Yarrow & Yarrow
[2022] FedCFamC1A 135
Federal Circuit and Family Court of Australia
(DIVISION 1) APPELLATE JURISDICTION
Yarrow & Yarrow [2022] FedCFamC1A 135
Appeal from: Yarrow & Yarrow [2021] FedCFamC2F 651 Appeal number(s): NAA 22 of 2022 File number(s): HBC 188 of 2020 Judgment of: TREE, WILSON & JARRETT JJ Date of judgment: 1 September 2022 Catchwords: FAMILY LAW – APPEAL – PARENTING – Relocation – Where the mother appeals from orders providing for the children to live with the father in Australia and spend time with her if she relocates overseas – Where the mother sought that she be permitted to relocate to the United Kingdom with the children – Whether the primary judge failed to consider a meaningful relationship – Whether the primary judge failed to consider the parties’ competing proposals – Whether the primary judge erred by requiring compelling reasons to relocate – Adequacy of reasons – Where no appealable error is established – Appeal dismissed.
FAMILY LAW – APPEAL – PROPERTY – Assessment of contributions and matters under s 75(2) of the Family Law Act 1975 (Cth) – Whether the primary judge failed to make an overall assessment of contributions – Whether the primary judge failed to consider matters under s 75(2) of the Act – Whether the primary judge gave adequate reasons – Where her Honour’s reasons with respect to ss 75(2)(b) and (n) were inadequate and thus the reasons as to the overall division were inadequate – Where it is not possible to discern the foundation for the s 75(2) assessment – Appeal allowed in part – Where not every such failure to give adequate reasons will result in remission of the matter for a new trial – Where there is power to remit the matter for the formulation of reasons – Orders set aside – Written submissions on the point to be filed.
Legislation: Family Law Act 1975 (Cth) ss 75, 79
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 36
Federal Court of Australia Act 1976 (Cth) s 28
Cases cited: AMS v AIF (1999) 199 CLR 160; [1999] HCA 26
Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Bolger & Headon (2014) FLC 93-575; [2014] FamCAFC 27
Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264
Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58
Hickey and Hickey (2003) FLC 93-143; [2003] FamCA 395
Holland & Holland (2017) FLC 93-798; [2017] FamCAFC 166
House v The King (1936) 55 CLR 499; [1936] HCA 40
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Lopez v Gold Titan Pty Ltd [2022] FCAFC 117
Marsh & Marsh (2014) FLC 93-576; [2014] FamCAFC 24
Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273; [2004] WASCA 149
North East Equity Pty Ltd v Proud Nominees Pty Ltd (2010) 269 ALR 262; [2010] FCAFC 60
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Willis & Willis [2007] FamCA 819
Zahawi & Rayne [2016] FamCAFC 90
Number of paragraphs: 71 Date of hearing: 3 June 2022 Place: Melbourne (via video link) Counsel for the Appellant: Dr Smith Solicitor for the Appellant: Taussig Cherrie Fildes Lawyers Counsel for the Respondent: Ms Mooney SC Solicitor for the Respondent: Wallace Wilkinson & Webster Counsel for the Independent Children's Lawyer: Ms Ryan ORDERS
NAA 22 of 2022
HBC 188 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS YARROW
Appellant
AND: MR YARROW
Respondent
INDEPENDENT CHILDREN'S LAWYER
order made by:
TREE, WILSON & JARRETT JJ
DATE OF ORDER:
1 September 2022
THE COURT ORDERS THAT:
1.The appeal is allowed in part.
2.Orders 29–38 made by the Federal Circuit and Family Court of Australia (Division 2) on 24 December 2021 are set aside.
3.No later than 4.00 pm on 16 September 2022 any party who wishes to do so, must make file and serve submissions in relation to whether the matter should be remitted to the primary judge for the formulation of reasons relating to s 75(2)(b) and (n) of the Family Law Act 1975 (Cth), and for further consideration of the making of orders under s 79 of that Act, or whether it should be generally remitted to a judge other than the primary judge (“the issue”).
4.No later than 4.00 pm on 23 September 2022 any party who wishes to do so must make file and serve any submissions in response to any submissions filed under Order 3.
5.Save for:
(a)the determination of the issue; and
(b)costs;
the appeal is otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yarrow & Yarrow has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
TREE, WILSON & JARRETT JJ:
introduction
Ms Yarrow (“the mother”) appeals from final parenting and property settlement orders made on 24 December 2021 by a judge of the Federal Circuit and Family Court of Australia (Division 2). The parenting orders provided for the parties’ two children to live with Mr Yarrow (“the father”) in City E and, in the event she relocated to Country D (“Country D”), to spend time with the mother during school holidays. The orders further provided that, in the event the mother did not relocate to Country D, the children would live with her and the father on a 8/6 nights per fortnight regime.
