Children – Full Court holds that trial judge’s finding that mother lied under cross-examination (in saying she feared father would carry out his threat to retain child) was inconsistent with her prior unchallenged evidence – Section 41 of the Evidence Act (improper questions) 

In Blakely & Morrell [2015] FamCAFC 49 (27 March 2015) the Full Court (May, Ryan & Benjamin JJ) heard the mother’s appeal against the order of a judge of the Federal Circuit Court that the parties’ two children continue to live with the mother, but only if the mother moved the children from Queensland to a place within a radius of 50 kilometres of the Newcastle Post Office. The mother had resisted moving from Queensland, alleging she had only moved there as a result of “the father’s controlling behaviour towards her”, “her desire to have the support of her family” and “her dire financial situation” (para 25).

The mother moved to Queensland when the parties first separated in June 2010 on the south coast of New South Wales and although they reconciled for a few months in 2011 when the father had moved to a town on Lake Macquarie, the father’s time with the eldest child (“X”) had been facilitated informally while the mother was in Queensland. The father applied in 2012 within 2 weeks of the mother giving birth to the parties’ second child (“Y”).

The Full Court said (at paras 50-51):

“In making orders that the mother and children should relocate, his Honour relied heavily on his view that the mother was unwilling to facilitate and encourage a relationship between the children and the father and his finding that she lied and misrepresented issues relating to family violence … On the other hand, it was found that the father was willing and capable of facilitating and encouraging a close and continuing relationship between the children and the mother.

As to the ultimate disposition of the matter, his Honour described the children continuing to live with the mother in Queensland as ‘disastrous’ to their best interests … because the father would not be able to have significant or substantial time with them and inevitably, ‘ … the children’s right to maintain personal relations would be severely inhibited by the mother (sic) poor attitude towards the father’ …”

The Full Court said “that the father wished the mother to relocate with the children to Newcastle whereas the mother wished to remain living in Queensland with the children” (para 24) but that “the crux of the appeal” were “his Honour’s credit findings and … material errors and inconsistent findings” (para 56). The Court said at para 57:

“Reference to the mother’s ‘lies’ would appear to be to pieces of evidence; being evidence about why the mother did not want the father to care for X during her confinement and an unsworn statement attributed to her when, with the assistance of the Red Cross, she applied for supported housing.”

The Full Court continued (from para 61):

“…       … it was uncontroversial that … the mother said she was concerned the father would act on his threat to retain their daughter in New South Wales. In other words, long before the mother gave evidence she mentioned that the father had made the threat which his Honour said she made up during cross-examination. It follows, that the line of questioning which sought to impugn this aspect of the mother’s evidence was improper and should not have been permitted (s 41 Evidence Act 1995 (Cth)). We agree with counsel for the mother that given the father’s evidence a finding that the mother’s evidence was made up during cross-examination to suit her cause and, by necessary implication was a ‘lie’ was not available. We understood counsel for the father to accept the point, albeit, it was not conceded that this error constituted an error of law.

[62]      So that the point is not overlooked, we feel compelled to observe that this was not the only occasion on which questions misrepresented the facts put to the mother. Notwithstanding objection by counsel for the mother, this occurred too often and without intervention by his Honour. And lest it be thought otherwise, these were not limited to matters which might be considered to be of little significance and included matters which went to the heart of the mother’s case that she had been intimidated and harassed by the father. ( … )

( … )

[64]      … In our view, before his Honour decided the mother was a ‘liar’ and her evidence was tedious and at times unresponsive, he needed to consider the probable harmful impact on the mother’s testimony overall of questions which she knew misrepresented her prior evidence or the facts and notwithstanding objection from her counsel were allowed to continue. For this to occur in a case concerned with intimidation and harassment is very troubling.

( … )

[92]      We cannot agree with the submission made by counsel for the father that the errors discussed above must give way, if it could be appropriately applied, to the ‘unique advantage which the primary judge alone possessed’ (Gronow v Gronow (1979) 144 CLR 513 per Stephen J at 517). However, these findings do not rest on his Honour’s impression of the parties. They are based on evidence inconsistent with unchallenged facts or an analysis of the evidence which, as we have explained, is erroneous (Devries and Another v Australian National Railways Commission and Another (1993) 177 CLR 472).”

The Full Court concluded (at para 96):

“There is good reason why in private family law proceedings judges do not often find that a person has lied to gain advantage in the proceedings. The proceedings usually involve intimate personal relationships and more often than not are undertaken between people who are parents and who need to maintain a degree of contact. The factual matrix is inevitably complex and usually requires consideration of a multiplicity of facts which span many years. No less relevantly a finding that a person has lied to gain advantage in the proceedings involves more than a simple balancing act between two versions of an event where one version is preferred. To be satisfied that a lie has been told and to find that it was said to gain advantage in the proceedings requires careful analysis of four things. The first is that the proffered version of fact is untrue, the second is that it is said knowing it to be untrue, thirdly to gain advantage in the proceedings and fourthly, that the finding is relevant to a matter in issue. In our opinion, prudence and fairness must dictate that before it is found that a person has lied on his or her oath in such a manner, the court would need to be strongly satisfied that each of those four elements is established.”

The appeal was allowed and the case remitted for re-hearing.

Unacceptable risk of harm – Full Court finds trial judge erred when prohibiting father’s contact with child by not adequately weighing the advantages and disadvantages of father’s proposals to reintroduce himself to the child and by not determining the magnitude of any risk to mother’s psychological health and parental functioning

In Blinko [2015] FamCAFC 146 (23 July 2015) the Full Court (May, Murphy & Tree JJ) heard the father’s appeal from an order that he spend no time with nor communicate with his child, having not seen her since 2009 when she was 11 months old (at [8]). The mother alleged that “her fear of the father, based upon [a] … history of violence, was so profound that she would not even be able to cope with the child only spending supervised time and communication with the father” while the father argued that her fear “was either not real, or not rational, or both” ([16]).

