Financial case – Applicant was seeking urgent release of funds to brief experts – His application for review of registrar’s refusal of leave to serve at short notice was granted  

In Bardon [2012] FMCAfam 1116 (24 August 2012) the husband filed an application for review of a registrar’s refusal to grant leave to serve short notice of an application in a case. Scarlett FM at paras 3-11 set out the relevant legislation, case law and procedure in respect of an application for review. 

Scarlett FM said at paras 23-29:

“The husband is seeking an earlier return date of the Application in a Case because he claims that 15 October is too late to enable him to obtain necessary valuations and make other preparations for the final hearing, which is listed for 25 and 26 October 2012.

The husband deposed in his affidavit that:

a)      he does not have the necessary funds to pay his legal representatives to prepare his case or to brief counsel and instruct expert valuers;

b)      he believes that expert reports will be needed to value the wife’s legal practice, the parties’ self-managed superannuation fund and the jointly-owned real property; and

c)      the return date of 8 October is too late for him to obtain the funds in the bank account, if his application is successful, and make the necessary arrangements in time for the hearing commencing on 25 October.

Accordingly, the Application for Review was listed for hearing today and the husband was ordered to serve the Application and Affidavit on the wife’s solicitors.

The solicitor for the wife opposes the review.

The review is a hearing de novo ([FMCR] 20.03). The Court may receive as evidence any affidavit or exhibit tendered before the Registrar and may, with leave, receive further evidence (see [FMCR] 20.03(c)).

The husband’s affidavit of 14 August 2012, filed in support of the Application for Review, was taken into account.

In my view, it was appropriate to grant the Application for Review and allocate an earlier return date for the Application in a Case.”

The matter was made returnable on 5 September. The husband was ordered to pay the wife’s costs of the day.

 

Bullied child in Year 6 allowed to change schools – Respective schools’ policies as to bullying considered under s 60CC(3)(m)

In Bardot & Benjamin [2013] FCCA 1024 (28 August 2013) Chief Judge Pascoe considered an application by a mother to move the parties’ eldest child (in Year 6) from the school she had attended since kindergarten, so as to avoid alleged bullying at that school.

The question before the Court was “whether or not [the child] is experiencing bullying at her present school and whether or not such bullying (if it is occurring) is systematic, and impacting on [the child’s] physical and/or psychological welfare” (para 12). If it was, the Court said that “the issue for the Court becomes whether or not such bullying means it is in [the child’s] best interests to change school” (para 13).

The mother relied upon allegations of the child “being reluctant to go to school” and her “sob[bing] uncontrollably” at home (para 18); the child telling the family report writer that the playground “felt like a ‘war-zone’” (para 44) and that she “’consistently and unambiguously expressed the view that she wished to change schools” (para 28). The father argued that the mother’s claims were exaggerated for her own purposes and that the child’s views had been “‘coached’ by the mother” (para 26); the child’s “high academic standards” were at risk (para 51); that the “bullying … problem had been resolved by” the school and that the distance between the proposed school and the child’s home (with the mother) involved the child commuting for “150 minutes a day” (para 59).

The parties put each school’s anti-bullying policies before the Court.

In its analysis the Court found that the child’s views were, as described by the report writer, “comparatively intelligent and articulate” (para 43); that the child had “unequivocally made the point that she did not wish to remain” at her current school (para 44); and that it would be “inappropriate … to discount … [those] … views” (para 49).

Dealing with the father’s concerns as to academic results, the Court said the child “has a record of maintaining high academic standards. If the change of schools were to help alleviate some of … [the child’s] … environmental distress then I cannot foresee any negative consequences in terms of academic performance” (para 58).

When considering distance between schools, the Court distinguished the Full Court’s decision of Re G [2000] FamCA 462 where the Court said at para 484 that when the Court must decide between “two schools which are prima facie very satisfactory, we see advantages to the children attending a school which is closer to the children’s residence”. Chief Judge Pascoe distinguished the case by noting that the Full Court’s rationale for this premise was to avoid the resident parent being subject to more irksome and unnecessary restraints, where in this case, it was “the resident parent making an application for [the child] to attend the less convenient school” (para 65) and further, that there was “clear evidence [as to bullying] that [the current school] may not be a satisfactory school for [the child] to attend …” (para 66).