The property orders provided that two real properties (one in City E and one in City C) be sold, and the net sale proceeds be divided 54 per cent to the father and 46 per cent to the mother. However, in the event the mother did not relocate to Country D, the sale proceeds of the City C property were to be divided so as to achieve an overall division of property 57/43 per cent in the mother’s favour. In broad terms, otherwise the parties kept the property and financial resources in their own respective names.
The father and the Independent Children’s Lawyer (“the ICL”) both opposed the mother’s appeal in respect of the parenting orders, however the father conceded the property appeal.
For the reasons which follow, insofar as it relates to parenting, the appeal will be dismissed, however it succeeds in relation to the property orders.
background
The mother was born in Country K and is presently aged 49. She is a permanent resident of Australia, and is currently unemployed. The father was born in Australia and is presently aged 48. He is currently employed as a professional.
In 2002, the father moved to Country D where he met the mother. In 2007, the parties commenced cohabitation in City C and married in 2008. They thereafter had two children; W born in 2013, and X born in 2016. They predominantly lived in City C until 2017, when they moved to Country K for 12 months, and thereafter relocated with the children to City E, Australia. The parties separated in early 2020, and the father commenced these proceedings in March of that year.
On 29 April 2020, interim orders were made providing for the parties to have equal shared parental responsibility for the children, who would live with the mother and spend time with the father for five nights a fortnight. Both parties were restrained from removing the children from City E. These were the orders in place at the time of the trial in September 2021.
At that trial, the mother primarily sought to relocate with the children to Country D, and for them to spend time with the father, the frequency and duration of which would depend upon whether he lived in Australia or Country D. The father’s primary position was for the children to remain in City E and to live between him and the mother. The ICL supported the father’s case. As the primary judge recorded, the mother’s evidence implied that she would not necessarily relocate to Country D if the Court did not permit the children to do so (at [29]–[30]).
It is not necessary for the purposes of the appeal to outline the parties’ trial proposals as to property division.
The trial took place over six days between September and November 2021, with the primary judge’s decision being delivered on 24 December 2021.
the appeal
At the outset, it is useful to restate the relevant principles which govern appeals from discretionary judgments. Particularly, it is well settled that error of the type identified in House v The King (1936) 55 CLR 499 at 504-505 must be established. There, the majority of the High Court said:
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
the appeal against parenting orders
As ultimately pressed, the Amended Notice of Appeal contained three grounds related to the parenting orders as follows:
1.In considering s 60CC(2)(a) of the Family Law Act 1975 (Cth), the learned trial judge failed to properly consider the benefit of the children having a meaningful relationship with both parents and how orders could be framed to ensure the children have such a meaningful relationship, or her Honour's reasons are inadequate with respect to such consideration.
2.The learned trial judge failed to adequately consider the competing proposals of the parties on their merits (including their advantages and disadvantages).
3.The learned trial judge erred in her Honour's discretion by requiring the wife to demonstrate compelling reasons to relocate.
4.[Abandoned].
Ground 1 – failed to consider a meaningful relationship
The gravamen of this ground, as expressed in the mother’s Summary of Argument, is that the primary judge “undertakes no evaluation of whether the mother’s proposals [to relocate with the children to Country D] would ensure that the children have a meaningful relationship with both parents” (at paragraph 8). Further it is said that “[t]he only conclusion made by her Honour is [the children’s meaningful relationship with their parents] would be ‘markedly impaired’ if the parents resided in different countries” (at paragraph 8).
However, that latter proposition is a misstatement, as her Honour’s conclusion of marked impairment related to the parties’ “capacity to maintain or promote a meaningful relationship” (at [51], emphasis added), rather than the relationship itself. This criticism therefore falls away.
At the heart of the remaining challenge is the contention that the primary judge concluded that there could be no meaningful relationship between the father and the children if they lived with the mother in Country D (mother’s Summary of Argument filed 5 May 2022, paragraph 12). However, neither expressly nor impliedly did the primary judge so find. Rather her Honour’s starting point was that the children presently had a meaningful relationship with both parents (at [46(1)] and [48]), and by implication, would benefit from that continuing. As to the future, at [51] her Honour adopted the conclusion of the Family Report writer that the children’s presently meaningful relationship with the father “is not likely to be as meaningful compared to if they were to continue to spend significant and substantial time with him” (Family Report dated 21 October 2020, paragraph 68). Further, at [117(l)] the primary judge concluded that relocation would see the father’s relationship with the children “diminished”. That is quite different to finding that there would be no meaningful relationship.
More, the primary judge did not conclude, whether expressly or by implication, that the only way a meaningful relationship could be maintained was by the parties living in geographic proximity. There is simply no warrant for reading her Honour’s reasons in such a way.