At first instance, Judge Coates “accepted that the mother had a genuine fear of the father, which fear was rational … His Honour accepted psychiatric evidence that if the child had anything to do with the father whatsoever, the mother may decompensate to the point where her parenting capacity would be seriously impacted. It was on that basis that he made the orders prohibiting the father [from] either communicating or spending time with the child” ([17]).

The Full Court said (from [18]):

“…     As will emerge, we are of the view that His Honour made no material errors of fact, nor is any misapplication of the law established. …

[19]    That being so, the central question as to whether his Honour erred in an appellate sense involves asking whether the orders made by his Honour, which see, effectively, a complete elimination of the child from the father’s life, involve an error in the exercise of his Honour’s discretion.

[20]    In that respect, his Honour was faced with an exquisitely difficult question. His Honour’s findings that the mother had a genuine, pervasive and rational fear of the husband are … not successfully challenged on this appeal. Further, his Honour found, on a firm evidentiary foundation, that if the child spent time with the father the mother would ‘decompensate’ which would detrimentally affect the mother’s care of the child (at [221]). There was no issue before his Honour that the mother is, and had always been, the primary carer of the child – indeed, she had been the exclusive carer of the child for some years prior to the trial.

[21]    There was no evidence from which a conclusion could properly be drawn that the father was likely to harm the child or that there was an unacceptable risk of him doing so. Of course, it needs to be reiterated and emphasised that the father had not seen the child for the best part of four years prior to the hearing. His Honour found, however, that there was a risk of harm to the child in a broader sense emanating from the reaction of the mother to any ordered time between the child and the father. In effect, his Honour found that any such time was likely to have such a dramatic impact upon her and her care of the child, that there was a risk of psychological harm to the child.

( … )

[27]    A consideration of risk, and factors which impact upon or ameliorate the risk, will in most cases be inextricably linked. That is because ‘[t]he object of safeguards is to convert an unacceptable situation to an acceptable one where that is feasible and is of ‘benefit to the child’: see Hon John Fogarty AM ‘Unacceptable Risk – A Return to Basics’ (2006) 20 Australian Journal of Family Law 249 at 261.

[28]    The authorities dealing with cases of unacceptable risk are replete with exhortations to trial judges to ‘consider deeply where the facts of the particular case fall, and to explain adequately their findings in this regard’: see for example N and S and the Separate Representative (1996) FLC 92-655 at 82,714. That extends not merely to the identification and analysis of the risk itself, but also to the imposition of conditions or other safeguards in relation to the non-resident parent. Particularly, if the Court ultimately accepts that there should be orders for communication and/or time, albeit surrounded by safeguarding conditions, then the Court needs to clearly explain the reasons why it is persuaded that those safeguards are sufficiently ameliorative of the risk. That is, amongst other reasons, so as the resident parent may scrutinise the adequacy of the reasoning process which underpins the orders, given the potentially grave consequences of exposing a child to risk.

[29]    As Brown J said in Mazorski & Albright [2007] FamCA 520 … ‘the word “meaningful” is a qualitative adjective, not a strictly quantitative one’. Similarly, in McCall & Clark [2009] FamCAFC 92 … this Court suggested that the court should ‘consider and weigh the evidence at the date of the hearing to determine how, if it is in a child’s best interests, orders can be framed to ensure the particular child has a meaningful relationship with both parents … ’.

[30]    Accordingly, where the Court makes no orders for time or communication because it is not persuaded that safeguarding conditions would sufficiently ameliorate the risk, again it should clearly explain the reasons for that conclusion. Looming large amongst the reasons for doing so, is because such orders will necessarily wholly prohibit the child, during their childhood and adolescence, from ever having any form of relationship with the non-resident parent, again, a potentially grave consequence. Such an outcome needs to be arrived at only after a careful evaluation of all of the other options which might work to enable the child to have the benefit of some kind of relationship with the non-resident parent, as indicated by the Objects and Principles of Part VII of the Act. Whilst s 60CC(2A) demands that greater weight be given to the consideration in s 60CC(2)(b) – something entirely consistent with the approach of the Courts since the commencement of the Act – the particular facts and circumstances of each individual case nevertheless require a careful evaluation and balancing of Considerations, and all the more so when what is at stake is the potential for a child to never know their parent.

[31]    Here the father’s proposals, which needed careful evaluation by his Honour, identified a range of potential means by which the child could have some relationship with the father. For instance they included:

1.    Permitting the father to send cards, gifts or letters to the child, whether on special occasions or more regularly;

2.    Permitting the child to spend supervised time with the father on one or more occasions during the year for a fixed period (on a final and not interim basis);

3.    Introducing, on an interim basis, some closely supervised time between the child and the father with adequate counselling supports, and after some period of time reviewing the efficacy of such arrangements; and

4.    Requiring the mother and child to engage with appropriate therapists with a view to preparing the child for re-unification counselling with the father.

[32]    Not only was it incumbent on the trial judge to consider such options, but in considering each of those alternatives, his Honour ought to have made an informed determination as to the magnitude of any risk to the mother’s psychological health, and hence parental functioning, which attended each of these, to enable him to then consider whether, notwithstanding the safeguards, the risk of harm to the child still remained unacceptable.

[33]    It is clear that his Honour did not expose the reasoning process by which he determined that no safeguard short of prohibiting the father spending time with or communicating with the child in any way rendered the risk to the child acceptable.”

The father’s appeal was allowed and the case remitted for rehearing.

Long marriage – Adjustment made for husband’s “enormous” initial contributions – Partially offset for wife’s s 75(2) factors

In Bloom [2014] FCCA 1882 (27 August 2014) Judge Burchardt considered a 20 year marriage where the husband at commencement of cohabitation in 1994 had “well over $250,000 worth of funds (apparently used to purchase shares) together with an unencumbered house” (para 11). The house was sold, the proceeds of which in 2004 (with the sale of some shares) enabled the acquisition of a business for $330,000 (para 13). The balance sheet included $565,947 as the net proceeds of sale of that business. The wife had no “assets of any moment at the commencement of the relationship” (para 12). The parties each had a child of a previous relationship who was adult at the time of trial (para 9) and two children together, aged 17 and 14 (para 8). The wife was 43, the husband 52 (para 5).

