Vedders & Gittens

Case [2023] FedCFamC1A 138

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 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION
BETWEEN:

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…

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AGLC
Vedders & Gittens [2023] FedCFamC1A 138
Case
[2023] FedCFamC1A 138
Decision Date

CaseChat Overview and Summary

In the case of Vedders & Gittens, the wife appealed the primary judge's decision to dismiss her application to set aside the sale of the former matrimonial home under section 106B of the Family Law Act 1975 (Cth). The wife's application was dismissed on the grounds of denial of procedural fairness and erroneous judicial notice. The court had to decide whether the primary judge was correct in his decision and whether the wife was denied procedural fairness in the bifurcation of proceedings and determination of the section 106B issue in a discrete hearing. The court also had to determine whether the primary judge erred in taking judicial notice of falls in real estate prices.

The court held that there was no error established in the primary judge's exercise of discretion in determining the section 106B issue prior to final hearing. The court also held that the primary judge did not err in taking judicial notice of falls in real estate prices, as the error did not affect the outcome of the hearing. The court dismissed the wife's appeal and made no order as to costs.

The court reasoned that while it is generally preferable to consider an application under section 106B at final hearing, the primary judge had the power to set the matter down for hearing and determination of a discrete issue at any stage of the proceedings. The court also noted that the absence of evidence as to the value of the property as at the date of the hearing was a matter of concern to the primary judge, who indicated that he would entertain an application for an adjournment for the purpose of the wife obtaining an updated valuation of the property. However, the wife did not take up this opportunity.

In conclusion, the court dismissed the wife's appeal and held that the primary judge's decision was correct. The court made no order as to costs.

Orders

Orders of the court

1. The wife’s Amended Notice of Appeal filed 27 April 2023 is dismissed.

2. There be no order as to costs.

Background

Background to the litigation

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

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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.CONSIDERATIONGround 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).