Finally, as to the challenge related to the primary judge’s reasons, the obligation to give adequate reasons is well established. In Bennett and Bennett (1991) FLC 92-191 (“Bennett”) at 78,266, the Full Court adopted the following test articulated by Gray J in Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18:
The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
Here the pathway by which her Honour reasoned that the orders which she made, on the eventuality both parties resided in City E, would maintain a meaningful relationship between the children and both parents, was clearly articulated at [117]. In the event the mother relocated without the children, then the orders provided for as meaningful a relationship between the children and both parents as circumstances permitted, (as the primary judge recognised at [117(a)]) and there is no deficiency in the exposure of the relevant reasoning.
Further, as we have said, there was no conclusion that the children could not enjoy a meaningful relationship with the father if they lived in Country D, and hence unsurprisingly no reasoning for such a conclusion was advanced. No error in respect of inadequate exposure of reasoning is otherwise discernible.
No limb of Ground 1 is established and it fails.
Ground 2 – failed to consider the competing proposals
As argued, this ground was an assertion that the primary judge impermissibly considered relocation in isolation and separately from the balance of the mother’s proposal. It was further said that the primary judge “did not address the advantages and disadvantages of the mother’s proposals”, and hence failed to deduce the essence of the parties’ competing proposals (mother’s Summary of Argument filed 5 May 2022, paragraphs 23–24).
The primary judge considered the proposed relocation at [117]–[121]. However that discussion was preceded by [115]–[116] as follows:
115.For the reasons referred to at [46], if not for the mother’s application to relocate with the children to City C, I consider it would be in the best interests of the children for the parties to have a roughly equal shared care living and spend time with arrangement for the children.
116.As the mother appeared to insist on only pursuing her primary case during closing submissions, I have closely and carefully scrutinised the basis for this in the context of all considerations informing what is in the best interests of the children according to the applicable legal principles. Such scrutiny must also be the made of [the] father’s proposal that the children live with him in City E instead.
(Footnote omitted) (Emphasis added)
Thus her Honour’s discussion of relocation which immediately followed must be seen against that background. It follows that therefore there was no quarantining of the relocation issue, but rather it came to be evaluated as a significant part of the mother’s proposal, as the primary judge had earlier correctly identified was her task by reference to relevant authority at [20] and [24].
Accepting that an exhaustive list of advantages and disadvantages of each proposal is not required (Zahawi & Rayne [2016] FamCAFC 90), her Honour plainly identified the main competing considerations which each party’s proposal raised. We agree with the submission made at paragraph 24 of the father’s Summary of Argument filed 25 May 2022:
24.However, and as occurs as a trial judge addresses the relevant statutory provisions, other advantages and disadvantages of the mother's proposal were identified throughout the judgment as follows -- some of which contentions were accepted and some rejected by the learned trial judge:
(a)That the parties' capacity to promote or maintain the father's meaningful relationship with the children would be markedly impaired by the relocation;
(b)That the elder child stated that he would miss his father if he lives in City C and miss his mother if he lives in City E;
(c)That the mother says she will be better able to financially support the children in City C as she will find employment and earn more there;
(d)That the mother asserts she has strong connections with relatives and friends in Country D and Country K and that a move to Country D would enable those connections to be re-established;
(e)That the children would have the opportunity to experience the paternal extended family [if] they live in City E, but this is highly unlikely if they move to Country D;
(f)That it is the mother who appears organized, diligent and the instigator of decision-making concerning the children whether it be in relation to enrolments, sports and health issues;
(g)That the mother had assisted the Court by addressing the practical difficulty and expense of the children spending time with and communicating with the father were they to relocate;
(h)That the trial judge "could readily imagine [the mother's] connection to a life in City C].
(As per the original) (Footnotes omitted)
Clearly the primary judge considered the parties’ proposals on their merits.
Finally, purportedly under this ground, criticism was made of the primary judge not admitting into evidence some letters from the mother’s family and friends which had been annexed to her trial material. However plainly this is not a challenge encompassed within this ground, and we will not consider it further.
Ground 2 fails.
Ground 3 – erred by requiring compelling reasons to relocate
This ground contends that the primary judge erroneously required the mother to establish a compelling reason for relocation. Ostensibly under cover of the ground, it is further said that the primary judge “appears to give no regard to the mother’s freedom of movement” (mother’s Summary of Argument filed 5 May 2022, paragraph 37).
It was common ground before us that a party proposing relocation need not establish any compelling reason (AMS v AIF (1999) 199 CLR 160). However that is not what the primary judge required. It is true that her Honour was critical of the lack of detail in the mother’s evidence supporting her proposal, including there being little evidence about the cost and practicality of travel between Australia and Country D, the children’s likely housing, schooling and healthcare in Country D, nor how they would be cared for in the event she was able to obtain employment, the prospect of which itself was supported by little material. However to point to such weakness in the mother’s case is not to require her to establish a compelling reason for relocation. It is simply identifying that absent such material, it is difficult to conclude that the children’s best interests lie in relocation.
