Child abduction and forum – Father fails in his appeal against order that he return child to mother in non-Hague Convention country

In Acquaah-Akuffo & Abioye [2016] FamCAFC 194 (27 September 2016), the Full Court (Ainslie-Wallace, Ryan & Aldridge JJ) heard the father’s appeal against Gill J’s interim order that the father return a child to the mother in Ghana, the father having unilaterally retained the parties’ child in Australia at the end of an agreed holiday. Both parties were Ghanaian nationals although the father lived in Australia. A Ghanaian Court had ordered in 2011 that the child live with the mother and spend time with the father. It was uncontentious that the agreed holiday was such that the child would stay with the father in Australia but return to Ghana for commencement of the school term on 9 September 2015. The father, however, retained the child and in March 2016 filed an application for parenting orders in the Federal Circuit Court (which was transferred to the Family Court).

The Full Court said (from [15]):

“His Honour did not accept the argument mounted on behalf of the father that to return the child to Ghana would be detrimental for him if final orders were then made that the child be returned to Australia. On this issue … his Honour observed [that] the change to Australia was unfamiliar to the child whereas the return to his mother was a return to the familiar …

( … )

[18]    …

[H]is Honour concluded that the maintenance of the mother’s relationship which the child had with her before the father’s act of removal of him from Ghana would be substantially affected. On the other hand, his Honour noted that the father had, in the past been able to travel to Ghana to spend time with the child …

[19]    The trial judge found … that the father’s action in retaining the child ‘displays little concern for the significance of the relationship between [the child] and his mother’.

[20]    His Honour concluded, having regard to the matters contained in s 60CC of the Act that it is in the child’s best interests to live with his mother and that he ‘promptly’ be returned to her care in Ghana … This conclusion was driven by his Honour’s findings that the father’s actions of taking and retaining the child conflicted with the child’s relationship with the mother; that the removal of the child to Australia had effected a serious disruption of the child’s living circumstances; that the reasons for removing the child from Ghana proffered by the father ‘at their highest, appear[ed] to be of marginal benefit to [the child]’; and that the mother had no capacity to come to Australia …”

The Full Court said (from [25]):

“ … it seems to us that some unnecessary confusion attended the proceedings and the determination of the issue.

[26]    What was before his Honour was a matter which required him to determine in which forum, Australia or Ghana, the parenting dispute about the child was to be heard. The determination of that question is to be had by reference to the child’s best interests. At the outset of her oral submissions, as she did in her written argument to his Honour, the advocate for the mother clearly identified the issue by reference to ZP v PS (1994) 181 CLR 639 and said:

‘ … where the court was considering proceedings under this Act where the issue for determination was whether a child in Australia having been removed in Australia from a foreign jurisdiction should be returned to that jurisdiction so the foreign court could formalise the parenting issues regarding that child. And, your Honour, in that case the High Court held the decision to be made by the court was to be made in accordance with the exercise of the court’s welfare jurisdiction and, therefore, should be in accordance with the child’s best interests. … ’

[27]    She further referred his Honour to Pascarl & Oxley (2013) FLC 93- 536 and said:

‘ … And in that matter the Full Court distilled the authorities in respect of abduction of children and noted that in cases where a child had been abducted from a non-Hague Convention country it may be appropriate for a court to conduct a speedy summary hearing and to order the return of the child. And, of course, that’s our application today. … ’

( … )

[31]    The advocate’s articulation of the law and the principles and her application of the facts to those principles was entirely correct. Regrettably the focus of the hearing deflected from that point.

( … )

[42]    There being no contention that Ghana was the country of the child’s residence up until the time he was brought to Australia and retained here by the father without the mother’s consent, it is appropriate to commence a discussion of the relevant legal principles with ZP v PS (1994) 181 CLR 639.

( … )

[44]    Their Honours [Mason CJ, Toohey and McHugh JJ] at 648 quoted with approval the statement by Neill LJ in In re F (Abduction: Custody Rights) [1991] Fam 25 at 32:

‘The general principle is that, in the ordinary way, any decision relating to the custody of children is best decided in the jurisdiction in which they have normally been resident. This general principle is an application of the wider and basic principle that the child’s welfare is the first and paramount consideration.’

[45]    Their Honours continued … at 648 that when the question arises whether the Family Court or a foreign court should determine the issues of custody of children:

‘ … In such an application, the first issue is whether the welfare of the child requires the making of a summary order that those questions be tried in the foreign forum. It is only when the Family Court determines that the welfare of the child does not require the making of a summary order, that the Court should embark on determining the issue of custody itself.’

[46]    In Kwon and Lee [2006] FamCA 730 … (also reported as EJK & TSL [2006] FamCA 730) the Full Court said, after reviewing the authorities:

‘ … We consider the following principles can be distilled from authority:

 …

(vi)     in some circumstances, such as an abduction from a non Hague Convention country it may be appropriate for the matter to be dealt with by way of a speedy summary hearing and an order for the return of the child to the foreign jurisdiction. In making such summary order the Court will have regard to the child’s best interests as its paramount consideration; … ’

[47]    In ZP v PS in the joint judgment of Brennan and Dawson JJ, their Honours at 663 adopted the following passage of Buckley L.J. in In re L (Minors) [1974] 1 WLR 250 at 264 – 265:

‘To take a child from his native land, to remove him to another country where, maybe, his native tongue is not spoken, to divorce him from the social customs and contacts to which he has been accustomed, to interrupt his education in his native land and subject him to a foreign system of education, are all acts … which are likely to be psychologically disturbing to the child, particularly at a time when his family life is also disrupted. If such a case is promptly brought to the attention of a court in this country, the judge may feel that it is in the best interests of the infant that these disturbing factors should be eliminated from his life as speedily as possible. A full investigation of the merits of the case in an English court may be incompatible with achieving this. The judge may well be persuaded that it would be better for the child that those merits should be investigated in a court in his native country than that he should spend in this country the period which must necessarily elapse before all the evidence can be assembled for adjudication here. Anyone who has had experience of the exercise of this delicate jurisdiction knows what complications can result from a child developing roots in new soil, and what conflicts this can occasion in the child’s own life. Such roots can grow rapidly. An order that the child be returned forthwith to the country from which he has been removed in the expectation that any dispute about his custody will be satisfactorily resolved in the courts of that country, may well be regarded as being in the best interests of the child.’

