TOBIAS & TOBIAS
[2020] FamCAFC 271
•6 November 2020
FAMILY COURT OF AUSTRALIA
| TOBIAS & TOBIAS | [2020] FamCAFC 271 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Extension of time to file Notice of Appeal from final orders made dismissing property proceedings – Both parties retained the assets and liabilities then in their name – Where there was a 14 week delay in filing – Where there is some excuse for the very considerable delay – Where challenges which appellant husband seeks to make in relation to the judgment appear to have merit – Application granted – Time to file extended to seven days from the date of these orders – Order for costs against the husband. |
| Bankruptcy Act 1966 (Cth) Pt X Family Law Rules 2004 (Cth) r 1.14(1) |
| Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 Carlson & Carlson (2019) FLC 93-934; [2019] FamCAFC 245 Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30 |
| APPELLANT: | Mr Tobias |
| RESPONDENT: | Ms Tobias |
| FILE NUMBER: | BRC | 9218 | of | 2016 |
| APPEAL NUMBER: | NOA | 66 | of | 2020 |
| DATE DELIVERED: | 6 November 2020 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Brisbane (via telephone) |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | 28 October 2020 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 23 June 2020 |
| LOWER COURT MNC: | [2020] FCCA 1657 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Kearney SC with Mr Blank |
| SOLICITOR FOR THE APPELLANT: | Shakenovsky & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Priestley |
| SOLICITOR FOR THE RESPONDENT: | Conroy Stewart Spagnolo |
Orders
The time to file a Notice of Appeal from the orders of the Federal Circuit Court of 23 June 2020 in proceedings BRC 9218 of 2016 be extended to seven (7) days from the date of these orders.
Within twenty-eight (28) days of these orders, the husband pay the wife’s costs in the sum of $9,972.45.
Otherwise the husband’s Application in an Appeal NOA 66 of 2020 filed 2 October 2020 be dismissed.
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 Tobias & Tobias 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 APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 66 of 2020
File Number: BRC 9218 of 2016
| Mr Tobias |
Appellant
And
| Ms Tobias |
Respondent
REASONS FOR JUDGMENT
Introduction
On 23 June 2020, the primary judge made final orders in contested property proceedings between Ms Tobias (“the wife”) and Mr Tobias (“the husband”) which simply dismissed both the wife’s Amended Application and the husband’s Further Further Amended Response. The effect of those orders was therefore that both parties retained the assets and liabilities then in their name (there being no joint assets or liabilities). In the case of the wife, save for a loan owing to her from the husband (“the loan”) it appears that that outcome saw her retain modest chattels and superannuation, and liabilities of about $170,000. In the husband’s case, likewise the orders left him as the owner of a very modest pool of chattels and superannuation, but even ignoring the loan, retaining significant liabilities which although not finally quantified by the primary judge, appear to have been in excess of $3 million.
The loan was, as found by the primary judge, a debt of the husband to the wife, at least in the sum of $1,590,000 (at [117]) and perhaps $1,951,636.19 (at [122]). Whilst the primary judge was ultimately unable to determine the precise value of the loan (at [143]) if one were to factor that debt into the parties’ positions resulting from the judgment at $1,590,000, then the wife obtained net benefits of about $1.5 million, whereas the husband was left with net liabilities in the order of $5.4 million.
The husband did not bring an appeal from those orders within the time limited for its institution. Now, by Application in an Appeal filed 2 October 2020, he seeks an extension of time in which to do so. Although opposed by the wife, for the reasons which follow, the husband’s application must succeed.
Background
As at the time of the primary judge’s orders, the husband was 66 years of age and the wife 53 years of age. The husband was a company director by occupation and the wife, albeit with a recent history of employment in business, was then unemployed, but shortly to complete a law degree.
The primary judge found that the parties’ relationship had a duration of between 21 to 24 years (at [22]) to which four children were born, all of whom were adult by the time of the orders.
Although the primary judge determined that the parties separated on a final basis in 2015 (at [21]) it appears that in 2008, the husband commenced a relationship with a woman who is now his second wife, and in consequence, the parties’ marriage fell into difficulty. Although thereafter the parties lived apart for extensive periods of time, and contemplated and discussed formally concluding their marriage, nothing concrete was ever undertaken or agreed.
In February 2011, the parties sold the jointly owned family home, from which sale net proceeds of $1.8 million were obtained (at [47]) but wholly paid to the wife (at [183]). Further, because the wife remained the primary carer for the parties’ children, the husband paid to her monthly sums between May 2010 and July 2015 of initially $21,000 per month, then reducing to $15,000 per month and finally to $10,000 per month (at [54]).
