Wall & Wall
[2002] FamCA 257
•26 April 2002
[2002] FamCA 257
FAMILY LAW ACT 1975
IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA
AT SYDNEY Appeal No. EA83 OF 1999
File No. SY8069 OF 1997
IN THE MATTER OF: WALL
PETER HAROLD
Appellant/Husband
AND: WALL
LYNETTE JEAN
Respondent/Wife
CORAM: LINDENMAYER, KAY & HANNON, JJ.
DATE OF HEARING: 22 MARCH, 2000 & WRITTEN SUBMISSIONS
DATE OF JUDGMENT: 26 April 2002
JUDGMENT OF THE COURT
Appearances: Mr Brereton of Senior Counsel (instructed by Adrian Twigg & Co, Solicitors, Level 10, 162-166 Goulburn Street, Sydney, NSW, 2000) for the Appellant/Husband
Mr Lloyd of Counsel (instructed by Gillis Delaney Brown, Solicitors, Level 6, 179 Elizabeth Street, Sydney, NSW, 2000) for the Respondent/Wife
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Coram: Lindenmayer, Kay and Hannon, JJ.
Heard: 22 March, 2000 and written submissions
Judgment: 26 April, 2002
APPEALS – From decision of Family Court Judge – Re-exercise of discretion – When re-exercising discretion upon appeal the Full Court’s discretion, subject to consideration of natural justice, is unfettered and the Full Court may substitute an order for that of the trial judge that is more favourable to a respondent who did not cross-appeal.
APPEALS – From decision of Family Court Judge – Re-exercise of discretion – Natural justice – Since the decision of the High Court in Allesch v Maunz (2000) FLC 93-033 the appellant must be taken to be aware that, if his appeal was successful, but further evidence was admitted of events occurring since the orders below, a successful appeal may be entirely Pyrrhic.
Family Law Act 1975 (Cth), s75(2), s79, s94, s94(2) – Criminal Code (Q), s668E(3) – The Criminal Practice Rules of 1900 (Q), r22
Quilter v Mapleson (1882) 9 QBD 672; Victorian Stevedoring and General Contracting Co Pty Ltd & anor v Dignan (1931) 46 CLR 73; Burke v Burke (1993) FLC 92-356; Townsend and Townsend (1995) FLC 92-569; CDJ v VAJ (1998) 197 CLR 172; and Pierce and Pierce (1999) FLC 92-844 cited - Thompson v Easterbrook (1951) 83 CLR 467 cited and considered - Allesch v Maunz (2000) FLC 93-033 cited, considered and followed - Neal v The Queen (1982) 149 CLR 305; In the Marriage of Perryman (1993) 17 FamL.R 200; and Ruscoe v Walker (2001) FamCA (unreported-judgment delivered 10 May, 2001) cited and distinguished.
This was an appeal, instituted by the husband, against property orders made by Cohen J on 25 August, 1999. At no stage did the respondent wife seek to cross appeal.
On 22 March, 2000 the Full Court (“the Court”) heard the appeal at Sydney. Subsequently, on 26 October, 2000, the Court gave judgment allowing the husband’s appeal (“the substantive judgment”). However, as the High Court gave it’s decision in Allesch v Maunz (2000) FLC 93-033 after this appeal had been heard, but before judgment was delivered, the Court did not proceed to re-exercise the discretion of the trial Judge, or to remit the matter for rehearing. Instead, the Court gave directions for the filing and service by each party of written submissions, as to whether or not the matter should be remitted for rehearing or disposed of by way of re-exercise of discretion by the Court. At the same time, directions were also given that sought to ascertain whether either party wished to adduce any further evidence of changed circumstances.
After considering these written submissions of the parties the Full Court published supplementary reasons for judgment on 16 May, 2001. On that occasion the Full Court deemed it appropriate to allow the parties to adduce evidence of only one post-trial event, being an alleged inheritance by the husband.
Pursuant to the Court’s orders of 16 May, 2001, the wife filed an affidavit on 29 May, 2001 and the husband filed an affidavit on 20 July, 2001. In her affidavit filed 29 May, 2001 the wife deposed that the husband’s father had died on 6 March, 2000, leaving an estate the value of which was estimated, for probate purposes, at $2,671,726.94. It was not contested by the husband that, in round figures, he received, by way of inheritance from his father, money and property to the value of not less than $1.3 million, between the date of the trial Judge’s decision and the hearing of the appeal.
After considering the parties’ material the Court made further directions seeking written submissions regarding the Court’s power to make orders on the re-exercise of discretion upon appeal more favourable, when compared with the orders made by the trial Judge, to a respondent, who had not cross-appealed.
On Appeal: The wife submitted that, in re-exercising the discretion, the Court should proceed in precisely the same way as a trial Judge would at first instance, and that in so doing it was inappropriate to give consideration to whether or not the respondent had cross-appealed. The husband conceded that although the Court had jurisdiction to make an order, pursuant to s.94(2) of the Family Law Act 1975 (Cth.) (“the Act”), more favourable to an unsuccessful respondent than earlier orders made by a trial Judge, it was a proper exercise of the Court’s discretion to refuse to do so and that any such jurisdiction should be constrained by the rules of natural justice.
Held: allowing the appeal, re-exercising the trial judge’s discretion, making orders more favourable to the respondent wife and making directions for written submissions as to costs:
The further evidence on appeal showed that the husband’s inheritance of approximately $1.3 million was very much an unforseen windfall benefit. Such a windfall could not possibly have been within the contemplation of the trial Judge when he exercised his discretion.
Accordingly, it was appropriate for the Court, rather than recasting the pool of assets in light of the inheritance and then reassessing the relative contributions by the parties to that pool to deal with the inheritance only when considering s.75(2) factors.
Taking all of those matters into account the Court considered it appropriate to make a significantly greater adjustment in the respondent wife’s favour.
Despite the end result of the Court’s re-exercise of discretion being that the wife pay to the husband $8,597 less than the trial Judge originally ordered her to pay to the husband (in order to retain the matrimonial home), and that she receive 75% of the net proceeds of sale of the boat, instead of the 65% originally ordered by the trial Judge, this outcome was open to the Court for the following reasons:
(a)Although the decision of Ruscoe v Walker (2001) FamCA 268 (unreported- judgment delivered 10 May, 2001) is an example of an exercise of discretion by the Court where it was held that it was inappropriate to allow the unsuccessful respondent to the appeal, who had not cross-appealed, to seek a more favourable result upon the re-exercise of discretion, there is no statement of principle in that case that that course can never be appropriate or which would bind this Court to conclude that in the circumstances of this case it would be an inappropriate exercise of discretion.
(b)Pursuant to s.94(2) of the Act the Court has jurisdiction to make an order more favourable to an unsuccessful respondent than those made by the trial Judge.