The father’s appeal was dismissed with costs.

International commercial surrogacy agreement – Order for twins to live with terminally ill sperm donor father and his former male partner who cohabited as “housemates” – Equal parental responsibility also ordered despite neither party being a parent

In Adair & Anor and Bachchan [2017] FCWA 78 (22 June 2017) Duncanson J of the Family Court of Western Australia heard an undefended parenting application in respect of twin children aged 4. There were two applicants – Mr Adair and his former same sex de facto partner, Mr Bonfils – who sought an order for equal parental responsibility between them and an order that the children live with them. While their de facto relationship ended before the children were born they remained close friends who lived together as “housemates”. The twins were born pursuant to an international commercial surrogacy arrangement, entered into by Mr Adair and the children’s birth mother. 

The Court said (from [10]):

“[In] August 2012 the first applicant entered into a surrogacy arrangement with the birth mother via [the Clinic] in New Delhi, India. At the time the birth mother was 21 years of age and single (divorced). The agreement was documented by a Gestational Surrogacy Agreement and Terms and Conditions of Surrogacy … The children were conceived with sperm from the first applicant and an egg from an anonymous donor.

[11]    … Both applicants were in India for the birth and spent three weeks there before bringing the children to Perth.

[12]    The children were issued with birth certificates by the Government of the National Capital Territory of Delhi [in] 2013. The first applicant is named as the father. The name of the mother is ‘NIL’. 

[13]    The children obtained citizenship by descent from the first applicant and became Australian citizens [in] 2013. 

[14]    Prior to the children obtaining Australian citizenship DNA testing was carried out by [Company A]. In terms of the parentage testing procedure report, the probability that the first applicant is the genetic father of the children exceeds 99.99%. 

( … )

[17]    The first applicant obtained an opinion [in] January 2013 from [Mr Patel], Advocate in New Delhi, as to the validity of the Gestational Surrogacy Agreement (‘the Agreement’). Mr Patel opines that the parties to the Agreement, namely the first applicant (referred to as the ‘Intended Father’) and the birth mother (referred to as the ‘Surrogate Mother’ were legally competent to enter into the contract and thus the obligations under the Agreement are legally enforceable and binding upon them. 

[18]    Mr Patel states the Agreement makes it explicitly clear that the surrogate mother shall have no enforceable right of any nature after giving birth to the child under the Agreement whereas the intended father shall have the sole and exclusive legal title of fatherhood of the twin newborn children. ( … )

[19]    Mr Patel states that the Declaration of Intent dated 31 May 2012 executed by the surrogate mother makes it clear she shall have no right of any nature on the twin children. ( … )

( … )

[27]    The Terms and Conditions of Surrogacy document records that the parties are fully informed and aware of the risk involved in the procedure. The ‘total compensation’ to be paid by the intended father for the services of the surrogate is: 

‘In consideration of the services of the Surrogate the Intended bFather has agreed to a total compensation of Rs. 2,25,000 (Rupees Two Lakhs Twenty Five Thousand Only) payable to the Surrogate in case of normal birth and/or Rs. 2,60,000/-(Rupees Two Lakhs Sixty Thousand Only) in case of caesarean birth in its entirety in the following manner: … ’

[28]    As at the time of the Agreement these amounts were equivalent to approximately $3,858 and $4,458 respectively. 

[29]    Of the ‘total compensation’, Rs 10,000 (approximately $171) was payable to the birth mother at the time of the embryo transfer.

[30]    After a pregnancy test and heart beat scan, if the scan showed a heartbeat the intended father was to pay the surrogate mother from the total compensation Rs 10,000 (monthly maintenance) every month for the pregnancy, and the balance was payable at the time of birth and successful handing over of the child to the intended father. The monthly maintenance was to cover all genuine expenses associated with the pregnancy. In addition the intended father was to pay all medical expenses and costs of medication.

( … )

[36]    The first applicant is the primary carer of the children.

[37]    The first applicant has been diagnosed with [a terminal illness]. …

( … )

[39]    The first applicant wishes to ensure that the children are cared for and loved by someone, as he had hoped to do. The second applicant is that person. The children have a close and loving relationship with both applicants.

( … )

[42]    … The children see the second applicant as their father. The children call the first applicant ‘dad’ and the second applicant ‘[a pet name]’. The first applicant said the second applicant has resources, love and understanding. The second applicant said he treats the children as his own and loves and adores them.

( … )

[46]    I am satisfied that these children, brought from India when only three weeks old, will continue to be loved and nurtured by the applicants or either of them.

The legal principles

[47]    The first applicant and the birth mother entered into the Agreement. The documents suggest she gave informed consent. The birth mother has not participated in these proceedings. A financial consideration was made to the birth mother, said to be for her maintenance and medical treatment during pregnancy.

