Yeng & Sun
[2025] FedCFamC1A 106
•18 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Yeng & Sun [2025] FedCFamC1A 106
Appeal from: Sun & Yeng (No 5) [2024] FedCFamC1F 702 Appeal number: NAA 333 of 2024 File number: SYC 8025 of 2022 Judgment of: MCCLELLAND DCJ, GILL & BRASCH JJ Date of judgment: 18 June 2025 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Appeal from orders dividing the parties’ property so the husband and wife received 50 per cent each of the matrimonial pool – Where the appellant contends that the primary judge erred in assessing the contributions of the parties as equal – Where the appellant contends the primary judge provided inadequate reasons to explain his treatment of funds provided to the appellant by his parents – Where reasons do not establish why the primary judge held that a sum of cash from the appellant’s parents was a gift to both spouses – Reasons inadequate – Appeal allowed – Costs certificates granted – Written submissions in respect to whether the matter should be remitted or whether the Full Court should re-exercise discretion. Legislation: Family Law Act 1975 (Cth) s 79
Federal Proceedings (Costs) Act 1981 (Cth)
Cases cited: Angelakis v Psychology Board of Australia [2024] SASC 133
Boyle (A Pseudonym) v The Queen (2022) 299 A Crim R 92; [2022] SASCA 50
Chief Commissioner of Police v Crupi (2024) 419 ALR 271; [2024] HCA 34
Hambart & Hambart [2023] FedCFamC1F 642
House v The King (1936) 55 CLR 499; [1936] HCA 40
Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24
Number of paragraphs: 55 Date of hearing: 2 April 2025 Place: Sydney Counsel for the Appellant: Mr Stapleton Solicitor for the Appellant: Longton Legal Counsel for the First Respondent: Dr Ingleby with Mr Mellas Solicitor for the First Respondent: Lander & Rogers The Second Respondent: Did not participate ORDERS
NAA 333 of 2024
SYC 8025 of 2022FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR YENG
Appellant
AND: MS SUN
First Respondent
MS HAU
Second Respondent
ORDER MADE BY:
MCCLELLAND DCJ, GILL & BRASCH JJ
DATE OF ORDER:
18 JUNE 2025
THE COURT ORDERS THAT:
1.The appeal is allowed.
2.The Court grants to the appellant a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.
3.The Court grants to the first respondent a costs certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
4.Within 21 days of the date of these orders, the parties are to file written submissions, of no more than 3 pages, in respect to the question as to whether the matter should be remitted for re-hearing before a judge other than the primary judge, or whether the Full Court should re-exercise discretion.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Yeng & Sun has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ, GILL & BRASCH JJ:
This appeal concerns final orders made by a judge of the Federal Circuit and Family Court of Australia (Division 1) (“the primary judge”) on 13 November 2024, pursuant to s 79 of the Family Law Act 1975 (Cth). Those orders effected an equal division of the matrimonial pool, comprising of real properties in Australia and overseas, cash, and superannuation, such that each party received $8,933,275.
The Amended Notice of Appeal filed by the appellant, Mr Yeng (“the husband”), on 12 February 2025 makes two primary complaints: the first is that the primary judge erred in finding that the husband and Ms Sun’s (“the wife”) contributions were equal, and the second is that his Honour provided inadequate reasons to explain his treatment of funds provided to the husband by his parents.
Relevant context to the appeal is that the primary judge found that the husband and wife benefitted from substantial financial contributions made by the husband’s parents. Those contributions were in five categories. The husband’s parents provided funds:
(1)In the sum of $400,000 for the husband and wife to acquire a property in Suburb NN, New South Wales;
(2)For the husband and the wife to separately acquire two properties in Country B;
(3)To assist the husband and wife acquire their matrimonial home in Suburb LL;
(4)Associated with the husband undertaking work in his parents’ business in Country B; and
(5)Initially intended to acquire bonds to assist in the husband’s parents intended migration to Australia, but which subsequently benefitted the parties upon their maturity.
