Venter & Venter
[2022] FedCFamC1A 122
•4 August 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Venter & Venter [2022] FedCFamC1A 122
Appeal from: Venter & Venter [2022] FedCFamC1F 67 Appeal number(s): NAA 50 of 2022 File number(s): BRC 10651 of 2021 Judgment of: AUSTIN, TREE & WILLIAMS JJ Date of judgment: 4 August 2022 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – Where the wife seeks leave to appeal orders discharging an earlier order for interim spousal maintenance – Whether the primary judge erred in finding that he was not satisfied the husband had the capacity to pay the wife interim spousal maintenance – Where that conclusion was reasonably open on the evidence – Weight challenges – Adequacy of reasons – Where the onus of proof of establishing the husband’s capacity to pay spousal maintenance remained with the wife – No ground of appeal enjoys merit – Where there is no basis to conclude that the primary judge’s decision is attended by sufficient doubt to warrant its reconsideration – Leave to appeal refused – Appeal dismissed – Costs ordered against the wife in a fixed sum after conclusion of substantive proceedings. Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 72, 74
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
House v The King (1936) 55 CLR 499; [1936] HCA 40
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 41 Date of hearing: 27 July 2022 Place: Heard in Brisbane (via video link), delivered in Cairns Counsel for the Applicant: Dr Matta Solicitor for the Applicant: Damien Greer Lawyers Counsel for the Respondent: Mr Williams QC Solicitor for the Respondent: Broun Abrahams Burreket ORDERS
NAA 50 of 2022
BRC 10651 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS VENTER
Applicant
AND: MR VENTER
Respondent
ORDER MADE BY:
AUSTIN, TREE & WILLIAMS JJ
DATE OF ORDER:
4 AUGUST 2022
THE COURT ORDERS THAT:
1.Leave to appeal is refused.
2.The Amended Notice of Appeal filed 10 June 2022 is dismissed.
3.Within 28 days of the finalisation of proceedings BRC 10651 of 2021, the applicant is to pay the respondent’s costs in the sum of $30,000.
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 Venter & Venter has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
AUSTIN, TREE AND WILLIAMS JJ:
INTRODUCTION
Ms Venter (“the wife”) seeks leave to appeal from orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) which discharged earlier orders requiring Mr Venter (“the husband”) to pay the wife interim spousal maintenance of $2,200 per week, plus her private health insurance premiums.
The husband resists the application for leave to appeal and the appeal.
For the reasons which follow, leave to appeal should be refused.
BACKGROUND
The wife is currently 56 years of age, and the husband is 60. They commenced a relationship in 1983, married in 1985 and separated in mid-2017, after a relationship spanning approximately 35 years. The husband has remarried, but the wife has not.
The parties have three adult children; Mr B Venter, Mr C Venter and Ms Glynn, all of whom are parties to the wife and husband’s substantive proceedings for property settlement.
Over the course of their relationship, the wife and husband operated a number of businesses together. After some years, they proved unsuccessful and subsequently both the husband and the wife became bankrupt.
Thereafter, during 2007, the husband and wife established what has proven to be a profitable business. At the time, Mr B Venter (who was then 19) was appointed the sole director and shareholder of the corporation which operated the business, as the bankruptcy of the wife and husband precluded them holding the required licences.
In or around June 2016, that business underwent a restructure and a number of entities were formed known as the “D Group”. Neither the wife or husband hold any legal interest in the D Group and the interests are largely held by Mr B Venter and Mr C Venter, who are directors of the ultimate holding company of the D Group.
It is not disputed that upon separation, the wife received weekly funds from the D Group; initially at $1,068 per week, but increasing to $2,200 per week from September 2020. The wife initiated the property settlement proceedings in August 2021. On 19 October 2021, the weekly payments to the wife ceased, and the wife filed an interim application for spousal maintenance on 28 October 2021.
The wife’s spousal maintenance application was heard by a Senior Judicial Registrar resulting in orders being made on 16 December 2021 for the husband to pay the wife interim spousal maintenance of $2,200 per week and her health insurance premiums.
By his Application for Review filed 4 January 2022, the husband sought to review the Senior Judicial Registrar’s orders, which came before the primary judge for hearing in January 2022. Upon review, the primary judge discharged the orders made by the Senior Judicial Registrar on 16 December 2021, dismissed the wife’s application for spousal maintenance and reserved the parties’ costs to trial. The wife’s appeal is from those orders of the primary judge.
