Children – Relocation – Treating psychologist provided prognosis based on two relocation scenarios before the Court – Appeal from the admission of treating psychologist’s evidence dismissed – Rule 7.01(1) limits parameters of evidence from a treating expert, but the expert evidence in this case did not breach that rule

In Eastling & Pariser [2024] FedCFamC1A 239 (12 December 2024) Christie J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia (Division 1), heard an appeal from orders of Judge Burt that permitted the mother to relocate the parties’ 3 children from Melbourne to Queensland ([2]-[6]).

The mother and her partner had purchased property in Queensland, the mother seeking orders to join her partner and live there. The findings at first instance included that the father had perpetrated family violence against the mother, that the mother had been diagnosed with post-traumatic stress disorder (“PTSD”) and that the mother had greater capacity to parent the children than the father. The mother relied upon a report by her psychologist (“Dr T”) which included a prognosis as to “the relative benefits to the … mother’s mental health of her relocating to Queensland with the children compared to remaining in Melbourne” ([17]-[18]).

The father appealed and said that the Court erred by admitting opinion evidence from the treating psychologist where the prognosis as to the mother’s relocation fell outside the exception to treating expert’s evidence in rule 7.01(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”).

The Court said (from [19]):

“The receipt of evidence (or the rejection of evidence) alone is not a basis for appellate intervention. Even if the appellant were to persuade me that the primary judge was in error in allowing the evidence, the appellant must also demonstrate that the admission influenced the judgment …

[20] The report of Dr T addressed (in accordance with r 7.01(1)(a)(i) and (ii) of the Rules):

(i) the results of an examination, investigation or observation made;

(ii) a description of any treatment carried out or recommended …

[21] The gravamen of the appellant’s complaint was that the material which appeared in answers 4 and 5 included opinion which was not ‘limited to the reasons for carrying out or recommending treatment and the consequences of the treatment, including a prognosis’: r 7.01(1)(a)(iii) of the Rules.

[22] … In answer 4, the treating psychologist expressed an opinion about prognosis if the court made orders as sought by the respondent, and in answer 5, about prognosis if the court made orders as sought by the appellant.

[23] The appellant submitted that the treating psychologist was not at liberty to offer a prognosis in those two scenarios. The submission was to the effect that the treating psychologist was only at liberty to offer an opinion in respect of prognosis in the context of how the existing or recommended treatment might impact on prognosis (without taking into account matters external to the treatment such as living arrangements, parenting arrangements, access to supports etc). In support of that construction, counsel for the appellant submitted that Part 7.1 of the Rules functions to limit expert evidence and provides a framework for consideration of the inclusion or exclusion of evidence with a focus on the receipt of single expert evidence. I accept that Part 7.1 is designed to limit expert evidence to that which is necessary to determine the case. However, I do not accept that it was designed to limit receipt of evidence from treating practitioners as that would run contrary to the principle that relevant evidence is admissible evidence. I accept that r 7.01(1) places limits on the parameters of evidence from a treating expert, but I consider that the evidence in this case was within the parameters and the argument for its exclusion adopted too narrow a reading of the Rule.

[24] To the extent that the appellant placed reliance upon the decision in Lister & Lister [2014] FamCA 606 … (“Lister”), such reliance was misplaced. Lister was concerned about the operation of the ‘permission rule’ to limit reliance upon adversarial expert witness opinion evidence. It is not appropriate to conflate the opinion evidence of a treater with the evidence of an adversarial expert. An adversarial expert is engaged by a party in the context of litigation, a treater has a professional relationship with the party (or child) which exists independently of the litigation. While I accept that the nature of the treatment relationship may result in the treater having views which appear partisan, they are not governed by or bound by the Rules which relate to the adducing of adversarial expert evidence.

[25] Even if I am incorrect in the conclusion which I have drawn about the interpretation of r 7.01(1), I am far from persuaded that the evidence in answers 4 and 5 influenced the judgment such as to produce error. Dr T did not offer an opinion about what orders would be in the best interests of the children but an opinion of the likely prognosis for the mother in two different scenarios both of which were in contemplation by the primary judge. The respondent gave significant lay evidence about the matters which underpin the opinion in answers 4 and 5 of Dr T’s report – which evidence was accepted by the primary judge. It follows that I do not accept this ground has merit.”

The appeal was dismissed. The father was ordered to pay the mother’s costs, fixed at $16,000.

Children – Reversal of care – Supplementary orders by trial judge that dismissed relief sought via an application in an appeal were without power and set aside – Refusal of mother’s stay application was not prejudicial to the children merely because she believed that the orders were detrimental

In Navickas & Fried [2024] FedCFamC1A 248 (18 December 2024) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia (Division 1), heard a mother’s appeal from orders made by a Division 2 judge that reversed the children’s residence from the mother to the father.

Judgment was delivered on 12 December 2024 that ordered the father to have “sole parental and decision-making responsibility” in respect of the parties’ two children, and that the children live with the father and spend supervised time with the mother 4 times per year and in writing ([3]-[4]).

Once judgment was delivered, counsel for the mother informed the primary judge that an appeal would be filed imminently. The primary judge advised that even if an appeal was filed, no stay application could be heard until the new year, following the Christmas break. An appeal was filed that afternoon which included an application in an appeal that sought a stay and expedition of the appeal. The primary judge then made orders in chambers that dismissed the stay application.

Austin J said (from [8]):

“Having pronounced the final parenting orders to determine the cause of action and exhaust jurisdiction early on 12 December 2024, in the absence of any stay application brought before her Honour, it is quite unclear how the primary judge then concluded jurisdiction existed to make the supplementary orders.

[9] Stay applications must be filed in the registry where the appealed orders were made and be determined by the primary judge when possible (s 38(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”); r 13.12(3) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)), but the Court record does not reveal any stay application being filed within the original jurisdiction of the Federal Circuit and Family Court of Australia (Division 2) at any registry at any time on 12 December 2024.

[10] However, on the afternoon of 12 December 2024, the mother did file a stay application in the form of an Application in an Appeal within the appellate jurisdiction of the Federal Circuit and Family Court of Australia (Division 1), which was listed for hearing and determination by this Court several days ahead on Wednesday 18 December 2024. The supplementary orders purport to dispose of that stay application …

[11] The supplementary orders are curious for two reasons: first, the Division 2 judge had neither jurisdiction nor power to hear and determine an application filed in the appellate jurisdiction of Division 1; and secondly, the primary judge told the mother’s counsel earlier that morning her Honour had no time to entertain any stay application until early 2025, which was why the mother filed the stay application in Division 1.

[12] The supplementary orders are defective for the first reason and should be set aside, as they would otherwise remain efficacious whilst they remain on the Court record (s 138 of the FCFCA Act).”

