Vedders & Gittens
[2023] FedCFamC1A 138
•21 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Vedders & Gittens [2023] FedCFamC1A 138
Appeal from: Vedders & Gittens [2023] FedCFamC2F 364 Appeal number(s): NAA 46 of 2023 File number(s): WOC 657 of 2019 Judgment of: MCCLELLAND DCJ Date of judgment: 21 August 2023 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Whether the primary judge erred in dismissing the appellant’s application to set aside the sale of the former matrimonial home pursuant to s 106B of the Family Law Act 1975 (Cth) – Grounds allege denial of procedural fairness and judicial notice being taken erroneously – Whether the appellant was denied procedural fairness in the bifurcation of proceedings and determination of the s 106B issue in a discrete hearing – No error established in the primary judge’s exercise of discretion in determining the s 106B issue prior to final hearing – Whether the primary judge erred in taking judicial notice of falls in real estate prices – Error did not affect the outcome of the hearing – Appeal dismissed – No order as to costs. Legislation: Evidence Act 1995 (Cth) s 144
Family Law Act 1975 (Cth) ss 79, 106B
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 26, 28
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.10
Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) reg 4.02
Cases cited: Beale v Government Insurance Office (NSW) (1987) 48 NSWLR 430
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55
Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2
DL v The Queen (2018) 266 CLR 1; [2018] HCA 26
Douglass v The Queen (2012) 290 ALR 699; [2012] HCA 34
Ghosh v Ninemsn Pty Ltd (2015) 90 NSWLR 595; [2015] NSWCA 334
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jones v National Coal Board [1957] 2 QB 55
Lane & Nichols (2016) FLC 93-750; [2016] FamCAFC 234
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
VC & GC and Ors (2010) FLC 93-434; [2010] FamCAFC 62
Venter & Venter (No 4) [2023] FedCFamC1F 64
Number of paragraphs: 42 Date of hearing: 18 July 2023 Place: Sydney Counsel for the Appellant: Mr Havenstein Solicitor for the Appellant: Helen Volk Lawyers First Respondent: Litigant in person Second Respondent: Litigant in person Third Respondent: Litigant in person ORDERS
NAA 46 of 2023
WOC 657 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS VEDDERS
Appellant
AND: MR GITTENS
First Respondent
MR HELMY
Second Respondent
MS HELMY
Third Respondent
order made by:
MCCLELLAND DCJ
DATE OF ORDER:
21 August 2023
THE COURT ORDERS THAT:
1.The wife’s Amended Notice of Appeal filed 27 April 2023 is dismissed.
2.There be no order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Vedders & Gittens has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
By way of Amended Notice of Appeal filed 27 April 2023, the appellant wife appeals from a decision of a judge of the Federal Circuit and Family Court of Australia (Division 2) dismissing her application pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) to set aside the sale of the former matrimonial home by the respondent husband to the second and third respondents (collectively, “the purchasers”).
The parties are involved in ongoing litigation in which the wife is seeking property adjustment orders pursuant to s 79 of the Act. Pending final determination of the matter, by consent orders made on 12 February 2021, the parties agreed to interim orders that the husband would pay the wife the sum of $250 per week by way of ongoing periodic spouse maintenance. Those consent orders provided that, in the event of the husband defaulting in respect to those payments, the former matrimonial home located at B Street, Suburb F (the “Suburb F property”) would be sold and the net proceeds applied firstly, to satisfy the husband’s obligation in respect to the payment of maintenance and; secondly, for the balance to remain as part of the parties’ property pool pending consideration of the wife’s application for property adjustment orders, which is yet to be fixed for hearing.
Unfortunately, the husband has engaged in conduct to thwart the effective operation of those interim consent orders by selling the Suburb F property to the purchasers and subsequently spending the totality of the net proceeds of sale, according to the husband, on gambling.
The wife has sought to rectify the situation, as best she is able, by filing an application for orders to set aside the contract of sale of the Suburb F property and associated documentation relating to the sale pursuant to s 106B of the Act. Her application is opposed by the husband and also the purchasers, who claim to be bona fide purchasers without notice of the husband’s wrong doing.
