Strahan & Strahan
[2019] FamCAFC 31
•21 February 2019
FAMILY COURT OF AUSTRALIA
| STRAHAN & STRAHAN | [2019] FamCAFC 31 |
| FAMILY LAW – APPEAL – ADJOURNMENT – Where the trial judge dismissed the wife’s application for an adjournment of the trial due to commence that day – Where trial dates in the matter had previously been vacated on nine occasions – Where the wife asserted that refusing the adjournment effectively shut her out of the proceedings – Where the wife was not precluded from appearing at the trial by any order made by the trial judge – Where the wife had been on notice for five months that the husband was seeking orders that the trial proceed on an undefended basis in default of the wife’s preparation for trial – Where the wife was not present and only provided instructions for her legal representatives to argue the adjournment application – Where the litigation’s history, impost upon public resources, impact upon other litigants seeking to avail those resources and the need to bring an end to the parties’ financial relationship were all highly relevant – Where such considerations outweighed any injustice to the wife – Leave to appeal dismissed. FAMILY LAW – APPEAL – PROPERTY – Where the trial judge identified the parties’ existing interests in property totalling approximately $48 million – Where the wife alleged that the husband had sent $142 million offshore – Where the trial judge considered the appropriate just and equitable settlement of property by reference to the pre-marriage period, the cohabitation period, the post-cohabitation period and the future – Where the trial judge ordered that the wife retain property and cash totalling about $11.6 million – Where the wife had received about $12 million in partial property settlements and $1.5 million in spousal maintenance during the protracted course of the litigation – Where the wife contended that the trial judge ought to have made interim orders rather than final orders given her absence – Where it is not open to the wife to assert on appeal a substantive issue that was neither raised nor foreshadowed before the trial judge – Where the wife’s remaining grounds of appeal failed to demonstrate any appealable error – Appeal dismissed. FAMILY LAW – APPEAL – STAY – Where the trial judge refused the wife’s application for a stay of the substantive property orders pending determination of her appeal – Where the wife did not press the stay appeal – Leave to appeal dismissed. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 81 Family Law Rules 2004 (Cth) rr 1.04, 1.07(d), 1.07(e), 1.10, 13.26 |
| Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Black and Kellner (1992) FLC 92-287; [1992] FamCA 2 Bulow & Bulow (2019) FLC 93-885; [2019] FamCAFC 3 C & C [1998] FamCA 143 Chang v Su (2002) FLC 93-117; [2002] FamCA 156 Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633 Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Grace v Grace (1998) FLC 92-792; [1997] FamCA 59 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33 Rowe v Stoltze (2013) 45 WAR 116; [2013] WASCA 92 Sali v SPC Limited (1993) 116 ALR 625; [1993] HCA 47 Strahan & Strahan [2018] FamCAFC 156 Strahan & Strahan (No 3) [2016] FamCA 826 Strahan & Strahan (No 5) [2017] FamCA 1177 Suttor v Gundowda Proprietary Limited (1950) 81 CLR 418; [1950] HCA 35 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48 |
| APPELLANT: | Ms Strahan |
| RESPONDENT: | Mr Strahan |
| FILE NUMBER: | ADF | 228 | of | 2005 |
| FIRST APPEAL NUMBER: | SOA | 90 | of | 2017 |
| SECOND APPEAL NUMBER: | SOA | 100 | of | 2017 |
| THIRD APPEAL NUMBER: | SOA | 19 | of | 2018 |
| DATE DELIVERED: | 21 February 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Murphy, Aldridge & Kent JJ |
| HEARING DATE: | 27 August 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 13 November 2017; 22 February 2018 |
| LOWER COURT MNC: | [2017] FamCA 948; [2017] FamCA 949; [2018] FamCA 84 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Hooper SC |
| SOLICITOR FOR THE APPELLANT: | McInnes Wilson Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Geddes QC with Mr Wilson |
| SOLICITOR FOR THE RESPONDENT: | Kennedy Partners Lawyers |
Orders
Leave be given to the husband to rely on a Summary of Argument filed on 23 August 2018.
The application by the wife for leave to appeal in appeal number SOA 90 of 2017 is dismissed.
Appeal number SOA 100 of 2017 is dismissed.
The application by the wife for leave to appeal in appeal number SOA 19 of 2018 is dismissed.
The wife shall pay the husband’s costs of and incidental to the appeal and each of the applications for leave to appeal in such amount as may be agreed between the parties in writing or failing such agreement as might be assessed.
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 Strahan & Strahan 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 ADELAIDE |
Appeal Number: SOA 90 of 2017; SOA 100 of 2017; SOA 19 of 2018
File Number: ADF 228 of 2005
| Ms Strahan |
Appellant
And
| Mr Strahan |
Respondent
REASONS FOR JUDGMENT
The wife brings three appeals against orders made by Cronin J. The appeals were heard together and these reasons relate to all three.
The husband and wife separated after 11 years of marriage in January 2005 and divorced in February 2006. They have been litigating about their marriage longer than they were married.
Since the first Initiating Application was filed shortly after separation, over 700 documents have been filed resulting in a vast number of different hearings. Sixty-one sets of reasons have been published. Ten previous appeals have been heard and determined. By March 2017, the parties had between them spent some $35 million in legal fees. They have each spent more since. The wife has instructed approximately 16 different firms of solicitors. Inclusive of senior counsel who argued the instant appeals, the wife has instructed eight different senior counsel and 14 different junior counsel.
On 13 November 2017, for reasons delivered ex tempore, Cronin J refused the wife’s application to adjourn the trial of property proceedings due to start that day and ordered that “the husband has leave to proceed in the absence of the wife”. The wife seeks leave to appeal that order (SOA 90 of 2017 – “the adjournment appeal”).
In arguing the adjournment application, senior counsel for the wife told his Honour, it must be presumed on instructions, that if the wife’s position was rejected by the Court, the proceedings would go ahead as an undefended case. That is what transpired.
Having proceeded to hear the proceedings for settlement of property in the absence of the wife, his Honour made orders and delivered reasons in those proceedings on 23 November 2017. The wife also appeals those orders (SOA 100 of 2017 – “the substantive appeal”).
The orders the subject of the substantive appeal require the wife to transfer to the husband, or abandon, any interests or entitlements she has in three named companies and two trusts and to withdraw caveats over real property “in Australia, Hong Kong, Switzerland or Southern Europe”. The husband was ordered to pay the wife $1.7 million in cash and to transfer five unencumbered real properties with a total value of approximately $7.8 million; an interest in an SH Investment valued at slightly more than $1 million; and other interests in property exceeding three-quarters of a million dollars. The wife was also to retain $300,000 held in trust for her by the husband’s solicitors and $118,644 in savings.
The wife has received about $12 million in partial property settlements during the protracted course of the litigation. That sum was not “added back” and credited as part of her assessed entitlements by his Honour. The wife had also received about $1.5 million in spousal maintenance in the approximately five years prior to his Honour’s orders.
The wife applied to stay all of those orders. The husband was ready, willing and able to comply with the orders requiring payment to the wife and transfer of the properties. An effect of the stay sought by the wife was to prevent her receiving that cash and those properties. The stay was refused by Cronin J. The wife filed an application for leave to appeal that order (SOA 19 of 2018 – “the stay appeal”). Undertakings given by the husband to Cronin J were continued by the Full Court until this judgment. The stay appeal is not pressed as a consequence. The application for leave to appeal will be dismissed.
The husband previously applied for the summary dismissal of all three appeals. That application was dismissed by the Full Court on 10 August 2018.[1]
[1]Strahan & Strahan [2018] FamCAFC 156 (Murphy, Kent & O’Brien JJ).