Addressing the stay application, Austin J said (from [17]):

“The discretion to stay the operation of appealed orders should only be exercised where circumstances exist to justify departure from the ordinary rule that a successful litigant is entitled to the fruits of the litigation pending the determination of any appeal. Such circumstances justifying a stay will exist where it is necessary to prevent the appeal from being rendered nugatory or for whatever other reason there is a real risk it will not be possible for a successful appellant to be restored substantially to his or her former position if the judgment against him or her is executed (Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) [1986] HCA 13 … at 222–223). The Court should also consider the prospects of the appeal and where the balance of convenience lies (see Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84 … at 685).

[18] Those common law principles apply equally to judgments delivered in this jurisdiction, including judgments in parenting proceedings … In relation to the proposed stay of appealed parenting orders, the welfare of the children is now considered a significant, but not the paramount, consideration. Residential changes should desirably be limited as far as reasonably possible. The Court should also consider whether the children’s present circumstances are satisfactory, the bona fides of the appeal, the apparent strength of the appeal, and the likely delay before the appeal is heard and determined.

( … )

[22] It may be accepted for present purposes the mother’s appeal is bona fides, but it does not patently evince the promising prospects for which she contended, particularly when this Court is obliged to strongly assume the discretionary judgment is correct (Australian Coal and Shale Employees’ Federation v The Commonwealth [1953] HCA 25 … at 627).

( … )

[26] The mother claims the refusal of the stay application will be prejudicial to the children because it is not in their best interests to remain in the primary care of the father, but that submission is just the embodiment of her bare belief, contrary to the cases advanced by the father and the Independent Children’s Lawyer. The mother’s belief stems from an underlying belief that she is better equipped to cater to the children’s medical and emotional needs. That her belief about detriment to the children is genuine is not objective proof of the fact.

[27] The primary judge contrarily found the children’s best interests were promoted by instead living with the father, which finding must be treated as binding until shown to be wrong upon the substantive hearing of the appeal. Her Honour found the children were at risk of harm in the mother’s care, so staying the appealed orders to ensure the children’s temporary return to the mother’s care would be profoundly incongruent with the primary judge’s findings.

[28] Recognising that residential changes for the children should be minimised, the stay of the appealed orders would be repugnant to that objective by requiring the children to now return to the mother’s residential care. If the stay is granted, the children return to the mother, and her appeal ultimately fails, there will be another residential change when the children revert to the father’s residence. If the stay is refused, the children remain with the father, and the appeal succeeds, only one change of residence back to the mother from the father will be required.

[29] On balance, the stay application is dismissed.”

The “supplementary orders” of the Division 2 judge were set aside. Costs in the appeal were ordered by consent.

Costs – Barrister fails in appeal from personal costs order – He said that he was only briefed for cross-examination, when grant of legal aid was for an 8 day trial – He also lacked standing as his name did not appear on the Register of Practitioners maintained by the High Court

In Kleid & Schnur [2024] FedCFamC1A 236 (13 December 2024) the Full Court (Aldridge, Gill & Strum JJ) heard an appeal by a barrister against a fixed costs order made against counsel by Johns J. The order required the barrister to pay costs fixed at $4,541 within 28 days.

The barrister appeared on behalf of the mother. On the first day of trial, the barrister said he was only briefed to cross-examine the father, orders having previously been made pursuant to s 102NA to prevent the mother personally cross-examining the father. The Court requested production of documents as to the grant of legal aid. The case was stood down for the day. The next day, the trial was vacated ([7]).

The reasons for the costs order included that the barrister had failed to appropriately prepare the case for the mother where he said he had not read all the evidence; that he had accepted a brief to appear in another court at 2 pm on the day of the hearing; and that he did not have standing to appear as he had not signed the Register of Practitioners maintained by the High Court of Australia ([3]).

The Full Court said (from [13]):

“None of the grounds of appeal challenged the finding … that the appellant did not have standing to appear in a federal court because his name did not appear on the Register of Practitioners maintained by the High Court of Australia (see s 55B(3) of the Judiciary Act 1903 (Cth) and s 57 of the Federal Circuit and Family Court of Australia Act 2021 (Cth)).

[14] … The fact that this might have been inadvertent (the appellant said he was not aware of the requirement) does not alter the reality that the appellant was not entitled to appear. …

[15] … [N] one of the grounds challenged the finding that the appellant was not ready to run the case for the mother.

[16] Accordingly, the appeal was doomed to fail from the outset.

( … )

[23] It was submitted that [s 117 of the Act as to costs] … is irrelevant as it only applies as to costs between parties …

[24] We do not agree. Section 117(1) of the Act makes it plain that the prima facie position is that a party shall bear his or her own costs. However, as s 117(2) provides, the Court may make such costs orders it thinks just and where the circumstances justify such a course. Such other orders may include an order that a non-party, such as a lawyer, pay the costs (Cassidy v Murray [1995] FamCA 91 … ).

( … )

[34] … [T]he material before the primary judge makes it clear that legal funding was available for the appellant for the entirety of the hearing …

[35] The appellant did not produce a letter of instruction, a backsheet or evidence from his clerk to challenge the statements of the solicitor that he was briefed for the entirety of the eight day trial. He did not seek to adduce such evidence on the appeal.

[36] There can be no doubt, therefore, the appellant was briefed for eight days, for the whole trial, even though he might not be paid for each day, and that he had accepted the brief. It must follow that he accepted the limited payment.

[37] Further, at a directions hearing on 16 April 2024, the appellant did not mention that there were any limitations on his appearance …

[38] This makes the appellant’s submissions as to his retainer even more difficult accept. Further, the warnings from her Honour make the lack of preparedness even more inexcusable. It follows that there is no merit in these grounds whatsoever.

( … )

[45] Further, even if the appellant had been in a position properly to run the hearing, he was unavailable to appear for the whole day as he was holding a brief to appear in another court that afternoon.

( … )

[55] We have already noted with some concern that none of the submissions grappled with two key findings of the primary judge which were the appellant’s lack of standing and lack of preparedness. Each of these easily justified the order, so to repeat, the appeal as constituted was doomed to fail.

[56] Further, accepting that the appellant was acting as a litigant in person and not as counsel at the appeal hearing, his appearance was marked by woeful preparation to a degree unacceptable for any litigant. Further we have significant concerns about the frankness and accuracy of some statements made to us by the appellant. We will direct the Principal Registrar to forward a copy of these reasons and the transcript to the Legal Services Commissioner.”

The appeal was dismissed.

Children – Subpoena objections – Determination of an objection to the production of documents is an evaluative, not discretionary decision – Once validity of subpoena is determined, any limitations on inspection is discretionary – Court erred by considering the best interests of the child a salient consideration

In Pedersen [2024] FedCFamC1A 229 (10 December 2024) the Full Court (Austin, O’Brien & Jarrett JJ) heard a father’s appeal from the dismissal of his objections to a subpoena issued at the request of the mother.

