Shriver & Shriver

[2007] FamCA 813

FAMILY COURT OF AUSTRALIA

SHRIVER & SHRIVER [2007] FamCA 813

FAMILY LAW – PROPERTY – APPEAL – Assertion that trial Judge erred in exercise of discretion not established. Held that no element of discretion was involved and that trial Judge did not err in fact.

FAMILY LAW - CROSS-APPEAL – Established that the trial Judge erred in failing to include partial property settlement as an asset of the wife upon the categorisation made by his Honour regarding such moneys.

Family Law Act 1975 (Cth) Section 75(2)

APPELLANT: MS SHRIVER

RESPONDENT/CROSS APPELLANT: MR SHRIVER

FILE NUMBER: SYF 4101 of 2004

APPEAL NUMBER: EA 80 of 2006

DATE DELIVERED: 10 August 2007

PLACE DELIVERED: Parramatta

JUDGMENT OF: Bryant CJ, Kay & Coleman JJ

HEARING DATE: 26 June 2007

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 18 July 2006

LOWER COURT MNC: [2004] FamCA 4101

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mark Anderson

SOLICITOR FOR THE APPELLANT: Doolan Wagner & Callaghan

COUNSEL FOR THE RESPONDENT: Peter Cook

SOLICITOR FOR THE RESPONDENT: Delaney Lawyers

Orders

1. That the appeal be dismissed.

2. That the cross appeal be allowed and lieu of the sum of $260 543.44 in the orders of 18 July 2006 the sum of $252 653.59 be inserted in the said orders.

3. That the Court grants to the appellant a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

4. That the Court grants to the respondent a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Shriver & Shriver

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

Appeal Number: EA 80/2006
File Number: SYF 4101/2004

MS SHRIVER

Appellant

And

MR SHRIVER

Respondent/Cross Appellant

REASONS FOR JUDGMENT

1. By Notice of Appeal filed 15 August 2006 Ms Shriver (“the wife”) appealed against orders made by Rose J on 18 July 2006 in proceedings between herself and Mr Shriver (“the husband”). On 30 August 2006 the husband filed a Notice of Cross Appeal.

2. The effect of the wife’s Notice of Appeal, if successful, would be to increase the sum payable to her by way of settlement of property pursuant to the trial Judge’s orders by $45 000. The effect of the husband’s cross appeal, if successful, would be to reduce the sum payable by him to the wife by $11 271.22, to the figure of $249 272.22. It will be readily apparent that the appeal and cross appeal thus fall within a narrowly defined ambit.

Background

1. The trial Judge heard proceedings between the parties in relation to the settlement of property, children’s matters and child support over a period of fifteen days commencing 25 July 2005 and concluding 2 June 2006. The appeal and cross appeal relate only to the property settlement part of the proceedings.

2. The parties cohabitated for a period of six years from 1998 to September 2004. The wife was 37 years of age and the husband 48 years of age at the date of the trial Judge’s judgment. There is one child of the marriage who was aged 6 at the time of the trial Judge’s judgment.

3. There were a number of corporate and trust entities through which the husband conducted his business and/or assets were held. The wife was at all material times engaged in home duties.

4. The trial Judge concluded that the assets of the parties were worth $1 243 036 net. Save to the extent to which reference will be made, that figure is uncontroversial.

5. The trial Judge concluded that the contributions of the parties should be assessed as 75 per cent by the husband and 25 per cent by the wife. Neither the appeal nor the cross appeal involves any challenge to that conclusion. His Honour concluded that a section 75(2) adjustment of 5 per cent in favour of the wife was appropriate for reasons which he detailed. Neither the appeal nor the cross appeal involves any challenge to that conclusion. The trial Judge concluded that the wife’s entitlement to 30 per cent of the net assets of the parties as found constituted a just and equitable proportion of their assets.

6. Save to the extent that adjustments to the asset pool are raised in both the appeal and cross appeal, none of the foregoing conclusions are challenged by the Notice of Appeal or the Notice of Cross Appeal.

