Procedure – Form of consent orders sought in FMC incorrect

In Binns & Tibbles [2010] FMCAfam 1054 (28 September 2010) Scarlett FM pointed out to the parties that their proposed consent order’s covering order was incorrect in reciting Part 10.4 of the Family Law Rules and in referring to a federal magistrate as a “registrar”, adding this at para 6:

“The errors are fundamental and fall well below the standard required by the Court. For this reason, and in order that practitioners who appear in this Court can avoid the embarrassment of having their documents rejected, it appears to be necessary to set out a few matters that some practitioners have apparently failed to grasp over the past ten years or more since the Court first sat in July 2000.”

Scarlett FM set out the correct procedure for filing consent orders in the FMC (Editor’s note – also set out at pages 8-3 to 8-6 of TFLB) and concluded with the following tip:

“A useful list of the Family Law Rules and Federal Court Rules applied in the Federal Magistrates Court can be found in Schedule 3 of the Federal Magistrates Court Rules.”

Full Court upholds wife’s appeal against court’s finding that two advances retrospectively secured by mortgages in favour of husband’s father were loans – Court also failed to provide reasons for its conclusion that the parties should be equally responsible for such loans

In Bircher and Anor [2016] FamCAFC 123 (15 July 2016) the Full Court (Strickland, Murphy & Hogan JJ) heard the wife’s appeal against a property order made by Judge Demack in a case where the pool was $185,171, $165,493 of which was superannuation so that the parties were “effectively litigating over disposable net assets of about $20,000” ([16]) due to a finding that $64,467 held in a solicitor’s trust account was not an asset but a debt payable to the husband’s father (the second respondent) in repayment of two loans he was found to have made to the husband during the parties’ relationship. Mortgages had been given by the husband in favour of his father retrospectively so as to secure the loans. The wife’s case at trial was that the loans and mortgages were shams.

The Full Court said (from [28]):

“[28]   The respective contentions of the wife on one hand and the husband and second respondent on the other as to the alleged loans required the trial judge to confront and make findings in respect to these questions by reference to the evidence before her, including:

(a)   Were there agreements for loans as alleged or at all?

(b)   If so, when were those agreements made?

(c)   What were the terms of the loans, including but not limited to:

•        The term of the loan;

•        The rate and calculation of interest if any;

•        The required repayments;

(d)   Were mortgages executed as alleged and when?

[29]    If her Honour’s conclusions were that the loans and mortgages existed, given that the loans were uncontroversially those of the husband alone, her Honour was required to determine if the parties should together bear those liabilities and, if so, in what proportion.

[30]    In answering those questions her Honour needed to examine the evidence so as to address the wife’s claim that there were significant inconsistencies in the evidence of the husband and the second respondent which called into question the authenticity of the alleged loans and the mortgages purportedly securing them.

[31]    It goes without saying that it was a matter for her Honour as to what weight and veracity she might attribute to the evidence of the relevant parties. It was, though, not open for her Honour to ignore evidence plainly relevant to the case advanced by the wife – or, at least, not without explaining why no or negligible weight was attached to it in arriving at her ultimate conclusions. With respect to her Honour, and while acknowledging the difficulties her Honour faced, we are bound to conclude that her Honour did not do so and injustice has been occasioned to the wife as a result.”

The Full Court analysed some of the inconsistencies in the evidence of the husband and the husband’s father as to the loans, such inconsistencies including discrepancies between the mortgage documents that were signed retrospectively and the alleged terms of the loans when the moneys were originally advanced, saying (from [46]):

“[46]   No explanation is given why a condition of the initial agreement that a ‘flat’ interest rate would be paid, changed three months later to a requirement for a compound interest rate to be paid, nor as to the apparent change of the conditions by reference to which the mortgage would be registered.

[47]    During cross examination by counsel for the wife, the second respondent admitted that the 2010 mortgage document contained details about a required minimum monthly repayment, and a standard monthly payment, and that interest at six per cent was then recorded as compounding and, in essence, that this was the first time such conditions appeared. He also admitted that the ‘attached schedule’ (that is, attached to the 2010 mortgage) talked about terms that were different to the original loan, an example being that the period was then five years. Counsel suggested to him that despite his evidence … the [terms of the] 2010 mortgage … were quite different in substance from the original loan documentation …

( … )

[56]    With great respect to her Honour, we do not regard it as sufficient to find that ‘the loan was real and the interest properly sought’ without making a finding as to the terms of the loan and the evidence accepted by her Honour which sustains that finding. While it might be the case that conversations between the husband and the second respondent are ‘recorded … with a great deal of particularity’ in the second respondent’s affidavits, it is not clear by reference to her Honour’s reasons how any inconsistencies between the accounts given by the second respondent (many of which, inadmissibly, purport to give evidence of what was in the husband’s mind and the like) are dealt with.

