Child protection order – Jurisdiction for parenting order – Held that the written consent of a child welfare authority gave jurisdiction to the court to make parenting orders in respect of a child under the care of that authority 

In Dunstan & Jarrod and Anor [2009] FamCA 480 (5 June 2009), Murphy J held at paras 50-56, applying the ruling of the former Chief Justice in Re Alex [2004] FamCA 297, that the written consent of a child welfare authority provided jurisdiction to the court to make parenting orders in respect of a child under the care of that authority.

Full Court upholds objection to inspection of documents by Chief Commissioner of Police on the ground of public interest immunity – Procedural steps where such immunity is claimed  

In Dupont & Chief Commissioner of Police and Anor [2015] FamCAFC 64 (28 April 2015) the Full Court (Ainslie-Wallace, Ryan & Johns JJ) found no error in Bennett J’s decision to uphold a public interest immunity objection raised by the Chief Commissioner of Police (“the Commissioner”) where the appellant mother had issued a subpoena for production of the Commissioner’s “entire investigation file … including any report/s whether completed or not and including but not limited to witness statements, recommendations, transcripts of interview or other recordings and notes in relation to any investigation by and not limited to [Inspector B]” (para 2). “Inspector B” was an Inspector of Workplace Standards who had “control of documents relating to 42 complaints made by 14 complainants against” the second respondent (para 3).

The relevance of the subpoenaed documents was said to be allegations by the mother as to the second respondent’s intimidating, controlling and “emotionally manipulative personality”, the mother alleging “that the second respondent would subject the child to emotional abuse” (para 11). At first instance, Bennett J was “ … only barely satisfied that [some of] the information might assist the appellant’s case” (para 17) but then considered public interest immunity and:

“ … by application of the common law she found that the claim of public interest immunity should be upheld and the documents should therefore not be produced or inspected … In coming to this conclusion the primary judge found that disclosure of the contents of the documents would be ‘…highly prejudicial to the ability of Victoria Police to properly receive and investigate complaints against police members…’ … The release of the documents would breach the confidentiality of the complainants, undermine confidence in internal disciplinary proceedings, prevent future potential complainants from disclosing complaints due to a fear their comments would be used to generate evidence and ultimately jeopardise public confidence in the investigation of complaints against police members [86]. Consistent with the balancing exercise discussed in Sankey v Whitlam (1978) 142 CLR 1, her Honour balanced the public interest in the avoidance of these types of harm with the public interest in the administration of justice not being frustrated or impaired by withholding documents for which a legitimate forensic purpose had been established. On the basis that production of the documents was unlikely to produce material evidence or lead to material evidence being obtained her Honour was satisfied that the information and documents were not important to the substantive proceedings …” (para 19).

The Full Court said (from para 7):

“…     As we will shortly discuss, in this jurisdiction public interest immunity claims (excluding journalist privilege) are either dealt with in accordance with s 130 of the Evidence Act 1995 (Cth) (‘the Evidence Act’) or the common law. Where the claim concerns the admissibility of evidence, s 130 is the governing provision. What might be described as pre-trial procedures invokes the common law. Irrespective of which regime applies the outcome should be the same.

[8]     The Court of Appeal in NSW v Public Transport Ticketing Corporation [2011] NSWCA 60 explained that despite the use of different language there is no practical difference between the two regimes. Allsop P (as he then was and with whom Hodgson JA and Sackville AJA) concurred [and] said at [42] of the judgment:

‘Both the common law and s 130 require two broad stages of analysis: first the assessment of the character of the information or document (as state papers or as relating to a matter of state) and secondly a weighing or balancing exercise to assess the public interest on whether disclosure would prejudice the proper functioning of the government.’

( … )

[23]    In proceedings to which the Evidence Act applies (such as these proceedings) s 130 of that Act sets out the test to be applied to a claim of public interest immunity but only when the claim relates to the ‘admission into evidence’ of information or a document. …

( … )

[32]    … by [the] … repeal of s 131A in its broader form in favour of the narrower and current form of s 131A in the Evidence Act, the Commonwealth Parliament evinced a clear intention that the Evidence Act affords an extended application of s 130 to only journalist privilege. And issues in relation to pre-trial procedures concerning the other privileges contained in Part 3.10 of the Evidence Act (including public interest immunity) are to be dealt with in accordance with the common law.

( … )

[34]    It follows that the claim for public interest immunity advanced in this case must be determined in accordance with the common law.”

The Full Court then described the relevant procedural steps where public interest immunity is claimed by a third party in response to a subpoena (from para 36) saying:

“…     … the first step which requires consideration is production of the documents to the court. This first step involves the determination of any objections to the subpoena or to the production of the documents. It is at this stage that the court will consider any claim by the person to have the subpoena set aside on the basis it is oppressive, is an abuse of process and the like and, relevantly, public interest immunity. A subpoena that does not have a legitimate forensic purpose is an abuse of process and at this stage must be set aside.

[37]    When a public interest immunity claim is made, it is expected that the person with the obligation to produce will:

•        apply to have the subpoena set aside; and

•      file an affidavit which addresses the scope and basis of the claim.

