Procedure – Change of venue from Melbourne to Albury granted

In Argyle & Jerrems [2012] FMCAfam 149 (22 February 2012) Harman FM granted the father’s application for a change of venue for the further hearing of parenting proceedings from the Melbourne registry to the Albury registry of the FMC where the proceedings had previously been conducted. Harman FM cited FMCR 8.01 as to the factors relevant to an application for change of venue between registries of the Court, being the convenience of the parties; the limiting of expense and the cost of the proceedings; whether the matter has been listed for final hearing and any other relevant matter. 

Harman FM’s discussion of the case for each party in respect of each of those factors is set out at paras 15-48.

 

Attachment parenting and alienation by mother – Reversal of care for 6 year old child to father from primary carer mother who could not shield the child from exposure to her adverse view of the father’s parenting – Discussion of immunisation

In Arranzio & Moss [2015] FamCA 544 (17 July 2015) Hogan J heard a parenting dispute between an Australian born mother (the child’s primary carer since birth) and Italian born father who were both “in their own ways, devoted to” their 6 year old son (at [6]) but had “diametrically opposed parenting views” ([13]) which included disagreement as to whether the child “should be immunised or not … what food he should eat … whether he should be the subject of further testing for alleged allergies to food … [and] whether he should be baptised” ([5]). A family report writer (“Ms D”) assessed the mother as having implemented “attachment parenting” in which “she and the child have consistently co-slept, he was breast fed on demand until he was about 4 years of age and did not attend kindergarten or any other form of outside the home care until then” ([7]).

Hogan J said at [38]-[39]:

“When analysed, the mother’s evidence really amounts to the contention that, such are the father’s failings as a parent, the child does not obtain any benefit from spending time with him. ( … )

Such a view ignores the unambiguous and consistent observations of the interactions between the child and his father … However, its expression by the mother provides a clear insight into the reality of her purported support for the child’s ongoing relationship with his father. The rigidity, totality and emphatic nature of her opinion that there is nothing the child can gain from the opportunity to spend time with his father provides a clear basis for the father’s concern that, if the child continues to live primarily with her, the likelihood of him receiving true support for an ongoing relationship with him (his father) is slight indeed.”

The Court continued (from [65]):

“…     In 2011, the child was just over two years of age. He appeared happy, even tempered and ‘remarkably calm’ throughout the sessions conducted by Ms D. … I accept Ms D’s opinion that her observations of the father’s interaction with the child suggested a mutually warm and loving relationship then existed …

[66]    During her 2012 interview, Ms D saw the child demonstrate a degree of clinginess with his mother – he became anxious and clingy, buried himself in his mother’s chest, started crying and said several times with genuine distress ‘I don’t want daddy to take me away’. ( … ) When Ms D told his father what had happened … the father responded appropriately by consoling him and reassuring him that he (the father) was not taking him anywhere.

[67]    The child then settled very quickly ( … )

( … )

[69]    Ms D considered the child was in the process of growing his developing bond with his father. ( … ) Given the child’s exposure to what Ms D regarded as attachment parenting in the mother’s house and the father’s absence from that residence, this was to be expected. She concluded that the father presented as strongly capable of managing the child’s emotions ( … )

( … )

[87]    I accept Ms D’s evidence to the effect that the child’s presentation was ‘most unusual’ for a child of his age. I accept her evidence that, despite expressing views to the contrary, the child welcomed contact with his father during her observations. ( … )

[89]    Against the background of his earlier observed interactions with his father:

a)    the content of the child’s comments to Ms D; and

b)    his demeanour during his interaction with her; and

c)    the manner in which he conveyed those comments to her, persuades me to conclude it is more likely than not that the child has been significantly influenced or encouraged (or, as the father would have it, ‘coached’) to tell Ms D the things she records.

( … )

[101] … I do not accept the mother’s implicit contention that [the child’s] refusal on occasion to spend time with his father is because, having become more aware, he has chosen her parenting style as the better or superior one. ( … ) I also do not accept her … contention that the child’s behaviour at the Centre when refusing on occasion to interact with his father has occurred because he has had ‘a gutful’ (of time with his father). I have little difficulty, however, in concluding that she has had a ‘gutful’ of having to accept the father’s ongoing presence in the child’s life.

[102] I accept Ms D’s assessment of the father as very child focused and as having an understanding of the child’s emotional and physical needs. ( … )”

The Court concluded (from [119]):

“…     A striking example of the mother’s inability to shield the child from exposure to her view of the father’s parenting of him [was where] … the child told his father that his mother had said he (the father) was a monster and wanted to make him (B) sick.