The non-superannuation asset pool was found to be $1,172,225 (paras 54-55), primarily comprised of business sale proceeds, shares and an unencumbered home. The superannuation pool was found to be worth $221,539, the parties agreeing that this pool be divided equally (para 63).

The Court said (from para 62):

“…       This was a relationship that endured from 1994 until 2012, a total of almost 20 years. It is clear that the parties both contributed throughout that relationship as best they were able. The husband and the wife both worked until the children came along, and even thereafter, the wife worked, as the husband concedes, 20 hours a week in the … business. It is clear that the wife was the primary caregiver to the children. The husband worked very long hours, particularly once the [business] had been bought.

( … )

[64]     In the ordinary way of things, it would be all too clear that the parties’ contributions should be assessed as equal. The difficulty of course is that the husband made an enormous initial contribution. The wife sought to minimise this contribution. She pointed out accurately enough that it was made almost 20 years ago. …

( … )

[66]     There is all too much law about the issue of initial contributions, springboard effects and the like. It needs to be remembered that each case turns on its own facts.

[67]     It is true that the husband’s initial contributions were made a long time ago, but what is unusual perhaps in this case is that the parties’ ultimate relative wealth springs as it were in an uninterrupted way from the husband’s initial contributions. The husband owned an unencumbered property at the start of the relationship and this is basically what enabled the parties to buy their next property … and it was that that enabled them to buy the [business]. The [business] has appreciated significantly, but that of course was due to the efforts of the parties. It is fair to say that it is far more probable than otherwise that the parties would never have been able to accrue anything like the sort of money they now have available to them without the initial contribution, albeit that substantial elements of the pool that has ultimately resulted come it would seem from both the capital appreciation in the [business] and the profits of the [business] …

[68]     In all the circumstances there should be a 12 per cent adjustment in the husband’s favour in this regard.”

The Court then considered s 75(2) matters, saying (from para 69):

“…       The husband has in my view a slightly better earning capacity than the wife, but both their future employment seems uncertain. It does not appear to be suggested that the parties’ future earnings if any are likely to be wildly disparate.

[70]     Neither party has any health difficulties such as to impact upon the Court’s deliberations, although I note that the husband is some nine years older and has therefore an appreciably lesser time available to him to work and accrue benefits.

[71]     On the other hand, the wife will undoubtedly have the primary care of the children for some time to come. In the case of W, she will turn 18 in January 2015 and in the case of Z, in May 2018. It is not appropriate to ignore the additional cost and responsibilities this will involve but it is not as if these children are tiny tots who will be on the mother’s unassisted hands for well over a decade to come.

( … )

[73]     One only has to note that if the wife had been successful in one of the job applications in which she came so close, the financial future of the parties would be thought to be radically different. After all, the wife has a home that is effectively unencumbered albeit that this will take up a substantial proportion of whatever amount of the pool that she receives. In all the circumstances in my view the wife should receive a loading in her favour of 7 per cent under this heading.”

The non-superannuation pool was divided as to 55 per cent to the husband and 45 per cent to the wife.

Financial agreements – Bankruptcy – A creditor does not have standing to seek an order that an agreement be set aside other than under s 90K(1)(aa) (as to protecting the interests of creditors)

In Bloomfield & Grainger & Anor [2014] FCCA 2074 (24 September 2014) Judge Cassidy considered a matter where a husband and wife had made a s 90C financial agreement during their marriage by which a property was transferred to the husband, the wife becoming bankrupt two months later. A judgment creditor of the wife filed an application seeking an order that the agreement be set aside and that the husband transfer the property to the bankrupt estate of the wife or that the husband pay a sum equal to the market value of the property to the bankrupt estate.

The judgment creditor argued that, notwithstanding the wife’s bankruptcy, the agreement should be set aside under s 90K(1)(aa) (where a party entered into an agreement to defraud or defeat an interest of a creditor or with reckless disregard of the interests of a creditor) and on the ground that the advice given to the wife was not independent as required by s 90G(1)(b).

The husband applied for the summary dismissal of the creditor’s application, alleging that the creditor lacked standing. In particular, the husband argued that the creditor was no longer a creditor with an entitlement to seek relief under s 90K(1)(aa) upon the bankruptcy of the wife and, further, that s 90K(1)(aa) was the only relief available to a creditor, a creditor being unable to rely on any other ground such as s 90G(1)(b).

The Court said (at para 11):

“The questions of law in issue … are:

‘Q1    Where a party to a financial agreement has become bankrupt does a creditor of the bankrupt have standing to apply to set aside a financial agreement or seek relief under s 90K(3)?

Q2     Does the power in s 90K(3) to make orders adjusting the rights of persons extend to adjustments other than for the purpose of substantially restoring the position existing before the financial agreement?

Q3     In seeking to set aside a financial agreement under s 90K may a creditor rely on any grounds other than the ground specified in s 90K(1)(aa)?’”

As to whether the creditor remained a creditor for the purpose of s 90K post-bankruptcy Judge Cassidy said (from para 19):

“…     The [husband] argues that at the time that the [creditor] commenced these proceedings, the [creditor] was not a creditor of [the wife] within the meaning of that expression, as used in the definition of third party proceedings and he relies on the case of The Trustee for the Bankrupt Estate of N Lasic & Lasic (2009) 41 Fam LR 369 (“Lasic”).

[20]    The [husband] argues on the authority of Lasic (supra), that upon [the wife’s] bankruptcy, the rights of the bankrupt’s creditors are regulated in accordance with the Bankruptcy Act 1966 (Cth). …

[21]    The [husband] submitted that the [creditor] had no standing to commence these proceedings.

( … )

[23]    The [creditor] submitted that a creditor does not cease to be a creditor when the debtor becomes bankrupt. He argues the consequences of a sequestration order … do not destroy the debtor / creditor relationship. What changes, he submits, are the remedies available to the creditor … The debts remain but the debts are no longer still owing once a sequestration order is made. The obligation to make payment converting to a right on the part of a creditor to prove in the bankruptcy.