It is accepted in respect of the adjournment appeal that we should consider its merits and, if the appeal be found to be without merit, it will follow that leave to appeal should be refused.
The Adjournment Appeal
The “CX Company” And The Wife’s Allegations
The parties’ litigation and its consequent expense has not been confined to financial issues; the parties were also engaged in proceedings for parenting orders which, with their own satellite litigation, also lasted for some years. In so far as financial issues are concerned, the recurring issues – to the extent that any broad summary is possible – appear to all devolve from a business venture described as “CX Company”.
CX Company was commenced by the husband and three others in 1990 (notably, some four years prior to the parties’ marriage). There seems little controversy that the venture has generated very large sums of money. The husband was able to acquire two real properties in Adelaide prior to the marriage.
The activities of the CX Company and its members attracted the attention of the Australian Taxation Office (“ATO”). The scale of the CX Company might be gleaned from the fact that an assessment issued against the husband and his business partners in the sum of $71 million. The husband subsequently settled his liability to the ATO by the payment of $17 million.
The husband was also involved in litigation with one of his business partners. Those proceedings ultimately settled and, after the payment of lawyers, the husband received $9.3 million.
Relevant to the instant application for adjournment and applications for adjournment by the wife which preceded it, the ATO investigation and payment pursuant to the proceedings with the business partner were settled by no later than February 2016.
The wife has always alleged that the husband has failed to make proper disclosure of his business affairs and corporate trust arrangements through which distributions have been made to him. The wife has always alleged that she has been unable to identify and value the extent of the husband’s property and the extent of his income. She asserts that both are very significant.
Specific to the instant proceedings, the wife asserts that the husband has not disclosed details of what was referred to as the “KC Trust”. She asserts generally that, whether by reference to the KC Trust or otherwise, the husband’s wealth is significantly greater than the approximately $48 million of property identified by his Honour in the proceedings to which the orders for settlement of property pertain. For example, a specific allegation by the wife is that the husband has exported more than $140 million “offshore” and has neither accounted for it nor provided documents or information in relation to it. The husband denies that allegation.
The wife has pointed to the significant disparity in assets and income available to the husband so as to obtain the approximately $12 million in partial property settlements earlier referred to. It seems that the vast bulk of that sum has been used to pay her various lawyers. As will be seen, the asserted need for further funding has played a part in the instant application for adjournment and applications for adjournment by the wife which preceded it.
The Adjournment Appeal in Context: Nine Previous Vacated Trials
On 1 May 2007, Strickland J made directions so as to facilitate the hearing of the trial of financial issues commencing on 3 September 2007. The trial did not take place. On 1 September 2016, Austin J made directions to facilitate the hearing of a trial of financial matters over 13 days commencing 3 April 2017. Again, that trial did not take place. The latter trial dates marked the eighth time that a trial had been set for hearing in the nine years between those two directions hearings.
In the proceedings on 1 September 2016 the wife sought that Austin J not list the property trial. Her reasons, as recorded by his Honour, were:[2]
… because she is still uncertain as to the extent of the husband’s financial affairs. She asserted there were two major issues which were impediments to the matter being listed for trial: first, the need for further discovery, and secondly, her need for further litigation funding.
[2]Strahan & Strahan (No 3) [2016] FamCA 826 (“Strahan (No 3)”) at [2].
His Honour listed the trial over the wife’s objection. In doing so, his Honour provided a period of five months within which the parties were to file their material for the trial, including their respective affidavits of evidence in chief.
In making the September 2016 orders Austin J said that he was “satisfied the past 11 years of litigation have afforded the wife sufficient opportunity to discover all that she would want in respect of the husband’s financial affairs”. His Honour went on to express the same sentiment specifically in respect of the KC Trust:[3]
When pressed on the point, the wife’s legal representative indicated the current problem about discovery arises out of an unanswered letter dated 29 July 2016 sent by the wife to the husband – that is, barely weeks ago. It is asserted that an entity described simply as “KC Trust” has annually distributed significant amounts of money to the husband. That entity is mentioned in the reports of the single expert witness, Ms E, who has apparently prepared many reports for the parties, the last of which was compiled months ago in May 2016. Given the passage of time since the last of those reports was released, I do not accept as a reasonable proposition the assertion the wife has not had sufficient opportunity to investigate the legal entity that is or sits behind the “KC Trust”.
[3]Strahan (No 3) at [3].
Importantly for what transpired subsequent to those orders – and the arguments in respect of the instant appeal – his Honour recorded the wife’s then solicitor “candidly conced[ing]”[4] that an established failure by the husband to properly or adequately disclose could form the basis of submissions at trial founded on Black and Kellner[5] and that, as a consequence, the asserted lack of disclosure by the husband did not impede the trial proceeding.[6]
[4]Strahan (No 3) at [4].
[5] (1992) FLC 92-287. The principle there also referred to in Chang v Su (2002) FLC 93-117.
[6]Strahan (No 3) at [4].
By February 2017, it became clear that neither party had complied with Austin J’s directions. Although the proceedings were filed in Adelaide, the continued management of them was assigned to Cronin J from the Melbourne registry.
On 9 February 2017, Cronin J listed a case management hearing. At that hearing, counsel for the wife foreshadowed an adjournment application by her in respect of the previously-ordered April trial. Counsel said the wife had retained new solicitors in December 2016 and sought interlocutory orders for further litigation funding from the husband and disclosure by him.
On 17 March 2017, neither party appeared before his Honour, although counsel appeared on behalf of the husband. Apparently, both parties were overseas attending to urgent medical matters affecting their son. On that date, Cronin J vacated the 3 April 2017 trial dates and adjourned the hearing of the wife’s application for interlocutory orders to 20 April 2017.
On 3 April 2017, the husband (who had filed his affidavit of evidence in chief for trial in March and had indicated his readiness for the trial to proceed) applied for an order that the trial proceed on an undefended basis. That application was subsequently adjourned to be heard by his Honour on 4 September 2017, that is, the ordered first day of trial.
By the time of the 20 April 2017 hearing the wife had again instructed new solicitors and counsel. Then counsel for the wife informed his Honour that he and his instructing solicitors were funded and instructed to appear only in respect of the interlocutory issues.
On 26 April 2017, his Honour dismissed the wife’s application for interlocutory orders. However, his Honour made orders that the trial commence more than four months later on 4 September 2017 and made directions accordingly.
The wife did not file her material for trial as his Honour’s directions made on 26 April 2017 contemplated. Nor did the wife specify with particularity the totality of the orders sought by her. Indeed, at the hearing of the appeal senior counsel for the wife, in conceding that no application was made to admit further evidence on the appeal, told the Court that even then he was unable to indicate the totality of the final orders for settlement of property that would be sought by the wife in any rehearing.[7]
[7] Appeal transcript, 27 August 2018, p 32 ln 12 to p 33 ln 28.
On 24 August 2017, less than a fortnight prior to the commencement of the ordered trial, the wife – having again engaged new solicitors – applied to vacate the ordered trial dates.
On 25 August 2017, Cronin J refused the wife’s application to vary an earlier order by which $300,000 was held on trust by the husband’s solicitor as a partial property settlement for the wife but was only to be released to the wife at the conclusion of the trial. In seeking an adjournment, it was contended on behalf of the wife that her then solicitor (from Melbourne) needed to travel to Adelaide to take witness statements and to draft and settle the wife’s trial affidavit. The wife sought that the order be varied so as to allow her then solicitors to bill her and be paid as they completed tasks.
