Yein & Zihao
[2019] FamCAFC 20
•15 February 2019
FAMILY COURT OF AUSTRALIA
| YEIN & ZIHAO | [2019] FamCAFC 20 |
| FAMILY LAW – APPEAL – PROPERTY – Where the parties were married for 15 months – Where the real property at the centre of the dispute was in the husband’s sole name – Where the trial judge found that the real property was purchased from funds provided solely by the wife – Where the husband was self-represented at trial – Whether the trial was affected by procedural unfairness – Re F: Litigants in person guidelines (2001) FLC 93-072, discussed – Where the failure to follow the Re F guidelines did not amount to injustice to the husband – Where the circumstances did not require the trial judge to appraise the husband of “the rule in Browne v Dunn” – Whether the trial judge showed apprehended bias – Where the trial judge’s interventions were to understand and clarify the husband’s evidence – Where the trial judge failed to properly consider s 79(2) – Where the failure to consider s 79(2) did not amount to an injustice – Appeal dismissed. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 79(2), 79(4), 94AAA(6), 117(1) Federal Court of Australia Act 1976 (Cth) s 28(1)(f) |
| Balenzuela v De Gail (1959) 101 CLR 226; [1959] HCA 1 Re F: Litigants in person guidelines (2001) FLC 93-072; [2001] FamCA 348 |
| APPELLANT: | Mr Yein |
| RESPONDENT: | Ms Zihao |
| FILE NUMBER: | BRC | 8318 | of | 2016 |
| APPEAL NUMBER: | NOA | 32 | of | 2018 |
| DATE DELIVERED: | 15 February 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Strickland, Murphy & Kent JJ |
| HEARING DATE: | 13 September 2018 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 9 March 2018 |
| LOWER COURT MNC: | [2018] FCCA 648 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Shoebridge |
| SOLICITOR FOR THE APPELLANT: | Jones Mitchell Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Hartwell |
| SOLICITOR FOR THE RESPONDENT: | Tang Lawyers Australia |
Orders
The appeal be dismissed.
Each of the parties bear their own costs of and incidental to the appeal.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yein & Zihao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NOA 32 of 2018
File Number: BRC 8318 of 2016
| Mr Yein |
Appellant
And
| Ms Zihao |
Respondent
REASONS FOR JUDGMENT
The husband appeals orders for settlement of property made by Judge Egan on 9 March 2018.
The parties married in China in May 2015. They separated 15 months later. There are no children of the relationship. The wife lived for various periods of the marriage in China and otherwise with the husband at a property at Suburb B, Australia. The husband lived there for the whole of the marriage. The husband deposed to owning real property in China estimated to be valued at $1 million. The wife deposed to owning real property in that country estimated to be valued at $1.6 million and life insurance and chattels with an estimated total value of $465,000.
The Suburb B property was purchased in the husband’s sole name for $675,000, the sale settling approximately two weeks after the marriage. It was common ground before his Honour that the wife provided $611,778[1] of the purchase price and the associated duties and fees totalling around $726,000.[2] The wife asserted she provided the entirety of that sum. This was an important contested factual issue before his Honour, but that issue was in fact ancillary to an associated issue. The husband asserted that he had repaid the funds provided by the wife; the wife asserted that he had repaid none of those funds.
[1] Approximately RMB 3,000,000 – the relevant exchange rate at trial was accepted as 5 RMB to 1 AUD: see [13].
[2] RMB 3,630,000.
His Honour concluded that the Suburb B property “was purchased solely from moneys provided to the husband by the wife” (at [24]) and that he had repaid none of those funds. Those ultimate findings are not the subject of challenge on this appeal and nor are the factual findings which underpin them.
His Honour’s orders vested the Suburb B property in a trustee for sale and required the property to be sold “by private treaty … [for] … not less than $735,000.00”. The orders provided for the wife to receive $675,000 and the husband the balance. Paragraph 13 of the orders makes it clear that the husband is to bear the costs of sale from his share of the proceeds. Otherwise, the orders provide relevantly that each of the parties be solely entitled to the exclusion of the other to all property in their respective possession.
There are six grounds of appeal. Counsel for the husband condensed those grounds into “two categories”.[3] The first category references Grounds 1, 2 and 3, and is summarised by the assertion that the husband did not receive a fair trial and includes a specific assertion of apprehended bias.[4] The second category of error identified by counsel embraces Grounds 4, 5 and 6. Although those grounds refer to specific errors (for example Ground 6 asserts a failure to have any regard to the “s 75(2) factors”), counsel encompasses all of those grounds within a challenge to the adequacy of his Honour’s reasons.
[3] Appeal transcript, 13 September 2018, pp 2 – 3.
[4] Ground 3 as pleaded asserts actual bias. Counsel for the husband amended that ground before us so as to allege apprehended bias.
Did The Husband Receive A Fair Trial?
Counsel for the husband asserts that his Honour failed to afford the husband a fair trial in three specified respects:
a)His Honour failed to follow the guidelines set out in Re F: Litigants in person guidelines;[5]
b)His Honour intervened excessively during the husband’s cross‑examination; and
c)His Honour demonstrated apprehended bias in favour of the wife.
