Watkins & Watkins
[2004] FamCA 381
•4 May 2004
[2004] FamCA 381
FAMILY LAW ACT 1975
IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT SYDNEY Appeal No. EA14 of 2003
File No. NCF 2067 of 2002
IN THE MATTER OF:
STANLEY JOHN WATKINS
Appellant Husband
- and -
BEVERLEY ANNE WATKINS
Respondent Wife
REASONS FOR JUDGMENT
BEFORE: Finn, Warnick and Mushin JJ
DATE OF HEARING: 26 June 2003
DATES OF FURTHER WRITTEN SUBMISSIONS:
15 October 2003; 10 November 2003; 28 November 2003.
DATE OF JUDGMENT: 4 May 2004
APPEARANCES: Mr Murphy of Counsel (instructed by Barry & Nilsson Lawyers, Level 21, 215 Adelaide Street, Brisbane QLD 4000 – DX 145 Brisbane QLD) appeared on behalf of the appellant
Mr Tregilgas of Counsel (instructed by Annette Nicholson & Associates, 80 Albert Street Taree, NSW 2430 – DX 7012 Taree NSW) appeared on behalf of the respondent
APPEAL SUMMARY
MATTER:WATKINS
APPEAL NUMBER: EA 14 of 2003 (NCF 2067 of 2002)
CORAM:Finn, Warnick and Mushin JJ
DATE OF HEARING: 26 June 2003
DATE OF WRITTEN SUBMISSIONS: 15 October 2003, 10 November 2003 and 28 November 2003
DATE OF JUDGMENT: 4 May 2004
CATCHWORDS: FAMILY LAW – APPEALS – Application by the respondent to the appeal to re-open the hearing of the appeal before the delivery of the Full Court judgment in order to adduce further evidence – Discussion of the principles to be applied by the Full Court – Hearing of the appeal re-opened to permit the respondent to adduce further evidence in order to support the order of the trial Judge.
FAMILY LAW – APPEALS – Property settlement – Whether trial Judge erred in treating a bank deposit in the name of the appellant husband’s mother, the interest on which was received by the husband, as either property or a financial resource of the husband – Trial Judge had erred on the evidence available at trial – error rectified by subsequent evidence adduced by the wife.
Caselaw cited:
Allesch v Maunz (2000) 203 CLR 172
CDJ v VAJ (1998) 197 CLR 172
Application to re-open the appeal granted
Application to adduce further evidence granted
Appeal dismissed
Directions made for the filing of written submissions as to costs
REPORTABLE
Introduction
This is an appeal by the husband against an order for property settlement made by Lawrie J on 30 January 2003. The effect of her Honour’s order was to divide the assets of the parties (which were situated in Australia and which were found by her Honour and agreed before us to have a value of $227,377) in the proportions of 80% to the wife and 20% to the husband.
The appeal was heard by us on 26 June 2003. At the conclusion of the hearing of the appeal we reserved our decision.
On 4 August 2003, while our decision was still reserved, the wife filed an application seeking orders that:
· “the handing down of the Reserved Judgment in the Appeal be stayed”; and
· “the wife be granted leave to re-open her case and pursuant to section 93(A)(2) ‘call in’ further evidence.” (The reference to s 93(A)(2) is to s 93A(2) of the Family Law Act 1975 (“the Act”).)
In support of her application the wife filed an affidavit (sworn 4 August 2003) in which she stated that the evidence, which she wished to put before the Full Court on a re-opening of a hearing of the appeal, was to the effect that on 31 July 2003 the husband’s mother had died in the United Kingdom.
On 15 September 2003 Finn J made directions by consent providing a timetable for the filing of written submission by both parties in relation to the wife’s application for the hearing of the appeal to be re-opened.
Written submissions were then filed by both parties, although not strictly in accord with the agreed timetable contained in the directions made on 15 September 2003. However, no issue has been raised concerning the delays in the filing of the written submissions.
The position taken by each party in relation to the wife’s application to re-open the hearing in order to adduce the evidence of the death of the husband’s mother, and in relation to the effect of that evidence on the outcome of the appeal, can be most conveniently considered once we have examined the content of Lawrie J’s reasons for judgment and also outlined the issues raised on the appeal.
The judgment of the trial Judge
Her Honour began her ex tempore judgment by recording that the wife (born 3 December 1943) and the husband (born 5 May 1944) had begun living together in 1966 and had married in England in February 1967, moving to Australia in the same year.
Her Honour also recorded that the parties have three children, all of whom are now adults, and that they had finally separated in August 2001 when the husband returned to the United Kingdom where he had been “principally resident” ever since.
Having commented that there was “little disagreement as to the assets in Australia”, her Honour then identified those assets in the following way:
· the former matrimonial home at Taree (occupied by the wife since separation) – agreed value $220,000;
· the husband’s car – agreed value of $9,000;
· savings taken by the husband to be “notionally added back” – agreed at $1,000;
· the wife’s credit union account of $4,500;
· furniture and furnishings in the home worth $2,440; and
· a credit balance of $9,563 on a St George line of credit.
Her Honour then found the value of the net assets (in Australia) to be $227,377. Although the total value of the assets listed in the last paragraph exceeds the figure of $227,377, we understood that both parties accepted this figure and wanted us to proceed on the basis that this was the value of the parties’ Australian assets.
Her Honour then observed (paragraph 4) that there was “also a question of whether the husband has assets in the United Kingdom”, and she went on to explain (with reference to various authorities) that “each of the parties in this jurisdiction has an obligation to fully disclose their financial affairs, both to the other party and to the Court.”
Her Honour then repeated the question, which she now termed a “central question” in the case, being “whether or not the husband had resources, or indeed property, in the United Kingdom”, and she went on to observe:
6.... It is not suggested if he has that they have come other than through the gift of his mother. There is no suggestion that he has for instance been taking funds out of Australia and secreting them in the United Kingdom. But he says that the reason he has been able to live in the United Kingdom without any earnings is because his mother, Mrs Freda Margaret Watkins, has been giving him the sum of £100 per week as a gift.