His Honour said “[i]f there was no history here and the previous solicitors had not had disputes and had their services terminated, I could hardly say that the wife’s solicitors should not have the opportunity investigate and be paid”.[8] Echoing what had been said by Austin J, his Honour also found that “[t]he wife has had ample opportunity to come up with an alternative funding solution, and I am not sure that the $300,000 is the only one available to her”.[9]
[8]Strahan & Strahan (No 5) [2017] FamCA 1177 (“Strahan (No 5)”) at [21].
[9]Strahan (No 5) at [30].
His Honour’s order declining to vary the earlier order that the $300,000 be held on trust by the husband’s solicitors until the conclusion of the proceedings was not appealed.
The wife was on notice, at least from that time, that two judges were reluctant to grant her further time to investigate an issue that had been live for many years. The wife was also on notice from that time that the judge who would hear the trial was not prepared to avail her of immediate funds to pursue specific documents and that the trial judge regarded the number of previous solicitors engaged by the wife; disputes with them; and the termination of their services as matters relevant to the exercise of the discretion then sought to be invoked in her favour.
Also on 25 August 2017, for reasons delivered ex tempore, his Honour acceded to the application to vacate the trial dates and, while refusing the wife’s application to postpone the trial to a date later than 1 March 2018, nevertheless ordered the trial to commence before him some two and a half months later. The trial was ordered to commence on 13 November 2017. The wife was ordered to file her trial material by 2 November 2017.
During those proceedings, his Honour raised with the wife’s then senior counsel the likelihood of another adjournment subsequent to the proceedings and the prospect of her then solicitor’s retainer being terminated as earlier retainers with other solicitors had been. Senior counsel for the wife responded: [10]
What I can say, your Honour, is that I have no reason to suspect that my instructing solicitor will have her instructions withdrawn, your Honour, but I accept what you say, that there’s some history, earlier history. But if this happens, your Honour – if the worst happens and we get access to the money now and we prepare the witness statement and then the rug is pulled from underneath us, that will be taken into account by your Honour when the – if your Honour accedes to my request for the rescheduling of the trial when that comes up.
[10] Transcript, 25 August 2017, p 12 ln 32–38. See also, Transcript, 25 August 2017, p 9 ln 11–24; p 17 ln 26–35.
Within weeks of those proceedings, the wife terminated her then solicitor’s retainer. The senior counsel representing her on that occasion did not thereafter appear for her. In October, the wife engaged her current solicitors.
On the first day of trial, 13 November 2017, the wife again applied to adjourn the trial. The wife was not present in Court. She appeared through new senior counsel. For reasons again given ex tempore, his Honour made the orders to which the adjournment appeal pertains.
The effect of refusing the application for adjournment was that the trial of the property proceedings proceeded as the August orders had decreed would occur.
The Trial Judge’s Reasons
In examining his Honour’s reasons, two considerations must be borne firmly in mind.
First, as senior counsel for the wife conceded before this Court, the wife’s application before his Honour was founded, in effect, on a plea for further time to pursue a central thrust of her case that the husband had, in effect, hidden money and she needed further time to pursue discovery and gather evidence in that respect. Specifically, it was contended that further time would afford the wife’s current legal practitioners to examine the documents known as “the PP documents”.
The PP documents had been the subject of an earlier successful Full Court appeal by the wife. The Court’s orders permitted the wife’s legal practitioner to have access to those documents subject to giving an undertaking. In essence, the undertaking was that the documents would be stored and kept safe. Importantly, the asserted necessity to access the PP documents was at the heart of the wife’s earlier application for adjournment (and funding) before his Honour in August. On that earlier occasion, his Honour recorded the “reticence” of the wife’s then solicitors to give the relevant undertaking without a variation of an earlier order that $300,000 in the husband’s solicitor’s trust account earmarked for the wife be retained there until the conclusion of the property proceedings. His Honour said then that he could “see no reason why” he should vary the order “simply to allow that process [of accessing the PP documents] to be undertaken and for the lawyers to be paid”.[11]
[11]Strahan (No 5) at [21].
The second important matter to be borne in mind in examining his Honour’s reasons is that the wife’s case for further time to investigate and prepare never included any evidence by which it could reasonably be concluded that further time would permit her to be in a better position than she was on 13 November 2017 or at the time of any of the earlier applications for adjournment.
Further, the wife, represented by experienced senior counsel acting on her instructions, put forward no suggestions by which justice to both parties might be achieved if her adjournment was granted. For example, no “guillotine order” was ever suggested. It was never suggested, for example, that further time would permit the filing of specific questions pursuant to r 13.26 of the Family Law Rules 2004 (Cth) (“the Rules”) so as to advance the Black and Kellner or Chang v Su case that had earlier been suggested to his Honour as a significant component of the wife’s case.
Relevant specifically to what was described by the wife’s senior counsel before this Court as a “primary point” in the wife’s appeal, it was never suggested to his Honour that interim property orders should be made on 13 November 2017 with the final determination occurring in March 2018 as the adjournment application otherwise mooted.
His Honour’s reasons of 13 November 2017 reflect the following matters as important to the exercise of his discretion in refusing the adjournment:
·The litigation path leading to the 13 November 2017 trial dates had been “littered with indulgences” in the more than ten years since initial directions were made, and particularly so in the approximately 12 months that his Honour was charged with hearing the matter (at [2], [3] and [35]). In his August 2017 reasons, his Honour referred to the relevance of the “public purse and the resources of the Court”.[12] His Honour relied upon “the same philosophical points I there made” (at [2]);
[12] Strahan (No 5) at [24] referring to Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
·No evidence had been presented, including specifically from the wife’s current solicitor, as to how anything now offered by the wife with regard to funding would or could cure the problem she asserted confronted her in preparation for trial (at [9]);
·While the wife alleged that the husband had removed approximately $142 million from the jurisdiction, that issue had been raised for “10 years” and “[n]othing seems to have moved on – in terms of the investigation in relation to that money – notwithstanding that the husband has responded to it” (at [10] and [11]);
·Despite the expenditure of $20 million in legal fees and ten years of litigation, his Honour said that he had “no idea what the wife’s case in this particular instance is” (at [12]). It should be said further in that respect that in exploring this issue with senior counsel for the wife before us 12 months later, counsel conceded that he, too, could not articulate with precision the wife’s case;[13]
[13] Appeal transcript, 27 August 2018, p 32 ln 12 to p 33 ln 26.
·While the wife’s non-appearance before his Honour was attributed to health difficulties and health difficulties were said to be an additional reason for the adjournment, there was no evidence before his Honour as to whether “that problem will be ameliorated by either treatment or – indeed, disappear – by the time that either senior counsel thought the case would be ready to proceed” (at [14]);
·Even if the wife could secure litigation funding as she said she could (including by reference to the three things which were said to have changed in that respect since the August application for adjournment by the wife), his Honour could not be confident that the wife would not terminate her legal practitioner’s instructions or accept the professional advice she was given or the way in which her case was prepared (at [4], [8] and [16] – [20]);
·While it was said that a signed irrevocable authority by the wife would “cure” the funding problem, no such document had been produced or signed between the solicitors accepting instructions in October and the hearing on 13 November 2017 (at [25]);
·No alternative method of litigation funding had been suggested by the wife, his Honour noting that he had rejected an earlier application for litigation funding “on the basis that there were properties that the wife would become entitled to simply by the husband offering them as part of her final property entitlements. There was no explanation or exploration about that option” (at [7]);
·His Honour doubted that the matter would in any event be ready by the date mooted by the wife, in particular noting that the wife’s solicitors estimated the hearing would cost $1.7 million and take 23 days (at [23], [24], [26] and [27]);
·Senior counsel’s acknowledgement that this was the wife’s “last opportunity” was an acknowledgement given previously by senior counsel acting for the wife some three months previously, her senior counsel commencing his submissions with the same (at [28]);
·While the Court would have “a contradictor” if the wife’s suggestions were accepted, “the evidence is what it is” (at [30]). The husband would not necessarily obtain the relief he sought if the proceedings were heard; the Court has a duty to arrive at orders that are just and equitable and is not in any sense bound by the proposals of the parties (at [32] and [33]);
·His Honour had “in the last 12 months or more” given the wife “at least two occasions to try and get her house in order” (at [35]).