[57]    It is entirely open to her Honour to have found … that the husband and wife should share in such liabilities as are owing, but we cannot find any reasons in which her Honour addressed the wife’s case in respect of the amount of any such loan and whether the wife should share in the totality of the liability as claimed.

[58]    In a similar vein, it is not to the point that the interest that ‘[the second respondent] sought to enforce is a reasonable amount and that it is reasonable, given that he loaned this money in 2001/2002, that there be interest due and owing on that money’.

[59]    The second respondent’s entitlement to interest is entirely dependent upon the loan agreements entered into between the husband and the second respondent (if they be found to exist or to exist as claimed). ( … )

[60]    Her Honour also does not address the fact that the husband (i.e. the borrower) does not at all depose to the terms of the agreement. In particular, he does not depose to the rate of interest or how it might be calculated when detailing the terms of the agreement reached between him and the second respondent.

( … )

[62]    The wife alleged that not only were the loans shams, but so, too, were the mortgages said to secure the loans. We cannot see that her Honour addressed this issue at all. In essence, the wife asserted that the existence of the mortgages was a recent invention or that they were created so as to deny her a property settlement entitlement. That issue was not, with respect, ‘neither here nor there’ as her Honour found at [35]; it was central to the wife’s case.

[63]    In those circumstances, we consider ourselves bound to conclude that there is an absence of findings by the trial judge in respect of the case advanced by the wife, and, concomitantly, a failure to provide reasons which adequately explain the path by which her Honour reached the conclusions that she did. …”

The matter was remitted for re-hearing, the husband and his father being ordered to pay the wife’s costs of the appeal. 

No error in decision to exclude late inheritance from pool – Appeal allowed as no assessment of contributions made as to the superannuation pool

In Bishop [2013] FamCAFC 138 (6 September 2013) the Full Court (Finn, May and Strickland JJ) considered a decision in respect of a 23 year marriage which produced 3 children and assets of $1.1 million, not including $250,000 which the wife inherited about 12 months before separation (under the one roof). The husband had owned (with his mother) a 900 acre farm which was partitioned so that 600 acres stood in his sole name about 2 years after marriage.

At first instance, the Court determined that an equal weighting as to s 79(4) was appropriate, despite calling the husband’s initial contribution of the farm “a significant financial contribution” which “could be valued in 1983 … [as being worth] … $300,000” (para 6). The Court said at first instance, as quoted by the Full Court at para 58:

“Were it not for the wife’s contributions to the welfare of the family in the form of her financial support of … [the parties’ child] … post-separation, and the capital contributions made by her … I consider that the contributions of the husband in the form of … [the farm] … at the time the parties married and the Gosper contributions made by the husband’s parents … would have required some small weighting in the husband’s favour (something of the order of ten per centum ie. 55/45% in the husband’s favour). But I think that those matters leave me in a position where I should regard their contributions-based entitlements as being equal. In the context of a 23 year marriage it is not appropriate for me to pretend that I am undertaking something analogous to an accounting or auditing exercise.”

The Full Court found no merit in the husband’s appeal of this finding, saying (at para 59) that while “another judge may have made a more generous contribution finding to the husband on the basis of his initial contribution … we are not persuaded, having regard to the limitations on appellate interference with discretionary judgments on the basis only of weight … that our interference with his Honour’s assessment of an equality of contribution … would be justified”.

The Full Court also dismissed the husband’s ground of appeal as to the Court having excluded the wife’s inheritance, albeit expressing some reservation about how the decision was expressed. The Court at first instance said (quoted at para 25 of the Full Court’s judgment):

“I think I am constrained by authority to leave the inheritance received late in the marriage by the wife out of the calculation of the pool. Bonnici & Bonnici (1992) FLC 92-272 … was a decision of the Full Court of Australia relied upon by both parties before me.”

and (at para 27 of the Full Court’s judgment):

“ … I think on the facts of this case I am bound to exclude the inheritance from the calculation of the asset pool. It was received in the twenty-first year of a twenty-three year marriage and it has been entirely quarantined by the wife (without the objection of the husband) from their dealings since the date of its receipt”.