In oral submissions before us, counsel for the mother relied upon the words we have bolded below in [117(g)] which reads:
117.…
(g)The undisputed evidence is that the children play soccer, swim, participate in other activities with both parents and, as commented by the Family Reporter, appeared relatively settled and content despite some awareness about the parents’ disputes. The elder child liked living in two homes. The mother has not provided justification for altering this status quo, which would only be necessary if she relocates.
(Emphasis added)
However at best for the mother, that observation related only to the children’s activities in City E, and the fact they liked living in two homes. It cannot be elevated to the primary judge requiring compelling reasons for relocation.
The suggestion that the primary judge had no regard to the mother’s freedom of movement must also be rejected. That her Honour well recognised that the mother had such freedom is manifest in the primary judge’s approach to the mother’s proposals, as outlined above.
Ground 3 fails.
Ground 4
This ground was abandoned during argument.
the appeal against property orders
The grounds of appeal against the property orders are as follows:
5.The learned trial judge failed to make an overall assessment of the parties' respective contributions.
6.In considering whether any adjustment was required due to the matters in s 75(2) of the Family Law Act 1975, the learned trial judge failed to consider, or failed to adequately consider, the impact of the assessment of contributions on the parties' future needs.
7. The learned trial judge gave inadequate reasons with respect to:
(a) The overall assessment of contributions;
(b) The overall assessment of the matters listed in s 75(2);
(c) The overall division of assets.
At the outset we should note that in her Summary of Argument filed 25 May 2022, senior counsel for the father conceded error by the primary judge as alleged in Grounds 6 and 7 and accepted that the appeal against the property orders ought be allowed. Notwithstanding that concession, we must nonetheless be satisfied of the relevant errors. In considering that, it is convenient to deal with the grounds sequentially.
Ground 5 – Failure to make overall assessment of contributions
Relevant to this ground, her Honour set out some of her findings at [168] of the reasons for judgment:
168.Review of the evidence overall permits me to make the following findings about direct and indirect financial and non-financial contributions:
(a)I am not persuaded that the father brought in assets worth about $100,000 at the commencement of the relationship, it was more likely less for the reasons below at [165];
(b)The mother brought in the H Road property, which she owned subject to a mortgage, but had contributed the deposit of £17,325 and net sale proceeds of about £34,200 from a flat she previously owned and had sold in 2005. This evidence was not contradicted and leads me to infer that the mother had equity of about £35,932 pounds soon after buying the H Road property;
(c)Between 2005 and commencing the relationship with the father in 2007, I infer that the mother made mortgage repayments relating to the H Road property, which likely reduced the mortgage further by the time a half interest was transferred to the father;
(d)Both parties earned a good income when they both worked, one more than the other at various times. Neither party challenged evidence given by the other about income, but there was small disagreement about the precise earnings of the parties;
(e)The mother received a lump sum exit payment from Company PP, the value of which was close to £113,000 paid in 2016. The father says the payment was £119,000 and in 2013. The difference is not particularly material, but I consider the evidence of the mother is more accurate. She says that she worked with Company PP and took maternity leave relating to the birth of the elder child in 2013. It was not until shortly before the younger child was born that she left that employment, according to her. In the father’s Case Outline he identifies the date of the mother’s redundancy as 2016, which aligns with the mother’s evidence;
(f)When Yarrow Company was liquidated, a liquidated net of tax cash payment was received of £225,000. The evidence relating to this finding was not challenged by the mother, who addressed the existence of the company and its liquidation in her own affidavit;
(g)The mother performed work or organised tradespeople to undertake renovations, first to the City C property and later a property at F Street, South City E (“the City E property”). The un-contradicted evidence is that during her maternity leave after the birth of the elder child, the mother did sanding, painting, and replaced curtains and carpet at the City C property. On the evidence, both parties contributed to the improvement of the City E property during the relationship, although the mother to a somewhat greater extent, and the mother continued to do renovations to it after separation;
(h)The mother has been the primary carer for the children and managed the joint household finances and organisation. She has been largely responsible for the children’s school enrolments and extra-curricular activities, as well as attending to their medical needs;
(i)The father undertook further study during the relationship, and the mother supported the family financially while he did so; and
(j)The father claims to have made post-separation contributions, by paying half the mortgage on South City E, paid his own rent and child support. However, for the reasons discussed below at [186], these were likely in part only possible because of monies he acquired from assets which existed at separation and now do not.
