memory and credibility. Furthermore, having seen and heard all of the witnesses, the primary judge enjoyed advantages that we do not have as an appellate court. As per Lord Sumner in SS Hontestroom v Sagaporack [1927] AC 37 at 47:
[N]ot to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge’s conclusions of fact should, as I understand the decisions, be let alone.
(Also see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588 at [90] per Kirby J).
As to the wife’s second complaint under this ground, a challenge to the weight his Honour attached to Mr Leng Snr’s evidence faces a significant hurdle because, as with her first complaint, this is a matter quintessentially for the primary judge: Gronow v Gronow (1979) 144 CLR 513 at 519. The wife was unable to demonstrate any error by his Honour in the apportionment of weight to Mr Leng Snr’s evidence. As will be discussed below, Mr Leng Snr’s evidence formed only part of the evidence that his Honour relied on to find that the loan existed. Accordingly, there is no merit in this aspect of the wife’s challenge.
The third challenge the wife raised under ground 1 was that his Honour’s finding that the husband owed his father $145,000 was not open on the evidence. The wife relied on Surridge & Surridge (2017) FLC 93-757 (“Surridge”) as support for her argument that, “[u]nless there is solid evidence in support of this alleged loan from the family member, it is unfair to recognise the alleged loan of $145K from the witness’ grandfather with only pieces of handwritten schedule of payments”.
Contrary to the wife’s assertion that Mr Leng Snr’s evidence and the handwritten schedule of payments were the only evidence before his Honour that supported the existence of the loan, there was ample other evidence to buttress such a finding, including the husband’s evidence, bank account statements from the husband’s account and his joint account with Mr Leng Snr, and a message from the wife to the husband’s sister acknowledging that the husband’s family contributed approximately $100,000 towards the Suburb F property.
In Surridge, the Full Court held that the primary judge erred by recognising the existence of a loan from the husband’s parents in circumstances where the primary judge had made adverse findings as to the husband’s credit, and where there was no evidence, objective or otherwise, that supported the conclusion that a loan existed (at 77,009 [44]). The facts of this matter are clearly distinct from those in Surridge because here, as outlined above, there was credible and cogent evidence before the primary judge that supported the existence of the loan.
We find that, based upon the evidence upon which the primary judge relied, it was reasonably open for his Honour to conclude, on the balance of probabilities, that the husband did owe Mr Leng Snr $145,000. As there is also no merit in this third complaint, ground 1 fails.
Ground 2
Ground 2 is that:
The trial judge fail to exercise his discretion to dismiss statement of facts during negotiation for compromise as evidence. In SRL scenario, the judge role needs to go beyond merely drawing inadvisability to the party’s attention to ensure justice being uphold.
(Errors and omissions in original)
Ground 2 concerns a message sent by the wife to the husband’s sister on 27 October 2012. The husband said in his trial affidavit that the message was annexed to that affidavit but it was not. On the last day of the trial, the husband tendered a copy of the message which was written in Chinese and subsequently translated in court. During the trial, his Honour was led to believe that the message in question was an email, however, on appeal, it became clear that it was a text message. Nothing turns on this for the purposes of the appeal. The message was marked Exhibit H6.
A section of the text message (“the message”) translated is as follows (Transcript 19 May 2017, p.24 lines 21–23):
[P]lease tell father and mother as long as M can come back to Sydney, I’m willing to give up everything in Taiwan and return the $3 million they have put into the Suburb F property to show my sincerity.
The wife argues that his Honour erred not only by failing to find that the message was inadmissible and proceeding to ask questions based upon it but also by failing to afford the wife procedural fairness by not informing her, as an unrepresented litigant, that she might be able to object to the admissibility of the message.
His Honour put to the wife that the message represented an acknowledgment by her that the loan (in Taiwanese dollars) existed (Transcript 19 May 2017, p.24 lines 30–31). The wife was given the opportunity to be heard on the message and respond to the inference that his Honour intended to draw from it. During this exchange, the wife said the message was part of a communication between the husband’s sister and herself in an attempt to try and get the husband and his family to return the parties’ eldest child to Australia. The wife also suggested that it was the husband’s money despite the fact that she herself referred to it as belonging to his parents (Transcript 19 May 2017, p.23 lines 38–45).