The trial Judge’s Reasons for Judgment

1. Having regard to the issues raised in the appeal and cross appeal it is unnecessary to refer in detail to more than a limited number of passages in the trial Judge’s reasons for judgment.

2. The Notice of Appeal contained two grounds, the second of which was abandoned by counsel at the commencement of the hearing. The first ground in the Notice of Appeal provided:

   That His Honour Justice Rose erred in finding the value of the husband’s shares in B Pty Ltd at $25,384.75, and ought to have found the value to have been $175,384.75 as was submitted by the husband at the hearing of the matter on 2 June 2006.

3. The Notice of Cross Appeal in reality raised one challenge to the trial Judge’s decision, such challenge being embodied in ground three of the Notice of Cross Appeal.

   His Honour erred in not deducting the amount of $11,271.22, being partial property payments made by the Husband to the Wife, from the amount that the Husband is to pay the Wife.

4. It is accordingly necessary and constructive only to refer to the passages of the trial Judge’s reasons pertaining to the value of the husband’s shares in B Pty Ltd and the receipt by the wife of $11 271.22 by way of partial settlement of property. Resolving challenges in relation to those issues determines the fate of the appeal and the cross appeal.

5. Under the heading “Property of the Parties” the trial Judge listed the assets of the parties, the great bulk of which were either not controversial or, to the extent to they were, and such controversies were resolved by his Honour, not matters which concern this Court.

6. His Honour included in the list “Shares in B Pty Ltd” owned by the husband and, in the value column recorded “TBA”. The footnote to the entity recorded:

   The parties agree that the assets of B include a Tea Gardens property valued at $240,000.00, a Mercedes SL 1986 motor vehicle valued at $30,000.00, and funds in the bank of $4,857.00, totalling $274,857.00. The parties agree that B owes $249,472.25. The husband contends that the loans totalling $249,472.25 should be taken into account in the asset pool and that the value of B is therefore $25,384.75. The wife reserves her position as to what portion of the loans totalling $249,472.25 should be taken into account in the asset pool until she has an opportunity to consider the source documents provided by the husband. [Appeal Book (AB) Vol 1, page 31, footnote 3].

7. The trial Judge did not in such list of assets include the $11 271.22 referred to in the Notice of Cross Appeal. Those funds were referred to by the trial Judge under the heading “Distribution of monies to date” in the following notes:

   2. The wife received $10,000.00 by way of partial property settlement in December 2005 (being $7,600.00 plus bond paid by husband of $2,400.00).

   3. The wife received $1,271.22 from the controlled monies account by way of partial property settlement in February 2006, being the insurance for the Astra motor vehicle. [AB Vol 1, page 32, paras 2 & 3].

8. The footnote to the paid legal fees of the husband of $193 944.17, which were included in his Honour’s list, recorded:

   4. The husband paid $332.00 in February 2006 from the controlled monies account on behalf of the wife, being the green slip for the Astra. The husband contends that the wife agreed to same and proposes that the payment be categorised as partial property settlement and that the wife obtain a refund for the payment she made. The wife contends that she did not agree to the husband using monies in the controlled monies account to pay for the green slip and does not agree to the payment being categorised as a partial property settlement. The wife proposes that the husband obtain a refund. The husband proposes that the wife obtain a refund and retain $332.00 by way of partial property settlement. The husband has not had the registration papers returned to him, despite requests, and is unable to obtain a refund. The green slip purchased by the husband does not list the wife as a driver of the vehicle and the wife contents [sic] that she may be required an excess in the event that she becomes involved in an accident which she cannot afford. [AB Vol 1, page 32, footnote 4].

9. Under the heading “Disputed Items of Property” the trial Judge dealt with a number of assets the valuations of which were disputed. The third of such items was “shares in B”. His Honour referred to the husband’s assertion that the value of the shares was $25 384.75. His Honour described the wife’s position in relation to the issue in the following terms:

   134. On behalf of the wife, documentary material was to be considered after which her position would be made clear to me.