( … )

[133] I have no doubt that the child’s expressed desire to continue to live with his mother is something genuinely felt by him. However, as I have already noted, such expression of wish is hardly surprising given the significant influence his mother has had upon his life to date.

[134] There can be little doubt that changing the child’s primary care regime in the manner sought by the father initially or the independent children’s lawyer through submission is highly likely to cause him significant short-term distress and upset. However, I note that Ms D has consistently assessed the father as having the capacity to soothe the child and address and manage feelings of distress and upset. ( … )

( … )

[162] … it could not seriously be thought that these parents are capable of reaching decisions jointly about major long term issues relating to the child in the manner required [if] an order for equal shared parental responsibility is made.

( … )

[167] Ms D’s third family report recommended that the parent with whom the child primarily lived be accorded sole parental responsibility for him. ( … )

[168] ( … ) [The mother’s evidence] persuades me to the conclusion that there is a significant risk to the child’s long term physical and psychological health if he is not afforded the opportunity to spend significantly greater time in his father’s care.”

As to the mother’s application to restrain the child from being vaccinated, the Court considered evidence from doctors ([198]-[260]), saying (at [248]-[258]):

“…     It is possible, in one sense, to infer that the particularised travel injunctions sought by the mother – which would prevent the child from travelling to any country located on the continents of Asia, Africa, Middle East or South America or to any country which is classified as a ‘developing country’ … constitute a tacit acknowledgment of the risks associated with not vaccinating the child: especially given Dr G’s evidence that an unvaccinated person who travels to a third world country where the diseases against which vaccinations are prevalent would be at a high risk of developing the disease.

( … )

[258] I consider that the consequences for the child of contracting a disease against which he may be vaccinated are so significant that they significantly weigh against the grant of an injunction prohibiting the administration of vaccine. …”

It was ordered that all previous orders be discharged, that the child live with the father, that he have sole parental responsibility and that the child spend alternate weekends and half school holidays with the mother.

Hague Child Abduction Convention – Mother ordered to return child to New Zealand – Conditions imposed which father could not meet set aside on appeal as not proper or appropriate to give effect to the Convention

In Arthur & Secretary, Department of Family & Community Services and Anor [2017] FamCAFC 111 (29 June 2017) the Full Court (Bryant CJ, Thackray & Austin JJ) heard cross-appeals concerning the return of a child to New Zealand pursuant to the Family Law (Child Abduction Convention) Regulations 1986 (Cth) (made under s 111B of the Family Law Act to give effect to the Hague Child Abduction Convention). The mother’s appeal was against an order of the Family Court of Australia that she return the parties’ child to NZ and the father’s appeal was against the Court’s subsequent order prescribing conditions for the return. The Department of Family & Community Services opposed the mother’s appeal but supported the father’s.

Parenting orders were made in New Zealand in January 2013 in which the child was to have supervised time with the father, the mother also being granted a protection order in New Zealand against the father on the ground that he had engaged in domestic violence against the mother. The mother took the child to Australia in May 2016, telling her mother that she would return to New Zealand in June 2016. When she failed to return the father brought Hague Convention proceedings. The Family Court of Australia ordered the return of the child to New Zealand, but imposed conditions upon the child’s return, including the following which the father appealed, being ([60]) that he:

1)      pay the mother “such reasonable sum as may be nominated” by the mother “or approved by the Court for the purposes of securing furnished accommodation in New Zealand for 2 months” to cover the mother’s rent and rental bond;

2)      provide the mother with an undertaking to pay NZ$535 per week for “the sustenance of the mother until the mother commences to receive welfare payments”;

3)      pay all child support obligations, either in Australia or New Zealand;

4)      undertake to provide his employer with a copy of the existing protection order and that he not use or access any firearm pending further order of the New Zealand Family Court.

The husband argued that these conditions were ultra vires or, alternatively, made without proper consideration of the husband’s meagre financial position to the extent that they had the effect of frustrating the return order. 

The Full Court said (from [69]):

“The Convention does not mention conditions being imposed on return orders, however, at least in common law countries, the use of conditions (or the acceptance of undertakings as a condition of return) is well accepted … In Australia, the power is conferred by reg 15(1) which provides:

(1)     If a court is satisfied that it is desirable to do so, the court may, in relation to an application made under regulation 14:

(a)     make an order of a kind mentioned in that regulation; and

(b)     make any other order that the court considers to be appropriate to give effect to the Convention; and

(c)     include in an order to which paragraph (a) or (b) applies a condition that the court considers to be appropriate to give effect to the Convention.