At [113], extracted above, his Honour inferred from the message that the wife was aware that the husband’s family had contributed approximately $100,000 towards the Suburb F property. His Honour relied upon this inference, along with the husband's and his father’s evidence, a written record of payments and bank statements of the joint account, to find that the $145,000 was a loan by the husband's father to the husband and not the husband's money.
As to the first limb of ground 2, the wife contended before us that his Honour should not have allowed the message to have been adduced into evidence because it was a communication made in connection with an attempt to negotiate the settlement of a dispute pursuant to s 131(1) of the Evidence Act 1995 (Cth) (“the Evidence Act”) and accordingly it was not admissible.
Section 131(1) of the Evidence Act is in the following terms:
Exclusion of evidence of settlement negotiations
(1) Evidence is not to be adduced of:
(a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
A “dispute” is a reference to “a dispute of a kind in respect of which relief may be given in an Australian or overseas proceedings" (s 131(5)(a) of the Evidence Act). In this case, the wife had the ability to obtain relief from this court by applying for both parenting orders and a property settlement order.
Section 131(1) is not discretionary and is an absolute privilege against the admission of the message unless one of the exceptions in s 131(2) of the Evidence Act are attracted. Further, s 134 of the Evidence Act provides that evidence that must not be adduced or given in a proceeding is not admissible in the proceeding. Given that the statement made by the wife in the message is in connection with an attempt by the wife to settle disputes about whether the parties’ eldest child was to be returned to Australia and the property settlement, the provisions of ss 131(1) and 134 are, subject to s 131(2), attracted.
In this case, the only exception to the privilege that might be relevant is s 131(2)(g) of the Evidence Act which provides:
(2) Subsection (1) does not apply if:
…
(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence…
It has been noted in various cases that the interpretation of the meaning and operation of s 131(2)(g) has been the subject of differing views (see, eg, Galafassi v Kelly (2014) 87 NSWLR 119 at 147 [136]; Slea Pty Ltd v Connective Services Pty Ltd [2017] VSC 232 at [34]). Indeed, there are two competing interpretations as to the breadth of s 131(2)(g) of the Evidence Act.
The broader view, which, in our view, accords with the ordinary meaning of the provision, is that s 131(2)(g) of the Evidence Act applies where the existence or the contents of otherwise privileged communication contradicts or qualifies existing evidence or an inference from that evidence and the court is otherwise likely to be misled unless the communication is adduced. This interpretation has been supported in Nader v Sutherland Shire Council [2008] NSWCA 265 at [48]–[52] and at first instance (see, eg, Mulkearns v Chandos Developments Pty Ltd (No 4) (2005) 12 BPR 22,993 at [66]–[67]; Simply Irresistible Pty Ltd v Couper [2010] VSC 505 and Edwards v Transport Accident Commission [2013] VSC 557).
The narrower view is that s 131(2)(g) of the Evidence Act has to be read as applying only to cases where the privilege in s 131(1) could enable a party to mislead the court about the course of an attempt to settle a dispute where that matter was an issue in the proceedings and the privileged communication contradicted or qualified evidence which had been admitted about that issue. This view was initially expressed by Emmett J in Brown v Commissioner of Taxation (2001) 187 ALR 714 at [184]–[185] (“Brown”) and has been supported at first instance (see, e.g. Bloss Holdings Pty Ltd v Brackley Industries Pty Ltd [2005] NSWSC 756 at [4]–[9]; Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd(No. 2) (2011) 193 FCR 479 at [41]–[57] (“Barrett Property Group”); Atlas Financial International Ltd v Nortbale Pty Ltd [2011] NSWSC 815 at [84]–[86]; Payne v Rowe (2012) 16 BPR 30,869 at 30,882 [45] (“Payne v Rowe”)).