The parents had originally agreed (and orders were made by consent) that their 15-year-old child attend non-reportable therapy with a psychologist (“the therapist”), but subsequent orders had permitted the parties to obtain a written report from the therapist.

The mother’s subpoena sought the production of the therapist’s file, to which both the father and therapist objected, despite the therapist having produced five reports and detailed answers to questions ([46]). The father objected to both the production and inspection of the documents, referring to the order for “non-reportable” counselling. He also argued that the child had a “continuing relationship of confidence and trust” with the therapist and that “the production and inspection of the documents would be contrary to the continuation of that relationship” ([49]). The therapist objected and “expressed concern” that her therapeutic relationship with the child would be “irreversibly damaged” by the production and inspection of her file ([50]).

At first instance, the Court dismissed the objections and granted permission for the lawyers to inspect the documents, expressly restraining the parents from any inspection ([3]).

O’Brien & Jarrett JJ said (from [51]):

“At the hearing before the primary judge, the parties and the ICL drew no distinction between the objection to the production of documents, and the objection to their inspection. Rather, argument was presented on the misconceived basis that the objections in full were to be determined by the exercise of discretion, and inferentially with the best interests of the child as the paramount consideration.

[52] That common approach was fundamentally wrong.

[53] The determination of an objection to the production of documents is an evaluative decision. It does not involve the exercise of discretion. Rather, it involves the evaluation of objections grounded, most usually, in the common law. Typically, those objections may assert the absence of a legitimate forensic purpose, fishing, oppression or privilege. Either a particular species of privilege from production is established, or it is not.

[54] In contrast, a determination about the parties’ access to the produced documents, and any conditions as to inspection or copying, gives rise to the exercise of a discretion… The relevant provisions of the Family Court Rules 2021 (WA) (particularly rr 256–258) simply reflect that established position. The court may fashion orders appropriate to the circumstances before it, including by limiting access to documents or restricting their copying…

[55] In the exercise of that discretion, and contrary to the approach seemingly taken by the parties and the ICL at the hearing before the primary judge, the court is not required by s 60CA to regard the best interests of the child as the paramount consideration. That requirement applies only to a decision whether to make a particular parenting order, as defined in s 64B. The best interests of the child may clearly be considered in the exercise of discretion as to access to produced documents, but they are not mandated as paramount.

( … )

[66] … The subpoena clearly served a legitimate forensic purpose. The opinions of the therapist were to be directly relied upon at trial. They were referred to in the reports of the single expert witness. The facts and observations relied upon by an expert witness in forming their opinion must be proved, and if reliance is to be placed upon the opinion the identified facts must form a proper foundation for it (Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 … ). Expert witnesses are not witnesses of fact, other than as to matters they directly saw or heard, for example in an interview. Their opinions are only as reliable as the facts upon which they are premised.

( … )

[69] Once the parties resolved to seek a report from the therapist for the purposes of the proceedings notwithstanding her original engagement for ‘non-reportable’ therapy, that original characterisation of the therapy self-evidently fell away. The confidentiality sought to be preserved by the objections was then comprehensively and frequently breached by the approach taken jointly by the parties, the ICL and the therapist.”

Austin J delivered separate reasons, which also held that a determination of the objections to the production of documents “was an evaluative decision, not a discretionary decision” ([8]) and that the primary judge erred by presuming “that the child’s best interests were a salient consideration in determining the dispute over the production of documents under the subpoena” ([11]).

The majority and Austin J differed to the extent that Austin J held the Court had erred by limiting inspection of the documents to the lawyers only, saying that the “cause of action is contested between the parties, not the lawyers” and that the restraints upon inspection would “impair the lawyers’ ability to obtain instructions from their clients” ([32]). Austin J also noted that the orders did not cater for one or the other party acting in person in the future. O’Brien & Jarrett JJ saw no error with the inspection restraints where the orders “did not include any restraint on the lawyers discussing the contents of the therapy documents with their clients” ([76]).

Leave to appeal was refused. The appeal was dismissed.

Property – Primary judge erred by ordering parties to use the net sale proceeds of their property and joint savings to pay tax debt of company – Court not empowered to order the parties to pay a debt owed by the company to the ATO

In Oldham & Krantz (No 2) [2024] FedCFamC1A 238 (16 December 2024) the Full Court (Austin, Harper & Hartnett JJ) heard an appeal from orders made by Strum J in a de facto property adjustment case.

The de facto husband owned a shareholding in a company, used as a vehicle to run a small business. A single expert valuer had valued the company at nil, its primary asset being loans the parties owed to it of $610,000, which was exceeded by the company’s debts of $153,000 to the ATO and a bank loan of $532,000 ([9]).

Following the valuation, a property was sold and the bank loan was discharged so that the company had a positive value, assuming the parties could repay their loans to the company ([10]).

After finding that the loans owed by the parties were unrecoverable, the Court at first instance ignored those debts, relieving the parties of that obligation by treating the value of the company as nil, where the company lost all value if the loans were unrecoverable ([11]).

The Full Court said (from [12]):

“ … However, his Honour counted the corporation’s tax debt as a personal debt of the parties … By taking the corporation tax debt into account, the parties’ debts then exceeded the value of their assets …

[13] Although the primary judge found the proceeding to be ‘nugatory’ on account of there being no net assets to usefully divide between the parties … his Honour still found the parties’ contributions to have been equal … and the evidence did not require any adjustment to their contribution-based entitlements under s 90SM(4)(e) and s 90SF(3) of the Act…

[14] The primary judge therefore ordered the parties to use the net proceeds of sale realised on the sale of their property … and their joint bank savings ($40,000) to pay the corporation’s tax debt, together with any additional penalties and interest … Any residual balance was to be divided equally between the parties and used by them to discharge their individual debts to the interveners ([86]). The orders thereby exhausted the parties’ assets, leaving them with nothing but personal chattels.

( … )

[19] … [T]he corporation’s tax debt could never be the parties’ debt in any circumstances. It was and would remain the exclusive liability of the corporation.

[20] The primary judge cited numerous past decisions as authority for the desirability of the Court ensuring the revenue laws of the Commonwealth are not mischievously evaded ([56]–[58]), about which proposition there could be no quarrel, but such an admirable objective must be distinguished from fixing parties with legal liability for the debts of third parties which could never be attributed to them at law.

[21] … While there is no doubt the Court has power to order parties to discharge a debt owed by one or both of them to a third party, equally, there can be no doubt the Court is not empowered to order the parties to pay a debt owed by one third party (in this instance, the corporation) to a second third party (in this instance, the Australian Taxation Office).

( … )

[23] … [T]he parties’ fixation with personal liability for the corporation’s tax debt deprived them of cash of not less than $170,628, which they could otherwise then use to discharge their personal debts to the interveners. The corporation must bear liability for its own debt, whatever consequences that might hold for its solvency.

