Zha & Wun (No 2)
[2025] FedCFamC1A 101
•13 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Zha & Wun (No 2) [2025] FedCFamC1A 101
Appeal from: Zha & Wun (No 8) [2024] FedCFamC1F 648 Appeal number: NAA 277 of 2024 File number: SYC 4269 of 2020 Judgment of: ALDRIDGE, GILL & CHRISTIE JJ Date of judgment: 13 June 2025 Catchwords: FAMILY LAW – APPEAL – RECUSAL APPLICATION – Where one of the judges of the Full Court hearing the appeal previously heard an ex parte application from the appellant wife and granted a series of freezing orders preserving assets pending the appeal – Where the orders were subsequently extended by consent – Where the respondent husband makes a recusal application on the basis of apprehended bias – Whether comments made by the judge in the ex parte hearing amounted to an acceptance of the wife’s allegations of fraud against the husband – Where the judge was identifying and testing the case being put – Where there is no logical connection between the purported finding of fraud and the proper disposition of the appeal – Application dismissed.
FAMILY LAW – APPEAL – PROPERTY – Large asset pool – Significant non-disclosure by the respondent husband at trial – Where the appellant wife contends the property adjustment should have been significantly larger due to the non-disclosure – Where the primary judge found a company was the husband’s alter ego – Where the wife contends the inclusion of the value of the company in the asset pool was mere fact-finding as opposed to a consequence of non-disclosure – Adequacy of reasons as to consideration of non-disclosure – Held the primary judge’s attribution of the company’s value to the husband was an appropriate response to non-disclosure – Where the property adjustment was just and equitable – Where the reasoning process is clear – Dispute as to ownership of property – Whether the primary judge erred by not finding the husband to be the beneficial owner of two properties via resulting trust – Where the factual findings precluded such a conclusion – Where the wife concedes there is no direct evidence to support her claim – Disputed balance sheet – Where the wife asserts the primary judge erred by not attributing a value to various assets of the husband – Findings open on the facts – Where one factual error was de minimis relative to the total asset pool – Appeal dismissed.
Legislation: Family Law Act 1975 (Cth) Pt VIII, ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Pt 6.1
Cases cited: Aldred and Aldred (No. 3) (1988) FLC 91-933; [1987] FamCA 46
Blatch v Archer (1774) 1 Cowp 63
Bosanac v Federal Commissioner of Taxation (2022) 275 CLR 37; [2022] HCA 34
Briese and Briese (1986) FLC 91-713
C & C [1998] FamCA 143
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Cantrell & North (2020) FLC 93-976; [2020] FamCAFC 175
Carevetta and Carevetta [2007] FamCA 667
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Chang v Su (2002) FLC 93-117; [2002] FamCA 156
Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633
Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165; [2018] HCA 12
De Winter and De Winter (1979) FLC 90-605
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63
Ferraro and Ferraro (1993) FLC 92-335; [1992] FamCA 64
Georgiades & Georgiades [2015] FamCAFC 115
Giunti and Giunti (1986) FLC 91-759; [1986] FamCA 15
Gould & Gould (2007) FLC 93-333; [2007] FamCA 609
Hepworth v Hepworth (1963) 110 CLR 309; [1963] HCA 49
House v The King (1936) 55 CLR 499; [1936] HCA 40
Innes & Innes [2010] FamCA 337
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kannis and Kannis (2003) FLC 93-135; [2002] FamCA 1150
Linder & Linder [2016] FamCAFC 139
Livesey (formerly Jenkins) v Jenkins [1985] AC 424
Masi-Haini v Minister for Home Affairs (2023) 298 FCR 277; [2023] FCAFC 126
Mezzacappa and Mezzacappa (1987) FLC 91-853; [1987] FamCA 20
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Omacini and Omacini (2005) FLC 93-218; [2005] FamCA 195
Oriolo and Oriolo (1985) FLC 91-653; [1985] FamCA 54
QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 66 Fam LR 369; [2023] HCA 15
Rajski v Wood (1989) 18 NSWLR 512
Re JRL; Ex parte CJL (1986) 161 CLR 342; [1986] HCA 39
Saklani v Valder (2023) 381 FLR 174; [2023] FedCFamC1A 163
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Stone & Stone [2015] FamCAFC 18
Storie vStorie (1945) 80 CLR 597; [1945] HCA 56
Suiker and Suiker (1993) FLC 92-436; [1993] FamCA 141
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Wallaby Grip Ltd v QBE Insurance (Australia) Ltd (2010) 240 CLR 444; [2010] HCA 9
Wei v Xia (No 5) (2023) 67 Fam LR 421; [2023] FedCFamC1F 679
Weir and Weir (1993) FLC 92-338; [1992] FamCA 69
Kopsen, Hugh and Robyn Carroll, “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” (2017) 45(1) Federal Law Review 97
Number of paragraphs: 200 Date of hearing: 4 March 2025 and 4 April 2025 Place: Sydney Counsel for the Appellant: Mr Moses SC with Mr Reynolds and Mr Scott Solicitor for the Appellant: Pickering Pendleton Counsel for the First Respondent: Mr Kelly KC with Ms Liu (recusal application)
Mr Livingston SC with Mr Nehmy SC (appeal)Solicitor for the First Respondent: York Law Counsel for the Second, Third and Fourth Respondents: Mr Coleman SC with Mr Turnbull Solicitor for the Second, Third and Fourth Respondents: David H Cohen & Co ORDERS
NAA 277 of 2024
SYC 4269 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS ZHA
Appellant
AND: MR WUN
First Respondent
MR A WUN
Second Respondent
MS YANG (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
ALDRIDGE, GILL & CHRISTIE JJ
DATE OF ORDER:
13 JUNE 2025
ON 4 MARCH 2025, THE COURT ORDERED THAT:
1.The Application in Appeal filed 28 February 2025 seeking the recusal of Justice Aldridge is dismissed.
…
THE COURT ORDERS THAT:
1.The Applications in an Appeal filed 17 February 2025 are dismissed.
2.Appeal NAA 277 of 2024 is dismissed.
3.Orders 3 and 4 of the Orders of 14 February 2025, as continued on 4 April 2025, are discharged.
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 Zha & Wun has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
On 28 February 2025, Mr Wun, the first respondent husband (“the husband”), filed an Application in an Appeal seeking for me to recuse myself from the hearing of the appeal. The application was heard at the commencement of the appeal hearing on 4 March 2025. After hearing submissions, I indicated that I would not recuse myself. These are my reasons.
The appeal is from property settlement proceedings in which the primary judge found the extent of the property available for division could not be identified due to the husband’s non‑disclosure. The identified assets were found to have a value of at least $565,988,500.
On 14 February 2025, sitting as a single judge, I heard an application brought by Ms Zha, the appellant wife (“the wife”), for a series of freezing orders against bank accounts and entities that were or had been associated with the husband and which had not been disclosed by him. The orders were said to be in support of the wife’s claim in the appeal for a property division in her favour of the order of a further $100 million. The orders were said to be in aid of that claim by freezing assets against which any increased property division could be enforced.
I made many, but not all, of the orders sought by the wife, which were wide-ranging and extended to assets in a number of different jurisdictions. As the application was made ex parte, the orders were only made up to and including 17 February 2025, so as to give the husband the opportunity to require the wife to seek to continue those orders against any opposition he might raise.
In any event, on 17 February 2025 the lawyers for the husband appeared and advised that they had no instructions from their client yet but were content for the orders to be extended up to and including the hearing of the appeal. Nonetheless, I allocated time for the husband to seek to disturb or vary the orders if he chose. Ultimately, he did not.
Application to cross-examine
At the hearing of the application, senior counsel for the wife made an oral application to cross-examine Ms Morozov, the solicitor for the husband. She had sworn an affidavit responding to the affidavits relied upon by the wife in seeking the further freezing orders that had been made by me. As I understand it, senior counsel wished to question the solicitor on the bona fides of the application for recusal. He also sought to explore with her the bank accounts she had annexed to her affidavit in support of a statement by her that the funds in the accounts had been appropriately spent. The names of the recipients of the funds had been redacted in the copies of the accounts annexed to the affidavit.
I could not see how this cross-examination could bear on either the recusal application or the disposition of the appeal. It had already been agreed that the further injunctions would be continued until determination of the appeal.
There was no point to the proposed cross-examination and accordingly I joined in the decision not to accede to the application.