   135. The opportunity for the wife’s legal representatives to consider all relevant documents has been provided together with further affidavits sworn by the husband. No further submission was made to me in that I was asked to consider an alternative value. However, it was agreed that B held shares in Telstra, earlier referred to. [AB Vol 1, page 34, pars 134 & 135].

10. His Honour concluded:

    136. In those circumstances, I accept the submission on behalf of the husband that the value of the shareholding to be attributed is $25,384.75. I will show the Telstra shares separately in the revision of Exhibit 8, also referred to me subsequently. [AB Vol 1, page 34, par 136].

11. The fourth item dealt with by the trial Judge was the husband’s paid legal fees of $193 944.17. His Honour described the “sources of these paid legal fees” [AB Vol 1, page 34, par 137] by reference to the notation he had earlier made [AB Vol 1, page 32, footnote 4] which we have set out above.

12. The trial Judge determined to include “the relevant amount as notional property of the party who paid it given that the sources of funds for that purpose were not property acquired after separation.” [AB Vol 1, page 34, par 137]. He thus included that $193 944.17 “as the husband’s notional property” [AB Vol 1, page 34, par 138], taking into account in so doing “that the husband’s credit card indebtedness is included as a liability for the purpose of the calculation of the parties’ net property in Exhibit 8 and a value has been attributed to the husband’s shareholding in C L Pty Ltd.” [AB Vol 1, page 34, par 138]. His Honour recorded:

    139. No submission was made that there was a further loan account of the husband in that company which should also be included in the revision of Exhibit 8. [AB Vol 1, page 34, para 139].

13. Having thus resolved the disputed issues with respect to the assets and liabilities of the parties, his Honour produced in tabular form a list of the “Revised Property of the Parties” [AB Vol 1, pages 36 – 37]. In that list the husband’s shareholding in B Pty Ltd was included at $25 384.75. Also included were his paid legal fees of $193 944.17.

14. As earlier noted, the $11 271.22 received by the wife was not included in the revised property list.

15. Under the heading “Conclusion” [AB Vol 1, page 48] the trial Judge recorded that he accepted “the submissions made by counsel for the husband that the … payments of $10,000.00 to the wife in December 2005 (which included a rental bond of $2,400.00); $1,271.22 for motor vehicle insurance will be categorised as partial property settlement rather than interim spousal maintenance.” [AB Vol 1, page 48, para 245].

16. His Honour added, “[t]he amounts involved especially the distribution of $100,000.00 to each of the parties gave them a significant discretion as to the manner in which the funds should be utilised.” [AB Vol 1, page 48, para 246].

17. As is apparent from the paragraphs which followed, the calculation of the wife’s entitlement to the assets of the parties as previously found by the trial Judge did not include the previous receipt by her of funds totalling $11 271.22.

The Notice of Appeal

1. It was submitted on behalf of the wife, correctly there is no doubt, that the value of the husband’s shareholding in B Pty Ltd was $175 384.75, and not the $25 384.75 which his Honour included in the revised list of the property of the parties to the marriage.

2. It was submitted that:

   4. The amount of $150,000 was conceded by counsel for the husband to come off the $249,472.25 debt alleged in relation to footnote 3 in Exhibit 8, so that the total liability of B Pty Ltd was $99,472.25: Transcript 02/06/06, page 5 lines 21 – 25, page 6 lines 15 – 16. The consequential mathematics results in a value of B Pty Ltd in the sum of $175,384.75: Transcript 02/06/06, page 5 line 25. This figure, it is respectfully submitted, is the value which His Honour ought to have found as a result of the submissions and evidence before him of B Pty Ltd. [Appellant’s Summary of Argument, page 2, para 4].

3. It was thus submitted that:

   5. Also, as a consequence of that valuation of B Pty Ltd, the pool of assets has increased and the wife’s entitlement pursuant to the assessment made by His Honour has also increased by the additional sum of $45,000. The total amount therefore, it is submitted, which should be paid by the husband to the wife is $305,543.44 by way of property settlement on or before 5 p.m. 18 October 2006. [Appellant’s Summary of Argument, page 2, para 5].