[24] If the parties are relieved of the burden of the corporation’s tax debt, the value of their assets exceeds the value of their personal liabilities and some modest surplus funds will be available for distribution between them, albeit that the surplus will then be applied to the payment of other personal debts.”

The Court re-exercised discretion, making specific orders to facilitate an equal division between the parties.

Children – No discernible difference between s 65DAAA and the rule in Rice & Asplund – To vary an order, there must be a significant change of circumstances – Full Court rejects Rasheem [2024] FedCFamC1F 595 and Whitehill & Talaska [2024] FedCFamC2F 768

In Radecki [2024] FedCFamC1A 246 (19 December 2024) the Full Court (Austin, Carew & Williams JJ) heard a father’s appeal from the dismissal of his application for parenting orders by Judge W J Neville.

Final orders were made in 2015 when the child (“X”) was 2 years old. Those orders were made on an undefended basis and provided for increasing paternal time until the child commenced school. During the hearing at which the orders were made, the Court enquired as to arrangements following the child attending school and the Court was told that the parties would “likely work it out” at that time as they had a “very good relationship” ([12]).

The mother did not comply with the orders between September 2022 and September 2023 and said this was due to the father’s intoxication, drug use and criminal behaviour ([14]). The father’s application sought to restore time. X was 11 at the time of the hearing and 12 at the time of the appeal.

At first instance, the Court said that there were “reasonable arguments on both sides” but ultimately concluded that there was “insufficient change in circumstances” since the final order ([133]).

Austin & Williams JJ said (from [30]):

“This appeal concerns s 65DAAA of the Act, which was intended to codify the common law rule in Rice and Asplund … This appeal provides an opportunity to clarify the principles which apply to applications under s 65DAAA of the Act …

[31] The controversy which has arisen since the introduction of the amendments to the Act is whether the wording of s 65DAAA creates a meaningful distinction and departure from application of common law principles or whether it codifies the common law principles.

[32] A literal reading of ‘consider’ in s 65DAAA(1)(a), contrary to the rule in Rice and Asplund, does not require a change of circumstances nor mandate the Court to make a finding of fact about a prima facie change of circumstances, rather the requirement is to ‘consider’ whether or not there has been a change of circumstances.

[33] In practical terms, whilst applying the first stage of the rule in Rice and Asplund, the dilemma is whether the Court is still required to make a finding about changed circumstances or alternatively, merely ‘consider’, whether or not there has been any change.

( … )

[58] On the one hand, Schonell J in Carlyon & Graham [2024] FedCFamC1F 443 … concluded there was no difference between the common law principles and s 65DAAA…

[59] Conversely, Altobelli J in Rasheem & Rasheem [2024] FedCFamC1F 595 … and Melounis & Melounis (No 4) [2024] FedCFamC1F 778 … and Judge O’Shannessy in Whitehill & Talaska [2024] FedCFamC2F 768 … partially relying on the definition of ‘consider’ in the Oxford Dictionary (2nd edition), adopted a literal interpretation of the word ‘consider’ in s 65DAAA(1) to the dictum. Their Honours concluded the statute now mandates the Court to reconsider final parenting orders even in cases where a significant change in circumstances has not occurred, but it is otherwise in the child’s best interests for a reconsideration to occur. In other words, there is no requirement to make a finding about changed circumstances, and the failure of an appellant to establish there has been a significant change of circumstances since the making of anterior parenting orders, is not dispositive of the fresh application. The obligation is supposedly to merely consider whether there has been a change of circumstances, without more. But then what would be the point of the consideration or ponderance?

( … )

[63] For the reasons that follow, we consider there is no discernible difference between the first stage test or threshold to be applied under the new statutory regime, and the common law principles espoused by the rule in Rice and Asplund.

( … )

[77] Relying on permissible extrinsic evidence, or ‘legitimate aids to construction’, in this case, the Explanatory Memorandum, including cited authorities and the wording of the Second Reading Speech, the context and purpose of the new statute was to codify the rule in Rice and Asplund and existing case law. It was not to ameliorate or modify the rule, by removing the requirement to make a factual finding about a significant change in circumstances in the application of the first stage. In that context, it is a misconception to apply the text of s 65DAAA so literally to only require a court to embark upon a consideration of whether or not there has been a change of circumstances, but without imposing an obligation to make a positive finding about that pivotal issue.

[78] The decisive factor in rejecting the literal interpretation of ‘consider’ is because to do so results in an operation of s 65DAAA which, adopting the terminology of relevant authorities, is absurd, irrational, and capricious, contrary to Parliamentary intention and may result in unintended undesirable consequences, as observed above. In other words, s 65DAAA would not rectify the mischief, being unfettered applications to revisit parenting orders, to which it is directed.

[79] We therefore conclude, for the purposes of s 65DAAA(1) of the Act, and having regard to the principles espoused in Rice and Asplund and subsequent authority, the proper interpretation of ‘consider’ should not be a literal one. The word ‘consider’ in s 65DAAA should be construed to mean the Court is required to contemplate the evidence and to make findings of fact as to what changes in circumstances (if any) there have been since the making of the anterior parenting orders. If there is no positive finding of changed circumstances, that is the end of the matter. If there is a positive finding as to changed circumstances, the second stage of the process requires the Court to make its determination, subject to the overarching best interests principle, as prescribed by s 65DAAA(1)(b) and otherwise having regard to relevant s 60CC considerations and the matters referred to in s 65DAAA(2).”

Austin & Williams JJ then said (at [87]):

“ … We accept the primary judge was obliged to find the destruction of the former cooperative parenting arrangement between the parties, the substantial effluxion of time, and the child’s much greater maturity were, in combination, significant changes in circumstances which satisfied and engaged s 65DAA(1)(a) of the Act. The failure of the appellant to bring an application to vary the December 2015 orders prior to September 2022 is readily explained by his reliance on the parties’ ability to negotiate parenting arrangements until then. His Honour was wrong to find there had been no significant change in circumstances … as required by the first stage of s 65DAAA. The error was material because it resulted in the dismissal of the appellant’s parenting application.”

Carew J delivered separate reasons but agreed that the appeal be allowed. Leave to appeal was granted and the appeal allowed. The case was remitted for re-hearing and costs certificates granted.

Children – Parental conflict and family violence not the same thing – Coercive control that amounts to family violence is an evaluative finding requiring forensic examination of relevant evidence – Trial judge erred by finding that the father’s litigious conduct amounted to coercive control – Litigant does not commit family violence by refusing to consent or submit to orders sought by the other parent

In Pickford [2024] FedCFamC1A 249 (20 December 2024) the Full Bench of the Full Court (McClelland DCJ, Aldridge, Austin, Carew & Williams JJ) heard an appeal from parenting orders made by Altobelli J in respect of 9 and 7 year old children.