Her Honour then referred to certain documentary evidence (being in the nature of bank statements) which was before her, and also to the fact that there was no evidence before her from the husband’s mother or any other witness explaining those documents, saying:
7.His statements of financial circumstances have not fully and frankly disclosed even his own account of how he has been supporting himself. Documents that were tendered as Exhibit B in the wife’s case, indicate that the husband has been the beneficiary of an account which contained at least £53,288 in 1998, and which had as at September 2001, (that is a month after he went to the United Kingdom), the sum of £34,382 and 15p. This was account number 0475769724, a three-year fixed-rate bond account in which the customer name is given as follows:
"Mrs Freda Margaret Watkins, Account Role First Trustee; Mr Stanley J Watkins, First Beneficiary"
on a document which issued on 1 October 2001, that is after the husband had taken up residence in the United Kingdom following the separation.
8.That is not the only document that suggests that the husband has some sort of interest in funds in the United Kingdom. There is also another account; it is in the name Mrs Freda M Watkins, re Mr Stanley J Watkins, being account number 0436202091. That was initially a two-year fixed-bond account, it appears, and on 1 September 2002 - the copy of the accounts bears a notation in handwriting:
"Three-year fixed rate bond 1st of the 9th 2002".
9.There was no evidence from Mrs Freda M Watkins, though we are told that she is, although in a nursing home, fully able to manage her own affairs. The lack of disclosure by the husband of those accounts and the interest in those accounts in his financial statement filed on 18 January 2002, adds support in my view for interpreting the account where he is shown as the first beneficiary and his mother as the first trustee as being that he has a beneficial interest in that money, there having been no other evidence produced by the other witness who could have indicated that it was otherwise.
10.Exhibit E, which was tendered by the husband, is in the sole name of Mrs Freda Margaret Watkins. That account was opened in September 2002. It contains £155,086 and 34p, as at 30 December 2002. The appointment for the settling of the listing for trial was on 6 July 2002. The husband's evidence is that the two accounts, that is exhibit A where he is referred to as "Re: Mr Stanley J Watkins" on the account held by his mother and the account in exhibit B where (sic) is more explicitly described as "First Beneficiary - First Trustee", were amalgamated to form the account which is in exhibit E. If that is so, then somebody would appear to have had to close the account in the passbook, that being exhibit A, prematurely because it was not due to end until September 2005.
Her Honour then reached the conclusion that the husband had “an interest in those funds” – being presumably the funds in the United Kingdom bank accounts – saying:
11.All of those matters persuade me to an actual persuasion that the husband has an interest in those funds. As I say, that comes about through the good offices of his mother and for no other reason. But nonetheless, I am satisfied he does have an interest in those funds. That is consistent with the fact that he has received what he describes as a gift from his mother, of £100 per week, which is what he is living on, combined with the provision by his present partner of accommodation in a home which is owned by her. They are able to enjoy a comfortable lifestyle which involves some travel, without it being necessary for either of them to engage in employment.
Next her Honour considered the contributions of the parties and concluded that they should be regarded as equal. As no issue was raised before us concerning her Honour’s assessment of contributions, it is unnecessary to examine the reasons for her conclusion of equality of contribution.
Then, turning to the matters contained in s 75(2) of the Act, her Honour stated that she saw the relevant matters as being:
14.… the income, property and financial resources of each of the parties, and the physical and mental capacity of each of them for appropriate gainful employment. …
She then went on to say:
14.… I am satisfied that the husband does have either property or at the very least a financial source (sic) in terms of his entitlement to the funds in the United Kingdom. The funds are on a very significant scale, given the modest nature of the pool of £155 - I think it would have to be at least $465,000 Australian, - I am just tripling it - which is more than double the total pool. So it is a very significant matter.
Finally, in considering what would be a just and equitable outcome in this case, her Honour concluded:
15.… This is a very modest pool and the financial resources are very significant. The property basically consists of the home, the furniture in the home, a little in the way of funds and the wife in addition also has a financial resource of about $20,000 worth of superannuation. It is put on behalf of the wife, that the adjustment should be such that the wife is able to retain the former matrimonial home. But effectively she would also be retaining the furniture and furnishings as I suspect the husband does not really foresee an auction of the contents of the home.
16.Given the disproportion, I think there should be an adjustment of 30 per cent to take account of the husband's resources and accordingly that the assets should be divided on the basis of 80 per cent to the wife and 20 per cent to the husband.
Her Honour then made orders in accordance with a draft submitted by the legal representatives of the parties. The exact terms of her order were:
1.That pursuant to Section 79 of the Family Law Act and by way of property settlement the wife pay to the husband the sum of $35,500.00 within two months of the date of these orders.
2.That upon compliance with Order 1 the husband and the wife do all such acts and execute all such documents as are necessary to transfer the husband’s right title and interest in the property at 5 Wentworth Street, Taree to the wife.
3.That bar the Hyundai motor vehicle the husband transfer all his right title and interest in all other assets to the wife.
The husband’s grounds of appeal
The essence of the husband’s appeal (as originally argued) was the treatment by the trial Judge (in paragraphs 11 and 14 of her judgment) of the capital sum of approximately £155,000 in the United Kingdom bank account or accounts, as a fund in which the husband had “an interest”, or as “property or at the very least a financial source (sic)” of the husband. (It is to be observed that the husband admitted to receiving the interest earned on that capital sum, and he accepted that it should be taken into account in the property settlement proceedings as his income or resource.)
As is explained in the written outline of argument of Counsel for the husband (submitted for the hearing of the appeal), that latter finding (being, that the husband has “either property or at the very least a financial source (sic) in terms of his entitlement to the funds in the United Kingdom”) is an error because it “was informed by inferences from the evidence which … were not open … and/or were erroneous … in particular findings made in respect of exhibits ‘A’, ‘B’ and ‘E’.” It is to this alleged error that grounds 3, 4 and 5 of the husband’s grounds of appeal are directed:
3.The learned trial Judge erred in law in finding that a capital sum belonging to and standing to the credit o (sic) the husband’s mother was an amount in which the husband “had an actual interest and/or was a financial resource of the husband”.