4. On behalf of the husband it was submitted that the effect of this Court upholding the wife’s appeal would be to “double-count a sum of $150,000 which the Husband had drawn down from loan facilities available to the family company, B Pty Ltd”. [Respondent’s Summary of Argument, page 1, para 1]. There followed a “chronology of events” which were said to support that contention.

5. It was submitted, accurately we accept, that until virtually the conclusion of the trial there were unresolved issues in relation to B Pty Ltd related to the accounting for $150 000.00 drawn against the company’s loan facilities by the husband and the sum of $36 000.00 which had been “misdirected into B’s account rather than a fixed monies account by the bank”. [Respondent’s Summary of Argument, page 2, par 4].

6. It was submitted that the husband acknowledged that the $150 000.00 had been expended for the payment of legal fees and spousal maintenance [see AB Vol 2, page 377, line 37]. The trial Judge was said to have added back $150 000.00 via the husband’s legal fees of $193 944.17. It was thus submitted that if the trial Judge was in error such error amounted to “no more than an error of characterisation of the $150,000 to be added back” and was “immaterial to the ultimate conclusion”. [Respondent’s Summary of Argument, page 3, par 9].

7. In response to the submissions on behalf of the husband, counsel for the wife submitted that the trial Judge’s asserted error was one of discretion. With respect, we are unable to accept that, if his Honour erred, such could be the case. The determination of the net worth of the assets of the parties was a fact finding exercise. In our view the findings of fact made by the trial Judge were reasonably open to him or they were not, and the exercise in question did not involve any element of discretion. Put simply, the trial Judge either erred in his calculation of the net assets of the parties or he did not.

8. As we have earlier noted, the trial Judge was aware that the value of the husband’s shares in B Pty Ltd was initially controversial. His Honour recorded the matters of agreement and disagreement in relation to that topic, correctly identifying that the wife initially reserved her position as to “what portion of the loans totalling $249,472.25 should be taken into account in the asset pool”. [AB Vol 1, page 31, footnote 3]. His Honour was mindful, as we have also noted, that the husband had paid $193 944.17 in legal fees, $70 600.00 of which he concluded that the husband had obtained from B’s cheque account, $71 396.65 from his portion of the $100 000.00 received by each of the parties by way of partial property distribution, the balance from credit card payments and payments from C L Pty Ltd.

9. His Honour later recorded in relation to B Pty Ltd that there were ultimately no further submissions made in opposition to the husband’s assertion that the shareholding in B Pty Ltd be included at $25 384.75 on the basis that the husband’s paid legal fees of $193 944.17 were also notionally added back as they were. It is instructive to have regard to the course which this aspect of the proceedings followed.

10. On 2 June 2006 the issue was agitated and what was then said is revealing. Counsel for the husband said:

    Your Honour, there were two matters that arose once my client put his March affidavit on. One was, put loosely, the accounting for the $150,000 – that was the loans that were not included in his earlier affidavit material – and the second was the receipt of some $36,000 from the sale of the P W Road property that was placed by the bank into B account rather than into a fixed moneys account. Your Honour, so far as the $150,000 is concerned, whilst it has not been possible to quarantine that $150,000 and follow it thorough the machinations of C L and B because there’s been a mixing of his income together with those moneys, the husband recognises that $150,000 was applied to the payment of legal fees and the payment of some $36,000-odd by way of spousal maintenance. … [AB Vol 2, page 377, lines 28 – 39].

11. Counsel then said:

    At paragraph 7 on page 4, your Honour, there is drawn from the affidavit of 31 March legal fees paid of $70,600. A further breakdown of moneys expended through B and C L is identified at the top of page 5. The $36,900-odd were payments made in terms of orders for spousal maintenance, rent and the like, and further legal expenses of $43,463 can be identified from the accounts kept by C L and B. Taken as a whole, your Honour, that is roughly the $150,000. [AB Vol 2, page 378, lines 4 – 9].