( … )

[49]    The court must nevertheless take a cautious approach. The court’s concerns include the potential for exploitation of vulnerable women and children in poorer countries. In Farnell & Anor and Chanbua (2016) FLC 93-700 at [255] Thackray CJ stated that there is a need for law reform in relation to cases of overseas commercial surrogacy: 

‘Since then, there has been a dramatic increase in the number of people finding the ‘solution for [their] various reproductive challenges’ in commercial surrogacy arrangements utilising the services of poor women in a cluster of developing economies. There are major public policy issues associated with this development. Indeed, the circumstances surrounding the present case have apparently been influential in the banning of international commercial surrogacy in Thailand, which was until then one of the major destinations for those who wanted to buy a baby.’ 

[50]    I am mindful of the best practice principles as determined by Ryan J in Ellison and Another & Karnchanit (2012) 48 Fam LR 33. 

[51]    I am satisfied upon the unchallenged evidence of the applicants that they are devoted carers of these children and I am also satisfied that they have given truthful evidence regarding the circumstances of the children’s birth. Having so satisfied myself, I do not consider it necessary to request the appointment of an independent children’s lawyer to represent the children’s interests. I have had an opportunity to make my own assessment of the applicants and to consider their parenting capacities and commitments to the long-term welfare of the children. Having done so, I do not consider it necessary, in the circumstances of this case, to require the preparation of a family report.

( … )

[53]    The reality is that the children were separated from the surrogate mother at birth and brought to Australia from India when three weeks old. Their primary carers seek orders which provide for their welfare both now and in the long-term.

[54]    I have approached this matter on the basis that the best interests of the children is the paramount consideration.

[55]    These proceedings fall to be determined pursuant to Part 5 of the Family Court Act 1997 (WA) (‘the Act’). Neither the first applicant nor the birth mother was married at the time of the surrogacy procedure.

[56]    The birth mother is the mother of the children and she is their parent.

[57]    The first applicant deposes he is not the legal father of the children and he does not ask me to make a declaration that he is a parent of the children.

[58]    The first applicant is not a parent of the children as he is expressly excluded by the provisions of the Artificial Conception Act 1985 (WA). The second applicant is not a parent of the children.

[59]    The first and second applicants have standing to bring these proceedings for a parenting order in relation to the children as they are persons concerned with their care, welfare or development. Sections 88 and 185 of the Act are therefore applicable.

[60]    In deciding whether to make a particular parenting order in relation to a child, the court must regard the best interests of the child as the paramount consideration. Section 66C sets out how a court determines what is in a child’s best interests. I must consider the primary and additional considerations.

( … )

[62]    Notwithstanding the distinction between a parent and a non-parent raised by s 66C, in dealing with equivalent provisions contained in s 60CC(3) of the Family Law Act 1975 (Cth) the Full Court in Valentine & Lacerra and Anor (2013) FLC 93-539 at 87,108 took the approach that all such factors ought to be taken into account in relevant proceedings.

[63]    To that end, the Full Court noted in Yamada & Cain [2013] FamCAFC 64 at [27] (original emphasis):

‘The broad inquiry as to best interests contemplated by s 60CC… recognises that it is not parenthood which is crucial to the best interests of the child, but parenting – and the quality of that parenting and the circumstances in which it is given or offered by those who contend for parenting orders.’

[64]    The approach to be taken here is as set out in Valentine & Lacerra and Anor (supra). I therefore intend to refer to the considerations as if they apply to the applicants. 

( … )

[71]    I am satisfied that the orders sought by the applicants are in the best interests of the children.

[72]    I have considered the terms of the Surrogacy Agreement and notwithstanding concerning issues which can arise from such agreements, in the circumstances of this case I am satisfied that the orders sought are in the best interests of the children.

[73]    The children have been in the care of the first and second applicants since their births. They are loved and cared for by the first and second applicants who make sound and reliable provision for their futures. ( … )”

It was ordered that the applicants have equal shared parental responsibility and that the children live with them, the birth mother to be served with a copy of the order.

Full Court finds no error in trial judge’s order that husband be solely responsible for tax debt notwithstanding that $220,000 of it had accrued before separation – Husband had been “able to maintain the same affluent standard of living” both parties enjoyed before separation

In Adair & Milford [2015] FamCAFC 29 (3 March 2015) the Full Court (Ryan, Murphy & Tree JJ) heard the husband’s appeal against Cronin J’s order at first instance where, after a 15 year relationship, the parties’ liabilities exceeded their assets and the husband was ordered to be solely responsible for a $419,000 debt to the ATO. The trial judge ordered the sale of the parties’ three properties, any net sale proceeds to be paid to the wife, finding that “she would receive little, if any, money” (para 4). Cronin J also declined to split super, the husband having $178,797 in super and the wife $350,000 (para 5).

The Full Court said (from para 28):

“…     … it was the husband’s application that the three parcels of real estate owned or controlled by the parties be transferred to him on the basis that he would take over the mortgages and indemnify the wife in relation thereto. In addition, he would remain responsible to satisfy his debt to the ATO. ( … )

( … )

[34]    As a segue to the primary judge’s consideration of the husband’s tax debt, his Honour determined that the magnitude of the wife’s legal and associated expenses (approximately $287,000), when compared with the husband having no outstanding legal fees, established that his ‘financial position must therefore be strong enough to have enabled him to pay those fees even if they were not of a similar quantum to those of the wife. This is a factor to be considered in relation to the tax issue’. In other words, it was significant that the wife carried substantial liabilities incurred in these proceedings whereas the husband had been able to meet his, albeit lesser legal expenses, from income.

( … )

[36]    Because the husband did not give evidence about the amount of taxation due at separation … the primary judge was satisfied that the best evidence was to be found in his financial statement filed in October 2012 in response to the wife’s application for interim spousal maintenance and some two months after separation. The husband’s evidence given in answer to question 48, which enquired about assessed and unpaid income tax, that he owed $220,000 was accepted [169]. There can be no doubt that when his Honour went on to find that after separation the husband’s taxation liability ‘increased significantly’ he was satisfied that between separation and the date of the hearing, the tax debt had increased from $220,000 to $419,000.