While expressing significant concern regarding the conduct of the husband, by orders made on 9 February 2023, the primary judge dismissed the wife’s application for the transaction to be set aside pursuant to s 106B of the Act. His primary reason for doing so was that the wife had not satisfied the primary judge that, if the sale was set aside in accordance with the wife’s orders, there would be sufficient funds left over after refunding the purchase price to the purchasers, such that it justified the detriment that would be suffered by the purchasers. This was in circumstances where the primary judge found that the second and third respondents were bona fide purchasers of the Suburb F property without notice of the husband’s improper conduct.
The wife appeals the dismissal of her s 106B application to set aside the husband’s sale of the Suburb F property to the second and third respondents.
Despite having sympathy for the situation that now confronts the wife as a result of the husband’s conduct, I dismiss her appeal on the basis that she has failed to establish appellable error on the part of the primary judge.
BACKGROUND
As noted in the wife’s Summary of Argument filed 31 May 2023, the primary judge succinctly summarised the chronology of events in his reasons for judgment dated 10 February 2023 (“the reasons”) from [7]–[26] which, by way of summary, is as follows:
(a)On 23 June 2019, the wife commenced proceedings against the husband seeking spousal maintenance and property adjustment orders.
(b)On 12 February 2021, interim spouse maintenance orders were made requiring the husband to pay the wife spouse maintenance in the sum of $250 per week pending further order (the “consent orders”). In addition, those orders endeavoured to secure future payment of that amount through the sale of the Suburb F property if the husband defaulted on his spousal maintenance obligation.
(c)Within two to three weeks of the consent orders, the husband approached the second and third respondents with a proposal to sell the Suburb F property to them.
(d)On 24 March 2021, the husband (as vendor) and the second and third respondents (as purchasers) entered into a contract for the sale of land in relation to the Suburb F property for a purchase price of $735,000, which reflected a single expert valuation obtained approximately six months earlier on 3 September 2020..
(e)On 21 April 2021, the sale of the Suburb F property was completed as between the husband and the purchasers, with the second respondent being the only named purchaser for tax purposes, and the husband received approximately $443,441 from the proceeds of sale.
(f)By mid-May 2021, approximately 13 weeks after the interim consent orders were made, the whole of the proceeds of sale received by the husband had been exhausted. In short, the husband gave evidence on the first day of the hearing of the s 106B application, under cross-examination limited to issues of disclosure, that “it’s all gone”[1] and that he, in effect, spent the entirety on gambling.
(g)In suggesting that the sale price of $735,000 was substantially below market value, the wife referred to an adversarial valuation completed by Mr C, filed 11 March 2022 (“the [Mr C] report”), which valued the property at $845,000 as at March 2021. However, no Application in a Proceeding was filed by the wife seeking leave to rely on that report.
(h)On 14 March 2022, the Court appointed a single expert, Mr D, to retrospectively value the property as at the date it was sold by the husband to the purchasers. That valuation (“the [Mr D] valuation”), filed 2 December 2022, ascribed a value of $785,000 to the property as at 1 April 2021.
[1] Transcript 9 February 2023, p.104 lines 5–8.
As earlier noted, the effect of the husband’s improper conduct in selling the Suburb F property, which was the principal asset in the substantive property proceedings, and subsequently dissipating the whole of the net sale proceeds is that the parties’ property pool has been significantly reduced to now only consist of some relatively minor and low value items. These items appear to include a motor vehicle and, possibly, equipment relating to the husband’s business as a tradesman.
THE APPEAL
The wife’s grounds of appeal are set out in her Amended Notice of Appeal filed 27 April 2023 as follows:
1.The Judge erred in not providing written reasons for judgement.2.The Judge erred in findings of facts made.
3.The Judge erroneously took judicial notice of general valuation trends to guide or affect the decision.
4.The Judge mistakenly took the view that the Appellant was able to register the interim spousal maintenance orders with the Land and Property Information Service when that is not the case.
5.The Judge erred in dismissing the applicant’s application to set aside transactions at an interim hearing.
6.The Judge erred in failing to make orders which would allow the appellant to access a just and equitable outcome at final hearing.
(As per the original)
In her Summary of Argument filed 31 May 2023, the wife confirms that Ground 2 is abandoned and, at the outset of the appeal, counsel for the wife confirmed that Ground 4 is no longer pressed.