No challenge is made to the primary judge’s conclusions in respect to the first four of those categories. The focus of the appeal is on the fifth category. The husband contends that the primary judge failed to determine that funds, in the sum of $5 million, that were initially provided by the husband’s parents to acquire a bond for immigration purposes, but which were found to have been subsequently relinquished to the husband, were a contribution of the husband to the matrimonial property pool, justifying an adjustment in his favour. This is in circumstances where the wife conceded during the proceedings that if funds, which had been returned to the husband’s mother in respect to the immigration bond monies, were to be “added back” to the property pool, then the husband was entitled to an adjustment in his favour.
As an alternative but related ground of appeal, the husband contends that the primary judge failed to provide adequate reasons as to how the finding that the immigration bond funds had been relinquished for the use of the husband “morphed” into a finding that the funds were effectively a gift to both the husband and wife. The point is highlighted by reference to anomalous findings where the primary judge found that that the funds in the first two categories, to which we have earlier referred, were in the nature of gifts to both the husband and the wife.
The wife opposes the appeal, contending that while there was no express finding that the immigration bonds funds were intended as a gift by the husband’s mother and/or father to both spouses, such a finding can reasonably be inferred, having regard to a reading of the judgment as a whole and in the context of the parties’ contentions. Consequently, the wife seeks an order for the dismissal of the appeal, with an order for costs in her favour.
We have determined that the appeal has merit and must be allowed for the reasons that follow.
RELEVANT FACTS AND BACKGROUND
In circumstances where the appeal falls on two discrete issues, we set out the background insofar as it is relevant to the determination of those issues.
The husband was born in 1976 and is currently 48 years of age. The wife was born in 1978 and is currently 47 years of age. The second respondent, Ms Hau (“the second respondent”), is the husband’s mother. She was born in 1948 and is currently 76 years of age.
The husband and wife married in 2001. They were married for 20 years and had two children, who are now teenagers, and live with the wife in Country B. The husband also lives in Country B.
The wife initiated these proceedings in 2022.
The trial commenced on 25 September 2023 and proceeded across eight days in four tranches, concluding in December 2023. Judgment was formally reserved on 19 July 2024, when the last submission was received into evidence. Judgment was delivered on 13 November 2024.
In setting out the husband and wife’s assets, his Honour noted (at [6]) that the balance sheet was largely agreed. However, the primary judge was required to determine whether the husband’s mother, the second respondent in the proceedings, had an equitable interest in funds and property acquired from funds sourced from an amount of approximately $5 million, which were transferred from Country B by or on behalf of the husband’s mother for the purpose of acquiring financial bonds, to facilitate the intended migration of the husband’s parents to Australia.
The history of transactions relating to those funds were largely set out in pleadings filed by the second respondent which, omitting controversial contentions, is as follows (at [9]):
(a) in February 2013 the husband’s mother was told that to obtain a significant investor visa she needed to invest AUD $5 million [in Australia] on certain terms;
(b) while assisting his mother to set up the necessary accounts in Australia so as to give effect to the deposit of funds in accordance with the significant investor visa, in early 2013 the husband opened Commonwealth Bank account #...69 and Commonwealth Bank account #...77 and the husband lodged an authority to operate both accounts naming the husband as an authorised signatory to both accounts;
(c)in early 2013 the husband’s mother deposited approximately AUD $4,900,000 into Commonwealth Bank account #...69;
(d)by late 2013 funds standing to the credit of the husband’s mother in the two Commonwealth Bank accounts identified above totalled AUD $5,038,615.87;
(e) on the instructions of the husband’s mother, the husband transferred AUD $5,000,000 to the New South Wales government and in late 2013 she acquired NSW Waratah Bonds in an equivalent sum;
[we will reference that $5 million as the “Waratah Bonds funds”]
(f)the NSW Waratah Bonds matured in early 2018 generating interest in the period between late 2013 to early 2018 of $685,518.90;
…
(h)in late 2016 the husband and wife entered into a contract to purchase the whole of the land known and described as Unit 1 K Street, Suburb J in the State of New South Wales … (“Unit 1”);
(i)the same day the husband and wife entered into a contract to purchase the whole of the land known and described as Unit 2 K Street, Suburb J in the State of New South Wales … (“Unit 2”);
(j)in late 2019 the husband used his ability to transact on his mother’s two bank accounts so as to misappropriate the sum of AUD $5,851,860;
(k)the misappropriated sum of AUD $5,851,860 was deposited into an account in the joint names of the husband and the wife;
(l)in late 2019 the husband and wife completed their purchase of Unit 1 and Unit 2 by paying $1,206,030 and $1,226,030 respectively from funds in their joint account into which the allegedly misappropriated sum of AUD $5,851,860 had earlier been deposited;
(m)legal title to Unit 1 and to Unit 2 is held by the husband and wife as joint tenants;
…
After November 2020, the husband transferred to his mother $3,409,632 in January and March 2021 (at [441]). It was not in dispute that the sum the husband transferred to his mother was in purported partial repayment of the funds sourced from the Waratah Bonds funds.