[70]    The power to impose conditions is not limited to cases where a defence has been successfully raised. In this respect, our law may differ from New Zealand where it has been said in obiter that it seems ‘reasonably clear’ that conditions can only be imposed on a return order if a defence has been established: A v Central Authority for New Zealand [1996] 2 NZFLR 517 … 

[71]    The reg 15(1) power is limited only by the requirement that the condition is ‘appropriate to give effect to the Convention’. But how are the limits of a power so expressed to be drawn? While the preamble of the Convention speaks of the desire to ‘protect children … from the harmful effects of their wrongful removal … and to establish procedures to ensure their prompt return to the State of their habitual residence’, the entire Convention is predicated on the basis that ‘the interests of children are of paramount importance’. Potentially, any condition attached to a return order that is designed to advance the interests of the child could be seen as giving effect to the Convention. 

[72]    Useful guidance can be gained from the Fifth Meeting of the Special Commission held at the Hague in 2006, which concluded that: 

1.8.1  Courts in many jurisdictions regard the use of orders with varying names, e.g., stipulations, conditions, undertakings, as a useful tool to facilitate arrangements for return. Such orders, limited in scope and duration, addressing short-term issues and remaining in effect only until such time as a court in the country to which the child is returned has taken the measures required by the situation, are in keeping with the spirit of the 1980 Convention … 

( … )

[76]    Despite academic criticism … of the undertakings required by Butler-Sloss LJ in [a 1989 English case] … there has been no criticism of the principles her Ladyship stated in a later case, Re M (Abduction: Undertakings) [1995] 1 FLR 1021 at 1025 including that:

•        conditions or undertakings should operate only until the courts of the country of habitual residence ‘can become seized of the proceedings brought in that jurisdiction’;

•        when imposing conditions or requiring undertakings to be given, courts ‘must be careful not in any way to usurp or be thought to usurp the functions of the court of habitual residence’; and

•        conditions or undertakings ‘must not be so elaborate that their implementation might become bogged down in protracted hearings and investigations’.

[77]    Most importantly for the father’s appeal, Butler-Sloss LJ stressed that undertakings that are required as a prerequisite to an order for return are:

‘… designed to smooth the return of and to protect the child for the limited period before the foreign court takes over, but they must not be used by parties to try to clog or fetter, or, in particular, to delay the enforcement of a paramount decision to return the child’. 

[78]    This brings us to the father’s argument, which in a nutshell is that:

•        he could not afford to meet the cost of the conditions; 

•        the child would therefore not be returned; 

•        such an outcome did not give effect to the Convention; and

•        therefore the conditions were ultra vires.

[79]    While accepting all of the premises, we are not persuaded it is appropriate to view this issue through the prism of power. Regulation 15(1) confers a wide discretion that must respond to a variety of circumstances. The corollary of the father’s argument would seem to be that if he had the means to comply, then the conditions would have been within power. Such an argument seems to us to sound in discretion rather than in power. 

( … )

[90]    As there was nothing put to his Honour (or to us) to contradict the information given at the hearing below concerning the father’s modest income … we accept the submission of the father’s counsel that the imposition of these conditions ‘set up a scenario where the child would not be returned to New Zealand’.

[91]    Although his Honour foreshadowed … that the father’s financial circumstances were a matter ‘of concern about other conditions’, he made no reference to this at all when accepting the proposals for the payment of the amounts summarised above. Given that the father’s ability to pay was clearly a relevant consideration, we consider his Honour’s discretion miscarried. 

[92]    Whatever may be the position where a defence has been successfully raised, we do not consider it proper, when making a mandatory return order, to impose conditions that cannot be met. The discretion to impose conditions has to be exercised having regard to the purpose of the Regulations. ( … )

[93]    As Butler-Sloss LJ has said, conditions also must not be used ‘to try to clog or fetter, or, in particular, to delay the enforcement of a paramount decision to return the child’. …

[94]    We consider that his Honour erred in failing to recognise that the conditions would result in the child not being returned to the country from which she was wrongfully removed, and that they therefore did not satisfy the requirement that they be ‘appropriate to give effect to the Convention’”.

The father’s appeal was allowed and the contested conditions for the return order were set aside.

Jurisdiction – Concurrent proceedings in Australia and England – Wife restrained from continuing her case in England where husband had filed first here – “Forum shopping”

In Ashforth [2010] FamCA 37 (29 January 2010) a couple had lived together and been married in England for 17 months before separating in Australia where their child was born, the UK-resident husband applying here for parenting and property orders and the wife (currently an Australian resident) subsequently issuing proceedings in England for maintenance and property orders.