LEAVE TO APPEAL
There was no dispute between the parties that leave to appeal the orders discharging the spousal maintenance order was required. The test adopted in this Court provides that such leave will only be granted where the decision of the primary judge was attended by sufficient doubt to warrant its reconsideration and a substantial injustice would ensue if leave were refused (Medlow & Medlow (2016) FLC 93-692). The merits of any proposed appeal are thus relevant to the success of the application for leave to appeal. It is therefore convenient to address the proposed grounds before returning to the question of leave to appeal.
THE APPEAL GENERALLY
All of the orders which are challenged by the wife’s appeal were made in the exercise of a discretion. At the outset, it is useful to restate the well-known principles applicable to appeals from such judgments. In House v The King (1936) 55 CLR 499 at 504–505, it was said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
Ground 1
This ground provides:
1.That the primary judge erred in his application of section 72 of the Family Law Act 1975 (Cth) in finding that the Husband did not have the capacity to pay the Wife interim spousal maintenance, which was contrary to the preponderance of the evidence, and compounded by the primary judge:
a)Failing to provide any reasons as to why his Honour rejected the sources of income available to the Husband; and
b)Failing to provide any weight, or any sufficient weight, to the Wife’s evidence of the history of spousal maintenance payments and the unchallenged evidence of the conversations between the Husband and the Wife.
(As per the original)
There are two aspects to the challenges made by this ground. The first contends that the primary judge’s finding that the husband did not have capacity to pay interim spouse maintenance was against the evidence, and particularly arrived at by failing to afford any or adequate weight to certain evidence of the wife. The second is that the primary judge’s reasons for rejecting the sources of income available to the husband were inadequately exposed. We will deal with them in that order.
In broad terms, the husband contended that Mr C Venter would not make funds available from the D Group to pay spouse maintenance to the wife, whereas the wife said that in reality, Mr C Venter would do whatever the husband wanted him to, notwithstanding her concession before the primary judge that Mr C Venter controlled the D Group. It was in this context that she emphasised the history of payments to her, and the content of conversations she had had with both Mr C Venter and the husband.
It is clear that those arguments challenge the weight which the primary judge afforded to the evidence favouring the wife’s case. However, such challenges face a high bar (Gronow v Gronow (1979) 144 CLR 513 at 519; CDJ v VAJ (1998) 197 CLR 172 at 230–231), as the weight afforded to competing evidence is quintessentially a matter for the primary judge.
At [25]–[26], the primary judge said:
25.Initially she received on separation $1,068 per week increasing to $2,200 per week from 8 September 2020. The payments ceased, the wife claims, without notice, on 19 October 2021, prompting the current interim Application in a Proceeding, seeking, inter alia, spouse maintenance, to be filed on 28 October 2021.
26.The wife contends, on an assessment of evidence whilst accepting the limitations of making findings on an interlocutory basis, that given the history of financial support the husband has had the benefit of, the Court should find the husband has a reasonable expectation that if he had a need or a deficiency of expenses over income, he will be able to access a financial resource – being the D Group capital and/or income through his son Mr C Venter.