Having regard to that history, the wife contended that the Waratah Bonds funds did not form part of the matrimonial property, alleging they had been fraudulently misappropriated by the husband including for the purpose of acquiring the two apartments located in Suburb J. That claim was, however, rejected by the primary judge.
The primary judge found that the use, by the husband, of the Waratah Bonds funds to acquire the Suburb J apartments did not amount to misappropriation because the second respondent had relinquished control of those funds to the husband. In that context, his Honour explained (at [408]) that the husband’s parents had abandoned any interest they had in Australia when they chose not to migrate in 2016 and, as such, the husband was permitted to apply the funds in any manner that he wished.
In circumstances where the second respondent did not participate in the appeal, having filed a Submitting Notice on 13 February 2025, the primary judge’s findings in relation to the use of the Waratah Bonds funds is not the subject of scrutiny, with no party alleging fraudulent use or the misappropriation of those funds.
In his judgment, the primary judge found that the property pool was valued at $17,866,550.60 (at [486]), comprising of real property in Australia and Country B, cash, and superannuation. His Honour also included two addbacks in the pool, namely:
(1)A partial property distribution that each party received prior to the final hearing in the sum of $680,000 (at [435]); and
(2)The sum of $3,409,632, which was the amount the husband had unilaterally paid his mother between January and March 2021 (at [443]).
The primary judge noted (at [419]) that King’s Counsel for the wife “contended that the sum the husband transferred was his own because the husband’s parents had earlier acquiesced in the husband treating AUD $5.8m[illion] as if it were his own and $3.4m[illion] formed part of the larger sum” (emphasis added). That submission was accepted by the primary judge.
Significantly, King’s Counsel for the wife, at the trial, acknowledged that if his submission was successful and the amount of $3,409,632 was added back to the property pool, then it would be just and equitable to divide the total pool with 45 per cent to her and 55 per cent to the husband. Thereby, the wife implicitly acknowledged those funds as being a contribution by the husband, which would tip the total contributions in the husband’s favour, over and above those of the wife.
Despite that concession, and the primary judge’s decision to add the amount of $3,409,632 back into the property pool, his Honour concluded that each party should receive 50 per cent of the pool, being $8,933,275 each.
The relevant contribution findings underpinning that conclusion were set out (at [458]) as being:
(a)at the commencement of their relationship the husband and wife had no appreciable or valuable assets between them;
(b)the husband and wife did not expend their own money acquiring real estate in Australia;
(c) the husband’s income in Australia was de minimis;
(d)the wife did not work but she provided non-financial contributions in the nature of child raising, and she did that in both Australia and Country B, for the whole of the marriage thereby permitting the husband to apply himself towards such gainful employment as he was able to find; and
(e)the husband and wife, over the life of the marriage, received very considerable benefactions from the husband’s parents.