The Court also considered the schools’ respective policies as to bullying as a s 60CC(3)(m) factor (“any other relevant fact or circumstance”) the Court comparing the two at paras 81-84:

“ … it was possible to discern that both schools include comprehensive definitions of bullying and incorporate anti-bullying material in their respective student planners. On its face [the child’s current school’s] approach appears to be more aspirational and stated in broad policy terms. [The mother’s proposed school] on the other hand, has a more specific policy which designates specific roles to those charged with investigating and resolving bullying complaints. [The mother’s proposed school] also has a clear and well articulated anti-cyber bullying policy which [the child’s current school] appears not to have in place.

Perhaps the most persuasive difference was [the mother’s proposed school’s] stated aim of promoting a ‘culture characterised by caring relationships and enhanced self-esteem’. While [the child’s current school’s] policy included the aim of developing a ‘culture of inclusiveness and care’, it would seem that [the mother’s proposed school’s] focus on enhancing self-esteem is on the face of it better tailored to [the child’s] needs.

It was also of concern that [the child’s current school] seemed to have only a draft policy and that this has been the case for some time. By contrast, [the mother’s proposed school] at least had comprehensive policies in place.

I must however qualify my findings in relation to the respective anti-bullying policies by pointing out that there was little evidence other than the actual policies themselves … I have previously commented on the fact that it is disappointing to say the least that the victim of bullying is the one who feels compelled to leave the school. Given the paucity of evidence I do not base my decision on the findings under this factor. Rather, it is just one more consideration to be weighed along side the other s. 60CC considerations when determining what is in [the child’s] best interests.”

Concluding that an opportunity to change schools would be in the child’s best interests, the Court also said (at para 92):

“The Father … did not offer to the Court any viable alternative to [the mother’s proposed school]. Nor did he make any submissions as to why [the mother’s proposed school] would not be an appropriate school for [the child] to attend. Instead he restricted his submissions to the possible adverse effects of [the child] leaving her current school. In my view these considerations are outweighed by the distress of the child and the possible long term adverse consequences for her health.”

Farming husband’s initial contributions realised $213,574 within first four years of an 11 year marriage – Contributions assessed in his favour 67.5:32.5 of a $503,353 pool – Adjustment of 20 per cent to wife under s 75(2) – Her unexplored earning potential balanced with her medical condition 

In Bardsen [2018] FCCA 2382 (5 September 2018) Judge McGuire considered an 11 year marriage between a 46 year old husband and a 39 year old wife. There were two children aged 11 and 8 who spent equal time with both parties. The husband was a farmer. He worked in a family business with his father, running beef cattle from the family farm and leasing parts of the farm for cropping and agistment. The wife, who suffered from Meniere’s disease, worked for 4 hours a week and received a Centrelink disability pension. The net pool was agreed at $503,353 plus superannuation of $76,064. The principal issue at trial was the weight to be given to the husband’s initial contributions.

The Court said (from [22]):

“The husband owned a property at Property C at the date of commencement of cohabitation and subject to a mortgage with the Bank 2. The husband’s affidavit deposes that the property was valued on 2004 at $235,000. The parties commenced their relationship two years later in 2006. The husband provides a rates notice from the local council as at 2005 with a capital value of $247,000. He estimates, with no expert corroborative evidence, that the value of the home as of 2006 was $300,000. The outstanding mortgage as of 30 June 2006 was $171,559.81. At its highest, therefore, the husband would claim an initial contribution from this property of approximately $128,400.

( … )

[24]   The husband owned a boat and Motor Vehicle A as at … commencement of cohabitation. He still owns a boat and a motor vehicle although the originals of each have been disposed of.

( … )

[26]   The husband claims that he held his interest in Business 1 Pty Ltd as at the date of cohabitation [current value of $9,109]. He also claims to have a term deposit held in the joint names of himself and his mother at that time totalling $37,078. Both the husband and his mother deposed to purchasing a property at Property B in 2006 … with the purchase price of $170,000 and utilising the term deposit ($37,078.22) towards that purchase. The Property B property was sold in 2008 netting $78,808 with the husband having a 50% entitlement or $39,404. The unchallenged evidence of the husband is that his share of proceeds was deposited in or utilised for the business operated by Bardsen Family Trust. ( … )

( … )