The Wife’s Challenges as Pleaded and Argued
The Grounds of Appeal
The wife’s grounds of appeal as contained in her Notice of Appeal are:
1.That the learned Trial Judge erred in the exercise of discretion to refuse the Wife’s application to adjourn the final hearing.
2.That the learned Trial Judge failed to give sufficient weight to the Wife’s inability to secure legal representation.
3.That the learned Trial Judge erred in dismissing the Wife’s Application for Final Orders filed 1 June 2010.
Whatever else might be said about those vague and unparticularised grounds, they have a different emphasis (or, less generously, are different in substance) to the written and oral submissions by the wife’s current senior counsel.
Senior counsel for the husband makes no complaint and addresses the substance of the arguments as presented orally and in writing and we will deal with them accordingly.
Was The Wife “Shut Out” of the Property Proceedings?
At least one oral submission made on behalf of the wife hints at asserted offence to the rules of natural justice; senior counsel asserts that the effect of refusing the adjournment was to shut the wife out of the proceedings and “in circumstances where [she was] endeavouring to be involved”.[14]
[14] Appeal Transcript, 27 August 2018, p 9 ln 42–46.
The Family Law Act 1975 (Cth) (“the Act”) and the Rules provide a specific legislative environment in which the wife’s application for adjournment needed to be considered.
First, there is a positive duty cast upon the Court by the Act to bring an end to parties’ financial relationships as far as practicable.[15] That duty is reinforced by the “main purpose” of the Rules which is to “ensure that each case is resolved in a just and timely manner”.[16] In doing so the Rules prescribe that the Court will apply the Rules in a way that (among other things) “gives an appropriate share of the court’s resources to a case, taking into account the needs of other cases”.[17] In what might be thought to be a savage irony in this case, the relevant Rule also provides that the Rules will be applied in a way that “promotes the saving of costs”.[18]
[15]Family Law Act 1975 (Cth) s 81.
[16] Family Law Rules 2004 (Cth) r 1.04.
[17] Family Law Rules 2004 (Cth) r 1.07(e).
[18] Family Law Rules 2004 (Cth) r 1.07(d).
Part 1.3 of the Rules is headed “Court’s powers in all cases”. Rule 1.10 provides relevantly that when making an order, unless a legislative provision provides otherwise, the Court (whether on application or by its own motion) may “impose terms and conditions”; “make a consequential order” or may “specify the consequence of failure to comply with the order”.[19]
[19] Family Law Rules 2004 (Cth) rr 1.10(2)(a), (b), (c).
In that respect, the second order made by his Honour on 13 November 2017 – that “the husband has leave to proceed in the absence of the wife on an undefended basis” – was made because senior counsel (and, apparently, his instructing solicitors) were constrained by the wife’s instructions to appear on that day (notably, the first day of the ordered trial) only for the purpose of arguing the adjournment. The wife’s then senior counsel advised the Court, it must be presumed also on instructions, that if the application for adjournment was unsuccessful, he and his instructing solicitors would each withdraw and the wife would not appear at the trial which would then commence. The wife was not present in Court.
The wife was not precluded from appearing at the trial by any order made by his Honour; the decision not to appear either herself or by counsel at the trial of the property proceedings was hers. She had been on notice since April (that is, for about seven months) that the husband was seeking orders in default of her preparation for the ordered trial. She had been granted further time to prepare for trial by his Honour’s orders on 25 August 2017.
Notwithstanding those matters, while the wife instructed experienced solicitors and senior counsel to appear on the first day of the ordered trial to argue for an adjournment, nothing said to his Honour or to this Court suggests that those representing her were instructed to do anything on her behalf in the event that the application for adjournment was dismissed. The dismissal of her application must have been perceived as a very real possibility in light of what had been said and decided by judges hearing previous applications including, in particular, the August proceedings before his Honour.
In our view, contrary to the underlying thrust of the specific submission on behalf of the wife earlier referred to, his Honour was in no sense seeking to “shut the wife out” of the proceedings. Rather, the wife was participating in the proceedings only to the extent, and upon the terms, which she sought to dictate.
The submission also suggests injustice to the wife as the only relevant consideration in the making of the orders. It goes without saying that consideration is fundamental. Yet, binding authority dictates that it does not stand alone or unqualified.
The principles established by decisions of the High Court such as Sali v SPC Limited[20] and, later, Aon Risk Services Australia Limited v Australian National University[21] can be seen conveniently summarised for present purposes in Rowe v Stoltze:[22]
In a curial setting there is no absolute right to have an action heard and determined on its merits. What the rules of procedural fairness require is that each party be provided with a reasonable opportunity to be heard: International Finance Trust Co Ltd v New South Wales Crime Commission. And what is a reasonable opportunity is to be judged nowadays not solely by reference to the interests of the parties but also having regard to the wider interest of other litigants waiting to have cases heard and the public interest in the proper and efficient use of the scarce public resources of the court: see Aon Risk Services Australia Ltd v Australian National University; Brocx v Hughes. What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources: Sali v SPC Ltd cited with evident approval in Aon. Moreover, as between parties to an action what constitutes a reasonable opportunity to be heard must be judged having regard to the effect of undue delay, including the stress and costs caused by having litigation hanging over a defendant's head for an undue period: see Aon.
(Citations omitted) (Emphasis added)
[20] (1993) 116 ALR 625.
[21] (2009) 239 CLR 175.
[22] (2013) 45 WAR 116 at [51] per Newnes JA; Pullin & Murphy JJA agreeing.
It could hardly be doubted that the history of this outrageously protracted litigation; its impost upon ever-scarcer public resources; importantly, the impact upon other litigants seeking to avail those resources; and the concomitant need to bring to an end the financial relationships between parties who had divorced over eleven years previously were all highly relevant considerations in the exercise of his Honour’s discretion. His Honour had himself presided over two ordered trial dates disappearing (3 April 2017 and 4 September 2017).
His Honour did not “shut the wife out” of the property proceedings and, equally, was entirely correct in having regard to, and giving importance to, the matters just referred to.
Did His Honour Fail To Take Account of Relevant Considerations?
In the wife’s Summary of Argument, senior counsel for the wife asserts eight specific errors. Despite the grounds of appeal, the wife’s arguments appear to rest on those asserted errors.
In addition, senior counsel for the wife commenced his oral argument by contending that there were “two primary points in this appeal” – the first being that his Honour should have allowed the adjournment and the second being that, if he did not, he should not have made a final order but, rather, an interim order.