( … )

[39]    … it was uncontroversial that for the financial year ended June 2011 the husband had a taxable income in the amount of $564,145 which fell to $442,216 in 2012 and $319,381 in 2013. His Honour was obviously sceptical about the husband’s explanation for his drop in income and in any event, satisfied that after the proceedings were finalised he would be able to re-establish his former and higher income earning capacity. Having rejected the husband’s evidence contained in his 2012 financial statement that his total expenditure exceeded his income his Honour, at [174], turned his attention to the 2013 financial year and found that the husband’s expenditure ‘ … exceeded his income even allowing for the tax that was not paid …’ The question that then needed to be answered was whether or not those expenses were reasonable.

[40]    At [174-178], the primary judge examined various expenses incurred by the husband which satisfied him that the husband’s ‘expenditure was hardly modest’. … [W]e observe the items of expenditure to which his Honour referred demonstrated a pattern of significant discretionary expenditure. With these matters to the fore, the primary judge determined that notwithstanding in the post separation period the husband’s income had fallen, he had been able to maintain the same affluent standard of living that prior to their separation, both parties enjoyed.

[41]    His Honour questioned if as the husband claimed he was unable to meet his liabilities from income, why it was he withdrew from the parties’ post separation agreement to sell the second and third properties. The point being that it was significant he chose not to take an obvious and commercially sensible step to realise property and retire substantial debt … Ergo, had there been a deficiency of income which could not be met by modifying his expenditure he would have taken a step which would have increased his disposable income and enabled him to make payments to the ATO.”

The trial judge Cronin J found that the husband had the capacity to pay the tax but that he made “a conscious choice not to pay it” and he had “misled the wife in respect of it” such that “it would not be fair now to attribute the debt to the wife” (para 43). The Full Court said (from para 44):

“…     … as we have demonstrated, the primary judge clearly understood that at least $220,000 of the husband’s $419,000 taxation liability accrued prior to separation. It is beyond dispute that the husband’s evidence on this topic was imprecise and that no criticism can be levelled at his Honour’s decision to accept the husband’s evidence that as at separation he was indebted to the ATO in that amount.

( … )

[47]    There is no principle of general application that merely because a taxation debt accrued prior to separation it must be brought to account as a joint matrimonial liability (Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor (2009) FLC 93-394). In our view, the facts as found amount to what the Full Court in Johnson and Johnson [1999] FamCA 369 … described as ‘compelling circumstances’ which would enable the court to leave one party solely responsible for his or her taxation debt.

[48]    … In our view, it is abundantly clear that his Honour was satisfied that the wife, being left with no available assets of value and a pessimistic financial future compared to the husband who had a significant income and earning capacity, made it reasonable that he leaves the marriage with somewhat greater debt than she did. In so doing there is no error.”

The husband also alleged error as to there being no splitting order (he had sought an equal division of super) but the Full Court found no error in the trial judge’s approach, saying (at para 52):

“…     As to superannuation, the primary judge first observed that each party was ‘a long way’ from when their interests would vest. Having found that the wife would receive little or nothing from the proceeds of sale of property and expressed the pessimistic view of her financial future to which reference has already been made, his Honour said that the disparity in the value of their superannuation interests was ‘not large’. With these factors in mind, and on the additional basis that the husband’s greater income meant that he had the capacity to continue to contribute to his superannuation interests in a manner and to an extent that the wife could not, he declined to make a superannuation splitting order.

[53]    ( … ) … in each … of the recent years the husband earned considerably more than the differential amount [the difference between each party’s super balance]. Approached in this manner, we agree with the primary judge that the difference in the value of the parties’ superannuation interests was not large.”

The appeal was dismissed.

Financial agreements – Agreement was voidable at wife’s election as husband had misrepresented his assets – Duress – Whether solicitor signing certificate must be the solicitor who provided the legal advice

In Adame [2014] FCCA 42 (16 January 2014) Judge Jarrett considered a wife’s application to set aside a financial agreement where she claimed that she had entered into the agreement “under duress” (para 5); where the husband “did not properly disclose all of his assets to her when the agreement was made” (para 5); and where she said that while a statement of independent legal advice had been signed her legal practitioner had not given her “the advice as required by s 90G” and that “she received no copy of the certificate” (see para 151).

The Court said that the parties’ “relationship was tumultuous and they separated and subsequently reconciled on a number of occasions between 1995 and the parties’ final separation” (para 19).

While the agreement was signed the lawyer to whom the wife first took the agreement (“Mr B”) “was not willing to sign the certificate of independent legal advice” (para 52). Mr B’s firm provided a letter to the wife, the “second paragraph [of which] … consisted of one sentence: ‘For several reasons, we strongly advise you not to sign the Agreement in its present form.’ The letter thereafter set out the ‘several reasons’ in the clearest of terms” (para 58). The Court said “Mr Adame was to pay Mrs Adame’s costs incurred” with Mr B (para 56) and that Mr Adame then arranged with his own lawyer to “provide Mrs Adame with the name of an alternate lawyer to provide her with advice about the financial agreement”. That lawyer (“Mr C”) “also advised Mrs Adame not to sign the financial agreement for reasons not unlike those raised by Mr B” (para 64). Mr Adame also “paid for Mrs Adame’s legal advice from Mr C” (para 67).

The Court said that the husband emailed his lawyer saying he “bought another house in California at [L] beach” (see para 67) and that when his lawyer listed that property in a draft of the agreement, he emailed again saying that the wife did “not know about the US property. It’s under a trust fund for the kids so better take that one out” and “At this stage, I would rather not disclose that property.” (para 79). The husband later said that he had not actually bought the Californian property but that he was “big noting [him]self to [his] … solicitor” (para 68).