(c)The re-exercise of discretion by an appellant court is a procedural alternative to rehearing. A new trial Judge would be obliged to exercise his or her discretion in the matter unfettered by considerations of which party appealed or what the order of the trial Judge was. There seemed no reason in principle why the position should be any different when an appellant court carries out the re-exercise of discretion.
(d)The whole tenor of the judgments of their Honours of the High Court in Allesch v Maunz (2000) FLC 93-033 supports the notion that, where further evidence is admitted, the appellant court’s exercise of discretion should be unfettered, so that the result arrived at is that which the Court, in its discretion, considers proper on all the evidence before it.
(e)Although not in a context where it was re-exercising discretion the High Court has made an order more favourable to a respondent, who had not cross appealed: Thompson v Easterbrook (1951) 83 CLR 467
(f)Subject to natural justice, the Court may, when re-exercising its discretion upon an appeal in proceedings under s.79 of the Act, conclude that a proper exercise of that discretion calls for an order more favourable to the respondent than that of the trial Judge, notwithstanding the absence of a cross-appeal by the respondent.
(g)The appellant husband must be taken to have known of his inheritance, before the substantive judgment in this appeal was delivered, and that one option for this Court, in determining that appeal, was to re-exercise the discretion of the trial Judge. He must also be taken to be aware, at least since the publication of the High Court's decision in Allesch v Maunz (2000) FLC 93-033, that if this Court allowed the appeal, it was open to it to re-exercise the trial Judge’s discretion and admit evidence of changed circumstances, including his inheritance. Accordingly, the appellant husband has not been denied natural justice.
REPORTABLE
INTRODUCTION
On 26 October, 2000, this Court published its judgment (“the substantive judgment”) and made orders in relation to an appeal by the husband from orders made by Cohen J (“the trial Judge”) on 25 August, 1999, in proceedings between the parties for orders under s.79 of the Family Law Act 1975 (“the Act”). This judgment should be read with, and in the light of the substantive judgment.
The orders which the Court made on 26 October, 2000, included orders that the appeal be allowed, and that orders 3 to 7, inclusive, of the trial Judge’s orders be set aside. However, as the appeal was heard before, but our judgment delivered after, the decision of the High Court in Allesch v Maunz (2000) FLC 93-033, we did not proceed, at that stage, either to re-exercise the discretion of the trial Judge, or to remit the matter for rehearing, but gave directions for the filing and service by each party of written submissions as to which of those courses we should follow and, in the event that we were to follow the course of re-exercising the discretion, whether either party would wish to adduce any further (and if so what) evidence of relevant changed circumstances, or new circumstances arising, since the judgment of the trial Judge.
In due course, the parties filed and served their written submissions pursuant to our directions of 26 October, 2000, and those submissions were considered by the Court. As a result of that process, the Court published, on 16 May, 2001, supplementary reasons for judgment (“the supplementary judgment”) and made orders in the following terms:-
“1. The respondent wife file with the Appeals Registrar within 14 days an original and 3 copies of any affidavit upon which she seeks to rely detailing any changes to the financial position of the appellant husband since the judgment of the trial Judge by reason of any asserted inheritance which she alleges he may have received, and arrange service of same upon the appellant's solicitors.
2. That within 14 days of receipt of same, the respondent file with the Appeals Registrar an original and 3 copies of an affidavit in reply and any further affidavits which he may seek to rely upon in answer thereto, and arrange service of same upon the respondent's solicitors.
3. That within 7 days thereafter the respondent file and serve any material in reply.
4. That the costs appeal and the costs of the appeal be stood over for further consideration pending final determination of the appeal.”
This judgment should also be read with, and in the light of the supplementary judgment.
Orders 1 and 2 of those orders of 16 May, 2001, reflected this Court’s determination, in the supplementary judgment, that the only further evidence that should be admitted at this stage was evidence in relation to an alleged inheritance received by the husband since the orders of the trial Judge (see paragraph 23 of the supplementary judgment). It was made clear (in paragraph 24 of the supplementary judgment) that at that stage the Court’s inclination was to re-exercise the discretion, rather than remit the matter for rehearing, but we also indicated that if, after compliance with our orders for the filing of further affidavit material, that material “remains too contentious”, it might “yet be necessary to remit the matter to the trial Judge for further consideration”.
Pursuant to our orders of 16 May, 2001, an affidavit of the respondent wife was filed on 29 May, 2001, and an affidavit of the appellant husband was filed on 20 July, 2001. Although our orders of 16 May, 2001 had not made provision for the filing of any further written submissions by either party, further written submissions on behalf of the appellant husband were filed (and presumably served on the wife’s solicitors) on 8 August, 2001. That eventually prompted a request by the solicitors for the wife to the Registrar for a relisting of the matter before the Court for further submissions, but after some communications between the Registrar and the solicitors the Court decided to issue directions for the filing of further written submissions by the parties, and on 29 November, 2001, we made the following orders:-
“1. That the wife file and serve such further written submissions (if any) as she may wish to make in answer to those of the husband filed on 6 August [sic.], 2001, within seven days.
2. That the husband file and serve written submissions (if any) in reply to those of the wife, within seven days of the receipt of the wife's submissions.
3. That each party indorse on the cover sheet of any submissions filed pursuant to orders 1. and 2. hereof the date of service thereof on the other party.”
As a result of those directions, there was filed, on 13 December, 2001, further written submissions on behalf of the wife, which submissions were served on the solicitors for the husband on the same day. We are informed by the Registrar that, on 24 January, 2002, the solicitors for the husband advised that they did not intend to file any further submissions on behalf of their client. Accordingly, we now regard the evidence and submissions in this case as complete. It remains for us, now, to either re-exercise the discretion of the Court and make orders in lieu of those of the trial Judge already set aside, or remit the matter for either a full or some form of partial rehearing.
Before doing so, it is appropriate to note that, save for the affidavit of the wife filed on 29 May, 2001, none of the material filed by the parties since our orders of 26 October, 2000, was filed in strict compliance with the time limitations expressed in those orders, or in our subsequent orders of 16 May, 2001 and 29 November, 2001. However, as neither party has raised any objection to the late filing and service of material by the other, we assume that each has consented, either expressly or by implication, to any necessary extensions of time to enable us to consider all of that material, notwithstanding its late filing. Accordingly, we grant all necessary extensions of time for compliance with those orders to enable each party to rely upon the material filed in purported compliance with those orders.