The Full Court said at paras 28-29:

“We agree with the assertion … that his Honour was not constrained by what the Full Court said in Bonnici about the treatment of inheritances. As the Full Court emphasised in that decision, and as we cannot emphasise too strongly, each case in this jurisdiction will depend on its own facts or circumstances.

However, we would not interfere with his Honour’s decision because of his view that he was bound by authority to exclude the inheritance from the calculation of ‘the asset pool’. This is because his findings or conclusions in the last three sentences of [41] would support the approach which he took of excluding the wife’s inheritance from the ‘asset pool’ and regarding the husband’s contributions to it as ‘nil’. His Honour did, however, have regard to the inheritance in the context of his consideration as to whether any adjustment was required to be made to the division of property to which the parties had contributed, on account of the matters contained of s 75(2) of the Act. This, in our view, was an approach open to him.”

The appeal was allowed on the ground that “his Honour did not, in his reasons, give any consideration to the parties’ contributions to their respective superannuation interests [considered in a separate pool]” (para 48). 

The case was remitted for rehearing.

Equal time despite father’s past violence – Mother’s allegation against him of child sexual abuse rejected – Equal shared parental responsibility  

In Biss [2009] FamCA 1234 (16 December 2009), despite a history of violence by the father (found not to be continuing beyond the breakdown of the relationship) and the mother’s allegation against him of child sexual abuse of one of their children, O’Reilly J rejected the existence of any identified risk of sexual abuse. An order was made for the parties to share equal parental responsibility and spend equal time with the children.

The Court (at [214]-[217]) concluded as to the children’s best interests:

“In my view, having regard to all of the evidence, the submissions, the statutory matters I am required to consider, and in particular having considered the positive and negative factors as to whether equal time is in the children’s best interests, I have determined firmly that it is.

Put simply, in my view, the positive factors to which I have referred outweigh the negative factors to which I have referred.

The concerns as to alleged sexual abuse of P have been negatived. The aspect of the father’s family violence has been put into current context. The successful implementation and maintenance by the parties of an equal time regime since December 2008, and the considerable changes already facing the children once judgment is given of commencing to live with the mother, Mr W and C, together with all other matters I have mentioned, satisfy me that an equal time order is in the children’s best interests.

I recognise that the interim orders made on 17 December 2008 provided for equal time week about, whereas the parties and the independent children’s lawyer now propose that the children spend half of the school holidays with each parent. Thus, any equal time order, if made, will operate so as to provide for equal time during the school terms, and half of the school holidays with each parent.”

The Court also found (at [229]) that an order for equal time would be “reasonably practicable” within the meaning of s 65DAA of the Family Law Act.  

Independent children’s lawyer – Review of ICL’s role – Liberty granted to ICL to inform contact supervisor of father’s mental health issues

In Black & Cauldwell [2009] FMCAfam 1079 (26 October 2009) Coates FM reviewed the role of an ICL. The Court varied an interim order (appointing an ICL and for a father’s time with a child to be supervised) by adding liberty to the ICL to inform the supervisors (a nanny agency) of the father’s potential mental health issues.  


Interim hearing between parent and non-parent after the death of the child’s primary carer (the mother) 

In Blackett & Leicester [2014] FCCA 1619 (18 July 2014) following the death of the mother interim parenting proceedings were heard before Judge Lapthorn between the maternal grandparents of a 10 year old child (‘X’) (who sought equal shared parental responsibility and an order that the child live with them) and the father seeking sole parental responsibility and an order that the child live with him. The grandparents lived on a farm with their three grandchildren – twins A and B who had just turned 18 and X who was in year 5 at school (para 8). The mother died in February 2014. She had separated from the father in 2007 after which the children “lived primarily with their mother and spent time with the father” (paras 10-12).

The Court said that the “father has played a significant role in the lives of his three children” (para 12) while the “evidence is also clear that the maternal grandmother played a significant role in helping the mother care for the children particularly during periods of time when the parents were separated and when the mother’s health was poor. The mother’s health deteriorated in 2013 and by September that year she and the children moved … to live with the maternal grandparents. The grandmother asserted she and the grandfather took on the major care of the children during this time” (para 13).