After the wife sent the husband an email which stated “I’m not signing it” (para 85) “Mr Adame made an appointment for Mrs Adame to meet [a further solicitor] Mr F…” (para 88) and that both parties “met with Mr F on 21 December 2010. It was the first time that Mr F had any communication at all with Mrs Adame” (para 89). At that meeting, Mr F said he “didn’t discuss anything in relation to the Family Law Act …” (para 91) but that the meeting with both parties “concerned clarification of the commercial terms of the agreement and his efforts that the agreement reflected what the parties intended” (para 92). The certificate was signed by Mr F and the agreement signed by the wife at a later meeting, as to which the Court said (para 113):

“I am not satisfied about the nature or the extent of any advice that was given by Mr F to Mrs Adame at the meeting of 14 January, 2011 when she signed the financial agreement. I am not persuaded by the generalised statements made by Mr F in his evidence, which merely conformed to the declarations made in the certificate attached to the financial agreement … It may well have been the case that both Mr F and Mrs Adame knew that the giving of such advice was unnecessary in circumstances where she had already received advice from two other lawyers about the financial agreement and she had nonetheless resolved to sign the document. Despite the certification attached to the financial agreement, I am not persuaded on the balance of probabilities that Mr F provided the advice set out in the certificate to Mrs Adame when she executed the agreement.”

The wife’s case was that she “understood what she was signing; she just did not want to sign it” (para 110) but that she “just ‘gave in’ and signed the financial agreement” (para 115).

The Court said (from para 128):

“…     In my view, however, the agreement is voidable at Mrs Adame’s election because it was entered into by Mrs Adame on the basis of a misrepresentation by Mr Adame as to his assets. Recital K of the financial agreement provides:

K.        The parties have detailed their assets herein below within Schedule A (Assets of Mr Adame), Schedule B (Assets of Ms Adame) and Schedule C (Assets of Mr Adame as trustee of the Trust).

[129] Although it is not stated expressly, there is a clear implication arising from that recital that all of the parties’ assets are detailed within the schedules attached to the agreement. I am satisfied that all of Mr Adame’s assets were not set out in Schedule A to the agreement. I am satisfied that Mr Adame owned, or had an interest in, property in California, United States of America from at least September of 2010.

( … )

[131] I am satisfied that when Mr Adame signed the agreement he knew that the representation that all of his assets were detailed in Schedule A to the agreement was false. I am satisfied that he knowingly made that representation to Mrs Adame. I am satisfied that he intended that she rely on that representation.

( … )

[132] I am satisfied that Mrs Adame relied upon Mr Adame’s statement set out in Recital J of the financial agreement (… )

[133] In those circumstances the financial agreement was voidable at Mrs Adame’s election. ( … )

[134] Further, I accept Mrs Adame’s argument that there was non-disclosure of material matters by Mr Adame. … It must necessarily be material … for there to be complete disclosure of … assets and resources. It may not be necessary for that disclosure to occur on the face of the financial agreement. There may be other dealings between the parties, including negotiations leading up to a settled form of financial agreement, which makes it clear that there has been proper disclosure of all material matters between the parties. Where, however, the terms of the financial agreement provide, either expressly or by implication, that the parties assets and financial resources are recorded within the terms of the agreement itself, the failure to include particular assets or particular financial resources may well amount to non-disclosure of a material matter for the purposes of s 90K(1)(a) of the Act.

[135] I do not, however, think that it is generally necessary that such disclosure extends to the provision of values for those assets and financial resources in the financial agreement, or otherwise. … It is the identity and existence of the relevant assets and financial resources which is material to the financial agreement.”

As to duress the Court said “at its highest [the wife’s] … case seemed to be that Mr Adame wished for the financial agreement to be signed and harassed her until she signed it (para 138). The Court said (from para 141):

“[141]          I am satisfied that Mr Adame brought pressure to bear upon Mrs Adame to sign the agreement. That pressure took the form of repeated requests to sign the document and expressions of displeasure and anger by him towards her for not wishing to sign the agreement. ( … )

[142] To secure relief in equity, Mrs Adame must establish that the pressure that was brought to bear upon her by Mr Adame to sign the financial agreement was, in all the circumstances, illegitimate. Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct ( … )

[146] … given the findings I have made about Mr Adame’s misrepresentations, I have no difficulty with finding that the pressure that was brought to bear upon Mrs Adame by Mr Adame contributed to her decision to execute the financial agreement. Mrs Adame was in a position of special disadvantage because Mr Adame knew the real facts about his assets and concealed them from her. Moreover, he knew that she was unwilling to sign the document, but nonetheless insisted upon her doing so and organised lawyers for her to see until one was willing to sign the certificate of independent legal advice. I accept Mrs Adame’s evidence that those matters weighed upon her until she simply ‘gave up’. ( … )”

The Court also considered whether the legal advice given to the wife by her previous solicitors would comply with the s 90G requirement as to the provision of advice and the signing of a certificate. The Court said (from para 153):

“…     … despite the certificate signed by Mr F, Mrs Adame did not receive advice about those matters from Mr F. He was concerned entirely with the ‘commercial terms’ of the agreement and whether those terms reflected the parties’ intentions.

[154] In those circumstances, the issue for determination is whether the signed statement that must be provided to a party signing a financial agreement pursuant to s 90G(1)(c) must be a statement signed by the legal practitioner who gave the advice pursuant to s 90G(1)(b) or whether it can be another legal practitioner.

