In Bevan [2014] FamCAFC 19 (19 February 2014), the Full Court (Bryant CJ, Finn & Thackray JJ) determined a matter where it had previously upheld an appeal and invited further submissions as to the proper re-exercise of discretion. A summary of the previous judgment of the Full Court, Bevan [2013] FLC 93-545, is at our online Members’ Archive (“case notes – property”). The parties had been married for 22 years when in 1994 the husband took “to the sea” then moved to England, telling the wife that she could retain their Australian property and that he would get on with his life elsewhere. The wife proceeded to invest and act in the belief that the Australian property was hers. The parties did spend some time living together and went on holidays until 2004, funded by the wife.
In its previous decision the Full Court held that the trial judge (Jordan AJ) had not applied Stanford [2012] HCA 52 correctly, particularly as to whether it was just and equitable to make a property adjustment order when the husband had made the representations he did in 1994 and the wife had acted in accordance with those representations since that time.
Counsel for the husband contended that the “four-step” approach was still applicable such that the trial judge’s decision (of 60:40 in favour of the wife) should remain undisturbed. The Full Court responded by saying “we accept [that the ‘four-step’ approach] provides a convenient way to structure both submissions and judgments provided the [‘fundamental propositions in Stanford’ referred to by counsel] are ‘not overlooked’” (paras 18-19 per Bryant CJ and Thackray J).
In re-exercising discretion, the Full Court dismissed the husband’s application (so that there was no property adjustment in his favour), Bryant CJ & Thackray J saying (from para 28):
“… Having determined that the wife is the legal owner of all of the assets, the question arises whether it would be just and equitable to make any order altering her interest in those assets. Only if that question is answered in the affirmative would it be necessary for us to consider the extent to which her interest should be altered.
( … )
[30] In the present matter, the husband elected to leave the relationship in 1994, at which time the parties had been married for 22 years. From time to time thereafter, the husband represented to the wife that she could retain their assets for herself and their sons, on the basis he would build his own life and acquire property elsewhere. Acting on the representations, and believing the assets were hers, the wife dealt with the property as if it were her own. …
( … )
[37] The husband sought to explain his failure to pursue a claim for property settlement between May 2006 (when he says the parties separated) and July 2011 (when he commenced proceedings) by referring to his poor health and lack of funds to meet legal expenses. The husband’s health did not prevent him from working for most of this period, and when he ultimately asked the wife for a property settlement he did so without incurring legal costs.
( … )
[40] In Stanford, the plurality touched on the issue of unwritten arrangements between parties to a marriage when discussing the three ‘fundamental propositions’ which they identified as governing applications under s79 of the Act. Their Honours said … :
‘41. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act then, subject to that Part, a court cannot (s 71A) make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of the marriage, the parties to a marriage have not expressly considered whether or to what extent there should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.’
[41] In commenting on this passage in our earlier reasons, we said:
‘[119] In our view, if the three ‘fundamental propositions’ can truly accommodate any consideration the parties gave to how their property interests should be arranged during the continuance of their marriage, they must also accommodate express consideration given to how those interests should be arranged after separation. Indeed, the argument for doing so is stronger, given that any mutual understanding is less likely to have been affected by extraneous influences that would be at work whilst their relationship was intact.
[120] This is not to suggest that any understanding between spouses would be conclusive of any later dispute, since an agreement can only be conclusive when the s 90G(1) formalities are satisfied or when a s 90G(1B) declaration is made … But the reasoning in Stanford makes clear that such an understanding would have to be a factor to be taken into account in deciding whether it would be just and equitable to make orders altering existing interests.’
[42] We also expressed the view, at [84] of our earlier reasons, that, in determining whether it would be just and equitable to make any order altering existing property interests, it would be necessary to have some regard to the matters mention in s 79(4), since it was accepted that it may not be considered just and equitable for the husband to be denied any entitlement in circumstances where it is accepted he made a significant contribution to property that may be seen as having provided the base from which the wife built the assets she now holds. However, such a contribution is but one matter to be considered in the exercise of the discretion conferred by s 79.
[43] Furthermore, the time at which such a contribution was made may have an impact on the weight to be afforded to it. Thus, in the unusual circumstances of the present matter, when we come to weigh up all matters relevant to the exercise of discretion to make any order altering existing interests we consider that contributions made by the husband after he made the representation about future ownership of the property would assume greater significance than those made previously.”
After considering the husband’s contributions the Full Court said (from para 80):
“… … we do not consider there is an onus on the wife to establish some form of equitable defence to the husband’s claim for property settlement. The onus is on the husband to show some principled reason for the Court to interfere with the wife’s interest in property.
[81] The fact the Court is given a wide discretion when deciding whether the husband has discharged the onus does not mean that the matter will be disposed of in an unprincipled fashion …
[82] The basis upon which it can be concluded in many cases that it is just and equitable to make orders interfering with existing interests in property following the breakdown of marriage is because it is no longer appropriate to proceed on the basis of the stated and unstated assumptions between the parties to the marriage in circumstances where they have not expressly considered whether, or to what extent, there should be some different arrangement of their property interests (Stanford at [41]). In the present matter, however, the parties did give express consideration to what should become of their property. In such circumstances we consider the husband must do more that point to the end of the relationship in order to persuade us that there is some principled basis upon which we should interfere with an existing state of affairs created by consent, or at the very least, acquiescence of the parties.
[83] The present state of affairs between the parties did not arise as a result of any duress or even agitation by the wife, but rather by the voluntary act of the husband. ( … )
( … )
[85] While we accept that the wife did not give evidence that she acted to her detriment on the basis of the husband’s representations, we consider any such assertion would have been dismissed as self-serving. Notwithstanding the absence of solid evidence, we find it impossible to resist the conclusion that the wife must have arranged her affairs secure in the knowledge that she would retain the assets for her benefit and for the benefit of the children.
[86] Although of lesser significance than the representations, we consider that the husband’s protracted delay in commencing proceedings until the eleventh hour prior to the expiration of the limitation period is also a matter to be taken into account. …”
The Full Court also dealt with a separate issue in that the husband sought, as part of the Full Court’s re-exercise of discretion, to have the Full Court accept that the net asset pool was $1,249,387, rather than the $1,069,000 found by the trial judge. Bryant CJ and Thackray J said (at para 23):
“We were not referred to any authority to support a proposition that, on the re-exercise of discretion, a respondent to an appeal who has not successfully cross-appealed is bound to accept all findings made by the trial Judge. The decision of the Full Court in Wall v Wall (2002) 167 FLR 461, although not precisely on point, would provide strong support for the proposition that the discretion of the Full Court is largely unfettered. … We are therefore prepared to proceed on the basis that it is open to the husband to advance his contention concerning the asset pool.”
Finn J delivered a separate judgment, agreeing with the dismissal of the husband’s application but expressing “reservations [that] … it is open to the respondent … to challenge the trial Judge’s findings as to the content and value of the parties’ property in circumstances where the husband did not cross-appeal…” (para 98).