THE PROPERTY OF THE PARTIES AT DATE OF TRIAL
The trial Judge found “the parties’ net assets and notional assets” (excluding a boat, to which he was unable to assign a value and which he therefore ultimately ordered be sold, and the proceeds divided) to be “worth $558,312”, constituted by assets and notional assets of $659,873 less liabilities of $101,561. [See paragraph 37 of the substantive judgment.] In the substantive judgment we held that the trial Judge erred in two respects in his calculation of the parties’ “net assets and notional assets”. Firstly, we held that he erred in ascribing a value of $55,043 to the husband’s share in Off the Wall Pictures Pty Ltd, the company through which he and his then de facto wife conducted the business of film producers/directors, and of which he and she were the only and equal shareholders. Secondly, we held that he erred in disregarding moneys retained by the parties at separation, namely $30,000 by the wife and $15,000 by the husband.
In relation to the first of those errors of the trial Judge, we held [the substantive judgment paragraph 70] that it arose because he effectively treated the personal goodwill attaching to the husband as commercial goodwill attaching to the business conducted by the company, and therefore adopted “a grossly inflated value for the business, for the company and the husband’s share in the company”. We also held [the substantive judgment paragraph 68] that there was “a significant element of personal goodwill attaching to … the husband … which is not transferable, and which … is really part of his earning capacity rather than property”.
However, although we rejected the trial Judge’s valuation of the husband’s share in the company as “grossly inflated”, we did not attempt to assign some other value to it. This was because the trial Judge had rejected, for proper reasons, the evidence of witnesses who had sought to value that share on the husband’s behalf (at “nothing”), yet the evidence of the wife’s valuer, Mr Bell, upon which his Honour relied (in part) to reach his valuation of $55,043, was that the share had a value of $80,000, a figure which we regarded as even more “grossly inflated” than his Honour’s.
The only other basis upon which we could now assign a value to the husband’s share in the company (if we are to proceed to re-exercise the discretion) would be to take half the value of the net tangible assets of the company, found by the trial Judge at $8,087. That would produce a value for the husband’s share of $4,044. However, we would regard such a figure as entirely artificial, as there is no suggestion that the company is to be wound up in the immediate or foreseeable future. In those circumstances, and as we consider the company has little intrinsic value when the value of the personal goodwill attaching to the husband and Ms Lee is excluded from consideration, we think the better course is to regard the husband’s share in the company as of no significant value, but to regard his earning capacity, of which the personal goodwill attaching to him is an element, as a substantial s.75(2) factor to be taken into account when considering the overall impact of those factors upon the exercise of discretion in this case. We certainly do not consider it necessary, or in the interests of either party, that the proceedings be remitted for rehearing merely to enable another finding to be made as to the value of the husband’s share in the company.
As for the moneys retained by the parties upon separation ($30,000 by the wife and $15,000 by the husband) which the trial Judge overlooked, we consider that, in the absence of any evidence from the wife about how she expended the $15,000 disparity, favourable to her, between those amounts, it would be an appropriate exercise of discretion in this case to bring that sum to account in the proceedings as a notional asset of the parties in the wife’s hands, in conformity with the principle enunciated by the Full Court in Townsend and Townsend (1995) FLC 92-569.
The effect of adjusting, in the manner outlined above, for the two errors of the trial Judge which we identified in the substantive judgment, would be to reduce the net property of the parties (other than the boat) available for division between them in these proceedings from the $558,312 arrived at by his Honour to $518,269 ($558,312 - $55,043 + $15,000). For present purposes, we round that figure off at $518,000.
THE FURTHER EVIDENCE ON APPEAL
The affidavit of the wife, filed on 29 May, 2001, pursuant to our orders of 16 May, 2001, establishes that the husband’s father, Harold Victor Wall (“the deceased”) died on 6 March, 2000, at the age of 85, leaving an estate the value of which was estimated, for probate purposes, at $2,671,726.94 (net of liabilities). By his will dated 30 October, 1992, the deceased appointed the husband and his sister, Maria Groom, as joint executors and trustees of his will. Probate of the will, and two codicils thereto, was granted to the executors by the Supreme Court of New South Wales on 15 May, 2000. By that will, as subsequently varied by the two codicils (the first dated 18 February, 1996 and the second dated 10 October, 1996) the deceased devised to the husband a home at 69 Wimbledon Avenue, Narrabeen, and a home unit at 10/80 Wyuna Avenue, Harbord (having values estimated by the executors for probate purposes at $1,000,000 and $280,000, respectively), and bequeathed to him certain personal property, including three items estimated by the executors to have a value of $3,200. Then, after devising and bequeathing to his daughter, Maria Groom, a residence at 49 Wimbledon Avenue, Narrabeen, and a unit at 11/80 Wyuna Avenue, Harbord (having a combined estimated value of $1,280,000) and some personal property including items estimated by the executors to be worth $22,300, the rest and residue of the estate was bequeathed to the husband and his sister in equal shares. That residue, on the figures provided by the executors in the probate application, was about $100,000.
The affidavit of the husband, filed on 20 July, 2001, pursuant to our orders of 16 May, 2001, essentially confirms the information about the husband’s inheritance disclosed by the wife’s affidavit referred to above, save that it clarifies that the values assigned to various items of property in the probate documents were estimates made by him and his sister only “and not based upon any expert opinion”. It asserts that the home at 69 Wimbledon Avenue, Narrabeen, which he inherited, was the home in which he “had grown up”, and that it “needs work to carried [sic.] out on it”. It does not annex any valuation of that property, nor of the home unit at 10/80 Wyuna Street, Harbord, which also formed part of his inheritance. The affidavit does, however, annex a certificate of valuation dated 21 June, 2000, by one Mark Nassif, of Stanley Thompson Valuers Pty Ltd of North Sydney, valuing the home unit at 11/80 Wyuna Street, Harbord, which was devised to the husband’s sister, at $225,000. The reason for this annexure is explained elsewhere in the affidavit. The husband further swears that, in addition to receiving those two properties, he also received a cash payment (presumably, his share of the residue of the estate, after payment of debts, duties and administration costs) of “about $55,000”. That would seem to be additional to and separate from the items of personal property specifically bequeathed to him including the three items values at $3,200.
Thus there is no contest that, in round figures, the husband received, by way of inheritance from his father, money and property to the value of not less than $1.3 million, between the date of the trial Judge’s judgment and the hearing of the appeal.
However, in purported reliance upon something said in the supplementary judgment, the husband’s affidavit goes on to depose to other changes in his financial circumstances since the orders of the trial Judge, upon the basis of a submission (made in paragraph 4 of the affidavit) that if regard is to be had to his inheritance received since trial “it is necessary in that event to consider the whole of my financial circumstances”. The affidavit then proceeds to detail various matters of a financial nature which have allegedly occurred, particularly in relation to the business of Off The Wall Pictures Pty Ltd, since the orders of the trial Judge.
In addition, the husband’s affidavit purports to give what is clearly inadmissible evidence of some asserted movement, since the trial, in the value of the parties’ former matrimonial home (the value of which was agreed, at trial, to be $480,000) and some evidence of a speculative nature about the wife’s prospects of receiving some form of inheritance from her parents.