[38]    The affidavit claiming public interest immunity ‘ … should state with precision the grounds on which it is contended that documents or information should not be disclosed so as to enable the court to evaluate the competing interests’ (Sankey v Whitlam per Mason J at 96) and should not contain confidential information that cannot be disclosed to the parties. In rare cases the court will receive a confidential affidavit (R v Mokbel (Ruling No. 1) [2005] VSC 410) and may take additional evidence in a closed hearing or indeed in camera. Countervailing evidence is rarely allowed (Young v Quin (1985) 59 ALR 225).

[39]    Ordinarily the court will not read the contentious documents but in an appropriate case may do so without them being formally ‘produced’ as that term is understood in first step production (Conway v Rimmer [1968] AC 910 at 971).

[40]    The second step is the decision concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents produced to the court and under its control. In this regard, the crucial question is whether the documents have apparent relevance to the matters in issue or are themselves the subject matter of the litigation. Notwithstanding that the documents may not at that stage be admissible, if they are apparently relevant then inspection will ordinarily be ordered (National Employers Mutual General Association v Waind & Hill [1978] 1 NSWLR 372).

[41]    The third step is the admission into evidence of a document or its use in the process of taking evidence. It is at this step that questions between the parties of relevance in fact and admissibility are determined (Waind & Hill; Hatton v Attorney-General of Commonwealth of Australia & Ors (2000) FLC 93-038).

[42]    As will be apparent, in a case concerned with a claim of public interest immunity in response to a subpoena for the production of documents, the focus of the claim falls to be determined at the first step.”

Discussing Bennett J’s decision and the immunity itself, the Full Court said (from para 49):

“…     It is entirely clear that the primary judge did not consider that s 130 of the Evidence Act applied to the instant proceedings and determined the matter by reference to the common law. As we have already explained, we are satisfied that in this case it is the common law which applies. …

[50]    Under the common law a public interest immunity claim made in relation to documents concerns what is often termed ‘state papers’. That term can be sourced to Gibbs CJ in Sankey v Whitlam where he discussed whether by their nature certain documents comprised a class of documents which ought not to be disclosed no matter what the documents individually contained. The discussion focused on cabinet minutes, minutes of discussions between heads of department and any document which relates to the framing of government policy at a high level. The Chief Justice accepted [at page 40] that ‘[n]o Minister, or senior public servant, could effectively discharge the responsibilities of his office if every document prepared to enable policies to be formulated was liable to be made public’ and that subsequently ‘ … some protection …’ had to be afforded. However, the argument in favour of an absolute immunity was rejected and he determined instead that documents in that class would only be withheld if it was necessary for the proper functioning of the government including the public service.

( … )

[59]    … The claim was made on the basis that disclosure of the documents would reveal the identity of the complainants and ultimately prejudice the proper functioning of Victoria Police. Before us counsel for the appellant appropriately conceded that in the event we are satisfied that the primary judge determined the case by reference to the contents of the documents and not on the basis that as a class of documents they are immune, her submissions addressed to the class claim must fail. As we will shortly demonstrate, the primary judge characterised the documents by reference to their content individually and not as a class.

( … )

[72]    … the primary judge carefully weighed the competing public interests. In considering the public interest in the administration of justice, she once again considered the actual documents and their importance to the substantive proceedings. In an obvious reference to Alister v R [(1984) 154 CLR 404], consideration was given to whether or not the documents were likely to produce material evidence or lead to material evidence being obtained. Her Honour was satisfied that both outcomes were unlikely. …”

The appeal was dismissed.

Mother’s former lawyer who filed an inappropriate Notice of Risk of Family Violence ordered to pay costs 

In Dwyer & Brent & Anor [2010] FMCAfam 1224 (10 September 2010) Riethmuller FM ordered the mother’s former lawyer to pay costs fixed at $3,300 being the cost of a hearing which had been lengthened by the action of that lawyer in filing a Notice of Risk of Family Violence alleging that the father “physically beat” the parties’ child based on instructions from his client that the father had smacked the child and that such physical discipline was not appropriate. 

Riethmuller FM at para 9 said:

“I do not accept the submission that describing an allegation of ‘smacking’ as being synonymous with ‘physically beats’ and I do not accept that any reasonable legal practitioner would see it as being synonymous. I note that the Notice of Risk of Family Violence was signed by the client but it was prepared by the lawyer.”

In explaining the costs order to be made, and prior to reviewing ss 117(2) and (2A) of the Family Law Act and Rule 21.07 of the Federal Magistrates Court Rules, Riethmuller FM said this at para 18:

“The result of the way the case has been conducted has been that the counsel for the father has now had to attend on three separate days. His fees are $1,650 per day. Having regard to the scale, and the seniority of counsel, this appears to me to be a very reasonable fee in the circumstances. The applicant seek costs in the sum of $3,300, being two days’ fees on the basis that properly managed, this was a one-day interim matter with directions and that that is what has ultimately occurred today. Instead, it has taken three days.” 

Mother wins appeal against coercive interim order requiring her to relocate with the children – Trial judge erred by not making an order as to parental responsibility and by disregarding contested evidence

In Eaby & Speelman [2015] FamCAFC 104 (27 May 2015) the Full Court (Thackray, Ryan & Forrest JJ) heard an appeal in a case where a mother had unilaterally relocated with the parties’ children to a town 765 kilometres away. At first instance Judge Turner ordered at an interim hearing that the mother return with the children and that the father spend time with them on alternate weekends, on each Wednesday and on special occasions ([2]).