[155] In my view, the signed statements provided for the purposes of s 90G(1)(c) must be given by the legal practitioner who gave the advice for the purpose of s 90G(1)(b) of the Act. I reach that conclusion for the following reasons:

a)    s 90G(1)(c) used the definite article “the” before the words “legal practitioner” which tends to suggest that it is a direct reference to the legal practitioner referred to in s90G(1)(b); and

b)    if it were otherwise the case, the legal practitioner signing the statement for the purposes of s 90G(1)(c) would have to make such inquiries so as to satisfy him or herself that the advice under s.90G(1)(b) had been given.

[156] The absence of a signed statement by the legal practitioner who gave Mrs Adame the advice required by s 90G(1)(b) means, in my view, one of the critical requirements of s 90G(1) of the Act is missing. The financial agreement is not, for that reason, binding on these parties.”

Financial agreement not set aside despite its “extra wording” as to the receipt of independent legal advice which went beyond the scope of s 90G(1)(b)(i) – Release of maintenance held void but severed from agreement 

In Adamidis [2009] FMCAfam 1104 (22 October 2009) (Lapthorn FM) a husband who entered into a financial agreement after the wife had received an inheritance of $980,000 (there being few other assets) failed in seeking to have the agreement set aside, despite its “extra wording” as to the receipt of independent legal advice which went beyond the scope of s 90G(1)(b)(i) of the Family Law Act.

He did, however, succeed in getting the provision for release of maintenance severed from the agreement which contained no provision for payment or allocation of maintenance as required by s 90E of the Family Law Act, and was granted leave to amend his $250,000 property claim so as to be for maintenance instead.

A coercive order requiring mother to relocate with the parties’ child so as to live closer to the father is set aside by the Full Court


In Adamson [2014] FamCAFC 232 (3 December 2014) the Full Court (Ainslie-Wallace, Murphy and Kent JJ) heard an appeal by the mother of a three year old child (“X”) from an order made by Judge Altobelli (Adamson [2014] FCCA 73) requiring the mother to relocate. The child was barely 12 months old when her parents separated in 2011, the mother relocating from Sydney to Town S (200 kilometres north of Sydney) after the father assaulted her (paras 17-18). The father remained in Sydney but he also relocated during the trial in 2013, although to Town C on the Central Coast of NSW (90 kilometres north east of Sydney and 140 kilometres or a two hour drive from Town S).

Both parents “contended that it was in the child’s best interests that they have equal shared parental responsibility and that she continue to live with the mother” (para 1), the disputes being the child’s time with the father (paras 2 and 5) and a coercive order that was made on the application of the father:

“That the mother do all things necessary to relocate [the child’s] home so that she resides in the New South Wales Central Coast region within a radius not exceeding 20 kilometres of [G] railway station … no later than 17 January 2015.”

When that order was made the mother and the child had been living in Town S for more than two and a half years (para 3), the Full Court observing (para 8):

“Notably, the final orders made did not include any order imposing any restriction upon the father’s ability to live wherever he chose.”

The Full Court said (from para 35):

“…       No ground of appeal asserts error in the trial judge’s finding that the Court has the power to make an order requiring the mother to move. Nor was it contended below that the Court lacked that power. His Honour found specifically that the power “is found in s 65D and 68B of the Act” … Authority supports his Honour’s conclusion (Sampson & Hartnett (No. 10) (2007) FLC 93-350 (“Sampson”); Ember & Assadi [2013] FamCAFC 107 – although it might be noted that his Honour appears to adopt the reasoning in the latter case which holds, contrary to what is asserted in the former, that the court’s power lies not in s 114 of the Act but in the sections to which his Honour referred. Again, no issue arises on this appeal in relation to any such distinction.     

  [36]      … it is important to … observe that this Court said in Sampson:

‘47.      As indicated earlier, the purpose of a ‘coercive’ order is more to create a situation, rather than choose between situations that already exist …

(…)

58.      However, we conclude there is power under s 114(3) of the Act to enjoin a parent from relocating or to relocate, provided that that injunction is no more than is necessary to secure the best interests of a child. The proper exercise of such a power is likely to be rare, because:

(i)        the location of the child will usually be the critical factor, leaving to the parents the choice about their roles; and

(ii)       in a parenting case, an order directed to a parent to relocate or not will likely only serve a useful purpose if that parent is to then discharge a particular role as a parent. If the evidence supports a finding that the parent will play that role, if the child is relocated or not, the order directed to the parent will likely be superfluous. If the evidence does not support such a finding, the order will be coercive in nature and be equivalent to forcing that parent to discharge a role in circumstances not of that parent’s choosing.’

(Emphasis added)

[37]    In Sampson this Court thus made it plain that ‘[t]he proper exercise of such a power is likely to be rare’ and orders made pursuant to an exercise of that discretion would be ‘…at the extreme end of the discretionary range…’ … It follows that there should exist ‘rare’ or ‘extreme’ factors that warrant the Court exercising its discretion to make ‘coercive orders requiring a parent to relocate so as to continue to be the primary carer of their child/ children …

[38]    … it is important to observe that this Court also said in Sampson, when discussing the application of s 65DAA:

‘( … )

75.      To order someone to relocate to another place will require the court to be satisfied that the practicalities of life equally or sufficiently exist in the place to which the party is required to move. One would therefore reasonably expect a close analysis of the moving party’s capacity and/or the other parties’ capacity to provide for such practicalities having regard to the orders proposed by the court. It is probably only in the circumstance of significant wealth of both parties that it might reasonably be inferred that the practicalities of life could be met without detailed inquiry.’

(Emphasis added)

( … )

[41]    It can thus be seen that having the power to make a coercive order is one thing, but the circumstances which must exist to justify its legitimate exercise is quite another.”

The Full Court continued (from para 44):

“        … the trial judge found that, even on the mother’s proposal that she and the child continue living in Town S whilst the father remained in Town C with the child spending time with the father as proposed by the mother, the child would continue to have a meaningful relationship with the father.