The eight asserted errors in the wife’s written Summary of Argument contend that his Honour:
(a)failed to take account [of] the unchallenged evidence of the wife and solicitors of the difficulty the wife had faced in obtaining legal representation on the basis that funds held for payment of the same would not be released until after trial;
(b)erred in positing that the positon that the wife would be likely to dismiss lawyers and seek to further adjourn when the evidence was that she had experienced funding problems throughout 2017 which had led to changes of lawyers;
(c)failed to take into account that the trial scheduled for April had been adjourned by consent and that the husband was not then ready or available;
(d)failed to take into account the disparity of resources available to the parties in recent times to prepare for appeal;
(e)failed to properly consider the effect of the child’s behaviour and demands upon the wife’s ability;
(f)failed to take account the intention of the Full Court that the wife should access the PP documents;
(g)should have apprehended the recurrent inability of the wife to obtain legal representation and the need for him to review the effect of the adjournment in August 2017 and that the terms of that adjournment having to achieve the desired effect through no fault of the wife; and
(h)focused on funds provided to the wife prior to 2012 when he should have paid attention to the actual resources available to the wife to prepare for trial.
(As per original)
Arguments Not Advanced Below: Interim Orders And Sub-paragraphs (d), (f) and (g)
The suggestion that his Honour should have made interim orders – indeed, interim orders in the terms for which the wife now contends on a re-exercise by this Court – was never made to his Honour by the wife’s senior counsel, nor was anything like that course suggested.
Had that course been suggested it would have been necessary for his Honour to have before him evidence from which it could be concluded that such a course was just and equitable in accordance with principle and submissions made to that effect.[23]
[23] See Family Law Act 1975 (Cth) ss 79(5), (6). See also Grace v Grace (1998) FLC 92-792 where, for example, the cumulative effects of the pre-conditions to the exercise of power were discussed at 84,888.
Senior counsel before us conceded that such a course was never suggested to his Honour: “Counsel’s application was to obtain an adjournment. He was instructed on that only and having failed, left”.[24] Senior counsel also conceded that he was “a bit stuck with something not taken [before his Honour]”.[25]
[24] Appeal transcript, 27 August 2018, p 13 ln 29–31.
[25] Appeal transcript, 27 August 2018, p 14 ln 44. Metwally v University of Wollongong (1985) 60 ALR 68; Water Board v Moustakas (1988) 180 CLR 491; Suttor v Gundowda Proprietary Limited (1950) 81 CLR 418 at 438; O’Brien v Komesaroff (1982) 150 CLR 310 at 319; Coulton v Holcombe (1986) 162 CLR 1; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [51].
No arguments advanced suggested how the difficulty thus confronted could be, or should be, overcome. In our view, it cannot be.
The same principles, and the same conclusion, apply to the errors asserted in paragraphs (d), (f) and (g) of the wife’s Summary of Argument quoted above.
As to (d), the disparity in the parties’ financial resources was not suggested to the trial judge as a matter relevant to his Honour’s discretion. Further, that issue was not at all relevant save to the extent that it was said to impact upon the wife’s capacity and willingness to fund any representation which she chose from her own resources or an assertion (never made) that the asserted disparity would result in her representing herself at the trial when otherwise she would, and should, have representation.
With respect, we do not consider it is correct to assert as the wife’s senior counsel does in sub-paragraph (f) above that it was “the intention of the Full Court that the wife should access the PP documents”. The effect of the Full Court’s order was that an asserted claim denying her access should be rejected and that the wife’s access should be conditional upon an undertaking being given by solicitors on her behalf as to the safe storage and preservation of the documents.
Be that as it may, the stated assertion was not raised before his Honour as a relevant consideration. Indeed, it hardly could have been: any difficulty said to attend inspection of the PP documents was specifically disavowed by senior counsel as a matter relevant to the wife’s preparation for trial: [26]
But I don’t say that we will be held up by getting access to the PP folders and boxes. I’m certainly not in a position to be able to say that that’s not something we might not pursue, but we’re not holding up the trial for that.
[26] Transcript, 13 November 2017, p 5 ln 3–6.
It is not now open for the wife to assert discretionary error in respect of a matter which was specifically disavowed as relevant in the proceedings before his Honour.
We have, with respect, some difficulty in understanding what is asserted to be the error contemplated by sub-paragraph (g). The August 2017 orders were never appealed. The assertion appears to be that it should be implied from the August 2017 orders that his Honour contemplated that the wife would be funded or that it was a “desired effect” of the August 2017 orders. We cannot see any such intention or desire. In any event, we were not directed to, nor are we able to see, where any such factor was submitted to his Honour as relevant to the exercise of his Honour’s discretion.
Further, his Honour did in fact “apprehend the recurrent inability of the wife to obtain legal representation”. It had been front and centre in earlier proceedings before his Honour and his Honour was plainly aware of it as a consideration in the instant application before him.
Moreover, the thrust of his Honour’s decision was that even if funding for the wife had now been secured – as in fact was effectively submitted to his Honour on 13 November 2017 – he had (a) not seen the documentary evidence of what was said to be the means by which it was secured and (b) was not in any event satisfied that the recurrent changes of representation which was a feature of the wife’s litigation history would not be repeated.
The Likelihood of The Wife Changing Lawyers: Sub-paragraph (b)
Senior counsel representing the wife on 13 November 2017 conceded that the list of lawyers who had represented the wife was “a long list”.[27] His Honour took account of that fact; the timing of the changes in representation (whatever be the cause); the evidence of the wife’s current solicitor referred to at [16] of the reasons; and the evidence of the wife referred to at [17] of the reasons.
[27] Transcript, 13 November 2017, p 3 ln 41.
Taken together those matters rendered it well open to his Honour to conclude that he could have no confidence that the wife’s current representation would remain in place for the preparation and hearing of the mooted adjourned trial.
Litigation Funding: Sub-paragraph (a)
It is important to place this asserted error into context. As has been seen, his Honour had, some three months prior to 13 November 2017, rejected the wife’s application that $300,000 preserved for her in the husband’s solicitor’s trust account should be released to her ahead of the conclusion of the trial. In doing so, his Honour held that there was nothing in the evidence presented by the wife on that occasion which would suggest that the wife had taken steps to obtain and sell real properties which the husband had offered to her ahead of that hearing.
Precisely the same can be said of the wife’s actions and inactions as evident at the 13 November 2017 hearing. His Honour expressly recognised as much (at [7] and [20]). Further, the assertion that his Honour “failed to take account” of difficulties the wife had in obtaining representation cannot be sustained on the basis asserted. His Honour expressly recognised the same at [18]. The issue was the focus of [16] to [19] of the reasons.
His Honour took account of that consideration but also considered the lack of confidence he had in the wife not ending her current solicitor’s instructions and his pessimism about the case being ready and able to be heard some four months hence as the wife proposed and, as his Honour was entitled to do, gave the latter two matters greater weight.
Contrary to its terms, in our view the wife’s challenge embraced by this sub‑paragraph is in truth a weight challenge and we can see no merit in it.
Failure to Consider Earlier Adjournment By Consent: Sub-paragraph (c)
As has been seen from the chronological context earlier set out, a trial set to commence in April 2017 was vacated by his Honour. The wife had applied to adjourn that trial. The husband swore, and it is not apparently suggested otherwise by the wife, that the wife had booked treatment for the parties’ son coinciding with the earlier-ordered commencement date for the trial. It seems that, despite their divorce and ongoing litigation war, it is the parties’ practice to attend all such medical appointments together. They did so on this occasion.
The wife is correct in asserting that the fact of the consent adjournment was not considered by his Honour. Nor were the circumstances just described.
Neither the written nor oral arguments by senior counsel refer further to this asserted error. Thus, no arguments illuminate how it is said that this factor, particularly seen against the other matters to which his Honour’s reasons and these reasons have referred, is said to have been relevant or, if relevant, deserving of any substantive weight.
The Child’s Behaviours and Demands: Sub-paragraph (e)
His Honour’s reasons at [13] reveal plainly that his Honour considered expressly “the effect of the child’s behaviour and demands upon the wife’s ability”. The challenge is that the same was not “properly” considered. Again, although expressed ostensibly in the language of a failure to take into account a relevant consideration, the challenge is in fact one as to weight.