Assuming the court was likely to be misled (see [49] below), in this case, the message would be admissible if the broader view was adopted, as the exception would apply because the wife’s evidence contradicted what she wrote in the otherwise privileged message. If the narrower view was adopted, the exception to the privilege would not extend to adducing evidence which would contradict or qualify existing evidence already adduced and the message together with the subsequent cross examination of the wife upon it, would have been inadmissible.
Section 15AA of the Acts Interpretation Act 1901 (Cth) (“the Acts Interpretation Act”) provides that, in the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying a provision shall be preferred to a construction that would not promote that purpose or object.
There is no cogent statement as to the purpose or object of s 131(2)(g) of the Evidence Act. The text of s 131(2)(g) of the Evidence Act has an ordinary meaning and requires three essential elements:
(a) Evidence or an inference from evidence already adduced;
(b) Evidence in an otherwise privileged communication or document sought to be adduced; and
(c) A likelihood that the court will be misled unless the evidence in (b) is adduced to contradict or qualify the evidence in (a).
The evidence in (b) is a reference to evidence about either the existence of or, the existence and contents of privileged communications.
In order for one construction to be preferred to another, an alternate construction must be open. Section 15AA of the Acts Interpretation Act is not a licence to rewrite s 131(2)(g) of the Evidence Act (see R v L (1994) 49 FCR 534 at 538; Mills v Meeking (1990) 169 CLR 214 at 235 (Dawson J)).
It would appear that proponents of the narrow view would read into the words of the first element of s 131(2)(g) of the Evidence Act namely, “evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding” additional limiting words such as “and that makes the privileged communication or document an issue in the proceedings.” There is no basis for doing this. The plain words in the subsection cannot be ignored. The first element of the subsection on its face applies to any evidence or inference from evidence already adduced.
There is also no basis to presume that the legislative task miscarried. Some supporting the narrow approach argue that the other exceptions in s 131(2) of the Evidence Act are confined (see Emmett J in Brown at [181]). However, the “broader” approach is still significantly confined by the need for there to be a likelihood that the court will be misled unless the privileged communication is adduced. The broader construction of s 131(2)(g) of the Evidence Act does not open the “floodgates”. In any event, s 135 of the Evidence Act provides a discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, be misleading or confusing, or cause or result in an undue waste of time. In this case, admitting the evidence was not an undue waste of time. The issue of the loan was important because the net assets of the parties were $304,662 and would have otherwise been $449,662 had the loan not been included.
It is also argued that the narrower view of s 131(2)(g) is supported by the policy objectives of the Evidence Act and that the broader view would destroy the privilege. For example, Bromberg J in Barrett Property Group expressed the view at [56]:
That [the narrower] construction serves the policy objectives which s 131 seeks to protect. Nothing could be more calculated to undermine settlement discussions, than the prospect of statements made in the course of those discussions being used to discredit evidence adduced at trial, should settlement negotiations fail. The construction contended for by the applicants, would replace the exclusionary cloak of s 131 with a thin veil behind which little would ever be said or done in pursuit of the amicable settlement of a dispute.
In our view, there are two policy objectives, not only the encouragement of settlement negotiation but also the provision of genuine representations during those negotiations. As Mansfield J said in Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (No. 3) (2004) 214 ALR 621 at [36] (in the context of considering the exception applying to privileged offers in a costs application; s 131(2)(h)):
Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically.
(Emphasis added)
If, as it is here, the issue is of importance, it is not sound public policy to permit a party to assert something is “white” when attempting to negotiate a settlement and then give sworn evidence that it is “black”, without the court knowing the witness had previously said that it was “white” and the witness being exposed to being tested upon the assertion made during settlement negotiations. We accept that despite the obligation to negotiate genuinely, sometimes care may need to be taken by the court when placing weight upon statements made in settlement negotiations. It may be as a result of testing that the court might conclude that the statement made in settlement negotiations was false but, as in this case, it may not.