In 2011 the husband purchased a business for $2,700,000. Part of that purchase price was funded by the loan, which initially was in the sum of $1.32 million. The loan was formally documented by agreement dated 10 May 2011. It is not in dispute that those funds the subject of the loan were wholly derived from the net sale proceeds of the jointly owned family home.
In July 2011 the wife loaned the husband a further $100,000 (at [66]) and a further $170,000 in October 2011 (at [67]). Again, those monies appear to have had their source in the sale proceeds of the parties’ home. Those further sums saw the total amount of the capital of the loan ultimately at $1.59 million (at [117]). Unfortunately it appears as though the business nonetheless subsequently wholly failed, leaving the husband with significant liabilities, presumably arising from personal guarantees given in connection with the business.
In 2016 the parties’ children moved from living with the wife to living with the husband. Also in 2016 the wife commenced these proceedings.
In 2017 the husband appointed controlling trustees to propose an agreement under Part X of the Bankruptcy Act 1966 (Cth) with all of his creditors, including the wife (at [83]). However two significant creditors, including the wife, voted against the proposed agreement, and it therefore failed to pass (at [86]).
The trial and the primary judge’s reasons
It appears that there were two major issues in dispute between the parties in the trial before the primary judge. The first was the wife’s assertion that the husband had failed to disclose significant assets, which she contended were worth several million dollars. The husband denied being in possession or control of any such assets, and the primary judge resolved that issue in his favour (at [134] and [145]).
The second matter was that the husband contended that the monthly payments he had been making to the wife were in discharge of the loan, such that the amount then owing under it was nil. In the alternative he sought an order that the loan be discharged under s 79 of the Family Law Act 1975 (Cth) (“the Act”). The primary judge specifically found that the husband’s payments to the wife were not towards the loan (at [56]) which had neither been repaid nor discharged (at [111]).
As to the husband’s alternate claim, that pursuant to s 79 of the Act, the loan should be discharged, whilst not specifically referring that provision, nonetheless ultimately the primary judge declined to make any such order (at [197]).
Whilst I shall need to discuss the primary judge’s reasons in more detail later, it is presently sufficient to say that her Honour was not satisfied that it was just and equitable to make any property adjustment order (at [141]) but nonetheless thereafter went on to consider the parties’ financial and non-financial contributions, concluding that they were equal (at [153]) and then went on to consider s 75(2) factors, although not reaching any overall conclusion as to their net effect. At [190] the primary judge again said that “I am unable to conclude that it is a just and equitable to make an order altering the interests of the parties in their property in this case…”
Relevant statutory provision and legal principles
Rule 1.14(1) of the Family Law Rules 2004 (Cth) (“the Rules”) provides that “[a] party may apply to the court to shorten or extend a time that is fixed under these Rules or by a procedural order.”
Whilst there are no criteria specified either in the the Act or the Rules relevant to the exercise of that jurisdiction, in Gallo v Dawson (1990) 93 ALR 479 at 480–481, McHugh J said:
[A] notice of appeal against his Honour's judgment had to be lodged within 21 days of the date thereof: O 70, r 3 of the Rules of the High Court (the Rules). Thus, the present application was made over 16 months out of time. However, the applicant relied on the provisions of O 60, r 6 to support her application. That rule provides that the court or a justice may enlarge the time appointed by the Rules for doing an act upon such terms, if any, as the justice of the case may require and that the enlargement may be ordered although the application is not made until after the expiration of the time appointed or fixed for doing the act. The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors and Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v. Scott (1986) 12 FCR 187 at 194-195; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v. Grigg [1967] VR 871 at 872; Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200, at 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1964] 3 All ER 933 at 935:
“The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.”
(As per the original)
The following factors are established by the authorities as being potentially relevant:
·The nature and history of the proceedings;
·The length of the delay, and any explanation for the same;
·The merits of the appeal; and
·Any prejudice or other consequence for the respondent if leave is granted.
Nature and history of the proceedings
It appears as though the proceedings between the parties which commenced in the Federal Circuit Court in 2016 only related to property. Much of the wife’s efforts in that litigation was directed towards establishing her claim that the husband had inadequately disclosed his assets, and not properly attended to disclosure generally.
The trial commenced on 13 August 2018, but was not then able to conclude and was listed again for 17 January 2019, although written submissions ensued, the last of which was filed on 27 May 2019. Judgment was then reserved and delivered a little under 13 months later on 23 June 2020.