[31]   Notably, four years after the commencement of cohabitation the proceeds of the sale of the husband’s Property C property, owned by him at the commencement of cohabitation, reaped some $175,170 which funds were applied to the purchase of the 50 acre property at Property A in which the parties continued to reside and it is now the major and valuable asset in the property pool. Despite the differences in opinion as to the equity in Property C as at 2006, I am easily satisfied that this equity did provide the ‘springboard’ for the current asset pool. Further, the purchase of the Property B property in 2006, only months after cohabitation, but with funds held by the husband and his parents at the date of cohabitation, was essentially doubled by the purchase and sale of that property. This is also a ‘springboard’ investment from an asset held by the husband at the commencement of the relationship. These are contextually significant contributions by the husband when seen against the contents and value of the property pool as it currently stands.

( … )

[33]   In conclusion as to contributions, I am comfortably satisfied that the husband made an overwhelmingly superior initial financial contribution to this relationship than did the wife. I take into account the duration of the relationship but also the type and ‘springboard’ effect of those contributions which are still evident in the current property pool. I also take into account the quantum of those contributions relative to the current value of the pool. That is, relative to the pool as it currently stands, I am satisfied that the husband’s initial contributions should be given some considerable weight. Where contributions during the relationship and post-separation are considered as equal, I think it proper to adjust the property pool on the basis of contributions as to 67.5% to the husband and 32.5% to the wife.”

As to s 75(2) the Court said (from [35]):

“It is indisputable that the husband has a current and potential superior earning capacity than does the wife. His income from the Business 2 business together with that from agistment of stock/lease of land and his own farming activities give him, on my calculations, a potential income in excess of $120,000 per annum. The wife, on the other hand, works only four hours per week and her income is supplemented by Centrelink benefit. I accept, however, that the medical evidence suggests that the wife has a potential for further remunerative hours of employment, subject to such employment being available, and some of her voluntary responses in cross-examination suggest she might not be inclined yet to maximise that potential. Nevertheless, the wife does suffer some significant and ongoing medical conditions which, I am satisfied, will impact on her employability in the context of availability in a rural township and, in any event, her income potential is substantially less than that of the husband.

[36]   The children will live in a shared care arrangement between the parties but those circumstances, together with the income difference, will impose some financial support obligations on the wife relatively more onerous than those of the husband.

[37]   The husband will have the opportunity to retain the home and farm pursuant to these orders whereas the wife will be required to re-establish herself in accommodation whilst noting, however, the husband will in all likelihood need to borrow in order to settle upon the wife.

[38]   I except generally the submissions of Counsel for the wife that the net value of the property pool is relatively small and consequently any adjustment pursuant to s 75(2) … should be given some real effect rather than a bland provision on a percentage basis. As such, and with emphasis on the income differentiation and the matters that flow from that, I accept the submission of the wife’s counsel that there should be an adjustment to the wife of 20% of the pool of the tangible assets.”

Non-superannuation was divided 52.5:48.5 in favour of the wife, superannuation being divided equally between the parties.

Consent property order set aside – Wife’s settlement was based on a percentage of the value of a property agreed at a figure that upon its sale soon afterwards proved to be $1m less than its true value, husband having concealed receipt of a pre-settlement offer for the property not appreciably less than its ultimate sale price  

In Barker [2007] FamCA 13 (24 January 2007) a property order made by consent was set aside by the Full Court (Bryant CJ, May and Boland JJ) under s 79A of the Family Law Act because the wife’s settlement was based on a percentage of the value of a property which had been agreed at a figure that upon its sale shortly afterwards proved to be $1 million less than its true value, the husband having concealed the receipt of a pre-settlement offer for the property not appreciably less than its ultimate sale price. 

The Court (at para 123) was satisfied that a miscarriage of justice had occurred by reason of suppression of evidence, but agreed with Brandon LJ’s warning in Livesey v Jenkins [1985] 1 All ER 106 (at 445-446):

“I would end with an emphatic word of warning. It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases when the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed, with costs…”

Rejection of views of child and single expert in error  

In Barningham [2011] FamCAFC 12 (3 February 2011) an eight year old child had spent “essentially equal time” with each parent in the Northern Rivers Region of NSW in the five years since separation. Both parents had repartnered. The father then moved to Victoria and wanted the child to live with him. Demack FM preferred the case of the mother who wanted to continue living in NSW, the child to live with her.