Later at [30], the primary judge relevantly concluded:
30.Contrary to the considered submissions of the wife, I am not at this time, on the evidence and applying the civil standard of proof, satisfied that the husband does have the capacity to pay spouse maintenance to the wife for the following reasons:
(a)Although the wife has established that she has received funds in the past, I am not satisfied the husband can access, as of right, a stream of income or capital so as to pay the wife. On this basis, if an order for spouse maintenance was made, it would not be capable of enforcement against the husband. Courts should not make orders which are incapable of enforcement;
…
(c)I accept the submission of [counsel for the wife] that the wife is asking me in a summary hearing, where the evidence cannot be tested on facts in contest, to reach by inference a finding about the future expectation of funds to the husband (based partly on the history), in direct conflict with the evidence provided by Mr C Venter – who controls the entities. In this regard, Mr C Venter, in his affidavit filed on 9 November 2021, says inter alia:
(i)that he has had a “strained personal relationship with my mother since in or about 2014” (at paragraph 4);
(ii)he has told his mother on many occasions from 2017 that “I don’t want to deal with you on money” and “I am not going to get involved in matters between you and dad” (at paragraph 6);
(iii)he makes his own decisions and “decisions about the D Group are not my father’s to make” (at paragraph 8) and since July 2018 he had made a decision to make payments to his mother voluntarily, not acting “on the direction of my father” (at paragraph 12);
(iv)the trustee of the Family Trust “decided it was in the interests of the trust to cease any further payments or advances to my mother in circumstances where legal proceedings have been instituted by her against myself, my siblings and related entities” (at paragraph 14);
(v)he told his parents that he would not sign any agreement that required him to make a payment to his mother although payments were made on a voluntary basis (at paragraph 17);
(d)I accept that at a trial other findings as to the control of the Family Trust or other entities may on the tested evidence, be open. However in light of the proper concession by Counsel for the wife, I am not prepared to ignore the direct sworn testimony of the person who controls the D Group;
(e)On the basis of Mr C Venter’s evidence (which perhaps unsurprisingly is echoed by the husband), I am not satisfied that the husband has a reasonable expectation that he will receive funds from Mr C Venter to benefit the wife. I accept the submission of [counsel for the wife] that the observations of the plurality of the Hugh Court in Hall & Hall [2016] HCA 23 at [54] and [55] are apposite when read in the shadow of Mr C Venter’s sworn testimony and explanations for prior conduct. There the Court said:
54.The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
55.Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
(f)The wife’s submissions contend that, for this application at least, there is some significance to the conduct of the husband in entering into a Deed to Vary the Family Trust Deed from October 2020, to remove him as the appointor. If the mere position of appointer under a Trust Deed amounted to control and therefore an argument that the assets of the Trust are, in some way, available to one of the parties to the marriage, that could be significant. However, as Chief Justice French said in Kennon v Spry [2008] HCA 56 at [64]:
64.The word “property” in s 79 is to be read as part of the collocation “property of the parties to the marriage”. It is to be read widely and conformably with the purposes of the Family Law Act. In the case of a non-exhaustive discretionary trust with an open class of beneficiaries, there is no obligation to apply the assets or income of the trust to anyone.
And further at [65] said:
65.Where property is held under such a trust by a party to a marriage and the property has been acquired by or through the efforts of that party or his or her spouse, whether before or during the marriage, it does not, in my opinion, necessarily lose its character as “property of the parties to the marriage” because the party has declared a trust of which he or she is trustee and can, under the terms of that trust, give the property away to other family or extended family members at his or her discretion.
In this case in respect of the Venter Family Trust, Mr C Venter says, he created the Trust and as such its origins and characteristics could not permit a finding that the Trust assets are property of either the husband or the wife. Clearly at a final hearing it is likely that an examination of the circumstances leading up to how the Trust was established and who it was that contributed in reality to the asset creation in the Trust, will be a critical issue. However, at this time where the evidence is that Mr C Venter created the Trust and where neither the husband or wife have been a shareholder or trustee of the Trust or named beneficiaries, the bland assertions of the wife from her perspective (or relying upon what she says the children have told her – much of which is disputed at least by Mr C Venter) that the husband controls the Trust and the D Group, cannot be accepted. I of course acknowledge, at the conclusion of what is likely (considering the factual matrix in dispute) to be a complex trial, findings as so alluded to by the wife may, be open;
…
(h)Finally, because of the conclusion I have reached about the future expectations of the husband, little is served in analysing the history – as interesting as that might appear. Spouse maintenance orders require a finding of future capacity. It may be that the husband and Mr C Venter are found to have worked together to “disentitle” the wife in some way. It may be that the intentions way back in 2007 did not include the situation developing as it has today. Often courts are asked to consider (generally in trusts controlled by a parent for the benefit of discretionary adult children beneficiaries), how the strength of the family relationships will likely lead to future distributions. This seems to be based often on a happy concept that families who have created wealth are inclined to share such wealth. It is a sad reality, and this case may be an example, that a breakdown in the parents’ relationship and all the hurt and emotional conflict that follows, often creates family dysfunction where moral expectations are replaced by legal reality.