[5] (2001) FLC 93-072 (“Re F”) at [253].
(a) Failure to Follow the Re F Guidelines (Ground 1)
Counsel for the husband raises the following specific matters referable to the Re F guidelines and the asserted lack of procedural fairness more generally:
a)At no time did the trial judge explain to the husband any procedures relevant to the trial;
b)At no time did the trial judge explain the manner in which the trial would proceed, including the order of calling witnesses and the right to cross‑examine witnesses;
c)At no time did the trial judge explain to the husband his right to object to inadmissible evidence, or to object to the wife giving further evidence-in-chief;
d)The trial judge asked the husband if he wished to cross-examine the wife by saying merely “[c]ross-examination”, without further reference or explanation of the effect of failing to cross-examine the wife;[6]
e)The interpreter raised a concern that the husband was not understanding some “legal terminology” such as the meaning of “affidavit”. His Honour expressed the view that it was the interpreter’s responsibility to explain what an affidavit is;[7]
f)The trial judge asked the husband if there was anything “that the husband would like to say” at the conclusion of the hearing, without clarifying that this was the husband’s opportunity, and only opportunity, to make submissions before the Court.[8]
[6] Transcript, 9 March 2018, p 36 ln 27 – 28.
[7] Transcript, 9 March 2018, p 33 ln 13 to p 34 ln 17.
[8] Transcript, 9 March 2018, p 87 ln 27 – 28.
The transcript of the proceedings before his Honour leaves little doubt that those specific divergences from the Re F guidelines contended for by the husband are made out. However, that is, of itself, insufficient to demonstrate appealable error.
The well-established guidelines set out in Re F are intended to have the effect explained, for example, in Norbis v Norbis.[9] There, the High Court of Australia was speaking of the role of guidelines in the exercise of broad discretions. Re F is concerned with a different context, namely ensuring procedural fairness for parties representing themselves in proceedings in this jurisdiction. Yet, just as with guidelines applicable to the exercise of discretion, a failure to follow the Re F guidelines is not, of itself, an appealable error.[10] Further, while the guidelines are directed to procedural unfairness – a matter central to preventing injustice – it is well settled that “not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial”.[11]
[9] (1986) 161 CLR 513 (“Norbis”) at 519 – 520 (Mason and Deane JJ); at 533 – 534 (Wilson and Dawson JJ); at 536 – 537 (Brennan J).
[10]Norbis, above.
[11] Stead v State Government Insurance Commission (1986) 161 CLR 141 (“Stead”) at 145 (Mason, Wilson, Brennan, Deane and Dawson JJ).
The question which falls to be answered is whether his Honour’s failure to follow well-settled guidelines has resulted in injustice to the husband. In that respect, High Court authority instructs:[12]
…when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a court of appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact…
[12]Stead at 145 – 146 (Mason, Wilson, Brennan, Deane and Dawson JJ).
Counsel for the husband conceded before us that his Honour confronted difficulties at the trial additional to those that commonly arise when a party represents themselves. In particular, difficulties resulted from the then self‑represented husband’s need for an interpreter and, apparently, the regional differences in language spoken by each.
An overall conclusion as to whether injustice has occurred involves a careful reading of the transcript of proceedings and reference to the issues necessary to be determined. The application of all guidelines must be moulded to suit the circumstances of particular cases and particular litigants.[13]
[13]Norbis, above.
Our conclusion that a failure to follow the guidelines in the specific manner asserted by the husband did not result in injustice devolves from our conclusion that the factual conclusions reached by his Honour were not only open on the evidence but were also compelled by the lack of evidence adduced by the husband. The latter is a circumstance that could not have been “cured” by adherence to any or all of the guidelines not followed by his Honour.
The husband’s case that he contributed to the purchase price was referenced to approximately $111,000 in deposits in his bank accounts. His assertion that the funds for those deposits came from “family members” was not supported by any affidavit or oral evidence from any family member. Nor did the husband offer any documentary evidence as to the origin of the funds for those deposits. The absence of affidavit evidence from at least one member of the husband’s family (his sister) occurred despite the husband indicating such evidence would be forthcoming so as to corroborate his account of the origin of funds used in the purchase. The absence of that evidence occurred in circumstances where the husband knew that the wife alleged that she was the source of all funds used in the purchase.
The absence of evidence offered by the husband pertained not only to the origins of the amount of the purchase price he asserted was paid by him but also to the origin of the funds used, as he also asserted, to subsequently repay the wife the sums which he admitted were advanced by her. In the latter respect, his Honour found it “inherently improbable” that the husband’s family members would bring, as the husband alleged, “two cardboard boxes of cash in the amount of RMB 3 million thousands of miles [from East Asia where they lived] to a wedding” where, it was said, the money was handed to the wife (at [23]).
By contrast, there was documentary evidence produced by the wife showing the movement of relevant funds from her bank account in China into the husband’s account and into “third party accounts” (which, it seems were used to circumvent Chinese laws restricting the amounts of cash leaving China).