On appeal, the Full Court (Bryant CJ, Finn and Boland JJ) said this at para 3 of its judgment:

“The federal magistrate decided that E should remain living with her mother. In doing so, she did not follow the views of the child nor the recommendations of the expert, Ms B [a clinical psychologist appointed by the Court as a single expert], who had prepared a family report. The father has appealed that decision. We propose to allow the appeal …”

The Full Court’s reasons contained this passage at paras 82-87:

“The question … is whether her Honour was justified in placing no weight upon the child’s views. Her Honour was entitled to consider that the child was only eight, although in finding that there was nothing in her report card to indicate that her maturity was anything more than average, she ignored the evidence of Ms B that E did appear to be expressing mature views.

Whilst there was evidence from which her Honour could reasonably conclude that E’s wishes had been ‘shaped’ by the father, the report writer’s evidence … was that although her views were one part of her conclusion that it would be in E’s best interests to be with her father, it was only one element of a conclusion that encompassed other factors.

In all, Ms B came to her conclusions based on the following matters relevant to E:

  • positive things her father had said to her about living in Northwest Victoria;
  • her own experiences of spending holiday times in Northwest Victoria with the father, Ms M [his new partner] and her children;
  • her attachment to her father;
  • her apparently positive view of life with the father’s family;
  • her understanding of the issues facing her and that she would miss her mother;
  • her maturity for an eight year old;
  • her close relationship with Ms M, as opposed to Mr S [the mother’s new partner], and that she would be assisted in adjusting to life in Victoria because of the support of Ms M and the father.


Although cross-examined at some length about E’s views, Ms B remained firm that they were reached after a consideration of a number of factors and were soundly based. She thought that the positive light in which life in Northwest Victoria had been portrayed was only one of a number of factors which caused E to express the preference to live in Victoria with her father.


We think there is force in the father’s submissions. Her Honour relied on the rejection of E’s views upon the father’s pointing out the positives of the move to Victoria to E … But Ms B had relied upon much more in coming to her conclusion that it would be in E’s best interests to live with her father.

Her Honour dealt with some of the other matters, a matter which we will turn to, but she did not deal with all of them. In particular, she gave no real consideration to the fact that life in Northwest Victoria was not unknown to E (albeit in school holidays), that she had enjoyed time with Ms M and her children in Northwest Victoria, that she liked Ms M and thought that she would be supportive, that she had some understanding of what the changes might mean for her, the closeness of the relationship with her father and the positive view of an experience of life with his family.”

SSAT appeal – Dismissal of retrospective departure application in the absence of “exceptional circumstances” set aside  

In Barone & Bianco (SSAT Appeal) [2010] FMCAfam 836 (9 August 2010) Slack FM heard an appeal from the Social Security Appeals Tribunal’s dismissal of the payer’s application for a departure from the child support assessment for the 18 months prior to the filing of his application. Slack FM held that the Tribunal (in affirming an objections officer’s ruling) had erred in law by dismissing the retrospective change sought in the absence of “exceptional circumstances”.

Slack FM reviewed the authorities relevant to retrospective applications, summarising at paras 21-22 that:

“…there is nothing in the Assessment Act that imposes on the applicant any requirement in seeking a retrospective change to a child support assessment to establish there is good reason for doing so.

The SSAT…should have determined his departure application for the relevant child support period (that was in the time limit of the Registrar to do so) in accordance with the statutory imperatives in Part 6A of the Assessment Act.” 

“Convenient commercial arrangement” not a “de facto relationship” 

In Barry & Dalrymple [2010] FamCA 1271 (15 December 2010, but just recently published) the applicant became employed as the carer and personal assistant of the frequently wheelchair-bound respondent. In his other capacity as a male escort the applicant also provided the respondent with sexual services about three times, for which the applicant also received payment. The respondent denied further sexual contact. The applicant was employed for 15 hours of caring duties per week in exchange for being given free rent (his own bedroom and bathroom and use of the house), a salary of $25,000 plus superannuation and some living expenses.

During the course of their 3.5 year arrangement the respondent was financially generous towards the applicant by providing him with luxurious interstate and overseas holidays and about $44,000 for the applicant’s use. The applicant (para 88) described this during his evidence as “living the life”. 

Coleman J heard evidence (paras 176-178) that the applicant did little or no domestic duties except cook a few meals; that the house was unclean; that the applicant “’[did] his own thing’, the needs of the respondent becoming increasingly secondary to the lifestyle to which the applicant had by that time become accustomed”. 