[24]    [The creditor] submits that there is no reason to read ‘creditor’ in s 4A of the Act differently from creditor in its ordinary sense. In particular in the sense in which it is used in the Commonwealth legislation, such as Bankruptcy Act 1966 (Cth) and the Corporations Act 2001. ( … )

( … )

[26]    The question in Lasic (supra) was whether [the creditor in that case] could enforce his judgment against the husband. That is whether [the creditor in that case] could recover money … directly.

( … )

[29]    I accept the submissions of counsel [for the creditor] that she is a creditor for the purposes of s 90K(1)(aa) of the Act. I therefore answer the question …

“Q1    Where a party to a financial agreement has become bankrupt, does a creditor of the bankrupt have standing to apply to set aside a financial agreement or seek relief under s 90K(3)?”

[30]    Yes.”

As to whether the power in s 90K(3) of the Act extends to adjustments other than for the purpose of substantially restoring the position existing before the financial agreement (Q2), the Court considered the question was best addressed at the final hearing (paras 39 and 40).

Finally, the Court held that a creditor could not rely on grounds other than s 90K(1)(aa), saying (from para 46):

“…     The [husband] submits that it is apparent that parliament did not intend to provide creditors with grounds to challenge a financial agreement, other than the ground in s 90K(1)(aa) of the Act. … I was referred to ASIC v Rich (2003) 31 Fam LR 667 and indeed it was that case that prompted the 2003 amendment that introduced s 90K(1)(aa).

[47]    I accept the submission that the scope of the Court’s jurisdiction is circumscribed by the definition of ‘matrimonial cause’ and the definition in s 4A of the Act restricts the challenge a creditor can make to the agreement to the grounds set out in s 90K(1)(aa) of the Act.

[48]    The only parties who could rely on the failure to obtain independent advice are the husband and the wife, were she not a bankrupt and now that she is a bankrupt, her trustee in bankruptcy. They are the only proper parties to a claim that relates to the question of whether [the wife] obtained independent legal advice.

[49]    In answer to ‘Q3’:

‘ … In seeking to set aside a financial agreement under s 90K may a creditor rely on any grounds other than the ground specified in s 90K(1)(aa)?’

[50]    No. The creditor is only entitled to rely on s 90K(1)(aa) in seeking to set aside a financial agreement.”

The husband’s summary dismissal application was dismissed, although the creditor’s application as to its reliance on s 90K(1)(aa) was struck out.

Editor’s note – Appeals by the husband and judgment creditor were dismissed: see Grainger & Bloomfield and Anor [2015] FamCAFC 221.

Full Court upholds appeal where trial judge attached percentages to particular components of a spouse’s contributions 

In Bolger & Headon [2014] FamCAFC 27 (27 February 2014) the Full Court (Thackray, Murphy & Kent JJ) considered a decision involving a “seven and a half year cohabitation” (para 1) and a net asset pool of “slightly more than $1.5 million” (para 5) where the husband’s initial contribution was found to have a “current value of $774,790” or representing “50% of the current asset pool” (para 4); and where the wife had inherited “a property worth $250,000 at trial”, her having received that inheritance “around separation” (see para 8).

The Full Court said that at first instance, the Court divided its “consideration into an assessment of “initial contributions” and “contributions during the relationship and post-separation”. That approach led, in turn, to her Honour concluding “… that it is appropriate to attribute 7% to the husband’s initial contributions”…” (para 7). Further, the Court found “ … that the husband should obtain a further 4% by way of contribution, totalling 11% by way of contributions on behalf of the husband”. The Court below also said (para 8):

“The wife brought a very significant asset into the pool quite late, in that she received an inheritance from her aunt at around separation and that property is valued at $250,000.00. I am satisfied and I adopt the submissions of the counsel for the wife, in the written outline, that 7.5% is an appropriate figure for that.”

After making a further “adjustment of 2.5% … under s 75(2)” in favour of the wife (para 10), the Full Court said that “by the conclusion of Her Honour’s discussion of the relevant parts of s 79, all that can be seen is that the husband is to receive 11 per cent and the wife 10 per cent” (para 12).

The first instance decision was that the “overall distribution of the asset pool will be 49% to the wife and 51% to the husband” (see para 13).

The Full Court said (from para 14):

“…       Counsel for the respondent … conceded that only two conclusions were reasonably open by reference to the approach and reasons just described.

[15]     First, the attribution of specific percentages to components of contribution and the adjustment in respect of the s 75(2) factors can only be seen to result in the overall conclusion if the premise is a 50/50 starting point …

[16]     If that be the explanation – and we think that it is – it is, as is properly conceded, erroneous as was clearly established by the decision of the High Court in Mallet v Mallet (1984) 156 CLR 605.

[17]     If that is not the explanation, then the only other conclusion reasonably open is that it is not possible to discern from her Honour’s reasons how the ultimate conclusion … is arrived at by reference to the findings … ”

And (from para 25):

“…       Of considerable significance to the approach of the trial Judge, this Court said in Dickons & Dickons [2012] FamCA 154:

‘ … There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).

There can be little doubt that the classification of contributions by reference to terms of such as ‘initial contributions’, ‘contributions during the relationship’, and ‘post-separation contributions’, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. … ’

( … )

[27]     In the same year, in Lovine & Connor and Anor (2012) FLC 93-515, this Court said:

‘As part of the process of ultimately determining just and equitable orders under s 79 there is included a complex of discretionary assessments and judgments of many components of contribution, only some of which are capable of measurement in money terms and then often only in historical, rather than present, money terms. Any dictate to the effect that in the course of assessment each disparate component part or kind of contribution must be assigned a discrete and identifiable value or percentage is antithetical to the nature of the discretion involved.’

[28]     We seek to respectfully repeat and emphasis the reference in Lovine to such an approach being ‘antithetical to the nature of the discretion involved’ and the reference to Dickons to such an approach being avoided in the usual course of events. Doing so, we repeat, is not consistent with a holistic assessment of the parties’ contributions which is what s 79(4) requires.

[29]     In our respectful view, the adoption of that course in this case led her Honour into error.”

The matter was remitted for hearing.