4.The learned trial Judge’s finding that a capital sum belonging and standing to the credit of the husband’s mother was an amount in which the husband “had an actual interest and/or was a financial resource of the husband”, was erroneous in that it:
4.1was contrary to the evidence and the weight of the evidence; and/or
4.2was based on the taking into account of irrelevant considerations; and/or
4.3 was based on the failure to take account of relevant considerations.
5. The learned trial judge erred in finding that:
5.1 there were any moneys “due to mature in December 2005” and/or
5.2 that Exhibit “B” in the proceedings was evidence of any such fact.
A second limb, so to speak, of the husband’s appeal was that the alleged erroneous finding (which is the subject of grounds 3, 4 and 5) appeared also “to have been informed by a finding that the husband had failed to disclose relevant evidence, including relevant documentation, pertaining to the account in his mother’s name.” This complaint is the subject of grounds 6 and 7:
6.The learned trial judge erred in finding that the husband had failed to disclose documentation pertaining to the account in his mother’s name in that:
6.1 there was no evidentiary basis for any such finding;
6.2 it was in fact not the case.
7.The learned trial judge’s apparent finding that the husband had failed to disclose documentation and/or information so as to invoke the principles enunciated in Black v Kellner and Weir;
7.1was [an] error of law in that such finding involved a misapplication of the principles in those cases;
7.2was an error of fact in that such finding was contrary to the evidence and the weight of the evidence; and
7.3was an error of fact in that such finding involved a misapprehension of the wife’s case;
It was also the husband’s case on appeal that the finding that the capital fund in the United Kingdom was an asset or resource of the husband and the finding that the husband had not made proper disclosure, were never sought as part of the wife’s case before the trial Judge, and thus the husband had never been afforded a proper opportunity to respond to, or produce evidence in respect of, those matters. It is to this complaint that grounds 9 and 10 are directed:
9.In making findings that, in essence, the husband was fraudulent, the learned trial Judge failed to accord to the husband natural justice.
10.In making findings that, in essence, the husband was fraudulent, the learned trial Judge erred in law in that Her Honour:
10.1 misapplied the “Rule in Jones v Dunkel”;
10.2misapplied the principles in White v Tulloch and White as to the necessity and/or desirability of receiving evidence from strangers to the action;
10.3wrongly found that there was sufficient evidence to satisfy the onus prescribed by section 140(2) of the Evidence Act 1995.
Finally, it was the husband’s case before us that “whether or not the husband had ‘an interest in’ his mother’s money”, an adjustment of 30% in favour of the wife pursuant to s 79(4)(e) (that is, “the s 75(2) factors”) was outside the bounds of a reasonable exercise of discretion and is plainly unjust. According to the written submissions of Counsel for the husband, this assertion forms the basis of grounds 1 and 2. It also appears to form the basis of ground 8:
1.The learned trial Judge’s ultimate finding that the property of the parties be adjusted in the proportion 80% to the wife and 20% to the husband fell outside a reasonable exercise of discretion and was unreasonable or plainly unjust.
2.The learned trial Judge’s finding that there should be an adjustment pursuant to section 79(4)(e) of 30% in favour of the wife fell outside a reasonable exercise of discretion and was unreasonable or plainly unjust.
…
8.Despite referring to the requirement prescribed by section 79(4)(e), the learned trial Judge erred by failing to make any findings in respect of same (save for Her Honour’s erroneous ultimate finding that money belonging to the husband’s mother was money in which the husband “had an actual interest and/or was a financial resource of the husband”)
At the hearing of the appeal, it was clearly the position of Counsel for the husband that in the event that we found substance in any ground of appeal, then we should re-exercise the discretion. The position of Counsel for the wife was not so clear, but we understood his preferred position to be that there should be a re-trial. In the event that we were to re-exercise the discretion, neither Counsel at that time sought the opportunity to adduce further evidence (pursuant to the principles enunciated by the High Court in Allesch v Maunz (2000) 203 CLR 172).
The wife’s application to re-open the hearing of the appeal
It is appropriate at this point that we return to the wife’s application made subsequent to the hearing of the appeal that that hearing be re-opened to enable her to adduce further evidence, being the evidence of the death of the husband’s mother on 31 July 2003. As mentioned earlier, written submissions have been made on behalf of each party in relation to that application.
It was conceded by Counsel for the husband in paragraph 14 of his written submissions in relation to the wife’s application, that at least for the purposes of this appeal, the Full Court of this Court has the power to re-open proceedings after hearing and before judgment. Accordingly, we need not, at least in this case, concern ourselves further with the issue of the existence of the power to re-open the hearing of an appeal (prior to the delivery of the judgment).
Having conceded for the purposes of the present appeal the existence of the power to re-open the hearing of the appeal (prior to the delivery of the judgment), Counsel for the husband then turned to consider in paragraphs 15 to 30 of his written submissions, the principles which govern the exercise of the power to re-open. It appears to us from a reading particularly of paragraphs 16 and 22 of his submissions, that the principles which Counsel contends should govern the exercise of the power to re-open, are very similar to, if not the same as, those which would govern the exercise of the discretion to admit further evidence on the appeal.
Counsel for the wife submitted in paragraph 24 of his written submissions that the application to re-open needs to be considered in light of:
· s 93A(2) of the Act, which in Counsel’s words, “allows, on (sic) the exercise of a discretion by the Full Court ‘further evidence’ of facts on appeal” to be received, and
· the “independent” discretion which the Full Court can exercise pursuant to s 94(2) if the appeal is upheld, with such discretion being exercised “by reference to the circumstances as they exist at the time of the appeal.”