In our view, the evidence referred to in paragraphs 17 and 18 hereof is not evidence (in so far as it may be admissible) which falls within the ambit of our orders of 16 May, 2001, and it is therefore not evidence which we should now receive for the purposes of our further consideration of this appeal.
We have already set out, in paragraph 3 hereof, the orders which we made on 16 May, 2001, in relation to the adducing of further evidence by the parties. Orders 1 and 2 of those orders need to be read in the light of our supplementary judgment, particularly paragraph 23 thereof, wherein, after considering submissions which the parties had made about the scope of further evidence which we should now permit to be adduced, we said this:-
“In these circumstances we propose to now invite each of the parties to file such affidavits as either of them may deem appropriate relating only to any inheritance to which the husband may have become entitled since the hearing of the proceedings before the trial Judge and we remind the husband of his obligation to make a full and frank disclosure. If the parties can file a statement of agreed facts, all the better.”
In our view, the evidence which the husband now seeks to place before this Court in those parts of his affidavit referred to in paragraphs 17 and 18 hereof clearly falls outside the scope of those orders, particularly in the light of that paragraph of the supplementary judgment.
The paragraph of the supplementary judgment relied upon by the husband to found his venture into areas of evidence unauthorised by our orders of 16 May, 2001, is paragraph 18, wherein we said:-
“It does seem to us that it is essential, if we are properly to exercise the discretion, to now invite evidence in respect of the present financial circumstances of the parties, otherwise it will not be possible for us to make an order that is just and equitable.”
However, that paragraph was then followed by other paragraphs (particularly paragraphs 21 and 22) in which, as already noted, we considered the parties’ submissions as to the nature of the further evidence which they were proposing to adduce, and that led to our conclusion, in paragraph 23, as to the scope of that evidence which we should permit to be adduced, as reflected in our orders. Accordingly, we reject the further evidence of the husband described in paragraphs 17 and 18 hereof.
Quite apart from the fact that the additional evidence sought to be relied upon by the husband is outside the scope of our orders of 16 May, 2001, we consider that so much of that evidence as relates to the performance of the business of Off The Wall Pictures Pty Ltd since the trial is not such as should, in any event, affect the re-exercise of discretion by this Court in this case. That is because it is of the nature of businesses of that kind that they go through fluctuations of fortunes, and experience events which reflect, sometimes positively and sometimes negatively, on their profitability. Events of that sort are part of the ordinary, foreseeable vicissitudes of business life and, as such, may properly be regarded as having been within the area of contemplation of the trial Judge in his assessment of the impact of s.75(2) factors in this case.
By contrast, the husband’s inheritance of approximately $1.3 million from his father is very much an unforeseen windfall benefit, which could not possibly have been within the contemplation of the trial Judge when he exercised his discretion. That inheritance improves the husband’s financial position by $1.3 million from whatever it would otherwise have been, irrespective of how he may ultimately employ it or of how his business may fare.
Moreover, such fluctuations as the husband’s business may have experienced since the trial may be due, wholly or in part, to managerial decisions made by the husband, or other factors over which he had control. It would therefore not be proper for this Court to receive evidence about such fluctuations, and take that evidence into account in considering, in the context of a re-exercise of discretion, the impact of the relevant s.75(2) factors, without providing the opportunity for the wife to explore the circumstances of their occurrence, at least through examination of the financial records of the company since the trial and cross-examination of the husband about them, if not also through the adducing of further evidence in rebuttal on her behalf, if sought. That opportunity could only be given through the mechanism of a rehearing before a single judge, and in our judgment the additional cost and delay which such a course would involve is simply not justified by the evidence tendered by the husband on this issue.
Accordingly, we are of the opinion that the appropriate course now is for this Court to re-exercise the discretion, in the light of the trial Judge’s findings as varied by our conclusions about the size of the net asset pool (including the fact that that pool now contains no component for the husband’s share in Off The Wall Pictures Pty Ltd, which he will retain) and having regard to the further evidence which we have admitted about the husband’s $1.3 million inheritance.
THE RE-EXERCISE OF DISCRETION
In the substantive judgment, we upheld the trial Judge’s assessment of the parties’ total contributions as being 55% by the wife and 45% by the husband. That, then, is the starting point for our reconsideration of the relevant s.75(2) factors, culminating in the re-exercise of the ultimate discretion in the determination of a just and equitable division between the parties of the net asset pool which we have re-assessed at $518,000, plus the boat, “The Edge”, having a gross value somewhere between $170,000 and $325,000. However, the trial Judge found, in paragraph 34 of his judgment, that the full sale proceeds of the boat are likely to be subject to capital gains tax at the top marginal rate. That would mean that if the vessel sold at, say, $250,000, the return to the parties, after capital gains tax, would be only about $130,000.
In paragraphs 108 to 121 of his judgment, the trial Judge identified and weighed the relevant s.75(2) factors, and how they should affect the ultimate exercise of his discretion. He concluded, in paragraph 122 of his judgment, that proper consideration of those factors called for an adjustment, in the wife’s favour, from the position at which he had arrived on the basis of contributions, of 10% of the parties’ net property (including the net proceeds of sale of the boat), leading to the ultimate conclusion that to “allow a just and equitable division” of that net property, the wife should receive 65% and the husband 35% thereof.
We regard that conclusion by his Honour as to the impact of the relevant s.75(2) factors not only as being one which was open to him, but also as one with which we agree, given the evidence which was then before his Honour in relation to those factors, and the starting point from which he approached his consideration of those factors. That starting point was that the parties’ net property had a value of $558,312, of which the husband’s interest in Off The Wall Pictures Pty Ltd constituted $55,043, plus the net value of the boat (say, $130,000 after tax).
In our reconsideration of the impact of those factors we have to take into account that the net pool of property has been reduced to $518,000 (plus the boat); that it contains nothing in respect of the husband’s interest in the company (which interest, instead, is to be taken into account as a significant financial resource of the husband); and that the husband is $1.3 million better off than the trial Judge perceived, as a result of his windfall inheritance. In relation to the resource represented by that inheritance, however, it is also appropriate for us to take into account that the wife appears to have made no contribution to its acquisition by the husband, which occurred after their separation. In the circumstances, rather than recast the pool of assets in light of the inheritance and then reassess the relative contributions by the parties to that pool giving the inheritance great weight, it is appropriate to deal with the inheritance only when giving consideration to the matters made relevant under s75(2). Indeed this was the course urged upon us by counsel for the wife in her submissions filed 22 December 2000. (for a similar approach see Burke v Burke (1993) FLC 92-356 at 79,762, 16 Fam LR 324).