To effect the equal division of property, the primary judge ordered that the wife would retain the former matrimonial home valued at $6.5 million, the two Suburb J apartments valued at $2.2 million, and her partial property distribution of $680,000. In turn, the husband would receive $446,725 from the wife and the balance of the net sale proceeds from a Suburb LL apartment in the sum of $374,169. Additionally, he would retain the parties’ various properties in Country B valued at $3,854,850, his partial property distribution of $680,000, credit for payments to his mother amounting to $3,409,632, small amounts of cash in bank accounts, his motor vehicle, and his superannuation.
It is the primary judge’s conclusion that there should be an equal division of the parties’ property, despite in the context of finding “very considerable benefactions from the husband’s parents” (at [458(e)]). That is the focus of this appeal.
THE APPEAL
In his Amended Notice of Appeal, the husband relies on two grounds. They are:
1In making orders 1 to 11 inclusive made on 13 November 2024 (“the relevant orders”) in circumstances where:
1.1 at the commencement of their relationship the husband and wife had no appreciable or valuable assets between them;
1.2 the husband and wife did not expend their own money acquiring real estate in Australia;
1.3 the Husband’s income in Australia was de minimis;
1.4 the Wife did not work;
1.5 in or about 2007, the Husband’s parents provided to the parties approximately $400,000 which was used by the parties for the purchase and improvement of [the Suburb NN property] which was sold in 2014 for $855,000 the proceeds of which were retained by the parties;
1.6 in or about 2010, the Husband’s parents transferred title to the property at [AA Street, Suburb BB, City CC, Region Z, Country B] to the Husband for no consideration;
1.7in or about October 2012, the Husband’s mother transferred $900,000 to the Husband which in 2013 he used to purchase [the OO Street, Suburb LL property] which he sold in May 2022 for $1,770,000 and from the proceeds of sale paid $680,000 to each party as a partial property distribution leaving $374,169;
1.8in or about 2013, the Husband’s mother transferred approximately $5 million to an account in her name operated by the Husband (“the mother’s account”) which money the Husband could do whatever he wanted with of which the Husband:
(a)applied $5 million to the purchase of a bond in the name of his parents which matured [in early] 2018;
(b)deposited the funds received on maturity of the bond and interest earned on the bond to the mother’s account;
(c)withdrew from the mother’s account approximately $5.9 million (“the visa money”) from which he:
(i)applied $1,206,030 and $1,226,030 respectively (total of $2,432,060), towards the purchase of [the Suburb J apartments] in [late] 2019;
(ii)paid $3,409,632 to his mother between January and March 2021;
1.9the net assets including superannuation of the parties as at the date of the relevant orders:
(a) had a value of $17,866,550.60;
(b) included the [City CC] property at a value of $223,858;
(c)included $374,169 being the balance of net proceeds of sale of the [Suburb LL] apartment;
(d)included the [Suburb J] apartments at a combined value of $2.2 million;
(e)included as an add back $3,409,632 which the Husband had paid to his mother;
(f)included as partial property distributions two amounts of $680,000 paid to the parties;
(g)included no amount as owing by either of the parties to either of the Husband’s parents in respect of the mother’s funds,
the primary judge erred in finding that the contributions by the parties were equal (AB p194, R [433]):
1.10 as such finding is unreasonable or plainly unjust and is plainly wrong;
1.11failed to take into account a material consideration, namely the receipt and application of the mother’s funds,
and should have found that the contributions by the Husband were materially greater than those of the Wife, such that the relevant orders were not just and equitable and the discretion miscarried.
2In making the relevant orders, the primary judge failed properly and sufficiently to explain his reasoning for making such orders in that he failed properly and sufficiently to explain why he found that the contributions of the parties were equal.
CONSIDERATION
Both grounds of appeal are interrelated. In essence, it is contended that that the Court’s conclusion that the funds originating from the Waratah Bonds funds were joint assets, lacked a proper evidential basis and, as a related issue, the Court failed to explain the process whereby the funds transitioned or “morphed” from funds in the husband’s control to become funds that were jointly owned by both the husband and the wife. The end result, it is contended, is that the primary judge’s contributions analysis failed to adequately consider the husband’s financial contributions, including the funds sourced to acquire the Waratah Bonds.