In recognition, perhaps, of the difficulties confronted by the husband as a result of that evidence, and the absence of evidence from him, and the findings resulting therefrom, counsel for the husband focussed on an assertion that the then self-represented husband was not afforded the opportunity to put his case to the wife, in particular that he had in fact repaid to her all of the money which she had advanced for the purchase of the Suburb B property.[14] Counsel submitted that the husband’s lost opportunity is said to have been particularly important because this was a case whose outcome was significantly dependent upon the resolution of the central factual issues earlier referred to.
[14] Counsel described the same as his “highest point”; Appeal transcript, 13 September 2018, p 13 ln 40.
In Logan & Logan[15] the Full Court said:
…the rule in Browne & Dunn, that it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, does not apply where “the witness is on notice that the witness’s version of events is in contest” (LC v TC…). Further … “[t]hat notice may come from the pleadings or the other side’s evidence or the other side’s opening; it may even come from the general manner in which the case is conducted”.
(Citations omitted)
[15](2013) FLC 93-555 at [53] citing LC v TC (1998) FLC 92-803 at [38] (Baker J).
The husband was on notice as to all of the assertions made by the wife as to the payment of funds by her. She deposed to the same and annexed relevant documents to her affidavit. The husband was also on notice that the wife asserted that he had repaid none of the funds; she had clearly deposed to that assertion. The husband had the opportunity to advance all such evidence as he might choose.
In our view, the circumstances of this case did not require his Honour to appraise the husband of “the rule in Browne v Dunn” or its effect. The husband had no evidence which he could put to the wife in contradiction of her version. The only proposition which the husband could have put to the wife was the bare assertion that her version was incorrect – something which his affidavit evidence had in effect already done and in respect of which he had already had the opportunity to adduce all such evidence as he chose.
As counsel for the husband ultimately in effect conceded before us, all that was lost to the husband was the opportunity to make the bare assertion to which we have referred. The evidence before his Honour and the broader circumstances of the case do not suggest that doing so could have made any difference to his Honour’s findings, including the important central finding that the husband should not be believed.[16] Those findings were informed by documentary evidence produced by the wife which substantially corroborated her evidence. Just as importantly, the findings also flowed from a complete absence of evidence adduced by the husband which supported his version of events.
[16] Reasons at [23].
In any event, when counsel for the wife in submissions apparently sought to rely upon the rule, his Honour indicated plainly that the application of the rule would not play a part in his ultimate findings.[17]
[17]Transcript, 9 March 2018, p 85 ln 11 – 12.
Giving full weight to the caution which High Court authority demands, we are nevertheless comfortably satisfied that, in the particular circumstances of this case, the identified irregularities in his Honour’s process pertaining to the husband’s then self-representation “could have had no bearing on the outcome of the trial of the [central] issues[s] of fact” upon which the outcome of this case largely depended.
(b) Excessive Intervention and Apprehended Bias (Grounds 2 and 3)
Counsel for the husband places significant reliance upon the recent decision of the Full Court in Huda & Huda and Laham[18] where it was found that interventions by a Federal Circuit Court of Australia judge during the course of cross‑examination in a trial amounted to procedural unfairness.
[18] (2018) FLC 93-837 (“Huda”). The Full Court referred there to Galea v Galea (1990) 19 NSWLR 263 (“Galea”) at 281 (Kirby A-CJ; Meagher JA agreeing); R v T, WA (2014) 118 SASR 382; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 (“Royal Guardian”).
Citing earlier authorities and, in particular, what was said by the New South Wales Court of Appeal in Royal Guardian Mortgage Management Pty Ltd v Nguyen[19] the Full Court accepted that “the ultimate question is always whether the intervention was unjustifiable and resulted in a miscarriage of justice”.[20] Ward JA in Royal Guardian also referred to what had been said by Kourakis CJ in R v T, WA.[21] Her Honour said at [168]:
At [40], Kourakis CJ acknowledged that many interventions will attract a consideration of both the bias and dust of conflict grounds but accepted that there would be some interventions which, even though they did not suggest pre-judgment, nevertheless showed that the judicial officer had lost the advantage of judicial detachment which he or she would otherwise have enjoyed as a judge adhering to the common law adversarial method of trial.
[19] (2016) 332 ALR 128.
[20] Royal Guardian at [169] per Ward JA citing Ellis v R [2015] NSWCCA 262 per Bathurst CJ, RA Hulme and Garling JJ.
[21] (2014) 118 SASR 382.
Here, apprehended bias is also asserted by the husband (Ground 3). In that respect, counsel for the husband conceded, with respect, expeditiously and appropriately, that if he could not persuade this Court of appealable error through the first two grounds, he would not “get [the Court] there with the apprehension of bias” ground.[22]
[22] Appeal transcript, 13 September 2018, p 26 ln 27 – 30 and p 27 ln 34 – 39.