Thus, at least for present purposes, we propose to proceed on the basis that the principles which govern the exercise of the power to re-open the hearing of an appeal for the purposes of admitting further evidence, are similar to (if indeed not the same as) those which would govern the power to admit further evidence on the hearing of the appeal. Ultimately however we will not need to concern ourselves with the principles governing the power to re-open the hearing of the appeal (as opposed to the power or discretion to receive further evidence), for the reason that Counsel for the husband (in paragraph 22 of his submissions) conceded that the better view is “that the new facts are sufficient, in the circumstances of this case, to found a re-opening.”
As mentioned above, Counsel for the wife has in effect submitted (in paragraph 24 of his written submissions) that by virtue of ss 93A(2) and 94(2), further evidence can be admitted on the hearing of an appeal (of the present type) for one or both of two purposes, being in summary, to support (or indeed to oppose) the appeal and/or to provide updating evidence on a re-exercise of the discretion by the Full Court.
The operation of both ss 93A(2) and 94(2) was explained by the High Court majority (Gaudron, McHugh, Gummow and Hayne JJ) in Allesch v Maunz in the following way (emphasis added):
20The nature of the appeal to the Full Court is to be discerned from s 93A(2) of the Family Law Act 1975 (Cth) (“the Act”), which was considered by this Court in CDJ v VAJ ((1998) 197 CLR 172) and in DJL v Central Authority ((2000) 74 ALJR 706; 170 ALR 659) and, also, from s 94 of the Act. Section 93A(2) provides that, subject to s 96, which is concerned with appeals from courts of summary jurisdiction:
“... in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and, in its discretion, to receive further evidence upon questions of fact, which evidence may be given by affidavit, by oral examination before the Family Court or a Judge or in such other manner as the Family Court may direct.”
21Section 94(1)(a)(i) provides that, subject to s 94AA, which is not presently relevant, an appeal lies to a Full Court of the Family Court from “a decree (by s 4(1) of the Act, “decree” is defined to mean “decree, judgment or order, and [to include] a decree nisi and an order dismissing an application or refusing to make a decree or order.”) of the Family Court, constituted otherwise than as a Full Court, exercising original or appellate jurisdiction ... under [the] Act”. And s 94(2) provides:
“Upon such an appeal, the Full Court may affirm, reverse or vary the decree or decision the subject of the appeal and may make such decree or decision as, in the opinion of the court, ought to have been made in the first instance, or may, if it considers appropriate, order a re-hearing, on such terms and conditions, if any, as it considers appropriate.”
22The majority in CDJ v VAJ proceeded on the basis that an appeal under s 94(1) of the Act is an appeal by way of rehearing ((1998) 197 CLR 172 at 201-202 [111] per McHugh, Gummow and Callinan JJ). That is undoubtedly correct. So much is to be discerned from the terms of s 93A(2), in particular its conferral of power to receive further evidence (see Re Coldham; Ex parteBrideson [No 2] (1990) 170 CLR 267 at 272, 274 per Deane, Gaudron and McHugh JJ; CDJ v VAJ (1998) 197 CLR 172 at 185 [52] per Gaudron J, 200-201 [107] per McHugh, Gummow and Callinan JJ). That is not a power possessed by appellate courts whose jurisdiction is confined to appeals in the strict sense and whose function it is simply to determine whether the decision under appeal was or was not erroneous on the evidence and the law as it stood when the original decision was given (see Mickelberg v The Queen (1989) 167 CLR 259; Eastman v The Queen (2000) 74 ALJR 915; 172 ALR 39). And an appeal under s 94(1) is, as s 93A(2) indicates, to be distinguished from an appeal under s 96 which is a hearing de novo (section 96(4) of the Act expressly provides that an appeal from a court of summary jurisdiction is to be a hearing de novo, as does s 96(6) in the case of appeals referred to the Full Court under s 96(5)).
23For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error (see CDJ v VAJ (1998) 197 CLR 172 at 201-202 [111] per McHugh, Gummow and Callinan JJ), whereas, in the latter case, those powers may be exercised regardless of error. …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 can only 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 (see Werribee Council v Kerr (1928) 42 CLR 1 at 20-21 per Isaacs J; Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 107 per Dixon J; Mickelberg v The Queen (1989) 167 CLR 259 at 278 per Deane J, 298 per Toohey and Gaudron JJ; Re Coldham; Ex parteBrideson [No 2] (1990) 170 CLR 267; Quilter v Mapleson (1882) 9 QBD 672 at 676 per Jessel MR; Ponnamma v Arumogam [1905] AC 383 at 390 per Lord Davey, delivering the judgment of the Privy Council).
…
30Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act "order a re-hearing, on such terms and conditions, if any, as it considers appropriate." And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.
31If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances. …
It seems clear from the structure and content of the written submissions of Counsel for the wife, that she would seek to have the further evidence admitted both on the appeal in order to support the trial Judge’s order, and in the event that the appeal were nevertheless to succeed, then on a re-exercise of the discretion by the Full Court.
In support of the application to have the further evidence admitted on the appeal in order to support the order made by the trial Judge, Counsel for the wife relied on various statements (which we will emphasise) in the following passages from the judgment of the High Court majority (McHugh, Gummow and Callinan JJ) in CDJ v VAJ (1998) 197 CLR 172, paragraphs 104 to 114:
The scope of s 93A(2)
104.In the exercise of the discretion conferred by a power such as s 93A(2), the critical factor is the subject matter of the proceedings with which the appeal is concerned. This is because the purpose of the power to admit further evidence is to ensure that the proceedings do not miscarry. Tests such as those stated in Wollongong Corporation based on the need for finality in litigation are therefore not necessarily applicable to cases in which the interests of third parties, such as children, are at stake (See R v Watt; Ex parte Slade [1912] VLR 225 at 239, 245; see also Re Australasian Meat Industry Employees' Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491 at 494; Totterdell v Nelson (1990) 26 FCR 523 at 529; Makhoul v Barnes (1995) 60 FCR 572 at 576-577), although factors such as finality, discoverability of the evidence and its likely effect on the orders made are usually relevant to the exercise of the discretion. In an application at common law to admit further evidence, the court applies principles, bordering on fixed rules. In an application under s 93A(2) and similar provisions, the Full Court or Court of Appeal weighs factors, although it may of course develop guidelines for weighing those factors and exercising the discretion.