We note, given both parties were unrepresented, that we have not heard any argument, fulsome or otherwise, in relation to the interpretation of s 131(2)(g). However, recognising that another court on receiving that argument may decide otherwise, we are nevertheless of the view, in this case, that the broader interpretation of the meaning and operation of s 131(2)(g) of the Evidence Act, based as it is upon the ordinary words of s 131(2)(g), is to be preferred to its narrower construction.
As already emphasised, s 131(2)(g) of the Evidence Act is only applicable where evidence or an inference from evidence is “likely to mislead’’. In some cases, it might be appropriate to conduct a hearing on the voir dire (see s 189 of the Evidence Act; Payne v Rowe at [46]). In the present case, the primary judge generally accepted the wife's credibility and the warnings in Surridge applied. In addition, the wife raised with the primary judge the fact that the husband had made an inconsistent statement about the amount of the debt and from whom he borrowed the money (he said his brother) in an earlier sworn financial statement. Notwithstanding the evidence of the husband, the evidence of Mr Leng Snr (including Mr Leng Snr’s written record) and bank statements in the joint names of the husband and Mr Leng Snr, the primary judge put particular weight upon the message to make the finding he did and we conclude it was likely that the primary judge would have been misled into accepting the wife's evidence had the message been excluded.
Thus s 131(1) of the Evidence Act does not apply to exclude the message because s 131(2)(g) was enlivened and the wife was not entitled to claim privilege.
We also note that our acceptance of the broader view is consistent with an emphasis, in matters arising in courts exercising jurisdiction under the Family Law Act 1975 (Cth) (“the Family Law Act”), on the second policy objective of genuine negotiations. In applications for a property settlement order, each party has an obligation of full and frank disclosure, starting with pre-action procedures for a case and continuing until the case is finalised (see r 13.01 of the Family Law Rules 2004 (Cth)). This obligation exists during settlement negotiations as much as it does when giving evidence.
The second limb of ground 2 is the wife’s contention that his Honour erred by failing to warn her that she was entitled to a possible claim of privilege. The wife is an unrepresented litigant. The Full Court in Re F: Litigants in Person Guidelines (2001) FLC 93-072 at [253] (“Re F”) set out nine guidelines of practice and procedure aimed at according procedural fairness to unrepresented parties in a court exercising jurisdiction under the Family Law Act. The guidelines contain a general statement in relation to how advice might be given to an unrepresented litigant about the right to object to inadmissible evidence and a more specific statement in respect of privileges. The following comments made by the Full Court in Re F are apposite:
185. The husband’s submission raises the issue of the extent of the trial judge’s obligation to advise a litigant in person as to issues of admissibility concerning his/her evidence. We do not think that the judge’s obligation can or should extend this far. We think it is sufficient for judges to do what his Honour in fact did and advise the litigant in person generally as to the sort of evidence that would not normally be admitted.
….
240. As far as guideline 6 is concerned, it does no more than remind judges of the statutory requirement of s132 of the Evidence Act 1995 (Cth). [this is a reference to guideline 6 in Johnson v Johnson (1997) FLC 92-764 at [121] which is replicated in identical terms as guideline 7 in Re: F]
….
253. Finally, we think it useful to list the set of guidelines as altered by our consideration of them above.
….
6.A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to enquire whether he or she so objects. A judge is not obliged to provide advice on each occasion that particular questions or documents arise;
7.If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights…
Section 132 of the Evidence Act provides:
If it appears to the court that a witness or a party may have grounds for making an application or objection under a provision of this Part [a reference to Part 3.10 – Privileges], the court must satisfy itself (if there is a jury, in the absence of the jury) that the witness or party is aware of the effect of that provision.
The primary judge went to great lengths on the first day of the trial to explain procedural processes to the parties who were both unrepresented. His Honour told the parties what evidence he intended to rely upon and generally how he would assess whether or not evidence was reliable and how he intended to approach the issue of objectionable parts of evidence. In doing so, his Honour adequately complied with Guideline 6. His Honour, however, did not comply with s 132 of the Evidence Act and Guideline 7 when the husband sought to tender the message.