APPELLATE PRINCIPLES
In dismissing the wife’s application for orders pursuant to s 106B of the Act, the primary judge was exercising a broad discretion reposed, by that section, in the Court. Accordingly, the primary judge’s conclusions attract the standard of appellate review articulated in House v The King (1936) 55 CLR 499 (“House v The King”). This requires “in substance, identification of an error of principle or a material error of fact, or, if no specific error can be identified, demonstration that the decision is ‘unreasonable or plainly unjust’”.[2]
[2] UBS AG v Tyne (2018) 265 CLR 77 at [74], citing Ghosh v Ninemsn Pty Ltd (2015) 90 NSWLR 595 at [37].
Additionally, appellate intervention may be required in circumstances where a trial judge fails to provide adequate reasons “sufficient to identify the principles of law applied by the judge and the main factual findings on which the judge relied”.[3] The adequacy of reasons will depend upon an assessment of the issues in the case, including the extent to which they were relied upon by counsel, their bearing upon the elements of the relevant statutory criteria and their significance to the course of the trial.[4]
[3] Douglass v The Queen (2012) 290 ALR 699 (“Douglass”) at [8].
[4] DL v The Queen (2018) 266 CLR 1 (“DL”) at [33], referring to Beale v Government Insurance Office (NSW) (1987) 48 NSWLR 430 at 443.
Reasons will not be inadequate “merely because they fail to address an irrelevant dispute or one which is peripheral to the real issues. Nor will they be inadequate merely because they fail to undertake ‘a minute explanation of every step in the reasoning process that leads to the judge’s conclusion’”.[5]
[5] DL at [33], referring to Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 259.
CONSIDERATION
Ground 5 – Whether the primary judge erred in dismissing the wife’s application to set aside the transactions at an interim hearing
It is well settled that a ground of appeal that raises procedural fairness must be dealt with first to determine the “validity and acceptability of the trial and its outcome”.[6] Grounds 5 and 6 were jointly dealt with in the wife’s Summary of Argument under the subheading ‘procedural fairness’. I will, however, deal with each ground separately.
[6] Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [117] (Kirby and Crennan JJ); Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9] (Basten JA).
In addressing this ground of appeal, reference was made to the decision of the Full Court in VC & GC and Ors (2010) FLC 93-434, wherein it was stated that, generally, it is preferable to consider an application pursuant to s 106B at final hearing. This is because, as noted by the Full Court at [159]:
…if either basis enabling the instrument to be set aside is established, it will rarely, at best, be open to conclude, on a discrete hearing, that the court would not, in the exercise of its discretion, set aside the instrument. This is because of the prospect that all factors bearing upon the discretion may not be identified until the completion of the final hearing.
While, no doubt, setting out wise and appropriate guidance, the case is not authority for the proposition that an application to set aside an instrument pursuant to s 106B can never be heard and determined in a discrete hearing.[7] The Court has power to set a matter down for the hearing and determination of a discrete issue at any stage of the proceedings. Rule 10.10 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) provides:
(1) A party may apply for a decision on any issue, if the decision may:
(a) dispose of all or part of the proceeding; or
(b) make a trial unnecessary; or
(c) make a trial substantially shorter; or
(d) save substantial costs.
[7] See for instance Venter & Venter (No 4) [2023] FedCFamC1F 64 at [69]–[70].
While it is relatively rarely done, it is clear that the primary judge had power to set the matter down for hearing for the purpose of determining the single issue of the wife’s application to set aside the sale of the Suburb F property pursuant to s 106B of the Act.
Moreover, the order to bifurcate these proceedings and set the matter down for hearing on that specific issue was made on 25 August 2022, that order being:
1.The matter is listed for final hearing over two days commencing 9 February 2023 at 10.00 am, limited to the Application for orders pursuant to s 106B of the Family Law Act 1975 (Cth).
It is to be noted that there has been no appeal against that order made on 25 August 2022. Moreover, that order to bifurcate the proceedings and set the matter down for hearing in respect to the s 106B issue was an interlocutory ruling requiring special leave to appeal,[8] which has not been sought by the wife.
[8] See ss 26 and 28 of the Federal Circuit and Family Court of Australia Act 2021 (Cth); reg 4.02 of the Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth).