In that respect, it is noted that (at [458(e)]) the primary judge, in undertaking the contributions analysis referred to the “very considerable benefactions” from the husband’s parents, but did not explicitly include the funds sourced to acquire the Waratah Bonds as part of that analysis.
Because of its centrality to the judicial function, we will firstly consider the inadequacy of the reasons ground: Wainohu v New South Wales (2011) 243 CLR 181 at [54] (French CJ and Kiefel J).
ADEQUACY OF JUDICIAL REASONS
The provision of adequate reasons for judgment is central to the judicial function, promoting confidence in the judicial process by demonstrating transparency and accountability: Boyle (A Pseudonym) v The Queen (2022) 299 A Crim R 92 at [118]. As a baseline, in providing reasons for judgment, judges must identify the principles of law applied and the main factual findings relied upon to adjudicate the issues in dispute: Chief Commissioner of Police v Crupi (2024) 419 ALR 271 at [19] (Gageler CJ, Edelman and Beech-Jones JJ).
The guidance provided in the authorities setting out the nature of the requirement of providing adequate reasons was usefully summarised by Doyle J in Angelakis v Psychology Board of Australia [2024] SASC 133 at [355]–[356], as follows:
Turning to the obligation to give reasons, the principles were summarised in Boyle (a pseudonym) v The Queen [[2022] SASCA 50 at [119] (Livesey P, Lovell and Bleby JJA)]:
Reasons are to be read as a whole [R v Ricciardi (2017) 128 SASR 571 at [25]]. It is not necessary for a judge or magistrate to give extensive and elaborate reasons [R v Ricciardi (2017) 128 SASR 571 at [25]; R v Mayger (2013) 116 SASR 488 at [21]; R v Keyte (2000) 78 SASR 68 at [52]; Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385–386]. The content and detail of reasons will vary according to the nature of the specific jurisdiction and jurisdictional powers exercised by each court, as well as the particular matter the subject of the decision [DL v The Queen (2018) 266 CLR 1 at [32]]. However, an appellate court should not have to guess or speculate as to what a magistrate or judge may or may not have meant, particularly on an important issue. The reasons must be more than a bare statement of the principles of law applied and the findings of fact made; there must be exposed a reasoning process linking them and justifying the latter and, ultimately, the verdict that is reached [Fleming v The Queen (1998) 197 CLR 250 at [28]]. Reasons must identify the relevant principles of law, refer to relevant evidence, state the magistrate or judge’s findings upon material questions of fact and provide an explanation for those findings and the ultimate conclusions reached by the magistrate or judge [DL v The Queen (2018) 266 CLR 1 at [32]–[33]].
Obviously, there are limits to the requirement to deal distinctly with every item of evidence and argument presented. Justice Nettle dissented in the outcome in DL v The Queen [(2018) 266 CLR 1]. However, even on his statement of the principles, it is relevant to consider whether evidence was ‘cogent’, and whether arguments are ‘substantial’. In a passage recently referred to by the Court of Appeal with approval in the context of the reasons required to be given by the South Australian Employment Tribunal [Return to Work Corporation of South Australia v Wastell [2024] SASCA 98 at [102] (Livesey ACJ, Bleby and David JJA)], his Honour said [DL v The Queen (2018) 266 CLR 1 at [131]]:
Since parties must be able to see the extent to which their cases have been understood and accepted, a trial judge will ordinarily be expected to expose his or her reasoning on points critical to the contest between the parties. This applies both to evidence and to argument. If a party relies on relevant and cogent evidence which the judge rejects, the judge should provide a reasoned explanation for the rejection of that evidence. If the parties advance conflicting evidence on a matter significant to the outcome, both sets of evidence should be referred to and reasons provided for why the judge prefers one set of evidence to the other. Similarly, while a judge is not required to deal with every argument and issue that might arise in the course of a trial, if a party raises a substantial argument which the judge rejects, the judge should refer to it and assign reasons for its rejection. And in providing reasons, the judge is required to make apparent the steps he or she has taken in reaching the conclusion expressed, for reasons are not intelligible if they leave the reader to speculate as to which of a number of possible paths of reasoning the judge may have taken to that conclusion. Failure sufficiently to expose the path of reasoning is therefore an error of law.