Although the guidelines are not binding legal rules such that failure to apply them necessarily results in procedural error, the provisions of s 132 of the Evidence Act are mandatory. The important question is whether the failure by the primary judge to comply with s 132 of the Evidence Act and Guideline 7 was such a failure to afford procedural fairness as to call for appellate interference. A departure from s 132 of the Evidence Act and Guideline 7 does not automatically entitle the aggrieved party to a new trial. It is necessary to consider whether it would be futile to order a new hearing because to do so would inevitably result in the same outcome in respect to the issue of privilege: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145 (“Stead”). Had the wife been informed about her rights in relation to a possible claim for privilege and made that claim, the primary judge would have properly ruled that the exception in s 131(2)(g) of the Evidence Act applied, and privilege could not be claimed. Thus the wife was not deprived of "the possibility of a successful outcome" (Stead at 147; Minister for Immigration and Border Protection v WZARH(2015) 256 CLR 326 at 341–343).
There is no merit in ground 2.
Ground 3
Ground 3 asserts that the trial judge erred by treating the “borrowed legal fees of the respondent as common assets & liability” (errors in original).
His Honour addressed the husband’s legal fees in the following manner.
In summarising the asset pool between the parties, his Honour noted at [125] that the husband had paid legal fees of $55,000.
At [126] and [128], the primary judge then noted that in addition to the $145,000 loan from Mr Leng Snr, the husband had borrowed a total of $87,660 from various other sources.
At [128], his Honour notionally included the husband’s paid legal fees of $55,000 as a joint asset and included the husband’s additional loans totalling $87,660 as a joint liability.
At [177], his Honour made the following comments in considering the matters listed in s 75(2) of the Act:
The husband’s liability for loans for legal fees and for living expenses amount to $87,660 of which only $55,000 can be for legal fees based upon his evidence. I propose to take into account here that $32,660 of the husband’s loans he obtained to fund his living expenses. There is no evidence as to how that money was expended. I have given the husband the benefit of the doubt and assumed there was no excessive living expense which the wife should be required by these proceeding to indirectly contribute to.
The treatment of funds used to pay legal fees are a matter for the discretion of the primary judge: Chorn and Hopkins (2004) FLC 93-204 at [56] (“Chorn”). Typically, where legal fees already paid are accounted for as a notional asset, then any associated liabilities used to pay the legal fees will be taken into account as a joint liability: Chorn at [60]. The primary judge’s treatment of the husband’s legal fees accorded with these well-established principles and we find no error in his Honour’s exercise of discretion. Thus, there is no merit in this ground of appeal.
Ground 4
Ground 4 is as follows:
Where lots of critical evidence needs to be provided from Taiwan that this court has no jurisdiction, the quality of the information is of a question. When the respondent father made deliberate non disclosure to this court that makes the asset pool unclear/impossible to decide, the authority apply shall be Weir v Weir [1993] FLC 92-338.
(Errors and omissions in original)
As to jurisdiction, when the parties divorced in Taiwan on 16 July 2012, the parties signed a “Divorce Settlement”. His Honour addressed this Divorce Settlement in the following paragraphs:
59. A divorce was granted in Taiwan on … July 2012. The husband said there was a Divorce Settlement. He said he annexed a copy of that settlement to his affidavit, however, it was not annexed.
60. Not being able to see what this document said I informed the parties that if there was a property settlement which had taken place in Taiwan then it may be that there could not be further proceedings before this Court. I informed the husband that he would need legal assistance if he wished to assert the property matters between he and the wife had already been determined. After some discussion the husband elected not to press an asserted “Divorce Settlement” in Taiwan as a bar to proceedings in this Court and the hearing then progressed.
On appeal, the wife conceded that both parties had agreed not to rely on the Divorce Settlement during the trial. Consequently, given that s 39(4)(a) of the Family Law Act was otherwise attracted, any argument regarding jurisdiction was not permitted.
The central premise of ground 4 is that his Honour erred by failing to make findings in the wife’s favour pursuant to Weir and Weir (1993) FLC 92-338 (“Weir”) where the wife asserted that the husband had deliberately failed to disclose important information. In support of this challenge, the wife made several complaints regarding the husband’s non-disclosure in her Summary of Argument and during the hearing of the appeal.