There was also evidence of a decline in the respondent’s health. Upon the termination of the applicant’s employment, the applicant applied under s 90RD of the Family Law Act for a declaration that he and the respondent had been in a “de facto relationship” within the meaning of s 4AA of the Act.

Coleman J from para 225 reviewed the relevant law, including the circumstances to which regard is to be had under s 4AA(2), and said at para 282:

“ … the Court is not satisfied on the balance of probabilities that the parties ever lived together on a genuine domestic basis. Although it is unnecessary to definitively find what the relationship was, it can perhaps best be described as in the nature of a ‘convenient commercial arrangement’, particularly for the applicant.”

Coleman J said further at paras 284-285:

“In MW v Director-General, Department of Community Services (2008) 82 ALJR 629, Gleeson CJ said (at page 635):

‘It is the common intention of the parties as to what their relationship is to be, and to involve, and as to their respective roles and responsibilities, that primarily determines the nature of that relationship. The intention need not be formed in terms of legal status: to some people that is important; to others it is a matter of indifference… The intention may be expressed, or it may be implied.’

The Court finds there to have been no common intention, expressed or implied, that the parties’ association was to be a de facto relationship. The Court has made findings as to the common intention of the parties as to their respective roles and responsibilities. They were at all times consistent with an employer/employee relationship, as asserted by the respondent. The Court’s findings as to the roles and responsibilities undertaken by the parties leave no room for concluding that, irrespective of any absence of the intention to do so, the parties at any time had a de facto relationship.”

Enforcement of property order via contravention application under Part XIIIA of the Family Law Act 

In Bashir [2010] FMCAfam 694 (10 May 2010) the wife issued a contravention application against the husband under Part XIIIA of the Family Law Act to enforce his compliance with an order to transfer $117,000 from the Bashir Superannuation Fund to her nominated fund. Monahan FM made an order under s 112AD(4) (which enables such order as is considered “necessary to ensure future compliance”) for the husband to pay that sum, with interest (under FMCR 22.01) and fixed costs.

Child support – Full Court rejects husband’s argument that funds settled under a child support trust for private school fees should be repaid to him as the child did not attend private school – His resulting trust argument was unsuccessful too – Rules of interpretation of an order

In Bass & Bass and Anor [2016] FamCAFC 64 (29 April 2016) the Full Court (Strickland, Murphy and Kent JJ) considered a child support trust that had been established pursuant to a consent order between the parties. The husband appealed Aldridge J’s refusal to order the return to him of $300,000 by the trust on the ground that the trust was settled by him for the purpose of private school fees, whereas the child had not undertaken and would not undertake private school ([5]). The husband argued that the beneficial interest in the moneys settled by him on the trust was only so far as necessary to provide for the purpose of private schooling, so that the monies were held beneficially for him by way of resulting trust.

Murphy and Kent JJ (with whom Strickland J agreed) said (from [19]):

“        The husband achieved, by the making of the consent orders and the establishment of the CST [Child Support Trust], his manifest intention of eliminating any past, current or future administrative assessment of child support for the child or indeed (by order 24) for any other of the children of the marriage.

( … )

[21]    The means by which the (legally represented) husband and wife sought to end any further administrative assessments of child support was to include in the consent orders obligations for them to establish a child support trust for the child. As is recorded in the consent orders, the child has intellectual difficulties and consequent special needs.

[22]    The orders required the husband to cause $350,000 to be paid into a bank account in the names of both parents as trustees of the CST as it was defined in the consent orders. Order 22.4 specified five mandatory terms to be included as terms of the CST:

22.4   the terms of the Child Support Trust must include the following terms:

22.4.1  until the CST is wound up, its capital must be applied to meet the obligations referred to in Order 16.

22.4.2 the trustee shall pay education or tutoring expenses additional to those specified in Order 16 as agreed between the parties in writing.

22.4.3 the trustee shall cause the CST to be wound up on 31 December 2015 unless the parties agree in writing to extend the date for the winding up of the trust.

22.4.4 upon the winding up of the trust the trustee shall hold any residual corpus in the CST for [the child] absolutely.