[45]    It follows that it could not be said that the coercive order was founded upon any identified need, in the child’s best interests, essential to establishing or maintaining the child’s meaningful relationship with the father.

( … )

[47]    Second and crucially … the trial judge found that it was common to the proposals of both parents that it was in the child’s best interests that she should continue living with the mother. The trial judge found that it was not the father’s proposal that the child should live with him even if the mother did not herself relocate. …

( … )

[49]    … in the context of the trial judge’s findings that:

*      Separation took place after the assault of the mother by the father on 17 July 2011 resulting in a final apprehended domestic violence order being made against the father at the Local Court for 12 months;

*      The father’s conviction on a charge of common assault with the imposition of a good behaviour bond for two years …; and

*      The subject actions of the father constituted family violence …

the trial judge made specific findings that in moving to Town S at separation the mother ‘had no other option open to her’ and that ‘it is clear the mother had no alternative’. …

[50]    It is thus clear on the trial judge’s findings that not only did the mother and the child commence living in Town S soon after separation (in mid-2011) as a result of the choice made by the mother as to where she (and the child) would live, the reality for the mother was that at separation she had no alternative but to make that choice. In this context it bears repeating that by the time of the final orders being made the mother and the child had been living together in Town S for more than two and a half years.

[51]    No person or court order required the father to move to Town C in September 2013. He moved to a place and at a time of his choosing. …

( … )

[53]    In our judgment the central findings which we have identified thus far do not sit conformably with a conclusion that rare or exceptional circumstances existed in this case such as to justify a legitimate exercise of discretion to make the coercive order. ( … )

( … )

[61]    This was not a case of a mother, having primary care of a child, proposing to relocate at all, let alone any significant distance or internationally ( … )

[62]    Nor was this a case of any great … geographical distance between Town S, where the mother had chosen to live and wished to continue to live, and Town C where the father had chosen to live. ( … )

[63]    Nor was this a case … where the mother’s choice to live in Town S is open to any criticism. ( … )

[64]    Nor was this a case where each parent presented an alternative proposal or option for the child’s primary residence. …

( … )

[71]    In our judgment, having regard to the central features of this case as reflected in the central findings of the trial judge earlier discussed, the trial judge failed to apply these principles in assessing the s 65DAA considerations and in exercising the discretion to make the coercive order. In doing so, his Honour acted upon wrong principle and did not take into account material considerations and thereby erred in exercising the discretion. …”

The appeal was allowed. The coercive order was discharged, the order as to the father’s time with the child varied and the case otherwise remitted for rehearing. 

Adjustment having regard to substantial debt and how it was incurred – Fraud – Indemnity – Non-disclosure  

In Agner & Somers [2011] FMCAfam 291 (14 April 2011) after an eight year marriage the parties sought property orders in respect of a modest asset pool which the court found hard to identify (para 56). 

Altobelli FM described some of the issues at para 3:

“During the course of the marriage the husband became bankrupt, and most of the assets they then had were lost as a result. During and after the bankruptcy the parties made a number of investments in the name of the wife, and these too were unsuccessful, leaving debts in the wife’s name. In view of this, this case is primarily about how to adjust the parties’ relatively modest property having regard to substantial debts, and how they were incurred. The wife raises issues about the extent to which the husband has complied with his duty of disclosure.”

Altobelli FM said further at paras 30-31:

“ … the husband used both his wife and his brother as convenient entities to participate in some form of investment scheme which, as far as can be ascertained from the evidence, involved the purchases of property putting in no money, but buying property in their name though in trust for [T], and borrowing substantial sums of money from [L] on the basis of low doc loans, all with complete disregard about the purchaser/borrower’s capacity to repay these loans. An accountant appears to have participated in what can only be described as blatant perfidy, all at the husband’s initiative and direction.

When the scheme came crashing down, with the properties sold at mortgagee sale at substantial losses, the wife and presumably the husband’s own brother were left to suffer the consequences as the husband walked away.”

Altobelli FM ordered that the husband indemnify the wife as to any claims for payment by any third party or entity concerning any properties bought in the wife’s name and secured by mortgage and any other loans in the name of the wife from any source, whether or not secured by real estate.

As to disclosure, Altobelli FM at para 22 referred to the husband’s reliance on a single affidavit that was 18 months old “which contained minimal relevant information”; to his “cursory” treatment of his bankruptcy and ASIC investigations; and to his “scant evidence” as to the mortgages and his employment. Altobelli FM applied Weir (1993) FLC 92-338 where the Full Court held that “once it has been established that there has been deliberate non-disclosure … the court should not be unduly cautious about making findings in favour of the innocent party”.

The asset pool was assessed at $152,000 ($112,000 of which was in superannuation) and at para 53 Altobelli FM said:

“ … when the evidence in this case is viewed overall, the husband made the major financial decisions throughout the course of the marriage, and she went along with this, for better or worse. That does not mean, however, that she was a party to what I would describe as the husband’s fraud perpetrated on [L]. On the evidence before me, I have no doubt that but for the fraud perpetrated by the husband, particularly in terms of the massive overstatement of the wife’s income, these transactions would not have gone through. Thus, if it is possible to say that one party made a greater contribution than the other to a liability, that is clearly the case in relation to any liability that the wife owes to the mortgage insurer or any other creditor emerging out of this failed fraudulent investment scheme.”

Altobelli FM added this at paras 55-56:

“I’m still struck with the artificiality of having a discussion about contribution to the pool of assets as I have found it, in the circumstances of this case. Nonetheless, doing the best I can, the wife’s contribution should be assessed as at least 50 per cent.