In Huda, the Full Court cited at [28] the following passages from the judgment of Ward JA in Royal Guardian that refer to the essential distinction between inappropriate interference calling for intervention and, alternatively, a trial judge seeking to understand the evidence and the case being advanced:
171.Finally, I note that in [Michel v The Queen], Lord Brown, delivering judgment for the Privy Council, identified the ways in which judicial intervention might lead to a miscarriage of justice as including not only interventions that prevent counsel from properly presenting the case but also interventions that prevent the relevant party (there, the defendant) from doing himself or herself justice in the giving of his or her evidence; as well as interventions that deny the basic right underlying the adversarial system of trial, namely that of having an impartial judge to see fair play in the conduct of the case. Lord Brown noted (at [31]) that “[t]he core principle, that under the adversarial system the judge remains aloof from the fray and neutral during the elicitation of the evidence, applies no less to civil litigation than to criminal trials”.
172.Lord Brown acknowledged that the judicial officer could properly “clear up ambiguities” and “clarify the answers being given” but said (at [34]) that:
... he should be seeking to promote the orderly elicitation of the evidence, not needlessly interrupting its flow. He must not cross-examine witnesses, especially not during evidence-in-chief. He must not appear hostile to witnesses, least of all the defendant. He must not belittle or denigrate the defence case. He must not be sarcastic or snide. He must not comment on the evidence while it is being given. And above all he must not make obvious to all his own profound disbelief in the defence being advanced.
Necessarily, the judgment of an appeal court as to whether asserted interventions fall on one side of the line or the other will require a careful reading of the transcript seen in the broader context of the particular case including, here, the difficulties for the trial judge earlier referred to.
In Huda, the Full Court said, again by reference to earlier authority, that the “number, length, terms and circumstances of the interventions” will be an important consideration.[23] Counsel for the husband took us to a number of passages in the transcript being what he described as the “high points” of his argument. He conceded that if the Court was not satisfied of inappropriate intervention by reference to the totality of those matters, the intervention challenge should fail.[24]
[23]Huda at [30] citing Galea at 281 (Kirby A-CJ; Meagher JA agreeing).
[24] Appeal transcript, 13 September 2018, p 23 ln 1 – 5.
We have read carefully those pages[25] and, indeed, the transcript as a whole. We can understand the concerns raised by the husband arising from some of the things said by the trial judge and the manner in which they were said. However, from our review of the transcript, statements of his Honour giving rise to any concern were inconsequential in that they were in relation to matters irrelevant to the central issues to be determined and to the evidence concerning those issues. On balance, we are satisfied that what is demonstrated is that, in difficult circumstances involving an interpreter assisting a self-represented litigant, his Honour’s interventions of substance should be viewed as him seeking to understand and clarify the husband’s evidence on central issues.
[25] Transcript, 9 March 2018, p 53 ln 19 to p 56 ln 13; p 44 ln 5 – 16; p 41 ln 30 – 34; p 37 ln 1 to p 39 ln 12; p 39 ln 33 to p 42 ln 42; p 43 ln 42 to ln 6.
Counsel for the husband also asserts that his Honour “tag-teamed”[26] with counsel for the wife.[27] We are not persuaded that the passages to which we were referred, or any other passages within the transcript sustain that contention. Ultimately, we are satisfied that those passages, too, are examples of his Honour’s attempt to clarify evidence with counsel, or with the husband.
[26] In the sense described in Huda at [53] – [54].
[27] Transcript, 9 March 2018, pp 54 – 56.
Within the context of apprehended bias, counsel for the husband properly raises with us a number of gratuitous comments made by the trial judge which, irrespective of their legal consequences, have caused understandable offence to the husband.
In light of our conclusion that the claim of apprehended bias is not made out, we will refer to only one of those comments. In doing so we reiterate that the husband does not speak English. Further, there were some difficulties in interpretation, emanating, it seems, from the fact that, while the husband and the interpreter shared a language, nuances or regional differences (the husband hailed from northern China while the interpreter did not) caused some confusion. Counsel for the wife indicated to his Honour that the interpreter was having difficulty being understood by the husband. This exchange then occurred:[28]
[28] Transcript, 9 March 2018, p 33 ln 13 – 36.
MR HARTWELL: Yes, your Honour. She has told me that she’s having trouble interpreting for [Mr Yein], that he doesn’t seem to be understanding what she is saying. I put it to her is he not understanding the process or is he not understanding the Chinese and she advised me “both”.
HIS HONOUR: Well, why is she an interpreter if she’s not qualified to interpret?
THE INTERPRETER: Sorry, your Honour. It’s the legal terminology in English and Chinese. [Mr Yein] is not familiar in this, and also the legal process.
HIS HONOUR: Well, that’s a matter that he’s always going to struggle with because he’s originally from a different culture.
THE INTERPRETER: Yes. The legal - - -
HIS HONOUR: And it seems that he hasn’t taken the time to learn it – about what our culture is.
THE INTERPRETER: Your Honour, I - - -
HIS HONOUR: That’s no excuse.
