Strand & Strand (No. 2)
[2018] FamCAFC 247
•12 December 2018
FAMILY COURT OF AUSTRALIA
| STRAND & STRAND (NO. 2) | [2018] FamCAFC 247 |
| FAMILY LAW – APPEAL – PROPERTY – Where the primary judge concluded that the parties respective contributions should be assessed as equal – Where the primary judge made an adjustment of 25 per cent in favour of the wife – Where the appellant contends that the primary judge erred in his assessment of the credibility of the parties – Where the appellant contends that the primary judge mischaracterised a loan as a gift – Where the appellant contends that the primary judge gave insufficient weight to the husband’s inheritance in his assessment of the contributions of the parties – Where the appellant contends that the primary judge erred in finding that a contentious bank statement was a genuine document – Where no error established – Where there is no merit in any of the grounds of appeal – Appeal dismissed. FAMILY LAW – APPEAL – COSTS – Where the appellant conceded that if the appeal was dismissed there could be no opposition to an order for costs in favour of the respondent – Costs ordered in the sum as sought by the respondent. |
| Family Law Act 1975 (Cth) |
| Berghan v Berghan (2017) 57 Fam LR 104; [2017] QCA 236 Biltoft & Biltoft (1995) FLC 92-614; [1995] FamCA 45 Bishop & Bishop (2013) FLC 93-553; [2013] FamCAFC 138 Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78 House v The King (1936) 55 CLR 499; [1936] HCA 40 Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21 Rodgers & Rodgers (No 2) (2016) FLC 93-712; [2016] FamCAFC 104 SS Hontestroom v SS Sagaporack [1927] AC 37 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; [1999] HCA 3 |
| APPELLANT: | Mr Strand |
| RESPONDENT: | Ms Strand |
| FILE NUMBER: | PTW | 520 | of | 2015 |
| APPEAL NUMBER: | WA | 5 | of | 2018 |
| DATE DELIVERED: | 12 December 2018 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Strickland, Ainslie‑Wallace & O’Brien JJ |
| HEARING DATE: | 25 September 2018 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 17 November 2017 |
| LOWER COURT MNC: | [2017] FCWA 162 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Cremin |
| SOLICITOR FOR THE APPELLANT: | DS Family Law |
| COUNSEL FOR THE RESPONDENT: | Mr Rynne |
| SOLICITOR FOR THE RESPONDENT: | Anthony R Clarke and Associates |
Orders
The appeal be dismissed.
The appellant husband pay the costs of the respondent wife of and incidental to the appeal fixed in the sum of TWELVE THOUSAND DOLLARS [$12,000].
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 Strand & Strand (No. 2) 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 PERTH |
Appeal Number: WA 5 of 2018
File Number: PTW 520 of 2015
| Mr Strand |
Appellant
And
| Ms Strand |
Respondent
REASONS FOR JUDGMENT
On 17 November 2017, Acting Judge Moroni pronounced orders between the appellant husband and the respondent wife altering their interests in property pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) after a 38 year marriage which ended in separation in April 2014.
The husband appealed all of the orders made.
Having determined, to the extent the evidence permitted, the legal and equitable interests of the parties in property, the primary judge assessed their respective contributions as equal. His Honour determined that a substantial adjustment in favour of the wife was required to reflect the considerations set out in s 79(4)(e) of the Act, and quantified that adjustment at 25 per cent of the value of the property and superannuation available for division after all liabilities were taken into account.
That determination was informed not only by the age, state of health, earning capacity and financial commitments of the parties but more particularly by his Honour’s findings as to the premature disposal of property by the husband, the financial advantages enjoyed by the husband in the period since separation, and what he regarded as the husband’s failure to comply with his duty of disclosure. The latter finding in turn was largely informed by his Honour’s findings as to credibility.
For the reasons which follow, the appeal must fail.
The appeal
Both the Notice of Appeal filed on 30 January 2018 and the husband’s summary of argument filed on 4 September 2018 were, to express it as neutrally as possible, confused and unclear.
With the wife’s consent, the husband was granted leave at the commencement of the appeal to rely on an amended outline of argument. That document in turn proposed grounds of appeal different from those in the Notice of Appeal. Considerable time was spent in clarifying with counsel the grounds actually pursued, and the arguments in support of them. Sensibly, counsel for the wife acquiesced in that process, acknowledging that the wife was not taken by surprise nor disadvantaged by the husband’s failure to comply with the orders made to ensure the orderly and fair progress of the appeal.
Having by that somewhat tortuous process finally identified the grounds of appeal and arguments in support of them, counsel for the husband expressly abandoned all other grounds and submissions contained in the Notice of Appeal and the original outline of argument. These reasons therefore address only the grounds and arguments finally pursued.