Appeal from AAT – “Financial resource” – Regular advances from paternal grandfather were a financial resource of the father for the purpose of calculating his child support income

In Bond & Child Support Registrar & Anor [2018] FCCA 422 (23 February 2018) the mother had been granted an administrative departure from a child support assessment in respect of the parties’ 10 year old child by which the taxable income of the father (a business owner who had been paying child support of $45 per week) was reassessed at $108,000 for the relevant period so as to reflect his true income, property, financial resources and his earning capacity for the purposes of ss 98C and 117(2)(c) of the Child Support (Assessment) Act.

The father lodged an objection which was dismissed. He applied for a child support first review by the Administrative Appeals Tribunal (“AAT”) which calculated his child support income at $127,500. In doing so, the AAT assessed past advances to the father by his father (the paternal grandfather) as a financial resource, rejecting the father’s argument that the advances were repayable loans. The payments were made from the grandfather’s trust and pursuant to a written loan agreement, which did not provide any security and ultimately treated the loans as a testamentary gift in the event of the grandfather’s death. The father appealed to the FCC.

Judge Brown said (from [24]):

“The major issue in this appeal concerns the manner in which the AAT characterised the moneys provided to the father by entities controlled by the paternal grandfather … for the purposes of section 117(2)(c)(ia) of the Assessment Act. …

[25]   … [It is the father’s position that] the sums in question are to be regarded as loans, which are subject to repayment rather than as a financial resource.

( … )

[29]   … [T]he AAT described the paternal grandfather as a lawyer and tax specialist.

( … )

[31]   Neither the father nor Mr Bond Senior disputed the existence of either the company or the trust or that the company had regularly advanced monies to the father. The controversy centres on the characterisation of the sums in question.

( … )

[39]   The Tribunal further indicated that Mr Bond Senior had deposed he had provided the father with loans to an amount of $200,000 …

( … )

[50]   The AAT said as follows in its decision in respect of the paternal grandfather’s financial situation:

‘[The paternal grandfather’s] income, property and financial resources are not relevant to these proceedings. What is relevant to these proceedings is whether amounts provided by these entities, in particular amounts provided to [the father by (business omitted) Pty Ltd are a financial resource to the father].’

[51]   I agree that this was the central issue in the review proceedings before the Tribunal. In this context, I do not consider that it can be said that the Tribunal posed for itself the wrong question. …

( … )

[53]   The Tribunal … found that (business omitted) provided the father with the use of a motor vehicle and a mobile telephone, which he largely used in running the business but which also provided him with some private use. The motor vehicle was also used by other family members, including Mr Bond Senior.

( … )

[59]   Mr Bond Senior, in his evidence to the Tribunal, emphasised that the payments advanced to the father occurred at his (the paternal grandfather’s) discretion and, as such, could not be regarded as being permanent in nature.

( … )

( … )

[62]   The Tribunal found that the father had not made any repayments to either (business omitted) Pty Ltd or the paternal grandfather and had not been required to do so. It further found that amounts of around $100,000 per annum had been advanced to the father since he and Ms Bond had reached their financial settlement [5 years earlier].

( … )

[67]   The Tribunal considered the meaning of financial resource as contained in section 117(2)(c)(ia) of the Assessment Act. In so doing it considered the following passage from Slack FM in Walker & Fielding (SSAT Appeal) [[2010] FMCAfam 320]: …

‘The term financial resource in the light of the objects of the Assessment Act should be broadly defined and would, in my consideration, refer to any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children.’

[68]   The late learned judge also noted that the expression itself was not defined in the Assessment Act and therefore its meaning should take its colour from the objective and principles of the Act overall. In the case, Slack FM was dealing with monies which a party utilised to fund living expenses. In this context, he found as follows:

‘The issue for the SSAT was not to determine what if any proprietary right he had in those funds. The SSAT were simply obliged to consider whether those monies represented a financial resource and if so what would be a just and equitable determination of the level of his child support having regard to the fact that he had that resource available to him.’

[69]   The Tribunal found that the sums advanced by (business omitted) Pty Ltd to the father amounted to $107,168 per annum. It further found that for a taxpayer ‘to earn an equivalent amount, a taxpayer would have to earn approximately $127,500’ resulting in an annual child support liability of $11,368.

( … )

[99]   In respect of the assertion that the payments were a loan, the Tribunal noted the apparent lack of any degree of formality surrounding the payment of the moneys so advanced, particularly the lack of security and the only reference to interest accruing on the alleged loan being that any such interest could not exceed the rate applicable to the father’s home loan. There was no evidence to indicate that any interest had in fact been calculated.

[100]  It also noted the provision within the agreement between the father and paternal grandfather that the loans could be set off in the event of Mr Bond Senior’s death against any moneys to be received by Mr Bond, by way of bequest, from his father’s estate. The implications of this provision would be to convert the so-called loan into a testamentary gift.

( … )

[106]  In my view the decision in question, based on a finding that Mr Bond Senior was more likely than not to continue the payments in question as he had indicated he would do, subject to his health and the continuance of his (business omitted), was one legally open to the Tribunal and is not one which can be characterised as legally unreasonable in the sense characterised by the High Court in Minister for Immigration & Citizenship v Li [(2013) 297 ALR 225].

( … )

[111]  In my view, the evidence available to the Tribunal indicated that Mr Bond could reasonably expect to continue to receive moneys from his father to supply his personal financial deficiencies. It is not necessary for Mr Bond personally to control the source of the funds. Rather, the evidence available must demonstrate he has a reasonable expectation that the advances will continue to be made.

( … )

[119]  In my view, in all these circumstances, the decision of the Tribunal was a legally reasonable one within the jurisdiction conferred upon it. …”

The husband’s appeal was dismissed with costs fixed in the sum of $5,000.