Multiple interim orders were made during the litigation, the last of which provided for the children to live with the mother and spend time with the father for four nights per fortnight during school terms and parts of school holidays ([60]). The father sought equal time.

At first instance, the Court found that the father had engaged in family violence by coercive control of the mother and that the conflict between the parents meant that equal time was not in the children’s best interests. Final parenting orders were made for the mother to have sole decision-making responsibility and that the interim care arrangements continue as final orders ([63]). The father appealed, primarily challenging the Court’s findings as to family violence.

While the father had been charged with assault of the mother and also had a provisional domestic violence order made against him, both the charge and the application for a domestic violence order were dismissed by a State court ([96]).

All of the Full Bench allowed the appeal, but the Full Court’s reasons were divided. Austin & Williams JJ delivered joint reasons. Aldridge & Carew JJ delivered separate, joint reasons. McLelland DCJ delivered separate reasons but generally agreed with Aldridge & Carew JJ.

The primary disagreement between the joint judgments was interpreting the definition of family violence in s 4AB of the Act and the Court’s approach to findings of coercive control, the definition being:

“(1) For the purposes of this Act, family violence means violent, threatening or other behaviour by a person that coerces or controls a member of the person’s family (the family member), or causes the family member to be fearful.”

Austin & Williams JJ said (from [83]):

“Nobody sought to disturb the children’s residence with the mother. Nobody doubted the children should spend an extensive amount of time with the father … The dispute was therefore confined to the question of how much time the children should spend with the father during school terms …

( … )

[86] For some reason … the parties then conducted a trial over 11 days at enormous expense and made contested allegations of family violence the centrepiece of the dispute. …

[87] Even if the parties did inadvisedly challenge one another about disputed allegations of historical family violence … given how the disputed allegations did not seem genuinely material to the outcome of the narrow parenting issue left to decide, one wonders why it was necessary for his Honour to appease the parties by engaging with their debate. It is apposite to observe how judges need not make findings to resolve contested facts unless the findings authentically influence the outcome …

( … )

[90] Implicitly, the mother’s case was posited on the basis that neither she nor the children were at any risk of harm from family violence committed by the father provided the children only spend four nights per fortnight with him in school terms, so it is entirely unclear how she could have conversely contended the children were at risk of such harm if they instead spend five, six or seven nights per fortnight with him in school terms …”

Their Honours said (from [78]):

“Nothing said within these reasons should be construed as the trivialisation of family violence, which is an undeniable blight on our society. …

[79] However, in litigation under Pt VII of the Act, untested allegations of family violence are not proven facts. No court can prophetically know whether such allegations made by one party against another are true or false and, if false, whether the falsehood is deliberate or inadvertent. Disputed allegations of family violence must be subjected to the same forensic rigour as any other contested factual issue (Edinger & Duy [2023] FedCFamC1A 194 … ). The party alleging the fact bears the burden of proving it (Wallaby Grip Ltd v QBE Insurance (Australia) Ltd [2010] HCA 9 … ) and the standard of the burden is the balance of probabilities (s 140 of the Evidence Act 1995 (Cth)). …

( … )

[94] The evidence of parental conflict in this case was abundant, but it is important to observe how parental conflict and family violence are not one and the same thing. Parents can be in conflict without one perpetrating family violence upon the other. Mere disagreement between parties, even if voluble, is not necessarily family violence.

( … )

[105] His Honour … fell into error by relying upon merely the mother’s perception of the father’s refusal as being an example of his exertion of control over her. Her feelings were irrelevant to the issue of ‘family violence’ if his conduct could not be objectively considered to be coercive or controlling…

( … )

[107] … [T]he mother’s subjective experience was irrelevant to any finding made about ‘family violence’ taking the form of coercion or control … The primary judge erred by concluding otherwise and by finding the mother’s own perception of the father’s behaviour was relevant to the factual issue at various points in the reasons for judgment …

( … )

[109] The definition [ed. in s 4AB] is exclusive, not inclusive. Notwithstanding the obvious breadth of the definition, it is disjunctive and admits of ‘violent, threatening or other behaviour’ amounting to ‘family violence’ in only one of two ways, being behaviour of that sort which:

(a) ‘coerces’ or ‘controls’ a family member – which is an objective concept focussing upon the characteristic nature of the perpetrator’s behaviour towards the victim; or

(b) causes the family member to be ‘fearful’ – which is a subjective concept instead focussing upon the victim’s reaction to the perpetrator’s behaviour.

[110] … [H]aving found the parties’ unresolved disagreement over the children’s prospective attendance at private schools and the manner of payment of the associated fees did not amount to violent, threatening or other behaviour by the father that ‘coerced or controlled’ the mother, her subjective feelings became irrelevant to the objective issue of the occurrence of family violence in that form. She certainly did not allege being ‘fearful’ on account of such disagreement with the father, which meant she eschewed the second limb of family violence. … [H]er feelings could not be relevant to the separate anterior factual question about the characterisation of the father’s behaviour as being either coercive or controlling.

( … )

[121] One litigant does not commit family violence against another litigant just by refusing to consent or submit to the orders for which the opponent applies. It is impossible to conceive otherwise and, by doing so, the primary judge fell into legal error. Parties are entitled to exert their legal rights and to expect such rights will be adjudicated according to law, regardless of the timidity of the opposing litigant. Undoubtedly, litigation is sometimes apt to be used by one litigant to strategically harass another, which is why Pt XIB of the Act was recently enacted to enable the Court to make orders dismissing, and injunctions prohibiting, unmeritorious, harmful or vexatious proceedings. But this case was far removed from that situation and it was not open to the primary judge to find the contrary. The father did not bring the parenting cause under Pt VII of the Act. The mother did. Nor did he bring the interlocutory litigation funding applications. She did. He was entitled to respond to the litigation instigated by the mother other than by his immediate and complete capitulation.”

Aldridge & Carew JJ said that they “largely agree with the reasons of Austin and Williams JJ, save in relation to their Honours’ interpretation of the definition of family violence which seeks to limit family violence to only two types of behaviour, namely, that which coerces or controls and that which causes fear” ([41]).

