COLEY -v- DANAE [2020] WASCA 13 (31 January 2020)

COLEY -v- DANAE [2020] WASCA 13 (31 January 2020) - WASCA 2020 case summary — Zoe

[20]

The appellant contends, by ground 1, that the Kangaroo Superannuation Fund should not have been included as part of the property of the de facto partners (thereby reducing the pool of 'property' to be altered by $638,911). On the other hand, the appellant contends, by ground 2, that 100% of the value of the ABC Family Trust ought to have been included as property of the respondent (thereby increasing the pool of 'property' to be altered by $1,974,069).
The other grounds of appeal (grounds 3 to 6) are concerned with the exercise of the learned trial judge's discretionary judgment in fixing the overall distribution of the property. Those grounds all allege a failure to take into account materially relevant considerations under s 205ZD(3) of the Family Court Act 1997 (WA).
The respondent, in addition to resisting the grounds of appeal, filed a notice of contention which, inter alia, seeks to rely upon further evidence not adduced at trial. The further evidence includes a Deed of Variation and Rectification of the ABC Family Trust executed by the respondent on 8 November 2016. That Deed was critical to a proper understanding of the control of the Trust. It was not disclosed in the respondent's discovery prior to trial.
Given its relative size, it will not come as a surprise that much of the hearing of the appeal was concerned with the judges' treatment of the ABC Family Trust and the contention that the learned trial judge erred in including only 50% of the value of that trust as the respondent's 'property'.
As will been seen, in all of the circumstances, we are satisfied that the learned trial judge did err in characterising 50% of the value of the ABC Family Trust as 'property' of the respondent for the purposes of s 205ZG. In reality, as the case was presented, the dispute as to the treatment of the Trust as 'property' for the purposes of s 205ZG was an all or nothing proposition: either it was entirely the property of the respondent for those purposes or none of it was.
There was, in truth, no principled basis upon which, in the manner of King Solomon, the ABC Family Trust could be cut in half and 50% of its value characterised as the respondent's 'property'. In closing submissions at trial, the respondent, perhaps for strategic reasons, conceded that 50% of the value of the Trust was his 'property'.[4] The legal basis for that concession, however, was not properly identified and the only basis identified by the learned trial judge (see [65] below) was erroneous.
As will also be apparent, much of the responsibility for that error rests squarely with the parties. In this regard, the manner in which the case was presented at trial tended to divert attention from a proper analysis of the true ownership and control of the ABC Family Trust. In addition, as the evidence sought to be adduced by the respondent on appeal revealed (and which the appellant sought to rely upon for the purposes of the appropriate orders if the appeal is allowed), the respondent failed to disclose significant documentation that would have been relevant to the determination of the critical issues in the trial.
Given the lack of focus on critical issues at trial, and the potential relevance of the documents produced by the respondent after the trial, it would be impossible for this Court to substitute its own conclusion as to the 'just and equitable' alteration of the parties' property interests for that of the learned trial judge. In all of the circumstances, regrettably, it is necessary for there to be an order for a retrial, deplorable as that result always is.[5] In this context, the appeal raises a number of issues as to the appropriate orders pending the retrial, given that the orders made by the learned trial judge have already been carried into effect.
To put the issues in the appeal in context, it is necessary to briefly set out the statutory context and the structure of the learned trial judge's reasons.

[32]