22.4.5 all income of the CST is to be paid to the husband as and when it is received on the basis that the Husband is solely responsible for:

22.4.5.1 all costs associated with the administration of the CST (except the costs referred to in Order 22.2); and

22.4.5.2 all tax arising on income received by the CST.

( … )

[26]    … importantly the trial judge made reference to the consent orders providing (at 22.4.3 and 22.4.4) for the CST to be wound up on 31 December 2015 (unless otherwise extended by agreement) and that upon the winding up of the CST ‘the trustee shall hold any residual corpus in the CST for the child absolutely’. The trial judge concluded from these terms [that] ‘[t]he surplus is there for his [the child’s] benefit. That is [as] valid a purpose as any’.

[27]    His Honour concluded on this issue:

‘99.    I do not accept the submission of the husband that the sole or primary purpose of the Trust was for the provision of a private school education or that the purpose of the Trust has failed.’

[28]    We agree with the conclusion reached by the trial judge and his Honour’s reasons for the conclusion that the CST did not fail by reason of failure of purpose. We agree with the trial judge’s conclusions that the CST had several purposes which he identified.”

As to the husband’s resulting trust argument, the Court said (from [31]):

“        There is nothing novel or contentious about the proposition that a resulting trust in favour of the settlor arises as to that part of the beneficial interest of the property in question which has not been disposed of by the express trust created by the settlement (see Gummow J in the Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia and Ors [1991] FCA 344; (1991) 30 FCR 491 (‘Re Australian Elizabethan Trust case’) at p 500).

[32]    However, as discussed in Jacobs’ Law of Trusts in Australia … at [1208] at p 238 the particular circumstances involved in each case are determinative of that issue. ( … )

( … )

[34]    Intention plainly plays an important part in the examination of the particular circumstances of the case and, fundamentally, the proper construction of the terms of the CST. However, as expressed in Scott and Ascher on Trusts … vol 1, s 4.1, cited with approval by Gummow and Hayne JJ in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [58]:

‘In some situations, legal consequences do turn on actual intentions, as in the case of those charged with certain crimes. Ordinarily, however, the legal effect of a transaction does not depend on the parties’ secret intentions, but on the outward manifestations of their intentions. For practical reasons, we disregard the parties’ undisclosed states of mind. To be accurate, therefore, it is necessary, when dealing with the creation of a trust and its terms, to speak not of the settlor’s intention but of the settlor’s manifestation of intention.’

[35]    That principle is particularly important in this case. As will be seen, we consider that here the settlor’s intention is plainly manifest in the terms of the CST and reinforced by the circumstances in which it was established.

( … )

[44]    No express term provides for any residue to revert to the husband, nor does any express term allude to any such outcome. It cannot be contended that this was an oversight. Aside from the fact that it would have been a simple matter of drafting to achieve that outcome if it were intended, other terms of the consent orders point to the opposite intention.

( … )

[54]    In our judgment there is merit in each of the submissions of behalf of the case guardian that:

a.      The ordinary rules of construction (including the principle of objectivity) as applied to the construction of contracts are applied in the interpretation of a Court Order: JKB Holdings Pty Ltd v de la Vega [2013] NSWSC 501 Lindsay J at [87];

b.      The fact that an inter partes contract/agreement was intended to be, and was in fact, given expression in orders of the Court must be taken into account: JKB Holdings Pty Ltd v de la Vega (above) at [82] citing Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 at [579] D:E;

c.      Where the terms of the Court’s order are sufficiently clear to govern the parties’ rights, the Court does not resort to extrinsic evidence of their intention: at [85] citing Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at [352]: Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; 86 ALJR 1 at [3] to [5]; and

d.      The same rules of construction of contracts apply to trusts: Byrnes v Kendle (above) per Heydon and Crennan JJ at [102].

[55]    We find no merit in the husband’s contention that he retained any beneficial interest in the fund upon establishment of the CST, and consequently we reject his contention as to a resulting trust in his favour in the residue.”

The husband’s appeal was dismissed.

 

Binding child support agreement declared void for uncertainty – Held that agreement left an essential or critical term to be settled by future agreement between the parties

In Bassett & Teale [2016] FCCA 2177 (24 August 2016) Judge Small heard a case where parents of children of 17 and 14 had spent six years litigating about the terms of a binding child support agreement made in 2009 ([2]). The agreement included provisions that the husband pay child support according to the administrative assessment, that the father pay 65% of private school fees, “reasonable education costs” and “reasonable extracurricular expenses” for each child, the mother to pay 35% of those costs. In 2012, the parties agreed to parenting orders that included a notation as to the parties’ intention to enter into a “fresh” child support agreement which would define or otherwise vary the provisions of the 2009 agreement and its provision for payment of “reasonable extracurricular expenses”.