THE INTERPRETER: It’s not excuse, your Honour. I trying to speak in Chinese with the legal terms, but he still doesn’t understand the legal …
His Honour’s gratuitous comments were, in our view, entirely unnecessary and irrelevant. Quite why they were made is not apparent to us and nor was it apparent to either of the legal practitioners who appeared before us. We have little doubt that these, and other comments made by the trial judge fuelled the husband’s allegations about the unfairness of the trial process, and the assertion of bias.
However, neither rudeness nor cultural chauvinism speak necessarily of a failure of proper process nor of satisfying the hypothetical observer’s assessment of whether the judge is bringing an impartial mind to the proceedings. An understanding of that very point fuels counsel’s proper concession earlier made and our conclusion that apprehended bias is not made out.
We are not persuaded that procedural unfairness is established by reference to any of the matters the subject of the first category of complaint encompassing Grounds 1 to 3.
Are The Trial Judge’s Reasons Adequate?
The balance of the husband’s grounds of appeal, embraced by a challenge to the adequacy of his Honour’s reasons are premised upon his Honour failing to refer to, and consider, the significant assets held by each of the parties in China.
It is contended that this omission evidences a failure to ascertain and give expression to “the pool of assets and liabilities” (Ground 4). That omission is said to lead in turn to a failure to exhibit an assessment of contributions as required by s 79(4) of the Family Law Act 1975 (Cth) (“the Act”) (Ground 5) and, thereafter, a failure to exhibit an assessment of the relevant s 75(2) factors by not having regard to those assets (Ground 6).
Ahead of the discussion of the arguments supporting those contentions, it should be recognised that his Honour’s reasons were delivered ex tempore after a trial completed in a day.
(a) The “Pool Of Assets” Challenge
The husband’s submissions in respect of this aspect of the second category of challenges can be seen to gain force from exchanges between his Honour and counsel for the wife which occurred early in the trial and again in counsel’s submissions near the trial’s conclusion. The first exchange is relevantly as follows: [29]
[29] Transcript, 9 March 2018, p 18 ln 4 to p 19 ln 14.
MR HARTWELL: Your Honour, it was a short marriage. There is really only two issues that - - -
HIS HONOUR: What about assets?
MR HARTWELL: One asset of the marriage, your Honour – one major asset of the marriage which is a house at [Suburb B]. Both parties have assets also in China.
…
HIS HONOUR: Near?
[THE WIFE]: [City M].
HIS HONOUR: [City M]. All right. And does – is it common ground that that is pre-acquired property?
MR HARTWELL: Yes, your Honour.
HIS HONOUR: So is that part of the pool, do you say?
MR HARTWELL: No, your Honour. We submit, having regard to the fact that it’s a short marriage, the only asset that is really part of the pool is – or should be considered is the house at [Suburb B].
(Emphasis added)
The later exchange is relevantly as follows:[30]
HIS HONOUR: I don’t think that’s applicable, because jurisdiction in respect of these matters is in respect of Australian property.
MR HARTWELL: Yes, your Honour. But I would submit that you can make orders in personam that will have an effect on property overseas by that reason.
HIS HONOUR: I know. But there is no property overseas.
MR HARTWELL: Well - - -
HIS HONOUR: There is property in Australia.
MR HARTWELL: Yes.
HIS HONOUR: Yes. Right.
(Emphasis added)
[30] Transcript, 9 March 2018, p 88 ln 13 – 27.
The statement by his Honour that “there is no property overseas”, is contrary to uncontroversial evidence and plainly incorrect. We consider that a fair reading of the transcript as a whole reveals that this statement is infelicitous rather than a statement made in ignorance of the evidence. Other comments made by his Honour indicate with tolerable clarity that his Honour was aware that the parties had interests in property other than the Suburb B property.
However that statement, and others, made by his Honour, are said to be indicative of a more fundamental error. It is contended that the erroneous statement in particular reflects an absence of any consideration of property, other than the Suburb B property, in the reasons. In addition, reference is made to his Honour describing the Suburb B property as the “only … real asset of the marriage” (at [1]) and the statement at [5] that “[i]t is conceded by all parties that the only asset in dispute so as to constitute the subject matter of any property adjustment order is the [Suburb B] property”.
Further, it can fairly be said that the transcript reveals each of the counsel for the wife and his Honour appearing to proceed on the assumption that s 79 is applicable only to “matrimonial property” or “property of the marriage” and thereby to have ignored s 79(2) of the Act and what was authoritatively said about its dictates by the High Court in Stanford v Stanford.[31]
[31] (2012) 247 CLR 108 (“Stanford”).
Expressions such as “the matrimonial pool” of property or “matrimonial property” or “assets of the marriage” are almost ubiquitous in submissions made to the courts and are often seen in reasons for judgment. As terms of description those, and like, expressions are convenient enough, but they are apt to mislead.
Section 79 of the Act refers to, and applies to, “the property of the parties to the marriage or either of them”. The s 79 task commences by “identifying, according to ordinary common law and equitable principles” all of the existing legal and equitable interests in property owned by both of the parties and each of the parties.[32] Having identified all interests in property, a separate question must be answered: whether justice and equity requires the interests in any or all of that property to be altered. If so, a yet further separate question then becomes what orders altering those interests are just and equitable.[33]
[32]Stanford at [37] per French CJ, Hayne, Kiefel and Bell JJ.