(Footnotes omitted)
After setting out her findings of fact relating to s 79(4)(d)(e)(f) and (g), her Honour says:
170.As is often cited, the assessment of contributions and other relevant factors addressed in section 79 of the Act is a matter of judgment, not a mathematical exercise. This is a case involving a relatively long marriage and the parties have both earnestly contributed, dependent on their stages in life. Additionally, the mother has made some non-financial contributions over and above those of the father based on my findings.
171.I assess that the mother has contributed overall slightly more than the father to the acquisition and maintenance of the parties’ net assets, based on all my findings.
(Footnotes omitted)
Between [185] and [188] her Honour considers various aspects of the contributions she has found each party has made. She discusses various arguments each makes about those contributions. At [190] and [191] she considers the parties’ superannuation interests and expresses a preference for a “one pool approach”. Then, between [192] and [196] her Honour considers the terms of some of the orders that she will make pending the final working out of the orders that she intended to make.
At [197] after the heading “Conclusion – Property” the primary judge sets out the parties’ assets, liabilities and financial resources as she finds them to be. At [198] she says:
198.In my view the parties interests in the net assets identified above should be adjusted to achieve an outcome whereby the father receives 54 per cent and the mother 46 per cent as I have concluded:
(a)that [the] mother’s overall contributions are somewhat more than the father’s (at [171] above);
(b)if the mother relocates to City C, as the father will have the primary parenting responsibilities and the children will live with him, a net adjustment of less than 10 per cent is required (at [172]); and
(c)a small adjustment in favour of the mother is needed for the add back finding made.
Her Honour’s conclusion that the mother’s overall contributions were “somewhat more” than the father’s was open to her on the evidence. No challenge to the factual basis for that finding was sought to be made before us. Nor was the conclusion, expressed as it was, challenged. Having regard to her Honour’s earlier findings at [170] and [171] her conclusion, infelicitously expressed though it was, was open.
The mother argues that the finding in [171] does not on its own support the conclusion expressed at [198] because the specific finding made at [171] related only to contributions pursuant to ss 79(4)(a) and (b). However, in our view, the reference to [171] in [198] did not intend to exclude the other matters that her Honour had considered and the findings that she made about them as set out above.
In our view, her Honour carried out a holistic assessment of the parties’ contributions as she was required to do (Jabour & Jabour (2019) FLC 93-898). She expressed a conclusion about that – a conclusion that was open on the evidence and her findings about that evidence.
Ground 5 has no merit.
Grounds 6 and 7 – Section 75(2)(b) and (n) considerations and adequacy of reasons
As shall shortly appear, it is convenient to deal with these grounds together.
The matters provided for in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”), so far as they were relevant, required consideration, and her Honour’s reasons show that she was aware of that. However, authorities binding on her Honour, which we shall specifically discuss below, mandated that the parties’ property and financial resources (s 75(2)(b)) and the terms of any order made or proposed to be made in relation to the property of the parties (s 75(2)(n)) had to be taken into account and the pertinent explanation relating to that undertaken in a meaningful way.
Willis & Willis [2007] FamCA 819 (“Willis”) concerned the primary judge’s failure to consider ss 75(2)(b) and 75(2)(n) when making property adjustment orders. In that case, each of the grounds of appeal against the orders made at first instance in that case failed. The appeal succeeded however, on a single point identified by the Full Court itself. The ratio of the case is encapsulated in [50] of the reasons as follows:
50.However, in our opinion there was an error in the trial judge’s treatment of the section 75(2) factors. Her Honour failed to consider the effect of the findings as to contribution on the respective positions of the parties, before proceeding to determine whether any adjustment was warranted pursuant to section 75(2). The effect of the 30 per cent differential established on the basis of contribution was approximately $220,000. This required consideration pursuant to section 75(2) but was not addressed by her Honour. The appeal must therefore be allowed in respect of the finding that the wife receive an adjustment of 15% on account of section 75(2) factors.
The correctness of Willis was not challenged before us, nor was any authority identified in argument which doubted the proposition for which it stands. Indeed, it has been followed and applied by Full Courts more than once.
Thus in Bolger & Headon (2014) FLC 93-575 the Full Court said:
11.Nowhere within her Honour’s discussion of the relevant s 75(2) factors did her Honour express a conclusion as to how her contribution findings might find reflection either in percentage or dollar terms or in terms of orders that might reflect the mooted contributions assessment. That consideration is important. In Willis & Willis [2007] FamCA 819, at [50] this Court found error “…in the trial judge’s treatment of the section 75(2) factors…” because, “…[h]er Honour failed to consider the effect of the findings as to contribution on the respective positions of the parties, before proceeding to determine whether any adjustment was warranted pursuant to section 75(2).”