Recusal application
It is well established a judge has the obligation to sit on cases allocated to him or her, except where there is a good reason, such as a reasonable apprehension of bias, for them not to do so (Rajski v Wood (1989) 18 NSWLR 512 at 519–520; Re JRL; Ex parte CJL (1986) 161 CLR 342 at 352 per Mason J).
The test for disqualification for apprehended bias is well-known and is whether “a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide” (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) at [6]).
In Ebner, Gleeson CJ, McHugh, Gummow and Hayne JJ explained the operation of the principle as follows:
8…Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits…
A number of matters where put which it was said would cause a fair-minded lay observer to form a reasonable apprehension of pre-judgment arising out of the hearing on 14 February 2025.
First, it was submitted that the wife improperly failed to draw matters to my attention in breach of their duty of frankness on an ex parte application. Whether that is so or not, I do not see how matters that I did not know could lead to a suggestion of an apprehension that I might not determine the appeal on its merits. Such conduct, if it occurred, might be a proper basis for discharging the orders but there is no apparent link between that lack of frankness on the part of the wife and a reasonable apprehension of a lack of impartiality which supports a recusal application.
It was then submitted that a remark I made during the hearing indicated that I accepted “that the Husband’s conduct was far more ‘egregious’ than was known to the trial judge, as supported by the ‘fresh’ evidence sought to be adduced but which is not yet admitted in the appeal” (husband’s written submissions filed 4 March 2025, paragraph 29(i)) and that I “accepted the Wife’s submission that the Husband had engaged in fraud” (husband’s written submissions filed 4 March 2025, paragraph 49).
This subsequently was described as the principal submission which was said to be supported by subsidiary considerations which were the extent of the material before the Court (thousands of pages of exhibits), the time taken for the hearing (over an hour) and the breadth of the orders.
The relevant passage from the ex parte hearing is as follows:
[SENIOR COUNSEL FOR THE WIFE]: But what I do say, your Honour, to be blunt about your first question, is there an identifiable amount that we can point to as saying, well, this should have been the pool, as opposed to what the court was able to find? I don’t think we’ve reached that point where we can advance that submission, certainly today, to the court. What this does demonstrate is the extent of the fraud. And I will be blunt about it, your Honour, that was perpetrated in the court. And - - -
HIS HONOUR: I’m not doubting that, I’m just doubting the purpose of - - -
[SENIOR COUNSEL FOR THE WIFE]: No, of course.
HIS HONOUR: - - - there’s a two-step process for ..... injunction. One is there has to be a prima facie case underpinning it, and I think that’s what I’m directing.
[SENIOR COUNSEL FOR THE WIFE]: Yes. And the prima facie case, your Honour, is made out on the fraud element only. We say that it gets us there in terms of this proposition, if I can say, your Honour, the principles that the court takes into account when granting an asset preservation order in circumstances where there has been a demonstrated dishonesty of a person, such as the court takes prima facie the view that a person must restraint or preserve their assets. This establishes this – this establishes this issue and the restraining of assets and accounts that we now know exist overseas.
(Emphasis added)
(Transcript 14 February 2025, p.17 lines 23–43)
The husband submitted the emphasised words indicated that I had accepted that the husband’s behaviour was fraudulent.
I do not agree. As the passage itself makes clear, before I was interrupted, I was testing the wife as to whether a prima facie case had been established.
Just earlier the following occurred:
HIS HONOUR: There are two reasons this could be put in the appeal: one is to show further non-disclosure; the second, and this is the question I was really getting at, whether it is an attempt to show that the property pool wasn’t $581 million but an even larger figure.
[SENIOR COUNSEL FOR THE WIFE]: Well, I think that’s - - -
HIS HONOUR: At the moment it seems incapable of doing the latter.
[SENIOR COUNSEL FOR THE WIFE]: Well I think there’s a bit of work to be done, your Honour, to be blunt about it, in terms of being able to put that second proposition.
HIS HONOUR: Yes.
[SENIOR COUNSEL FOR THE WIFE]: Certainly the first proposition, but the second proposition - - -
HIS HONOUR: And for the second – as to the first proposition, it’s then – the question is what that gets you. Because as I understand, [the primary judge’s] decision was not based on the size of the pool so much, but what he took your client’s contributions to be, assessing them in a monetary sum rather than a contribution. And I suspect the answer that’s going to be put against you on appeal is it doesn’t matter how big the property pool is, that doesn’t change the nature of the wife’s contribution.
(Transcript 14 February 2025, p.16 line 40 to p.17 line 14)
Just after I said:
HIS HONOUR: Your point is, isn’t it, that if the appeal is successful, the assets that are currently preserved by [the primary judge] would be insufficient to meet an enlarged order.
(Transcript 14 February 2025, p.18 lines 9–11)
When read together, as the passages must be, they reveal a testing and identification of the case being put by the wife. The nature of the case ultimately did not invoke “fraud” as an element, so the making of the orders could not be seen as an acceptance of it.
The premise of the submission is not established, but even if it had been, the second limb remains a difficulty.
The issue of whether the husband “was fraudulent” or whether the proposed fresh evidence showed he was fraudulent, more fraudulent or his non-disclosure was more egregious than that found by the primary judge, was not an issue in the appeal. The “fresh evidence”, which is essentially the same as that relied upon for the ex parte injunctions, was only to be relied upon if the appeal was allowed and if the appeal court decided to re-exercise the discretion itself. It is not relevant to the appeal itself. However, on any re-exercise, the relevance of the new evidence would be the extent of the husband’s property, not the extent or characterisation of his behaviour.
Thus, it was not in issue in the appeal whether the husband’s disclosure was worse than that found by the primary judge. Rather, the question was whether the primary judge erred, on the facts before him, in determining an appropriate division of property.
There is therefore no logical connection between an alleged acceptance that the husband was fraudulent for the purposes of an ex parte injunction (if that is what it was) and the proper disposition of the appeal, because the wife was relying on the findings of the primary judge arising from the evidence in support of the appeal.
To be clear, the wife did assert that the findings of the primary judge (the husband’s non‑disclosure and mendacity) could aptly be used to find fraudulent conduct by the husband. That does not, however, make the point an issue in the appeal.
As conceded by senior counsel for the husband, the subsidiary matters do not themselves support an application for recusal in the light of the rejection of the principal argument.
Judges, especially those sitting in courts with docket systems, regularly hear ex parte applications, a contested application and a final hearing in the same matter without demur. An example can be found in Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at [72]:
In none of the applications was Einstein J required to make, and in none of the applications did he make, any determination of any issue that was to be decided at trial. Einstein J did decide that the disclosure affidavits could be made available for use in applications made to another court (for freezing orders and appointment of receivers) and for use by investigating authorities in other countries. And he decided that the proceedings which yielded those orders and the orders themselves should not be disclosed to the present respondents. But in none of the applications was it necessary for Einstein J to make any finding about the reliability of any party or witness, and in none did he make such a finding. Nor was Einstein J required to make any choice between competing versions of events. All that was required, and all that was found, was that there was apparently credible evidence of a sufficient risk of dissipation of assets to warrant making the confidentiality orders that were made.
(Footnotes omitted)
The position is the same here. As explained, there was not a finding that the husband was fraudulent and this was not an issue to be determined on the appeal.
The husband relied on the following passages in Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165:
61The applications before Hargrave AJ sought to have the Supreme Court of South Australia rescind its own perfected judgment. The proper application by Players was a fresh action to rescind the perfected orders. If fraud had been alleged, as was necessary, then even if there had not already been an appeal from the orders of the Supreme Court the proper course was to bring such an application to the same court rather than to the Full Court of the Supreme Court for a new trial.
62The power to set aside the Supreme Court’s own decision with which Hargrave AJ was concerned was the narrower power that was historically distinct from an appellate court’s powers to set aside orders of a court below and order a new trial. Before that narrower power could be exercised in this case it required a pleading, and proof, of actual fraud. Players’ alternative contention was that even if actual fraud was required, it could still succeed. That contention should be rejected. Fraud needs to be clearly pleaded and proved. It was not. Unsurprisingly, the factual findings of Hargrave AJ and the Full Court did not address, and were not adequate to establish, actual fraud. The appeals must be allowed on the first ground.
(Footnote omitted)
The reference is a red herring. There is no suggestion any fraud vitiated the hearing before the primary judge either by way of primary application or by appeal.
I am not persuaded that there is any basis for disqualification and I decline to recuse myself.
That is not the end of the matter. It is now a question for the Full Court to determine the fate of the application (QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 66 Fam LR 369; Saklani v Valder (2023) 381 FLR 174; Masi-Haini v Minister for Home Affairs (2023) 298 FCR 277).