Although not directly relevant to the property proceedings, it appears uncontroversial that the wife presently has no relationship with any of the parties’ four children. She says that is because the husband has involved them in the proceedings, thereby poisoning their perception of her. She hopes to be able to re-establish those relationships once these proceedings conclude.
Length of and explanation for the delay
The husband concedes that his delay in bringing this application is lengthy, being some 14 weeks from 21 July 2020, which was the last day on which the appeal could have been brought as of right.
His explanation for the delay is set out in his affidavit affirmed 1 October 2020. In essence he says that:
(a)At the time the primary judge’s decision was delivered, although normally living in Adelaide, he had temporarily moved to live in Sydney, so as to maintain his employment as a company director during the COVID-19 pandemic (at paragraph 12–13);
(b)At the time he received the emailed orders and judgment on 23 June 2020, he had no access to his papers in relation to the proceedings, and no legal representation, nor funds to obtain legal advice (at paragraph 15);
(c)It was not until August 2020 that he received funds sufficient to retain new lawyers, which he immediately did, including seeking advice from counsel and senior counsel (at paragraph 19–20);
(d)There was then difficulty in obtaining files from his previous lawyers (at paragraph 21) and other documents needed to be sourced from his Adelaide home (at paragraph 23). Further, he was “advised that certain material necessary to lodge an appeal was not amongst the material” that was obtained (at paragraph 22), necessitating it being obtained by inspection of the original court file in Brisbane (at paragraphs 25–26);
(e)That after retaining lawyers in August 2020, he has acted as quickly as he could to have the Notice of Appeal drafted and filed (at paragraph 27).
However also relevant to this chronology is the wife’s activity after the primary judge’s orders to enforce her rights under the loan.
Firstly, on 26 June 2020 the wife’s solicitors emailed the husband, seeking a proposal as to repayment of the loan, to which on 29 June 2020 the husband responded, noting that “a final judgement for payment of the claimed debt [is necessary] before a bankruptcy notice can be issued” and indicating that any proceedings in relation to the debt would be defended (Wife’s affidavit filed 12 October 2020, annexure W15).
Although there were thereafter some attempts at negotiation, they did not bear fruit, and, likely in light of that, on 2 July 2020 the husband emailed the wife and her solicitor identifying that his address for notices and correspondence was his home in South Australia (although his evidence before me was that he was not then living there) (Wife’s affidavit filed 12 October 2020, annexure W19).
On 6 August 2020 the wife’s solicitor emailed to the husband by way of service, a Statement of Claim filed in the New South Wales Supreme Court, in which the wife sought $2.47 million from the husband, to which by email of 18 August 2020, the husband responded by saying “I do not regard this as proper service.” By email of 20 August 2020 the husband said to the wife’s solicitors “you are advised as to my Address for Service in a previous email” A little later on that day, in a second email, he said “I am interstate and proper service has not been effected. I am informed that to properly serve proceedings outside of a State you need to comply with the Service and Execution of Process Act 1992, which you have not done” (Wife’s affidavit filed 12 October 2020, annexure W22–W25).
On 31 August 2020, the wife’s solicitor emailed the husband, advising that three attempts at service by a process server in South Australia had been unsuccessful, to which the husband responded saying that he was travelling, but his wife would accept service on his behalf when she was home. (Wife’s affidavit filed 12 October 2020, annexure W29).
Ultimately service was effected on a date which is unclear on the evidence before me.
However significantly, in none of the email exchanges between the husband and the wife and/or her solicitors, was there any foreshadowing of the bringing of an appeal from the primary judge’s orders, even after the husband retained solicitors in August 2020. The focus of the communication, insofar as it did not deal with settlement, was the New South Wales Supreme Court proceedings.
In effect the wife says that the husband was trying to buy time to settle the overall proceedings, including by placing hurdles in the way of service of the New South Wales Supreme Court proceedings. That appears likely.
At the hearing of the application, the wife tendered into evidence bank statements of the husband spanning the post judgment period. She seem to think they supported her claim that the husband could have retained solicitors earlier than he did, but in fact they do not. Rather, they strongly support the husband’s version, in that they show that the first significant post judgment deposit ($21,304.28 on 31 August 2020) was, on the very next day, used to pay $8,250.00 to his lawyers, with a further $8,250 being paid to them on the next day as well (Exhibit A).
But for the 31 August 2020 deposit, the husband would have been unable to fund either such payments; indeed he seems to have been living rather hand to mouth prior to then.