Similarly, in Marsh & Marsh (2014) FLC 93–576 (“Marsh”), the Full Court thought it significant that although the primary judge had expressed his contribution based assessment in percentage terms, he had not gone on to consider what that meant in dollar terms for the parties in the context of that case. At [128]–[129] Murphy J said:
128.Important to the assessment pursuant to s 79(4)(e) is a consideration of the quantum and effect of the mooted assessment of contributions. That is required by reference to ss 75(2)(b) and (n) (see, Willis & Willis [2007] FamCA 819, especially at [50]). Here, in considering specifically s 75(2)(b), and, indeed, s 75(2) more broadly, the Federal Magistrate appears to have paid no regard to his mooted assessment of contributions nor the nature and effect of the orders that might flow from it.
129.No ground of appeal contends that his Honour erred in principle in so doing. Yet, the consideration just referred to is important in informing my view that his Honour’s adjustment of 10 per cent in respect of the parties’ property in favour of the wife (in dollar terms, about $310,000) is plainly wrong.
(Emphasis added)
Whilst it is true that there is no obligation on a trial judge to express his or her conclusions about the parties’ contribution based entitlements in any particular way – either by way of percentage, in monetary terms or by a distribution of property as found (i.e., by way of proposed orders), to do so is the preferred practice (Hickey and Hickey (2003) FLC 93-143). Nonetheless a departure from that preferred practice is not an appellable error. For present purposes, what is important is that an appeal court can determine that the primary judge has undertaken a consideration of each relevant matter. To make that determination requires a consideration of the primary judge’s reasons for judgment, and hence we turn to Ground 7.
Ground 7 complains that her Honour’s reasons for judgment were inadequate in three respects. However they were not inadequate with respect to the overall assessment of contributions. As outlined above, the primary judge made an assessment of the parties’ contributions for the purposes of ss 79(4)(a), 79(4)(b) and 79(4)(c). She expressed that overall finding in qualitative terms and gave reasons for her conclusion. Ground 7(a) is without merit.
Further, save in the respects set out below, her reasons with respect to the assessment of the matters listed in s 75(2) were likewise adequate. However, to the extent her Honour’s reasons with respect to ss 75(2)(b) and (n) were inadequate, her reasons as to the overall division of the parties’ assets are also inadequate.
The inadequacy has at its origin the use of exclusively qualitative descriptions for the assessment of contributions, which does not permit of an understanding of the way in which her Honour reached her decision because it masks, rather than exposes how, if at all, she gave any consideration to the matters raised by ss 75(2)(b) or 75(2)(n) as the authorities recited above obliged her to do. Her reasons do not refer to those subsections in terms, nor to their substance. The nature and extent of the consideration given by the primary judge to those matters is thus opaque, and not able to be ascertained (Bennett).
The conundrum presented by reasons couched in the terms used here is highlighted by the following passage from Holland & Holland (2017) FLC 93-798 (“Holland”):
66.We have not been directed to, nor can we see for ourselves, any findings by which it is possible to discern how her Honour’s qualitative description of a “slightly greater” contribution by the wife during the post-separation period can be assessed in terms of its meaning or impact in dollar terms. Quite apart from the obvious difficulty that “slightly greater” might mean different things to different people – including the parties – the property and superannuation to be divided has a modest net value. The consequence of the latter is that what some judges, or the parties, might regard as “slightly greater” in dollar terms may represent a percentage disparity that might not be so described.
67.In the instant case, that can be seen to be particularly important. Property W had a value of $715,000. The total net assets to which the contributions assessment pertained had a value of about $373,000. (As her Honour observed, Property W had “at least twice the value of the equity of the [former matrimonial home]”).
68.In the absence of findings as to how a “slightly greater” post-separation contribution is to be assessed in what was, in this case, a lengthy post‑separation period in which the parties made a miscellany of contributions, it is not possible to discern the “overall” assessment of contributions.
69.Without an overall assessment of contributions it is not possible to discern the prospective entitlements of each of the parties based upon that assessment. Without a finding as to the prospective entitlements of each of the parties based upon an overall assessment of contributions it is not possible to discern the foundation for her Honour’s assessment of s 75(2) including, importantly but not exclusively, s 75(2)(b), or how that assessment was reflected in dollar terms.
(Footnote omitted)
Although the primary judge here has made an overall assessment of the parties’ contributions, the way in which she has expressed her conclusion and the absence of any amplification of her qualitative finding means that it is impossible to tell from her reasons just what it is that her assessment meant in terms of any proposed orders based upon that assessment. Those matters may well have been considered by her Honour, but her reasons do not disclose that they were.