Ground 1
By this ground, the husband asserted that :
“[t]he learned judge erred in fact in finding the respondent wife receive 75% of the pool as the parties are deemed to have contributed equally to the asset pool and His Honours reasons do not adequately reason the disproportional division”.
(As per the original)
Leaving aside its confused expression, no arguments or submissions were advanced in support of this ground. In any event, it is founded on a premise which is simply wrong; there is no presumption or “deeming” of equality of contributions: Mallet v Mallet (1984) 156 CLR 605.
This ground is without merit.
Ground 2
By this ground, as amended, the husband asserted that the primary judge erred in his assessment of the credibility of the parties.
In essence, counsel for the husband argued that the primary judge’s positive findings as to the credibility of the wife were flawed, as they involved an acceptance of her evidence of her suspicions that the husband had disposed of property, and her evidence that he had failed to give proper disclosure. Counsel argued that, the wife having acknowledged that she had relied on her solicitors to thoroughly inspect the documents produced by the husband, and having admitted that she did not know the full extent of the property available for division between the parties “[t]herefore, she cannot say what the [husband] has allegedly disposed of or not discovered”: Ground 2.5 of Summary of Argument.
The fallacy inherent in that argument is self-evident.
In any event, counsel’s submissions did not address the significant adverse findings made by the primary judge as to the credibility of the husband. His Honour outlined in detail aspects of the husband’s evidence which he regarded as unsatisfactory and unconvincing. He took into account, as he was plainly entitled to, his findings as to the inadequacy of the husband’s disclosure, describing him as exhibiting “something of a ‘catch me if you can’ attitude”, and finding that he “appeared to be minded to muddy the waters wherever possible” ([98]).
His Honour’s findings were not based merely on observations of the appearance and demeanour of the parties as witnesses. His Honour had regard to the unexplained failure of the husband to address matters put squarely in issue at an early stage of the proceedings, when he alone had access to information and documents relevant to those matters. He had regard to the “vague and unsatisfactory” nature of the husband’s answers to questions about withdrawal of significant amounts from a bank account, and his failure to disclose financial documents clearly relevant to matters in issue ([102]).
At an early stage of the proceedings, the wife produced a document which purported to be a statement for an account in the name of the husband, showing a significant amount which was otherwise unaccounted for. From the outset, the husband maintained that the document was a forgery; in response, the wife’s lawyers invited the husband to sign an authority directed to the relevant bank which, if signed, would have enabled the wife to have access to all of his bank records. That invitation was not taken up by the husband, in circumstances which the primary judge regarded as being inadequately explained.
All of those matters, and others which emerge from the transcript, contributed to the conclusion of the primary judge that he was “far from convinced that it would be safe to rely on any of the [husband’s] financial evidence, except to the extent that it is either not contested by the [wife] or is adequately corroborated by other evidence” ([106]).
That conclusion was clearly open to his Honour. No error of principle or fact, reference to irrelevant considerations or failure to take into account relevant considerations has been demonstrated.
In those circumstances, and bearing in mind the well-established principles acknowledging that appellate judges are “in a permanent position of disadvantage as against the trial judge” in assessing the credibility of witnesses and making findings of fact, this ground of appeal is without merit: see, eg, SS Hontestroom v SS Sagaporack [1927] 2 AC 37,47; Devries v Australian National Railways Commission (1993) 177 CLR 472 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588.
Ground 3
By this ground the husband challenges the finding of the primary judge that a sum of $100,000 advanced by the wife to the parties’ son was properly characterised as a gift and not a loan.
The submissions made in support of this ground were, frankly, difficult to follow.
Uncontroversially, the primary judge found that the advance was made approximately six months prior to the breakdown of the marriage, and was made to assist the son in the purchase of a property to be registered in his sole name. His Honour also noted that on 17 August 2013 the wife and the son signed two documents which were, on their faces, inconsistent. The first was a letter to the mortgage broker acting for the son, confirming that the advance was by way of gift; the second was a loan agreement providing for the son to repay to the wife the amount advanced, plus a share of any increase in the value of the relevant property. The explanation given for the execution of the latter document was that it was intended to afford to the son a measure of protection if he separated from his then partner, and a claim was made against his property (see [182]– [186]).
The characterisation of a particular advance of monies depends on whether the circumstances known to both parties to the transaction at the time demonstrate, objectively, that the payment was made by way of loan. If, for example, the money was paid upon the express condition that it should be repaid then, notwithstanding any absence of formal documentation, and regardless of the motivation for the payment, a contract of loan will exist: Berghan v Berghan (2017) 57 Fam LR 104.
Even if a contract of loan is established, it does not necessarily follow that any liability so created will be taken into account in determining a just and equitable alteration of property interests. The court may properly determine not to take into account an unsecured alleged liability in certain circumstances, including where the alleged liability is vague or uncertain or unlikely to be enforced: Biltoft and Biltoft (1995) FLC 92-614, Rodgers & Rodgers (No 2) (2016) FLC 93-712, [41]–[42].