The Court said (from para 16):

“…     …The Full Court of the Family Court in Goode & Goode [[2006] FamCA 1346] set out the approach to be adopted in interim proceedings in light of the history of the courts preserving well-settled arrangements pending a final determination … It was submitted by the solicitor for the father that the approach laid out in Goode is problematic in this case as that authority identified the procedure to be adopted in disputes between parents whereas in this case the dispute is between grandparents and the father. Whilst the particular nature of the dispute may require some adjustment of the way in which the court considers the legislative provisions, the framework itself remains the means by which the court must determine a parenting application. To that extent I do not accept the father’s submission and I respectfully adopt the views of Moore J in Potts & Bims [[2007] FamCA 394] to which I will refer below.

( … )

[23]    In determining what is in a child’s best interests the court must consider the matters set out in s.60CC. Some of these provisions also appear to relate only to parents. Moore J in Potts & Bims considered the approach to be adopted in cases between a parent and a non-parent. Her Honour had this to say:

‘The provisions about children’s arrangements are to be found in Part VII of the Family Law Act 1975. The concept of best interests of the child is at the heart of it and that is designated to be the paramount consideration in making any parenting order. Some Part VII provisions refer to ‘parent/s’ which, given the word’s ordinary meaning and in the absence of an expanded definition or some other descriptor such as ‘party’, means a number of sections do not apply when assessing ‘best interests’ in proceedings that are not between parents but between a parent and a non-parent [eg. relative]. Section 60B(1) and (2) set out the objects of Part VII and the principles underlying them. However, a number are expressed to apply to ‘parent/s’ and so are excluded in proceedings of the latter kind. For example, paragraphs 60B(1)(a), (c), and (d) fall away and what remains is paragraph (b); namely, the object of protecting children from physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence. Similarly, paragraphs 60B(2) (a), (c) and (d) fall away as underlying principles and there remains paragraph (b); namely, [‘except when it would be contrary to a child’s best interests’] ‘children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives)’. With objects and underlying principles as a guide, the determination of what is in a child’s best interests requires the court to consider both ‘primary considerations’ and ‘additional considerations’ set out in s 60CC. But again the use by the legislature of the word ‘parent/s’ in a number of those considerations operates to exclude those factors in proceedings between a parent and non-parent. Falling within that group is the primary consideration in paragraph 60CC(2)(a) and the additional considerations at paragraph (c), (e), and (i). However, that does not mean those considerations are to be ignored if the facts of the case raise them as issues because they can be addressed under other considerations such as paragraph (f) [capacity to provide for needs] or, if nowhere else, under paragraph (m) [any other fact or circumstance relevant]. On that same analysis, the presumption of equal shared parental responsibility imposed by s61DA and, if it applies and the order is to provide for equal shared parental responsibility, consideration of the child/ren spending equal time or substantial and significant time, as set out more particularly in s65DAA, are not prescribed pathways in the reasoning process towards a best interests conclusion in proceedings between a parent and non-parent. Nonetheless, the particular applications may make it necessary to address those outcomes in any event.’

( … )

[25]    ( … ) In light of the mother’s death the father has parental responsibility for X (s 61C(1)). As the presumption [that it is in the best interests of the child for the parents to have equal shared parental responsibility] only applies as between parents it is not applicable in this case (s 61DA). The court has power though to make a parenting order conferring parental responsibility on a person other than a parent.

[27]    ( … ) Save for the father’s concern that the grandparents will not promote a positive relationship between him and X I am satisfied the grandparent’s proposal will not see the child’s relationship with his father compromised. They proposed the child spend time with the father on alternate weekends and during school holidays. The child has for the large part spent regular time with the father but has not primarily lived with him since the mother and father separated. X was only three years old when that occurred. ( … )

[28]    If I was to adopt the father’s proposal however the child would be uprooted from the home he has had with the grandparents since September last year and separated from his older sisters. To do so at this interim stage without the benefit of a family report risks undermining a sense of stability for the child. When that is considered in the context of the recent loss of his mother I am of the view that it would be both unwise and not in the child’s best interests.

( … )

[35]    At this interim stage I do not propose to give any weight to what the grandmother says about the child’s wishes. Any expression of a wish to both the father and grandmother would be contextual and significantly influenced by any sense of loss he would be feeling as a result of his mother’s death. It would be appropriate to have a family report writer assess any wishes he expresses along with his level of maturity and understanding of the consequences of those wishes.”

As to parental responsibility the Court said (at paras 45-46):

“Whilst I have sympathy for the father’s position … I have concluded that at this interim stage the child should remain living with the maternal grandparents I am of the view that the parties should share the child’s parental responsibility. The final hearing has been set down to be heard in four months’ time. There should not be any major decisions affecting this child’s long term care in that time but it might overcome some difficulties that can arise in relation to a child’s medical and educational needs if the people with whom the child is living shares the parental responsibility with the father.