It is convenient at this point to address a further argument raised by the wife, namely that I should be satisfied that the husband was clearly untruthful in some aspects of his evidence in relation to the reasons behind his delay. However, absent cross-examination, I would not be prepared to make a finding of dishonesty, unless there was clear and incontrovertible objective evidence which established that to be the case to the relevant standard (Evidence Act 1995 (Cth) s 140). There is not.
Ultimately I am satisfied that there is some, but nonetheless a poor, excuse for the very considerable delay in bringing of this application by the husband.
The merits of the appeal
The proposed grounds of appeal were annexed to the husband’s affidavit filed 2 October 2020 and were as follows:
1.That Her Honour erred in failing to determine the interests of the parties for the purpose of the determination pursuant to section 79 of the [Act] – being the interests of each of them in the property and liabilities of each them.
2.That Her Honour erred in respect of the Loan Agreement (the Agreement) dated 10 May 2011, including by:
2.1failing to have any regard to and to find that the Agreement did not give rise to an enforceable debt as between the parties;
2.2failing to find that the Agreement was one entered between the parties for the purpose of protecting the interests of the parties from creditors, and potential creditors;
2.3failing to determine the amounts advanced pursuant to the Agreement and the amounts (if any) owing pursuant to the same;
2.4finding that payments made by the appellant to the respondent from May 2010 to December 2015 were not to be credited against any amount(s) found to be owing pursuant to the Agreement; and
2.5failing to make orders consequent upon such finding as was made as to the indebtedness of the appellant to the respondent pursuant to the Agreement, including so as to determine the financial relationship between the parties and avoid further proceedings between them – section 81 of the [Act].
3.That Her Honour erred in failing to determine and/or for failing to properly determine:
3.1the application that the Loan Agreement be set aside; and
3.2the application that any amounts owing pursuant to the Loan Agreement be reduced, including to nil;
Including by:
3.3failing to have any or any evident regard to the matters arising pursuant to section 79 (4) in determining not to do so;
3.4failing to have any or any evident regard to the matters arising pursuant to section 81 in determining not to do so; and
3.5failing to provide adequate or sufficient reasons for determining not to do so.
4.That Her Honour erred in the assessment of the contributions of the parties, including:
4.1in proceeding to undertake such assessment without regard to the context in which such assessment was to occur, including without having made findings as to the interests of the parties;
4.2in failing to have any or sufficient regard to the contributions of the appellant following August 2008; and
4.3having found that payments made by the appellant to the respondent from May 2010 to December 2015 were not to be credited against any amount(s) found to be owing pursuant to the Agreement, in failing to recognise accord proper (if any) recognition to such matters in the assessment of contributions.
5.That Her Honour erred in:
5.1finding that the appellant’s earnings and earning capacity would be relevantly unaffected if the appellant was to enter into bankruptcy; and
5.2failing to have any or sufficient regard to the financial position of the appellant consequence upon the Orders made.
6.That Her Honour erred in failing to provide adequate or sufficient reasons for the determination.
(As per the original)
At the hearing of the application, counsel for the wife, having heard exchanges between myself and senior counsel for the husband, conceded that two grounds of appeal had merit. That concession was sound. Nonetheless it is useful to briefly consider the proposed grounds.
As argued by senior counsel for the husband before me, he arranged those grounds into two groups, the first comprising grounds 1, 4, 5 and 6. In relation to that group counsel said “[it] was incumbent upon the Courts to have determined the interests of the parties (and values of the same) for the purpose of exercising (or not) any properly available discretion pursuant to s 79 of the Act…” (Husband’s outline of case filed 13 October 2020, paragraph 15). It is then said, at paragraph 17, that:-
[t]he failure to determine the interests of the parties and the value of the same has permeated the entire adjudicative process then undertaken by the Court, diverting the Court from any ability to and any proper consideration of the contributions of the parties and of those matters arising in for consideration pursuant to s 79(4)(e).
By analogy to Carlson & Carlson (2019) FLC 93-934 it was said that “it is equally not possible for the Court to properly conclude that it is not just and equitable to make any order” absent findings as to values, contributions and 75(2) adjustments (at paragraph 18).
It is correct to say that there appears to be no final ascertainment of the parties’ property interests, and indeed the primary judge expressly said so (at [145]). The grounds asserting that this comprises error therefore appear to have merit.