[33]Stanford at [40] per French CJ, Hayne, Kiefel and Bell JJ.
If his Honour proceeded on the assumption that the respective interests in property of the parties situated in China were not relevant to the s 79 process, his Honour has plainly erred. The relevant error is not only in the adequacy of the reasons but is a fundamental error of law. The first question for this Court is, can the references to a pool of property which excludes property other than Suburb B be properly seen as a shorthand means of posing and answering the question which s 79(2) mandates must be answered prior to addressing s 79(4) or, rather, are those references indicative of the erroneous assumption referred to?
It is contended on behalf of the husband that the latter conclusion gains force not only by reference to the passages earlier quoted but also from the fact that neither counsel for the wife nor his Honour referred in terms to s 79(2) of the Act during the hearing and neither did his Honour refer to that fundamental sub-section in the reasons for judgment. There is force in that assertion. The passages earlier quoted, and other relevant passages of the transcript, make clear an approach that excludes property other than Suburb B from “the pool”. His Honour’s question earlier quoted is precisely to that effect.
Moreover, at [26] of the reasons his Honour exhibits, with respect, the very conflation which the High Court in Stanford made clear must be avoided. His Honour says this:
There is no application for spousal maintenance on foot in this matter. I am required, when making an order for property adjustment pursuant to section 79(1) of the Family Law Act 1975 (the Act), to make such order under section 79(2) which is in all of the circumstances just and equitable.
We are persuaded of a fundamental error in approach; his Honour did not address s 79(2) as a question separate to what orders should be made pursuant to s 79, following consideration of s 79(4) and in doing so ignored both the dictates of the section and the interpretation of it made clear by the High Court in Stanford.
The Full Court in Lane & Nichols[34] suggested at [72] that it will be a “rare or exceptional case” where identification of a fundamental error of law does not lead to the Full Court ordering a rehearing. However, s 94AAA(6) of the Act provides that a rehearing may be ordered by the Full Court if the Court considers that course “appropriate”. The meaning of that expression as interpreted by the High Court by reference to the analogous s 28(1)(f) of the Federal Court of Australia Act1976 (Cth), was examined in Lane.[35] The Full Court pointed out[36] that the plurality in Conway v The Queen[37] discussed “… a number of authorities concerning both civil and criminal matters (as was Conway itself)…” before concluding at [6]:[38]
To construe s 28(1)(f) as authorising the dismissal of appeal on the basis that no substantial miscarriage of justice has actually occurred gives effect to the long established rule of the common law that a new trial is not ordered where an error of law, fact, misdirection or other wrong has not resulted in any miscarriage of justice…
[34] (2016) FLC 93-750 (“Lane”).
[35] Lane at [73] – [81] citing Conway v The Queen (2002) 209 CLR 203 (“Conway”); Chamberlain v The Queen [No. 2] (1984) 153 CLR 521 and the earlier judgment of Dixon CJ in Balenzuela v De Gail (1959) 101 CLR 226 at 234 – 235 to the same effect in a common law context.
[36]Lane at [76].
[37]Conway per Gaudron A-CJ, McHugh, Hayne and Callinan JJ.
[38]Conway at [6].
For the following reasons, we are not persuaded that injustice to the husband has occurred. In our view, the only conclusion open on the record before us in respect of the s 79(2) requirement is that justice and equity required a s 79 order being made in respect of the Suburb B property but not in respect of the other property of either of the parties.
The High Court said in Stanford:[39]
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
(As per original)
[39]Stanford at [42].
The ready satisfaction of the s 79(2) requirement leads in many cases to the parties agreeing that its requirements are met and that a s 79 order should be made by applying s 79(4). However, s 79(2) requires the exercise of a judicial discretion and the parties’ agreement cannot bind the Court. Of course, all else being equal, the parties’ consent is extremely persuasive.[40] A consequence of the matters just discussed is that, in very many cases, the required satisfaction of s 79(2) is at best alluded to and must be gleaned from non-specific references within the transcript.
[40] Adapting, with great respect, Brennan J in Harris v Caladine (1991) 172 CLR 84 at 103 “The Court may be satisfied that [s 79(2) is satisfied] by reference not only to the material before the Court … but by reference to the advice available to the respective parties and the consent which they respectively give to the [section being satisfied]”.
That is plainly unsatisfactory and often leads to error. Clear and specific submissions should make clear how it is said that s 79(2) is satisfied on the evidence before the Court and reasons should make clear (however briefly the circumstances might dictate) why that assertion is accepted.
Here, no such agreement is indicated and nor can any reference to s 79(2) be gleaned or implied in the submissions or in his Honour’s reasons.