The child’s disabilities and his consequent needs are, of course, extremely important in decisions concerning his welfare. But their relevance to an adjournment and the weight that might be attached to the same in light of all other circumstances – including in this case, as his Honour again expressly recognised, the significant assistance given to the wife in that respect – is a different question.
The attribution of the weight that might be attached to that consideration was a matter for his Honour and no submission made to us suggests any error which warrants the intervention of this Court.
The Focus on pre-2012 Funds: Sub-paragraph (h)
Nothing to which we were referred in the written or oral arguments on behalf of the wife point to anything within his Honour’s reasons that sustain a challenge in the terms set out in this sub-paragraph.
In any event, in terms, the challenge can only be one in respect of the attribution of weight and no submission made to us suggests any error which warrants the intervention of this Court.
The Adjournment Appeal: Conclusion
Nothing to which we have been directed orally or in writing persuades this Court of any appealable error in respect of the adjournment appeal.
It follows that we are not persuaded that the orders wreak a substantial injustice upon the wife. No errors of principle are evident. Leave to appeal will be refused.
The Substantive Appeal
The grounds supporting the substantive appeal as pleaded in the wife’s Further Amended Notice of Appeal are:
IHaving determined to proceed with hearing the matter in the absence of the wife or her representatives, and in circumstances where he found the husband's evidence as to his sources of his very significant income to be implausible. His Honour should not have made a final order as he could not have been satisfied that it was in all the circumstances just and equitable to make a final order without the wife's participation in the trial.
That in the alternative:
ii.That the learned Trial Judge erred in his assessment of the parties contributions and in particular:
1.The learned Trial Judge erred by bringing to account and giving weight to the Husband’s “skill” as a Q professional;
2.The learned Trial Judge erred by giving sufficient [sic] weight to the Wife’s primary care of the child S;
3.The learned Trial Judge erred by placing too much weight upon the Husband’s financial support of the child S over the post-separation period.
iii.That the learned Trial Judge erred in his findings with respect to the Husband’s interest in the KC Trust, and in particular:
1.The learned Trial Judge erred in accepting the Husband’s evidence about his interest in the Trust despite a finding as to the “implausibility” of the Husband’s evidence in relation to the Trust.
2.The learned Trial Judge erred in assuming that the Wife did not challenge the Husband’s evidence as to his interest in the Trust.
iv.That the learned Trial Judge erred in making a finding that the Wife could adequately support herself from her capital resources provided for by the Final Orders made.
v.That the learned trial Judge erred in his assessment of “what is just and equitable” in circumstances where the Trial Judge only bought to account he [sic] amounts received by the Wife by way of partial settlement of property and without having any knowledge of those funds and/or assets held by the Husband.
vi.The learned Trial Judge failed to, but should have questioned the husband and/or his Counsel in an attempt to satisfy his view as to the "implausibility" of the husband's evidence concerning his income from the KC Trust and further should have obtained information from the husband as to what he had paid in respect of legal and other costs in relation to the proceedings and the sources of funds for payment of the same and should not have made a final order without having satisfied himself as to those matters.
vii. His Honour erred when assuming that the wife could obtain an income from the properties to be transferred to her which would go anywhere near meeting her current weekly expenses and further erred in assuming that the properties could be converted to money at their valuation without any taxation impost..
2. That. on the evidence available to the Learned trial judge, his orders did not provide a just and equitable outcome in that they did not properly take into account the past and future child caring contributions of the wife and the disparity of property, resources and income earning capacity of the parties.
(As per original)
The Trial Judge’s Reasons
As we have earlier pointed out, his Honour identified the existing interests in property of the parties or either of them. The total value of those interests was about $48 million, a figure arrived at not only through the evidence of the husband but also by reference to expert valuation reports in evidence before his Honour.
Having traversed the relevant history of the relationship and the litigation, his Honour identified “three controversial issues”. The three issues are the allegation that the husband had sent $142 million offshore; that there were many boxes of documents that the wife wished to inspect but said she had been unable to do so; and the husband’s evidence about his income stream and what the wife asserted was the implausibility of it. Those matters have largely already been addressed in the reasons above pertaining to the adjournment appeal.
Counsel for the husband adopted what might be termed a traditional approach and sought to identify and value the property of interests of the parties or either of them adding back approximately $20 million which the husband asserted the wife had received “by way of various payments” (at [144]) (including approximately $12 million received by the wife in partial property settlements) and attributing percentage entitlements to the parties wherefrom orders were framed by reference to the identified property.
His Honour rejected that approach finding that “it is artificial for no other reason than quite a number of the assets have been acquired by the husband subsequent to the cessation of the relationship” and that “it remains now undisputed that the specified type of investment scheme interest no longer exists”. No error is asserted or evident in his Honour’s approach which was entirely open to him.
Understandably in a case where one of the parties to a marriage had significant assets prior to the marriage and where the Court was dealing with a situation where the pre and post-cohabitation periods of time are longer than the period of cohabitation, his Honour considered the appropriate just and equitable settlement of property by reference to four specific time periods: the pre-marriage period; the cohabitation period; the post-cohabitation period and the future.
Generously to the wife, it might be argued, his Honour determined to not add back moneys received by the wife from the husband and otherwise spent on account of paid legal fees noting that “if the wife is right about having spent $20 million on legal fees, a “pool” of $67.7 million is entirely artificial” (at [47]). His Honour determined to have regard to the amount received by the wife pursuant to s 75(2)(o). Such an approach is entirely consistent with authority.[28]
[28] See Chorn and Hopkins (2004) FLC 93-204; C & C [1998] FamCA 143.
Similarly, his Honour decided to not add back the husband’s legal fees noting that his legal fees had been paid from his “earnings” since the separation which occurred about 12 years ago (at [48]).
Additionally the wife had been ordered to pay costs to the husband in various interlocutory applications totalling approximately $100,000. The husband proposed to waive those costs in the orders that he proposed and his Honour determined to do so.
Given the emphasis placed by the wife upon the KC Trust and the husband’s asserted lack of disclosure about it and more generally, what his Honour said about that trust should, we think, be quoted:
THE KC TRUST
104.In about July 2013, the husband said that he received a package of documents from STL Limited. This package was accompanied by a letter indicating that he was eligible to become a discretionary beneficiary of a trust known as the KC Trust. The trust was set apparently in the UK and the trustees were said to be professional trustees. He completed the documents including the incorporation of a company IY Ltd to act as beneficiary of the trust. Thus, IY Ltd owns nothing other than that it acts as the beneficiary of the KC Trust. It does not have a bank account. In December 2013, the husband received notice that payment was about to be made to IY Ltd and those distributions thereafter have come through his lawyers in Hong Kong.
105.IY Ltd was a company incorporated in the British Virgin Islands and therefore according to the husband, there was difficulty establishing a bank account for it in Hong Kong. Hence, the distributions were made to the Hong Kong lawyers.
106.Between December 2013 and November 2016, the husband received distributions from this trust of USD10.5 million.
107.The husband’s evidence about the KC Trust was breathtakingly simple. He said:
[102] I know very little about the KC Trust, and have not been given any documentation relating to it, apart from the “package of documents”. My involvement with the KC Trust is a precarious one. My company, IY Ltd, is a discretionary beneficiary – the trustee determines whether or not it will receive a distribution and how much that distribution will be. As I understand it, the trustee has no legal obligation to continue making distributions to IY Ltd and I have no ongoing “right” or entitlement to receive distributions. At present, without these distributions from the KC Trust I would not be able to fund the lifestyle that the wife and the child S, on the one hand, and my family and myself on the other, enjoy.