As in many cases under s 205ZG (and its counterpart under the Family Law Act 1975 (Cth)), the learned trial judge in the present case approached the application of these provisions by way of a three step methodology. That methodology was entirely appropriate and no criticism is made of the learned trial judge in that regard. The methodology is, of course, ultimately directed to determining what is just and equitable in the circumstances of the particular case.
That methodology, in broad terms, was as follows.
First, her Honour identified what constituted the existing property interests of the parties.[6] That is, her Honour determined what constituted 'the property of de facto partners' within the meaning of s 205ZG(1). The identification of the 'property' for the purposes of the section as a whole was an essential first step, as no adjustment with respect to the 'property' can be made without knowing what that property is.
It was in the context of this step that her Honour considered various entities associated with the respondent and members of his family (including his mother and his sister). Those entities included the ABC Family Trust, a trust established by the respondent's mother (Penny Fir) on 23 December 1996. An important feature of the manner in which the case was run below was that the appellant alleged that the various entities associated with the respondent's family (including the ABC Family Trust) were a 'false front' and that all of the entities and their assets were, in truth, owned by the respondent.[7] The learned trial judge rejected that contention.[8]
The second step in the process, once the 'property of the de facto partners' had been identified, was for her Honour to make an assessment of the 'contribution' of each partner to the de facto relationship, including the 'acquisition, conservation or improvement of any of the property of the de facto partners'.[9] The statutory basis for this step was s 205ZG(4)(a) and (b).
This step may be undertaken, in the trial judge's discretion, either on an 'asset by asset' or a 'global' basis.[10] In the present case, the learned trial judge adopted a global approach and concluded that the relative contributions of the parties to the total property was 40% to the appellant and 60% to the respondent.[11]
The third and final step undertaken by the learned trial judge was to 'adjust' the division or alteration of property interests by reference to matters other than the parties' contributions. Those matters include the relevant matters referred to in s 205ZD(3), including the 'financial resources' of each of the parties.[12]
Having regard to those matters, the learned trial judge considered that an adjustment in favour of the appellant of 7.5% was appropriate,[13] thus producing the overall distribution of the property of the parties of 47.5% to the appellant and 52.5% to the respondent.
It will be apparent from this brief overview of this methodology that the conclusions reached by the court at each step of the process will have significant effects upon the assessment of the subsequent steps.
For example, if a certain asset is not characterised as 'property' for the purposes of s 205ZG(1) (because, the relevant party does not exercise relevant control over the asset[14]), the asset may, nevertheless, constitute a 'financial resource' from which a party may be expected to derive benefit in future. As the present case demonstrates, issues of this kind may be particularly relevant in relation to discretionary trusts for which a party is a nominated beneficiary.
We will turn to the specific issues in that regard later. For present purposes, it suffices to note that whether or not a particular asset is identified as 'property' for the purposes of s 205ZG(1) may have an impact upon whether it will later be regarded as a 'financial resource'.
Similarly, whether a particular asset is included within the 'property' of the parties may have a significant impact upon the assessment of the contribution made by each party to the property as a whole. This is particularly so where, as in the present case, the court assesses the parties' contributions on a global basis. So, for example, in the present case, if the entire value of the assets of the ABC Family Trust was characterised as the respondent's 'property', logically, the greater would be the respondent's percentage 'contribution' to the property as a whole (albeit that there may not be a linear relationship between the two).
With this brief overview, we turn to the grounds of appeal. We commence, first, with the grounds concerning the ABC Family Trust (grounds 2, 4 and 5), that being the matter of most significance in the appeal.

[36]

Evidence in relation to the ABC Family Trust was given by Mrs Fir and the respondent.
Mrs Fir died on 20 November 2015, and her evidence was in the form of an amended affidavit previously sworn on 24 September 2015[15] and affirmed on commission on 9 October 2015.[16]
The respondent gave evidence by affidavit and was cross-examined.
A number of documents relating to the ABC Family Trust were also tendered in evidence including, but not limited to, the ABC Family Trust Deed dated 23 December 1996 (the 1996 Deed),[17] ABC Family Trust amending Deed dated 21 December 2004 (the 2004 Deed)[18] and Mrs Fir's last will, dated 14 October 2015.[19]
The following matters concerning the ABC Family Trust, drawn from the learned trial judge's reasons, are uncontroversial.
The ABC Family Trust was established on 23 December 1996 by the 1996 Deed. Under the 1996 Deed, Mrs Fir and the respondent were appointed as joint trustees. In addition, Mrs Fir was the appointor and guardian of the Trust.
The initial assets of the ABC Family Trust were shares and investments held by Mrs Fir, worth approximately $460,000, that Mrs Fir had transferred to the Trust.[20] In 2006, Mrs Fir transferred $482,577, comprising her shareholding and cash, from the ABC Family Trust to the Danae Superannuation Fund, of which Mrs Fir was then a joint trustee with the respondent.[21] At the time of trial, a significant asset of the ABC Family Trust consisted of shares in another company, Antwerp Holdings Pty Ltd (Antwerp). Antwerp was the holder of assets derived from the income from the respondent's landscaping business.[22] The value of the Trust's interest in Antwerp was found by the learned trial judge to be $2,789,000.[23]
The Primary Beneficiaries of the Trust (as defined) were the respondent and his sister, Ms Danae (sometimes referred to as 'Melissa' in the evidence). Mrs Fir was a residuary beneficiary. The beneficiaries also included the children and remoter issue of the Primary Beneficiaries.[24] While each of these persons was defined in the 1996 Deed as a 'beneficiary', the ABC Family Trust is nevertheless a discretionary trust. None of the defined 'beneficiaries' have any vested beneficial interest in the assets owned by the Trust; they are, rather, members of the class of objects of the powers of the trustee under cl 6 of the 1996 Deed.[25] There was no finding or suggestion that the appellant herself was a beneficiary under the ABC Family Trust.
On 21 December 2004, the ABC Family Trust was varied by the 2004 Deed. The 2004 Deed amended the definition of the appointor and the guardian of the Trust, so as to appoint Mrs Fir and the respondent as joint appointors and guardians during their lifetimes. Upon the death or legal incapacity of either Mrs Fir or the respondent, Ms Danae was to act jointly with the surviving appointor.[26]
As noted above, Mrs Fir died on 20 November 2015. In accordance with both the definition of appointor in the 2004 Deed and consistently with Mrs Fir's last will, upon her death both the respondent and Ms Danae became joint appointors of the ABC Family Trust. The learned trial judge made findings to that effect.[27]
After that time, of course, both the respondent and Ms Danae remained the Primary Beneficiaries of the ABC Family Trust. As beneficiary of a discretionary trust, however, the assets of the Trust would not, for that reason alone, be regarded as the respondent's property.[28] A finding that the assets of the Trust were wholly or partly the property of the respondent would require, at the very least, a consideration of whether the respondent was the sole trustee of the Trust and whether, under the Trust instrument, the respondent was a beneficiary to whom the trustee could appoint the entirety of the Trust assets (for the reasons set out below).
Unfortunately, it is at this point that the analysis in the proceedings below broke down.