The evidence reveals that the parties’ respective property was all owned by each of them prior to a marriage that subsisted for only 15 months. The parties’ respective property was kept separate from the Suburb B property. There is no evidence of any informal agreement or indeed any discussions about the other’s property from which any “stated or unstated assumptions” in respect of it might be gleaned other than that each kept it separate from the other party and separate from the Suburb B property. There is no evidence that either party saw the other’s Chinese property, much less used it or occupied it. Neither party made any specific claim to the other’s property nor claimed any direct contribution to it. Any claimed indirect contribution made by each to the other’s property other than Suburb B must take account of the fact that the property was situated overseas and the matters just referred to.
By way of contrast, the parties occupied the Suburb B property and it seems clear that the property was purchased so as to permit their cohabitation in it (albeit that, at trial, the parties contended for differing periods of cohabitation occurring there). Crucially, that property is vested in the name of the husband in circumstances where the wife asserted (ultimately successfully) that she paid the whole of the purchase price. The just and equitable requirement is “readily satisfied” in respect of that property.
While we are satisfied of a fundamentally erroneous approach by his Honour, the warrant for intervention by this Court is that injustice arises as a consequence. We are not persuaded that it does so here. As we have said, despite the failure to exercise the discretion required by s 79(2), had the question required by the sub‑section been posed and answered as it should have been, the only conclusion open on the evidence is that it was just and equitable to make an order pursuant to s 79 in respect of the Suburb B property but not in respect of the parties’ other property.
To the extent that this aspect of the challenge addresses specifically an inadequacy of reasons, it is important to again recognise that the adequacy of reasons for judicial decisions is significantly influenced by the circumstances of the case, and the issues defined by the parties as requiring determination.[41] A principal potential injustice sought to be addressed by adequate reasons is that which arises from a litigant being unable to have explained why their case has been rejected. No such injustice occurs here. It should be reiterated that neither party directed any questions or submissions to property other than the Suburb B property. As we have sought to point out, that did not relieve his Honour from the obligation placed upon him by s 79(2) but his Honour’s ex tempore reasons can otherwise be seen to be tailored to the circumstances of the case as presented and argued.
[41] See, for example, Pettitt v Dunkley [1971] 1 NSWLR 376; Tatmar PastoralCo Pty Ltd v Housing Commission of New South Wales (1984) 54 ALR 155; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Bennett and Bennett (1991) FLC 92-191.
(b) The Contributions and Section 75(2) Challenges
The first 24 paragraphs of his Honour’s 28-paragraph judgment are directed to resolving the central factual issues in the case to which we referred at the commencement of these reasons. Paragraph 26 of the reasons has earlier been quoted. That paragraph aside, his Honour’s consideration of the matters required to be considered by s 79(4) of the Act is confined to three paragraphs of the judgment which we will quote in full:
25.The husband is, on his evidence, the owner, or at least the part‑owner, of a family … business situated in China. No evidence was given as to the nature of the [products] which might have been produced by or on behalf of the husband. He receives some small amount of money per month by way of his share of profits. There is no evidence to the contrary. The wife has business interests in China and her position is that she is a woman of substance in a monetary sense.
…
27.There are no children of the marriage. Each of the husband and wife had adult children who are no longer dependants. There is asserted to be, on the part of the husband, a child aged 6 years who resides in [Country P] and in respect of whom there is an obligation to pay the sum of $100 per week by way of maintenance, but otherwise there is no evidence as to the needs of any such child.
28.As to the matters which must be taken into account under section 79(4) of the Act, I find as follows:
a)The wife has made a direct financial contribution in the amount of approximately $710,000 towards the acquisition of the [Suburb B] property. The husband has, I infer, taken steps to conserve and improve such property since the time of its purchase. He has been living in the home primarily and to the extent that there is any increase in value, the wife has not been responsible for same. He no doubt has spent some money in minor maintenance over the years, albeit that such sums have not been quantified.
b)As indicated earlier, the husband has made a non‑financial contribution toward the conservation and improvement of the property at [Suburb B]. He is largely responsible for any increase in value of the property in that regard.
c)The marriage was a short one and there was no indication that it was one likely to endure based upon mutual love and affection. There is little evidence that the wife was a good homemaker or that she made any relevant contribution in that regard.
d)Any order which I make is, in my opinion, not likely to affect the earning capacity of either party to the marriage.
As can be seen, those sub-paragraphs reflect the numbering and subject matter of s 79(4)(a) to (d). It will also be seen that no reference is made in terms or by subject matter to s 79(4)(e), which sub-paragraph refers to s 75(2).
Ground 5 is framed by reference to a failure of the reasons to make specific reference to contributions made to property other than Suburb B. Our earlier comments as to the issues identified and pressed pertain equally to that challenge.
In argument, counsel for the husband makes specific reference to what is said by his Honour at [24] of the reasons:
Accordingly, I find that the [Suburb B] property was purchased solely from moneys provided to the husband by the wife. The market value of the property as at May 2015 would have been reflective of the purchase price. There is no direct evidence of the current valuation of such property. It has been suggested by counsel for the wife that the property is now valued in excess of $700,000 but, as indicated, there is no evidence of such valuation. It must be said, though, that to the extent that the property has, or may have, appreciated in value, such appreciation is due to the efforts of the husband, not the wife. The husband has continued to reside in Australia at the subject property and it must be inferred in the absence of evidence to the contrary that he has maintained such property. The wife, on the other hand, has lived overseas and cannot seek to have attributed to her efforts any increase in value.