Their Honours said (from [46]):

“In fulfilling the onus of proving an allegation of family violence that involves behaviour that coerces or controls, it is not necessary to prove the alleged perpetrator intended the behaviour to be so. That does not mean that intention is irrelevant, but it is not dispositive. …

[47] The focus of the fact finding process is on the behaviour and the impact of the behaviour. It is the behaviour that coerces or controls. It requires action and reaction. A single act is unlikely to be coercive or controlling but it may be. Behaviour that coerces or controls may be innocuous, subtle, capable of different interpretations, complex, undermining, etc. Such behaviour may create impossible expectations for the other family member. It may be transactional and involve punishments for perceived failures. The impact of the behaviour can be insidious. …

[48] When determining an allegation that a person has engaged in behaviour that coerces or controls a family member, a trial judge will undertake a forensic examination of all relevant evidence to:

(a) identify the behaviour about which complaint is made;

(b) identify the full context of the behaviour including any explanation that may be given by the alleged perpetrator;

(c) identify the impact of the behaviour on the alleged victim (mere assertion by the alleged victim that they feel coerced or controlled is insufficient);

(d) make all relevant factual findings; and

(e) explain why the behaviour in question is or is not family violence that coerces or controls the family member and if the alleged behaviour does not entail a course or pattern of conduct, explain how the behaviour can nevertheless be characterised as behaviour that coerces or controls, if so found.

( … )

[50] The definition of family violence is necessarily broad and any interpretation that may be perceived to, or actually, create unnecessary hurdles to an alleged victim proving an allegation of family violence should be avoided.

[51] Whilst the key feature of coercion or control is that a person is induced (many other words are also apt here) to do as the other wishes, the statutory focus is simply on behaviour that coerces or controls and not the intention of the perpetrator.

[52] So understood, the finding that there is coercive or controlling behaviour is an evaluative one, having regard to all of the circumstances and all of the evidence before the court. Whilst patterns of behaviour may be particularly illuminative, they are not essential. Importantly, for present purposes, the trial judge does not need to spend time and trouble searching for an inference that there is an intention to coerce or control. It is sufficient simply to apply the words of the statute without embellishment and assess whether there is behaviour that coerces or controls.”

McClelland DCJ said (from [2]):

“I … agree with each of their Honours’ respective judgments that, in considering whether a party has been the subject of coercive or controlling behaviour, the intention of the alleged perpetrator will very often be a decisive factor but that it is not an essential element to the making of such a finding.

[3] I otherwise agree with the judgment of Aldridge and Carew JJ in so far as their Honours take a more expansive view of the concept of family violence and, in particular that the interpretation of the definition of family violence should not be limited to only two types of behaviour, namely, that which coerces or controls and that which causes fear.

( … )

[36] In their thoughtful judgment, Aldridge and Carew JJ have set out a useful guide to assist trial judges to undertake what can be the complex task of evaluating allegations of coercive and controlling conduct. I respectfully commend that guide as being of potential benefit to trial judges.”

The appeal was allowed and parenting orders discharged. The matter was remitted for re-hearing.

Property – Husband’s breach of an injunction by depleting entire asset pool via refinancing – Wife’s application for property settlement and for s 106B orders dismissed – State of the law in relation to caveatable interests “cries out for” urgent law reform

In Wasem & Nasser (No 5) [2024] FedCFamC2F 1063 (1 August 2024) Judge Street heard a wife’s application for property adjustment after a 9 year marriage that produced 5 children ([6]).

During the marriage, the husband acquired an investment property for $1,250,000. He demolished an old house on the block and commenced constructing two homes as a development. Where the development was incomplete and the parties disagreed as to various aspects of the development and its finance, the Court made injunctions in August 2021 preventing the husband from refinancing the property for more than $160,000 ([8]).

In March 2022 and without notice or consent of the wife, the second respondent, B Pty Ltd, granted refinance to the husband for $4,194,014.83, which included the husband receiving $1,419,873.19 to his bank account with the Commonwealth Bank (“CBA”). When asked what he did with those funds by the Court, he said they had been spent and were unavailable ([11]).

The wife sought orders for property settlement and s 106B relief to set aside the dealing in favour of the husband. The husband sought no property orders on the basis that there was no property capable of being repossessed and said that further injunctions or s 106B orders were pointless where the funds had been spent and where he simply refused to pay the mortgage or complete the development project ([12]-[14]).

The Court noted that it was “unable to identify the existence of any funds held by the husband that could be recovered” ([15]).

Considering submissions as to s 106B, the Court said (from [89]):

“[Counsel for the wife] … refined his case so as to attack the disposition of the approximately $1.4 million paid to the husband identified in the PEXA transaction to CBA. [Counsel for the wife] … submitted that whilst that was the disposition which was sought to be set aside, it was only sought to be set aside preferable to what was said to be slivers available, either through the unsecured creditors that were paid out, or through an alleged reduction in what might have been the same proceeds. The Court raised with [counsel for the wife] … that the $1.4 million was paid into a CBA account and then withdrawn by the borrower in cash from CBA. That the disposition of the $1.4 million was for value by the second respondent. [Counsel for the wife] … maintained that the Court could, nonetheless, make orders affecting that disposition and through s 80 of the Act or otherwise, if the Court finds a sliver of entitlement for the benefit of the wife.

( … )

[93] It is a most unsatisfactory position that the state of the law in relation to caveatable interest is one that it does not recognise the potential property interests of a de facto or married person with respect to proceedings on foot in the Federal Circuit and Family Court of Australia, be it division 1 or division 2. That is an unsatisfactory feature that cries out for legislative reform to prevent the enormous injustice and unfairness that occurs where, despite efforts to try and protect a de facto or spouse, a transaction proceeds by a fraudulent party inconsistent with existing injunctions that defeat that party’s interests. Urgent law reform is called for to prevent the type of tragedy that occurred in this case being repeated. This Court has regularly made orders permitting the filing of a caveat by the spouse or the de facto and foreshadowing an anti-suit injunction to restrain any attempt to remove the caveat…

[94] In substance, [counsel for the wife] … maintained that inquiries should have been made to identify the proceedings on foot by his client.

( … )

[97] The Court accepts the force of [counsel for the wife’s] … submissions that this was a transaction where the borrower was not the subject of any statement of assets and liabilities, no identified capacity to repay, where the borrower, in fact, was a $2 company, and where there was no identification of assets and liabilities of the guarantor, and where it was apparent that the guarantor and the borrower were stressed in terms of proceedings against them.

[98] Those matters rise no higher than factors relevant to a potential negligence by the second respondent or the facilitator in proceeding with the transaction. They do not identify circumstances by reason of which reasonable financier should have taken further steps to ascertain the source of the underlying debts the subject of the caveats. This is not a case where there was a wilful shutting of eyes by the second respondent or by the facilitator.”

The Court said as to the wife’s property adjustment claim (from [133]):

“The above balance sheet identifies that there is no effective property for the purpose of s 79 of the Act. … While the Court would have, had there been property, as the Court has indicated, found that there was a significant and important home-maker contribution by the wife throughout the relationship, over which the parties had five children. This would have more than equated with the financial contributions and the initial contributions made by the husband, and that a future allowance, had there been property that it was just an equitable to alter, would have been required, depending on the amount available, an adjustment in the order of 10%, totalling in the order of 60 per cent in favour of the wife and approximately 40 per cent in favour of the husband. However, the Court is not in a position where it can make those final orders because there is no property from which any adjustment can be made.