GILL J:
I agree, for the reasons given by Aldridge J, that he should not be disqualified from the hearing of this appeal, and would refuse the application that he do so. In particular, I agree that the use of the phrase “I’m not doubting that”, being the central point of the husband’s complaint, did not amount to the expression of a finding by Aldridge J that the husband’s behaviour was fraudulent. On a proper reading of the exchange there is no basis to consider that Aldridge J engaged in a prejudgment of the husband.
CHRISTIE J:
Having had the opportunity to consider the reasons of Aldridge J, I agree with the reasons, conclusions and resulting orders.
ALDRIDGE, GILL & CHRISTIE JJ:
By Amended Notice of Appeal filed 3 February 2025, the wife appeals from Order 2 of the orders of a judge of the Federal Circuit and Family Court of Australia (Division 1) made 25 September 2024. The husband seeks that the appeal be dismissed. The second, third and fourth respondents respectively are the husband’s brother, the husband’s brother’s wife and AB Ltd, a company registered in Country WW of which the second respondent is recorded as the sole director and shareholder. Each of the second, third and fourth respondents seek that the appeal be dismissed.
TRIAL
The primary judge heard and determined an application for property adjustment between the wife and the husband and made orders, including Order 2 which is the subject of this appeal and read:
Within sixty (60) days from the date of these Orders, the Respondent Husband (“the husband”) shall pay to the Applicant Wife (“the wife”) by way of cleared funds the sum of AUD$9,744,000.
The husband and wife married in 2012 and separated in 2018. There were no children of the marriage. There was a period of cohabitation before marriage. The primary judge found the relationship was approximately seven years and three months.
The wife had modest assets at the commencement of cohabitation and conceded the husband “made almost the entirety of the direct and indirect financial contributions” (at [259]).
At trial, the husband contended that his assets at the commencement of cohabitation were valued in excess of $16,590,000. Consistently with the husband’s case, that figure did not attribute a value to the husband’s interest in AB Ltd. At the conclusion of the trial the primary judge found the husband had an interest in that entity. The reasons record the primary judge’s conclusion about initial contributions at [259]:
…I accept the wife’s contention that the task of identifying the totality of the husband’s assets at the date of cohabitation, during the relationship and post-separation is impossible as a consequence of his failure to disclose. The wife concedes that during the course of the relationship, the husband made almost the entirety of the direct and indirect financial contributions.
As the primary judge accurately recorded at [5], the trial was primarily concerned with:
…the composition and value of property wheresoever located and held by whomever. Central to a determination of that issue is whether AB Ltd is the alter ego of the husband or alternatively held on trust for the husband. If it is, then the pool of assets is measured in excess of $650 million. The husband asserts on one version of the Balance Sheet that the pool of assets is approximately $50 million.
The primary judge found that the net assets of the husband and wife were at least $565,988,500. AB Ltd had an agreed value of $481,000,000. In order to reach that conclusion, the primary judge reviewed the evidence of all relevant witnesses before concluding at [147]:
For the reasons given above and considering all of the evidence marshalled in the wife’s case and the submissions advanced in the WFF and WWS I am satisfied that the husband and the brother have not given a frank explanation of the husband’s interest in AB Ltd I am also satisfied that the husband has failed in his obligation to fully and frank disclose the true extent of his wealth and in particular his interest in AB Ltd. I am satisfied that the evidence in its totality persuades me that the more plausible explanation is that AB Ltd is the alter ego of the husband. I am satisfied that the brother is a “straw man”.
(As per original)
The wife sought a financial adjustment of approximately $134 million.
The primary judge concluded at [285]:
I do not know what the true extent of the husband’s wealth is. I accept that the husband’s non-disclosure is significant and egregious. To the extent to which the wife was put to significant cost in determining the pool is a matter more properly considered in the context of costs as opposed to s 75(2).
The effect of the primary judge’s orders was that the wife was to retain property with a net value of approximately $19.8 million (which was inclusive of AUD5,723,240 paid by the husband to the wife following proceedings in the Peoples Republic of China (“China”)).
Separately, as foreshadowed at [285], the primary judge heard and determined an application for costs made by the wife. The resulting orders are the subject of a separate appeal.
APPEAL
The primary focus of the appeal challenges the treatment of the husband’s non-disclosure.
It is appropriate to address the question more generally before proceeding to consider the specific grounds since Grounds 1 to 4 address similar issues or principles.
In 1985 the House of Lords heard and determined an appeal in Livesey (formerly Jenkins) v Jenkins [1985] AC 424 at 438 (per Lord Brandon):
My Lords, once it is accepted that this principle of full and frank disclosure exists, it is obvious that it must apply not only to contested proceedings heard with full evidence adduced before the court, but also to exchanges of information between parties and their solicitors leading to the making of consent orders without further inquiry by the court. If that were not so, it would be impossible for a court to have any assurance that the requirements of [the relevant section of the English Act] were complied with before it made such consent orders.
Soon thereafter the principles discussed by Lord Brandon were approved by Smithers J, in Briese and Briese (1986) FLC 91-713 at 75,181 and subsequently by the Full Court in Oriolo and Oriolo (1985) FLC 91-653, Giunti and Giunti (1986) FLC 91-759 and Suiker and Suiker (1993) FLC 92-436.
Section 79 of the Family Law Act 1975 (Cth) (“the Act”) provides a broad discretion to “make such order as it considers appropriate…altering the interests of the parties to the marriage in the property”.
That broad discretion is fettered by the words of s 79(2) which provides “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”.
The discretion is informed by the considerations listed in s 79(4), as matters which “the court shall take into account” in “considering what order (if any) should be made…in property settlement proceedings”. Amongst those considerations, s 79(4)(e) entreats the decision maker to consider “matters referred to in subsection 75(2) so far as they are relevant”.
The matters which the court may consider are not at large but s 75(2)(o) specifically permits consideration of “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
As the High Court observed in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) at [37]:
First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”.
(Emphasis in original)
Thus, it may be seen from the outset that where failures of disclosure obscure the identification of the assets of the parties to the marriage, then the process by which the court determines whether its resulting orders are just and equitable is compromised. As the Full Court has observed in Cantrell & North (2020) FLC 93-976 at [81]:
The obligation on parties to give accurate and full disclosure is of single importance in maintaining the integrity of the judicial process.
The importance of the requirement is expressed through its inclusion in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), particularly Pt 6.1.
The authors of “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” helpfully identify categories of consequences which arise from non-disclosure as follows:
(1)Evidential consequences (including drawing inferences, prohibitions on tender of non‑disclosed documents, inability to withdraw admissions);
(2)Procedural consequences (including issue of subpoena and making of Anton Piller orders, and dismissing, striking out or dealing with a matter on an undefended basis); and
(3)Final order and related consequences (including alteration of property interests, setting aside orders, financial agreements or awards, costs orders, referrals and contempt proceedings).
The appeal is primarily concerned with evaluation of the third category, namely what is the consequence of a finding of non-disclosure for the determination of what orders (if any) will be just and equitable, but evidentiary consequences are also raised by the grounds in this appeal.
It is plain that findings that a party has not made full and frank financial disclosure, can, where appropriate, impact on the adjustment of assets in a number of identifiable ways:
(1)Where the court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated (Kannis and Kannis (2003) FLC 93-135 (“Kannis”). See also Gould & Gould (2007) FLC 93-333 (“Gould”); Weir & Weir (1993) FLC 92-338 (“Weir”); Mezzacappa and Mezzacappa (1987) FLC 91-853; Chang v Su (2002) FLC 93-117 (“Chang v Su”));
(2)“If there is persuasive evidence supporting a reasonably plausible conclusion of the existence of other undisclosed assets, it may be open to the Court to make a finding that such assets exist, or take into account of the likely existence of assets under s 79(4)(e) of the Act (s 75(2)(o) of the Act…)” (Wei v Xia (No 5) (2023) 67 Fam LR 421 (“Wei v Xia”) at [175]). Sometimes the value of those assets will be known – in which case the asset will form part of the pool of assets which the court considers when deciding what adjustment (if any) would be just and equitable (Georgiades & Georgiades [2015] FamCAFC 115);
(3)Making an adjustment (often, but not necessarily, expressed as a percentage) in favour of the party who has successfully established non-disclosure by the other spouse (for example, see Stone & Stone [2015] FamCAFC 18 (“Stone”));
(4)Making an order that one party receive all known assets, or all known assets within the jurisdiction (for example, see Chang v Su);
(5)Making an order that one party receive all known assets and a cash payment which takes into account the existence of undisclosed assets or income where the inference is available that such assets or income exist; and
(6)Making an order that the party whose disclosure has been found wanting make a cash payment to the other party where there is sufficient evidence assets exist (but their exact identity, location or quantum may be unknown).