The court is required to disregard the allocation of parental responsibility made at interim proceedings such as these when it considers the matter on a final basis (s 61DB). This will mean that when I determine where the child should live on a final basis this issue will be looked at afresh.”

The Court ordered that until further order the child continue living with the grandparents, that they and the father have equal shared parental responsibility and that the father spend time with the child each alternate weekend. An order was also made for a family report and the appointment of an ICL.

Financial agreement in contemplation of marriage made 3 days before marriage – Thai wife had limited English – Agreement set aside on the ground of fraud due to non disclosure of value of husband’s pension – Court would have been satisfied of duress too 

In Blackmore & Webber [2009] FMCAfam 154 (6 April 2009) the parties entered into a s 90B financial agreement in contemplation of marriage, marrying 3 days later. A child soon followed but they separated two years later. The Thai wife had limited English.

Bender FM set aside the agreement on the ground of fraud due to non?disclosure of the value of the husband’s pension.

Although not required to determine the issue, the Court also found that it would have been satisfied of duress, where:

  • the BFA was first produced to the wife 5 days before the wedding;
  • the husband told the wife the wedding was off should she not sign the BFA;
  • the wife was 4 to 5 months pregnant with the husband’s child; and
  • the wife’s visa was due to expire had the wedding not proceeded.

The Court also found that it would have been satisfied that the husband had engaged in conduct that was, in all the circumstances, unconscionable, finding that the wife was at a “special disability” her lacking English skills at the date the Agreement was signed, in addition to the factors set out above.

De facto husband fails in his appeal against setting aside of consent order under s 90SN(1)(c) where as a result of his default (by paying $130,000 to respondent 13 months late) the increase in value of property during that delay meant that she would not be receiving her entitlement under the order

In Blackwell & Scott [2017] FamCAFC 77 (28 April 2017) the Full Court (Aldridge, Kent & Watts JJ) heard Mr Blackwell’s appeal in a de facto property case where a consent order was made in February 2014. The order provided for him to retain an investment property (the Suburb K property) and pay the wife $130,000 within 90 days. It was common ground that that sum had been agreed upon as arriving at an equal division of property between the parties. Upon the appellant’s non-payment, the respondent applied for the setting aside of the order in September 2014, the appellant ultimately paying the required sum in June 2015 with interest in November 2015. 

Between the date of the order and 26 October 2015 the Suburb K property increased in value from $860,000 to $1 million according to a valuer. The respondent argued that the order should be set aside as the increase in value during the period of default meant that she would receive far less than an equal division of property. The appellant argued that his default had not caused the increase in property value as the section requires. 

Judge Brewster granted the respondent’s application and the appellant appealed.

Each member of the Full Court delivered separate reasons but agreed that the appeal should be dismissed.

Kent J said (from [36]):

“Section 90SN(1)(c) relevantly provides:

90SN Varying and setting aside orders altering property interests

(1)     If, on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is satisfied that:

…

(c)     a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

…

the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 90SM in substitution for the order so set aside.

[37]    … [T]he counterpart to s 90SN(1)(c) is s 79A(1)(c). But for the references in s 79A to ‘section 79’ whilst s 90SN refers to ‘section 90SM’, the respective sections are identical. It follows that judicial pronouncements on the proper interpretation of s 79A(1)(c) are relevant to our consideration of the proper interpretation of s 90SN(1)(c). ( … )

[38]    ( … ) [T]he essence of the husband’s contention is that the substantial increase in the value of the Suburb K property is not causally related to the husband’s default. The husband contends that the wife had to prove a cause and effect between the default on the one hand, and the increase in property value on the other, for the subsection to have operation. ( … )

( … )

[46]    Specifically with respect to subsection (c) of each of s 79A(1) and s 90SN(1), the subsection is only engaged when a person is in default of a property adjustment order. Given that the usual civil remedy when default of an order occurs is enforcement, the purpose of each subsection can be seen to reflect the recognition that in some instances of default, enforcement will be an inadequate remedy to achieve justice and equity. … Ensuring that justice and equity is achieved in the context of default of an order having occurred is the central purpose of subsection (c).

( … )

[51]    … I note that the interpretation and application given to s 79A(1)(c) (the counterpart provision) by the Full Court of this Court in Monticone [[1989] FamCA 92] does not appear to lend support to the husband’s narrow construction.