Unilateral relocation to the US sought by father while on holiday there with sons of almost 17 and 15 who wanted to stay with him – Existing order for equal shared parental responsibility and that the (three) children live with mother and father as agreed or at the children’s own election – Mother granted recovery order – Father’s appeal dismissed – As to a child’s views “context is critical”

In Bondelmonte [2016] FamCAFC 48 (8 April 2016) the Full Court (Ryan, Aldridge and Le Poer Trench JJ) heard the father’s appeal against orders made by Watts J in a case involving three children. Two sons “R, almost 17” and “S, almost 15” lived with the father and a daughter T (12) lived with the mother. An order had been made in 2014 that the parents have equal shared parental responsibility and that the children live with the mother and father “as agreed between the parties or at the children’s own election” ([18]). The family had lived in Australia until January 2016 when the father took the sons for a holiday to New York with the mother’s consent.

During that holiday the father told the mother that he had decided to stay in the United States indefinitely with the boys. The father deposed that the boys expressed a clear wish to living with the father in New York, that neither wished to return to Australia and that they had an estranged relationship with their mother (particularly the eldest son).The mother urgently sought a recovery order for the return of the children and an order that the boys live with her.

Ryan and Aldridge JJ (“the majority”) said at [6]:

“ … the primary judge was satisfied it was in the best interests of the boys for them to return to Australia pending a determination about whether, in the long-term, they would continue to live in Australia or move to the United States. In the event the father returned to Australia with the boys, they were to continue to live with him but, if he remained in New York, the boys would live with the mother. However, difficulties in the mother’s relationships with the boys made it possible that even if the father did not return, one or both of them would refuse to live with her. Thus, the orders enabled the boys and the mother to make arrangements for the children to stay with nominated third parties without needing the father’s agreement to do so.”

The majority delivered a joint decision dismissing the father’s appeal while Le Poer Trench J allowed the appeal.

The majority said (from [57]):

“…     … his Honour was satisfied both boys wanted to live in New York with the father and neither wanted to return to Australia or live with the mother. His Honour was satisfied that if the boys were interviewed in New York their views would be the same. However, the weight which might otherwise be attached to the views of children then aged 16 and 14 was ‘ … weakened by the circumstances which have been contrived by the father’ ([32]).

[58]    ( … ) His Honour was satisfied that a report which dealt with more than simply the boys’ views was required as the Court would need to examine, for example, the dynamics of the sibling relationship and the children’s relationships with each of their parents. A report of this type could be undertaken in Australia with the participation of all family members ([34]).

( … )

[70]    … [H]is Honour made plain his disquiet about the manner in which the father retained the boys and his involvement of them in his breach of orders. In so doing, the father demonstrated poor judgment as a parent and ‘as a role model to the boys’. For the Court to sanction the father’s behaviour would send a poor message [to him and the boys] ‘ … about what might be considered to be appropriate parental behaviour’. This was a matter of some significance.

[71]    Against that background, his Honour expressed his conclusion thus:

‘62.      The determinative matters under s 60CC(2) and (3) of the Family Law Act 1975 (Cth) (‘the Act’) primarily require a balance of the consideration of the boys’ expressed views as against the damage that is currently being done, particularly to [S’s] mother/son relationship; [T’s] father/daughter relationship and [T’s] relationship with her brothers, by the unilateral action of the father. This needs to be judged having regard to the history of the family dynamics and identified risk factors.

63.       Without a return order, there is a greater chance that the relationships to which I have just referred will be irretrievably damaged. I find that it is in the children’s best interests to make orders for the return of [the boys] to Australia.’”

One of the father’s grounds of appeal was that that as there was an order for equal shared parental responsibility s 65DAA applied, so that the Court was obliged to first consider whether or not an order for equal or substantial and significant time was in the best interests of the children and reasonably practicable before making orders in favour of the mother ([80]).

Ryan and Aldridge JJ said (from [81]):

“…     However, it will be recalled that neither party proposed an order for equal time or substantial and significant time. Both parties ran the proceedings before his Honour on the basis that orders of that type would not be in the best interests of the children. These were factual and legal concessions which his Honour was entitled to accept and plainly did accept. In this respect, the case is on all fours with SCVG & KLD (2014) FLC 93-582 where the Full Court explained that a judgment needs to address only contentious factual and legal matters that remain outstanding. ( … )

[82]    Contrary to the submission made by senior counsel for the father, we do not accept that an application for an order that a child lives exclusively with one or another parent is an application for substantial and significant time. Although an exclusive arrangement might be defined as substantial and significant, its exclusiveness gives the arrangement an entirely different character. As the words used in s 65DAA(2)(b) make plain, the section requires that the Court consider whether the child spending time with ‘each’ of the parents would be in the child’s best interests. It follows that the point of substantial and significant time orders is the allocation of time between parents; it is not concerned with the exclusive allocation of time to one parent.”

The father also argued that appropriate weight was not given to the children’s views, as to which the majority said (from [97]):

“…     It is important to record at the outset that it is not, and never has been, the case that a judge in his Honour’s position is obliged to make orders consistent with a child’s stated views (H & W [1995] FamCA 30; (1995) FLC 92-598; Maldera & Orbel (2014) FLC 93-602). Rather, a primary judge is obliged to consider the weight which should be given to any stated views. Of course, a range of factors may affect the weight given beyond simply the age and level of maturity of the child. In other words, context is critical and it is a matter for the judge to determine how giving effect to a child’s stated view accords with the child’s best interests (R & R (Children’s Wishes) [2002] FamCA 383; (2002) FLC 93-108; Gillard & Gillard [2015] FamCAFC 169 at [81]). As we will shortly discuss, this is precisely what his Honour did.

( … )

[100] … his Honour accepted their views were genuinely held. ( … ) [T]he parties and the Court were satisfied that each child could choose with whom the child would live (in Australia) and their views would be determinative. However, the parties and the Court did not empower the children to make other major long-term decisions and that power remained vested in the parties jointly.

[101] His Honour adopted a similar approach, albeit because the parties could not now agree about how to give effect to the children’s views, he needed to resolve that impasse. Thus, and notwithstanding that the parties and Court were recently satisfied the mother was able to care for the boys and his Honour’s concern about the father as a role model, the boys’ views in favour of living with the father would be given effect but upon condition that the father returned to Australia with them. It was only in circumstances where the father refused to return to Australia with the boys that the order in favour of the mother would be given effect. Even then, his Honour placed significant weight on the boys’ views contrary to that outcome and made other options available if, in their opinions, those options were acceptable.