108.The implausibility of that statement is self-evident. Why would an unknown benefactor invite the husband to become a beneficiary of a trust, the details of which remain a mystery? However, apart from those distributions, the husband disclosed income of $7384 per week which he estimated came from “various PT events”. His income when averaged through IY Ltd as the beneficiary of the KC Trust, for the 2016 calendar year, were estimated to be $82,480 per week.
109.The wife had been aware of the husband’s assertion through his affidavit from at least March 2017 and presumably earlier from disclosures he made. Whilst the simplicity of the husband’s evidence might be seen to be implausible, the absence of any approach by the wife as to how she would establish that the husband’s evidence was untrue or that he had some control over, or was the owner of, the capital proceeds that gave rise to these distributions, must mean that his evidence is unchallenged. The husband has disclosed that the trust is based in the UK so presumably, the wife would need to investigate whether or not she could get access to those details. I do not know and am not prepared to guess, whether banking and/or corporate structures in the UK can be investigated. The difficult problem is whether the court can presume that consistency and reliability of payments under the trust would mean that the husband has a secure income stream for the future.
110.Throughout 2014, three distributions were made; in 2015, there were four. In 2016, there were three distributions. In each case, the payments varied markedly albeit each was a large sum of money. The court knows no more than that.
111.I find in the circumstances that it is a significant income stream albeit irregular but that the husband can rely upon it to provide him with an affluent lifestyle when I come to consider his financial circumstances under s 75(2) of the Act.
His Honour dismissed the wife’s application for spousal maintenance (at [37] – [45]).
In doing so his Honour noted that on 31 May 2010, an interim order was made that the husband pay to the wife a lump sum amount of spousal maintenance of $325,000. On 24 April 2012 Dawe J made an order that the husband pay the wife interim spousal maintenance of $26,021 per calendar month. His Honour noted that the present order had continued since 2012 and that the orders intended to be made by his Honour in relation to settlement of property would give the wife capital entitlements.
His Honour found that “the wife can adequately support herself even factoring in what she had previously described as a luxurious lifestyle” (at [45]). His Honour then considered a number of expense items which his Honour considered excessive and concluded that “the wife should be able to live comfortably by community standards factoring in the significant amount of money and property that she will have from this case”.
A consequence of the wife not putting evidence before his Honour and not otherwise participating in the property proceedings is that his Honour only had the evidence of the husband (and expert reports) before him. However, as is plain from the passages just referred to, it cannot be said that his Honour simply accepted the evidence, including specifically about the KC Trust, without considering its inherent reliability and veracity.
His Honour’s findings about that trust included that it produced a “significant income stream albeit irregular”. While his Honour found the husband’s evidence about the provenance and workings of the trust implausible (at [108]), his Honour nevertheless found specifically that the trust was responsible for giving the husband income of $82,480 per week (or about $4.29 million per year) in 2016.
His Honour also found that the KC Trust permitted the husband to rely upon it for “an affluent lifestyle” which his Honour noted would be taken up when considering s 75(2) (at [111]).
Ultimately, as has been seen, his Honour ordered that the wife retain or have transferred to her property and cash totalling about $11.6 million. That total includes five unencumbered real properties in Adelaide with a total value of approximately $7.8 million, an SH Investment valued at slightly more than $1 million and cash and savings totalling about $2.12 million. The husband received property totalling “approximately $35 million worth of assets by the time the farm is taken into account and the liabilities in the Strahan Trust” (at [149]).
In the final analysis, the wife was awarded in total about $1.7 million more than the husband proposed she receive.
The Wife’s Challenges as Pleaded and Argued
We again feel bound to point out that the oral and written arguments in respect of the substantive appeal differed somewhat from the grounds as pleaded.
The written Summary of Argument divided the asserted errors under two headings: “Should not have made a final order” and “If a final order, then not enough”.
The First Heading: “Should Not Have Made a Final Order”
The two headings within the written Summary of Argument presage the oral arguments which commenced with an assertion of the two “primary points” earlier referred to. Both written and oral arguments make plain that the assertion that his Honour should have made interim orders lies at the heart of the appeal.
We repeat what we have earlier said about this issue. We do not consider that we need to say more in order to reject the wife’s contention. It is not open to the wife to now assert a substantive issue neither raised nor foreshadowed before his Honour.
The arguments gathered in the written Summary of Argument on behalf of the wife under the first of the two headings just referred to appear to address broader concerns, many of which also have echoes in the arguments addressed in support of the adjournment appeal. For example it is contended:
75.His Honour could not have been satisfied that his order was just and equitable when there had been no enquiry made by His Honour or contradiction by the wife’s representatives as to the husband’s evidence concerning his relationship with the KC Trust.
76.It is self-evident that an allegation that the husband may not have made full and frank disclosure of his finances and moneys under his control is probably linked to any enquiry concerning the providence of the corpus of the KC Trust…
If, as we have concluded, his Honour was not in error in refusing the wife’s application for adjournment, his Honour was bound to, and could only, consider the requirements of s 79 by reference to the evidence (and submissions) that each party chose to put before him.
The wife chose to put no evidence before his Honour for trial, including evidence contradicting the husband’s account. She was given every opportunity to do so. The wife chose to not appear before his Honour herself and chose to not instruct the lawyers already engaged by her to argue the adjournment on the first day of trial to engage otherwise in the proceedings whether on a limited basis or otherwise.
Other arguments under the heading “Should not have made a final order” lead to an asserted conclusion that his Honour should have made a “self-executing or ‘guillotine’ after allowing a period for the wife to make any further application”.[29] These are arguments seeking to rebadge arguments in support of a contention of error in the adjournment appeal. More fundamentally, they too, constitute an attempt to raise matters of substance on appeal that were not at all raised or foreshadowed in the proceedings below.
[29] Wife’s Summary of Argument at paragraph 80.
Those arguments, too, should be rejected.
The Second Heading: “If a Final Order, Then Not Enough”
The second heading within the Summary of Argument groups together a miscellany of different asserted errors.
With all respect to the arguments thereafter articulated, in our view the heading in fact speaks to the wife’s true case which, simply put, is that she did not receive from his Honour as much as she should have. Of course, without more, that is not a discretionary error calling for this Court’s intervention even if any or all of us consider that we would have made a higher award.
The Contributions Challenge
The three specific challenges to his Honour’s assessment of contributions as stated in the wife’s Further Amended Notice of Appeal all attack the attribution of weight. That task within a highly discretionary environment is quintessentially one for the trial judge. The unusual circumstances of this case might be thought to make it more so.
His Honour considered the respective contributions of the parties within three distinct timeframes (and looked separately at “the future” so as to assess s 79(4)(e)). In our respectful view, doing so in circumstances where the period of cohabitation formed a minority of the time under consideration allowed the different type of contributions to be better assessed.
It is not asserted by the wife that his Honour failed to take into account any relevant considerations in the assessment of contributions nor that his Honour took account of any irrelevant consideration. His Honour gave consideration to all such matters relevant to that assessment and attributed weight accordingly.
Quite apart from the inherent difficulties in having an appeal court find error on the attribution of weight, we are in any event unable to see any error by his Honour in respect of contributions.
Contrary to that which is asserted in the grounds, his Honour did give significant weight to the wife’s primary care of the child S and to the child’s particular needs deriving from his disabilities whilst noting that the wife received significant assistance in respect of the same, mostly paid for by the husband. (at [66] and [125]).
