Background
The Husband (58 at time of trial) and the Wife (44) commenced an intimate relationship in 2012 while the Husband was still residing with his former spouse. The couple only lived together intermittently and were never de facto.
There was a significant asset and income disparity between the parties, with the Husband initially having around $20,000,000 worth of assets (later reduced to $9,000,000 after a property settlement with his former wife) and the Wife only having nominal. In April 2014 the Husband bought an uninhabitable house for $2,200,000, gifted the Wife one-tenth and commenced renovations.
In December 2014, while in hospital from a suspected heart attack and under pressure from the Wife, the Husband transferred the Wife a further 40% of the property. In March 2015, the parties then entered into a Deed stating that the parties held the property as joint tenants and if the Wife died before the Husband he would transfer her siblings $1,000,000.
In August 2016 the parties married, only to separate 23 days later. Both parties sought alterations of property interests.
Initial Findings
By January 2018, the Wife had spent over $200,000 in legal fees. Over the Wife’s objections, the matter was listed for final hearing in June 2018. The Wife failed to file her evidence on time and her solicitors ceased to act a week before the hearing, leading to her to file an application for adjournment the day before the hearing. The application was refused, and the Wife was warned that the hearing might proceed even if she didn’t appear. Despite this warning, the Wife did not appear at the hearing, and the matter proceeded undefended.
The trial judge found that, despite the marriage’s brief duration, the parties had intended to have a lasting relationship and for the property to be a place where they shared their lives. His Honour found that the Husband had intended for he and the Wife to be joint tenants and acknowledged his obligation to make payment to the Wife’s siblings if she predeceased him. His Honour was satisfied that it was just and equitable to make a property settlement order and that the Husband’s contributions to the property had been overwhelming greater than the Wife’s.
The trial judge found that the Wife’s contribution to the property had been less than $220,000 and made orders leaving her with assets of $430,000 and the Husband with assets in excess of $12,000,000.
Full Court Appeal
The Wife appealed and sought to adduce further evidence. The Full Court rejected this and found that all of the evidence the Wife now sought to adduce could have been put on before the trial.
The Full Court also rejected the Wife’s argument that the trial judge had failed to take the Deed or the Wife’s legal ownership of the property into account. The Full Court found that the property settlement did not deprive the wife of the benefit of the deed without giving her any compensation, noting that both parties sought orders severing the joint tenancy. The Wife’s appeal was dismissed.
High Court Appeal – Majority Decision
The Wife appealed again to the High Court, where a majority of Chief Justice Kiefel and Justices Bell and Keane dismissed her appeal. The Wife, the majority found, had had an opportunity to put her case before the trial judge and failed to take it; a final hearing was not some preliminary skirmish the Wife was at liberty to choose not to participate in without consequence. The Court reiterated that in family law matters parties are under an obligation to act in a way that resolves their case in a just and timely manner, and at a reasonable cost, and stated that the need for finality in a case such as this, where there was a notably short marriage and no children of the relationship, was a highly material factor.
The majority also found that the Deed did not contain an inference that the Husband was to pay the Wife $1,000,000 upon separation, as the Wife claimed, only for the Husband to pay the Wife’s siblings if the she died before the Husband while they still owned the property. Their Honours rejected the Wife’s contention that the trial judge had failed to properly consider her contention, which she had raised only on appeal, that the parties’ property interests shouldn’t be disturbed – as this argument was not put to him, the High Court found, the trial judge could not be criticised for not addressing it. Nor, said the Court, should his Honour be taken to task for not closely examining whether the second, 40% transfer was voidable due to undue influence, unconscionable conduct or duress; the trial judge had made no such finding, and his reasons reflected the arguments that were put to him. The Wife’s right of appeal, the Court concluded, was not an opportunity for her to make a case that she chose not to make at trial, and the trail judge’s assessment of the parties’ respective financial contributions were open to him in this case.
Dissenting Judgment
Justices Nettle and Gordon dissented. In their view, the primary judge had failed to give proper effect to the interests of the parties, which was an essential first step in making an alteration of property interests.
Their Honours zeroed in on the trial judge’s finding that the Wife’s additional 40% interest in the property had been abrogated by the Wife’s “pressure” on the Husband, finding that this was incorrect; whatever “pressure” may jave affected the Husband’s initial transfer, it had not been present when he entered into the Deed. The dissenting Justices reiterated that where duress, undue influence or unconscionable conduct are claimed the Court must closely consider the facts in order to establish it. The trial judge had not done this, and the facts did not show that the Wife had exerted improper pressure when the transfer was made. Additionally, even if she had, the Deed then ratified the transfer.
In their Honours’ view, the Deed clearly ratified transferring the Wife joint title, and the trial judge should have stared by recognising the joint ownership, and how that ownership came to be, whether by gift or otherwise, was irrelevant. According to Gordon and Nettle this was not just an incidental finding either; if the trial judge had taken the Wife’s full 50% interest into account, they asserted, logically, under the method of calculating the asset split he had used, the Wife would have been awarded five times what she recovered. There was no justice, their Honours declared, in stripping the Wife of her 50% interest in a million-dollar property in return for $180,000 in costs.
Conclusion
Like many High Court judgements, Hsiao & Fazarri is as much about the conduct of judges as it is about litigants. Nevertheless, there are a few salient points which practitioners can take away.
The first, and perhaps the most obvious, is to not be lax when going to Court. The fact that a right of appeal exists does not remove the need to initially make one’s case at trial – an appeal is not a do-over, and a hearing is not a draft. Secondly, it is vitally important to be very careful when wording a Deed, as any entitlements a Deed contains will turn on how they’re worded – an entitlement under specific circumstances is not an entitlement no matter what. Nothing is as expensive as a missed opportunity; and near enough, as they say, is not good enough.
~ with Benjamin Keyworth, Associate.