It is well established that a party may not rely upon his or her non-disclosure to avoid the making of otherwise appropriate orders because to permit the same would be a “charter for fraud”. The Full Court in Weir, in using the expression “charter for fraud”, was talking not about making specific adjustments, but about not being “unduly cautious about making findings” in favour of an “innocent party” (at 79,593).
What does taking a “robust approach” mean?
The decisions in Gould and Kannis are both cited as authority for the proposition that where there is a finding of non-disclosure in favour of one party, the court may take a robust approach. This approach was described in Linder & Linder [2016] FamCAFC 139 as a “robust exercise of discretion in favour of the [other party]” (at [32]).
It is worthwhile setting out the passage from the decision in Kannis as set out in Gould from which the language of “robustness” is drawn:
50.Mr Ackman submitted that the cases discussed above were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.
51.Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
We take from that passage the following points:
(a)A judge may be more robust in drawing adverse inferences following a finding that there has been non-disclosure;
(b)A judge may conclude the asset pool is greater than contended for by the non-disclosing party; and
(c)A judge may “err on the side of generosity” in favour of the party who would otherwise be disadvantaged by the non-disclosure.
The consequences will be specific to the circumstances of the litigation and may be affected by the length of the relationship, whether the assets have been acquired through direct or indirect efforts of one or both spouses, how large the known pool is and the inferences which may be drawn about unquantified assets.
It is plain that following a finding that there has been non-disclosure of assets, income or financial information there is no warrant in the Act or the Rules for an order which is punitive in nature (see Innes & Innes [2010] FamCA 337 per Coleman J; Carevetta and Carevetta [2007] FamCA 667 per Carter J).
Grounds 1 to 4 are concerned with the manner in which the primary judge exercised the discretion afforded to him by Pt VIII and in particular s 79 and s 75(2) of the Act. In that regard, it is worthwhile to have regard to the principles in House v The King (1936) 55 CLR 499 (“House v The King”) at 504–505 per Dixon, Evatt and McTiernan JJ:
…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 discretion is reviewed on the ground that a substantial wrong has in fact occurred…
Against those observations, we turn to consider the first four grounds which relate to non-disclosure.
Ground 1
The first ground is as follows:
1.His Honour’s discretionary decision miscarried because he adopted an erroneous and unjust approach to the assessment of the [wife’s] entitlement in that:
1.1having found that the [husband] had failed to disclose the extent of his wealth at the commencement of cohabitation [259]; and
1.2having found that the [husband] was mendacious and deceived the Court [26], [73], [84] as to the extent of his wealth at the time of the hearing [147], [259] & [285];
his Honour failed to identify and take into account that these actions had the necessary consequence of undermining the integrity of the judicial process including but not limited to depriving the Court of the ability to make a proper contextual assessment of the contributions of the [wife], including context as to the increase of wealth during the relationship, and the pathway by which that was achieved, and in doing so effectively drew inferences that wrongly operated to the advantage of the [husband].
The wife submits that the husband’s non-disclosure impacted the primary judge’s assessment of the wife’s contributions. The submission is developed in this way:
(a)The primary judge was not able to reach a concluded view about the extent of the husband’s property at the commencement of the parties’ relationship;
(b)It followed that the primary judge was unable to properly evaluate how the parties’ respective direct and indirect contributions to the conservation and improvement of those assets was to be weighed; and
(c)This operated to the disadvantage of the wife.
We accept that the primary judge was unable to make a finding about the husband’s assets at the time of cohabitation and correspondingly at the time of trial. However, in circumstances where the wife did not contend direct or indirect contributions to the conservation and improvement of those assets, the finding that the contribution-based entitlements of the parties overwhelmingly favoured the husband was not only open but the subject of some consensus, at least as regards initial contributions.
Further, the wife’s case was predicated upon the proposition that the major contentious asset, AB Ltd, was the alter ego of the husband. If AB Ltd was found to be the alter ego of the husband, then it was an asset in the hands of the husband since prior to the commencement of the relationship.
The wife’s success in including AB Ltd meant that, rather than the pool being of the magnitude asserted by the husband, namely approximately $50 million, it was found to exceed $550 million.
The corollary of the wife’s success on this point was that, rather than the husband bringing property of about $16.5 million in at the commencement of the relationship, he additionally brought in AB Ltd.
The success of the wife on this issue rendered inevitable the conclusion reached by the primary judge that the husband’s contributions both dwarfed the wife’s contributions and formed the basis of the assets then held by the parties. The drawing of such an inference was, in the context of the manner in which the case was run by the wife, and her concession that the husband made almost the entirety of the direct and indirect financial contributions during the marriage, the only reasonable inference available.
To the extent that Ground 1 contends that this inference was wrongly drawn to the advantage of the husband, it is misplaced.
The balance of the submission operates on a mistaken premise that the wife’s contributions can only be assessed by reference to the known increase in value of the assets, as though some principle of “community of ownership arising from marriage” applied (Stanford at [39] citing Hepworth v Hepworth (1963) 110 CLR 309).
It is the position that, in an appropriate case, where the court is called upon to reach a conclusion about what adjustment (if any) is just and equitable, the fact that the entirety of the assets of the husband and wife were accrued during a long relationship may feature in an assessment of contributions – particularly where the evidence establishes that the non-financial contributions of one party have facilitated the financial contributions of the other (Ferraro and Ferraro (1993) FLC 92-335; Aldred and Aldred (No. 3) (1988) FLC 91-933). In such a case it might be properly observed that the contributions in different spheres (one remunerated, the other unremunerated) should be assessed as equivalent and an adjustment be made on that basis. That was not this case.
The appeal ground appears to assert as a matter of law that where the primary judge cannot ascertain with precision the extent of the assets available for adjustment as between the parties, and this incapacity arises from non-disclosure by a spouse, then the primary judge is obliged to recognise this through imposition of a specific consequence.
It must be remembered that a finding that one spouse has not made full and frank financial disclosure allows a more robust approach to fact finding but it does not and cannot fill evidentiary lacunae, nor does it dictate the pathway or pathways which will be appropriate in any given fact scenario.
We accept that non-disclosure by a party may be relevant to the assessment of evidence, drawing of inferences and “ultimately may bear on the question of discharge of an onus of proof” (Wei v Xia at [166]).
The primary judge made findings about the value and ownership of those assets and add backs for which he could identify evidence of in order to reach the conclusion that the pool of assets totalled $565,988,500.
The finding that the husband’s interest in the assets of AB Ltd was greater than he contended was the finding for which the wife contended. Sometimes the consequence of non-disclosure is a finding that an asset will be considered as property of the non-disclosing spouse.
The finding that the transactions between the husband, and the second, third and fourth respondents were complex and poorly explained favoured the wife, though the primary judge rejected the conclusion that all of the monies being transferred were those of the husband.
In Weir, the Full Court stated at 79,593:
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
In a following paragraph of the same decision, the Full Court recognised the dilemma of what order should be made:
The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a Court making a finding as to the amount that has not been disclosed, then the other party fails. We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.
The question which arises, in our view, is this: having made a finding of non-disclosure the exact size of the asset pool may realistically remain opaque, is it possible to make an order which is just and equitable in this situation? In this case the answer was yes. The primary judge was able to reach a conclusion about the possible parameters of the asset pool. There was little controversy about the length of the relationship. In that context the primary judge was also able to assess the contributions which the wife had made during the relationship – taking into account both financial and non-financial contributions. Given the extent of the asset pool on any case and the wife’s acknowledgment that it was open to the primary judge to assess contributions by reference to a sum certain (as opposed to a percentage of a pool), no error is demonstrated.
The appeal ground uses the phrase “a proper contextual assessment of the contributions”. It may be inferred from context that the submission is to the effect that in order to evaluate the wife’s financial and non-financial contributions it was necessary for the primary judge to understand the precise size of the assets of the husband and wife available for adjustment. It cannot be denied that, whilst the approach of first identifying the net assets and their value is an orthodox first step in approaching the question of what orders (if any) ought be made in the exercise of the court’s discretion, an inability to reach a firm conclusion about the exact quantum of that pool of assets does not necessarily detract from the court’s capacity to assess the parties’ contributions and did not in this case.