…
107.The discretion conferred by s 93A(2) to receive further evidence on appeal is not expressed to be limited in any way. In particular, the sub-section contains no requirement, comparable with that often found in statutes conferring power on an appellate court to receive further evidence, that "special grounds" or "special leave" be shown before the evidence can be adduced (See for example Supreme Court Act 1970 (NSW), ss 75A (8), 75A(9); Rules of the Supreme Court (WA), O 63 r 10(1); Supreme Court Civil Procedure Act 1932 (Tas), s 48(3)). Nor, in contrast to the common law position, must the motion to receive the evidence be designed to set aside the verdict at first instance. Nothing in s 93A(2), for example, prevents the respondent to the appeal from bringing a motion to adduce further evidence to support the orders made.
…
109.One consideration in construing s 93A(2) is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
…
111.Still another consideration is that the discretion is given to an appellate court hearing an appeal against an order made in the exercise of original jurisdiction. No doubt it is true that, because the appeal is by way of rehearing, the Full Court's jurisdiction is neither purely appellate nor purely original (Ex parte Australian Sporting Club Ltd; Re Dash (1947) 47 SR(NSW) 283). In Attorney-General v Sillem ((1864) 10 HLC 704 [11 ER 1200]), Lord Westbury LC pointed out that "[a]n appeal is the right of entering a superior Court, and invoking its aid and interposition to redress the error of the Court below." ((1864) 10 HLC 704 at 724 [11 ER 1200 at 1209]) Appellate jurisdiction in the strict sense is jurisdiction to determine whether the order of the court below was correct on the evidence and in accordance with the law then applicable (Ponnamma v Arumogam [1905] AC 383 at 388; Victorian Stevedoring (1931) 46 CLR 73 at 109). In contrast, the Full Court of the Family Court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of hearing the appeal (Victorian Stevedoring (1931) 46 CLR 73 at 107). Speaking of the similar jurisdiction of the English Court of Appeal, the Master of the Rolls, Sir George Jessel, said that the appeal is a "trial over again, on the evidence used in the Court below; but there is a special power to receive further evidence." (In re Chennell; Jones v Chennell (1878) 8 Ch D 492 at 505) Nevertheless, it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
…
114.No doubt the Full Court will readily admit further evidence which is not in dispute and which the Court is able to evaluate and take into account in considering the appeal without the necessity to have the proceedings re-heard. Further evidence of this kind is particularly likely to be admitted where the evidence relates to events occurring after trial. In the case of undisputed evidence which the Full Court can evaluate as part of the evidence in the appeal, the discretion to admit the evidence may even be properly exercised without the Full Court considering what effect it would have had on the trial judge's decision. In that context, the likely effect of the further evidence on the Full Court's view of the evidence before the trial judge is the important consideration. Where there is no need for a new trial or extensive taking of evidence, other discretionary factors such as the availability of the evidence at the trial and the need for finality of litigation are likely to be more relevant in the exercise of the discretion than the effect that the evidence would have had at the trial.
Against the background of these statements by the High Court, in particular the statements in paragraphs 107 and 109 to the effect that a respondent to an appeal can adduce further evidence to buttress the findings or support the orders made by a trial Judge, Counsel for the wife submitted:
27.Such “further evidence supports the orders made” and “buttress(es) the findings already made” for these reasons:-
27.1At the trial the learned trial Judge found the parties net assets at $227,377.00. …
27.2The learned trial Judge finds that the husband has an interest either as “property” or a “financial source” (sic) … in funds in the United Kingdom, essentially bank accounts relative to the husband’s mother Freda Margaret Watkins, of approximately £155,000.00 or “at least” $465,000.00 AUD. …
27.3And the learned trial Judge writes
· the percentage adjustment for s.75(2) factors depends on ‘what the pool is’. …
· “(t)his is a very modest pool and the financial resources are very significant”. …
adjusts the contribution based entitlement found at 50% each … to an adjustment to the wife of 30%. Therefore husband 20% and wife 80%. …
27.4This saw the parties receiving from these net assets:-
Husband approximately
$45,474.00
Wife approximately
$181,903.00 net
27.5If the husband’s “inheritance monies” are added in as an asset the net assets and liabilities are:-
As found by the learned trial Judge
$227,377.00 net
Plus
$465,000.00
$692,377.00
Of which the wife receives, pursuant to the learned trial Judge’s orders $181,903.00 net or approximately 26% of these amended net assets and liabilities.
27.6Or alternatively such “inheritance monies” are dealt with as a Section 75(2) factor, …
27.7Either way whether such “inheritance monies” are added in as an asset or dealt with as a section 75(2) factor they “support the orders made” or “buttress the findings already made” of the learned trial Judge, that there should be a “significant” section 75(2) adjustment to the wife due to
· the very modest pool of assets and
· the husband’s interest in “financial resources” that “are very significant”. …
27.8Such “further evidence” ensures that the proceedings did not miscarry.
We would say at this point that we are of the view that there is considerable force in the submissions put on behalf of the wife for the hearing of the appeal to be re-opened in order that the evidence of the death of the husband’s mother can be admitted to support the orders made by the trial Judge.
We take this view against the background of the following matters of fact which are asserted in the submissions of Counsel for the wife and which do not appear to be contested in any way in the submissions of Counsel for the husband (which were prepared in response to the submissions on behalf of the wife):
14.On 30 July 2003 the husband’s mother Freda Margaret Watkins dies.
15.Thereafter the wife promptly sought certain information from the husband as to his mother’s estate. As at the date of settling these written submissions, Sunday 12 October 2003, all of such information has not been provided by the husband to the wife.
16.The husband and the wife agree on the following facts:-
16.1That on 30 July 2003 the husband’s mother Freda Margaret Watkins died.