(Emphasis added)
As is plain from the emphasised portions of [30(a)] and [30(c)] the primary judge had regard to the history of payment of maintenance, and we are not satisfied that error is established as to such weight as his Honour placed on it. Moreover, although cast as a weight challenge, a proper construction of the last sentence of [30(d)] makes it plain that it was not the weight afforded to Mr C Venter’s evidence which was in play, but rather its existence, in a context where its conflict with the wife’s contentions could not be determined.
As to the conversations relied on by the wife, these were set out by her at paragraphs 20 and 21 of her Summary of Argument as follows:
20.Again, leaving to one side that these assertions amount to a submission and conclusion and not evidence, Mr C Venter, like the Husband, failed to engage with the direct evidence of the Wife in relation to the Husband’s control of the D Group, the history of establishing the [business] within the group, (including the fact that Mr C Venter was only 16 years of age when the [business] began operating through its antecedent entities) and the Husband’s ability to call on and apply assets for his use and benefit. For example, the Wife deposed to a meeting with the Husband to discuss her property settlement, where Mr C Venter told her:
If you don’t want us to do this [referring to [the husband’s] proposal that [the Wife does] not receive a property settlement]…then that’s it. You go off your merry way. Doesn’t mean you’re not my mum. Doesn’t mean I don’t like you but the family money is controlled by dad right? So, you get a settlement and you will never ever receive financial support from the family ever again. So as long as your cool with that. I hope you understand what that meant.
21.The Wife also deposed to the conversation she had with the Husband and Mr C Venter when they had become aware that she had consulted with her current solicitors. Mr C Venter said to her:
You had no reason to be scared until now. So, if you were scared before now, you should be scared. And I am going to do whatever dad decides on this now, is what I am going to do.
(Emphasis in original) (Footnotes omitted)
However the primary judge specifically referred to Mr C Venter’s conversations with the wife at [30(f)], noting both there and at [30(d)] that the question of control of the relevant entities will be an issue for trial, where findings contrary to the husband’s position may be open.
Again, no error is shown in this regard.
That then leaves the more general contention which is expressed as a challenge to the finding that the husband did not have the capacity to pay the wife interim spouse maintenance. However that reverses the way in which the primary judge expressed his conclusion, which, as has been seen, was that the wife had not persuaded him that, on the balance of probabilities, the husband had the capacity to pay spouse maintenance to the wife.
In order for the wife to succeed in dislodging that conclusion, she would need to establish that such a finding was not reasonably open on the evidence (Edwards v Noble (1971) 125 CLR 296). However plainly it was, given Mr C Venter’s evidence referred to by the primary judge at [30(c)]. To point to contrary evidence does not establish error.
Although but faintly pressed before the primary judge, before us counsel for the wife emphasised that the husband was the sole director and shareholder of a company (“S Pty Ltd”) which was not part of the D Group, from which he derived income in the form of fully franked dividends of $6,100 per week.
However, that contention conceals more than it reveals. The evidence before the primary judge established that S Pty Ltd had a net worth of $1,383,011 if alleged impaired assets of $1,404,949.61 were ignored (husband’s affidavit filed 7 December 2021, paragraph 20 and exhibit Mr Venter2). Leaving aside a relatively small sum in a bank account, the assets of S Pty Ltd, impaired or otherwise, entirely comprised loans. From them, it derived an income of $1,600 per week (husband’s affidavit filed 7 December 2021, paragraph 19). Yet, in addition to the weekly dividends of $6,100, S Pty Ltd had been also paying $25,209 per month to the ATO, to reduce a tax liability of about $233,000 (husband’s Financial Statement filed 9 November 2021, page 12).
The source of the deficiency between S Pty Ltd’s $1,600 income and its vastly larger outgoings was, and could only be, the D Group, and most likely a particular company called R Pty Ltd (“R Company”), given the evidence that R Company loaned considerable monies to S Pty Ltd over the relevant period. However as to whether the prospect of further such loans in the future represented a capacity of the husband to pay the wife spousal maintenance, the unchallenged evidence was that, if any part of the monies which the D Group deployed to either the husband or his entities was used to pay spousal maintenance to the wife, then Mr C Venter would not only cease all such payments, but also seek the repayment to R Company of all monies loaned to S Pty Ltd (affidavit of Mr C Venter filed 9 November 2021, paragraph 9; husband’s affidavit filed 7 December 2021, paragraph 36).