Her Honour adopts the same approach to the adjustment of the parties’ contribution based entitlements in that whilst she determines that an adjustment in the father’s favour of 10 per cent is appropriate if the mother relocates away from Australia, she also considered that a small adjustment in favour of the mother was needed “for the add back finding” her Honour made. She does not nominate a size for that adjustment. It is unclear just how that adjustment has affected the orders her Honour fixed upon. Nor is it possible to reverse engineer the primary judge’s assessment of contributions (and thereby derive meaning of the qualitative term she used) based on the overall outcome. Her Honour at [198] states that if the father is to be the primary carer of the children, then there should be an adjustment of “less than 10 per cent” but that then needed to be lessened by the “add back finding” issue.
Adopting what was said in Marsh and Holland, without an understanding of the nature and effect of her Honour’s overall assessment of contributions on the potential distribution of the assets as found by her Honour (either in percentage or dollar terms, or in specie), it is not possible to discern the prospective entitlements of each of the parties based upon that assessment. Without a clear articulation of the prospective contribution based entitlements of each of the parties, it is not possible to discern the foundation for her Honour’s assessment of the s 75(2) matters including ss 75(2)(b) and 75(2)(n).
It follows that Ground 7 succeeds insofar as it relates to ss 75(2)(b) and (n), although it otherwise fails. Ground 6 likewise fails, as the absence of adequate reasons precludes us being satisfied that her Honour erred in the way it contends.
outcome
The appeal ought be allowed and Orders 29–38 of the orders under appeal set aside.
That said, Ground 7 is the only ground of appeal to, albeit only partially, succeed. However whilst a failure to give adequate reasons for a judicial decision may be an error of law, not every such failure will result in the setting aside of the orders under appeal and the remission of the matter for a new trial. It is well established that an appeal court is entitled to consider and decide the matter for itself, if it can do so. In Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 the Court of Appeal said at 444:
What is the result of an inadequate statement of reasons?
It does not automatically follow that because the reasons for decision are inadequate then an appealable error has occurred. Examination of nearly any statement of reasons with a fine-tooth comb would throw up some inadequacies. Indeed, an appeal court will reserve any intervention to those situations in which it is left with no choice: where no reasons have been given in circumstances where there was an obligation to provide them and in circumstances where a statement of reasons is so inadequate as to constitute a miscarriage of justice. In other words, the statement of reasons must be looked at as a whole and the material inadequacies identified and considered.
Another question, which need not presently be decided, is whether the failure to provide reasons or the provision of inadequate reasons constitutes either an error of law or some other appealable error. This was a question which Hope A-JA noted but found unnecessary to decide in Mifsud v Campbell (at 729). It is sufficient to note that most cases have assumed the error is one of law.
Lastly, it is noted that an appealable error arising from inadequate reasons does not necessarily mean that a new trial is required. An appeal court is entitled to consider the matter and, if appropriate reasons are given, may itself decide the matter. Thus, if the only conclusion open on the evidence available at trial was the conclusion reached by the trial judge, then, notwithstanding an inadequate statement of reasons, the matter need not go to a new trial: NSW Insurance Ministerial Corporation (formerly GIO of New South Wales) v Mesiti (Court of Appeal, 1 December 1994, unreported).
(Emphasis added)
These passages were applied by the Full Court of the Western Australian Supreme Court in Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273 at [29] as follows:
29.Inadequacy of reasons does not necessarily amount to an appealable error. An appeal court will only intervene when no reasons have been given in circumstances in which they were required, or when the inadequacy is such as to give rise to a miscarriage of justice: Beale (at 444). Nor does an appealable error arising from inadequate reasons necessarily result in a new trial. The appeal court is entitled to consider the matter and, if it can do so (where, for example, only one conclusion is reasonably open on the available evidence), it may itself decide the matter: Beale (at 444).
(Emphasis added)
See also Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264 and Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [41].
In this case, we are not persuaded that only one conclusion is open on the available evidence, or that the matter is otherwise susceptible to re-exercise, and thus remitter for rehearing seems to be the inevitable outcome, although one which seems quite disproportionate to the very narrow compass of the success of the appeal, especially given the lack of any challenge to the underlying findings of fact.
But there is a further alternative. In North East Equity Pty Ltd v Proud Nominees Pty Ltd (2010) 269 ALR 262 (“North East Equity”) the Full Court of the Federal Court said:
38.The consequence of a judge’s failure to give adequate reasons was recently considered by the Full Court in Echo Tasmania Pty Ltd v Imperial Chemical Industries Plc [2008] FCAFC 58 at [41] (Echo):
[41] A failure by a trial Judge to give adequate reasons does not necessarily mean that the matters should be remitted for a new trial or for the purpose of the trial Judge formulating adequate reasons for the orders. In Bourke v Beneficial Finance, for example, the Full Court considered (at FCR 284; ALR 736-7) that, although the trial Judge in that case had not given adequate reasons for his conclusions, the appropriate course was for the Court to analyse the documentation upon which the appellants relied and reach its own conclusions as to whether the orders made at first instance were justified. Since the analysis showed that the appellants could not succeed in their claims for relief, the Court concluded that there was no point in sending the matter back for a new trial …
Their Honours pointed out that in Echo, as in Bourke v Beneficial Finance Ltd (1993) 47 FCR 264; 124 ALR 716 (Bourke), there was no issue concerning the credit of witnesses, and the case depended entirely on the documentation and on unchallenged evidence. In those circumstances, they thought the appropriate course was for them to determine, on the evidence before the primary judge, whether his orders were properly made.