The Court said (from [27]):

“I note here that the relevant portions of the 2009 agreement are not able to be severed from the whole so as to make them voidable, nor are they able to be rewritten to provide better clarity, as s 80CA of the CSAA states clearly that a binding child support agreement must not be varied.

( … )

[34]    There is no dispute between the parties that all of the technical requirements for the document signed on 14 May 2009 to be a binding child support agreement under Part 6 of the CSAA are present in the document’s contents.

[35]    What the husband argues is that before the court can even look at the wording of the document to decide whether it is binding or not, the question of whether there ever was an agreement at law must be addressed.

[36]    The husband’s argument is that the 2009 agreement is void for uncertainty because the parties were not ad idem when they signed it, as the ensuing disagreements about their obligations pursuant to its terms show them not to have had a common understanding about the meaning of ‘reasonable education costs’ and ‘reasonable extracurricular expenses’ at that time.

[37]    There is some force to the husband’s argument on this point.

[38]    The notation to the orders of 23 July 2012 indicates that the parties were already in dispute in relation to what were ‘reasonable education costs’ or ‘reasonable extracurricular expenses’, and that they had negotiated a resolution to that dispute through the proposed new binding child support agreement.

[39]    The very fact that the parties have been in dispute about the meaning of those terms virtually ever since they signed the 2009 Agreement indicates that they were not in agreement in relation to their meaning at the time of signing it.

[40]    Their evidence to the court, both in writing and in person, gives the very clear impression that these parties could not agree that the sky is blue.

( … )

[42]    Under cross-examination at trial, Ms Bassett agreed that arguments between her and Mr Teale about which expenses were or were not included in the 2009 agreement were ‘intractable’ and ‘never-ending’.

( … )

[45]    In addition, when it was put to her that the history of the matter indicated that the parties would never be able to come to an agreement about what ‘reasonable’ means, she replied that ‘someone else’ would have to decide the meaning of the word.

[46]    As counsel for the wife says in his final submissions, it is not unusual for a court to have to decide what the word ‘reasonable’ means and he quotes multiple cases in varying jurisdictions where that has been the issue.

[47]    However, if the determination of what was meant in the 2009 agreement by ‘reasonable education costs’ and ‘reasonable extracurricular expenses’ had to be referred to the court every time a dispute arose between these parties about those terms, then based on the history of this matter, we could expect almost continuous applications for that determination in any given year until [the youngest child] … turns 18. Such decisions arise on a month-by-month basis and it is not this court’s function to decide what ‘reasonable’ means with that regularity and/or frequency. The whole point of the Parliament providing parties with the opportunity to sign binding child support agreements is to keep those matters out of court.

[48]    Further, the husband argues that if the 2009 agreement contains provisions which can only be effected by further agreement of the parties, then the 2009 agreement is void.

[49]    Again, there is some force in that argument.

[50]    As Menzies J said in Thorby v Goldberg [(1964) 112 CLR 597] … approving the statement of Sugarman J in the NSW Supreme Court in the same case:

‘It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties.’

[51]    That statement was quoted with approval in the family law context by Fogarty J in Weiss & Barker Gosling [(1993) FLC 92-399] …

[52]    There is no dispute that the clauses which oblige the parties to pay ‘reasonable educational costs’ and ‘reasonable extracurricular expenses’ are ‘essential or critical’ to the 2009 agreement. Indeed, apart from the clauses about the payment of medical insurance and expenses, they form the core of that agreement and could be said to embody much of its raison d’etre.

[53]    In the current case, the determination of what constitutes ‘reasonable education costs’ or ‘reasonable extracurricular expenses’ relied on the agreement of the parties from time to time after the signing of the 2009 agreement.

[54]    In other words, an ‘essential or critical term is expressly left to be settled by future agreement of the parties’.

[55]    For these reasons I will make a declaration that the 2009 agreement is void for uncertainty.”

The Court was also satisfied that a departure order should be made pursuant to s 116(1)(b) of the Child Support (Assessment) Act.