Taking all of those matters into account, we consider that a significantly greater adjustment in the wife’s favour, on account of the s.75(2) factors, is called for than that which the trial Judge made on the material before him. In considering the appropriate adjustment, we must also bear in mind that whatever percentage we ultimately arrive at, it will apply also to the net proceeds of sale (after capital gains tax) of the boat, which may be quite substantial. The adjustment which we would make, in the exercise of our discretion, is 20% of the parties’ net property, including the boat, which would mean that the wife should receive 75% and the husband 25% of that net property. On that basis, the wife’s entitlement from the property other than the boat becomes $388,500 and the husband’s $129,500 instead of $362,903 and $195,409, respectively, as found by the trial Judge.
The effect of such an apportionment would be that, for the wife to retain the former matrimonial home she would have to pay the husband $115,851 (instead of $126,448 as determined by the trial Judge), calculated as follows:-
Wife’s 75% of $518,000: $388,500
Less: net property retained by wife (being $9,351
found by the trial Judge plus $15,000 cash retained
at separation): $24,351Wife’s net entitlement: $364,149
Less: agreed value of former matrimonial home: $480,000
Cash adjustment payable by wife to husband: $115,851.
The end result of our re-exercise of the discretion of the trial Judge is that we would require the wife to pay to the husband $8,597 less than the trial Judge ordered her to pay him, in order to retain the former matrimonial home, and she would receive 75% of the net proceeds of sale of the boat (after Capital Gains Tax) instead of 65%. However, as the wife has not cross-appealed from the orders of the trial Judge, it is necessary to consider whether it is open to this Court, upon a re-exercise of the discretion, to make orders more favourable to her than those of the trial Judge, where that re-exercise follows our upholding of the husband’s appeal. Such a result may seem anomalous, since it would render the husband’s successful appeal entirely Pyrrhic, but it would have been brought about solely as a consequence of the husband’s having received, since the orders of the trial Judge, an inheritance of $1.3 million, which has significantly altered the balance of the s.75(2) factors, in the husband’s favour, from the balance which existed at the time of the trial and was reflected in his Honour’s orders.
Having reached that point in our deliberations on this Court’s re-exercise of the trial Judge’s discretion, we were conscious of the fact that it had not been clearly flagged to the parties, and particularly to the successful appellant husband, that upon that re-exercise this Court might (because of the further evidence before us about the husband’s inheritance) reach a conclusion more favourable to the respondent than the orders of the trial Judge. We had therefore not invited any submissions upon the specific issue of the Court’s power to make such an order in the absence of a cross-appeal by the wife. We felt that it ought to have crossed the minds of the parties’ legal representatives, and particularly the appellants, that a re-exercise of discretion on the basis, flowing from our orders of 16 May, 2001, of the admission of evidence of the husband’s inheritance, might product such a result, and that they would therefore have addressed this issue in their submissions filed, in the appellant’s case, on 8 August, 2001, and, in the respondent’s case, on 13 December, 2001. However, neither party addressed this issue in any of their submissions, although the respondent’s submissions filed on 13 December, 2001, inferentially supported an unfettered re-exercise of the discretion.
Notwithstanding our view referred to in the immediately preceding paragraph, we decided, out of an abundance of caution, and in order to ensure procedural fairness to the appellant husband, to make further directions for the filing, by the parties, of further written submissions upon the power of this Court to make orders more favourable to a respondent who has not cross-appealed than those of the trial Judge, where the Court is re-exercising the discretion following a successful appeal. We made those directions on 21 March, 2002.
Pursuant to those directions, we received further written submissions from the respondent wife on 28 March, 2002, and from the appellant husband, on 3 April, 2002.
Predictably, the submissions for the wife argued that, in re-exercising the discretion, this Court should “proceed in precisely the same way as a Trial Judge would at first instance”, and that in so doing it is “immaterial and inappropriate to give consideration to whether or not the Respondent cross-appealed”. [Submissions of Wife of 28 March, 2002, pp.6-7.] In support of that submission, reliance was placed on the well-known passage from the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ in Allesch v Maunz (2000) FLC 93-033, at 87,517 (paragraphs 30 and 31) which is cited in paragraph 148 of the substantive judgment, and upon a statement by the Full Court in Pierce and Pierce (1999) FLC 92-844, to the effect that the obligation of the Court in re-exercising the discretion of a trial Judge “is to make an order that the Court considers appropriate”.
The submissions for the appellant husband, after first acknowledging that “the court in appropriate circumstances has jurisdiction to make an order pursuant to s.94(2) more favourable to an unsuccessful respondent than those made by the trial judge” [Supplementary Submissions of Appellant/Husband para.2], then adds the following qualifications to that statement [Supplementary Submissions of Appellant/Husband paras. 2.1 and 2.2]:-
“2.1 a proper exercise of discretion will almost always be to refuse to do so;
2.2 in any event, any such jurisdiction is constrained by the rules of natural justice. If the court were contemplating doing so, at least the Appellant should be notified and given an opportunity to make submissions against that course, and/or to withdraw the appeal. In this case, it is too late now to take that course consistent with justice.”
The appellant’s submissions then refer to a number of authorities on the nature of an appeal by way of rehearing (which an appeal to this Court under s.94 of the Act is), culminating in a reference to the statement of McHugh, Gummow and Callinan JJ in CDJ v VAJ (1998) 197 CLR 172, [111], that such an appeal is “neither purely appellate nor purely original”, which, it is submitted “illuminates the proper approach to the exercise of discretion under s.94(2)”. [Supplementary Submissions of Appellant/Husband, para.3.]
The appellant’s submissions then contend that, although s.94(2) empowers the Court to make an order more favourable to the appellant, it would be “an inappropriate exercise of discretion to do so” in this case because the “ultimate issue in the appeal was whether the trial judge’s order was too favourable to the wife; there was no contention that it was inadequate”. [Supplementary Submissions of Appellant/Husband, paras. 4 and 4.1.]
In support of that submission, two passages are quoted [Supplementary Submissions of Appellant/Husband, para.4.2] from the joint judgment of Lindenmayer and Joske JJ in Ruscoe v Walker [2001] FamCA 268 (unreported – judgment delivered 10 May, 2001) [incorrectly cited as “Walker v Ruscoe”]. The passages quoted are part of para.16, and para.24 of that joint judgment. We find it unnecessary to repeat the entirety of those passages, as they are reproduced in the Submissions. It will suffice to say that, in those passages, Lindenmayer and Joske JJ expressed the opinion that, in the circumstances of that case (in which there had been a distribution of the parties’ property pursuant to the trial Judge’s orders, and the only issue on appeal by the wife was the quantum of a cash adjustment to be paid to her by the husband), it “would be quite unjust to the wife to allow the husband now to have the opportunity to re-open the whole issue of property settlement and to seek a result more favourable to him than that arrived at by the trial Judge when he did not at any time cross-appeal from those orders, and the wife’s appeal has been so significantly successful”.