[102] It does not follow that because his Honour did not make orders consistent with the boys’ views in favour of remaining in New York with the father, that those views did not carry considerable weight. ( … )”

The majority dismissed the appeal. It was ordered that the father pay the independent children’s lawyer’s costs, that the mother file an affidavit addressing FLR 19.08(3) as to indemnity costs and that the father make written submissions in reply (if any).

In allowing the appeal Le Poer Trench J concluded at [201]:

“Given the circumstances which had arisen in the hearing before the primary judge it is my view that the hearing should have been adjourned and the mother required to provide more information about the proposal for the children to live with the benevolent volunteers. The independent children’s lawyer should have been given an opportunity to investigate the proposal in the usual way that is done and the independent children’s lawyer should have been in a position to inform the Court of the two boys’ views about the proposal (and evidence of those views if that was possible). The father should have been required to inform the Court of whether he would or could accompany the children to Australia should the order sought by the mother be made, and further whether he had any proposal to house the boys in Australia pending the determination of the mother’s parenting application and any parenting application he was proposing to make. There was nothing so urgent about this case which could not have accommodated such a process. ( … )”

Editor’s note – The father’s appeal to the High Court was dismissed: see Bondelmonte v Bondelmonte [2017] HCA 8.

Uncle’s application to be appointed as case guardian of children aged 17 and 15 dismissed – Children understood proceedings and were capable of conducting the case so FLR 6.08(2) applied 

In Bondelmonte & Bondelmonte and Anor [2016] FamCA 1145 (22 December 2016) Watts J heard an Application in a Case filed by the paternal uncle of two sons who were the subject of the Full Court’s decision in Bondelmonte [2016] FamCAFC 48 (a summary of which is at our archived “case notes – children” under “relocation”). The sons, aged 17 and 15, had been unilaterally retained in New York after an agreed holiday by their father who was ordered to return them to Australia (where the mother lived with their 12 year old daughter) despite the sons’ expressed wish to remain in the US with their father. The father unsuccessfully appealed that order to the Full Court and to the High Court (Bondelmonte [2017] HCA 8). The uncle’s application was to be appointed case guardian for the sons and for leave to intervene on their behalf. The mother and the ICL opposed the application.

Watts J said (from [5]):

“In Mankiewicz & Anor & Swallow & Anor (2016) 311 FLR 415 the Full Court said at [10]:

‘The effect of s 65C is that the only people who have an unconditional right to apply for parenting orders are those identified in ss 65C(a), (b) and (ba).’

[6]   Relevant to this application, the elder children have an unconditional right to apply for parenting orders. It is axiomatic that the two elder children each are ‘a child’ for the purposes of s 65C(b) of the Act.

[7]   As the Full Court in Re K [1994] FamCA 21 … point out (at page 550):

‘ … It is true that at common law a child cannot instruct counsel or a solicitor except through a next friend or guardian [now known under the Family Law Rules as a case guardian]. However, since the enactment of s 63C(1)(b) of the Act in 1987 [now s 65C(b) of the Act], which enables a child to institute proceedings, the rule that a child may not give instructions should be regarded as having been abrogated by statute, for it seems inconceivable that Parliament intended that a child could commence proceedings but not give instructions to a solicitor or counsel to do so or to conduct the proceedings on his or her behalf.’

[8]   The fact that the elder children are independently represented by the independent children’s lawyer is no bar to them making such an application. The independent children’s lawyer is not the children’s legal representative, is not obliged to act on the elder children’s instructions and must act in what the independent children’s lawyer believes to be their best interests. A lawyer directly representing the elder children is their legal representative, takes instructions from the elder children and is not bound by what the lawyer believes is in the children’s best interests.

( … )

[10]  Rules 6.08 and 6.09 of the Family Law Rules are in the following terms:

‘6.08 Conducting a case by case guardian

(1)   A child or a person with a disability may start, continue, respond to, or seek to intervene in, a case only by a case guardian.

(2)   Subrule (1) does not apply if the court is satisfied that a child understands the nature and possible consequences of the case and is capable of conducting the case.

6.09 Who may be a case guardian

4.    A person may be a case guardian if the person:

(a)   is an adult;

(b)   has no interest in the case that is adverse to the interest of the person needing the case guardian;

(c)   can fairly and competently conduct the case for the person needing the case guardian; and

(d)   has consented to act as the case guardian.’

After referring to the mature ages of the children ([14]); the concession that the sons understood “the nature of the case” ([12]); the mother’s evidence that the sons had “matured” ([16]) and the uncle’s affidavit that he had spoken to the children who had said “it’s so unfair that they don’t listen to us”, “I am almost 18 and an adult. We don’t want to go back” and “We want to stay here with Dad, [Ms P] and [N]. It’s so much better here” Watts J said (from [17]):

“Given this evidence and particularly the applicant’s assertion that R and S are mature children for their respective ages, I infer that both the elder children are Gillick competent. On that basis I find that they are capable of understanding the possible consequences of the case.

[18]  Counsel for the applicant argued there was no evidence the elder children were capable of conducting their case. He submitted that the elder children could not conduct the case in circumstances where solicitors are prohibited from entering into a contract with a child and would necessarily require a case guardian. No authority or statutory reference was provided for that submission. There can be no issue that the elder children are capable of giving instructions to a lawyer.

[19]  When considering whether the elder children could make arrangements to pay a lawyer I note there is no evidence in the applicant’s material to indicate how the costs of the case guardian would be paid although I would infer that the applicant is a person of some means. … I comfortably infer that the elder boys are capable of obtaining any funding they need either from their father or the applicant to conduct their case.

[20]  I conclude the elder children understand the possible consequences of the case and are capable of conducting the case.

( … )

[22]  Further in the context of the argument as to who bears an onus of establishing whether or not a child understands the possible consequences of a case and is capable of conducting a case the applicant has to satisfy the requirements for rule 6.09(b) and (c) of the Family Law Rules. Both of these sub-rules are predicated on the elder children ‘needing a case guardian’ (emphasis added). This rule places an onus on the applicant to establish each of the elder children ‘need’ a case guardian.