The primary judge had the advantage of observing the parties and the son giving evidence. He also noted documentary evidence that the husband had been informed of the advance “when the parties were apparently still on good terms” and found that it was made “at the very least, with the [husband]’s tacit consent” ([188] and [198] respectively).
Having concluded that the advance was “more in the nature of a gift than a loan”, the primary judge found further that in any event there was no evidence to suggest that the son was likely to offer any repayment in the foreseeable future, nor that he would have the capacity to do so ([194]).
Again, those findings were clearly open to the primary judge on the evidence at trial.
Ground 3 is without merit.
Ground 4
In or about 2010 the husband received an inheritance following the death of his father. Documents exhibited to the husband’s trial affidavit indicated that the total amount of the inheritance, which was received in tranches, was just under $290,000. The primary judge noted that in other documents authored by the husband there was reference to the inheritance being in an amount of approximately $330,000; on appeal though, the husband asserted that the inheritance “was valued at approximately $290,000”.
By this ground of appeal, the husband asserts that the primary judge gave insufficient weight to the husband’s inheritance in his assessment of the respective contributions of the parties.
That assertion must be considered against the background of the presentation of the husband’s case at trial.
The husband did not argue at trial that his inheritance should be excluded from the calculations required to determine the existing interests of the parties in property available for division. Rather, he argued that the required holistic assessment of the contributions of the parties would lead to a conclusion that those contributions were equal were it not for his receipt of the inheritance, and that those contributions should be assessed in proportions of 55 per cent to him and 45 per cent to the wife because of it.
Counsel for husband also acknowledged in opening submissions at trial that there was “going to be controversy” as to the inheritance and specifically “where it went, how and why” (Transcript 27 July 2017, p.11 lines 15–17).
Notwithstanding that acknowledgement, the primary judge observed that it was “difficult to determine, from the evidence advanced by the [husband], what actually became of the money inherited” ([214]). If anything, that observation understated the paucity of evidence directed to the issue identified by counsel for the husband at trial.
The primary judge correctly noted that his task was to assess all of the relevant contributions of the parties from the commencement of the relationship until the time of trial. His Honour also correctly observed that the weight to be given to an inheritance in an overall consideration of contributions can be influenced by a determination as to the use to which the money was put ([214]). He acknowledged the greater financial contribution of the husband over the course of the relationship, but also found that the wife had made a greater contribution to the welfare of the family, including contributions made in the capacity of homemaker or parent. He concluded that the “sheer volume of work of all types undertaken by each of the parties” over the relevant 41 year period to the date of the hearing was such that it was difficult to “attach any significant weight to the fact of the [husbands]’s inheritance” ([213]).
The impact, if any, of the receipt by either party of an inheritance on the assessment of contributions will depend on the facts and circumstances of the individual case: Bishop & Bishop (2013) FLC 93-553 at [28]. That assessment in turn involves the exercise of a broad discretion.
The principles derived initially from House v The King (1936) 55 CLR 499 at 504–505 are well-known and do not require restatement. The conclusion of the primary judge that the contributions of the parties were equal was open to him, and has not been demonstrated to be unreasonable or plainly unjust so as to admit an inference that he failed to properly exercise his discretion. No error of principle or relevant mistake of fact has been identified, nor was it suggested that the primary judged allowed irrelevant matters to affect his determination, or failed to take into account some material consideration.
Ground 4 is without merit.
Ground 5
By this ground, the husband asserts that the primary judge erred in finding that the contentious bank statement referred to above was “a genuine document” and “that there must have been a deposit of $300,000 deposited into [the account]” (Transcript 25 September 2018, p.27 lines 1–3).
In the course of his oral submissions, counsel for the husband acknowledged that the primary judge made no such finding. All his Honour did was recite the suspicion of the respondent wife ([53]).
On that basis alone, Ground 5 is clearly without merit. For the sake of completeness, however, it may be observed that reference to the wife’s suspicions in relation to the document in question was only one of the numerous elements which led to the primary judge’s findings as to the husband’s failure to meet his duty of disclosure, and his Honour’s findings as to credibility more generally. As already observed, those findings were clearly open to the primary judge, and informed his determination that a substantial adjustment was warranted to what would otherwise be the contribution based entitlements of the parties.
Costs
At the hearing of the appeal, counsel for the husband appropriately conceded that in the event the appeal was dismissed, he could not oppose an order for costs in favour of the wife. He also conceded that the amount of $12,000 sought by the wife was reasonable (Transcript 25 September 2018, p.42 lines 5–6).
The appeal having been wholly unsuccessful, and those concessions having been made, an order for costs in the amount sought by the wife is proper.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ainslie-Wallace & O’Brien JJ) delivered on 12 December 2018.
Associate:
Date: 12 December 2018
7
6
1