( … )

[55]    Whilst the facts in … Monticone … differ substantially from the facts of this case, the focus in Monticone upon circumstances is, I consider, important. No definition or prescription as to the meaning of ‘circumstances’ as it appears in s 90SN(1)(c) is contained within the subsection or in the Act. There is no reason to conclude that it is to be given other than its ordinary meaning. ‘Circumstances’ obviously has a wide meaning capable of embracing a wide variety of things. ( … )

[56]    The subsection thus directs attention to relevant ‘circumstances’ – a potentially wide category of things – existing at the time of the making of the order in order to identify what relevant ‘circumstances’ can be seen to have ‘arisen’ (ie presented themselves).

( … )

[58]    The relevant ‘circumstances’ when the subject consent orders of 24 February 2014 were made, included that the orders were intended and designed to effect an equal division of the parties’ net assets. The adoption of $130,000 as the cash sum to be paid to the wife was plainly not arbitrarily selected, but was adopted to effect an equal division given, relevantly, the value of the Suburb K property at the time at $600,000 to $650,000. ( … )

[59]    By prescribing a period of 90 days for the payment the parties accepted, and the Court endorsed by making the consent orders, that it was just and equitable that there be an allowance of 90 days to effect the payment. Had the value of the Suburb K property risen or fallen within that 90 day period, the relevant circumstance was that both parties had accepted that prospect and the Court had endorsed that acceptance in making an order in those terms.

[60]    In contrast, the critically important circumstances arising upon and from the husband’s continuing default over the 13 month period referred to, included that when the wife finally received the payment of $130,000, even with the subsequent payment of interest, she was not then receiving an equal division by reference to the worth of the Suburb K property at the time of receipt. 

[61]    In short, the relevant circumstance of and at the time of the consent order was that payment to the wife of $130,000 in accordance with its terms, meant that the wife would be receiving, at the time of payment, her equal entitlement to the net assets. … The relevant circumstances arising as a result of the husband’s default included that payment of $130,000 even with interest, could no longer achieve the wife receiving anything approximating an equal entitlement at the time the payment was made.

[62]    In my judgment the husband’s central contention ignores the proper meaning to be given to ‘circumstances’ as it is used in the unitary terms of the subsection. The subsection only operates if there has been default but its remedial purpose in that event is to confer a discretion to vary or set aside the order.

[63]    The formulation by the husband of a test of causation in terms that the increase in the value of the Suburb K property was caused by the market, and is not the result of the husband’s default, is misconceived. Properly expressed by reference to the terms of the subsection, the substantial increase in the value of the Suburb K property is the reason why the husband’s default results in circumstances arising to make it just and equitable to vary or set aside the orders.”

Aldridge J disagreed that Monticone “lends any assistance to the determination of issues” ([2]) and said (from [11]):

“The question posed by s 90SN is whether the property orders made under s 90SM continue to be just and equitable or appropriate, subject to the terms, in this case, of s 90SN(1)(c) being met, including the requirement that the relevant circumstances must have arisen as a result of default. It is therefore entirely proper to look at the content and effect of the s 90SM orders to identify the relevant changed circumstances. 

[12]    The primary judge found, without challenge, that the evident purpose of the property settlement orders was to achieve an equal division of the property of the parties. Thus, to use the words of s 90SM, it was just and equitable and appropriate that there be such a division and that that division be effected by a payment to the wife of $130,000. 

[13]    The husband’s delay in complying with the orders was lengthy and substantial. By the time he did comply with the obligations imposed upon him by the orders, the wife did not receive anything close to 50 per cent of the matrimonial property, which was both the intent and effect of the orders at the time the parties consented to them. …

[14]    Thus whilst it is entirely correct to say that the husband’s default did not cause house prices to rise, that is not the relevant enquiry. The relevant enquiry is whether circumstances have arisen as a result of the husband’s default that would make it just and equitable to reconsider the earlier orders. The circumstances that arose were that, as a common sense proposition, the wife received significantly less than an equal division of the property and the husband received considerably more. That difference resulted directly from the husband’s delay in complying with the orders. The primary judge was therefore entitled to find that the position of the wife had arisen as a result of the husband’s breach. 

[15]    It is not the point that the wife got the bargain to which she agreed. The point is that by reason of the husband’s default the agreed equal division of the parties’ property did not take place.”

Watts J agreed with Aldridge J and said (from [91]):

“The ground in subsection (c) contains three elements: 

a)      A default;

b)      Circumstances that have arisen as a result of that default; and

c)      Having regard to those circumstances (and importantly not all the circumstances that have arisen since the order was made) the applicant bears the onus of establishing that it would be just and equitable to change the order.