( … )

[135] In all the circumstances, the existence of the liabilities, as significant as they are against the husband, provides no basis whatsoever for any adjustment of interests in respect of those liabilities for which the wife played no role whatsoever. They are all liabilities of the husband. It is unfortunate that the wife still has some small liabilities that she must carry on her own.

[136] It is a tragedy in the present case that the husband managed to defeat the Court being able to make proper property adjustment orders in favouring of the wife. It is little satisfaction for the wife to be told that the law relating to caveats has not been satisfactorily amended as identified above. It is an awful outcome for the wife and her children that property which should have been available for the alteration of property interests has been effectively dissipated in breach of an injunction of this Court, and the wife and the children are left with no effective remedy by this Court in relation to s 79 of the Act.

( … )

[138] The Court finds it is not just and equitable to make any property alteration between the husband and wife…”

As to the s 106B claim, the Court concluded (from [139]):

“It follows like night and day, for the reasons already identified, the Court does not accept that this is a case where there is a disposition or settlement that can be set aside under s 106B as against the second respondent. The Court does not accept that there was a deliberate shutting of the eyes to the interest of the wife or that this is a case where the Court should find there was constructive notice because a reasonable person or a reasonable lender in the shoes of the mortgagee should have made inquiries to identify the likely defeating of her interest from the transaction.

[140] The Court … does accept that the wife made out the requirements of s 106B(1) however, the Court does not accept that the second respondent engaged in a settlement or disposition that was not bona fides …”

The Court dismissed the wife’s property adjustment and s 106B application and ordered judgment against the husband in favour of the second respondence for $8,242,144.97. The husband was ordered to pay the costs of the wife and each respondent.

Property – Wife alleged late husband promised to leave bulk of his estate to her upon his death if she did not bring a property settlement claim against him – Found deceased had engaged in a “campaign of obstruction and intimidation” – Wife’s promissory estoppel claim failed but family provision claim was granted

In Alessandra Hart v Gerard John Basha [2024] NSWSC 1441 (13 November 2024) Williams J heard a wife’s application in relation to her deceased former husband’s estate.

The husband and wife married in December 1968, had three children and separated and divorced in 1992. There were never any property adjustment proceedings or orders between them ([3]).

The husband had two long-term relationships following separation. His estate was valued at approximately $2,700,000. His last will provided for repayment to the wife of $65,000 for a loan and the transfer of 5,000 Telstra shares which she had given to the husband in about 2012 to hold and manage for her. His estate was otherwise to be distributed between his children, the children of one of his partners, his partner at the date of death and charitable organisations ([6]-[9]).

The wife argued that the husband unconscionably resiled from representations made to her from January 1992 until his death in January 2021 that, if she did not pursue a property settlement following their separation and divorce, she would inherit the bulk of his estate upon his death ([10]).

The administrator of the estate opposed any payment to the wife.

After reviewing the history of financial transactions between the husband and wife following their divorce and the communication between their respective family lawyers, the Court said (from [139]):

“The plaintiff’s pleaded case relies on three categories of alleged representations.

[140] The plaintiff pleads that the deceased represented to her from the time of their separation in January 1992 that, if she did not ‘bring a property settlement against him’, he would leave ‘the bulk of his estate’ to her upon his death. According to the particulars, this alleged representation was made by the deceased orally and ‘repeated on many occasions during conversations’ between the plaintiff and the deceased during the period from 1992 to 2021. …

( … )

[143] The second category of alleged representations pleaded by the plaintiff are representations that the deceased’s will made on 20 November 1992 was his current will, and that the benefit provided for the plaintiff under that will would remain unchanged ‘so long as she did not push for a property settlement’. According to the particulars, the alleged representation was oral and was ‘made and repeated on many occasions during conversations’ between the plaintiff and the deceased during the period from November 1992 to January 2014. …

( … )

[146] The third category of alleged representations pleaded by the plaintiff are representations that the deceased’s will made on 24 March 2014 was his current will, and that the 70% share of the deceased’s residuary estate given to the plaintiff under that will ‘would remain her entitlement under his will’. According to the particulars, the alleged representation was oral and was ‘made and repeated on many occasions during conversations’ between the plaintiff and the deceased during the period from 2014 to 2021. …

( … )

[149] The plaintiff pleads that it was unconscionable for the deceased to resile from the first, second and third categories of representations, and that the defendant therefore holds 70% of the deceased’s estate on constructive trust for the plaintiff. Alternatively, it is pleaded that the defendant holds the estate subject to an equitable lien in favour of the plaintiff, or that the defendant should pay equitable compensation to the plaintiff. … ”

The Court continued (from [150]):

“I acknowledge the submissions made by counsel for the plaintiff to the effect that the doctrine of promissory estoppel acts not only as a restraint on the enforcement of legal rights, but also as a source of obligation, referring to passages from the judgment of Mason CJ and Wilson J and the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7. However, the Court of Appeal held in Saleh v Romanous [2010] NSWCA 274 that promissory estoppel ‘is not the equitable equivalent of a contract’, and operates as a restraint on the enforcement of rights and must therefore be negative in substance.

( … )

[153] The plaintiff’s promissory estoppel claim must be dismissed … ”

The Court concluded (from [165]):

“There is no evidence that the plaintiff raised the question of property settlement with the deceased, or that the deceased said anything to her about his will, at any time prior to the conversation in early November 1992 referred to below, which was closely followed by the deceased showing her his will in December 1992.

( … )

[169] However, I accept the plaintiff’s evidence that the deceased said to her when he showed her his will in December 1992 words to the effect of “if you go and see a lawyer about a property settlement you will ruin everything and I will leave you with nothing”. Although the deceased was later prepared to engage directly with the plaintiff in relation to a potential property settlement, including in 1993 when he contemplated taking out a loan in order to facilitate a settlement, it is inherently probable viewing his conduct in the property settlement negotiations during the period from 1993 to 2003 as a whole that he said things to discourage the plaintiff from obtaining legal advice about her entitlements. The first letter of advice that the plaintiff received from her solicitor in March 1999 records the plaintiff’s instructions to her solicitors that the deceased had exerted psychological pressure on her and threated to ‘leave [her] with nothing should [she] see a lawyer’.