The second grouping of grounds (Grounds 2, 3 and 6) pertain to the loan agreement. At paragraphs 21 and 22 of their Outline of Case, counsel for the husband said in relation to this group:
21. Whilst the Court found that the application of the wife for orders pursuant to section 79 could not succeed as no property which could be the subject of such an order had been identified [J-139], the Court simply failed to recognise that the wife’s interest pursuant to the Loan Agreement was an interest amenable to an order pursuant to section 79 as the husband indeed sought. Consequent upon that failure, the Court in turn does not address that which would be just and equitable in respect of both that interest and the interests of the parties more broadly having regard to the matters arising pursuant to section 79(4).
22. The path of reasoning at [183] and [184] is notable for that which is not recognised and considered – contrary to that which is here found, without more the interest is property of the wife alone and a liability of the husband alone. It is this fact that the Court fails to relevant recognise and engage with – to the extent that [183] provides some recognition of the position which is ultimately adopted by the Court, that which follows fails to engage with the fundamental contention of the husband that such interest ought be altered pursuant to section 79 and fails to advance any reasons for not doing so, including by referent sot sections 79(2) and (4).
There are indeed some curiosities in the primary judge’s reasons in this respect. At [111] her Honour said:
The loan to the husband by the wife is an asset currently in the hands of the wife. I have found that it has not been repaid. It has not been otherwise discharged.
A little later at [143] her Honour said:
I have been unable to make a finding about the precise value of the loan agreement.
Her Honour then turned to consider the loan agreement specifically (at [182]–[189]) as follows:
182. Counsel for the wife submitted that in the event the court does not find that the husband has significant assets, then the wife should retain the benefit of the loan agreement. It is submitted that regard ought be had to:
a)the nexus between the creation of the loan agreement and the promised property settlement which did not eventuate;
b)the purpose for the money loaned was not communicated to the wife at the time the loan was given; and
c)the husband took a risk for which the wife should not be held responsible, particularly in circumstances where “the loan agreement was allegedly to protect her” and she did not consent to or participate in the venture.
183. The husband submitted that the funds for the loan were sourced from the sale of the [Suburb B] property for which he received nothing. He submits that the wife should not be the beneficiary of the loan (as an asset) and the proceeds of sale of the [Suburb B] property. The argument has merit. The proceeds of sale of the [Suburb B] property is in effect reconstituted by the loan (as an asset). If the loan is not set aside, or not reduced, and no property adjustment order is otherwise made, then the wife will stand beneficiary of the parties’ only significant asset.
184. I have previously discussed the status of the loan. It is property of the parties or either of them. It is also a liability of equal value.
185. In submission the husband proposes a number of ways in which he could pay the wife. He submits:
a)He could afford to pay her $1,750 per month after tax. He does not say until when.
b)He could pay the wife “a share of any windfall investment outcomes possible in the future to the extent that the financial liabilities have been settled or extinguished first and that 25% of the free (after costs and tax) wealth created. The husband, in some years out may be gifted shares in an environmental project that could have considerable wealth generation. Presently this venture has no value and the husband is yet to be granted shares.”
c)He could bequeath to the wife 33% of his estate.
186. As the husband says, his second proposal is difficult to order and difficult to forecast. The latter is also inappropriate.
187. Annexed to his affidavit filed by leave on 17 January 2019 is an offer to the wife that he pay to her $1,750 per month. As noted, he does not say for how long this would continue. He adopted this offer and the alternate proposal annexed to the affidavit as the orders that he seeks. In cross- examination he said he has a capacity to pay her $1,500 per month as soon as a Part X agreement is reached. Notwithstanding that this proposal appears on all faces to be a proposal for an order for spouse maintenance, the husband assured me in cross-examination that he intended it to be an order for property settlement.
188. The issue with the husband’s proposal, setting aside for the moment that it carries the implied concession that an order in favour of the wife is just and equitable, is that there is very little evidence that supports the husband’s capacity to fund a $1,500 monthly payment to the wife. On his evidence his wife has financially assisted him from time to time because he has had to assign the surplus of his income to his many, many liabilities.
189. The husband says he does not seek a spouse maintenance order. Nor does the wife. The power under s.79 is to alter the interests of the parties to the marriage in the property. The husband’s proposal deals with future income, not property for the purposes of s.79(1)(a).
(Emphasis added)
Her Honour then continued to address the loan agreement under the heading “Conclusion” at [193]–[197] as follows:
193. If I do not make a property adjustment order at all, the husband will stand to retain all of his liabilities, including the loan agreement. The evidence is that the wife is not liable for any of those liabilities. Both parties will have little assets and the income earning capacity that they do.