In Weir, the Full Court held that once it is established that there has been a deliberate non-disclosure, the court should not be unduly cautious about making findings in favour of the innocent party (at 79,593). Given the inherent difficulty in identifying and assessing contributions to property or financial resources that have deliberately not been disclosed, the court may take a “broad brush approach” in determining the orders made in favour of the innocent party (Weir at 79,594).
His Honour was faced with the difficult but not uncommon task of reconciling inconsistent and conflicting oral evidence. In order to enliven a possible finding pursuant to Weir, the wife first had to demonstrate deliberate non-disclosure by the husband. As will be set out below, she did not do so and therefore failed to establish an error in his Honour’s exercise of discretion.
The husband’s evidence of the $145,000 loan from Mr Leng Snr
The wife also argues that the primary judge should have made a finding pursuant to Weir because the husband gave inconsistent evidence of the parties to this loan and its amount.
The husband was permitted to rely on an affidavit sworn on the second day of the trial, 16 May 2017, and on an affidavit and updated financial statement filed on the third day of the trial, 17 May 2017.
His Honour heard the wife’s objections to these documents, during which she specifically drew his Honour’s attention to an inconsistency in the husband’s evidence regarding the loan (Transcript 18 May 2017, p.6 lines 29–36). In the husband’s financial statement filed on 2 April 2014, the husband asserted that he owed his brother $185,000 for the purchase of the Suburb F property. Contrastingly, in his financial statement filed 17 May 2017, the husband stated that he owed his father $145,000 for the purchase of the Suburb F property.
The husband was cross-examined at length about this. In answering questions from both the wife and the primary judge, the husband maintained that his father loaned him $145,000 for the purchase of the Suburb F property.
His Honour noted the inconsistencies in the husband’s evidence in summarising the parties’ credit:
9. The husband presented as an affable person who was reliant upon his family for support. I accept he did try to assist the Court with evidence about the financial aspects of their marriage. Unfortunately he had failed to comply with directions which were made the previous year for the filing of his evidence for the trial. Nonetheless I extended to him the ability to place evidence before the Court and he had been able to marshal a significant amount of evidence to attach to his affidavit. Clearly other evidence which he had anticipated would be available to him to attach to his written evidence could not be obtained in time for the hearing.
10. Whilst I thought the husband gave his evidence in a helpful and apparently straightforward and honest manner, I considered his memory for dates and figures was not as good as that of the wife.
The husband’s description of the loan in his most recent financial statement accorded with the husband’s oral evidence at trial, Mr Leng Snr’s evidence, the relevant bank statements and the message sent by the wife to the husband’s sister. Whilst it was not consistent with his earlier financial statement, the wife did not adduce any evidence to suggest that the husband had deliberately misrepresented or concealed this information.
We find no error in his Honour’s decision not to make a finding pursuant to Weir because the discrepancy between the husband’s descriptions of the loan fell short of the clear evidence of deliberate non-disclosure required for such a finding.
The husband’s personal bank accounts in Taiwan
The wife contends that a further basis for a finding pursuant to Weir was that the husband failed to provide information about his personal bank accounts in Taiwan.
There was some documentary evidence of the husband’s bank accounts in Taiwan before the primary judge provided by the wife. At trial, the wife argued that in his family, finances were “mixed up together” (Transcript 19 May 2017, p.24 line 39) and the husband had almost unfettered access to funds from Mr Leng Snr. In support of this argument the wife tendered a statement of the husband’s Bank S account in Taiwan (Exhibit M3). This statement shows that, as at 20 February 2011, there was the equivalent of AUD $100,767.73 in this account. The husband provided a plausible explanation for this, being that he borrowed it from Mr Leng Snr for a few days in order to secure the mortgage financing needed to finalise the settlement of the Suburb F property. At trial, the wife conceded the legitimacy of this justification (see Transcript 19 May 2017, p.22 lines 1–15).