The Act requires the judge to take into account “the financial contribution made directly or indirectly by or on behalf of a party to the marriage…to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them” (s 79(4)(a)). The primary judge found (uncontroversially) at [259] that “[t]he wife concedes that during the course of the relationship, the husband made almost the entirety of the direct and indirect financial contributions”.
Given that finding, and the size of the known asset pool, the Act did not impose upon the primary judge an obligation to assess the wife’s contributions as a percentage or fraction of a pool to which she conceded having made minimal financial contributions. The size of the pool did not define the nature and quality of the wife’s contributions toward it. Senior counsel for the wife at trial conceded the same:
HIS HONOUR: Do you agree with me, [senior counsel for the wife], that the quantum of the pool has no bearing to the assessment of contribution?
[SENIOR COUNSEL]: Yes. Yes. Quite. No, no. Quite. Quite.
(Transcript 23 July 2024, p.784 lines 20–23)
The wife submitted that as the husband had contended that his net asset position at the commencement of the relationship was approximately $16,590,000, he should be held to that figure. Further, the wife submitted the primary judge ought then to have examined the increase in the value of the net assets of the parties during their relationship from $16,590,000 to at least $565,988,500 in order to inform his Honour’s assessment of the parties’ respective contribution-based entitlements. We disagree. The husband’s figure of $16,590,000 did not include any value for his interest in AB Ltd. While we accept without hesitation that the lack of information about the value (if any) of that entity arose from the husband’s denial that he had a financial interest, having found that the entity was the husband’s alter ego established in 2005 to conduct business previously conducted by the husband through a different entity, it was not open to the primary judge to treat the balance sheet at cohabitation as though it did not contain AB Ltd.
In aid of the argument the wife referred to the decision in Chang v Su where the husband had made representations to the Department of Immigration concerning his asset position approximately nine years prior to the trial. At trial he was unable to explain the diminution in his net worth from $4.55 million to negative $1.84 million and accordingly the trial judge found his assets were likely to be at least equivalent to that which he had previously represented; that is, she held him to his representation. It does not follow that the husband in this case should be held to his representation since the primary judge has found that his assets at cohabitation included AB Ltd – an asset of substantial but unknown value. Holding the husband to his estimate of worth at the commencement of cohabitation which explicitly excluded AB Ltd would require the primary judge to ignore his own finding.
The wife has not satisfied us that any of the matters raised as relevant to the disposition of Ground 1 have merit.
Ground 2
The second ground is as follows:
2.In the context of his Honour being able to do no more than identify the low water mark of the [husband’s] wealth as a consequence of [the husband’s] actions his Honour failed to take into account that the monetary assessment approach, in the manner he addressed it as being curtailed by what he found to be the duration of the relationship, in the context of the matters in ground 1:
2.1 was entirely arbitrary;
2.2failed to constitute a principled and real assessment of the [wife’s] contributions;
2.3 was inadequate, and
2.4 his reasons failed to adequately disclose the basis of his determination.
This ground seems to assert multiple disparate errors including errors of law and principle and failure to provide (adequate) reasons.
The primary judge accurately recorded the relevant authorities applicable to the assessment of contributions at [237]–[239].
The primary judge’s findings about initial contributions, financial contributions during the relationship, post-separation contributions and non-financial contributions are not challenged as factually inaccurate (subject to the unsuccessful challenge discussed above at Ground 1 and at Ground 5).
The primary judge assessed the identified contributions at [258]–[275]. The reasons are adequate since they clearly delineate the basis upon which the decision was reached.
The wife’s complaint appears to be grounded in a concern that because of the size of the pool (and potentially the greater unknown size of additional assets) the assessment of contributions expressed in dollar terms failed to adequately acknowledge the value of the wife’s contributions. The submission does not grapple with the useful description of the evaluative exercise, as discussed by Coleman J in Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]:
Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case. In some cases, the “leap” is so great, and so unheralded by the discussion which precedes it as to render the reasoning process defective…
The reasons why the primary judge concluded that the contributions of the wife warranted an adjustment of assets such that she received net assets of approximately $20 million could not be considered, in any sense, unheralded.
The appeal ground uses the expression “monetary assessment approach”. In context this appears to be a reference to the fact that the primary judge ordered that the wife receive an adjustment of property by reference to a lump sum cash payment ordered to be paid by the husband to the wife, as opposed to ordering that the wife receive a percentage of the known assets.
It must first be accepted that it was not only open to the primary judge to approach the adjustment by ordering a lump sum payment, it was also largely consistent with the primary submission of the wife – where the primary judge and the wife differ is not so much in the approach but in the resulting figure.
Senior counsel who appeared on behalf of the wife below, while contending that part of the relief which was sought was reliant upon the Court having regard to matters contained in s 75(2) of the Act, emphasised that his client’s application was for a lump sum (albeit that it was calculated by reference to a percentage of the pool contended for by the wife). In effect, the wife’s complaint is about the size of the lump sum.
The inclusion of AB Ltd as an asset of the husband was a significant redress to the wife’s claims of non-disclosure. We accept that its inclusion was not the whole answer to the issue of non-disclosure since the precise identity and value of the whole of the husband’s assets remained unknown. However, the impact of its inclusion (contrary to the position of the respondents) and the impact of its inclusion on the adjustment cannot be overlooked. The entity was valued at $481,000,000. In addition, the bank accounts of the entity were included in the assets to which the primary judge had regard when considering his adjustive orders. The bank accounts totalled $12,638,785. Effectively, the amount included totalled $493,638,785. The husband had been contending for a net asset position for he and the wife of about $50 million.
The wife submitted that the inclusion of AB Ltd as the husband’s alter ego was not a consequence of non-disclosure but an incidence of appropriate fact finding. It was both. The husband had “by a process of obfuscation and failure to comply with his obligations” (at [84]) sought to exclude valuable property from consideration. The primary judge accepted the wife’s “circumstantial case” persuaded that the evidence had established AB Ltd was an alter ego of the husband was “the more plausible explanation” (at [147]). The consequence was a considerable increase in the assets of the husband, and an increase of the pool that was available for adjustment as between the husband and wife.
Even accepting that the resulting pool was, as described by the wife, a “low water mark”, it was sufficient to establish that the pool was of a great magnitude. In that context the primary judge remained tasked with the obligation to assess and weigh the myriad contributions made by the wife and was at liberty to express the result as a fixed sum rather than as a percentage or proportion of the total pool. In arriving at the fixed sum result the primary judge conducted a painstaking identification of the contributions made by the wife. The manner by which the primary judge arrived at the conclusion was adequately disclosed and could not fairly be described as arbitrary. Nor did the wife establish a principled reason as to how it could be described as inadequate, in the House v The King sense, as indicative of undisclosed error.
Ground 2 is not established.
Ground 3
The third ground is as follows:
3.In the alternative to ground 1, in the event it be refused, his Honour failed to give any or any adequate reasons as to how he had taken into account the [husband’s] concealment of the true extent of his wealth in his assessment of the contributions of the [wife] in circumstances where he rejected taking those matters into account pursuant to s.75(2)(o) Family Law Act 1975 (“the Act”).
This is a reasons ground. The question is whether this Court is able to understand how the primary judge took into account the husband’s inadequate disclosure.
The central, albeit not the only, focus of the findings about non-disclosure related to the evidence of the husband and his brother that AB Ltd belonged to the brother. The primary judge made findings about the credit of the husband and the husband’s brother. The primary judge took those findings into account when considering the ownership of AB Ltd at [91].
The primary judge systematically outlined the bases upon which he concluded that AB Ltd was the husband’s alter ego at [109]–[157].
If the primary judge had concluded otherwise, the known pool of assets of the husband and wife would have been $72,349,715 and not at least $565,988,500. The primary judge increased the pool of assets, contrary to the husband’s evidence and submissions, in reliance upon his findings that the husband had failed to disclose his actual financial circumstances. The reasoning of the primary judge in this regard is plain.
The wife is effectively contending, by Ground 3, a failure to give adequate reasons for declining to make a further adjustment in favour of the wife by reference to s 75(2)(o) of the Act.
The primary judge considered the relevant matters listed in s 75(2) of the Act as part of a holistic assessment. In that regard his Honour considered income and earning capacity, age, property to be retained or received, the existence of other proceedings and made the following findings:
285.I do not know what the true extent of the husband’s wealth is. I accept that the husband’s non-disclosure is significant and egregious. To the extent to which the wife was put to significant cost in determining the pool is a matter more properly considered in the context of costs as opposed to s 75(2).
