Property – De facto thresholds – “Breakdown” of a de facto relationship is the trigger point for jurisdiction – Aggregate of circumstances supported conclusion that de facto relationship had broken down

In Fairbairn v Radecki [2022] HCA 18 (11 May 2022) the High Court (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ) heard an appeal from a decision of the Full Court of the Family Court of Australia in Radecki & Fairbairn [2020] FamCAFC 307 (summarised at our archived case notes – property under “de facto relationship, thresholds etc”) where the de facto wife was in care.

The New South Wales Trustee & Guardian (“Trustee”) as case guardian for the de facto wife had sought orders for the sale of a home (in which the de facto husband lived) so as to pay for the wife’s care accommodation. The de facto husband argued that the Court lacked jurisdiction as the parties had not separated. The trial judge found that the relationship had broken down by no later than 25 May 2018. The Full Court found that the trial judge erred by imputing the de facto wife’s intention to separate rather than assessing the indicia laid down under the Family Law Act 1975.

The High Court held (from [6]):

“The Act contains no exhaustive definition of the term ‘breakdown’, save that s 4 of the Act relevantly provides that in relation to a de facto relationship, it ‘does not include a breakdown of the relationship by reason of death’ …

( … )

[21] … The primary judge found that the respondent’s conduct during the demise of the appellant’s mental capacity was inconsistent with a ‘fundamental premise’ of their relationship, namely the strict separation of their assets. That inconsistent conduct, all of which occurred while the appellant was ‘labouring under an incapacity’, comprised: the entry into a new enduring power of attorney that ‘favoured [the respondent’s] rights over hers’; the respondent instructing solicitors to prepare an updated will ‘on terms vastly more favourable to him’; the respondent’s ‘unwillingness to cooperate’ with the appellant’s children in the administration of her affairs; the respondent’s ‘persistent’ refusal to permit the Trustee to sell the home … while ‘neglecting to pay any of the [appellant’s] care costs’, thus depleting her estate; the respondent’s proposal that the appellant’s ‘super be used in the first instance to meet her costs’, and then his subsequent proposal that ‘he pay the … fees in the first instance and be reimbursed by the [appellant’s] estate’; and the respondent’s ‘ongoing and deliberate frustration’ of the Trustee’s lawful administration of the appellant’s financial affairs. The primary judge found that this conduct was ‘unequivocally indicative of and consistent only with … the cessation of the de facto relationship as it previously existed’. ( … )

( … )

[23] ( … ) The Full Court reviewed the conduct identified by the primary judge. None of the conduct was found to be fundamentally inconsistent with a continuing de facto relationship … ”

The High Court continued (from [25]):

“The appellant submitted that the phrase ‘living together’ in s4AA(1)(c) requires cohabitation at some place and in some way, and that this is an irreducible minimum of what a de facto relationship, as defined, must continuously display. A permanent cessation of cohabitation, whether voluntarily undertaken or involuntarily imposed, and for whatever reason, was said to result, in every case, in a de facto relationship ending.

( … )

[27] The appellant’s alternative argument was that the de facto relationship between the appellant and the respondent had broken down by no later than 25 May 2018 by reference to the circumstances listed in s 4AA(2). In this context, the appellant submitted that ‘breakdown’ does not necessarily mean ‘end’.

( … )

[29] A de facto relationship will have broken down when, having regard to all the circumstances, the parties no longer ‘have a relationship as a couple living together on a genuine domestic basis’. Such a conclusion is not precluded by the presence of an ongoing relationship of some sort. …

[30] … It is the ‘breakdown’ or ‘end’ of a de facto relationship that is the trigger point for the Federal Circuit and Family Court to be seized of jurisdiction to make a property settlement order under s 90SM of the Act. It would make no sense for such a jurisdiction to arise before a de facto relationship had ended …

( … )

The need for cohabitation

[32] The appellant’s primary argument that the parties’ de facto relationship had broken down when the appellant was placed into an aged care facility such that the parties were no longer physically living together must be rejected. It is contrary to the text of s 4AA and to statutory context and purpose to which reference has been made. It is also contrary to real-world considerations. It would be productive of injustice if two people who live apart (including for reasons of health) were incapable of remaining in a de facto relationship.