In applying the test adopted by the High Court in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564-565 (followed by the High Court for the purpose of family law proceedings in Henry (1996) FLC 92-685), Rose J held that the Family Court of Australia was not “a clearly inappropriate forum” and that the wife be restrained from continuing her proceedings in England.

Rose J did not accept that continuation of the Australian proceedings would be oppressive [interpreted in Voth as “seriously or unfairly burdensome, prejudicial or damaging”] or vexatious [“productive of serious and unjustified trouble and harassment”]. Nor did the court accept that the valuation of English real estate would be hampered, or the claim that the Family Court could not provide “complete relief” via a recognised order as to the husband’s British superannuation, as such an order was unlikely to be made.

Rose J at para 34 added:

“I also give significant weight to the wife causing the institution of the English proceedings not only subsequent to the institution of the proceedings in this Court but some three weeks after she had received written notice of such proceedings.  An inference may be drawn of forum shopping which has been criticised by various courts over many years.” 


Father imprisoned until 2040 granted no time with daughters – His consent to the issue of passports to the children (aged 12 and 6) was dispensed with – Mother granted sole parental responsibility – Order facilitating phone contact by the children and the sending of correspondence by father

In Aslam & Render [2017] FCCA 3180 (22 December 2017) Judge Obradovic heard the father’s application for time with the parties’ 12 and 6 year old daughters brought in response to the mother’s application for parenting orders. The father was serving a sentence in a maximum security gaol for supplying a large commercial quantity of a prohibited drug, with a non-parole period of 21 years and 6 months to expire in 2040. The last time the children spent time with him was in late 2014 in gaol before his sentence.

The Court said (from [22]):

“The issue … is not simply about the risk of harm, it is about the nature of the risk, the degree of risk, what might be done about the risk and    the balancing of assessed risks against the benefit of the child having a relationship with the parent against whom the risk of harm is alleged to be unacceptable … The issue is the extent of the risk and the things that might be done reasonably to alleviate (not eliminate, but alleviate) the risk [Jopson & Lilwall (No. 2) [2016] FamCAFC 262 at [56]].

[23]   The more serious the consequences the higher the risk even if the odds of this happening of the relevant event are comparatively low … However, once a finding of unacceptable risk of harm is made, ‘the finding can come down between parent and child like an iron gate that no subsequent efforts can raise’ [Napier & Hepburn [2006] FamCA 1316 per Warnick J at [114]].

Best interests considerations

[24]   The mother makes very serious allegations of family violence. The father denies all allegations and indeed, he denies that the relationship was anything other than ideal, even after his arrest and when the mother took the children to visit him in gaol.

( … )

[26]   The children expressed to the family consultant as follows:

a)      X reported that her memories of living with the father were that he was often not at home, and that when he was, he was usually angry and she could hear him yelling at the mother.

b)      X also said that she remembers the father hitting her and locking her in her room, and that when he was angry he would ‘throw stuff around’.

c)      During the visits to gaol, X said that the father did not show any interest in her and that he would ‘just shush us and tell us to go the playground and yell at mum’.

( … )

[27]   The children have not had any face to face time with the father for three years. The last time they went to visit him in gaol they said to the mother ‘I don’t want to visit dad again … It’s a terrible place and I don’t want to go back there’. …

( … )

[30]   The Court accepts the mother’s evidence in relation to the family violence, and finds that the father did engage in physical violence against X during the parties’ relationship, that he threatened and intimidated the mother both during the parties’ cohabitation and after he was incarcerated, and that the father’s family engaged in threatening and intimidating tactics against the mother.

[31]   As such, the Court finds that the children will be placed at an unacceptable risk of harm if they were to spend any face to face time with the father:

a)      The father has engaged in threatening and intimidating behaviour, which has continued since his incarceration;

b)      The child X has memories of the father’s physical abuse of her and verbal abuse of the mother;

( … )

d)      The children have expressed strong wishes not to spend time with the father at a correctional facility.

[32]   The mother has since the father’s incarceration, taken the children to spend time with him. She has, the Court finds, demonstrated an appropriate attitude towards her responsibilities of parenthood and that despite the duress and intimidate suffered at the hands of the father, she has attempted to foster a relationship between the father and the children, and will continue to do so notwithstanding the fact that the children will not see their father out of gaol until their mid adulthood.