I think the real issue in relation to assessment of contribution is that the husband has failed to adequately disclose what his real financial position is. The real problem is 50 percent of what?”

An adjustment of 32 per cent was made for s 75(2) factors in favour of the wife with whom the two children of the marriage lived, Altobelli FM saying that “the court is entitled to adopt a robust approach” in cases of non-disclosure. As well as the indemnity, splitting orders were made in respect of two superannuation funds. 

Law firm subpoenaed by wife for production of documents – No conduct money provided at time of service – Costs of $770 for compliance and costs thrown away ($1,500) considered reasonable, but husband ordered to pay as his failure to disclose had necessitated the subpoena  

In Agostino & Co Solicitors & Anor & Colville [2014] FCCA 3127 (23 July 2014 but published April 2015) Judge Harman heard a case where the wife issued a subpoena to a solicitor (“the solicitor”) but presented an undated cheque for $30 at the time of service such that “no conduct money accompanied the subpoena” (para 12). The day before the date for production, the solicitor who returned the cheque and sought costs of $1,540 for compliance, after which the cheque was dated and returned.

Instead of filing a Notice of Objection in accordance with the Rules the solicitor filed an Application in a Case for reimbursement of the cost of compliance, the wife seeking an order that the solicitor appear before the court to explain his non-compliance and as to why there should not be an order for costs in favour of the wife or that the solicitor be referred to the Legal Services Commissioner (para 21).

When the solicitor ultimately produced the documents the Court considered the remaining issues in dispute, being the cost of compliance, the costs of the appearance and who should be liable for those costs (para 28).

The Court said (from para 31):

“…       Clearly, at the time that the subpoena was served, conduct money was not provided. It has since been provided and would appear to comply with the relevant rule. No issue is raised that it does not, so far as the cost of travel is concerned.

[32]     However, the Rules also provide at rule 15A.10 that the Court may make an order for costs with respect to ‘any loss or expense incurred in complying with a subpoena’.

[33]     At rule 15A.11 provision is made for the costs of complying with a subpoena by a non-party. It provides clearly that if a subpoena is addressed to a person who is not a party and before complying with the subpoena the person who is being subpoenaed issues a notice, (presumably to the person who has served the subpoena upon them and caused its issue) that substantial loss or expense would be incurred in properly complying with the subpoena and including an estimate of loss or costs and if the Court is satisfied that the substantial loss or expense is incurred, that the Court may then make an order to reimburse that cost.

( … )

[38]     What is sought in relation to the cost of compliance is an amount of $770. That is made up of two hours of the professional’s time at a rate of $350 per hour plus GST.

[39]     The Court’s jurisdiction to make an order for ‘costs’ in this circumstance relates to loss and expense.

( … )

[42]     As regards the charge out rate, I have no difficulty with it. Clearly, the attorney is highly qualified and experienced and there is no realistic basis to suggest, within the context of the legal market, that the charge out rate is unusual or excessive. ( … )

[43]     The issue also arises as to what is required regarding compliance with a subpoena. It is instructive to consider the material that is sought being ‘[a]ll documents, deeds, files and contracts from 1 January 2010 to date’ relating to five individuals or entities and relating to 10 specific transactions of either purchase or sale of commercial property or real estate. In addition, documents are sought with respect to wills and probate issues relating to the estate of the late Mr Colville.

[44]     Clearly, the documents that are required to be produced are substantial. As counsel for the subpoenaed attorney has made clear, there is some real requirement for legal attention to be applied to compliance with the subpoena. What is required to comply with the subpoena is to ensure that all documents within ‘the possession, custody or control’ of the recipient and which fall within the category or classes of documents requested are produced.

[45]     There is real force to counsel’s submission that the eye of a solicitor and their experience, qualification and training would be required to determine full compliance, lest there then be a suggestion that there has been something other than full compliance or the production of documents which could not or need not be produced or might be the subject to some claim for privilege. It is not sufficient or appropriate to simply retrieve the files and send them.”

After approving $770 as the cost of compliance, the Court considered the costs of the day in court, saying (from para 57):

“…       As their Honours comprising the High Court in the Norton Rose Litigation [Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Managing and Marketing [2013] HCA 46] made clear, rules with respect to matters of this nature should not be necessary. It may be necessary for such rules as regards non-practitioners, but these lawyers should have sorted this issue out between themselves.

( … )

[66]     The matter can and should have been dealt with by people picking up the telephone and speaking to each other. If that had occurred, then surely a sensible and commercially realistic determination of the issue could have been made inter partes without the need for the Court’s involvement.”

After finding that an appearance by the third party (the solicitor) was necessary, the Court ordered that $1,500 be paid towards the third party’s costs.

As to who should pay each amount, the Court said (from para 72):

“…       During the course of the proceedings, the husband has been less than diligent in his attending to his obligations. ( … )

( … )

[74]     The parties attended a Conciliation Conference with a Registrar. However, the Conference did not proceed. The Registrar’s bench sheet commences with ‘Parties attended, husband has not complied with disclosures [sic]’. Accordingly, the proceedings were referred back to my list and came before the Court on 3 July 2014.

[75]     As a consequence of non-disclosure by the husband, the subpoena was issued seeking to obtain documents, which should and could have been disclosed by the husband. They are by and large, documents that would have been in the husband’s ‘possession, custody or control’.

( … )

[79]     The husband did not attend on 3 July 2014 and had not instructed his solicitors sufficiently to enable them to continue to act. He is in the process of seeking to do so now. However, that simply compounds the difficulties. The Court does not have any input from him with respect to this issue.

[80]     If the husband’s obligation of disclosure had been met then it would have obviated the need for the issue of the subpoena at all and thus, the issues which have arisen.”

The husband was ordered to meet the approved sums of $770 and $1,500 for the costs of the subpoena.