[33]  … [C]ohabitation of a residence or residences is not a necessary feature of ‘living together’. That phrase must be construed to take account of the many various ways in which two people may share their lives together in the modern world. Two people, for any number of reasons, may not reside in the same residence, but nonetheless be in a de facto relationship in the sense required by s 4AA.

[34] The fact that here the appellant was placed into an aged care facility may be relevant to the existence or breakdown of a de facto relationship under the Act, but it could not, of itself, be determinative of that issue. The same observation applies to the decline in the appellant’s cognitive ability.

( … )

[39] The language of s 4AA of the Act and its reference to ‘living together’ requires no different approach to determining whether a relationship exists of the kind defined. ‘Living together’ … should be construed as meaning sharing life as a couple. Section 4AA does not prescribe any way by which a couple may share life together. Its language is sufficiently broad to accommodate the great variety of ways a de facto relationship may exist. ( … )

( … )

[46] Whilst there had been a degree of mutual commitment to a shared life, that commitment ceased when the respondent refused to make the ‘necessary or desirable adjustments’ in support of the appellant and, by his conduct, acted contrary to her needs. ( … )

[47] In aggregate, these circumstances support the conclusion that there had been a breakdown in the parties’ de facto relationship by no later than 25 May 2018. With respect to the Full Court below, this was more than just a dispute between the respondent – a man found to have behaved poorly – and the Trustee and the appellant’s children.”

[Footnotes omitted]

The appeal was allowed, with the appeal to the Full Court dismissed.

 

Property – Considerations when determining competing applications for retention of the family home – Relevance of Heads of Agreement to judicial determination – Refusal to accept higher offer for property is not waste

In Farnham [2022] FedCFamC2F 83 (4 February 2022) Judge Turnbull heard competing property applications where both parties wished to retain the former family home.

The home was the most valuable asset in the asset pool after a 20 year marriage which produced four children aged between 8 and 17 years.

After a conference of experts, the agreed value of the property was $450,000. Both parties sought to retain the property in preference to it being sold and they both also sought alternate orders that if they could not retain the property, it be sold ([67]).

The wife also sought that the Court make orders in terms of a Heads of Agreement signed by the parties but reneged on by the husband, which included an agreement to sell the home.

The Court said (from [85]):

“The Husband’s behaviour during the litigation, and in particular in relation to selling the … property, has created distrust. The Wife firmly believes that if the Husband retains the … property he will gain a financial advantage at her expense. In light of his poor conduct during these proceedings, I am suspicious of his motivations for keeping the … property. He claims he wishes to retain it because of some attachment to it as a farming property and as a convenient location. It is more likely, however, that he is motivated by a belief that the property is worth more than the figure agreed between the valuers and adopted by the parties …”

In summarising the law as to enforceability of Heads of Agreement, the Court said (from [90]):

“An agreement which purports to alter parties’ property interests, unless formalised by court order or through s 90G of the [Family Law Act] is vulnerable. This is true even of uncontentious agreements. ( … )

( … )

[93] An agreement which in fact alters the parties’ property interests is, of course, relevant to identifying their existing legal and equitable interests as required by Stanford & Stanford [2012] HCA 52 (‘Stanford’). A party may enter a new employment contract with a higher salary, or sell personal or real property. Those agreements form the backdrop for the parties’ current property interests, and aid the Court to ‘acquaint itself with changes in the composition and value of the property pool’ (DW & GT [2005] FamCA 161). Agreements of this nature are used like a historical source, and do not enshrine the parties’ own ambitions of what their property interests should be under a settlement.

( … )

[98] I am not bound by the Heads of Agreement in assessing whether an order should be made, or in drafting the contents of an order. I will determine these proceedings following the legislative pathway … In following the legislative pathway, however, some of the agreements between the parties will be relevant. In particular, the parties agreed to sell the … property, and I will take into account that they were for a period of time agreed on that course of action at an agreed price.

( … )

[179] If the property had sold for $530,000 or $540,000.00, the parties would have significantly more funds to divide between them. That said, the contract was conditional on finance and inspection. Further on this point, though, the Husband admitted that he rang the purchasers and told them the property was no longer for sale. His actions undermined the Heads of Agreement, as reached between the parties at mediation, and would have upset the Wife.