[56]

The appellant submits that the learned trial judge erred in law in concluding that Ms Danae had an entitlement to 50% of the assets of the ABC Family Trust by reason of the fact that Mrs Fir's residuary estate was left equally to the respondent and Ms Danae.[49] There is, the appellant submits, no relevant legal or factual connection between Ms Danae's entitlements under the Trust and her entitlements under the residuary estate.
In this submission, the appellant is correct. The identification of Ms Danae's, and the respondent's, entitlements under the Trust required an analysis of the legal effect of the 1996 Deed, and any variations to it. It could not be determined by their status under Mrs Fir's will. Accordingly, the judge's reasons disclose no proper basis for concluding that the respondent had a 50% interest in the assets of the ABC Family Trust. Nor, as discussed below, was there any other basis on the facts found, or on the materials before her Honour, to treat the respondent as having a 50% beneficial interest in the assets of the Trust. The acceptance of error in this regard does not, however, establish the corollary alleged in ground 2, namely that the respondent had a 100% interest in the assets of the Trust.
Once the learned trial judge had rejected the 'false front' case (i.e. by finding that the ABC Family Trust was 'owned in accordance with [its] legal ownership'), it nevertheless remained necessary for the learned trial judge to determine what that 'legal ownership' was; that is, who the trustee was.
More specifically, whether the assets of the ABC Family Trust (or part of them) were to be included within the 'property of the de facto partners, or either of them' for the purposes of s 205ZG of the Family Court Act 1997 (WA) was a matter which could not be determined without regard to the legal and equitable rights under the Trust, in light of the statutory meaning of that expression. As the High Court made clear in Kennon v Spry, the word 'property' is used in different ways in different statutory contexts.[50]
In Kennon v Spry, which concerned s 79 of the Family Law Act 1975 (Cth) (the equivalent provision to s 205ZG), it was held by a majority of the Court that assets held in a trust, in relation to which one party to the marriage (the husband) was the sole trustee and the other party to the marriage (the wife) was a beneficiary, could properly be characterised in the circumstances of that case as 'property of the parties to the marriage' within the meaning of s 79 of the Family Law Act 1975 (Cth), even though the husband had no power to apply the assets of the trust to or for himself.[51]
In reaching this conclusion in the circumstances of that case, the majority in Kennon v Spry referred to the husband's legal title as trustee of the assets of the trust and the absence of any equitable interest in the assets, the trustee's power to appoint the whole of the fund to the wife, the husband's fiduciary duty to consider whether and in what way the power should be exercised, and the wife's interest in the due administration of the trust.[52]
The circumstances of that case were that the discretionary trust was a creature of the husband, created before the marriage, which had been used to accumulate assets for the family, including the family home.[53] French CJ placed significance on the origin and nature of the assets of the trust. His Honour said:[54]

[65]

Reference was made earlier in these reasons to the comprehensive sense in which the term 'property' is defined in s 4(1) of the Act. And it will also be recalled that the 'property' which may be the subject of orders under s 79(1) of the Act is 'the property of the parties to the marriage or either of them' (emphasis added). The right of the wife with respect to the due administration of the Trust was included in her property for the purposes of the Act. The submissions by Mr Gleeson to this effect should be accepted. The submissions to the contrary by Mr Myers should not be accepted. And in considering what is the property of the parties to the marriage (as distinct from what might be identified as the property of the husband) it is important to recognise not only that the right of the wife was accompanied at least by the fiduciary duty of the husband to consider whether and in what way the power should be exercised, but also that, during the marriage, the power could have been exercised by appointing the whole of the Trust assets to the wife. Observing that the husband could not have conferred the same benefit on himself as he could on his wife denies only that he had property in the assets of the Trust, it does not deny that part of the property of the parties to the marriage, within the meaning of the Act, was his power to appoint the whole of the property to his wife and her right to a due administration of the Trust.