The mother appealed. Ryan J (with whom Thackray & Forrest JJ agreed) said (from [13]):

“…     Her Honour did not make an order in relation to parental responsibility. Given that, on a final basis, both parties proposed that they have equal shared parental responsibility and the mother sought an order of that type on an interim basis, it is somewhat surprising that no reasons are given for her Honour’s decision not to address this issue. But in any event, the terms of s 61DA are clear, and in the absence of findings in accordance with ss 61DA(2), 61DA(3), or 61DA(4), the presumption that it was in the best interests of the children for the parties to have equal shared parental responsibility applied.

[14]    The effect of this is that her Honour should have ordered accordingly, and having done so she was obliged to address s 65DAA (Goode & Goode (2006) FLC 93-286 at [65(2)]; Marvel & Marvel [2010] FamCAFC 101).

[15]    These provisions lay at the heart of the proceedings with which her Honour was concerned, yet they were either overlooked or inexplicably ignored. I accept the mother’s argument that she was entitled to have her application determined in accordance with the law and that her Honour’s failure to properly apply the Act is an error of law.”

Ryan J also found error in the Judge’s approach to contested evidence at interim hearings, saying (from [17]):

“…     At [11] of her Honour’s reasons for judgment, she identified eight topics on which the parties gave conflicting evidence. They were matters of substance and were undoubtedly relevant to the case at hand. On the basis that the parties’ evidence was in conflict and/or lacked corroboration by an independent source, that evidence was disregarded. The point being, as her Honour said at [13], the proceedings were determined solely on the basis of the agreed facts.

[18]    Her Honour early in her reasons referred to Goode & Goode for guidance as to the correct approach to the determination of interim parenting proceedings. It is true that in Goode & Goode, at [68], the Full Court said that the circumscribed nature of interim hearings means that the court should not be drawn into issues of fact or matters relating to the merits of the substantive case where findings are not possible. However, that does not mean that merely because the facts are in dispute the evidence on the topic must be disregarded, and the case determined solely by reference to the agreed facts. Rather, the proper approach to contentious matters of fact in the determination of interim hearings is as explained in Marvel & Marvel, at [122] and [123], as follows:

[122] In SS & AH [2010] FamCAFC 13 the majority (Boland and Thackray JJ) discussed at [88] of their reasons the care necessary to be exercised in making findings in interim parenting proceedings. Their Honours said:

[88]   In our view, findings made at an interim hearing should be couched with great circumspection, no matter how firmly a judge’s intuition may suggest that the finding will be borne out after a full testing of the evidence.

[123] Later, at [100] their Honours amplified their comments and said:

[100] The intuition involved in decision-making concerning children is arguably of even greater importance when a judge is obliged to make interim decisions following a hearing at which time constraints prevent the evidence being tested. Apart from relying upon the uncontroversial or agreed facts, a judge will sometimes have little alternative than to weigh the probabilities of competing claims and the likely impact on children in the event that a controversial assertion is acted upon or rejected. It is not always feasible when dealing with the immediate welfare of children simply to ignore an assertion because its accuracy has been put in issue.

[19]    As would be immediately apparent, this approach enables the court to appropriately and carefully deal with contentious issues relevant to the welfare of the child, and for those issues to not be ignored.”

The interim orders requiring the mother to return with the children were set aside and the case remitted for re-hearing.

Finality of orders proposed by wife preferred to continuing financial entanglement proposed by husband – Section 81 of the Family Law Act 

In Eades [2009] FMCAfam 1165 (20 November 2009) the wife was allowed to take over from the husband the mortgage payments on the home and have the property in her name, his proposal being that she remain there for another nine years with the children and he continue the payments.

Bender FM said at para 42:

“ When questioned as to the evidence given by Ms Eades and her treating psychiatrist as to the negative impact upon her of having to continue to be financially entangled with him in the event that orders were made in the terms being proposed by him, it was the husband’s evidence that he did not accept that it would have such an impact upon her and he was of the view that she would be able to manage as she has done to date.”

Bender concluded at paras 84-87:

“ … I do not believe that the husband’s proposal is one that accords that finality as between the parties. His proposal requires that the parties continue to be financially entangled for another nine years, with the possible risk of the necessity of further litigation in circumstances that the husband either fails or is unable to meet his obligations to make mortgage and other payments in relation to the former matrimonial home in the intervening nine years. 

I also have real concerns that, in the circumstances of the ongoing health issues for [X] and [Y] in particular, the proposed equal division of the net proceeds of sale at the end of this period, or at any time earlier because of non-payment by the husband, is not just and equitable. 

I am also very concerned that there is a significant negative impact upon the wife if she were to be required to continue to be financially entangled with the husband. I accept completely her evidence and that of her treating psychiatrist that this will have an ongoing negative impact on her mental health, and should be avoided if at all possible. 

Whilst there is some possibility that the wife may not be able to continue to afford to remain in the matrimonial home in the medium term, I am satisfied from her evidence that she is a resourceful woman who will manage her affairs and those of her children in a sensible, competent and appropriate way. If at some time in the future she makes the decision that it is economically more viable for her to sell the matrimonial home and downsize, then that is a decision that she should be entitled to make.”

Costs – Party/party costs awarded in parenting proceedings against litigant in person – “General rule” that each party pay their own costs considered 

In Eades & Wrensted [2014] FCWA 64 (26 September 2014) Walters J heard a mother’s costs application where she had previously won her application to temporarily relocate to Thailand for 18 months with the parties’ children (Eades and Wrenstead [2014] FCWA 15, a summary of which is at our online “case notes – children”). The father had unsuccessfully opposed that application and was unrepresented. The mother sought costs on an indemnity (solicitor/client) basis (para 10).