( … )

[36]   … [T]he father’s insistence on seeing his children because it will help him do his time, is strong evidence of his priorities, namely that he prioritises his own needs above those of the children. The father is completely dismissive of the children’s wishes and indeed tried to impress upon the Court that the children have expressed strong wishes to him to see him. The mother of course gives evidence to the contrary, and the Court accepts the mother’s evidence over that of the father where the two are in dispute. …

[37]   Maximum security gaols are no place for children to visit, even in the best of circumstances. These two children have not had a positive relationship with the father and the time that they have spent with him while he has been incarcerated has not been a positive experience for them. To put them in a situation where they and their mother have to travel to (omitted) Correctional Facility on a regular basis over the course of the next many years is not an order that the Court considers is in the children’s best interest.

[38]   The mother submits to the Court that the children should have the opportunity of communicating with their father, and for this reason she submits to the Court that orders for the children to have telephone communication with the father on a regular basis, as well as to receive cards and gifts from the father are orders in the children’s best interest. Such orders will ensure that the children retain a relationship, and know their father. At the same time the orders will ensure that the risk to the children will be minimised.”

Orders were made for the mother to have sole parental responsibility; no time between the father and the children; that the mother be permitted to leave the country with the children without the father’s consent; and an order facilitating phone contact by the children and the sending of correspondence by the father.

Property – Debts exceed assets – Declaration as to liability

In Athanastos [2011] FamCA 66 (16 February 2011) Cohen J found that the parties’ debts exceeded their assets by $558,000. Cohen J assessed their liability in respect of each debt, then declared that “neither party has any interest in any property or has any liability for any debt solely held by or in the name of or held on the sole behalf of the other party except as provided for in these orders and except for property or debts which are listed in … the judgment”.

Children – Leave to call additional expert refused

In Atkins & Caldwell & Anor [2011] FMCAfam 74 (31 January 2011) Neville FM dismissed an application by the mother for leave to call another expert witness (Ms H), being an expert in “attachment theory” who had been involved at an earlier stage of the proceedings at the suggestion of the former family consultant and had prepared a report in December 2008. Neville FM said this at paras 7-12:

“It is not disputed that Ms H has not seen the parties, or the child, for the better part now of two years.

On the other hand, Ms L [the current family consultant] has seen the parties (and the child) now on a number of occasions, and quite recently so.

Ms L is a highly qualified and experienced family consultant. In my view, she readily meets the criteria of an expert witness ( … )

It is no disrespect to Ms H to say that Ms L’s evidence, in my view, is and could only be the best evidence to assist the Court precisely because of her very significant experience and expertise, and because she is the expert who has been most recently involved with the parties and the respective families, and the child.

Whatever of Ms H’s expertise, her evidence could only be considered on the basis of certain scenarios – assumed or otherwise – rather than having the benefit of seeing the parties and the child, as Ms L has done on a number of occasions in more recent times.

In the course of the trial I indicated my concern about a possible contest between experts which, in my view, would not assist the Court in the resolution of the matters that were before the Court.”

Spousal maintenance – Discharged maintenance liability cannot be varied under s 83 as no order was “in force” at time of hearing – Court’s refusal to grant leave to amend application set aside for erroneous application of s 44(3)

In Atkins & Hunt [2016] FamCAFC 230 (12 November 2016) the Full Court (Bryant CJ, May & Murphy JJ) heard the wife’s appeal against an order made by McClelland J dismissing her application under s 83 of the Family Law Act to vary an spousal maintenance order. His Honour did so on the ground that while at the time of filing her application the order was in force the husband’s liability to pay had been discharged by the time of the hearing upon the sale of the former matrimonial home as provided for in the order.

The Court at first instance also refused the wife leave to amend her application so as to seek maintenance under s 74 on the ground that such leave would “confront s 44(3)” ([17]).

Murphy J (with whom Bryant CJ & May J agreed) said (from [27]):

“( … ) It is said that the court retained jurisdiction despite the order being, by its terms, discharged as a result of the completion of the sale of the former matrimonial home. Consequently, the argument continues, that his Honour was in error in finding that there was no jurisdiction by reason of an order not being ‘in force’ at the time of the hearing.

( … )

[33]     …[I]n my view, the court’s power to make an order within the jurisdiction properly invoked by the filing of the wife’s application pursuant to s 83 depends entirely on whether there was ‘in force an order’ at the date of hearing of that application.

[34]     Senior counsel for the wife contends that, consistent with a beneficial interpretation of an entirely remedial section … it is an absurd or strained interpretation of s 83 to suggest that such a remedial provision can be invoked by the filing of an application but can be defeated through no action (or inaction) on the part of the applicant but, rather, the exigencies of the Court’s case management system and the court’s capacity to schedule the hearing of the application.