...

In the circumstances of the present case, it was open to the primary judge to formulate his orders, as he did, on the basis that the 'asset pool' ... included the assets of the Trust ... To proceed on that basis properly reflected what was 'the property of the parties to the marriage or either of them' ... To proceed on the basis propounded by the husband would confine attention to what was his property.

...

The conclusion reached by the trial judge (erroneously) that the husband could have applied the whole or part of the Trust fund to or for his own benefit is inconclusive of the outcome. The jurisdiction being exercised by the Family Court was, as earlier indicated, jurisdiction over 'proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them' (emphasis added). What matters in this case is that once the 1998 Instrument and the 2002 Instrument were set aside by the s 106B orders, the property of the parties to the marriage or either of them was to be identified as including the right of the wife to due administration of the Trust, accompanied by the fiduciary duty of the husband, as trustee, to consider whether and in what way the power should be exercised. And because, during the marriage, the husband could have appointed the whole of the Trust fund to the wife, the potential enjoyment of the whole of that fund was 'property of the parties to the marriage or either of them'. Furthermore, because the relevant power permitted appointment of the whole of the Trust fund to the wife absolutely, the value of that property was the value of the assets of the Trust. In deciding what orders should be made under ss 79 and 80 of the Act, the value of that property was properly taken into account.

[70]

The Full Court decisions referred to by French CJ included cases where the relevant party was not a trustee but, as a matter of fact, had full control over the trustee entity.[61] It is not necessary for present purposes to examine those cases in this context, but it should be noted that there is an important difference between a situation of 'de facto control' and a 'false front'. A person may, in fact, be in control of a trust (by reason of the relevant facts and circumstances) without the trust being a 'counterfeit, a façade or a false front'.[62]
Accordingly, in order to conclude whether the assets of the Trust could properly have been characterised as the respondent's property for the purposes of s 205ZG, it was necessary in the present case for the learned trial judge to consider, at least, whether the respondent was both the sole trustee of the ABC Family Trust and a beneficiary for the benefit of whom the entirety of the trust assets could have been applied under the trust instrument.[63]
On the other hand, if (for example) the respondent did not have any control of the ABC Family Trust, none of the assets of the Trust would have amounted to his 'property ' for the purposes of s 205ZG. In this regard, applying the methodology adopted by the learned trial judge, those assets (or any portion of them) would not have been brought to account at the first step of that methodology.
In saying this, we recognise that, in Kennon v Spry, it was accepted that a spouse's equitable right, as a beneficiary of a discretionary trust, to due administration of the trust may (in a particular case), itself, constitute his or her 'property' for the purposes of s 79 of the Family Law Act 1975 (Cth),[64] and may accordingly also constitute 'property' under s 205ZG.
However, as French CJ observed, in effect, it is likely to be difficult to put any realistic value on such a right.[65] While his Honour did observe that 'a valuation might not be beyond the actuarial arts in relation to the right to due consideration',[66] that observation must be understood in the context of his Honour's overall conclusion that, without Dr Spry's legal title to the trust assets, the rights and powers under the trust were 'meaningless'.[67]
Further, in and of itself, the right to due administration of a discretionary trust as 'property' is quite separate and distinct from the assets of the trust itself. The valuation of such a right, if it might be possible, is almost certainly not to be equated with the assets of the trust, or even a proportion of them. Such a valuation would be a matter for expert actuarial or valuation evidence in light of all of the facts.
There is, for example, no basis to suppose, in accordance with the conclusion of the learned trial judge in the present case, that the value of the respondent's right to due administration of the Trust would necessarily equate to 50% of the value of the trust assets, particularly given the existence of other potential beneficiaries. Moreover, the case was not presented before the learned trial judge on the basis that the 'property' of the respondent in the present case relevantly included the right to due administration. The focus was, at all times, on the trust assets themselves.
It is for these reasons that, in our view, in the absence of special circumstances of the kind considered in Kennon v Spry, the bare equitable right of a beneficiary under a discretionary trust will not ordinarily be included as 'property' for the purposes of s 205ZG of the Family Court Act 1997 (WA).
That is not, of course, to say that such a right is otherwise irrelevant to the application of that section. In particular, where a party to the de facto relationship is a mere beneficiary of a discretionary trust, the prospect of trust distributions to the beneficiary may be considered as a 'financial resource', the existence of which is a materially relevant consideration under s 205ZD(3) of the Family Court Act 1997 (WA).
The decision of the High Court in Hall v Hall is pertinent in this regard.[68] That case concerned the application of s 75 of the Family Law Act 1975 (Cth) in relation to a spousal maintenance order. It nevertheless concerned the same expression ('property and financial resources') as that which appears in s 205ZD(3) of the Family Court Act 1997 (WA) (as it applies via s 205ZG(4)(e)).
In Hall v Hall, French CJ, Gageler, Keane and Nettle JJ held:[69]