286.I am conscious of the authorities that the wife’s senior counsel has referred to in support of a s 75(2) adjustment. There is however a difference between a robust approach to findings and the factors going to a consideration of the matters under s 75(2). The notion that an adjustment under s 75(2) is warranted because of a failure to disclose must be principled, not reactive, and must also have regard to the ultimate findings at the contribution stage.
287.Recognizing as I do that the husband has assets in the many hundreds of millions of dollars, the wife will have assets of nearly $20 million, which is a large sum of money by any measure. In those circumstances I am not satisfied that there is a warrant for a further adjustment under s 75(2).
The statutory considerations are a guide to the matters which must be considered and not a prescription as to how that consideration informs the outcome, save that the resulting orders must be “just and equitable”.
The size of the proposed property adjustment order in favour of the wife was a matter to which the primary judge was entitled to have regard when concluding that no further adjustment was required.
Making an adjustment merely because there has been non-disclosure is not an approach sanctioned by the Act or the jurisprudence. In a case where it is necessary to, adopting the language of Stone, provide a “hedge” against the possibility of further concealed income or assets, s 75(2)(o) may be a proper basis upon which to make such an adjustment but a failure to make an adjustment will not be in error where all relevant matters have been considered and the justice and equity of the situation do not require any further adjustment.
The concept of providing a hedge or a buffer to take into account the possibility of the existence of further assets was not mandatory on the facts of this case. We accept that the primary judge concluded that it was “impossible” on the evidence to determine the true extent of the assets of the husband but three factors, all the subject of lengthy analysis by the primary judge, are relevant to the conclusion his Honour reached, being that no further adjustment was required. Those factors were:
(1)The ability to make an order recognising the wife’s contributions;
(2)The paucity of evidence to establish that unknown property was property to which the wife had made any direct or indirect financial contribution; and
(3)The inclusion in the asset pool the subject of consideration of an asset which comprised over 87 per cent of the known pool.
To the extent the wife contended that the correct application of principle required “that serious non-disclosure must be addressed in a way that prevents the wrongdoer from benefitting from it, and in a manner that does not cause detriment to the other party” (Transcript 4 April 2025, p.104 lines 27–29), we agree. However, we consider that the approach undertaken by the primary judge did not fall foul of this approach.
The wife submits the primary judge made findings of egregious non-disclosure but, save for the costs orders, there was no consequence for the husband to the effect that he benefitted from his non-disclosure. This submission fails to address the central submission of the husband which was twofold:
(1)Findings of fact which did not favour the husband had financial consequences for him; and
(2)“Consequences” are only mandatory where necessary to achieve justice and equity as between the parties.
The wife has not demonstrated error as contended for by Ground 3.
Ground 4
The fourth ground is as follows:
4.His Honour’s discretion miscarried in rejecting any s.75(2) of the Act adjustment in favour of the [wife] having regard to relevant matters including but not limited to:
4.1failing to make any adjustment arising from the findings as to the [husband’s] undisclosed wealth;
4.2misdirecting himself [286] in regard to the asserted difference in any applicable robust approach;
4.3erroneously conflating the issue of the consequence of the [husband] concealing his wealth with consideration of costs incurred in proving the truth [285] which was for s.117 of the Act;
4.4failing to take into account the disparity in the financial circumstances of the parties as required by s.75(2)(b) of the Act; and
4.5failing to consider the matters he had identified [183] as being appropriate for consideration pursuant to s.75(2) of the Act.
The complaint articulated at Ground 4.1 has been the subject of discussion under Ground 3.
The contention that the primary judge misdirected himself at [286] is rejected. The primary judge said:
286.I am conscious of the authorities that the wife’s senior counsel has referred to in support of a s 75(2) adjustment. There is however a difference between a robust approach to findings and the factors going to a consideration of the matters under s 75(2). The notion that an adjustment under s 75(2) is warranted because of a failure to disclose must be principled, not reactive, and must also have regard to the ultimate findings at the contribution stage.
These observations are in keeping with authority.
The section is not designed to punish for non-disclosure or to require further adjustment in all cases of non-disclosure. As the primary judge observed at [286], any adjustment must be “principled” and “not reactive”.
In a case where the primary judge effectively found that the husband had an unspecified financial interest in assets considerably greater than those to which the wife could establish legal title, the wife submits the resulting adjustment did not recognise the significant wealth of the husband. The difficulty with this submission is that the primary judge specifically considered and rejected making a further adjustment in reliance upon s 75(2) of the Act because he concluded that the net assets which would be retained by the wife (upon compliance with his orders) were just and equitable.
It is not appropriate to read paragraphs of the primary judge’s reasons in isolation. The primary judge makes the point at [274] that in making orders for property adjustment upon consideration of the contributions of the parties, it is necessary to have regard to the reality of those contributions such that the resulting order bears a “sensible or rational relationship” to the actual contributions over seven years.
The imprecision of the exercise could not be improved.
The wife seeks to persuade this Court that the effect of the operation of s 79(4)(e) and s 75(2) is that where one of the matters in s 75(2) of the Act arises on the facts then a trial judge will be required by reason of that consideration to make a further adjustment in favour of the wife, and failure to do so will constitute error. That is not the position.
At [183] the primary judge declined to include as property of the husband money the husband deposited in his mother’s bank account prior to the date on which his Honour ultimately found the parties commenced living together on a bona fide domestic basis. This is unsurprising. His Honour went on to observe that it is more consistent with authority to give consideration to the inclusion of assets which are no longer assets of the parties in considering “whether” to make a further adjustment. No error in declining to make a further adjustment on account of transactions predating the relationship is demonstrated.
It should be emphasised that in some cases a finding of non-disclosure will sound only in costs. That is because the findings made by the judge about the likely identity and value of the assets available for adjustment as between the husband and wife may adequately address the non‑disclosure, for example by inclusion of hitherto undisclosed assets as part of the property of the parties or either of them.
It is accurate to acknowledge that s 75(2)(o) permits a judge to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. In an appropriate case, this will include a potential adjustment designed to recognise that deficiencies in disclosure have compromised the ability to otherwise make orders which are just and equitable.
There was no error in the observation that $20 million was a large sum of money (at [287]). In fact, s 75(2)(n) of the Act required the primary judge to consider the terms of the proposed order to be made under s 79 in respect of the property of the parties, to which his Honour made reference at [286].
The wife’s ultimate complaint is really that she would have preferred that the adjustment was larger. This would require the wife to have demonstrated that the discretion miscarried in the manner referred to by the final limb of House v The King, or, as otherwise described by Kirby J in CDJ v VAJ (1998) 197 CLR 172, the “plainly wrong” challenge. For the reasons which we have discussed at length, we are not so persuaded and this ground must fail.
Ground 5
The fifth ground is as follows:
5.His Honour’s discretionary decision miscarried because his Honour failed to take into account:
5.1the contributions made during the relationship by the [wife] prior to the March 2011 when his Honour found the parties commenced cohabitation;
5.2implicitly determining that no weight should be afforded to the [wife’s] post separation contributions because of funds provided by the [husband] during that period [267] but in doing so failed to take into account the full extent to which those funds in part were taken into account in the identified pool of property; and
5.3the approach adopted by the primary judge as to assessing overall contribution was manifestly unjust and outside the reasonable bounds of the scope of the discretion.
This ground contains several disparate complaints. They appear to be:
(a)Failure to take into account a material fact: the wife’s pre-marriage contributions;
(b)Failure to take into account a material fact: the wife’s post-separation contributions; and
(c)Manifestly unjust and unreasonable outcome.
The wife’s pre-marriage contributions were not a material fact. On both parties’ cases, the parties spent considerable time living apart after their relationship started. Living separately limited the scope of any non-financial contributions the parties could make for the benefit of the other. The primary judge made a finding about when cohabitation commenced and there is no challenge to that finding on appeal. As a matter of law the contributions of a party prior to marriage and even cohabitation can, in an appropriate case, require recognition. The contributions of the wife in this category were modest.
The wife owned a property in China at the commencement of the relationship and this was considered by the primary judge at [260]. At the time of the parties’ marriage there was another piece of property registered in the wife’s name in China but it had been purchased in her name by the husband and so would properly be regarded as the husband’s contribution.
The primary judge did take into account the wife’s post-separation contributions at [267]. He weighed them, as he was obliged to do, against the husband’s own considerable post-separation contributions.