[180] This does not, in my view, quite reach the level of waste identified in Mabb & Mabb [2020] FamCAFC 18 (‘Mabb’). On appeal, the husband in that case argued that the trial judge erred in fact and law by regarding his refusal to accept offers to buy a property as ‘waste’ in the sense set down in Kowaliw & Kowaliw [1981] FamCA 70.

[181] The Full Court in Mabb found that the trial judge was not in error to take into account (under s 75(2)(o)) the husband’s refusal to respond to a high offer where the relevant property ultimately sold for a far lesser amount. The Full Court stated that (emphasis added):

‘76. By “waste” we understand the challenge to be to her Honour taking into account the husband’s refusal to accept the offer as having a direct and deleterious financial effect on the parties. Here, as her Honour correctly found, it was the husband’s deliberate conduct which had produced a loss to the parties of the more advantageous selling price, in a clearly falling market as the decreasing offers to purchase made to the parties from 2011 demonstrates.’

[182] The Husband has, by his own admission, conducted himself in a manner in which he purposefully undermined the potential sale of the property. The contract was, however, conditional. There is insufficient evidence to support a finding that the sale would have been completed but for the Husband’s conduct [footnote omitted]. His conduct cannot, using the words in Mabb, be said to have had a ‘direct and deleterious financial effect’ or to have ‘produced’ the loss.

( … )

[184] While the Husband’s conduct was poor, and no doubt upsetting and stressful for the Wife, I cannot take his actions into account under s 75(2)(o).”

As to which party should retain the property, the Court said (from [195]):

“ … [T]he parties previously agreed, as recently as September 2020 as evidenced by the Heads of Agreement, that they would sell the property. The Wife maintained that it should be sold up until the trial, at which time she changed her proposal. The Husband … decided he wished to retain the property upon the contract of sale being provided to him for signature.

( … )

[204] The case authorities point to several common but non-exhaustive factors with respect to whether a real estate asset (most often the family or matrimonial home) should be sold. These factors are as follows:

  • Has the party seeking to retain the property, along with any children of the relationship, lived in the property since separation and do they intend to continue doing so? If yes, the Court should look to the effect of the sale in that party losing their home.
  • To what degree would the assessment under s 79(4), as a percentage, be disrupted by ordering that a party retain the property in question? Is it just and equitable in the circumstances for the assessment under s 79(4) to be so altered?
  • What is the borrowing capacity of the party or parties seeking to retain the property?
  • Where is the property situated? For example, is it close to favoured schools or the residences of family or friends?
  • Is the mortgage on the property subject to a very favourable interest rate which cannot presently be obtained on a mortgage?
  • If a party is ordered to have a right of occupation in the property, would the state of repair of the property be detrimental to the party who continues to occupy the property? For example, are the costs of keeping the property in modest repair greater than the amount owing on the mortgage?
  • What is the zoning of the property, and how may this indicate the property’s future uses? Is it possible or likely that the property will be rezoned?
  • If the effect of the order is to leave one party without housing, what is the cost of alternative housing?
  • For the purposes of parenting orders, would the child/ren with whom a party spends time derive more benefit from this arrangement if their time occurred in the property sought to be retained?
  • Is the property co-owned with third parties to the marriage? If so, it may be less appropriate to order the sale of the property.

[Footnotes omitted]

[205] The Court in Myerthall & Myerthall [1977] FamCA 59, from which factors (d)-(g) are extracted above, remarked that listing feasibly relevant matters does not create an ‘exhaustive catalogue of matters which ought to be looked at’ in each case. Further, their Honours noted that:

‘ … evidence of these matters ought to be led if the Judge is going to be invited to exercise [their] discretion to make any of the variety of orders open to “them” under sec. 79.’

( … )

[212] Neither party has provided evidence to support their borrowing capacity. Neither party produced evidence from a financial institution that they had pre-approval for a loan sufficient to retain the property. I am not satisfied that either party has proved that they have the financial means to take on the mortgage and pay the other party the amount due to them.

[213] … [N]either party has led sufficient evidence to the effect that they must, for some reason grounded in justice and equity, retain the … property. This being the case, I find that it is just and equitable to order the sale of the … property. Both parties submitted that this was an appropriate outcome if the property was not transferred to them.