( … )

[107]  The central assertion in the husband’s case is that the wife cannot rely upon the increase in the value of the major asset as being the circumstances which have arisen as a result of the default. If that was the wife’s case then her argument that the subsection (c) ground was made out would fail because it could not be said that the husband’s default caused the rise of the value of real estate in the Sydney property market. That however is not the wife’s contention. The circumstances to which the wife points as having arisen as a result of the husband’s default are that she has not got the bargain she negotiated, nely a property settlement order that would have the effect of dividing the net value of the assets of the parties equally. 

[108]  Given that those were the circumstances upon which the wife relied, the trial judge was correct in being satisfied that the wife had established the subsection (c) ground namely that it was just and equitable to change the order because by reason of the husband’s default the wife did not get an equal division of the net assets.” 

The appeal was dismissed with costs.

Maintenance – Bankrupt spouse has standing to apply for variation of maintenance order

In Blake [2011] FMCAfam 796 (17 August 2011) during property proceedings initiated by the wife an order was made by consent requiring the husband to pay the wife interim spousal maintenance of $5,300 per month. Six months later the husband was declared bankrupt on his own petition and two months later he filed an application for the discharge of the maintenance order, an application opposed by the wife on the ground that as a bankrupt he lacked standing to bring such proceedings. 

Connolly FM reviewed the relevant law and concluded at paras 14-16:

“With respect to the issue of standing, the authorities submitted by both parties support the view that, despite bankruptcy, a bankrupt party has standing to bring an application under the Family Law Act 1975, or applications, that are personal in nature. In broad terms, and as a matter of principle, bankruptcy is no bar to a bankrupt maintaining claims on his or her own behalf. I agree with the submissions made by counsel for the applicant husband that proceedings that are personal in nature are those which do not affect the quantum of the bankrupt estate, and that principle was recognised in Cummings v Clearmont Petroleum (1996) 185 CLR 124.

It seems to me that the crux of the argument relies on the interpretation of section 83(1A)(b), which allows the trustee in bankruptcy to bring an application to vary a spousal maintenance order, at his or her initiative if there is a bankrupt party to the marriage. It doesn’t, however, preclude a bankrupt spouse from making such an application. I am satisfied that the Court’s jurisdiction under subsection 83(1A)(a) may be exercised in any case in proceedings with respect to the maintenance of a party to the marriage. And that is the case in this matter. It also provides, under subsection 83(1A)(b), if there is a bankrupt party, as there is in this case, then an application can be made by the bankruptcy trustee. Furthermore, in the circumstances of the current application, vested property will not be affected. While the Court is required to consider or take into account the matters set out in s 75(2), it does not mean that the application affects the vested bankruptcy property. The 2005 amendments do not expressly address the situation involving the bankrupt’s non-vested property and applications personal to the bankrupt. It is therefore the position that the previous legal principles which allow a bankrupt party to prosecute a matter personal to him remain undisturbed. I am satisfied further, that there is nothing in the Act to preclude the bankrupt party from making the application, and the Act is silent on the issue of proceedings personal in their nature, and as they do not affect the vested property, then the matter can proceed.

With respect to the issue of joining the trustee in bankruptcy and the Registrar of the Child Support Agency, it is clear from the letters which have been served on each, with the husband’s application, that neither have any interest in being involved. The matter should be listed for a hearing accordingly.”

Twins born by overseas surrogacy – Step-parent adoption sought by same sex partner of sperm provider – Right to apply 

In Blake & Anor [2013] FCWA 1 (10 January 2013) Charles Blake applied for step-parent adoption of twins as de facto partner of James Marston, the father of the children. Before Crisford J was the question as to whether Marston could be considered the “parent” of the twins for the purpose of the Adoption Act 1994 (WA) having regard to the circumstances of their conception and birth. They were born by a surrogacy procedure in India in which eggs from an anonymous donor which were fertilised with Marston’s sperm were implanted in a surrogate who gave birth to the twins. The children were at birth given into the care of Marston and Blake by the surrogate who under a surrogacy agreement relinquished all rights in respect of the children and declared Marston to be the “intended parent”.