After referring to s 117 of the Family Law Act, Walters J said (from para 17):

“…     The weight to be given to the various factors referred to in FLA s 117(2A) is a matter for the trial judge, but they must all be taken into account and balanced when considering whether the overall circumstances justify the making of a costs order: see I and I (No 2) (1995) FLC 92-625 and Hitch & Hitch (2012) 47 Fam LR 603. On the other hand, there is nothing to prevent any of the factors being the sole foundation for an order for costs: see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) & Fish and Another [2005] FamCA 158; (2005) 191 FLR 294 at 130.

( … )

[19]    There is nothing in the provisions of s 117 to justify any difference in approach to the question of costs in parenting cases. … all relevant matters referred to in s 117(2A) must be taken into account – as in any application for costs: see I & I (No 2) (supra) and Re David Costs [1998] FamCA 40 … see also Braithwaite & Braithwaite [2007] FamCA 468 …

[20]    Hawkins & Roe [2012] FamCAFC 77 was an appeal by a father from a costs order where the substantive proceedings had concerned parenting matters only. …

( … )

[22]    With the greatest of respect to their Honours [in Hawkins & Roe] the reasoning … appears to be inconsistent with previous authority. For example, the majority referred to ‘serious conduct’ – such as knowingly making a false allegation or statement – as ‘more predictably (attracting) the making of a costs order’ in parenting proceedings. In support of such a proposition, the majority cited the first instance decision of Brown J in Edgar & Halle (No 2) [2010] FamCA 260, but Edgar & Halle (No 2) (supra) is no more than a single example of a costs order being made in circumstances where one party made numerous false allegations and statements in the course of the proceedings … It is clear from the judgment, however, that such behaviour was not the sole ground for the making of the costs order. Indeed, Brown J referred to the relevant behaviour under the general heading of s 117AB of the FLA, and in the context of making a finding to the effect that section 117AB(2) applied. Given that s 117AB was inserted into the FLA in 2006 and repealed in 2011, Edgar & Halle (No 2) (supra) is arguably a less than helpful example of the predictability of costs orders in parenting proceedings.

( … )

[27]    The majority in Hawkins & Roe (supra) concluded their re-exercise of discretion as follows:

‘( … )

147.     Whilst the categories of occasions when costs may be ordered is not limited, the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made, or where one party is clearly motivated by self interest rather than the best interests of a child, then a judge may well conclude that there are circumstances justifying an order for costs. … ’

[28]    Again, and with the greatest of respect to their Honours, these paragraphs appear to be unsupported by authority. Relevantly, decisions such as I & I (No 2) (supra) contradict them. … Even if I am wrong in these observations, it is apparent that there is an internal inconsistency in the majority’s approach: if the categories of occasions when costs may be ordered are unlimited, then it is clearly impermissible to attempt to limit them by suggesting that, before a costs order can be made in a parenting dispute, the case ‘should’ have certain particular features. The inference from the majority’s comments seems to be that the ‘particular features’ that a parenting case ‘should’ have before a costs order can be made comprise the following:

a.      an allegation or finding of dishonesty;

b.      adverse findings about a party’s conduct of his/her case at trial;

c.      a complete absence of preparedness to compromise in the face of unambiguous expert evidence;

d.      the making of false allegations; or

e.      where one party is clearly motivated by self-interest rather than the best interests of a child.

( … )

[30]    To the extent that the majority might be perceived to be suggesting … that the discretion of a judicial officer at first instance to order costs should be fettered by rules or guidelines such as those listed above, I would simply record that the exercise of such discretion cannot be so fettered.

( … )

[32]    As Thackray J implies [in his dissenting judgment in Hawkins & Roe] statements to the effect that the ‘default position’ (that each party should pay his/her own costs) is not often displaced in parenting cases are simply statements of fact – or, perhaps, perceived fact. They cannot and do not mandate the setting of a higher standard or threshold test to be satisfied before a judicial officer at first instance can make an order for costs in parenting cases. Such an approach would be in direct conflict with the costs provisions of the FLA. …

[33]    The majority’s suggestion that the reason why cost orders are made less frequently in parenting cases (than in, say, property cases) is because ‘it is proper that parents be able to put their case in seeking orders which they believe to be in the best interests of their children’ seems directed towards creating or maintaining a distinction between categories of family law cases that may not, in fact, exist. …

( … )

[36]    It follows from the above that I propose to bear in mind that the general rule (to the effect that each party should bear his/her own costs) is not often displaced in parenting cases, and that I should be alert to the need to identify features which might justify a departure from the general rule. I recognise, of course, that some relevant factors might support an order for costs, while other relevant factors might not. At the end of the day, however, the balancing of such matters is a matter for the Court in the exercise of its discretion.”