[35]     However, in my opinion the question is not whether the application is defeated by any such consideration but, rather, whether the statute gives the court power to make the order sought at the time the power is sought to be exercised. That question is answered in turn by the ordinary and natural meaning of the expression ‘in force an order’ within the context of s 83 and the context of the Act …

( … )

[45]     …I see no material difference in the ordinary and natural meaning of the words ‘in force an order’ when used in respect to a lump sum order when compared to an order for the payment of a periodic sum. Read in the context of the section, the expression seems to me to mean an order that is capable of being the subject of the orders contemplated by the succeeding provisions of the section. Seen in that light, there can be no basis for an order, for example, ‘vary[ing] the order so as to increase or decrease any amount ordered to be paid’ unless there is an amount payable which can be increased or decreased. So, too, the ordinary and natural meaning of a power to ‘suspend [the] operation’ of an order, or to ‘discharge the order’ is referenced in each case to an order with existing obligations that need to be suspended or discharged respectively. …

( … )

[47]     The effect of the conclusion just outlined is that if the wife was to properly agitate a claim for maintenance before his Honour, she could not do so in reliance upon s 83.

[48]     Equally, as there was no order for maintenance ‘in force’, s 80(2) of the Act (which provides that the making of a spousal maintenance order ‘does not prevent a court from making a subsequent order in relation to the maintenance of the party’) could not avail the wife.”

Murphy J, however, said (from [50]) as to the primary judge’s application of s 44(3):

“Section 44(3) of the Act provides (with emphasis added):

(3)       Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:

a)        a divorce order has taken effect; or

b)        a decree of nullity of marriage has been made;

proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:

c)        in a case referred to in paragraph (a)–the date on which the divorce order took effect; or

d)        in a case referred to in paragraph (b)–the date of the making of the decree.

[51]     The highlighted words within parenthesis relating to spousal maintenance can be seen to mirror the terminology contained in the specific sub-paragraphs of s 83(1). It might be argued that the exception provided for in s 44(3) is confined to the circumstances contemplated by s 83 of the Act. In my view, neither the ordinary and natural meaning of the expressions there contained, nor the broader provisions of the Act pertaining to spousal maintenance, admit of reading down the terms of s 44(3) in that manner.

( … )

[55]     The order made by Aldridge J on 4 December 2014 was made in ‘proceedings with respect to the maintenance of [the wife]’ within the meaning of s 44(3). The order is, as it seems to me, an ‘order previously made’.

[56]     I conclude that it was not necessary for leave to be sought pursuant to s 44(3) so as to permit any amended application for spousal maintenance to proceed.

[57]     If that conclusion is correct, the apparently primary foundation for his Honour’s refusal to grant leave to the wife to amend her Initiating Application falls away.”

The wife’s appeal was allowed and leave to amend her application granted.

 

Interim costs – Wife who alleged husband was worth $11 million unsuccessfully seeks order for her interim costs in sum of $412,000 but was granted a dollar for dollar order 

In Atkins & Hunt and Ors [2018] FamCA 14 (18 January 2018) Watts J heard a case that had been determined by Aldridge J, successfully appealed and remitted for rehearing. Before Aldridge J the parties agreed that the husband owned an interest in a franchise business worth $11 million but when that Court released the husband from injunctions as part of its final order the husband transferred 90 per cent of his controlling interest in the structure to his 3 sons for $90,000. Upon the rehearing the wife joined the sons to the proceedings; sought that the transfers be set aside pursuant to s 106B of the Act and sought a 40 per cent property adjustment as to a pool including the $11 million interest.

She sought interim relief, including $412,000 by way of an order for her legal costs and disbursements, or alternatively, a dollar for dollar order.

Watts J said (from [12]):

“In Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 the Full Court … set out that when considering whether or not to make interim property orders, the ‘over arching consideration’ is the interests of justice. It was not necessary to establish compelling circumstances. All that was required was that the exercise of power be appropriate. The Full Court went on to adopt what had been previously said in Harris and Harris … (1993) FLC 92-378, namely that the power needed o be exercised within the framework of s 79 and the discretion had to be exercised conservatively.

[13]   The wife in her Amended Application for a final property settlement order … seeks a property adjustment of 40 per cent of the net assets of the parties [and argues that the] … company was [the husband’s] alter-ego … That is, the husband had at his disposal an asset which had an agreed value at the time of the trial before Aldridge J of a sum in excess of $11 million.

[14]   ( … ) It is part of the wife’s assertion that dispositions by the husband to his children … took place at a value which did not reflect the real value of the shares being transferred.