39.The present case is unlike Echo and Bourke. If the respondents are found to have adduced evidence to the contrary for the purposes of s 51A(2), the question will be whether the appellant has established that Mr Proud did not have reasonable grounds for making the representations. In answering that question the primary judge will have the advantage we do not have of having seen and heard Mr Proud give his evidence. Further, the reasonable grounds issue does not depend entirely on documentation and unchallenged evidence.
40.In Mount Lawley Pty Ltd v Western Australia Planning Commission (2004) 29 WAR 273 (Mount Lawley); [2004] WASCA 149 at [29] (Mount Lawley) the Full Court said that one case in which an appellate court might itself decide the matter was where only one conclusion is available on the evidence. That is not the case here. The parties’ detailed written submissions on this issue, and our own preliminary examination of the evidence, disclose that the s 51A reasonable grounds issue is far from open and shut. In recognition of the inappropriateness of our undertaking this enquiry ourselves, neither party suggested that we should embark on that exercise. Mr Allanson SC submitted that the only course was for there to be a new trial on the trade practices claims, that is to say without reopening the contract and tort causes of action. Mr McGowan also adopted that approach.
41.As appears from Echo at [41], an alternative to ordering a new trial is for the matter to be remitted for the purpose of the primary judge formulating reasons for his conclusion that s 51A did not assist the appellant. The appropriate course to adopt will depend on the circumstances of the particular case. Here, the inadequacy of reasons is restricted to one comparatively small point. The primary judge’s reasons are otherwise comprehensive. A retrial, even on the limited issues on which the appellant seeks it, is unnecessary.
The conclusion ultimately reached by the Full Court in that case was:
182.We will allow the appeal and remit the matter to the primary judge for the formulation of reasons for his conclusion that s 51A of the Trade Practices Act did not assist the appellant, and for further consideration of the question of damages in the light of our reasons.
A similar approach was taken in Lopez v Gold Titan Pty Ltd [2022] FCAFC 117 (“Lopez”). In that case the central issue was whether the primary judge gave sufficient reasons for her award of $150,000 damages to the respondent. The Full Court concluded that she had not, although there was sufficient evidence before her Honour to do so. The course to be taken was explained by the plurality (Stewart and Goodman JJ with whom Rares J agreed) as follows:
107.In the circumstances, in our view the appeal should succeed on the ground that the primary judge’s reasons for judgment failed to adequately explain the basis for her Honour’s assessment of $150,000 for pecuniary loss to Evagroup caused by the breaches of contract, confidence and the ACL by Mr Lopez and Imperial. As there was evidence before her Honour on which an assessment might properly be able to be made, the proper course is for the appeal to be allowed and for the matter to be remitted to her Honour for the provision of further reasons for her assessment. Such a remittal is not for the purpose of reopening the principal case for further evidence or submissions. See North East Equity Pty Ltd v Proud Nominees Pty Ltd [2010] FCAFC 60; 269 ALR 60 at [38]-[41].
The powers available to the Full Court of the Federal Court of Australia are provided for in s 28(1) of the Federal Court of Australia Act 1976 (Cth). They were considered sufficient to permit the Full Court to make the orders that it did in North East Equity and Lopez. Whilst there are some textual differences, s 36(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), confers substantially the same powers on this Court in its appellate jurisdiction.
In the present case, the difficulty arises because her Honour has chosen to express her conclusion about contributions in a qualitative way, which has obscured her subsequent reasoning for the conclusions she has reached. So viewed, the error is rather minor, although nonetheless compels that the appeal be allowed.
The question then is whether we ought remit the matter for rehearing to a judge other than the primary judge, or remit it to her Honour for the provision of further reasons for her assessments. We prefer the latter but, as in Lopez, we would reiterate that such remittal is not for the purpose of reopening the case for further evidence or submissions.
However that course was not one which we raised with the parties at the hearing of the appeal, and hence we will give them the opportunity to make such further written submissions on the point as they may wish, and defer pronouncing any orders in that respect, or as to costs. Apart from this partial success, otherwise the appeal will be dismissed.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Tree, Wilson & Jarrett. Associate:
Dated: 1 September 2022
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