Whilst the husband did not include details of his Taiwanese bank accounts in any of his affidavits or financial statements, he gave oral evidence that there was the equivalent of AUD $20 in the Bank S account, and around AUD $500 in his other bank accounts in Taiwan (see Transcript 19 May 2017, p.29 lines 8–19). With this information, his Honour attributed the husband’s bank accounts with a value of $500 (at [128]).
The wife did not make any submissions about how much money was in the husband’s accounts. As such, it was open to his Honour to find, at [123], that the wife had accepted the value attributed to the husband’s bank accounts.
The husband’s company in Taiwan
The wife also asserts that the husband failed to disclose his interest in a company in Taiwan. His Honour addressed the husband’s company at [124]:
The wife also asserted that the husband has an interest in and earns an income from a rental property business (operated in a company name) that is registered in his name. In cross-examination, the husband said that the rental property business company does not trade. The registered capital of the property is NTD 1,000,000. The husband says that he borrowed that sum from his sister. There is no evidence that any amount remains owing. There is no evidence as to the value, if any, of the husband’s interest in the trading company. There is no evidence as to the Australian dollar value of NTD 1,000,000 so that even if the capital was paid up the value of same is not known. In short, the evidence about the company is so deficient as to be of no assistance at all. No submission was made about what action the court should take given the obligation to make a full disclosure in relation to the company lay with the husband.
The wife’s grounds of appeal did not challenge his Honour’s findings that the husband’s interest in the company could not be attributed any value.
Rather the wife’s complaint was that given the husband did not include details of the company in any of his affidavits or financial statements, his Honour should have found that the husband failed to make full disclosure and made orders pursuant to Weir. As noted by his Honour at [124] the wife did not make any submissions about what action the court should take in respect of the husband’s disclosure. In all the circumstances, the primary judge was not required to find that the husband had deliberately failed to disclose his interest in this company.
The Taiwan property
An issue between the parties at trial was whether the husband owned a property situated at O Street, Suburb P, City D, Taiwan (“the Taiwan property”). The wife asserted that the husband purchased and owned the Taiwan property. The husband denied this and instead declared his father purchased the Taiwan property for his brother but allowed the husband to live there rent-free.
His Honour considered this issue at [103]–[108] of the reasons, and found that the husband held the legal title of the Taiwan property but not the beneficial interest (at [108]).
It became clear during the appeal hearing that his Honour made an error of fact in finding, at [70] and [103], that a title search of the Taiwan property dated 11 July 2013 recorded the husband as the owner. In fact, the title search listed the husband’s brother as the owner. His Honour’s error can be attributed partly to the parties’ less than clear explanation of the title search (see Transcript 17 May 2017, p.20 line 23 to p.21 line 34) and partly to the difficulty inherent in interpreting the document itself which was written in Mandarin.
We are of the opinion that this error was immaterial: De Winter and De Winter (1979) FLC 90-605. In any event, a correct interpretation of the title search would have only supported his Honour’s finding that the husband did not hold the beneficial interest in the Taiwan property.
The wife’s complaint on appeal regarding the Taiwan property is that the husband’s position at trial did not accord with his previous representations. For example, in an earlier affidavit the husband asserted that he purchased the property himself (affidavit of the husband filed 24 November 2009 at paragraph 4).
His Honour noted this inconsistency in the husband’s evidence at [106] and at [8] in finding that “[t]he wife’s evidence specified a number of representations which I accept the husband had made to her and which were ultimately false”.
Whilst there were discrepancies in the husband’s affidavit evidence regarding the Taiwan property, his Honour was entitled to accept the evidence suggesting that the husband did not hold the beneficial interest in that property.
Conclusion
None of the wife’s complaints demonstrate that the orders made by the primary judge are the result of any error that would permit appellate interference: House v The King (1936) 55 CLR 499 at 504–505.
Accordingly, the appeal should be dismissed.
Costs
As both parties were self-represented at the hearing of the appeal, there will be no order as to costs.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Alstergren CJ, Strickland & Watts JJ) delivered on 8 February 2019.
Associate:
Date: 8 February 2019
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