As to the costs in this particular case, the Court considered that “the father’s inability to meet an order for costs does not, in itself, prevent the making of a costs order” (para 74); that the father’s opposition to the overseas sojourn was “wholly unsuccessful” (para 90); that offers of settlement were made (para 98); that while the father was not represented “he ‘participated in the trial process fully, confidently and relatively comfortably’” the Court describing the father as “an intelligent and determined man” (paras 77 and 78); that “the father used insulting language to the mother’s solicitors … that he sought to manipulate [the mother’s partner] emotionally … and that he failed or refused to show respect for the mother’s position regarding the sojourn” (para 79); that “much of the material contained in the father’s trial affidavit was of little or no relevance to the question of whether the sojourn should be permitted. … The material was irrelevant because it has been prepared in support of an application for shared care – which … was abandoned at the commencement of trial” (para 81) and that “some [of his] affidavit material … was prolix and argumentative” (para 83).

Walters J said “the father’s strategy appeared to involve metaphorically ‘drowning’ the mother in a sea of negativism and unnecessary detail” (para 85). 

In conclusion the Court said (at para 87):

“ … He was entitled to argue that the sojourn was not in the best interests of the children. However, because his approach to the litigation was as combative, overly inclusive and declamatory as I have described it above, it crossed boundaries of what might fairly be considered reasonable argument. It has therefore become relevant to his conduct as a litigant. Even if I am wrong in this regard, the father’s approach to the litigation is relevant under s 117(2A)(g) – under the heading of ‘other matters considered relevant’.”

The Court was not satisfied that an indemnity costs order was appropriate but ordered the father to pay the mother’s costs of and incidental to the proceedings on a party/party basis.

 

Editor’s note – The father’s appeal from this decision was dismissed: see Wrensted & Eades [2016] FamCAFC 46. AustLII’s headnote summarises the appeal decision as follows:

FAMILY LAW – APPEAL – COSTS – Where the appellant’s pre-trial conduct plainly justified an order for costs in favour of the respondent – Where there was no failure by the trial judge to abide by the principles in Div 12A of Part VIII of the Family Law Act 1975 (Cth) in considering the appellant’s pre-trial conduct – Where it was proper for the trial judge to take into account that the appellant was wholly unsuccessful when making an order for costs in favour of the respondent – Where there was no error in the trial judge considering the respondent’s offer to settle in circumstances where it could not be said that such an offer was unreasonable – Where to apply a distinction between categories of family law cases in exercising the wide discretion to order costs would place a fetter on that discretion which has no legislative basis – Where to the extent that the majority in Hawkins & Roe [2012] FamCAFC 77 suggests that certain features need to be present in a parenting dispute (as distinct for example from a property dispute) before a costs order can be made, this court respectfully disagrees – Where the trial judge was justified in making an order for costs against the appellant extending to the entirety of the proceedings – Where the trial judge’s decision was not unreasonable or plainly unjust – Appeal dismissed.

FAMILY LAW – APPEAL – COSTS – Where there were plainly circumstances justifying an order for costs – Where the appellant was wholly unsuccessful – Costs granted.

 

Mother allowed to temporarily relocate with children to Thailand for 18 months despite “Level 2” travel warning, “unsavoury reputation” of city of destination and possible civil unrest

In Eades & Wrensted [2014] FCWA 15 (5 March 2014) Walters J considered an application by a mother of two children (aged 10 and 4) to relocate from Perth to “City A” in Thailand for a period of 18 months where her partner had obtained employment, after which a previously ordered arrangement would resume in Perth. The father resisted the application based upon the “current political unrest in Thailand and the volatility” there, the amount of travel, the effect of the relocation upon the children’s schooling and his concerns as to the mother not fostering a close and loving relationship between him and the children (para 2). No “family report or single expert report had been obtained, or even sought” (para 24).

The mother’s proposal sought the temporary suspension of the existing parenting order (by which the children were spending time with the father on 5 nights per fortnight) and an order that there be at least 6 trips to Australia to facilitate the father’s time during the 18 month relocation (para 32).

Walters J said (at para 72):

“Although I have set out the law relating to parenting cases in some detail, and described how a relocation case should be approached, the current proceedings did not comprise a relocation case in the usual sense. The mother’s proposal is for the children to spend 18 months in Thailand with her and [her partner] Mr D. It follows that the proposal does not entail the children being permanently removed from their present place of residence. That is not to say that the changes to the present arrangements sought by the mother are insignificant, or that the father’s objections are to be treated lightly, but the temporary nature of the relocation and the comparatively substantial contact between the father and the children proposed by the mother serve to reassure the Court that the sojourn is unlikely to have the dire consequences foreshadowed by the father in his trial material. Importantly, and as discussed below, I have concluded that the sojourn will not result in the father having anything other than an ongoing, meaningful relationship with the children.”

The Court’s considerations and findings included (from para 173):

“…     … The mother proposes to cover the cost of travel to and from Perth on the various occasions that the children will be travelling, and she will be accompanying the children. The mother also proposes that the father should be permitted to visit the children in Thailand whenever he is minded to do so, and to spend time with them there. In addition, the father is to have significant Internet and electronic communication with the children while they are in Thailand. I accept, of course, that Internet and electronic communication is less satisfactory than face-to-face contact between the children and the father. I also accept that there is always the possibility of technical difficulties arising … By and large, however, the mother’s proposals are satisfactory and will serve to maintain the current close and positive relationship between the father and the children. …

[174] … I accept that the mother’s proposals involve lengthy and tiring travel arrangements for the children. I am satisfied, however, that the mother has the capacity to settle and properly care for the children during the relevant flights and transfers. I am also satisfied that she will ensure that the children are comfortable and entertained at all times.

[175] There is no credible evidence to the effect that the children will be unable to cope with the travelling inherent within the mother’s proposals….