It is submitted for the husband that those words “are directly applicable to the instant case”. Indeed, it is submitted that this case is even stronger than that case, because the change of circumstance since the trial in this case “is attributable to … an inheritance [by the husband] post-separation and post-trial … when the wife’s expectancy has not fallen into possession, because her parents survive”.
We think that the case of Ruscoe v Walker (supra) is distinguishable from the present case because, in that case, there had been a full distribution of the property of the parties pursuant to the trial Judge’s order, including the payment by the respondent husband to the appellant wife of the cash adjustment in her favour determined by the trial Judge. In this case, there is nothing to suggest that the trial Judge’s orders have been fully executed, including the sale of the boat and the payment by the wife to the husband of the amount fixed by the trial Judge as the amount to be paid in exchange for his interest in the former matrimonial home. Moreover, the primary issue for the Court in that case was not simply whether the unsuccessful respondent husband could, on the rehearing of the proceedings to be ordered by the Full Court, obtain a result more favourable than that embodied in the trial Judge’s orders, but the wider issue of whether the whole s.79 proceedings, including the assessment of the value of the parties’ property, and of their contributions up to trial, the former settled by the Full Court’s decision, and the latter by the trial Judge’s unchallenged determination, could be re-opened at the rehearing. By majority, the Full Court held that it could not.
Accordingly, we acknowledge that Ruscoe v Walker (supra) is an example of an exercise of discretion in which the Court, when ordering a rehearing of s.79 proceedings, held that it was inappropriate to allow the unsuccessful respondent to the appeal, who had not cross-appealed, to seek to obtain a result more favourable to him than the trial Judge’s orders. However, we perceive no statement of principle by the Court in that case that that course can never be appropriate, or which would bind this Court to conclude that in the circumstances of this case it would be an inappropriate exercise of discretion to make such an order upon the re-exercise of the trial Judge’s discretion.
Before moving on to consider the second basis of the appellant’s opposition to our exercising the discretion to make an order more favourable to the respondent who has not cross-appealed (the “natural justice” point) we think it appropriate to say that we consider the concession that the power to make such an order exists was properly made by senior counsel for the husband.
Authority upon the question so far as our researches have revealed, is sparse. Looking at the matter, first, without authority, it appears to us that when an appellate court, entertaining an appeal by way of rehearing (as an appeal to this court under s.94 of the Act is), concludes that the trial Judge erred in the exercise of his or her discretion, and decides that, rather than remit the proceedings for rehearing, it should itself re-exercise the discretion of the trial Judge, then the Court not only may but must re-exercise that discretion in such a way as to produce the result which the trial Judge ought to have arrived at had he or she exercised the discretion properly.
49.. In the absence of the admission of further evidence on appeal, the exercise of discretion by the appellate court will be performed upon the evidence which was before the trial Judge. In that case, it may be that it would be most unlikely that the Court would conclude that the re-exercise should lead to a result more favourable to a respondent who has not cross-appealed than the trial Judge’s order, since it would be a brave respondent in those circumstances who would submit that it should. However, as a matter of principle (and leaving aside issues of procedural fairness), it would seem that there would be no legal impediment to the Court’s reaching such a conclusion. After all, the re-exercise of discretion by the appellate court is a procedural alternative to a remittal for rehearing, and there can be no doubt that in the latter case (absent some express limitation upon the rehearing imposed by the appellate court in its remittal order) the new trial Judge would be obliged to exercise his or her discretion in the matter, anew, unfettered by considerations of which party appealed or what the order of the original trial Judge was. There seems no reason in principle why the position should be any different when the re-exercise of discretion is carried out by the appellate court itself, rather than by a new trial Judge on remittal.
The argument for an unfettered re-exercise of the discretion by the appellate court becomes even stronger in a case such as this where, in accordance with the decision of the High Court in Allesch v Maunz (supra), this Court admitted further evidence for the purposes of that re-exercise, and that further evidence has a significant bearing upon how that discretion ought to be exercised.
As for authority on the point, we consider that the whole tenor of the judgments of their Honours of the High Court in Allesch v Maunz (supra) supports the notion that, in the circumstances predicated above, the appellate court’s exercise of discretion should be unfettered, so that the result arrived at is that which the Court, in its discretion, considers proper on all the evidence before it. In particular, we would refer to and rely upon the final sentence of paragraph 23 of the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ (at FLC 87,515-6) where their Honours said:-
“And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense canonly give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand.”
Amongst the citations in the footnote to that sentence is a reference to the judgment of Dixon J (as he then was) in Victorian Stevedoring and General Contracting Co Pty Ltd & anor v Dignan (1931) 46 CLR 73 at 107 where that learned judge cited, with approval, a statement by Jessel MR in Quilter v Mapleson (1882) 9 QBD 672 at 676 that on an appeal by way of rehearing “such a judgment may be given as ought to be given if the case came at that time before the Court of first instance”.
Thompson v Easterbrook (1951) 83 CLR 467 is a case in which the High Court, on an appeal to it, made an order more favourable to the respondent than the order of the court appealed from, although the respondent had not cross-appealed. Although not directly relevant to this case, because it did not involve a re-exercise of discretion on an appeal by way of rehearing, it at least demonstrates that their Honours did not see a failure to cross-appeal as necessarily precluding the making of an order, on appeal, more favourable to the respondent than that of the trial Judge.
In In the Marriage of Perryman (1993) 17 FamL.R. 200, Kay J dealt with an application by a father liable to pay child support for a departure from administrative assessment so as to decrease the amount payable by him. The main issue in the case was whether a previous departure, by the decision of a review officer under Part 6A of the Child Support (Assessment) Act 1989, from an administrative assessment of child support payable by the father, itself created an “administrative assessment” in respect of which the father could then bring an application for departure under s.117 of that Act. His Honour held that it did. However, towards the end of his judgment (at 213-4) Kay J considered whether it was open to him, on the husband’s application to reduce the child support payments, to increase them. On that question his Honour said this:-
“The High Court in Neal v. The Queen (1982) 149 CLR 305 held that a Criminal Court of Appeal should not, when hearing an appeal against severity of sentence, increase the sentence in the absence of a cross-appeal. Whilst the analogy between the criminal jurisdiction and the child support jurisdiction is not exactly apposite, as the process before the Court is not by way of review, in the absence of a cross-application the Court should confine itself to the issue as to whether the departure order sought or a different order still favourable to the applicant should be made.”
We consider that Perryman (supra) is clearly distinguishable from the present case. In that case, the only proceeding in the court was the father’s departure application seeking a reduction of the child support payable by him. The mother had not brought any cross-application for a departure by way of an increase in the amount payable. The process by way of an application for departure from administrative assessment, as Kay J noted in the passage cited, was not in any sense a review or an appeal. It was a statutory process in the nature of an originating proceeding.