Accordingly, for these reasons, Ground 5 is without merit.
Ground 6 – Whether the primary judge erred in failing to make orders which would allow the wife access to a just and equitable outcome at final hearing
As earlier noted, the wife’s Summary of Argument addressed both Grounds 5 and 6 under the subheading of ‘procedural fairness’. That was also the substance of the oral submissions by counsel for the wife.
While this ground of appeal is ambiguous, it was clarified by counsel for the wife during oral that this ground effectively contends that, in dismissing the wife’s application for orders pursuant to s 106B prior to the final hearing, the primary judge made that determination prior to his Honour being in a position to identify “all factors bearing upon the discretion”.[9]
[9] Wife’s Summary of Argument filed 31 May 2023, paragraph 26.
In substance, this ground is therefore focused upon the orders made on 25 August 2022 for the proceedings to be bifurcated and the matter set down for hearing and determination of the wife’s s 106B application as a separate and discrete issue. For reasons earlier provided, this ground in that respect must be dismissed.
Insofar as counsel for the wife sought to expand what he contended was the failure of the primary judge to identify all factors bearing upon whether or not his Honour should exercise the discretionary power to make orders pursuant to s 106B, this ground is nevertheless without merit.
Perhaps the best-known statement of the requirement for any trial to be conducted in accordance with the principles of procedural fairness and natural justice is Jones v National Coal Board [1957] 2 QB 55, where it was noted at 67:
There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge.
That passage was cited with approval by the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145 and that principle is foundational to the proper exercise of judicial power.
In the present case, the primary judge provided every opportunity to the parties to present such evidence and submissions as they considered necessary to persuade his Honour to determine the proceedings in their favour. Indeed, as earlier noted, the primary judge indicated to counsel for the wife that he would entertain an application for an adjournment to enable the wife to obtain evidence to address what the primary judge specifically identified to counsel for the wife as a hiatus in her evidence. It is not to the point that, as contended by counsel for the wife during the course of this appeal, the wife did not avail herself of that opportunity as a result of concerns for costs, including the cost of obtaining an updated valuation. The obligation on the part of the primary judge was to provide the parties with the opportunity to properly present their cases and every such opportunity was given to the parties in the present case by the primary judge.
Accordingly, for these reasons, Ground 6 is also without merit.
Ground 3 – Whether the primary judge erroneously took judicial notice of general valuation trends to guide or affect the decision
It is the case, as submitted in paragraphs 11 and 12 of the wife’s Summary of Argument that:
The primary judge opined at paragraph 68 of his Reasons that he did not have evidence that would allow him to assess the extent to which the orders proposed by the Appellant wife will provide her with a measure of justice.
The primary judge expressed his concern that he did not have evidence as to the current value of the former matrimonial home, nor did he know what would be the costs of any sale in the event that his Honour was to make the orders sought by the Appellant wife.
At [70] of his Honour’s reasons, the primary judge noted that the Mr D valuation, provided by a properly appointed single expert, was unchallenged admissible evidence tendered in the proceedings that, as at 1 April 2021, the value of the Suburb F property was $785,000. This was in circumstances where the challenged transaction occurred in March 2021. However, in that paragraph, his Honour expressed concern that he did not have before him admissible evidence as to the value of the property as at the date of the hearing.
During the course of the hearing before the primary judge, counsel for the wife unsuccessfully sought to rely upon the Mr C report, an adversarial valuation report obtained approximately 12 months prior to the hearing. An exchange between the primary judge and counsel for the wife during the hearing clearly establishes that, as at the date of the hearing, there was no admissible evidence before his Honour as to the value of the property at that time. That exchange was, relevantly, as follows:[10]
HIS HONOUR: All right. Now, this affidavit was obtained almost a year ago?
[COUNSEL FOR THE WIFE]: That’s correct, your Honour. I appreciate the market - - -
[THIRD RESPONDENT]: Has changed.
[COUNSEL FOR THE WIFE]: - - - has changed. One doesn’t know whether it has gone up or whether it has gone down.
HIS HONOUR: Are you going to suggest to me the market has gone up?
[COUNSEL FOR THE WIFE]: I’m not, your Honour, but I’m not going to suggest to you either that it has gone down.