( … )

[187] It is not readily apparent that either permitting or refusing the sojourn will lead to the institution of further proceedings. The orders proposed by the mother (and the orders made on 6 February 2014) provide for the current contact arrangements to be suspended during the sojourn. They will resume after the sojourn.”

Addressing the travel warnings (and the need to protect the children from harm), Walters J said (from para 192):

“…     I have not ignored the father’s reference to City A’s unsavoury reputation. I am satisfied, however, that the mother and Mr D will ensure that the children are insulated from the city’s seamy side.

( … )

[201] TAD1 [the relevant “travel advice document”] contains the following advice:

‘We advise Australians to exercise a high degree of caution in Thailand due to the possibility of civil unrest and the threat of terrorist attack. We advise you not to travel to the southern provinces (“the southern provinces”) due to high levels of ongoing violence in these areas.’

[202] There are four levels of recommendation. The levels are as follows:

a)      Exercise normal safety precautions (Level 1);

b)      Exercise a high degree of caution (Level 2);

c)      Reconsider your need to travel (Level 3); and

d)      Do not travel (Level 4).

( … )

[204] The TAD1 advice in relation to the southern provinces is at Level 4. Its advice in relation to the rest of Thailand (including City A) is at Level 2.

( … )

[208] Not unreasonably, the father placed considerable emphasis on TAD1 and the potential risks to the children of spending 18 months in Thailand. The mother and Mr D accept that risks exist, but urge the Court (and the father) to accept that they are mature and responsible adults who will do everything in their power to ensure that the children are not exposed to any unacceptable risks during the sojourn. I have no hesitation in accepting that proposition. By the end of the trial, the father also accepted that the mother and Mr D will do everything in their power to ensure that the children are not exposed to any unacceptable risks during the sojourn (even if he did not concede – or did not concede directly – that they are mature and responsible adults).

[209] In my opinion, the potential risks to the children reflected in TAD1 comprise the single most significant factor supporting a conclusion that the sojourn should not go ahead. Given the temporary nature of the sojourn and my findings about the mother and Mr D (and my other findings generally), and given the mother’s proposals for contact between the children and the father, the other broad areas of the father’s objections should be rejected.”

Walters J continued (at para 196):

“I have no doubt that a meaningful relationship between the children and each of their parents could be more easily promoted if the father and the mother were to live in relatively close proximity to each other, and if the children were to be able to see each of them regularly and frequently. I do not accept, however, that the children will not be able to have a meaningful relationship with the father during the sojourn. There is no evidence that their relationship with the father is likely to be less ‘meaningful’ if they see him during the regular and extended block periods to which reference has been made (and have telephone, Skype or other forms of Internet or electronic communication with him at other times) than if they see him on a weekly or fortnightly basis for comparatively short periods of time. I accept, of course, that the relationship between the father and the children will be different if they see him with the degree of infrequency inherent within the proposals associated with the sojourn. In any event, even if the father’s relationship with the children is indeed less ‘meaningful’ than it would be if the sojourn were not to be permitted, that does not lead to a conclusion to the effect that the relationship will not still be meaningful (even if it is not optimal), and it certainly does not lead to a conclusion to the effect that the relationship between the father and the children will be non-existent or close to non-existent (as the father has suggested).”

After adjourning the matter briefly to consider whether the Department of Foreign Affairs and Trade’s travel warnings had changed subsequent to elections being held in Thailand (and finding the warnings had not changed) an order was made permitting the temporary relocation. 

Section 66M application for maintenance of stepchildren must be coupled with an application for child maintenance under s 66F – Carnell [2006] FMCAfam 476 overturned – Judicial comity requires FCC to follow decisions of the Family Court of Australia unless plainly wrong

In Eames [2018] FamCAFC 204 (1 November 2018) the Full Court (Alstergren DCJ, Aldridge & Austin JJ) heard the father’s appeal from Judge Bender’s summary dismissal of his application for credit of child support payments he had made to third parties in respect of the parties’ two children and a declaration that he was lawfully obliged to maintain the two step-children of his new partner.

In dismissing his application Judge Bender followed a line of single judge decisions of the Family Court to the effect that an application for maintenance of step-children under s 66M of the Family Law Act must be coupled with an application for child maintenance (Tilman & Baxter [2016] FamCA 141; Mulvena [1999] FamCA 280; W & W [2000] FamCA 92; LP and DP & JM [2004] FamCA 1409; and JFF & JEC [2005] FamCA 1317).

The father appealed on the ground that there was Federal Circuit Court authority that a s 66M application did not require a concomitant application for child maintenance (Facey [2001] FMCAfam 4 and Carnell [2006] FMCAfam 476) such that there was an arguable prospect of success.

The Full Court said (from [24]):

“ … [W]e do not agree that there are competing authorities on the point. The position has been settled by a number of first instance decisions of the Family Court of Australia. There are two decisions of judges of the then Federal Magistrates Court of Australia to the contrary.

( … )

[26]   It is clear that a court … is obliged to follow decisions of a court to which an appeal lies (Viro v The Queen [1978] HCA 9; (1978) 141 CLR 88 at 93).