16.2That on or about 1 August 2003 the wife first became aware of this fact.
16.3That on 4 August 2003 the wife filed an application to re-open her case and pursuant to Section 93A(2) to call “further evidence” of facts on appeal.
17.In the absence of information to the contrary from the husband, as to the estate of the late Freda Margaret Watkins deceased, the position would appear to be
·The husband is “the most likely person to inherit” her estate. Appeal Book page 153 line 25 (see also Appeal Book page 163 line 6).
·That her estate has a value, being monies on account, of approximately £155,000. Appeal Book page 153 lines 10 to 15 (see also Appeal Book page 140 at paragraph 9).
·That on receipt the husband would utilise such monies to support himself. Appeal Book page 162 line 12.
18.It is this amount of £155,000 that the learned trial Judge utilised to arrive at the figure in the judgment of £155,000 or $465,000.00. …
19.Again, in the absence of information to the contrary from the husband, the amount $465,000.00 shall be utilised in these written submissions.
It is important to note the actual content of the passages from the evidence of the husband referred to by Counsel for the wife in paragraph 17 of the passage from his written submissions just quoted. This evidence is set out below in the order used by Counsel for the wife in paragraph 17:
[Counsel for the wife:] Sorry, you’re the only child. So as you understand it, you’re the most likely person to inherit that money from your mother?--- [Husband:] Yes. (Transcript p 9, at Appeal Book p 153 line 25)
…
[Counsel for the wife:] Right. But I take it when you left Guninnings you were aware that you were going to be a beneficiary of both your mother’s and your aunt’s estate?--- [Husband:] Not my aunts. I knew I would become beneficiary of my mother’s because I’m the only child. (Transcript p 19, at Appeal Book p 163 line 6)
…
[Counsel for the wife:] Now, you say in your latest affidavit, that’s your affidavit of 23 January this year, that you understand your mother’s estate has a value of 155,000 pounds?--- [Husband:] that’s correct.
I take it you know that because you’ve discussed that with your mother?---I know that because I’ve seen the property my mother’s got, yes.
And I take it the whole of that estate really comprises moneys that are in a bank account?---That’s correct. (Transcript p 9, at Appeal Book p 153 lines 10-15).
…
9.I…depose that my Mother’s estate is valued at approximately 155 000 pounds, and my Aunts (sic) estate approximately 300 000 pounds. (Affidavit of the husband filed 24 January 2003, at Appeal Book p 140)
…
[Counsel for the wife:] And I take it when you inherit either of those moneys, that is either the money from your mother’s estate or the moneys from your aunt’s estate you would utilise those moneys to support yourself?--- [Husband:] That’s correct. (Transcript p 18, at Appeal Book p 162 line 12)
As we have already said, Counsel for the husband did not in his written submissions take issue with any of the factual assertions contained in paragraphs 14 to 19 of the submissions of Counsel for the wife. Indeed, in paragraph 29 of his submissions (which we will later quote in full) he described the evidence now sought to be adduced by the wife in the following way:
29.… the proposed new evidence … is, in essence, simply that the prospective inheritance evident both at trial and at the hearing of the appeal, has crystallised.
Further, the impact of the death of the husband’s mother on the issues between the husband and the wife is acknowledged in the following paragraphs in the submissions of Counsel for the husband:
18.Submissions were made at the hearing of the appeal (and at the trial) that the mother’s money (as it then was) was not under the control of the husband (which submissions were central to the errors said to have been made by the trial judge) and, further, was not a financial resource of the husband. The foundation – or part of the foundation – for the latter submission was that the husband owed obligations as an attorney and could not deal with the money and that (as the trial judge found) its relevance as a prospective inheritance could and should be ignored.
19.The death of the mother, it must be accepted, changes fundamentally the basis of those submissions.
20.It is also accepted that the mother’s death is an exceptional circumstance; was not anticipated or in contemplation of either of the parties or the court and the amount of the inheritance is substantial by reference to the value of the pool.
We would have to say, however, that we have some difficulty in understanding the exact position being taken by Counsel for the husband in relation at least to the application to adduce further evidence. Out of fairness to Counsel, we will therefore set out what appear to be the key paragraphs in his submissions, before indicating our understanding of his position:
21.It is not accepted, however, that the evidence of the crystallisation of the moneys erstwhile belonging to the mother would “most probably affect the result” or “produce a result significantly more favourable” to the wife. Nor is it accepted that the failure to reopen and admit the evidence would necessarily result in injustice to the wife.
22.Those matters, if accepted, could lead to the reopening being refused. However, it probably has to be accepted that the better view is that the new facts are sufficient, in the circumstances of this case, to found a reopening (see eg: CDJ v VAJ (1998) 197 CLR 172 @ 203) and that the matters just mentioned are relevant to the similar, although distinct, issue of what should occur if the proceedings are reopened and the evidence admitted.
23.This is not a case (as in Wall) where neither the prospect of inheritance nor the amount of any prospective inheritance was referred to at trial and emerged only later. That is, reopening is not sought to introduce as fresh evidence an entirely new factual area. In this case, the prospective inheritance and its amount was in evidence before the trial judge and this court on the hearing of the appeal and it was open to this court (contrary to the submissions on behalf of the husband) to take same into account as a s.75(2) factor.
24.Whilst it is obviously acknowledged that the monies are now property as distinct from a resource, it is submitted that, nevertheless, this court would treat the monies in a similar way to that which they would have been treated were it determined that they remained a resource. Put another way, the inheritance “should not be brought into account” (to use the words of the Full court in Bonnici (1992) FLC 92-272 at 79,020); this court would not add same to the pool of assets and re-determine contributions and the other required steps in the light of that new pool but would rather treat the inheritance as a factor under s.75(2).
25.In that respect, the now crystallised inheritance has to be seen against a factual background where:
·The wife has not ever (and does not appear now) to allege she made any contribution to that inheritance. (The parties lived in Australia; the husband’s mother lived in England);
·The inheritance was received some three years after separation;
·The inheritance consisted of monies in a bank account which the husband managed on his mother’s behalf in the approximately two years leading up to his mother’s death;
·The inheritance was received after the conclusion of the trial;
·The inheritance was received after the conclusion of the appeal hearing.