Given this, during argument before us, unsurprisingly counsel for the wife all but conceded that the state of the evidence precluded the primary judge from being satisfied that the prospect of future dividends from S Pty Ltd established any capacity of the husband to pay spousal maintenance to the wife. To the extent the argument was sought to be kept alive because of the prospect of loans being repaid upon the expiration of their term, or impaired loans proving not to be so, there was no evidence establishing any imminent repayment, or suggesting a lack of impairment. This aspect of Ground 1 does not enjoy merit.
Turning then to the challenge to the adequacy of the primary judge’s reasons, in Bennett and Bennett (1991) FLC 92-191 at 78,266, the Full Court adopted the following test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
Here, it is true that the primary judge did not detail the husband’s historical income and financial position, including a taxable income in 2020 of $803,650, deposits totalling of $173,251 into his bank account between June and November 2021 and the possibility of a company under his control still having cash, which cash at 30 June 2020, was about $375,000. Likewise, the primary judge did not refer to the husband’s financial position explained as recently as 9 November 2021 in his latest Financial Statement, including the husband’s receipt of considerable dividends from S Pty Ltd we have previously referred to.
However a judge is not obliged to refer to every piece of evidence advanced by a litigant (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62]). In any event, at [30(h)] the primary judge noted that his conclusion in [30(e)] that he was “not satisfied that the husband has a reasonable expectation that he will receive funds from Mr C Venter to benefit the wife” meant that “little is served in analysing the history”. That adequately explains why his Honour did not do so in relation to historical payments directly to him from entities controlled by Mr C Venter, and no error is shown. It is also sufficient to explain the primary judge’s rejection of the – barely advanced – argument relating to the prospect of further loans being made by the D Group to S Pty Ltd, from which it could pay future dividends to the husband, and in turn, from which spousal maintenance could be paid to the wife.
Ground 1 is without merit.
Ground 2
This ground provides:
2.That the primary judge erred by misdirecting himself as to the correct application of:
a)section 74 of the Family Law Act 1975 (Cth) by finding that it was necessary for the Court to be satisfied that the order sought by the Wife was capable of enforcement; and
b)section 140 of the Evidence Act 1995 (Cth) by finding that the Husband had discharged his onus of proof to the requisite standard.
(As per the original)
At [30(a)], the primary judge did indeed say:
(a)Although the wife has established that she has received funds in the past, I am not satisfied the husband can access, as of right, a stream of income or capital so as to pay the wife. On this basis, if an order for spouse maintenance was made, it would not be capable of enforcement against the husband. Courts should not make orders which are incapable of enforcement;
Enforceability is not a precondition to an entitlement to an order for spouse maintenance. However, that is not why the primary judge refused to make such an order, rather it was because of his lack of satisfaction that the husband had capacity to pay. The two final sentences of [30(a)] are mere surplusage, and do not infect the preceding finding with error.
The second aspect of this ground is based on a misconstruction of what the primary judge did. He did not impose an onus on the husband, and the onus always remained with the wife. That much is plain from the chapeau to [30] and thereafter [30(e)]. Although in [31] the primary judge does express his conclusion more positively, namely “I have reached the conclusion that the husband does not have the capacity at this time to pay spouse maintenance to the wife”, that is not reflective of an onus being imposed on the husband, but rather a state of satisfaction as to the facts.
Ground 2 is also without merit.
OUTCOME
Neither proposed ground of appeal enjoys merit, and hence there is no basis to conclude that the primary judge’s decision is attended by sufficient doubt to warrant its reconsideration. In those circumstances, it is not necessary to go on to consider whether substantial injustice would occur if leave were refused, as the decision is not wrong.
Leave to appeal should be refused and the Amended Notice of Appeal dismissed.
COSTS
In the event the appeal failed, the wife conceded that she could not resist an order for costs, nor dispute the quantum ultimately claimed by the husband in the sum of $30,000 but sought that payment be deferred until the conclusion of the principal proceedings. Given the lack of merit in the proposed appeal, we are satisfied we should order costs against the wife in that sum, but given the financial position of the wife vis-à-vis the husband, defer payment until 28 days after the conclusion of the property settlement proceedings between the parties.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, Tree & Williams. Associate:
Dated: 4 August 2022
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