[27]   However, no appeal lay from a decision of a judge of the Federal Magistrates Court of Australia or lies from a judge of the Federal Circuit Court of Australia, to a single judge of the Family Court of Australia sitting at first instance. Federal Circuit Court judges are therefore not bound to follow first instance Family Court decisions. ( … )

[28]   This does not mean that the decisions of the Family Court should not have been followed. Judicial comity required that those decisions be followed unless a judge was convinced that they were ‘plainly wrong’. ( … )

[29]   A similar principle applies between judges of first instance ( … )

[30]   The course taken by the primary judge entirely accorded with these principles. Her Honour correctly followed the decisions of the Family Court cited to her – and not those of the Federal Circuit Court – because the weight of authority and because judicial comity obliged her to do so. …

( … )

[32]   In Tilman & Baxter [2016] FamCA 141 Foster J applied the following passage from a decision of McManus R in Mulvena & Mulvena [1999] FamCA 280; (1999) FLC 98-006 (‘Mulvena’) at [66]:

‘The purpose of the Division is to make provision for child maintenance and it places upon parents the primary duty to be responsible for the financial support of their children. The purpose of s 66M is to provide for those cases in which a parent cannot meet this duty and it is appropriate, in the circumstances of the case, to impose a secondary duty on a step-parent. It can be said, then, that if there is no application for child maintenance there can be no duty imposed under s 66M. That is to say, the duty only exists in conjunction with an application asserting a right to child maintenance.’

This conclusion is supported by the words of s 66N which clearly assume there is an application under Division 7. ( … )

( … )…

[36]   In LP and DP & JM [2004] FamCA 1409 … O’Reilly J found at [25] that:

‘ … the court should not embark upon any determination under s 66M unless in the context of, and thus ancillary to, the hearing and determination of an application for a child maintenance order under s 66F’.

( … )

[38]   O’Reilly J also expressly approved of the decision in Mulvena.

[39]   These decisions were followed by Faulks J in JFF & JEC [2005] FamCA 1317.

[40]   These authorities speak with one voice. An application under s 66M can only be brought in the context of an application for the actual payment of maintenance in respect of step-children. The provision cannot be used simply to support the making of a declaration of a duty in a general sense.

[41]   Contrary to this body of authority are two decisions of the then Federal Magistrates Court: Facey & Facey [2001] FMCAfam 4 … and Carnell & Carnell [2006] FMCAfam 476 … In each the view was taken that it was not necessary to seek an order for actual payment of maintenance for there to be an order made under s66M.

[42]   In Facey that position was quite open because the only relevant existing authority before the federal magistrate was a decision of a registrar of the Family Court.

[43]   In Carnell, after considering all of the authorities of the Family Court which we have discussed above, Jarrett FM said [at [49]]:

‘None of the abovementioned decisions is binding upon me, although they are all of considerable persuasive value. There are two decisions of this Court that appear at odds with each other.’

[44]   We consider that this paragraph does not afford the weight that judicial comity obliged his Honour to give to the decisions of the judges of the Family Court.

[45]   The appellant’s submission that there was ‘a divergence of opinion on a point of law between two trial level judicial officers’ misstates the position. The decisions were not of equal status. The Family Court is constituted as a superior court … (see s 21(2) of the Family Law Act; compare with s 8(3) of the FCC Act … (Cth)).

( … )

[52]   Given the abundant weight of authority and the obligation of a judge of the Federal Circuit Court of Australia to follow a decision of a single judge of the Family Court of Australia unless convinced that it is plainly wrong, we are of the view that the primary judge did not err in proceeding to find that the state of authority was such that there was no reasonable prospect of this aspect of the matter succeeding.

( … )

[54]   We note, of course, the provisions of s 66E which provide that the court must not at any time make a child maintenance order if an application could properly be made under the Assessment Act.

( … )

[65]   Having regard to the context in which s 66M is placed within Division 7, we are of the opinion that its role is to operate as a prerequisite for the making of an order under s 66N; thus an order under s 66M must be sought in the context of an application for maintenance under s 66N and has no standalone operation. This is because the purpose of the Division is to provide for the maintenance of children by orders that mandate a specific financial outcome in favour of the party seeking the child maintenance order.

( … )

[67]   … [A]n application for maintenance under s 66M is likely to arise between the partner of the step-parent and the step-parent where one is seeking an order for maintenance of those step-children …

[68]   In the present case, there is no evidence of any dispute between the appellant and his new partner as to the maintenance of the step-children. She seeks no such order against him. There is therefore no controversy between them. The seeking of an order under s 66M is therefore hypothetical or ‘theoretical’ … Such an order would not quell any dispute existing between any of the parties.

[69]   It was submitted by the appellant that the order under s 66M was appropriately sought by him because, if granted, it could have the effect of reducing the amount of child support payable by him to the respondent. In Facey and Carnell the federal magistrates held that such an effect justified an order under s 66M even though no order was sought under s 66N.

( … )

[73]   We consider the opinion we have expressed that an order can only be made under s 66M in the context of an application under s 66N is consistent with [the] … provisions of the Assessment Act. A step-child will … be taken to be a relevant dependent child for the purpose of the Assessment Act only where an actual order for payment of maintenance has been made. It is logical that an actual financial obligation to maintain a step-child should have a possible effect upon the assessment of child support as opposed a general unspecified duty to maintain which may have no actual financial consequences whatsoever. That would be the effect of an order under s 66M only.

( … )

[76]   Absent such an order, the seeking of an order under s 66M is nothing more than an opportunistic attempt to reduce the amount of child support payable without a matching obligation to pay maintenance for the step-children.