( … )

[19]   Senior counsel for the husband rehearsed the arguments that will be run in the rehearing of the s 79 proceedings, and points to the fact that the husband is 82 years of age and the wife 62 years of age. The husband says his financial position has deteriorated substantially since the hearing before Aldridge J. It was agreed between the parties that the husband had conducted the business for three decades before he commenced living with the wife in 2001. The husband and wife lived together for a period of about 10 years and married during that period. The wife did not make any direct financial contribution to the business, although she was in paid employment in that business (the husband saying she was overpaid for her personal exertion). ( … )

[20]   Senior counsel for the husband describes the wife’s claim for 40 per cent of the husband’s assets as an ambit claim.

( … )

[25]   Senior counsel for the husband asserted that during the course of this litigation the husband has paid out to the wife a sum of approximately $1.9 million as a result of interim orders made for spousal maintenance by Ryan J and Rees J; interim property and the implementation of the orders of Aldridge J made at the first trial.

[26]   At the rehearing the husband seeks that the wife’s application for a property settlement order be dismissed and that she receive no further alteration of property. … Senior counsel for the husband points to the fact that absent success by the wife in her application to set dispositions aside and have the court find that the husband had the whole of the interest in the business worth more than the husband asserts, the pool of property remaining to be divided is $2.66 million.

[27]   Balancing this history, having regard to the respective financial positions of the husband and the wife and taking a conservative approach, I am not able to find it is appropriate to make an interim property order pursuant to s 79 of the Act for the sum of $412,000 …

( … )

[30]   In the event the court declined to exercise a discretion … for a lump sum interlocutory costs order, the wife in the alternative seeks orders in a form commonly known as a ‘dollar for dollar’ order.

[31]   A dollar for dollar order provides a set of machinery provisions to ensure that for any dollar the financially advantaged party spends on legal costs and disbursements on the case, the disadvantaged party is also provided a dollar to spend on their case. The wife seeks this order on the basis that such an order would, to some extent, ‘level the playing field’.

( … )

[39] In Selena [Selena & Montez and Ors [2017] FamCA 583] McClelland J quotes Murphy J in Esdale & Schenk [2012] FamCA 111 where Murphy J with respect correctly observes that certainly since the Full Court’s decision in Strahan it is usual for a financially disadvantaged party to rely upon s 79 as the power to obtain a lump sum interim property settlement order for the purposes of funding litigation. Justice Murphy comments that s 117, whilst a possible relevant power, is little used because of the need to satisfy the requirements of the section before obtaining an order.

[40]   As indicated, dollar for dollar orders are most usually made relying    upon s 117 of the Act. I agree with McClelland J that, if that is the       power relied upon, in order to make a dollar for dollar order a positive finding needs to be made under s 117(2) after the court has regard to s 117(2A) considerations.

( … )

[44]   In Ryder & Bonham [[2017] FamCA 979] Gill J made a dollar for dollar order notwithstanding he was unable to make any findings in respect to s 117(2A)(c)-(f) considerations. That is likely to be usually so, although in this case the husband raises an issue relating to the wife’s conduct of the proceedings. Also it would be rare, if ever, that a party in a financial case would be in receipt of assistance by way of legal aid. That is so in this case.

[45]   When making a dollar for dollar order under s 117(2), the focus will usually be in considering the disparity of the financial resources available to the respective parties, including their ability or lack of ability to meet their litigation expenses (s 117(2A)(a)) and the unusual features of the matter (s 117(2A)(g) of the Act).

[46]   The making of a dollar for dollar order is a discretionary order that is usually made only as an order of last resort. Examples of      circumstances which may attract the exercise of the discretion include:

46.1.  Where:

46.1.1.      The party who apparently controls significant financial purse strings pleads impecuniosity; and

46.1.2.      The financially disadvantaged party cannot point to any particular fund or asset that might be available to help assist that party fund their litigation; but

46.1.3.      The financially advantaged party seems to be able to fund their litigation through personal exertion income or structures that they directly or indirectly control …;

46.2.  Where a financially advantaged party is a minority shareholder in a company and/or a discretionary beneficiary in a trust and directors or trustees seem more than willing to declare dividends or make distributions to fund litigation for the financially advantaged party against the disadvantaged party;

46.3. Where a financially advantaged party has relatives or associates who are prepared to fund the litigation against the financially disadvantaged party in circumstances where the financially disadvantaged party does not have the same support from third parties (Hurford & Hurford [2016] FamCA 328).

[47]   Once the relevant matters in s 117(2A) have been considered, then the overriding question is whether or not there are circumstances that justify making a costs order which is just in the circumstances of a particular case. … I do not accept I am precluded from making a dollar for dollar order because its quantum would not be certain and only able to be ascertained on each occasion the husband pays monies to his lawyers or other professionals for their services in respect of the case.