(Emphasis added)
In an otherwise comprehensive and thoughtful consideration of the issues before him, the judgement of the primary judge has left us to speculate as to why he found that the Waratah Bonds funds were a gift to not only the husband, but also to the wife. For reasons which we explain, his reasons were therefore deficient.
PARTIES ARGUMENTS
The Husband
Counsel for the husband referred to the process of reasoning of the primary judge in concluding that the funds provided by or on behalf of his mother, to acquire the Waratah Bonds, were relinquished by the husband’s mother for his personal use.
By way of summary, that judicial reasoning process was as follows:
·The funds in the sum of approximately $5 million were deposited in Australia, to facilitate the husband’s parents’ immigration to Australia and were found not to have been illegally obtained (at [413]–[414]).
·The funds originated from the husband’s parents, primarily the mother (at [413]).
·The husband was authorised by his mother to manage the funds, acting as her agent (at [388]–[389]).
·The husband’s parents abandoned their plans to migrate in 2016 and were unable to repatriate the funds, leading to an inference that they abandoned the money (at [388]).
·The husband acted with express authority from his mother to withdraw and manage the funds (at [388]–[389]).
·No loan existed between the husband and his mother (at [398]).
·The husband’s mother behaved with indifference towards the return of the funds, never demanding repayment (at [401]).
·The husband was authorised to deal with the funds as he chose, without any mention of the wife being included in this authority (at [411]).
·The husband’s mother treated the husband as the owner of the funds, free to use them as he wished (at [442]).
It is submitted that following that course of reasoning, the Court determined that the funds were joint assets of the husband and wife, despite no explicit finding of a gift or evidence supporting this conclusion (at [443]).
The Wife
Counsel for the wife contended that the totality of the primary judge’s reasoning supported the conclusion that the funds were a gift to both the husband and wife.
Counsel submitted that the issue as to whether the Waratah Bonds funds were gifted to both the husband and the wife was identified by the wife as an issue requiring determination in the proceedings. In that respect, counsel for the wife referenced the wife’s pleading at paragraph 20A of the wife’s Further Amended Defence to the second respondent’s Amended Points of Claim filed on 6 November 2023, which stated: “[The second respondent] and [the husband’s father] gifted all of the funds in [the second respondent’s] [b]ank [a]ccounts to the [h]usband for the benefit of the [h]usband and the [w]ife”.
Counsel for the wife submits that it is relevant that the primary judge rejected the husband’s case that the funds were a loan, requiring joint repayment by both parties. The primary judge noted this at [471], stating: “I disagree that any indebtedness exists as between the husband and wife jointly and the husband’s mother”.
Counsel for the wife conceded that there was no direct evidence that the funds originating from the Waratah Bonds were intended as a gift to not only the husband but also the wife, but argued that the inference could be drawn from the reading of the judgment as a whole in the context of the circumstances of the case, including the concluding sentences of [404], [408] and [411] (Appeal Transcript 2 April 2025, p.65 lines 44–45).
The relevant extracts from those paragraphs are as follows:
404…On the balance of probabilities, the husband did not inform his mother of the acquisition of [the Suburb J apartments] because he took the view that he was under no obligation to tell her, the money being his own to apply in such manner as he chose.
…
408I find that once the husband’s parents decided not to migrate to Australia in 2016, they abandoned any interest each may have had in the funds in Australia and they thereafter permitted the husband to do whatever he wanted to do with the money.
…
411I reject the contention that the husband stole or misappropriated any money allegedly owned by his mother. I find that the husband was authorised to deal with those funds as he chose.
