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Parties Oppose Final Property Settlement Orders

Fung & Forbes [2021] FedCFamC1A 6 (10 September 2021) 

The primary judge made final orders in property settlement and spousal maintenance proceedings between the parties.  The parties dispute the final property settlement orders seeking to raise matters of fact and contentions not raised at trial.  The Court, in adjudicating this dispute, determined whether or not there were exceptional circumstances present. 

Facts:

The parties commenced a de facto relationship in 1999, married in 2009 and separated in 2016.  The parties have two children aged 17 years and 14 years, who live with the wife and spend time with the husband.  The husband has re-partnered but the wife has not.  The husband works part-time as a consultant for G Pty Ltd, a company of which he indirectly owns a 30 per cent interest. 

The wife is unemployed and receives social security benefits.  At the commencement of their relationship, the husband held interests in G Group and H Group, together with various real properties and superannuation interests.  After the parties’ relationship terminated, the husband continued to meet the living expenses of the wife and the children, including the children’s private school fees.  Post separation, many of the husband’s business interests in China failed and some of the husband’s interests in the H Group were taken over by another company.  

In 2020, the wife, with the husband’s assistance, travelled to China and engaged a lawyer to seek to recover their investments in the H Group, but those efforts were entirely unsuccessful.  In April 2017, the wife commenced proceedings for property settlement and spousal maintenance.   On 17 July 2017, an interim property settlement order was made for the husband to pay the wife $25,000 and spousal maintenance of $16,200 per month.  The husband applied to vary the amount of spouse maintenance to approximately a quarter of what he was ordered to pay.  

On 15 May 2018, that application was dismissed and the husband’s spousal maintenance arrears was required to be paid to the wife in monthly instalment over six months, although that did not occur.  As found by the primary judge, the arrears of spousal maintenance at the time of trial was in the sum of $600,942.  A single expert was appointed to value the parties’ interests and to conduct an analysis of various transactions of the husband’s superannuation fund, as the wife challenged the husband’s claim that he had transferred about $1,400,000 from it to the H Group in China.  The primary judge set out the balance sheet of the parties’ property with values as contended for by each party. 

The wife asserted the value of the parties’ assets was at $11,376,671, while the husband asserted a value of $125,627.  It was the wife’s case that the value of certain items should be notionally added back in the property pool.  The primary judge adjusted the balance sheet to find that the parties’ net assets totalled $146,588.  On 12 February 2021, a judge of the Family Court of Australia made final orders in property settlement and spousal maintenance proceedings between the parties.

The husband was ordered to pay the wife the sum of $88,000 within a 12 month period.  The sale of shares owned by the parties and the proceeds (if any) were to be paid to the wife.  Sums recovered in respect of the husband’s loan accounts with companies in China were likewise to be paid to the wife as well as spousal maintenance of $745 per week.  The primary judge also ordered that the outstanding arrears of spousal maintenance pursuant to a prior interim order be reduced to $16,000 and paid to the wife within 12 months. 

Issue:

Whether or not there were exceptional circumstances to raise matters on appeal. 

Applicable law:

Coulton v Holcombe(1986) 162 CLR 1[1986] HCA 33 - where it was provided that if parties are not bound by the conduct of their case at trial, trials would become “little more than a preliminary skirmish”.

Edwards v Noble(1971) 125 CLR 296[1971] HCA 54 - held that an appeal court should not interfere with a finding of fact if it was reasonably open on the evidence.

Gronow & Gronow(1979) 144 CLR 513[1979] HCA 63 - provided that appeals which seek to challenge the weight given to competing evidence are therefore particularly fraught.

House v The King(1936) 55 CLR 499[1936] HCA 40 - the High Court said that 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. 

Jones v Dunkel(1959) 101 CLR 298[1959] HCA 8 - where there is direct, and on occasion unchallenged, evidence before the primary judge matters raised in the grounds, the findings necessarily were reasonably open.

Metwally v University of Wollongong(1985) 60 ALR 68[1985] HCA 28 - where both the wife and the husband in their respective appeal and cross-appeal seek to raise matters of fact and contentions not raised at trial, however absent exceptional circumstances a party is bound by the conduct of their case at trial.

Analysis:

The wife asserts that the Judge erred in finding that the total value of the assets of the parties was $146,588 because the Respondent had not disposed of the proceeds of sale of particular assets.  Those proceeds should have been the subject of an ‘add back’ in the calculation of the assets and liabilities of the parties to the marriage or, alternatively, have been treated as a financial resource of the Respondent.  Contrary to the assertion of the wife, the proceeds of the sale of particular items were dealt by the husband as proven by direct, and on occasion unchallenged, evidence.  It was therefore reasonably open to the primary judge to accept that evidence and act upon it. 

The constant refrain during the oral submissions of the wife’s counsel, that the primary judge “should” have applied a Jones & Dunkel inference, fails to engage with the discretionary nature of the application of the rule, and more particularly, the permissible limits on appellate interference with such decisions.  Both the wife and the husband in their respective appeal and cross-appeal sought to raise matters of fact and contentions not raised at trial, however absent exceptional circumstances a party is bound by the conduct of their case at trial. 

Conclusion:

The Court found that there were no exceptional circumstances.  The Court ordered the Amended Notice of Appeal filed 28 June 2021 dismissed.  The Notice of Cross-Appeal filed 12 March 2021 is dismissed.

 

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