( … )

[52]   Senior counsel for the husband submits that the husband himself cannot point to a source of funds from which to pay his own legal and expert expenses. The wife points to the historical financial connection between the husband, his sons and the entities he once more closely controlled which are now controlled by his sons. To this point the husband has been represented before me by senior counsel.

[53]   I am mindful that the husband’s case will be assisted by the opposition by the 2nd to 7th respondents to the wife’s s 106B application. It is clear that in this litigation the 2nd to 7th respondents have a vested financial interest in ensuring that their father’s legal case is run as well as it can be. They have the ability to fund the litigation as they control the assets … which the wife says gave the husband control over assets valued in 2014 in excess of $11 million with turnover of $150 million per annum.

[54]   Balancing the relevant consideration in s 117(2A) I find that it is just to make orders under s 117 of the Act in this case.”

A dollar for dollar order was made, Watts J also holding that the Court had power to direct the lawyers for each party to implement that order.

Trustee in bankruptcy unable to validly assign a bankrupt’s “right” to apply under s 79A so that the assignee might bring an application to set aside a property order  

In B Pty Limited & Sykes and Anor [2013] FamCA 359 (24 May 2013) Aldridge J considered an application to set aside final property orders made in July 2008 between a husband and wife, after which the husband had become bankrupt. As part of the husband’s bankruptcy his trustee purported to assign the husband’s rights under s 79 and 79A of the Act to company “B”, which then brought an application to set the final Order aside.

Although not limited to these, the primary questions considered by the Court were (para 3):

“a)       Is [the company] a “person affected” within the meaning of s 79A of the … Act and/or otherwise entitled to bring the application?

b)        Is the Deed of Assignment dated 2 February 2012 between [the company] and [the trustee] legally effective to assign the rights relied upon by [the company] in these proceedings?”

The Court answered both questions in the negative, saying at paras 23-25:

“The rights and entitlements of a bankruptcy trustee arising from his or her standing under s 79A(5) are not property of a bankrupt that has vested in the bankruptcy trustee. The trustee derives standing from the express provision of s 79A(5) and not from any right of the bankrupt that has vested. ( … )

Therefore the rights and entitlements of a trustee in bankruptcy cannot be described as an ‘asset and property which the trustee was to get in for the benefit of creditors’, to use the words of Seear [Seear v Lawson [1880] LR15 Ch D426] or a cause of action vested in the husband at the commencement of the bankruptcy …

Section 75A gives a trustee in bankruptcy standing to bring an application under s 79A(1) by taking the trustee to be a person whose interests are affected by the order sought to be set aside or varied. However, to use the words of James LJ, s 79A does not give a trustee in bankruptcy ‘a right to impeach a deed by reason of it being a fraud on creditors’. This is for two reasons. The first is that s 79A does not confer a right. It entitles a person affected in particular circumstances to ask the court, in its discretion, to vary, declare void or set aside orders. There is no existing right being recognised by the court.”

Aldridge J continued at paras 29-31:

“The second reason is that, if an order under s 79A is made, the trustee then has a direct interest in the outcome of the proceedings because such property that remains to be dealt with by the court, would, to the extent that the bankrupt had an interest in it, vest in the trustee to the extent the existing property orders were set aside, as opposed to varied. The operation s 58 of the Bankruptcy Act 1966 (Cth) remains unaffected by the Deed. Whilst it purports to assign entitlements to bring proceedings under s 79 and s 79A of the Act and to deal with the fruits of any such action it does not purport and cannot oust the statutory provision relating to the vesting of property. That possible interest will be taken into account when the court is considering whether the orders should be varied, or alternatively, set aside.

The result is that the trustee in bankruptcy is a relevant and necessary party and the only party that can represent the interests of creditors with provable debts and deal with the divisible property of a bankrupt at the hearing of a s 79 application. The bankrupt party to the marriage, of course, remains a relevant and necessary party, at least in so far as any divisible property and any surplus from the bankrupt’s estate is concerned.

Thus s 79A(5) gives standing to a particular person, the trustee in bankruptcy, by taking them to be a person affected within the meaning of s79A. It confers standing that cannot be transferred to another person. ( … )”

The Court concluded at para 38:

“For these reason I am not satisfied that the Deed of Assignment is legally effective to assign rights and standing to [the company] such that would enable it to commence and continue these proceedings.”

The Court did not dismiss the application but joined the trustee in bankruptcy in the proceedings (as an applicant).