[23]  Counsel for the applicant accepted that if a finding is made that the requirements of rule 6.08(2) are satisfied then the applicant’s application pursuant to rule 6.08(1) would be dismissed. I make a finding that the requirements of rule 6.08(2) are satisfied.”

The uncle’s application was dismissed.

Child support – SSAT appeal – Consent to setting orders aside

In Bonner & Neville (SSAT Appeal) [2010] FMCAfam 848 (16 July 2010) Slack FM expressed doubt that an SSAT appeal could be allowed by consent, given the requirement of s 110B of the Child Support (Registration and Collection) Act for the court to be satisfied that there had been an error of law. Noting that the SSAT had come “to a number of conclusions as a result of the applicant’s failure to appear [including] that he had not complied with directions and was avoiding giving evidence” and that he had not been “given the opportunity to explain his failure”, Scarlett FM held that “the question of whether he was afforded sufficient procedural fairness in this matter, to my mind, is attended with sufficient doubt to warrant the orders that are sought by the parties”.

Long marriage – Initial contribution of home by husband remained the primary asset – Contributions assessed 61/39 of $711K pool (1 per cent being for husband’s post-separation care of children) – No s 75(2) adjustment – Husband’s non-disclosure of earnings 

In Booth [2010] FMCAfam 1269 (23 November 2010, but published 5 November 2014) Judge Terry heard a property application after a 25 year relationship where the “only significant asset available for distribution [was] the former matrimonial home” (“Property B”) which the husband “brought … into the relationship unencumbered” (paras 3 and 5). The parties had four children, two of whom were minors and lived with the husband (paras 17 & 20).

The “husband was guilty of a serious non-disclosure. In his financial statements he declared that he was in receipt of Centrelink benefits and a small pension from the (country omitted) Government” but admitted during the trial that “he regularly did jobs … for cash payments and non-cash benefits in exchange” (para 9).

After finding that the pool was worth about $711,000 of which Property B had an unencumbered value of $700,000 (para 24), the Court said (at para 50):

“…     I am satisfied that during this relationship each party contributed to the parenting and homemaking tasks, maintenance and repairs and work on the home and financial support of the family to the extent of the funds and assets available to them and in accordance with their aptitudes and abilities. I am satisfied that the financial and non-financial contributions of the parties during the relationship should be assessed as equal.

[51]    After separation in February 2009 X, Y and Z continued to live with the husband. X turned 18 in … 2009 and has now left school and is doing tertiary education. Y and Z are still at school.

( … )

[55]    The wife has spent limited time with X, Y and Z since separation.

( … )

[58]    It was the husband’s case that his post-separation contributions exceeded those of the wife because he cared for Y and Z in particular for more than eighteen months after separation with minimal financial and non-financial contribution from the wife.

( … )

[61]    The parties did not acquire any significant assets during the relationship. The principal asset available for distribution is the Property B property which the husband brought into the relationship.

[62]    The property was worth $70,000.00 in 1983 or a little under 10% of the pool as it currently stands. However it would be wrong to simply focus on the value of the property in 1983. In Williams & Williams [[2007] FamCA 313] the Full Court said as follows:

‘We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation.’

[63]    The Property B property is currently worth $700,000.00, or very close to 100% of the pool. The parties did some work on the property during the relationship but there was no evidence that the work materially contributed to the property’s increase in value. It is reasonable to infer that the increase in value of the property was largely the result of market forces.

[64]    The husband’s initial contribution of the home therefore looms large and must be given weight, but the decided cases have repeatedly emphasised that in a final assessment of contributions all contributions made during a marriage must be weighed and balanced, and that the significance of an initial contribution diminishes as time passes and other contributions come into play.

( … )

[69]    The husband’s counsel submitted that contributions should be assessed as 75/25 in the husband’s favour and relied heavily on the importance of his introduction of the Property B property. I do not accept that such an assessment gives adequate recognition to the wife’s contributions.

[70]    This was a long marriage and when the wife’s contributions over a period of more than twenty five years, including her contributions as homemaker and parent, her financial contributions from income and her contribution to the maintenance and improvement of the home from time to time are weighed and balanced with the contributions of the husband during the same period, namely his important contribution in introducing the home which has appreciated so greatly in value during the relationship and his unmatched post separation contribution to the care of the two youngest children, it is reasonable to assess contributions as 61% by the husband and 39% by the wife. The 1% is my attempt to give some meaningful recognition to the husband’s important post separation contribution to the care of the children.”

As to s 75(2) factors, the Court found that the wife was 46 (para 74) while the husband was 70 (para 98); the wife’s “only likely work” in the future was “unskilled work” (para 83); and the husband had not disclosed the extent of his earnings (para 100). The Court also considered the husband’s care of the two youngest children in circumstances where he could “expect fairly minimal child support from the wife” (para 118). The Court concluded (from para 120):

“        … There are circumstances in which it is not appropriate to make an adjustment in favour of the party with the care of the children because despite the fact that little child support is being paid, the party with the care of the children has at the same time the much stronger income earning capacity. I cannot make a finding about the husband’s income earning capacity in this case and the reason I cannot do so is because the husband first hid the fact that he was earning an income and when it was revealed, made some very limited admissions about the remuneration he was receiving…

[121] The comparative circumstances of the parties therefore as they are known to me are that the husband has the care of the children but an unknown income earning capacity and that the wife does not pay much child support but has emerged from a 26 year marriage in which she did little paid work with a capacity to earn only a fairly low income.

[122] It may be that in time the wife will enter the paid workforce and certainly she has in theory a longer working life in front of her. On the other hand at present the husband is working and receiving unknown benefits and the wife is out of the workforce, so in the immediate future it may be the husband rather than the wife who makes better financial headway, despite his care of the children.

[123] It was the wife’s case that there should be no adjustment for s 75(2) factors and given that I am unable to make a proper comparison of the parties circumstances because of the husband’s failure to make full and frank disclosure, I consider this the appropriate outcome. The wife will thus [be] entitled to $277,598.88 and the husband to $434,193.12.”