When pressed as to how those paragraphs infer the husband’s parents intended to gift the Waratah Bonds to not only the husband, but also the wife, counsel for the wife referenced a finding made by the primary judge in respect to funds provided by the husband’s parents to both the husband and the wife, shortly after their marriage. Counsel for the wife sought to extrapolate that finding to reflect the same or a continuing intention in respect to the Waratah Bonds funds. Specifically, reference was made to [248] of the reasons, which is as follows:
The husband’s mother gave evidence that she recognised that up to AUD $9,000,000 in gifts had been given by the husband’s parents. However, the husband’s mother qualified her answer by stating that gifts of that value had been given to the husband but not to the wife. That statement seemed to me to [b]e inherently improbable, at least insofar as the husband’s parents’ monetary transfers for the [Suburb NN] property was concerned. By 2007, the husband and wife were newlywed. As a matter of common human experience, there being no evidence of antipathy between the wife and the husband’s parents as at 2007 and 2008, it is more probable than not in my view that the husband’s parents’ financial assistance to enable the husband and the wife to settle the purchase of the [Suburb NN] property and to construct a dwelling on it took the form of a benefaction of some form to both the husband and to the wife jointly and not in the manner asserted by the husband’s mother, namely, as a gift solely to the husband. That is for the simple reason that, absent antipathy as between a son’s parents and a daughter-in-law, parents are more likely than not to wish to benefit the newly married couple jointly than only one of them individually.
(Footnotes omitted)
Counsel for the wife argued that the absence of evidence of antipathy between the husband and the wife at the time of the abandonment of the Waratah Bonds funds to the husband, supported the inference of a gift to both spouses in respect to those funds.
DISPOSITION
Ground 2 – Inadequate Reasons
It was uncontroversial that an issue in the proceedings that required determination was whether the Waratah Bonds funds, which were held to have been relinquished to the husband, should have been categorised as a contribution of the husband only or as a contribution made equally by the husband and the wife.
We find merit in the submissions of counsel for the husband that his Honour failed to provide adequate reasons to explain how he arrived at the conclusion that the relinquishment of the Waratah Bonds funds by the husband’s mother was a gift to both the husband and the wife and, to the extent that he so found he was, with respect, an error. This is because, taken at its highest, paragraphs [404], [408] and [411] of the primary judge’s judgment support only a finding that the husband’s parents gifted the Waratah Bonds funds only to the husband.
Counsel for the wife, appropriately, conceded that the primary judge did not refer to any direct or indirect evidence of an intention on the part of the husband’s parents or either of them, to gift the Waratah Bonds funds to not only the husband but also the wife.
In the absence of a reference to his earlier finding in respect to monies advanced by the husband’s parents to the husband and wife in 2007 (at [248]), it can be no more than a matter of speculation as to whether the primary judge intended, by extrapolation, to apply that finding to the abandonment of the Waratah Bonds funds to the husband in 2019.
Accordingly, we find merit in the second ground of appeal that the primary judge failed to provide adequate reason to explain why he concluded that the relinquishment of the Waratah Bonds to the husband constituted a gift to both the husband and also the wife. The appeal must therefore be upheld.
Ground 1 – Miscarriage of Discretion
Relevant principles to assist in determining whether the parents intended to gift funds to only their child or to both their child and their child’s partner, were comprehensively considered by Schonell J in Hambart & Hambart [2023] FedCFamC1F 642, where his Honour observed at [99]–[102]:
In relation to the question of a gift, Fogarty J in Gosper and Gosper (1987) FLC 91-818 (“Gosper”) said at 76,167–76,168:
…
Where a gift is made solely to the donor’s relative…and that spouse applies that property to the marriage, that is a direct financial contribution solely by that party and will be assessed in the ordinary way alongside other contributions by each party to the marriage. …
…
The critical case is where a relative of one of the parties gifts property to both of the parties to that marriage. Dependent upon the circumstances of the case it is, in my view, open to Court in such a case to look at the actuality and treat that as a “financial contribution made directly ... on behalf of’” the spouse relative (see for example Rainbird, Matthews, W., Underwood, Abdullah, Freeman, cf. Cleary, Hogan J. in Freeman, and Antmann).