HIS HONOUR: Well, I don’t have any evidence of what it currently is.
[COUNSEL FOR THE WIFE]: No...
[10] Transcript 10 February 2023, p.162 lines 27–43.
The absence of evidence as to the value of the property as at the date of the hearing was clearly a matter of concern to the primary judge, who momentarily adjourned the proceedings to permit counsel for the wife to obtain instructions and “contemplate the hiatus” in the wife’s case.[11] Indeed, so concerned was the primary judge regarding that hiatus in evidence, his Honour indicated to counsel for the wife that he would entertain an application for an adjournment for the purpose of the wife obtaining an updated valuation of the property. That opportunity was not taken by the wife. [12]
[11] Transcript 10 February 2023, p.165 lines 30–32.
[12] Transcript 10 February 2023, p.173 lines 38–40.
Moreover, counsel for the wife himself acknowledged the possibility of the primary judge taking judicial notice “that there may be a slump in the property market”.[13] It is within this context that [70] of his Honour’s reasons must be read. In terms of the potential to take judicial notice, the primary judge stated in the balance of that paragraph:
I do not know what has happened to the value of the [Suburb F] property since it was sold by [the husband] to [the second respondent] in March 2021. I take judicial notice that, generally, there have been significant falls in real estate prices, but I cannot use that knowledge to determine what has happened to the value of the [Suburb F] property. I am not permitted to do that. Rather I raise it to amplify the significance of the hiatus in the evidence concerning the current value of the [Suburb F] property.
(Emphasis added)
[13] Transcript 10 February 2023, p.172 lines 45–46.
The practice of taking judicial notice of a fact or facts is permissible in the limited circumstances set out in s 144 of the Evidence Act 1995 (Cth), which relevantly provides:
144 Matters of common knowledge
(1)Proof is not required about knowledge that is not reasonably open to question and is:
(a)common knowledge in the locality in which the proceeding is being held or generally; or
(b)capable of verification by reference to a document the authority of which cannot reasonably be questioned.
(2)The judge may acquire knowledge of that kind in any way the judge thinks fit.
(3)The court (including, if there is a jury, the jury) is to take knowledge of that kind into account.
(4)The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced.
In the present case, it was not disputed that the Suburb F property is situated in the locality of City E. The primary judge heard the matter in the City E registry. It is unnecessary to determine whether the concession by counsel for the wife that the primary judge could take judicial notice “that there may be a slump in the property market” satisfies s 144(1)(a), noting that the Suburb F property is situated “in the locality in which the proceeding” was held. This is because, for the purpose of this appeal I accept that, in the context of this matter, the primary judge was in error in taking judicial notice that “there have been significant falls in real estate prices” (at [70]).
However, as the error did not have any influence on the result of the hearing, it can be safely disregarded.[14] In that respect, I note the primary judge specifically stated that he could not rely upon that knowledge, that is, his Honour’s assessment that there had been a decline in the local property market, “to determine what has happened to the value of the [Suburb F] property” (at [70]). The salient point being made by the primary judge, that was relevant to his determination, was that there was a “hiatus in the evidence concerning the current value of the [Suburb F] property” (at [70]).
[14] Conway v The Queen (2002) 209 CLR 203 at 207–208, 217, 219–220, 232 and 244; Lane & Nichols (2016) FLC 93-750 at [72]–[81].
In those circumstances, the primary judge was unable to assess the utility of making the orders sought by the wife to set aside the sale of the Suburb F property. This was because the evidence did not permit an assessment to be made as to whether the net proceeds of such sale, after refunding the purchase price paid by the purchasers, justified the Court making orders to the detriment of the purchasers. That is, the primary judge was not in a position to assess what, if any, was the likely benefit to be gained by the wife in the event of the s 106B order being made.
In those circumstances the primary judge, correctly in my view, determined that the wife had failed to discharge the persuasive burden of establishing that the balance of convenience favoured making orders sought by her in the context of the acknowledged detriment that would have been suffered by the purchasers.
For these reasons, Ground 3 is also without merit.
DISPOSITION AND COSTS
In circumstances where I have found an absence of merit in any of the wife’s grounds of appeal, the appeal must be dismissed.
I make no order for costs in circumstances where none of the respondents are legally represented.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 21 August 2023
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