[77]   It follows then that the seeking of a mere order under s 66M for the purpose of reducing child support payable to another person is a purpose that is collateral to the legislation and ought not be permitted.”

The father’s appeal was dismissed with costs. 

Valuation of minority shareholding in private company

In Eaton [2012] FMCAfam 9 (17 January 2012) the husband owned shares in three companies – his most significant interest being in “[P2] Company”. The shares in the company had been held by three families (including the Eaton family) since its incorporation in 1954. The husband was the general manager of its business which employed about 10 staff. The wife had worked for the company in the past. The husband’s shares represented 45.82% of the issued shares. The corporate trustee of his family trust (“Eaton Nominees”) held a further 1.35%, a combined holding of 47.1%. There were nine other shareholders spread between three other family groups, although the husband’s mother held some shares as well. [P2] Company had three directors, each representing their families’ interests. Its articles included restrictions on the sale of shares, voting rights and the requirement that all board resolutions be unanimous.

The husband held 21% of the voting rights, totalling 25.38% by adding Eaton Nominees, being insufficient votes to be able to pass an ordinary resolution (50%). Jarrett FM found (paras 18-19) that the husband had no control over his co-directors, who in the past had both acted upon the husband’s advice and not done so. Jarrett FM was “satisfied that [the husband] does not have a controlling shareholding in the company” (para 20).

The parties disagreed as to the value of the company’s assets, including the business it undertakes. Accountants called by each party made a joint statement that the “basic or face value” of the shares was about $1.2m and $35,000 (Eaton Nominees) respectively, disagreeing on two issues. One issue was their proviso that real estate held by [P2] Company should be valued by others with expertise in such valuations. 

Jarrett FM then said at paras 26-27:

“The significant dispute between the parties and their respective experts is about the ‘discount’ that should be applied to the value of the shares to account for Mr Eaton’s minority shareholding. Both experts, however, recognise that the appropriateness and level of any ‘discount’ is a matter to be determined by the Court.

The object of the valuation exercise is to determine the value of the shares to Mr Eaton: Harrison & Harrison (1996) FLC 92-682 at p 83,087; AJW & JMW (2002) FLC 93-103 at [14].”

Jarrett FM then set out Warnick J’s discussion in Ramsay (1997) FLC 92-742 as to whether there is a market for the shares; evidence of any market value (if there is) “even if there is no intention to sell”; any allowance for lack of realisable value (and such issues as the likelihood of the shareholder gaining control of the company and of particular benefits being received by the shareholder in the future) being best left to the Court, the valuer to be “concerned with the value to the party if he/she gains control … [and] the value if the party remains a minority shareholder” and the value of the shareholding “both on the basis that the benefit is received and that it is not”.

Jarrett FM then applied the Full Court’s statement in Georgeson (1995) FLC 92-618 at p 82,218:

“There is no fixed rule as to the proper method of valuation of shares in Family Court proceedings although in some circumstances a particular methodology may be preferable; see Mallet v Mallet (1984) 156 CLR 605.”

Jarrett FM at paras 30-32 compared the valuation approach of each expert (one applying a discount to the net asset based value of the shares and the other relying on some historical sales of shares in the company) and examined that evidence at paras 33-41, concluding at paras 42-44:

“In my view, the factors which impact upon the discount to be applied to the asset derived value of the shares are:

a)        that Mr Eaton does not hold a controlling number of shares, either directly or indirectly;

b)        that Mr Eaton’s single or combined shareholding on an ordinary vote or poll does not provide him with authority to pass an ordinary resolution of the company, or authority to pass a special resolution;

c)        that Mr Eaton has no authority or power to overrule any decisions of the directors (of which he is but one of three) relating to share transfers, dividend declarations or any other matters;

d)        the company is controlled by its three permanent directors who cannot be removed by an ordinary vote of shareholders. Even a special resolution comprising 75% or more of the shares of members present or by proxy cannot remove the permanent directors;

e)        the board of directors cooperate in the making of resolutions, the company being run for the benefit of the three families and their descendants;

f)         and that no dividends have been declared by the company for the past three years at least and have only been declared infrequently prior to that.

I conclude that the higher end of the range of discount contended for by Mr M is too little. It does not properly reflect the factors set out above. Nor do I think that the figure arrived at by Mr P is sound. I think that his opinion was influenced by the misunderstanding that he operated under concerning Article 85(c). His view, essentially, was that control of the company was vested in the directors and all shareholders rights were in abeyance whilst soever the permanent directors remained in office. That view was clearly erroneous.

In my view an appropriate discount to reflect the matters discussed above is 35% of the asset based value of the shares. That means that Mr Eaton’s shares should be seen as having a value of $230.65 per share – a total asset value of $782,364.80. 

I find accordingly.”

Proper avenue of appeal from Magistrates Court of Western Australia

In Eckett [2010] FamCAFC 39 at paras 33-35 and 52 (12 March 2010) the Full Court (Coleman, Warnick and Thackray JJ) held that amendments to s 94AAA of the Family Law Act 1975, in conjunction with s 96(1AA), gave the Magistrates Court of WA constituted by a Family Law Magistrate of WA “substantially the same jurisdiction and appeal structure as the [FMC]” so that an appeal from a Family Law Magistrate is now to be heard by a Full Court, unless the Chief Justice determines it is appropriate for it to be heard by a single judge. “Importantly”, hearings de novo no longer apply.