Rowley & Amenta
[2023] FedCFamC1A 53
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Rowley & Amenta [2023] FedCFamC1A 53
Appeal from: Amenta & Rowley [2022] FedCFamC2F 1528 Appeal number(s): NAA 279 of 2022 File number(s): MLC 5442 of 2021 Judgment of: TREE J Date of judgment: 24 April 2023 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the husband appeals final property settlement orders – Whether the primary judge erred by not taking into account liabilities of the husband under s 90SF of the Family Law Act 1975 (Cth) and in concluding just and equitable orders – Where the husband is bound by the conduct of his case at trial – Where the terms of s 90SF(3)(b) and (n) do not support an argument that liabilities must be taken into account under them – Where the effect of any contended error would be de minimis – Appeal dismissed – Cross-appeal dismissed – Costs ordered in favour of wife. Legislation: Family Law Act 1975 (Cth) s 90SF Cases cited: Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Marsh & Marsh (2014) FLC 93-576; [2014] FamCAFC 24
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12
Number of paragraphs: 33 Date of hearing: 20 April 2023 Place: Cairns (via video link) Counsel for the Appellant: Mr Wilson Solicitor for the Appellant: Pearsons Lawyers Pty Ltd Counsel for the Respondent: Dr Ingleby Solicitor for the Respondent: Coulter Legal ORDERS
NAA 279 of 2022
MLC 5442 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR ROWLEY
Appellant
AND: MS AMENTA
Respondent
order made by:
TREE J
DATE OF ORDER:
24 April 2023
THE COURT ORDERS THAT:
1.The appeal and cross-appeal are dismissed.
2.The appellant is to pay the respondent’s costs in the sum of $10,000 within 28 days.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Rowley & Amenta has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE J:
INTRODUCTION
On 24 November 2022, a judge of the Federal Circuit and Family Court of Australia (Division 2) made final property settlement orders between Mr Rowley (“the husband”) and Ms Amenta (“the wife”).
Those orders declared the existence of a de facto relationship between the parties, and made a 52.5/47.5 per cent division of their property in favour of the wife. The orders also effected an equalisation of the parties’ superannuation and tax liability pursuant to the parties’ agreement. This saw the husband ordered to pay the sum of $589,046 to the wife (together with a $10,000 costs order) in exchange for her transferring to him her interest in the former matrimonial home (“the Suburb B property”) in default of which it would be sold and the net sale proceeds divided in the allocated percentages.
The husband appeals these orders. The wife opposes the appeal. Initially she also cross-appealed, but abandoned it in her Summary of Argument. For the reasons which follow, the appeal will be dismissed as, for completeness, will the cross-appeal.
BACKGROUND
The husband and wife are both 59 years of age. They met in 2002, and as found by the primary judge, commenced their de facto relationship in October 2003.
There are no children of the relationship, although the husband has three adult children from a previous marriage.
In October 2003, the parties purchased the Suburb B property. It was still in the early stages of construction, after completion of which the parties resided there for the duration of their relationship.
In 2018, the husband commenced proceedings against his former employer, C Pty Ltd, seeking damages for the termination of his employment. He was unsuccessful in his claim, again unsuccessful on his appeal from that decision, and ordered to pay significant costs.
The parties separated in July 2020, and the wife moved out of the Suburb B property. The husband has remained living there.
In May 2021, the wife commenced property settlement proceedings. The trial of them was heard by the primary judge from 22 to 24 August 2022. At the time of the hearing, the husband was a manager earning approximately $198,000 per annum and the wife in the property industry earing approximately $80,000 per annum.
THE APPEAL
At the outset, it is useful to restate the relevant principles which govern appeals from discretionary judgments. Particularly, it is well settled that error of the type identified in House v The King (1936) 55 CLR 499 at 504–505 (“House v The King”) must be established. There, the majority of the High Court said:
… The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred…
Ground 1
The first ground contends that:
1.The learned primary judge failed to take into account the de facto husband's unsecured liabilities as a relevant matter pursuant to subs 90SF(3)(b) and (n).
Before the primary judge, the husband sought to include in the asset pool a number of liabilities, relevant to this appeal, being as follows (as recorded at [154]):
154. The Husband seeks to include in the asset pool the following liabilities:
…
(b)The sum of $45,000 being the sum that he alleges he owes in costs for the [C Pty Ltd] litigation;
…
(d)The sum of $4,500 being the amount the Husband alleges he owes to [Mr D] of Counsel …;
…
He was unsuccessful in doing so, and no appeal is brought from that. Rather the husband says that those liabilities ought nonetheless to have been taken into account under either s 90SF(3)(b) or (n) of the Family Law Act 1975 (Cth) (“the Act”), and the failure to do so was an error of law. However no such argument was advanced before the primary judge, and a party is bound by the conduct of its case at trial (Metwally v University of Wollongong (1958) 60 ALR 68 (“Metwally”)) as otherwise it would be “little more than a preliminary skirmish” (Coulton v Holcombe (1986) 162 CLR 1 at 7 per Gibbs CJ, Wilson, Brennan and Dawson JJ).
I do not accept that by specifically advancing a case including the liabilities in the balance sheet, the husband was also by implication advancing an alternative case for their consideration either under any aspect of s 90SF(3) or indeed as Ground 2 contends, as a general consideration informing the just and equitable division of the parties’ property.