[74]

To this, it might be added that, depending upon how the evidence unfolded, the non-disclosure of the 2016 Deed might have proved fertile ground for cross-examination of the respondent in relation to the appellant's 'false front' case.
How these issues might be resolved is unknown. However, one thing is clear. None of them can be resolved by this Court. The resolution of the effect of the 2016 Deed would require proper disclosure, further evidence from the parties (and potentially others, such as Ms Danae) and further cross-examination.
For this reason, the proposed further evidence relied upon by the respondent cannot provide an answer to ground 2. The respondent's application to adduce additional evidence should be dismissed. Ground 2 should be upheld to the extent indicated and contention 1 in the notice of contention dismissed.
For the same reason, it is not open to this Court to attempt to re-exercise the discretion under s 205ZG of the Family Court Act 1997 (WA). The unresolved factual and legal questions concerning the ABC Family Trust (including any application that might be made to set aside the 2016 Deed) are such that this Court could not conclude that the Trust was the 'property' of the respondent.
In addition, even if such a conclusion were open, the re-exercise of the discretion would not, as the appellant initially submitted, involve simply applying the learned trial judge's findings as to the appellant's entitlement (i.e. 47.5%) to an adjusted amount of the 'property' available for alteration.[81] As noted at [29] above, and accepted by senior counsel at the hearing of [82]e appeal,82 if the entirety of the value of the ABC Family Trust were characterised as 'property' (so as to increase the 'pool' by $1,974,069) the appellant's contribution to the property as a whole would have been correspondingly reduced. By how much it would need to be reduced is a matter to be determined in light of all of the evidence.
In addition, if the entirety of the value of the ABC Family Trust were characterised as 'property', the rights of the other beneficiaries of the Trust may come into sharper relief as matters relevant to the exercise of the court's discretion under s 205ZG, and would also involve questions of joinder.
In all the circumstances, the only appropriate manner of resolving the issues raised by ground 2 would be by way of a retrial.

[75]

In light of our conclusions that ground 2 should be upheld, it is not necessary to deal with grounds 4 and 5 in detail. Those grounds were expressed to be in the alternative to ground 2, in the event that the attribution of 50% of the value of the ABC Family Trust as property of the respondent was upheld.
In that regard, grounds 4 and 5 allege that the learned trial judge failed to take into account the remaining 50% of the ABC Family Trust as a 'financial resource' (ground 4) and failed to take into account indirect contributions made by the appellant to the ABC Family Trust (ground 5).
As to the first matter, there is a conceptual difficulty with treating 50% of the ABC Family Trust as 'property' and the remaining 50% of the ABC Family Trust as a 'financial resource'. As we have set out above (see in particular at [92]), in the circumstances of this case, either the ABC Family Trust was 'property' (in its entirety) or it was a 'financial resource'. There was no other possibility; it could not be both. If there was some proper basis for concluding that, in all of the circumstances, 50% of the value of the Trust was the respondent's property (perhaps on the basis that that was the value of his right to due administration), it is difficult to see how there could be any room for a further interest arising out of the Trust. Presumably, in that hypothetical case, the valuation of the respondent's right would reflect the net present value of all of his expected entitlements.
As for the matter of indirect contributions, again, the appellant submitted that the learned trial judge ought to have taken into account the fact that by 'freeing up the respondent to apply his income from [his] landscaping business for other purposes', the appellant indirectly contributed to the other assets, including (for the purposes of ground 5) the respondent's interests in the ABC Family Trust.
In the present case, the learned trial judge assessed the contributions of the parties to the property on a global basis, as she was entitled to do. In doing so, her Honour recognised that the contributions of the appellant, for example to a property in Suburb A that she and the respondent purchased together, benefited the respondent as it enabled him to retain income and apply it elsewhere.[83] Her Honour clearly took those matters into account in assessing the 'global' contribution of both parties,[84] the assessment of which her Honour recognised was 'not a mathematical exercise'.[85]
In those circumstances, in our view, there is no basis for concluding that the learned trial judge failed to have regard to the appellant's indirect contributions to the extent that they applied to the ABC Family Trust. The fact that a particular consideration is not expressly mentioned in the learned trial judge's reasons, particularly where the assessment is being undertaken on a global basis, does not mean that her Honour failed to take it into account.[86]
In any event, as the respondent submitted, the indirect contributions upon which the appellant sought to emphasise on appeal were not considerations that were expressly relied upon by the appellant in her case before the learned trial judge. In that regard, when a court is required to make a discretionary decision, to which many factors may be relevant, it is incumbent on parties who contend on appeal that attention was not drawn to particular matters, to demonstrate that the primary judge's attention was drawn to those matters, at least unless they are fundamental and obvious.[87]
1. We turn now to the other principal asset the subject of the appeal, the Kangaroo Superannuation Fund.