[214] In selling the … property, each party is entitled to bid for the property if they so desire. One of them may be the highest bidder … and come to own the property albeit by a different path. They may achieve a price greater or less than $450,000.00, which will be the reserve price … ”

Property – Short cohabitation – Treatment of initial contributions in four year relationship – Specific and generalised allegations of family violence had a significant adverse effect upon contributions – Lump sum spousal maintenance

In Ferman & Lapham [2022] FedCFamC2F 415 (5 April 2022) Judge Kearney heard an application for property adjustment and spousal maintenance after a four year relationship.

There were no children of the relationship, both parties having children from previous relationships.

The de facto husband’s initial contribution was $895,000 and the de facto wife’s $21,000 (including superannuation) to an asset pool of $2,814,132, with all but $10,763 of the pool owned by the de facto husband.

The de facto wife sought a division of 75:25 in the de facto husband’s favour; with the de facto husband seeking a 90:10 division.

Judge Kearney said (from [115]):

“I am required to make a holistic value judgement when exercising my discretion pursuant to the [Family Law] Act and in doing so, I should not engage in an accounting exercise. ( … )

( … )

[183] The Court must treat the de facto husband’s superior initial contributions as one of those myriad of contributions to this relationship rather than weighing the myriad of contributions during the relationship against his initial contributions …

( … )

[185] I have had regard to … how the de facto husband’s labour, income and property interests have led to the acquisition of the farm, the retention of three other real properties and the ongoing maintenance/improvement of all his superannuation and non‑superannuation interests …

[186] Using a broad brush approach, from the de facto wife’s perspective, she asked the Court to reflect on any differential of property adjustment to the de facto husband through a consideration of the s 90SF(3) factors and her contributions being made more arduous as a result of the family violence she endured. …

[187] I have had regard to the de facto husband’s contributions towards the non-biological children forming part of the relationship. …

[188] … [T]he de facto husband’s contention [is that] his contribution in assisting in the care of … his non-biological children and in providing financial support for them must be assessed in a meaningful way pursuant to s 90SF(3)(r) (see Zaruba & Zaruba [2017] FamCAFC 19 at [53] and In the Marriage of Robb and Robb [2994] FamCA 136). …

[189] However, circumstances which weigh against the de facto husband’s contribution are the short duration of the relationship and his large absences from the … home in the first half of the de facto relationship (due to his work commitments …). For these reasons, I am not satisfied that a Robb & Robb contribution favours the de facto husband.

( … )

[211] The de facto wife contended that through the prism of her contributions having been made more arduous in light of family violence, the contributions of the parties needed to be assessed such that she receive 15% of the nett non-superannuation pool.

[212] The wife’s allegations as to her exposure to family violence are both specific and generalised.

( … )

[236] There is no doubt that the de facto husband has engaged in serious family violence, including but not necessarily limited to, engaging in physical violence upon her and [her child] (for which he has been convicted), behaving in a threatening manner towards her, repeatedly making offensive, abusive and derogatory comments about her and [her child], damaging property in the presence of her and [her child] and breaching (on more than one occasion) an existing ADVO.

( … )

[239] I conclude that the de facto wife’s many and varied contributions to the family and the property pool … took place in a context of fear and suffering caused by the de facto husband’s conduct. A qualitative assessment of those contributions leads inevitably to a conclusion that they were rendered significantly more arduous by circumstances of the de facto husband’s making and meaning that her contributions were adversely affected by her having to bear the burden. …”

After assessing contributions as 90:10 in favour of the de facto husband, the Court continued (from [272]):

“In my view, the de facto husband has an income earning capacity significantly higher than disclosed to the Court and will retain over 80% of the parties’ property. … The disparity of income between the parties is stark but I also need to consider the other s90SF(3) factors including whether that income earning capacity has been impacted by the duration of the relationship which was only for four (4) years – much shorter than the 10-year relationship Hobson [ed. full citation Hobson & Hobson [2020] FamCAFC 251]

[273] … I have … found that the de facto relationship has had an effect on her income earning capacity, albeit given the state of the evidence, the best I can do is to say that the de facto husband’s behaviour has at least in part exacerbated some of the de facto wife’s pre-existing conditions and symptoms.

[274] For the reasons set out above, the s 90SF(3) factors warrant a further adjustment of 5% in the de facto wife’s favour.”

The Court ordered a division of the asset pool as to 85 per cent to the de facto husband and 15 per cent to the de facto wife, equating to a payment of $411,400 plus lump sum spousal maintenance of $47,000.