In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made “because she was a daughter of that family” as was said in W.’s case at p. 75,527.
It is clearly a “financial contribution” and one “made directly” to the acquisition, conservation and improvement of property. In such cases it is open to the Court to conclude, if the facts justify it, that it was made “on behalf of” one spouse.
In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.
In Kessey & Kessey (1994) FLC 92-495 (“Kessey”) their Honours considered Gosper and held at 81,149–81,150:
… In our opinion the application of the principles enunciated in Gosper should not be so limited. Rather, those principles should be regarded as being applicable in all cases where there has been an advance of money or property by a parent (or perhaps even by some other relative) of one of the parties, to one or both of the parties (or to their property), and the circumstances of the advance cannot be categorized as a loan, or as any other recognized commercial transaction.
…
… In other words, a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.
In W & W [2000] FamCA 1302 [at 138], the Full Court noted that Kessey:
… effectively puts the onus on the spouse who is not the child of the generous parent to place evidence before the Court that the parent did not intend to benefit only his or child, absent which the benefaction of the parent will be presumed to be a contribution by or on behalf of the child spouse…
(Emphasis added)
If it is the case, as contended by counsel for the wife, that his Honour relied on “common human experience” to determine an intention on the part of the husband’s mother to gift the Waratah Bonds funds to both the husband and the wife (Appeal Transcript 2 April 2025, p.66 lines 31–35), then his Honour was in error in having regard to an irrelevant consideration within the principles adumbrated in House v The King (1936) 55 CLR 499 at 505. This is because the judge acted upon a wrong principle and also because he allowed extraneous or irrelevant matters to guide or affect him. That is, the primary judge’s reliance upon “common human experience” (at [248]) to determine the husband’s mother’s intention was an irrelevant consideration. What was relevant was the proper consideration of evidence establishing the husband’s mother’s intention in this particular case.
In that respect, counsel for the wife properly conceded there was no direct evidence of the mother’s intention in this case (Appeal Transcript 2 April 2025, p.59 lines 32–35) and, as we have earlier explained, the indirect evidence referred to by counsel for the wife establishes, at its highest, only an intention on the part of the husband’s mother to gift the Waratah Bonds funds to the husband and not to the wife.
In the absence of evidence as to intention on the part of the husband’s mother to gift the Waratah Bonds funds to both the husband and also the wife, it was therefore unreasonable for the primary judge to find that the Waratah Bonds funds were a contribution by both the husband and the wife rather than one solely by the husband. This is particularly so in the context of the concession of the wife, at first instance, that if funds originating from the Waratah Bonds funds were to be added back in the property pool, there should be a 5 per cent adjustment in favour of the husband.
Accordingly, as there is merit in both grounds of appeal, the appeal must be upheld.
RETRIAL OR REMITTAL
The parties expressed concerns regarding the protraction of these proceedings and the costs that would be incurred by the parties if the matter was to be remitted for rehearing and therefore expressed a desire for the Full Court to re-exercise discretion. Whether that is reasonably practicable requires the parties to agree on what specific facts this Court would rely on in re-exercising discretion.
As such, the parties will be given the opportunity to further consider this issue and submit brief written submissions, not exceeding three pages. The submissions should address whether this Court should re-exercise discretion or remit the matter for re-hearing before a judge other than the primary judge. Additionally, if the parties wish for this Court to re-exercise its discretion, they should specify the evidence we would consider, including any updating evidence and whether that evidence is controversial.
COSTS
The parties sought a certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). In circumstances where the appeal has been successful due to an error of law, it is appropriate to grant certificates in favour of both the husband and the wife for the appeal.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Gill and Brasch. Associate:
Dated: 18 June 2025
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