26.It is noteworthy that the Full Court in Wall specifically adopted such a methodology by reference to factors such as those existing in the present case. The present case presents stronger reasons for adopting that approach because, here, the prospective inheritance was known to both the trial Judge and this Court and its then possible impact as a s.75(2) factor was very much alive. …
27.Submissions were made at the appeal as to the impact of the prospective inheritance on any re-exercise of the discretion. A specific ground of appeal related to the trial Judge’s (submitted erroneous) s.75(2) adjustment. The husband contended in written submissions made on his behalf at the appeal:
“Whether or not the husband had an interest in his mother’s money, an adjustment of 30% in favour of the wife pursuant to s.79(4)(e) is outside the bounds of a reasonable exercise of discretion and is plainly unjust…” [emphasis added] (para 21, appellant husband’s written outline of submissions).
28.Although it was submitted at the trial (and appeal) that the trial Judge was correct to exclude the prospective inheritance as a relevant matter in the circumstances of the case, it was nevertheless submitted on appeal that:
“An adjustment of 30% (ie a disparity of more than half the pool after 34 years of cohabitation) was outside the bounds of a reasonable exercise of discretion even if the trial judge was correct to hold that the monies standing to the credit of the husband’s mother was a financial resource.” [emphasis added]
29.In those circumstances, the proposed new evidence – which is, in essence, simply that the prospective inheritance evident both at trial and the hearing of this appeal, has crystallised – adds nothing to the wife’s case nor the arguments advanced by the parties at the time of the hearing of the appeal. At that time, the debate was whether the money was a resource and, if so, its impact pursuant to s. 75(2). Now, if there is to be a reopening and new evidence, the issue is the impact property of that amount might have pursuant to s. 75(2).
30.The wife makes out no case that an inability to adduce further evidence of the fact of death and the crystallisation of a known amount would cause injustice. The fact that a new set of calculations can be done – as in the wife’s outline of submissions – based on an increased pool and different percentage entitlements says nothing about injustice.
Admission of the New Evidence
31.If, contrary to the submissions made above, this Court determines that, having reopened the proceedings, the new evidence will be admitted, it is submitted that:
(a)This court ought nevertheless re-exercise the s.79 discretion for itself rather than remitting the matter for re-hearing; and
(b)In re-exercising the discretion the considerations relevant pursuant to s. 75(2) remain those submitted at the conclusion of oral argument before this Full Court.
As we have said, we have some difficulty understanding the exact position of Counsel for the husband. However, it would seem to be:
·that “the new facts” are sufficient “to found a re-opening” (paragraph 22);
·that the wife has not established that any injustice will be suffered by her if the evidence of the death and the consequent crystallisation of a known amount were not to be admitted as further evidence (presumably in opposition to the appeal and in support of the trial judge’s order) (paragraph 30);
·that if the appeal is to be allowed (the further evidence having not been admitted to support the trial Judge’s order), this Court should re-exercise the discretion rather than remit the matter for re-hearing and (it would seem) should do so without regard to the new evidence (paragraph 31).
Conclusion
We are able to say unequivocally that if the further evidence of the death of the husband’s mother (with its apparently agreed consequence of the receipt by the husband of a capital sum in the order of £150,000) was not before us, we would have found sufficient substance in the grounds of appeal which assert that the trial Judge erred in finding that the capital fund in the United Kingdom was either the property or a financial resource of the husband, to warrant our interference with her Honour’s decision. We say this for the following reasons.
Before us Counsel for the wife conceded that it had never been part of the wife’s case before the trial Judge that the capital fund in the United Kingdom should be regarded as an asset or financial resource of the husband. Rather, the wife’s case had been limited to the assertion that it was more likely than not that the fund would come to the husband by way of an inheritance, and that that was a matter which should be taken into account in the wife’s favour in the determination of the proceedings.
However, it was submitted by Counsel for the wife that this misunderstanding by the trial Judge of the case before her was not of sufficient significance to warrant the interference of this Court with her decision. In our view the difficulty with that submission is that it is clear from the following passages of the transcript that her Honour had during the trial rejected the notion that any reliance could be placed in the determination of this case on the husband’s expectation of an inheritance (Transcript p 46):
HER HONOUR: … if this was a pure expectation under a will, I would see it as being completely irrelevant, because the mother can wake up tomorrow and say “I’m going to leave it all to the RSPCA.”
In these circumstances, it would have been extremely unfair to the husband in our opinion, to have allowed the decision to stand, based as it was on a finding that the fund in the United Kingdom was either the property or a financial resource of the husband.
It is true that immediately following her rejection of the notion that any reliance could be placed on the husband’s expected inheritance, her Honour herself raised the possibility that the fund in question could be taken into account “as a resource if not actual property.” But at that point, Counsel for the husband drew to her Honour’s attention that these were matters which were not part of the wife’s case and which had not been put to the husband (Transcript p 46-47):
HER HONOUR: … Then it can be taken into account as a resource, if not actual property. Now if someone is shown as being a beneficiary, and that the other person is a trustee for them, to me that’s a little bit further on than being an expectation under a will.
MR MURPHY [Counsel for the husband]: Well you Honour, be that as it may, the evidence is---
HER HONOUR: Well, be that as it may [it] is a pretty important question in this case.
MR MURPHY: Well, it is, I accept that your Honour. However, the evidence, your Honour, is that the Woolwich [Bank], from which your Honour has heard no evidence, put the account in that name for reasons best known to themselves, after discussions with persons best known to themselves, but on the clear evidence, not after any discussions involving my client. Compared to the position which we know as a fact to be true, and that is that when he physically goes to England, and lives in England, an (sic) is, as it were, in the same country as his mother, the first thing that occurs, well the first documentary evidence in respect to what occurs after that, is that the money is held in her name. And, that’s coupled with the fact that however, that when---
HER HONOUR: But that’s all happening after this has been set down for trial.