His Honour found by way of contrast that “the husband’s role in supporting the child has been largely confined to financial support”. We are simply unable to see how the ground which asserts that his Honour placed “too much weight upon the husband’s financial support of the child over the post-separation period” is made out by reference to his Honour’s reasons.
Also contrary to that which is asserted in the grounds of appeal, his Honour did not in our view give weight to the husband’s “skill” as a Q professional. Rather, his Honour gave weight to the husband’s direct and indirect contributions as s 79(4) contemplates. His Honour refers to the husband’s “capacity to use his skills as a Q professional” which had enabled significant wealth to be accumulated through the CX Company and the entities related to it (at [123]). It was the husband’s direct contributions to the CX Company (what his Honour described as “the specified type of investment scheme”) which produced wealth, much of which was acquired pre-cohabitation. His Honour described the husband’s direct financial contributions by 1994 when the marriage occurred as “overwhelming” (at [81]). We see no error.
The KC Trust Challenge
We have, with respect, some difficulty in understanding the error asserted in the grounds pertaining to the KC Trust (sub-paragraphs iii (1) and (2) of the grounds).
The grounds appear to refer to [108] of the reasons quoted above. However, in our view what his Honour ultimately finds in that respect is both consistent with the finding of implausibility and favourable to the wife.
The effect of his Honour’s findings is that although he has no evidence from the wife about the trust and doubts whether any such evidence would be realistically obtainable in any event (at [109]), he is prepared to make a finding, favourable to the wife, that the trust can be relied upon to produce a “significant income stream” so as to provide the husband “with an affluent lifestyle” (at [111]).
The Finding that the Wife Could Adequately Support Herself
Grounds iv and vii quoted above can conveniently be dealt with together.
We do not consider that his Honour made the assumption contended for in Ground vii that the wife could obtain income from the properties transferred to her. Nor do we see error in the finding that the wife could adequately support herself from the capital resources provided for her in his Honour’s orders. It is also contended in Ground vii that his Honour assumed the properties could be converted to money at their valuation without any taxation impost. Again, we can see no such assumption in his Honour’s reasons.
His Honour found (at [112]) that “[t]he wife’s future depends entirely upon what she does with the assets with which she is left”, referring to the fact that the wife “will still have substantial assets in her name”, noting that there was no evidence from her as to what she intended to do with them. All of those conclusions were entirely open to his Honour and correct on the evidence before him.
The complaint by the wife that that conclusion was reached without any reference to taxation impost again suffers from a difficulty that the wife chose to produce no evidence as to what she intended to do with the properties which, it should be noted, the husband had for some time offered to her as part of a property settlement. There was no evidence upon which his Honour could draw any conclusions about any taxation impost because there was no evidence as to what the wife intended to do with those properties.
Pursuant to his Honour’s proposed orders, the wife would receive the following property whose values were the subject of uncontradicted evidence: five properties with a total unencumbered value of about $7.8 million; a SH Investment valued at $1.013 million; cash totalling $2 million and $118,644 held by the wife in savings. In the absence of any evidence from the wife, it was open to his Honour to conclude that the approximately $11.6 million in assets she would receive could provide adequate support to her.
The conclusions reached by his Honour were well open to him on the evidence.
The Partial Property Settlement Amount and Other Assets
We are unable to see the basis for the error asserted in Ground v.
His Honour took into account the uncontroversial fact that the wife had received significant amounts by way of partial property settlement and, as we have said, did so in a manner that can be argued to be generous to the wife.
His Honour did not take account of “funds and/or assets held by the Husband” that were not established as funds and/or assets by the evidence before him. What the wife may have wished to prove is entirely different to what she did prove. In any event, the wife chose to put no evidence before his Honour which set out what she could prove (or, indeed, by which she asserted her foreshadowed case based on the principles emerging from cases such as Black and Kellner or Chang v Su).
The Trial Judge Should Have Cross-Examined
As can be seen from the terms of Ground vi, the purported specific challenges contained within it are in fact particulars of the challenge which asserts that his Honour erred in not making an interim order.
The challenge the subject of that ground should be rejected on that basis alone.
In some circumstances, where both parties have put evidence before a judge and a manifest inadequacy is present, it may be necessary for the trial judge to seek that evidence where it is necessary to do justice.[30] So too, the pursuit of justice might necessitate inquiry (rather than “cross-examination”) by a judge.
[30] See for example Bulow & Bulow (2019) FLC 93-885 at [34] and the legislative provisions and cases there referred to.
However, neither of those circumstances can be seen to pertain here. It was not for his Honour to seek to make a case for a party who had not only not deposed to evidence by which that case was sought to be sustained, but who had elected not to further participate in the proceedings. The evidence of the husband, although in some specific respects found “implausible” by his Honour, was not such as to impose upon his Honour any obligation to undertake any inquiry further than what he did.
Past and Future Child Caring Contributions
Ground 2, in so far as it relates to the “past… child caring contributions of the wife”, is simply a repetition of the weight challenge embraced by Ground ii(2). To the extent that the ground refers to future child caring “contributions” we take it to be a challenge to an aspect of his Honour’s s 79(4)(e) assessment. Again, we observe that the challenge is solely directed to the attribution of weight.
There is no doubt that his Honour was well aware of the “disparity of property, resources and income earning capacity of the parties”; his Honour’s reasons refer to each and every one of those issues. Again, no ground asserts that relevant matters were not considered or that irrelevant matters were considered.
The Substantive Appeal: Conclusion
Nothing to which we have been directed or anything which we have seen for ourselves suggests appealable error by his Honour.
Once it is accepted that his Honour did not err in failing to grant the wife the adjournment which she sought, his Honour was bound to consider s 79 requirements by reference to the evidence before him. However, it should not be thought that in doing so the absence of evidence from the wife was the only difficulty confronted. The wife had not articulated, even in general terms, the relief she sought in the proceedings for settlement of property. As his Honour said (at [59]), there was “little point” in his Honour referring to the wife’s amended application because it was, by then, seven years old and because it “otherwise does not assist”.
If her appeal was successful, the wife sought that Cronin J’s orders of 23 November 2017 stand as interim orders only, with the matter to be remitted for rehearing with a guillotine order providing for the wife to file the material on which she sought to rely within a prescribed timeframe and any failure to comply with such timeframe would result in those orders becoming final. However, to repeat, even on appeal the wife was unable through her senior counsel to articulate the orders for which the wife contended by way of final relief upon any rehearing. Further in that respect, no application was made to adduce further evidence, noting that the substantive appeal was heard almost 12 months after his Honour’s orders and reasons. In the event the Full Court determined that it was appropriate to re-exercise the discretion on the evidence available, the wife sought an order in her Further Amended Notice of Appeal that the husband pay to the wife the further sum of $4 million by way of final property adjustment.
The substantive appeal should be dismissed.
Costs Of The Appeals
At the conclusion of the hearing the Court reserved its decision but, in order to save further time and expense, sought submissions in respect of costs from each of the parties in the event that the appeals were either successful or unsuccessful.
Senior counsel for the wife made no submissions in opposition to the application by the husband that the wife pay his costs of and incidental to the appeals in the event they failed.
We consider that circumstances here justify an order for costs in all three appeals. The wife has been wholly unsuccessful. We have considered the financial circumstances of the parties. The appeals have their genesis in the refusal by the trial judge to grant what was a significant indulgence and an indulgence which in substance had been refused previously.
We will order that the wife pay the husband’s costs of and incidental to all three appeals.
I certify that the preceding one hundred and fifty-six (156) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Murphy, Aldridge & Kent JJ) delivered on 21 February 2019.
Associate:
Date: 21 February 2019
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