Counsel contends that “what is missing” from the reasons is “any evidence of the quantum of what that appreciation might be or the way in which the contribution should have informed an adjustment”.[42] As a plain reading of [24] of the reasons reveals, his Honour appears to make a finding of a specific contribution despite, in the same paragraph, indicating that any such finding has no evidentiary foundation.
[42] Appeal transcript, 13 September 2018, p 32 ln 29 – 39.
However, apart from the fact that counsel’s argument does not bear any relation to the ground (which is confined to a contention in respect of property in China), any such erroneous finding cannot be productive of injustice to the husband; the erroneous finding is to his benefit and there is no cross-appeal by the wife.
The circumstances of this case marked it as one in which the direct financial contributions of the parties to the Suburb B property would be of overwhelming significance. Equally, while his Honour made no specific reference to the indirect contributions made to the property which might have been linked to his occupation and preservation of it, his Honour’s orders in respect of the division of the Suburb B sale, seen against the wife’s direct financial contribution of, as his Honour found, the entirety of its purchase price, stand in the way of the husband establishing the necessary injustice.
While counsel for the husband orally referred to the complaint in Ground 6 being encompassed by a challenge to the adequacy of reasons, we observe that, in terms, it asserts specific discretionary error, namely a failure to consider relevant considerations, namely “the factors referred to in ss.75(2) of the Act”.
As expressed orally, the contention is that his Honour’s reasons are manifestly inadequate to explain which of the matters contained within the sub-section were considered by his Honour and the comparative weight which his Honour attached to them.
Although not referenced specifically to s 79(4)(e) or s 75(2), the reasons contain findings that:
a)The husband has a six year old child who resides in Country P for “whom there is an obligation to pay the sum of $100 per week” at [27];
b)The husband receives “some small amount of money per month by way of his share of profits” in a family business situated in China at [25];[43]
c)The wife has “business interests in China” and that she is “a woman of substance in a monetary sense” at [25].
[43] The husband deposed to receiving $250 per week in his affidavit filed 18 November 2016, at paragraph 27(b).
Those findings, albeit unamplified, can be seen to be referable, respectively, to s 75(2)(d)(ii); (b); and also, perhaps, (g).
In addition, other factors are apparent from the reasons or facts that are either uncontroversial or not challenged on appeal. In particular:
a)This is a very short marriage that embraced an even shorter period of cohabitation which, on any view, had a negligible effect on each party’s income earning capacity and financial circumstances more broadly (s 75(2)(k) and (o));
b)There are no children of the marriage (s 75(2)(c));
c)As a result of orders made by his Honour each of the parties retain property in China estimated to exceed $1 million in each case (s 75(2)(n)(i); (b); and (g)).
There is no doubt that it would have been preferable for his Honour to have referred specifically to all such s 75(2) factors as his Honour considered relevant. The absence of any reference to s 79(4)(e) when his Honour otherwise referred (extremely briefly) to summary findings in respect of what can be seen to be other relevant sub-paragraphs of s 79(4) has, understandably enough, fuelled significantly the husband’s assertion on appeal.
However, again, the relevance of particular s 75(2) factors and the weight attributed to them must depend upon the circumstances of the individual case. The circumstances here are dominated by an extremely short marriage and even shorter cohabitation; the absence of children of the marriage; the significant separate property of each party which they will each retain; and the central factual finding, the consequence of which is that the husband made no direct financial contribution to the property which he owned and in which he resided during the marriage and between its cessation and trial.
We have not been directed to any relevant matter the absence of reference to which suggests injustice to the husband nor to any matter which ought to have been taken into account with any such asserted effect.
In the particular circumstances of this case, we are not persuaded that his Honour’s very brief ex tempore reasons are inadequate to explain his conclusions in respect of the case agitated by the husband.
Conclusion
The husband’s appeal fails.
Costs Of The Appeal
Pursuant to procedural orders made on 23 August 2018, each party filed a schedule of the costs to be sought on the appeal at the scale prescribed by the Family Law Rules 2004 (Cth).
In the event that the appeal was unsuccessful, the wife sought that the husband pay her costs of and incidental to it, in an amount of $21,553.76. In the alternative, if the Court determined that, in accordance with s 117(1) of the Act, each party should bear their own costs, both parties sought costs certificates pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).
Neither party deposes to significant income but their respective asset positions are strong. The husband has been “wholly unsuccessful” in his appeal in terms of the orders we will make. However, it will be clear from what we have said that, despite the foundation of his Honour’s orders lying in the absence of evidence produced by the husband, the matters sought to be advanced on the appeal were, although ultimately unsuccessful, not without ostensible merit.
We consider that the circumstances do not justify departure from s 117(1) and we will order that each party bear their own costs.
I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Murphy & Kent JJ) delivered on 15 February 2019.
Associate:
Date: 15 February 2019
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