Crisford J at para 10 cited Ellison & Anor & Karnchanit [2012] FamCA 602 in which Ryan J, under different legislation and factual history, discussed some of the policy issues that faced the court in such cases. Crisford J said at paras 17-20:

“Before even considering the orders sought by Mr Blake, the Court must determine whether he satisfies the relevant criteria to enable this adoption to take place. The Court needs to firstly deal with whether Mr Blake has any standing as a ‘step-parent’.

Pursuant to s 4(1) of the [Adoption] Act [WA] a step-parent means, in relation to a person, another person who:

(a)     is not a birth parent or adoptive parent of the first-mentioned person; and

(b)     is married to, or the de facto partner of, the first-mentioned person’s birth parent or adoptive parent;

Thus, for Mr Blake to fulfil the definition of a ‘step-parent’ for the purposes of a step-parent adoption, Mr Marston would have to be defined as either a ‘birth parent’ or ‘adoptive parent’ of the children.

The Act contains a definition of who is a child’s birth parent:

birth parent means, in relation to a child or adoptee:

(a)     the mother of the child or adoptee; and

(b)     the father or parent of the child or adoptee under section 6A of the Artificial Conception Act 1985 [(WA)].”

Crisford J examined the relevant legislation as to paternity, observing at para 22 that there is no definition of father in the Adoption Act or the Interpretation Act 1984 (WA) and concluding at para 25 that s 7(2) of the Artificial Conception Act appeared to exclude Marston from being the father, not being the husband of the surrogate. Crisford J concluded at para 30 that he would not be included in the definition of “parent” under the Interpretation Act either, continuing at para 31:

“However, as already noted, that definition is not exhaustive. In the Court’s view, there is scope to enlarge the definition and determine what other people might be considered a ‘parent’ or a ‘father’ within its ordinary meaning. Unless the Court so determines, a person in Mr Marston’s position would not be considered a birth parent for the purpose of the Act.”

Crisford J from para 34 reviewed the presumptions of parentage set out in Part 5 Division 11 Subdivision 3 of the Family Court Act 1997 (WA), saying at paras 39-40:

“The Court might be able, on the admission of appropriate evidence showing Mr Marston’s genetic connection to the children, to declare that Mr Marston is a parent of the children.

Such a power exists specifically in the Family Law Act 1975 (Cth), s 69VA:

‘As well as deciding, after receiving evidence, the issue of the parentage of a child for the purposes of proceedings, the court may also issue a declaration of parentage that is conclusive evidence of parentage for the purposes of all laws of the Commonwealth.’”

Crisford J ultimately concluded at paras 51-55:

“To suggest that Mr Marston is anything other than a parent or a father within its ordinary meaning is to turn a blind eye to the reality of ‘family’ in present day society. It is also turning a blind eye to the reality of the situation presently before the Court. The objective facts surrounding the birth and the manner in which various agencies have treated those circumstances coupled with the fact of the genetic father acting in that role since the birth of the twins points to the use of an expanded definition of parent.

To adopt any other interpretation would serve no purpose in addressing any public policy issues if, indeed, any exist. It would serve no purpose in enhancing the future welfare and best interests of these children.

As the Australian Human Rights Commission submitted in Ellison (supra) ‘the Court really needs to take children as it finds them’. There is no valid reason to disadvantage children of surrogacy arrangements.

It follows from this that the applicant has established the conditions necessary to commence proceedings. Having found this to be the case it is helpful to also set out the principles found in the legislation [s 3 of the Adoption Act]:

3.      Principles

(1)     The paramount considerations to be taken into account in the administration of this Act are –

(a)     the welfare and best interests of a child who is an adoptee or prospective adoptee;

(b)     the principle that adoption is a service for a child who is an adoptee or a prospective adoptee; and

(c)     the adoption of a child should only occur in circumstances where there is no other appropriate alternative for the child.

Thus, superimposed on the established facts is the need for this Court to bear in mind the interests of these children. This includes their identity and their long-term welfare.”

As to the orders, Crisford J said at para 57:

“I intend to make the orders sought by Mr Blake. I consider that the content of the surrogacy agreement of December 2009 has the effect of the birth mother relinquishing all her rights. In these circumstances the need for her to consent to an adoption is meaningless in the circumstances of this case. Likewise, an adoption plan is again meaningless given the nature of the children’s conception and the existing agreement between the surrogate mother and Mr Marston. The orders I will make are:

1.      There be a dispensation for the requirement to obtain the birth mother’s consent under s 24(2)(g) of Adoption Act 1994 (WA).

2.      There be a dispensation for the requirement for an adoption plan under s 73(b) of the Adoption Act 1994 (WA).”