[84]

The treatment of superannuation entitlements for de facto partners in Western Australia remains a difficult and vexed issue. In relation to married couples who are separating, or de facto partners in other states, under Part VIIIB of the Family Law Act 1975 (Cth), the Family Court of Australia may make orders adjusting superannuation entitlements of the parties. In that context, superannuation interests are to be treated as 'property' for the purposes of the definitions of 'matrimonial causes' and 'de facto financial causes' under that Act.[95]
In this way, in those jurisdictions, the court is able to take account of superannuation interests as 'property' and make orders affecting that 'property' under s 79 of the Family Law Act 1975 (Cth). Prior to the introduction of those provisions, superannuation entitlements were generally treated as a 'financial resource', rather than 'property'.[96]
Intergovernmental relations between the Commonwealth and Western Australia have not (yet) made orders of the kind contemplated in Part VIIIB of the Family Law Act 1975 (Cth) available in cases concerning de facto partners in Western Australia.[97]
In those circumstances, in such cases, it is necessary to give consideration to all of the relevant statutory provisions and private instruments, in light of all the facts and circumstances, in determining whether particular superannuation funds are to be treated as 'property' or a 'financial resource'.[98] The former approach may be appropriate, for example, where a party can put themselves in a position of obtaining their entitlements to the fund without suffering any detriment such as the loss of the opportunity to continue their career.[99]
At the hearing of the appeal, the respondent referred to a number of provisions of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (the Regulations) in support of the learned trial judge's finding. The Regulations prescribe standards for the operation of regulated superannuation funds under the s 31 of the Superannuation Industry (Supervision) Act 1993 (Cth). The standards include 'conditions of release' and 'cashing restrictions' in relation to the release of superannuation benefits.[100]
According to the Regulations, the appellant, having attained her 'preservation age' of 55 years, would be entitled to access various kinds of defined benefits.[101] The appellant remained, however, subject to 'cashing restrictions' until the age of 65 years, unless she retired.[102] These provisions therefore supported the notion that the appellant had, at trial, some entitlements to access benefits under the Fund, although the extent of those entitlements was not explored at trial, or on appeal.
1. What is also clear, however, is that until the appellant retires or attains the age of 65 years, there remain restrictions in relation to her access to the Kangaroo Superannuation Fund. Significantly, while the appellant was not employed at the time of trial, she had recently undertaken retraining, including as a phlebotomist (although she was not yet qualified).[103] There was no suggestion that the appellant had retired or had ever, in fact, accessed her superannuation.
2. In those circumstances, there is merit in the appellant's submission that there was an insufficient basis in the evidence to conclude that the Kangaroo Superannuation Fund should be treated as 'property'. The appellant's evidence that she was 'vaguely aware' that she could draw on the Fund if she wanted to did not address the extent to which, as the authorities recognise, she might suffer a detriment if she did so.
As the analysis in relation to ground 2 demonstrates, whether or not a particular entitlement is characterised as 'property', or alternatively, as a 'financial resource', the methodology adopted by the learned trial judge is such that the entitlement will ultimately be taken into account in determining what is 'just and equitable' in the circumstances. In that regard, it may be that in some cases, depending upon the circumstances and the manner in which the discretion is exercised, the distinction between 'property' and a 'financial resource' is a 'distinction without a difference'.[104]
1. Echoes of this notion were reflected in the respondent's submissions on appeal, to the effect that, if the Kangaroo Superannuation Fund had not been included as 'property' the outcome would 'not result in a variation to the trial judge's orders'.[105] This submission was made on the basis that the exclusion of the Fund would result in a proportionate decrease in the appellant's contribution '(assuming there is no other alteration to the overall level of contribution)'.[106]
2. The answer to this submission lies in this last-mentioned assumption. There is, in our view, no basis to assume that the exclusion of the Kangaroo Superannuation Fund as property would not have resulted in an overall change to the distribution between the parties. Indeed, in the present case, in our view, the inclusion of the Kangaroo Superannuation Fund as 'property' in the first step of the methodology applied by the learned trial judge was apt to skew the overall result in favour of the respondent.
This is for five reasons.
First, of the overall net assets of the parties of $5,736,024, the amount attributed to assets held by the appellant was $1,222,567 (i.e. approximately 21%). Despite this, and applying a global approach to the contributions of the parties, the learned trial judge arrived at a global contribution by the appellant to the property 'pool' of 40%. The learned trial judge's assessment of the contribution of the appellant was therefore clearly greater than that which could be said to be attributable to assets 'in her name' (and considerably so).
1. Secondly, of the $1,222,567 of assets attributed to the appellant, the Kangaroo Superannuation Fund (at $638,911) accounted for more than half of those assets (52%). Her assets were otherwise relatively small. This too serves to illustrate the relative significance of including the Fund as 'property' at the first step of the methodology.
Thirdly (and relatedly), as noted above, the respondent's superannuation fund was valued at $2,448,210 but was not included in the 'property of the de facto partners'. Rather, it was treated as a 'financial resource'. The learned trial judge was not in error in treating the respondent's superannuation entitlements as a 'financial resource'. Nevertheless, the fact that they were treated differently to the appellant's superannuation did tend to overstate the appellant's 'property' and understate the respondent's 'property' as a whole (at the first step in the methodology).
Fourthly, while the Danae Family Superannuation Fund was brought to account in relation to the 'adjustment' factors under s 205ZD(3) (i.e. step three of the methodology), those adjustment factors, being 7.5% of the overall distribution, clearly had a less significant impact upon the overall exercise of discretion than the assessment of 'contribution' (at step two).
1. Finally, in arriving at that 'adjustment' percentage, the learned trial judge also referred to the appellant's superannuation entitlements. Arguably, therefore, the Kangaroo Superannuation Fund was taken into account both as 'property' and as a 'financial resource' available to the appellant.
For these reasons, we are satisfied that, in the circumstances of the present case:

[101]

In this context, the respondent placed particular reliance on the quoted passage from Evans v Bartlam,[119] which he submitted supported a finding of approbation and reprobation in circumstances in which an appellant, seeking to appeal the quantum of an award of damages, also enforces payment of the existing award.
Properly understood, in our view, Evans v Bartlam is not authority for that proposition. The remarks of Lord Russell were not made in the context of an appeal by a successful plaintiff, but rather were made in the context of a submission that a judgment debtor who asked for, and obtained, time to pay the judgment and who subsequently sought to have the judgment set aside was seeking to approbate and reprobate. The House of Lords rejected that submission.
The full context of the passage in Lord Russell's judgment relied upon by the respondent was his Lordship's bewilderment at the suggestion of approbation and reprobation in that case. The quoted passage was an example of the opposite circumstances. It was therefore, clearly, obiter dicta and in any event was not concerned with circumstances in which a party sought to exercise rights of appeal while taking the benefit of the judgment below.
In that regard, as the respondent recognised, there are a number of authorities to the effect that an appellant who accepts payment in satisfaction of sums awarded at trial is not precluded from exercising their right of appeal, seeking further relief: Lissenden v CAV Bosch Ltd,[120] Sterling Realty Ltd v Manning[121] and Karabotsos v Plastex Industries Pty Ltd.[122] In each of those cases the appellant had been awarded a sum by way of statutory entitlement or other forms of damages in circumstances in which the appellant sought to increase that sum on appeal.
In each case, the court held that the right of appeal and the right to receive payment of the judgment debt then enjoyed by the appellant were not alternative or mutually exclusive rights.[123] While there may be exceptional circumstances in which an appellant has so conducted themselves (such as by making restitution impossible) as to prevent an appeal from being prosecuted, the mere receipt of money under the judgment is not sufficient.[124]
In our view the same is true of the circumstances in the present case.
The appellant's appeal in this case was prosecuted on the basis that, while the property interests of the parties were adjusted in her favour by the Final Property Orders, she nevertheless maintained that the court's discretion, properly exercised, ought to have resulted in a greater alteration in her favour. Her primary case, on appeal, was that this Court should re-exercise the discretion to order additional sums be paid to her. For the reasons we have explained, that is not possible and a retrial would be necessary.
Nevertheless, in all of the circumstances, it could not be said that the appellant was doing anything inequitable or inconsistent by pursuing the appeal and accepting the sums payable to her under the Final Property Orders. In particular, the circumstances do not support any express or implied representation by the appellant that she would not prosecute the appeal and nor was accepting payment then owing under the judgment an unequivocal act able to support an inference that she was accepting or electing inconsistent rights.
The fact that, as a consequence of the manner in which the appeal has been determined, the only appropriate order is for a retrial does not, in our view, take this case out of the principle reflected in Lissenden and the cases which follow it. Indeed, as McGarvie J recognised in Karabotsos, while Mr Lissenden had in his notice of appeal sought to retain what he had and to obtain more, he had, in the alternative, sought a new trial.[125]
For these reasons, we reject the contention that the appellant is precluded from exercising her right of appeal on the basis of the doctrine of approbation and reprobation (or the doctrine of election). Contention 2 in the notice of contention should be dismissed.