In this case, the proceedings before the trial Judge, which are being reheard by this Court on appeal, involved cross-applications by the husband and wife for different orders under s.79 of the Act. The orders now under contemplation by this Court fall well within the ambit of the wife’s claim in those proceedings. By her amended application filed on 30 July, 1999, she sought orders that the husband transfer to her the home at Elanora Heights and, in addition, that he pay her the sum of “Five Hundred Thousand Dollars ($100,000)” [sic.] in return for a transfer to him of her interest in the boat. In her “Case Outline Document” filed for the trail, she sought an order “in a range of between 70% and 80%” of the parties’ total net property.
In the result we conclude that if, in re-exercising the discretion of the trial Judge upon an appeal in proceedings under s.79 of the Act, this Court concludes (as we have in this case) that a proper exercise of that discretion calls for an order more favourable to the respondent than that of the trial Judge, this Court is at liberty (subject to the issue of natural justice, discussed below) to substitute such an order for that of the trial Judge notwithstanding the absence of a cross-appeal by the respondent, at least in circumstances where the proposed order is within the ambit of the orders sought by the respondent before the trial Judge.
The second, “natural justice”, point raised by the appellant as a basis for opposing an order, by this Court more favourable to the wife than that of the trial Judge, is contained in para.5 of the Appellant’s Supplementary Submissions. It is there submitted:-
“If the Court were contemplating such a course, the Appellant should have been told at an early stage, so that he could reconsider pursuing the appeal.”
In support of that submission, reliance is put upon the decision of the High Court in Neale v The Queen (1982) 149 CLR 305, referred to by Kay J in the passage from Perryman (supra) quoted in paragraph 54 hereof.
That case turned on the application of s.668E(3) of the Criminal Code (Qld) and r.22 of the Criminal Practice Rules 1900. Although there was some dissension within the Court as to how the appeal to it should be resolved, all four Justices (Gibbs CJ, Murphy, Wilson and Brennan JJ) held that on an application by a convicted person for leave to appeal against the severity of his sentence (upon the hearing of which he was not entitled to be and was not in fact in court) the Queensland Court of Criminal Appeal could not exercise the power granted by s.668E(3) to increase the severity of his sentence, since r.22 enabled an appellant to abandon his appeal at any time by giving notice to the Registrar, upon which the appeal "shall be deemed to have been dismissed". It was held that, there being no appeal by the Attorney-General, under s.669A of the Code, before it could exercise the power under s.668E(3) to increase the penalty imposed on the applicant by the trial court, the Court of Criminal Appeal was obliged to grant the applicant leave to appeal, which would then give him the opportunity, if he saw fit, to exercise his right to abandon his appeal (upon the hearing of which he had a right to be present in court). Thus the case was essentially about procedural fairness, and it has some relevance to the issue under discussion in this case.
Gibbs CJ (with whose reasons Wilson J expressed agreement) expressed the view in that case (at 308) that, since the enactment of s.669A of the Code (which gave the Attorney-General power to appeal against the leniency of a sentence), s.668E(3) “may now be regarded as redundant, except perhaps in very special cases”. Brennan J (at 322), in a passage relied upon in the appellant’s submissions here, agreed with that proposition, adding:
“… and then only after the court has given an appellant full opportunity to protect what Isaac J called ‘the vested interest that a man has to be free and which is his, subject to the sentence of the primary tribunal.”
Murphy J (at 310) said that the power given by s.668E(3) to increase a sentence “should be regarded as virtually obsolete since the Act was amended to give the Attorney-General the power to appeal against sentence”. His Honour also said (at the same page):
“Although Mr Neal applied to the Court of Criminal Appeal for leave to appeal on grounds of excessiveness, the Court granted leave on the basis of apparent inadequacy, and forthwith dealt with the appeal. Mr Neal’s counsel was given no opportunity to consider, or obtain instructions on, whether to proceed with the appeal after leave was granted on this adverse basis. Natural justice required that he be given that opportunity.”
Senior counsel for the husband submitted that similar considerations apply in this case, and that as the wife had not, by cross-appeal, contended that the trial Judge’s orders were, from her perspective, insufficient, “in the absence of clear notice to the Appellant that it is considering doing so, and affording the Appellant an opportunity of withdrawing the appeal” this Court should not now make orders more favourable to her than those of the trial Judge.
We would have thought that we could hardly have given any clearer indication, that we were considering making orders more favourable to the wife than the trial Judge’s, than to invite written submissions from the parties, at this time, as to our power to make such an order. Having apparently foreseen that as a view we might take, senior counsel for the appellant made these submissions [Supplementary Submissions of Appellant/Husband, paras.5.3 and 5.4]:-
“5.3 In this respect, while the invitation to make these submissions now may serve notice of the court’s intention, submissions have been invited only as to power. Submissions have not been sought as whether the court ought to do so on the evidence, and accordingly, save for the general discretionary considerations referred to above, these have not been addressed.
5.4 In any event, it is now too late to do so, the appeal having been pursued to the point that it has succeeded, and considerable costs having been incurred.”
With respect, we think the first of these submissions involves an unreasonable splitting of hairs. If the appellant wished to submit that, on the evidence, this Court ought not (despite its power to do so) make an order more favourable to the respondent than that of the trial Judge, he has had ample opportunity to do so, either in the recent Supplementary Submissions or in his earlier submissions of 8 August, 2001. In any event, it appears to us that that is precisely what has been done in the Supplementary Submissions, in the course of addressing the “general discretionary considerations”, since discretionary considerations relevant to the exercise of power in a given case must surely involve a reference to any facts relevant to that exercise.
As to the second of those submissions, we agree that it is now too late for the appellant to consider withdrawing his appeal, since it has been allowed, and the trial Judge’s relevant orders set aside, by our orders of 26 October, 2000. But the appellant cannot complain of a denial of natural justice, or procedural unfairness, arising from the fact that he was not appraised of the Court’s intention to increase the trial Judge’s award to the wife prior to our orders of 16 May, 2001, since it was only upon receipt of the further evidence tendered pursuant to that order that the possibility arose of such a result arising from our re-exercise of the discretion.
In our view, this case is distinguishable from Neal v The Queen (supra) relied upon by the appellant. Apart from the fact that that case turned upon the specific statutory provisions (including the Criminal Practice Rules) with which the Court was there dealing, there is the important difference that the procedure instituted by the appellant there was an application for leave to appeal, and the Court of Criminal Appeal could not increase his sentence without first granting him leave to appeal. It therefore erred in purporting to grant his application for leave to appeal solely for the purpose of enabling it then to exercise its power, under s.668E(3) of the Code, to increase the sentence against the severity of which he had sought leave to appeal.