194. The husband asserts that I should set aside the loan agreement because if I do not, he might become bankrupt on application by the wife and he will lose his ability to generate an income. However, he said himself in cross-examination that any number of his creditors could bankrupt him because he does not have the capacity to pay his debts.
195. The parties did not effect a property settlement when they separated. Against her better judgment and notwithstanding her training in finance the wife lent the husband virtually all of the money she had and did so without any legal protection, security or otherwise. It is a clear inference on the evidence she did so by reason of the benefits she viewed as likely accruing to her as a consequence, based on the parties’ earlier history. I so find.
196. Even if she had had the benefit of a property adjustment order at the time that she advanced the husband the loan, the evidence suggests that she would likely have been in the same position in which she is now.
197. Having concluded that it is not just and equitable to make a property adjustment order no order should be made in respect of the loan agreement.
(Emphasis added)
I confess to considerable difficulty in understanding the reasoning in [197]. Indeed it is very difficult to ascertain the reason why the husband’s application, insofar as it specifically sought to have the loan discharged under s 79 of the Act, and the argument in support of which “has merit,” was wholly rejected. Even accepting that the test for adequacy of reasons is whether, reading them as a whole, there is sufficient exposure of reasoning so as to ascertain the basis of the primary judge’s decision (Bennett and Bennett (1991) FLC 92-191 at 78,266) it is arguable that standard has not been met here.
The proposed appeal therefore has merit, as the wife candidly conceded.
Prejudice or consequence for wife if extension granted
The wife says that these proceedings have been on foot since 2016, and are causing her to stress, and the involvement of the children in them has seen them alienated from her. However all of that must be understood against the context that the wife herself has now commenced proceedings in the Supreme Court of New South Wales, which may well themselves be protracted. I say that because it seems that the last tranche of repayments of the loan was not due until next year. Precisely how there is present indebtedness in the sum claimed is thus unclear, and whilst there may be a pleaded basis for it, absent a traverse by defence, it is unclear whether that will be conceded by the husband.
That said, I accept that in the event that the time for bringing an appeal in relation to this matter were to be extended, and if the appeal were allowed, result in a re-hearing as the husband seeks, the protraction of the proceedings would be highly undesirable.
Evaluation and outcome
The husband has a poor explanation for his significant delay in bringing this application. That said, the challenges which he seeks to make in relation to the judgment appear to have merit. As discussed earlier, even assuming that the loan is only given a value of only $1.59 million, the outcome effected by the primary judge’s orders, whereby the wife left the relationship with significant assets, and the husband left with enormous debts, including the loan, which the primary judge refused to adjust, is difficult to see as just and equitable. Moreover, the reasons why the primary judge refused to adjust the loan under s 79 of the Act, are difficult to discern.
That said, to have those matters further considered on appeal, and potentially re-litigated before another judge, will inevitably be a significant stressor for the wife, who was given no forewarning by the husband of the prospect of an appeal prior to, it seems, October 2020.
Weighing those matters is necessarily a difficult matter. Nonetheless upon balance I assess them as favouring – albeit only very slightly – the husband in this case. I give particular weight to the merit which the appeal presently appears to have, as conceded by the wife. I therefore will accede to his application.
Costs
Notwithstanding any success of the husband’s application, the wife nonetheless contended that there ought be an order for costs in her favour, because the application was only necessitated by the default of the husband in bringing the appeal within time, and indeed, that there was significant further delay in bringing the application for an extension of time. Further, the wife says that the husband is in a far better financial position than her, at least from an income perspective, with him, according to the primary judge’s reasons, having an income somewhere in the range of $180,000 to $210,000 per annum excluding tax (at [163]), whereas she is a full time student with income of $18,720 annually (at [169]).
The husband contended that any determination of the wife’s application should await the hearing of the appeal, however I am not so persuaded. This application is a discrete piece of litigation, and the Court hearing the ultimate appeal will be in no better position than I am to determine the application for costs.
I am satisfied that the two matters relied upon by the wife tell in favour for an order for costs against the husband. The amount claimed by the wife was $9,272.45. It was not disputed by the husband. Further the wife’s counsel had made no provision for his fees of the hearing itself, and at the hearing claimed an additional $700.
In those circumstances it seems appropriate for me to assess that the reasonable costs of the wife in this matter is as claimed, namely $9,972.45. That sum should be paid in 28 days.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 6 November 2020.
Associate:
Date: 6 November 2020
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