[111]

Similarly, at the hearing of this appeal, the appellant sought an order that, if a restitution order was to be made, the order should be stayed pending the outcome of the retrial.[136] The respondent, in the event that a stay was granted, proposed a more detailed set of orders whereby the order for restitution would be partially stayed pending an application for an interim partial property settlement.[137] The parties put submissions at the hearing of the appeal in support of their respective positions.
While the submissions used the language of a 'stay', the correct nomenclature is, of course, a 'suspension' of the order, in accordance with s 15 of the Civil Judgments Enforcement Act 2004 (WA). As with a stay, it is necessary that there be 'special circumstances' justifying a suspension.
In all of the circumstances of the present case, we are satisfied that there are such special circumstances and that, while there should be an order for restitution, it should be stayed pending determination of the retrial or a further order of the Family Court of Western Australia.
Our reasons for so concluding are as follows.
First, the order for restitution in the present case is to be made against the successful applicant. That, of itself, is a particularly unusual circumstance, in relation to which there is no precedent.[138] The appellant's success on appeal at least makes it strongly arguable that she will obtain an order for alteration of property at least as favourable as that which was ordered by the learned trial judge. If that were not so she would be ill-advised to proceed with the retrial.
Secondly, there is no doubt, based on the unchallenged findings of the learned trial judge in relation to the other issues determined by her Honour, that the appellant's application under s 205ZG of the Family Court Act 1997 (WA) was always going to result in an alteration of property in the appellant's favour. It is only the extent of the alteration that was in issue. The respondent did not contend otherwise.
In the proceedings before the learned trial judge, for example, the respondent proposed that a payment to the appellant of $1,800,000 (including the discharge of the Suburb A Debt) would reflect an appropriate alteration of their property interests.
1. Thirdly, the clearly disparate asset position of the parties prior to the trial (see [146] to [147] above) was such that, without being suspended, an order for restitution would inevitably cause the appellant hardship. Leaving aside the amount allocated in her assets for paid legal fees ($276,000) and the value of the Kangaroo Superannuation Fund ($638,911), the appellant had very little in the way of assets. Her residual assets[139]ounted to $307,656.139 Those assets were significantly less than even the appellant's share of the Suburb A Debt.
Indeed, given that, of the total sums paid by the respondent for the appellant's benefit, $579,550.39 was attributable to paying off the Suburb A Debt, in the absence of any further evidence it may be confidently inferred that the appellant would be unable to meet the obligation to provide full restitution pending the retrial. That would mean, as Tobias and McColl JJA observed in Hume v Walton [No 2], that if a stay is not granted, it is probable that the appellant would be deprived of the opportunity to pursue the retrial.[140]
Finally, in our view, the necessity for a retrial in the present case was, largely, brought about by the respondent's conduct of the proceedings below, and in particular, his failure to disclose the 2016 Deed. While we would not allow the application to adduce the evidence of the Deed on the appeal, the fact of its non-disclosure may nevertheless be taken into account for these purposes. As we have said at [107] above, the existence of that deed raises a number of outstanding questions, and had it been properly disclosed, and its impact assessed at first instance, the need for a retrial (and indeed the appeal itself) may have been avoided.
In expressing these conclusions, we recognise that there is a prospect that, depending upon the outcome of the retrial, the exercise of the Court's discretion might be less favourable to the appellant.[141] Nor, of course, given the potentially changed circumstances, would the respondent be bound by the position he took at the first trial. In this regard, particularly in relation to the ABC Family Trust, there is the potential that the Court might conclude that none of the assets of the Trust are the respondent's 'property'.[142] How such a conclusion might be reflected in the overall exercise of the Court's discretion would remain to be seen. It is sufficient to note that it cannot be assumed that the outcome would be the same, or more favourable, from the appellant's perspective on the retrial.
Nevertheless, the risk that that might occur is better addressed by the Family Court of Western Australia upon the remitter, in light of the likely time to trial and the circumstances then prevailing before that court. In this regard, the respondent's submission that there should be some form of interim adjustment made pending the retrial is a matter best left to the Family Court of Western Australia. It would be unhelpful, in our view, to bind the Family Court of Western Australia to a particular course in that regard.
If the respondent has concerns that funds to which he may become entitled might be dissipated prior to the retrial, those are matters than can be properly addressed, in light of all of the available material, before the Family Court of Western Australia. For this reason, we would order that the order for restitution should be stayed pending the retrial or further order of the Family Court of Western Australia. Such an order affords the Family Court of Western Australia the greatest latitude in determining what is in the interests of justice.
Finally, while not a matter justifying a stay of the restitution orders, preserving the status quo between the parties might have the added benefit of providing better conditions within which the parties might endeavour to settle their disputes without the added financial and emotional cost of a retrial.

At a glance

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Before

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Judgment (204 paragraphs)

Legislation Cited (5)

Cases Cited (22)