Finally, it is contended that the assessment of the wife’s contributions was manifestly inadequate. As previously discussed in respect of Ground 4, where, as here, the primary judge has systematically and in detail considered and weighed the parties’ contributions according to the terms of the statute and reached a conclusion about an adjustment sufficient to recognise those contributions, an appellate court will only interfere where the result, as expressed in the sum to be adjusted, falls outside “[t]he generous ambit of reasonable disagreement [which] marks the area of immunity from appellate interference” (Norbis v Norbis (1986) 161 CLR 513 at 540 per Brennan J).
Ground 5 is not established.
Grounds 6 and 7
The sixth and seventh grounds are as follows:
6.His Honour erred in his consideration of the path of funds applied to the purchase of [2 N Street, Suburb P] [180] in:
6.1failing to take into account the effect of findings otherwise made as to the actions of the [husband] and the [husband’s brother];
6.2failing to take into account the failure of a party with natural recourse to evidence to call it and the unexplained failure of any of the Respondent’s (sic) to call evidence from the mother of the [husband] and [the husband’s brother] as to funds passing through her accounts and what the arrangements were; and,
6.3erroneously finding that the [husband’s brother] has had sources of funds available to him other than funds sourced from [AB Ltd].
7.His Honour erred in his consideration of the path of funds applied to the purchase of [4 N Street, Suburb P] [182] in:
7.1failing to take into account the effect of findings otherwise made as to the actions of the [husband] and the [husband’s brother’s wife];
7.2failing to take into account the failure of a party with natural recourse to evidence to call it and the unexplained failure of any of the Respondent’s (sic) to call evidence from the mother of the [husband] and [the husband’s brother] as to funds passing through her accounts and what the arrangements were; and
7.3failing to consider the evidence that the funds used by the [husband’s brother’s wife] were from the [husband].
Grounds 6 and 7 assert error in the primary judge’s conclusion that two pieces of real estate (2 and 4 N Street, Suburb P) (“the N Street properties”) were legally the property of the persons whose names appeared on title.
The primary judge found at [169] and [170] uncontroversially that a property at 2 N Street, Suburb P was purchased in mid-2017 in the name of the husband’s brother and that the funds which were used to affect the purchase came from a Commonwealth Bank account in the name of the husband’s brother’s wife (but had been transferred into that account from an account in the name of the mother of the husband and his brother).
The husband attended the auction and bid with an authority from his brother. The wife did not attend the auction. The wife never attended at 2 N Street nor discussed development with architects or builders. The husband’s brother and his wife live at 2 N Street.
After the wife and husband separated, a property (4 N Street, Suburb P) was purchased in the name of the husband’s brother’s wife in early 2019.
The wife had submitted that the husband’s brother and his wife, whilst registered on title to the N Street properties, held their interest on resulting trust for the husband.
The primary judge was obliged to commence, as he did, with a recognition that legal title to 2 N Street was held by the husband’s brother. It was for the wife to demonstrate, on the basis of evidence, that the Court should find otherwise.
Factually, the wife contended that the resulting trusts arose as a consequence of the funds for acquisition having been provided by the husband. The key error alleged by each ground is as to factual findings concerning the purchasing funds. Those funds were asserted to have been sourced from payments made by the husband to his mother in the sum of $9.468 million in 2009 and 2010.
The circumstances in which a resulting trust will be recognised was the subject of discussion by the High Court in Calverley v Green (1984) 155 CLR 242, where their Honours said at 246:
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser.
Accordingly, to establish the existence of a resulting trust the primary judge must be satisfied that:
(a)The husband provided the purchase monies in respect of one and or both properties; and
(b)There is no evidence to displace the presumption that the husband intended to retain beneficial interest in one or both of the properties.
Relevantly, the High Court has acknowledged that the presumption of a resulting trust is recognised as a “weak presumption” given changes in the circumstances which originally justified its recognition (Bosanac v Federal Commissioner of Taxation (2022) 275 CLR 37 at [98] per Gordon and Edelman JJ). If it arose in this case (and we are sceptical given the failure to establish that the funds used to purchase the N Street properties belonged to the husband), then the findings which his Honour made at [168]–[182] effectively displaced it.
The respondents submitted at trial and submit on appeal that the evidence did not establish that the money which purchased the N Street properties was the husband’s money.
There was no dispute between the parties that funds in the sum of $9.468 million had been paid into the bank account/s of the husband’s mother by the husband in 2009 and 2010. It was not in dispute that the funds in those accounts had subsequently dwindled to nil. It was not in dispute that funds from other bank accounts in the name of the husband’s mother had been paid into bank accounts in the name of the husband’s brother and his wife to fund the purchase of 2 N Street in 2017.
However, the direct evidence, the wife accepts at [67] of her Summary of Argument, fell short of establishing that the funds which were applied to the purchase of the N Street properties came from the husband.
Countering the notion that the purchase was, in reality, by and for the husband, the primary judge considered it significant that the husband had purchased real property in Australia in his own name and there was no logical reason why he would purchase it in the name of the husband’s brother and his wife if the husband intended to own the property.
The primary judge found that the rental income from 2 N Street was reported as income for taxation purposes by the husband’s brother.
The wife submits that the primary judge ought to have drawn an inference from other evidence and credit findings sufficient to support a conclusion of a resulting trust, reliant upon the purchase funds having come from the husband.
The primary judge, as identified at [104] of the judgment, was acutely aware of the limitations in credibility of the wife, the husband and his brother. The primary judge correctly observed that a finding that a party is not to be accepted about one matter does not mean that the judge is obliged to reject their evidence in respect of other issues. His Honour also observed the need to consider whether the evidence of the parties aligned with “undisputed facts or matters that are inherently plausible or aligns with documents of unquestionable providence” (at [104), an approach demonstrated above in the primary judge’s examination of the circumstances surrounding the N Street properties.
Although the wife concedes that her evidence did not compel a trier of fact to find this aspect in her favour, she contends that a “provisional or tactical burden” was placed on husband and his brother to call evidence from their mother.
The wife, drawing upon principles from Blatch v Archer (1774) 1 Cowp 63 (“Blatch v Archer”) at [65], Jones v Dunkel (1959) 101 CLR 298 (“Jones v Dunkel”) and Wei v Xia, submits that the primary judge was in error when he concluded that the N Street properties were not held on resulting trust for the husband.
The wife submits that the evidence adduced by the wife was sufficient to place an obligation on the husband to adduce contrary evidence. We disagree.
The wife calls on the useful discussion in Wei v Xia in aid of the conclusion that, the wife having raised the issue of the beneficial ownership of the N Street properties, the information about their acquisition (in particular its funding) was more easily within the possession and control of the respondents and their failure to provide such information supports the finding for which the wife contended at trial.
In Blatch v Archer, Lord Mansfield wrote at [65]:
…It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.
That must be considered in light of the judicial maxim that he or she “who alleges must prove” (Wallaby Grip Ltd v QBE Insurance (Australia) Ltd (2010) 240 CLR 444 at [36]).
The deficit claimed by the wife was in the failure to call the husband’s mother, from whose accounts, uncontroversially, funds had been provided for the purchases of the N Street properties, and a failure by the husband and his brother to call other evidence. It was not made clear what other evidence was in the hands of the husband and his brother to lead aside from the potential to call their mother to give evidence.
It is not clear why the inferences which may have been drawn in reliance on the dicta in Jones v Dunkel would have been sufficient to ground a finding of resulting trust based on the funds provided by the husband’s mother being, in fact, the husband’s funds. Any weakness in the husband’s or his brother’s case brought about by the failure to call their mother did not equate to a positive proof of the contrary proposition that the funds were those of the husband and that they were provided in a manner indicative of a resulting trust.
This is particularly so when the primary judge relied on other matters that were indicative that the beneficial ownership of the properties was not with the husband.
The primary judge explained in his reasons that the evidence fell short of satisfying him that the funds could be traced from the husband to the acquisitions of the N Street properties. He further found that various factual circumstances – such as the husband’s purchase of other property in his own name – supported the conclusion that the properties were purchased in the names of the husband’s brother and his wife because it was intended that the properties would be owned by them. If the primary judge did not “feel an actual persuasion” then he was not in error to decline to draw the inferences he was invited to draw, including as to the provision of funds by the husband, in aid of the conclusion about ownership.