Children – Costs – Father fails in application for indemnity costs where the mother’s mental health difficulties were central to her conduct during the litigation

In Earle [2022] FedCFamC1F 16 (21 January 2022) Hannam J heard a father’s application for costs on an indemnity basis after highly acrimonious parenting proceedings which culminated in orders for the parties’ two children to live with the father, for sole parental responsibility and for supervised maternal time.

The mother’s mental health was such that the single expert concluded the mother’s symptoms were consistent with a diagnosis of schizophrenia ([11]). The mother’s adversarial expert concluded that a “delusional disorder” was more likely ([13]).

The father argued that the mother’s conduct favoured his costs application, where she failed to accept expert evidence; failed to accept offers of compromise; and maintained her ultimately unsuccessful position ([26]).

After considering s117(2)(A) factors, Hannam J said (from [47]):

“It is the father’s contention … that the mother conducted the proceedings in a manner that caused him to incur significant and unnecessary expense.

( … )

[59] It is … submitted on the mother’s behalf that her general conduct and steps she had taken throughout the proceedings had been in accordance with legal advice and on this basis should not attract a punitive costs order against her.

( … )

[61] …  I accept the father’s submission that the mother’s conduct with respect to the proceedings generally contributed to delay and difficulty in reaching a conclusion to the proceedings, which may well have resulted in costs being thrown away. However … this conduct must be viewed in the context of the mother’s mental health difficulties and the impact these difficulties had on her overall functioning. I attach particular weight to this matter when considering whether a costs order should be made against the mother …

[62] The father further argues that a costs order should be made against the mother given she was wholly unsuccessful in the proceedings. In this regard the father attaches considerable weight to the mother continuing to press for final orders which were contrary to the opinions and recommendations of the court-appointed expert and the final orders ultimately made in the proceedings.

( … )

[65] … [T]here was significant time in the proceedings devoted to the issue of the orders that most appropriately and properly fostered the children’s relationship with the mother given that despite the parenting challenges associated with her mental health condition, the children’s primary attachment was with her and they undoubtedly receive a benefit from having a relationship with her.

[66] The final orders made were not entirely in accordance with the father’s proposal and in the complex circumstances of this case the Court is unable to state simply that one party was ‘wholly successful’.

[67] … I attach some weight to the fact that the mother had limited success in the parenting proceedings when considering the father’s application for a costs order in his favour. However, this must be balanced together with all of the other relevant factors including … the mother’s mental health difficulties …

( … )

[77] In summary, I accepted at the final hearing that the mother’s mental health difficulties (which were presenting as a psychotic illness from at least June 2020 … ), had been evolving over time. The unusual and paranoid thinking which the expert originally considered was part of the mother’s world-view had been present for some time prior to the first of the specific court events in respect of which the father now seeks costs … ( … )

[78] In my August 2021 judgment I accepted the opinion of the expert that the mother did not have any insight into her psychotic symptoms or the effect that they were having on her functioning. I also accepted that the mother’s observed disorganised and unusual behaviour had been present to some extent throughout the entirety of the proceedings. In circumstances where these features of the mother’s functioning and behaviour are central to the father’s contentions about her conduct, I do not consider it just to attach significant weight to this matter as the father contends.

[79] … I consider the matters set out in the foregoing paragraphs are weighty in determining that these circumstances do not justify an order for costs. This is particularly the case when it appears on the evidence before me that the father is in a superior financial position than the mother.

[80] In written submissions made on her behalf the financial consequences for the mother are set out if the orders are made as sought by the father. These are that the mother will have reduced capacity to obtain necessary medical treatment to address her mental health difficulties, reduced capacity to live independently … and great difficulty and ultimately an inability to meet the ongoing half share of the costs of supervision of the children’s time. It is submitted that the father’s orders if made would be particularly punitive as he seeks that any such order be satisfied by deduction from the mother’s share in the property settlement proceedings. Given the limited property for distribution and the father’s contentions in those proceedings such orders sought by the father may even result in the mother owing a debt to the father. In my view weight must be given to these matters when determining this application.”

The Court concluded that there should be no departure from the usual rule that each party bear their own costs, however ordered the mother to reimburse the father for her share of the expert’s costs incurred during the proceedings.