    And later said:

    There was another $117,000 of the husband’s commissions mixed with that so we’re not – unable to obtain perfection of dollars, not an accounting exercise, but, your Honour, we find there that there is in essence $150,000 of debt incurred by B and $150,000 of expenditure surrounding this case engaged in by the husband. If I understand the application of Sean’s case, where a debt is incurred to pay legal fees, for example, then they remain, as it were, off the balance sheet, so the effect of that, your Honour, is then found in paragraph 10. The indebtedness of B is currently 249,000-odd but from that should be removed $150,000. That leaves a debt so far as the parties’ balance sheet is concerned of 99,400-odd dollars, and when one applies that level of debt to the assets that were agreed in the April balance sheet, B has a value of 175,300-odd dollars. [AB Vol 2, page 378, lines 13 – 25].

12. The trial Judge then said to counsel for the wife:

    HIS HONOUR: But what I wanted to know though is do you agree then that the matters upon which reopening were allowed have been now each identified and that the approach that should be taken to each one that Mr C outlined ranging from the accounting for loans of 150,000, part of the P W Road property proceeds, 36,000, and the Telstra shares in his name, that is, the husband’s name, and in B have now been adequately dealt with on the summary that Mr C has provided?

    MR ANDERSON: I think I’d have to agree in relation to part 1 and 2 of that, your Honour. Part 3 dealing with the Telstra shares, on my instructions there may in fact be some more shares. I’d need to look at --- [AB Vol 2, pages 380 – 381, lines 47 – 8].

1. There is no other discussion relevant for present purposes to which we have been referred, or have found for ourselves.

2. Without needing to express a concluded view, it seems that, in final submissions, counsel for the wife accepted that the inclusion of the husband’s shareholding in B Pty Ltd at $25 384.75 accurately reflected the value of the shareholding on the basis that the $150 000.00 which the husband had drawn out of the company was reflected in the husband’s paid legal fees, albeit the notes to which we have referred to his Honour’s tabulation of the assets of the parties perhaps erroneously reported the course by which that eventuated. We are not otherwise persuaded that his Honour erred in his calculations of the net assets of the parties by virtue of his treatment of the husband’s shareholding in B.

3. It seems clear that if $150 000.00 was notionally written back into B Pty Ltd there would need to be a corresponding reduction to the husband’s paid legal fees. Given that the husband had retained the benefit of his paid legal fees and the shareholding in B Pty Ltd, the wife was not disadvantaged in any way by virtue of this treatment.

4. Even if there was not in fact agreement in the terms which we have discussed by the conclusion of the trial, in our view the submissions then made to which we have referred entitled the trial Judge to treat B Pty Ltd in the manner in which he did.

5. We are thus, on either of these bases, not persuaded that the appeal should be allowed.

The Cross Appeal

1. On behalf of the husband it was submitted that having accepted that $11 271.22 paid by him to the wife should be regarded as partial property settlement rather than spousal maintenance, the failure to include that sum in the revised listed assets of the parties and the failure of the trial Judge to include such sum as part of the assets received or receivable by the wife [AB Vol 1, page 49, par 250] constituted appealable error. In essence, if correct, the husband should have been required to pay 70 per cent of $11 271.22 to the wife. That is the effect of adding $11 271.22 to the asset pool.

2. On behalf of the wife it was submitted that the trial Judge had not erred. Counsel submitted:

   12. His Honour took into account and accepted the submissions made by counsel for the husband that the payments of $100,000 each from the sale of proceeds of 27 P W Road and subsequent payments of $10,000 to the wife in December 2005, and motor vehicle insurance expense paid by the husband should be categorised as partial property settlement rather than interim spousal maintenance: Judgement paragraph [245]. His Honour also determined that the amounts involved particularly the proceeds of sale gave the parties a significant discretion as to the manner in which the funds should be utilised: Judgement paragraph [246].