In this case the husband appealed, (ultimately successfully) against the trial Judge’s orders on grounds related to the size of the relevant asset pool, and the treatment of monies retained at separation. Were it not for the facts, disclosed by evidence subsequently admitted in accordance with the judgment of the High Court in Allesch v Maunz (supra), orders would have been substituted by this Court more favourable to the husband. However, the husband must be taken to have known, before this Court’s substantive judgment was delivered on 26 October, 2000, of the fact of his inheritance since the orders of the trial Judge, and, that, one option for this Court, if his appeal succeeded, would be to re-exercise the discretion of the trial Judge. He must also be taken to have been aware, at least since the publication of the judgments in Allesch (supra) on 3 August, 2000, that if this Court allowed his appeal and elected to re-exercise the discretion it would be obliged to admit relevant evidence of significant changed circumstances since the trial Judge’s orders, and that that must almost inevitably include, at least, evidence of his inheritance of $1.3 million, when the total asset pool of the parties dealt with in the trial Judge’s orders was only about $.5 million. He thus had an opportunity, between 3 August, 2000 and 26 October, 2000, to consider whether he should withdraw his appeal, but did not choose to do so. We perceive no denial of natural justice, or procedural unfairness to him in our now proceeding to re-exercise the discretion in such a way, if we consider it appropriate on all the evidence now before us, as to produce a result more favourable to the wife than the orders appealed from notwithstanding the absence of a cross-appeal by the wife.
Perhaps all appellants in this jurisdiction must be taken, since the publication of the judgments in Allesch (supra), to be aware of the risk they run that, if their appeal is successful, but further evidence is admitted of events occurring since the orders below which casts a new light on how the discretion should be re-exercised, a successful appeal may be entirely Pyrrhic, and that they therefore pursue the appeal at their peril in that respect.
Before concluding this judgment and announcing the orders which we propose to make, we think it necessary to correct an error which we made in the substantive judgment which did not affect the outcome of the appeal, as determined by that judgment, but which is material to the form of one of the orders made by the trial Judge and the orders which this Court should now make.
In paragraph 43 of the substantive judgment, we said that we were unable to understand how the trial Judge calculated the figure of $118,719, fixed by order 7(i) of his orders, as the amount to be paid to the wife from the proceeds of sale of the home (in the event of its sale upon default of compliance by the wife with order 5) prior to the division of the balance of those proceeds between the parties in the proportions 65% to the wife and 35% to the husband. We there said that it appeared to us that the figure should be $41,552, calculated in the manner set out in that paragraph.
Upon reflection, we perceive that his Honour’s figure was correct, given that he was calculating an amount to be paid to the wife from the net proceeds of sale of the home before division, with only the balance remaining after that payment to be divided in the proportions which he had fixed. Our calculation, on the other hand, produced a figure to be paid by the husband to the wife (as an adjustment in respect of property and liabilities retained by each party apart from the boat and the home) out of his share of the net proceeds of sale of the home, after their division in the proportions fixed by his Honour. Whilst our calculation was correct, as far as it went, it would (if his Honour’s other orders remained undisturbed) have required that order 7 of the trial Judge’s orders be recast so that from the net sale proceeds the wife received 65% thereof plus $41,552, and the husband received the balance.
That his Honour’s figure of $118,719 to be paid to the wife before the division of the net sale proceeds is correct, may be demonstrated by the following calculation:-
Net assets as found by his Honour: $558,312
Wife’s 65% entitlement therefore: $362,903
Less net property to be retained by wife: $9,351
\ Wife’s net entitlement: $353,552
Assumed net sale proceeds of home: $480,000
If wife receives from proceeds, before division: $118,719
Balance sale proceeds remaining = $361,281
65% of that balance = $234,833
\ Wife receives: $234,833
Plus: $118,719
= $353,552.
. The figure to be paid to the wife from the net sale proceeds before division, in accordance with the trial Judge’s intention as reflected in his order 7(i), following our re-exercise of the discretion as set out above, becomes $16,596, calculated as follows:-
W is entitled to receive $364,149 on the assumption that the house is worth $480,000 net.
If she receives the first $ 16,596
plus 75% of the balance of $463404 ($480,000 – $16596) $347,553
she will have received $364,149
COSTS
Issues of costs remain outstanding. Apart from the issue of the costs of this appeal, there is an outstanding appeal (at one stage deemed abandoned, but either reinstated or agreed to be reinstated) against an order of the trial Judge, made subsequently to his orders of 25 August, 1999, in relation to the costs of the proceedings before him. [See paragraphs 151 and 152 of the substantive judgment and paragraphs 10 and 11 of the supplementary judgment.] It is appropriate that we now give directions for the filing of written submissions on those outstanding issues so that this appeal may finally be disposed of without any further oral hearing.
ORDERS
For the foregoing reasons, the Court makes the following orders:-
In lieu of orders 3 to 7 of the orders of The Honourable Justice Cohen made herein on 25 August, 1999 (which orders were set aside by order 2 of the orders of this Court of 26 October, 2000) it is ordered as follows:-
“3.On the sale of the said boat, after payment of the costs of and incidental to sale, 75% of the balance of the price is to be paid to the wife forthwith, and the remaining part of the balance is to be paid to the husband forthwith.
4.In the event that the husband is given a notice of assessment of capital gains tax payable on the proceeds of sale of the boat, the wife shall, within one month of being notified by the husband of his said capital gains tax liability, pay 75% of it to the Commissioner of Taxation in partial discharge of that liability.
5.Within one month of the sale of the said boat the wife shall pay to the husband the sum of $115,851.
6.In the event that wife complies with order 5, the husband shall forthwith do all things and execute all documents necessary to transfer to the wife and shall transfer to the wife free of all encumbrances all his right title and interest at law and in equity in the premises situate at and known as 8 Marinna Road, Elanora Heights.
7.In the event the wife fails to comply with order 5, the parties shall sell the premises known as and situated at 8 Marinna Road, Elanora Heights within three months of that failure and after payment of all costs of and associated with the said sale shall distribute the balance of the proceeds as follows:-
(i)$16,596 to the wife;
(ii)75% of the balance to the wife;
(iii)the remainder to the husband.”
The respondent is to file and serve upon the appellant written submissions as to the costs of this appeal and as to the appeal from the costs order of The Honourable Justice Cohen made in relation to the proceedings which culminated in his Honour’s orders of 25 August, 1999 (“the Costs Appeal”), within 28 days of the date of these orders.
The appellant is to file and serve upon the respondent written submissions in answer to the submissions referred to in order 2 hereof, within 14 days of the receipt of those submissions.
The respondent is to file and serve upon the appellant, written submissions (if any) in reply to those referred to in order 3 hereof, within 7 days of the receipt thereof.
Each party is to endorse on the cover sheet of any submissions filed pursuant to orders 2, 3 or 4 hereof, the date upon which those submissions were served on the other party.
I certify that the preceding 76 paragraphs are a true copy of the reasons for judgment delivered by this
Honourable Full Court.
Sgnd: Elizabeth Hore
Associate
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