( … )

[174] … [T]he plaintiff … persistently pursu[ed] property settlement negotiations with the deceased during the period from 1993 to 2003. The overwhelming weight of the plaintiff’s evidence given in cross-examination is that she had no expectation during that period of being a substantial beneficiary under the will of her former husband … [T]he contemporaneous correspondence generated by the property settlement negotiations is devoid of any reference to any representation by the deceased that he would leave all or a significant portion of his estate to the plaintiff by way of inheritance. … [I]t is plain from the terms of her letter to the deceased dated 3 October 2003 that the plaintiff had asked the deceased for a final property settlement many times, and the deceased had responded, not by referring to any promise concerning his will, but by articulating reasons why he considered that he was not obliged to pay the plaintiff anything further … ”

[175] … To the extent that the defendant’s submissions suggested that the deceased genuinely believed that he had made payments to the plaintiff by that stage which represented an appropriate property settlement, I reject those submissions. I infer that the deceased believed that his campaign of obstruction and intimidation had served him well. The plaintiff had been worn down by ten years’ of asking the deceased for a property settlement, only to be met with payments of sums of the deceased’s choosing which did not even equate to half of the net sale proceeds of their jointly owned assets, and threats of violence when the plaintiff engaged a solicitor to represent her in relation to her property settlement claim. I infer that the plaintiff, out of a conscious or sub-conscious sense of self-preservation, gave up her long and unsuccessful pursuit of the deceased for a property settlement in late 2003 when her sons came to her financial rescue by paying out the vendor finance loan for the Michelago property. …

( … )

[186] As counsel for the plaintiff acknowledged, the evidence does not provide a sufficient basis for the Court to estimate the amount that would have been payable to the plaintiff by way of an appropriate property settlement following her divorce from the deceased in 1992. Nevertheless, for all of the reasons explained above, the evidence does provide a sufficient basis to find that the deceased refused to enter into an appropriate property settlement with the plaintiff, and was determined to disable the plaintiff in their property settlement negotiations by threatening her with violence if she persisted in having a solicitor represent her, and by refusing to disclose relevant financial information to which only the deceased was privy. … ”

The Court proceeded to determine the family provision claim, making an order for the wife to receive $600,000 from the husband’s estate ([220]).

Property – No property order (or provision) made – Assets of corporate group were not property of the de facto husband where he never had ownership or sole control of the assets due to structure of directors’ and appointors’ powers – His representations in financial agreements were no more than “subjective proposals” that did not “require any decision-making” as to the corporate group’s assets

In Montoya & Rosales (No 2) [2024] FedCFamC1F 521 (13 August 2024) McGuire J considered competing property applications in respect of a 10 year de facto relationship between a 70 year old de facto husband and 50 year old de facto wife. They had not lived together, but had two children together, aged 14 and 10.

The de facto husband relied on Stanford and sought no property adjustment orders. The de facto wife argued that the asset pool included property belonging to two companies who had intervened in the proceedings, Montoya Pty Ltd and Montoya Equities Pty Ltd as trustee for the Montoya Equities Trust (“the Montoya Group”). According to her, the Montoya Group had a combined wealth of in excess of $40 million.

The de facto wife owned property in her own name worth $3,343,724. She lived in a property in Town M owned by the intervenors and sought that she retain her own assets, the property at Town M, plus $14,700,000 paid by the de facto husband via his superannuation fund and assets of the Montoya Group.

The intervenors opposed the inclusion of their property in the asset pool. The de facto husband’s son, Mr P held roles as appointor, director, shareholder and beneficiary in the Montoya Group. The de facto husband argued that he “never had ownership or sole control of the Montoya Group assets by reason of the structure of directors’ and appointors’ powers have always been joint or subject to the removal by shareholders which provides generally, and historically, checks and balances against absolute control or ownership” ([39]).

After review of the case law, the Court said (from [53]):

“The [de facto wife] says the [de facto husband] initiated a meeting of early 2019 evidenced by email communications with Mr HH, the accountant. She says the agenda references ‘asset protection from [her]”. The [husband’s] family law solicitor, Mr NN, was in attendance. The parties separated in July 2019 and it is open to infer that the relationship was ‘in trouble’ as of February of that year. Mr P was not present at that meeting.

[54] In early 2019 Mr P was appointed as a Director of Montoya Pty Ltd and two new shares were created in Montoya Equities Pty Ltd to be held by the [de facto husband]. Deeds of Variation were signed by the [de facto husband] t in respect of Montoya Family Trust and Montoya Equities Trust.

[55] The [de facto wife] also relies on financial agreements executed by the [de facto husband] with his former de facto partner, Ms U, dated 3 May 2011 and 17 October 2013 (termination agreement). …

( … )

[59] Similarly, the [de facto wife] relies on approaches made by the [de facto husband] to her during their de facto relationship so as to enter financial agreements and representations by him, directly and impliedly, of ownership/control of the trust’s assets. …

[60] The [de facto wife] says that these are statements by the [de facto husband] consistent with ownership, control and the right to benefits from the Family Trust assets.

[61] Similarly, Mr P gives evidence that he was not aware of these negotiations and/or representations made by the [de facto husband]

( … )

[80] The intervenors position and submissions rely heavily on the decision of the Full Court in Harris & Dewell and Anor (supra) and citing Finn J in Stephens & Stephens and Ors (supra) that the long line of authority dealing with this complex issue has not gone so far as to hold the control alone without some lawful right to benefit from the assets of the trust be sufficient to permit a Court to treat the assets of the trust as property of the party who has control.

( … )

[82] … [T]he intervenors say that the evidence before this Court and the historical structures of the Montoya Group do not show in the [de facto husband] the dual requirements of control and lawful right to direct income or property of the corporation or trust or, more particularly, that the [de facto wife] has not proven that factual solution on the balance of probabilities.”

The Court continued (from [98]):

“ … [I] am unable to find on the balance of probabilities that she has made out her case that the Montoya Group is in reality the alter ego of the [de facto husband] in that Mr P is no more than his ‘puppet’ and leaving control of the Montoya Group solely with the [de facto husband] and where he has the legal entitlement to derive benefit from the Montoya Group to himself. I find that the structure of the Montoya Group historically has always required unanimous decision-making where the various Deeds position appointors, directors and shareholders are such that unilateral control is not available. I find the various representations attributed to the [de facto husband] in financial agreements with Ms U and towards a financial agreement with the [de facto wife] are no more than subjective proposals and, in the first case not activated so as to require any decision-making as to diversion of Montoya Group assets and, in the second, constituting nothing further than proposals which were not accepted and hence no requirement required for agreement of Mr P or other officeholders.

( … )

[101] It follows, therefore, in respect of the s 90SM application that the assets of the Montoya Group will not be included in the property pool for consideration as between the [de facto husband] and [de facto wife].”

His Honour proceeded to determine the property applications of the parties, concluding (at [149]):

“Where the orders leave the assets of each of the parties currently in their hands and I calculate a division of the net property therefore at 66.3 per cent to the [de facto husband] and 33.7 per cent to the [de facto wife] in accordance with the balance sheet set out herein then in the particular circumstances of this relationship, and particularly given the implicit assumptions of the parties and the nature of their financial relationship, it is my view that justice and equity is served by not altering the property interests of the parties as they currently sit in each of their hands.”