   13. It is submitted that His Honour therefore determined that it was unnecessary to provide for further reimbursement to the husband given the wide and significant discretion in relation to the proceeds of sale, and made no adjustment in his calculation of the final payment to be made. [Appellant’s Summary of Argument, pages 4 - 5, pars 12 & 13].

3. It is undoubtedly correct that the trial Judge recorded that his acceptance of “submissions made by counsel for the husband” that the payments of the husband to the wife of December 2005 totalled $11 271.22 should be “categorised as partial property settlement rather than spousal maintenance”. [AB Vol 1, page 48, par 245]. The matter was not again or otherwise raised. It is clear that such sum or any part of it does not appear in any relevant table of assets appearing in the trial Judge’s judgment.

4. In terms of the judgment, understandably, counsel for the wife asserted that the statement by his Honour at paragraph 146, which we have earlier recorded, should be seen as encompassing the sum of $11 271.22. We have not been referred to any submissions or other portions of the Appeal Books shedding any useful light on topic.

5. The topic was agitated before the trial Judge in submissions on 12 April 2006. [AB Vol 2, page 354f]. During the course of submissions a document headed “Exhibit 8 Agreed Schedule of Assets and Liabilities” was provided to the trial Judge. It is clear that is the same document as the trial Judge referred to in his Reasons for Judgment. [AB Vol 1, page 30, par 121]. The document recorded matters of agreement and disagreement, included in which were the monies totalling $11 271.22.

6. Nothing which we have discovered for ourselves in the transcript of that day, or to which we have been referred by counsel, sheds useful light on the trial Judge’s reference to the submissions made by counsel for the husband should be accepted.

7. Nothing in the submissions of 2 June 2006 sheds any helpful light on the topic.

8. We do not perceive there to be any other transcript supplied to us and are, as were counsel, thus unable to find where the submissions which the trial Judge purported to accept were made.

9. To the extent that it is submitted on behalf of the wife that the trial Judge’s general statement with respect to the $100 000 received by each party encompassed his conclusion with respect to the wife receiving $11 271.22, we are unable to agree. It would have required the trial Judge to say little more than he did in that paragraph for the submission on behalf of the wife to be accepted, but we do not accept that, on a balanced reading of the paragraph, it can fairly be said to extend or qualify his Honour’s previously stated conclusion in the way it was asserted on behalf of the wife.

10. Nothing to which we have been referred on behalf of the wife persuades us that his Honour erred in concluding that the monies received by the wife from the husband were erroneously “categorised as partial property settlement rather than interim spousal maintenance” [AB Vol 1, page 48, par 245] by the trial Judge.

11. In the absence of other reasons, and none are suggested, for not taking that sum into account as having been received by the wife, we are satisfied that his Honour erred in failing to do so. This is essentially so because of his conclusion as to its appropriate categorisation. It is conceivable that, had his Honour been approached pursuant to the slip rule, we would not have been troubled with this issue, but the cost to the parties of not dealing with the matter would be disproportionate to the sum involved. Although the sum is de minimus, on such material as has been presented to us, we accept that the trial Judge erred in having concluded as he did as to the “categorisation” of the monies the husband paid to the wife of $11 271.22 the sum should have been included and apportioned in the percentages the trial Judge determined to be just and equitable. The consequence of so doing is that the husband would be obliged to pay $7889.85 less to the wife than the trial Judge’s orders provided.

Conclusion

1. The appeal should be dismissed.

2. The cross appeal should be allowed and in lieu of $260 543.44 the sum of $252 653.59 be inserted in the trial Judge’s orders.

Costs

1. In our view the husband’s success on the cross appeal ought not found an order for costs against the wife, nor should the wife’s failure on the appeal found an order for costs against her. The cross appeal having succeeded, each party should receive the appropriate costs certificate under Federal Proceedings (Costs) Act 1981.

I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate: 

Date:  10 August 2007