Although before me the husband argued that the new contention, if advanced at trial, could not have been met by evidence, the fact is that the husband’s Case Outline filed 22 August 2022 did not even foreshadow such a consideration under s 90SF(3), and hence necessarily the wife’s case was conducted without any opportunity to address it, including for example, potentially, leading evidence as to post-separation debts of hers. In that sense at least, it could not be said that evidence could not have been led to counter the issue, and hence prejudice to the wife cannot be excluded (Water Board v Moustakas (1988) 180 CLR 491).
However leaving to one side the Metwally point, in any event, the contention is without merit.
Section 90SF(3)(b) and (n) of the Act provide:
90SF(3) The matters to be so taken into account are:
…
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
…
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
…
Clearly the terms of s 90SF(3)(b) do not support an argument that liabilities must be taken into account under it. The husband’s suggestion that the word “property” means net property after factoring in liabilities was, unsurprisingly, conceded by counsel to be unsupported by any authority. In any event, the consequences of including liabilities not included in the balance sheet within the mandatory considerations imposed by s 90SF(3)(b) would be quite remarkable, requiring a consideration of all debts of a party, irrespective of how they were incurred. As I explored with the husband’s counsel at the hearing of the appeal, that would necessarily require such things as post-separation gambling debts, or post-separation debts arising from an award of damages for assault, to be taken into consideration, with the failure to do so being an error of law.
Of course, in the right case, such debts might properly be considered as a matter of discretion under s 90SF(3)(r), which permits the taking into account of “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account” but the argument of the husband is that s 90SF(3)(b) compels that accounting in all cases. That seems most unlikely to have been the legislative intention. For instance it would be curious that parliament would have required even small debts to be taken into account, yet necessarily that is what the husband’s construction would require. All of that speaks strongly against his novel construction being meritorious, and I reject it.
As to s 90SF(3)(n), the statutory mandate simply requires the court to take account of the proposed property orders. It does not require their minute dissection, but rather only a consideration of their nature and effect (Marsh & Marsh (2014) FLC 93-576). There is no reason to think that, in considering the adjustment referable to s 90SF(3) factors, the primary judge did not do so.
In any event, the same considerations as I outlined in relation to s 90SF(3)(b) again apply. They make it far more likely that the proper construction of s 90SF(3) as a whole is that, whilst as a matter of discretion debts not included in the balance sheet can be taken into account under s 90SF(3)(r), it is not otherwise mandatory to do so.
Of course, there is an inherent contradiction in the husband’s contentions, in that if the debts are required to be taken into account under s 90SF(3)(b), why they must again be considered under s 90SF(3)(r) is unclear, and vice versa, but I need not address that further.
Finally, as the husband conceded, even if the liabilities were required to be considered under s 90SF(3) as he contends, that consideration would not, in this case, have a direct mathematical impact in the amount of the debts, but rather, at best, there would be some percentage or fixed sum adjustment attributed to them. Here the husband suggested a one per cent adjustment would be warranted. In the context of a net pool as found of $1,289,152.11, that is less than $13,000 which if not de minimis, is clearly approaching it. Given that the remedy which the husband seeks in his appeal is a new trial, the absence of any miscarriage of justice resulting from the contended error would justify the dismissal of the appeal on that basis alone (Conway v The Queen (2002) 209 CLR 203 (“Conway”)).
This ground fails.
Ground 2
The second ground asserts:
2.In determining whether the ultimate orders were just and equitable, the learned primary judge failed to have due regard to the unsecured liabilities of the de facto husband and in so doing failed to consider the nature, form and characteristics of the orders.
Again, this contention was not advanced at trial, which is all but fatal to it now being raised for the first time (Metwally). My observations on this point in relation to Ground 1 equally apply to this ground.
However, as with Ground 1, in any event this complaint is without merit, as there is no reason to think that the primary judge overlooked the relevant liabilities when determining whether the postulated orders were just and equitable, notwithstanding the omission of any reference to them at [299]. Even if they were overlooked, there are two further matters which tell against this ground succeeding. Firstly, the liability referred to at [154(d)] is de minimis, and that referred to at [154(b)], whether considered individually or with the [154(d)] debt, is not obviously of such materiality that required an adjustment of the division of the pool, given that the debts were not included in the balance sheet, and thus formed no part of the calculation of the pool. Hence the Conway point discussed in relation to Ground 1 has equal force in relation to this ground.
Secondly, there is simply no warrant – much less authority – for imposing some mandatory consideration which must, in every case, be addressed in determining the justice and equity of a property settlement. There is otherwise no further challenge raised by this ground which engages with House v The King.
Finally, the phrase “due regard” in the ground is redolent of a complaint of inadequate weight – one which is nigh bound to fail (Gronow v Gronow (1979) 144 CLR 513 at 519 per Stephen J). However even if the ground is not read in that way, as explained above, it is still unmeritorious.
This ground fails.
Ground 3
Ground 3 was abandoned at the hearing of the appeal.
OUTCOME
The appeal wholly fails and shall be dismissed.
COSTS
The appeal as originally framed was wholly abandoned, and as amended was partly abandoned and otherwise failed. In those circumstances, costs ought follow the event. As reduced to accommodate her abandonment of her cross-appeal, the respondent’s claimed amount for costs of $10,000 is modest and will be allowed in full. Those costs should be payable within 28 days.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Tree. Associate:
Dated: 24 April 2023
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