Appellant Opposes Previous Property Division Orders Including Loans

Aston & Haymon [2021] FamCAFC 146 (9 August 2021) 

Property settlement proceedings took place between the parties.  The primary judge made property division orders including various loans alleged to relate to the respondent's legal fees into the property pool.  The appellant asserts that the primary judge erred in making its orders.  The Court, in deciding whether or not to grant the appeal, assessed the grounds substantiated by the appellant as well as the basis for the primary judge's finding to include the loans. 

Facts:

The parties commenced cohabitation in October 2010, married in 2015 and separated on a final basis in September 2017, meaning that the relationship subsisted for a little less than seven years.  The appellant commenced property settlement proceedings in 2018.  The trial initially ran for two days in May 2019, and later for another day in June 2019, but was then unable to be concluded, which saw submissions heard in December 2019, with judgment being reserved.  On 26 November 2020, the primary judge made orders effecting the division of the parties’ property.  The appellant wife received 50 per cent of the net pool of non-superannuation assets, and each party retained their superannuation, which saw the appellant take about 75 percent of the superannuation pool. 

The equal property division was achieved by the appellant retaining the assets in her sole possession or name, being paid the net proceeds of sale of some livestock and the respondent husband making a further payment to her of $120,000.  On appeal, the appellant asserts that the primary judge erred by accepting evidence that the post-separation loans made to the respondent and included these loans in their entirety into the property pool despite the stated purpose for some of these loans being for payment of legal expenses, fines and penalties and court ordered costs.  There is an amount of $200,000 which he says was loaned during the marriage.  There is an amount of $177,800 when he says was loaned post-separation. 

Issues: 

I. Whether or not the primary judge erred in including various loans into the property pool. 

II. Whether or not the primary judge erred by accepting evidence from a witness which had not been challenged by a self-represented applicant in circumstances where it was clear the applicant was challenging the witness’ evidence.

Applicable law:

Analysis:

Legal fees attributable to the property proceedings should not be included as liabilities in determining the net property pool, given that to do so would see the other party bearing some responsibility for them.  The primary judge said that any amounts within the loans which were for legal fees or expenses should not be included in the pool, but the judge is unable to tell from the husband’s father’s evidence which amounts are strictly legal costs and so the amounts in their entirety will need to go in.  However it is clear that the sum of $48,665.80 includes costs referable to proceedings other than the property litigation, or are ambiguous, or silent as to what legal proceedings they relate to.  Thus $13,810 is specifically said to relate to the parties’ domestic violence proceedings in the Magistrates Court, and $6,999.99 is unspecified.

Whilst a single payment of $26,315.81 is said to be “relating to property matters” and $1,540 for a valuation – perhaps associated with the property proceedings – there is still room for doubt.  As to the sum of $8,777.69, the respondent’s father’s affidavit does not specify as to whether it related to fees in the property proceedings or not, and it is not clear what the purpose of the loan of $12,417.68 was.  It would not have been open to her Honour to infer that they were referrable to the property litigation, absent a sufficient evidentiary basis for doing so.  The $200,000 amount comprised two loans of $150,000 and $50,000, as sworn to in the respondent’s father’s affidavit at paragraph 130.

He was not cross-examined by the appellant by reference to either sum, or indeed about any loaned monies at all.  It cannot seriously be contended that the appellant was unaware of her entitlement to cross-examine the respondent’s father.  The appellant raised his contention that the loans for legal fees incurred in the property proceedings should be excluded on that basis for the first time on appeal.  Hence, the respondent was denied the opportunity to lead evidence in relation to the proper characterisation of the loans, and deprived him of the opportunity to try to persuade the primary judge that in the exercise of her discretion, such loans as may be referrable to payment of legal fees incurred in the proceedings should nonetheless be included in the balance sheet.

Conclusion: 

The Court concluded that the primary judge did not err in accepting evidence that the post-separation loans made to the respondent and included these loans in their entirety into the property pool despite the stated purpose for some of these loans being for payment of legal expenses, fines and penalties and court ordered costs.  The primary judge was also held to have correctly accepted evidence from a witness which had not been challenged by a self-represented applicant in circumstances where it was clear the applicant was challenging the witness’ evidence.  The Court ordered the appellant’s Application in an Appeal filed 30 July 2021 dismissed.  The appeal shall be dismissed.  The appellant is to pay the respondent’s costs in the sum of $8,000 within 60 days.