MR MURPHY: It’s all happening after he’s been to England.
HER HONOUR: And as you said to the – in cross-examination to the wife. That wouldn’t be something that was done with an eye to these proceedings.
MR MURPHY: Well, your Honour, that was never put to my client. That was never put to my client, either by your Honour, or by my learned friend, and that’s why I prefaced all of my submissions in this respect, by saying that it has never been part of my friend’s case, as I apprehended, and my friend has made no submissions in that respect.
This discussion between her Honour and Mr Murphy continued on in a similar vein over a further five pages of transcript. We do not consider it necessary to quote that material. We would only say that it demonstrates that there were significant matters on which the husband was entitled to be heard before the finding was made that the United Kingdom fund constituted either his property or a financial resource for him. In these circumstances, we consider that our interference with her Honour’s decision would have been warranted, that is, of course, in the absence of the admission of the further evidence.
As to the wife’s application to re-open the hearing of the appeal in order to be permitted to adduce the further evidence, we consider that given what was said by Counsel for the husband in paragraph 22 of his written submissions (see paragraph 41 above), that it is appropriate to grant the wife’s application to have the hearing of the appeal re-opened. (Whether there would be any point in allowing the re-opening if we did not propose to admit further evidence, is a matter which we need not decide.)
We are also of the view that we should, for reasons we will shortly explain, exercise our discretion to permit the wife to adduce the further evidence of the death of the husband’s mother for the purposes of supporting the order made by the trial Judge. That the discretion can be exercised in this way and for this purpose is clear from the statements by the High Court majority in CDJ v VAJ (paragraphs 107 and 109), and also from the description by the High Court majority in Allesch v Maunz of the powers of this appellate court:
23.…being exercisable only where the appellant can demonstrate that having regard to all the evidence now before the appellate court the order that is the subject of the appeal is the result of some legal, factual or discretionary error.” (Emphasis added)
If the evidence of the death is admitted, it would follow, apparently as common ground, that the capital fund which the trial Judge had erroneously (in the appellate sense) concluded was the property or the financial resource of the husband, is indeed now the property of the husband. Therefore there would no longer be any substance in any of the grounds of appeal which are directed to that finding by the trial Judge, or to the manner in, or process by, which she arrived at that finding. There would also, in our view, no longer be any substance in any ground of appeal which challenged the “s 75(2)” adjustment of 30% made in the wife’s favour given the current circumstances whereby the husband now has available to him a sum in the order of £155,000 and the total value of the parties’ Australian property is only $227,377 (which the trial Judge had divided 80%-20% in the wife’s favour).
The High Court majority also made it clear in CDJ v VAJ (at paragraph 104) that the purpose of the power to admit further evidence is to ensure that proceedings do not miscarry. We consider that these proceedings could well be said to have miscarried – and indeed that the interests of justice would not be served – if we were to refuse to admit on the appeal the further evidence and then proceed to uphold grounds of appeal directed to a finding of fact, or to an assessment of entitlement, which may have been erroneous when made, but which subsequent events have rendered no longer erroneous.
It should be noted in this regard that Counsel for the husband accepted in paragraph 20 of his written submissions (see paragraph 41 above) that the further evidence concerns “an exceptional circumstance” which has resulted in the husband receiving an inheritance the amount of which “is substantial by reference to the value of the pool”.
While the High Court made it clear in CDJ v VAJ (paragraphs 107 and 109) that a respondent to an appeal may adduce further evidence in order to support the orders made by the trial Judge, we acknowledge that much of the guidance provided by the High Court in that case as to the circumstances in which the discretion to admit further evidence should be exercised, can be read as being directed to the situation where it is the appellant who is seeking to adduce the further evidence to establish or confirm error on the part of the trial Judge. Little guidance is provided concerning the exercise of the discretion in favour of a respondent to an appeal who seeks to adduce further evidence to support the trial Judge’s order or to establish that a finding of the trial Judge is no longer erroneous.
Accordingly, should it be that we are in error in exercising the discretion to admit the further evidence on the application of the respondent for the purposes of upholding the trial Judge’s order, we make it clear that had we refused to admit the further evidence in support of that order and thus found substance in the grounds of appeal, we would nevertheless have admitted the further evidence as updating evidence for purposes of the re-exercise of the discretion. On a re-exercise of the discretion we would have taken the husband’s recently received inheritance into account as a s 75(2) matter and would have then made the same order as the trial Judge. In those circumstances, we would also have dismissed the appeal.
We note that Counsel for the wife in his written submissions urged that if we found substance in any ground of appeal, we should remit the matter for re-hearing rather than re-exercise the discretion. However, as we understand Counsel’s submissions, the wife’s primary position is that we should admit the further evidence to uphold the trial Judge’s order, which is what we have done.
Accordingly, our orders will be:
That the application by the wife to re-open the hearing of the appeal be granted.
That the application by the wife to adduce further evidence (being the evidence contained in her affidavit sworn and filed 4 August 2003) be granted.
That the appeal by the husband against the order of the Honourable Justice Lawrie made on 30 January 2003 be dismissed.
Costs of the appeal and of the application to re-open
At the conclusion of the hearing of the appeal on 26 June 2003, oral submissions were made to us in relation to the costs of the appeal.
However, in their subsequent written submissions in relation to the application to re-open the hearing of the appeal, both Counsel submitted that the costs of the appeal should be the subject of written submissions following the delivery of this judgment.
Accordingly, we will make the following directions for the filing of such submissions:
(4)(a)That each party be at liberty to file and serve any written submissions in relation to the costs of the appeal and the costs of the application to re-open the hearing of the appeal within 28 days of the date hereof.
(b)That each party have a further 28 days in which to file and serve any written submissions in answer to any submissions filed by the other party.
(c)That each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.
I certify that the preceding 61 paragraphs
are a true copy of the reasons for judgment
of this Honourable Full Court
Associate
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15
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