The wife was critical of the finding of the primary judge at [149] that the husband’s brother had income from a number of sources, a proposition that the primary judge noted was not challenged by the wife. The husband’s brother’s evidence identified that he owned properties outside of AB Ltd, and that he had been employed outside of AB Ltd. The question of whether the husband’s brother and his wife had income independent from the husband is a distraction for two reasons. The source of funds for the acquisition of the properties were said to be funds in bank accounts of the husband’s mother (not the husband’s brother and his wife) and there was considerable evidence that the husband’s brother had assets in his name (apart from the N Street properties) as reflected in the wife’s contentions recorded at [16] and [17] of her Summary of Argument and the primary judge’s finding at [216].
Grounds 6 and 7 are not established.
Ground 8
The eighth ground is as follows:
8.His Honour erred in discretion, and failed to follow established guideline principle, in refusing to addback the legal costs paid by the Second to Fourth Respondents [194] in the light of his finding that [AB Ltd] was the alter ego of the [husband]; the failure of the Second to Fourth Respondent’s (sic) to adduce evidence establishing that the funds had not been sourced from the income and resources of [AB Ltd]; the failure of the Second to Fourth Respondent’s (sic) to provide a proper disclosure of the source of funds pursuant to rule 12.06(6)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; the admission by the Second to Fourth Respondents made through their solicitor stating that their legal fees were paid by the Respondents; and ought have approached the issue that the costs incurred were in reality an extension of the costs of the [husband].
The paid legal fees of the second to fourth respondents were contained in their costs disclosure notices filed in accordance with the Rules. They were reproduced in the joint balance sheet under the “Applicant’s value” column (being the wife’s). The quantum of $1,381,730 was uncontroversial but not the question of whether those funds should be notionally considered property of the husband. The primary judge declined to add back those funds.
The wife argued that from the finding that AB Ltd was the husband’s alter ego, it would follow that legal fees paid by AB Ltd for the legal fees of the second to fourth respondents would appropriately be considered as an “add back”.
Treating property which is no longer property of the parties as though it were property of the parties (or one of them) is, as the Full Court concluded in C & C [1998] FamCA 143 at [46], “the exception rather than the rule”. Although, it has long been recognised that one of the categories of expended funds which the court may notionally have regard to as part of the pool of assets available for adjustment includes paid legal fees (Omacini and Omacini (2005) FLC 93-218). Whilst Chorn and Hopkins (2004) FLC 93-204 is often cited as a guideline as to the treatment of paid legal fees, it did not establish that paid legal fees must be “added back”, acknowledging the discretionary nature of the decision and observing:
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58.If funds used to pay legal fees have been generated by a party post‑separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post‑separation income or acquisitions.
Those observations, as the Full Court noted in Trevi & Trevi (2018) FLC 93-858, recognised that there exist circumstances in which it will be appropriate to add back legal fees and circumstances in which it will not, and the overall determinant for the exercise of the discretion will be which approach is productive of orders which are just and equitable.
The primary judge declined to include the paid legal fees for the reasons expressed at [194]:
I am not satisfied that the wife has established a basis to include moneys paid by the second to fourth respondents for their legal fees. Her basis for doing so rests on her assertion that the “legal fees have been paid by [AB Ltd] an entity which the husband owns”… There is no evidence that supports this assertion.
The wife’s argument focussed upon whether this factual conclusion was correct.
It should be noted that the proposition being addressed by the primary judge was that the legal fees for the second to fourth respondents had been paid by AB Ltd, the fourth respondent, the alter ego of the husband. The conclusion reached by the primary judge was that there was no evidence to sustain this. The wife identifies no evidence to contradict this conclusion, other than a reference to Exhibit 21, being a costs notice jointly filed for the second to fourth respondents that recites the source of funds as “paid by clients”. This assertion, clothed with ambiguity as it was, was not sufficient to constitute evidence that AB Ltd had paid the costs for the second to fourth respondents, even if it was consistent with some costs being paid by that entity either for itself or for the other respondents.
The wife has not established why the approach of declining to add back funds was not open in the circumstances of this case. Ground 8 lacks merit.
Ground 9
The ninth ground is as follows:
9.As to as to the following items in the balance sheet his Honour erred in his finding:
9.1as to item 45 of the Australian Balance Sheet [p 43] that there was no evidence recording a liability to the [husband] of $1,850,000 [186];
9.2as to item 47 of the Australian Balance Sheet [p 44] that there was no evidence recording that the [husband] had loaned $900,000 to [CX Company] [186];
9.3as to item 53 of the Australian Balance Sheet [p 44] that there was no evidence that the [husband] had invested $1,000,000 in the [CZ Business] [186]; and
9.4as to item 49 of the China Balance Sheet [p 51] rejecting taking into account the whole of the value of the property despite there being no issue on the evidence that the [husband] was the owner of a one-half share with an agreed value of $1,928,723 [211].
This appeal ground is concerned with errors of fact.
In De Winter and De Winter (1979) FLC 90-605, having referred to House v The King and Storie v Storie (1945) 80 CLR 597, the High Court observed that (at 78,092):
…It may in some cases appear that the mistake of fact has not affected the final result, or that its effect has been negligible, or that in any case the conclusion reached was correct, notwithstanding the error. But it is not right to say, as the majority of the Full Court appear to have said in the present case, that a discretionary judgment which has proceeded upon a mistake of fact should be upheld simply because the order was well within the range of the discretion of the primary judge.
…The question is whether the invalid reason has influenced the ultimate conclusion, or whether the error was immaterial; if the error did affect the conclusion, the result may nevertheless be so plainly right that it can be allowed to stand notwithstanding the unsoundness of some of its foundations.
Having examined each of the asserted errors they fall into two categories:
(1)The primary judge’s finding was open on the evidence; and
(2)The primary judge’s finding was in error but in the context of this case was immaterial.
Open on the evidence
The wife asserted that the husband had an interest in FF Pty Ltd. The husband agreed that he had a shareholding in that entity which was equivalent to 3.22 per cent of the shares. The primary judge had no expert evidence about the value (if any) of the shareholding and the husband asserted it had no value.
In 2015 the husband acquired his interest in the entity for the sum of $1,850,000.
In the Financial Statement upon which the husband relied at trial the value of his interest was recorded as nil.
The primary judge said “[t]here is no evidence to support the wife’s contention as to value” of item 45 (the shareholding). In that regard the primary judge was correct. The wife made no submissions on the topic.
It was also open to the primary to judge to conclude that, to the extent that the husband may have previously had an interest in a loan to the CX Company, at the time of trial there was no evidence before the Court sufficient to establish a present interest. No error is demonstrated.
In 2015 the husband invested $1 million in an entity described as CZ Business. In evidence he described the project as “frozen” albeit he expected he may be somewhat compensated in the future if the project were to be revived. It was open to the primary judge to treat that investment as having a present value of nil on the evidence.
Error not material
The husband accepts that the primary judge was in error when he recorded the value of the husband’s interest in BY Street, Town BZ, City R at nil. The husband’s Financial Statement recorded his interest as being a half interest. The agreed value of the property was $3,857,446, and accordingly the husband’s interest ought to have been recorded by the primary judge as $1,928,723.
Given the primary judge’s finding as to the extent of the pool and the approach of ordering a fixed sum – the exclusion of the husband’s interest in this piece of real property in China was de minimis in the context of a pool of assets which exceeded $565,988,500 and a relationship of just over seven years where it was not in contest that the husband had made the overwhelming financial contribution.
Ground 9 is not established.
Ground 10
The tenth ground is as follows:
10.On the facts as determined by his Honour the order made was manifestly unjust and plainly wrong.
We have addressed this more specifically above as it was raised in the context of Grounds 2, 4 and 5. We understand the wife to be contending that, having regard to the magnitude of the husband’s non-disclosure and the extent of the husband’s wealth (including the existence of wealth beyond that which the was able to be the subject of a finding), the resulting order was manifestly unjust and plainly wrong.
It is worthwhile repeating the observations of the High Court in Stanford at [36]:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds…
(Footnotes omitted)
The discretion is such that a proper consideration of all relevant factors by a different judge may produce a different result and no error will be demonstrated where all relevant considerations have been weighed in light of the facts and circumstances in the particular case.
The wife has not established error under Ground 10.
DISPOSITION
Since we have not found merit in any of the grounds it follows that both the Application in an Appeal to adduce further evidence (relevant to re-exercise) and the appeal will be dismissed.
I certify that the preceding two hundred (200) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Gill & Christie. Associate:
Dated: 13 June 2025
SCHEDULE OF PARTIES
NAA 277 of 2024
SYC 4269 of 2020Respondents
Fourth Respondent:
AB LTD
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