Children – Serious contempt warrants 6 month imprisonment of mother – Liberty to purge contempt by mother disclosing whereabouts of child

In The Marshal of the Federal Circuit and Family Court of Australia & Trach [2022] FedCFamC1F 22 (25 January 2022) Gill J heard an application for sentencing following a contempt finding against a mother who failed to provide information about the whereabouts of her son “X”, born in 2020, after she handed him to a friend “Ms B” in 2021.

In breach of an order for X to live with the maternal grandmother and a recovery order dated 19 May 2021, the mother subsequently asserted that she could not locate him.

Gill J said (from [8]):

“In sentencing [the mother] I accept that to find facts or to use facts that are adverse to her I must find facts beyond reasonable doubt. I accept further that where there are matters that are supportive of, or positive for [her] then they need only be found on the balance of probabilities [R v Olbrich [1999] HCA 54, [27]; Kendling and Anor & Kendling [2008] FamCAFC 154 (‘Kendling’)]. She has established of course that she is still a young woman. She has shown that she is pregnant and she has shown some requirement, to a degree not demonstrated, for particular care in her pregnancy due to a Streptococcus infection. She has demonstrated that she suffers from some cognitive difficulties, including in terms of her capacity to understand people, not only in what they say but in why they act in the way that they do. I accept that she is a vulnerable person. The evidence has shown that she is vulnerable to being used by others … While I accept that she is a vulnerable person it has not been shown that the offending conduct is connected to or the product of that vulnerability and so it is not a matter of significance in reducing her culpability for the contempt.

[9] … [T]here are a number of different sorts of matters that I am to take into account, which include [the mother’s] personal characteristics … her level of remorse, the seriousness of the contempt, whether she has purged the contempt, the effects of the contempt, issues involving retribution, personal deterrence and general deterrence [Kendling … ; In the Marriage of Ibbotson and Wincen [1994] FamCA 103; …; In the Marriage of G and G [1981] FamCA 38; …; H v B [2002] FMCAfam 326, … ]. … [T]here are varying purposes of sentencing for contempt and of particular importance is the enforcement of orders, punishment, including to effect specific and general deterrence and the vindication of the Court’s authority [Abduramanoski and Abduramanoska [2005] FamCA 88] …

( … )

[12] … [I]t is necessary that the sentence imposed should be proportional to those three purposes and also to the nature of the contempt, and that not all contempts are equal in seriousness.

( … )

[15] … [T]he seriousness of the contempt calls for a custodial disposition … I consider that [the mother] ought to be given the option to purge her contempt and if she provides to the Court the information that she has about X’s whereabouts then she may be released prior to the completion of the custodial term ( … ).  It is not adequate to suspend the term or part of the term. Suspension is typically characterised as occurring on terms that a person enter into security or an agreement with the Court to be of good behaviour. Where [the mother] has not disclosed the information that she holds about X and has not purged her contempt, it may be taken that she is not of good behaviour and an attempt to release her on the basis of good behaviour under those circumstances would be somewhat farcical.

( … )

[17] The circumstances of this case and the purposes of sentencing for contempt will be sufficiently met by a term of six months, on terms that permit [ the mother] to relist the matter before the Court at any point to disclose the information about X’s whereabouts and secure his release.”

Property – Original jurisdiction of the Federal Circuit and Family Court of Australia (Division 1) to hear cases commenced in the Family Court of Australia prior to 1 September 2021 – Exceptional circumstances warrant opinion from the Full Court

In Nevins & Urwin (No. 3) [2022] FedCFamC1F 201 (31 March 2022) Hogan J stated a case for the consideration of the Full Court of the Federal Circuit and Family Court of Australia pursuant to s 34(1) of the Federal Circuit and Family Court of Australia Act 2021 (“FCFCAA”)

The substantive proceedings related to a parenting trial that proceeded in the Family Court of Australia in July and August 2019, but was adjourned until December 2021 due to the father’s criminal trial.

The Court said (from [2]):

“ … [A]uthority establishes that:

(a) the procedure of a stated case should be resorted to only in exceptional circumstances, where it may be important to get an opinion on a question of law [Daff and Daff [1982] FamCA 13] and it should not be a method whereby a judge at first instance sidesteps a decision or a means by which such judge avoids making a decision on questions of jurisdiction, power or statutory interpretation [Bakhtiari & Minister for Immigration Multicultural and Indigenous Affairs [2002] FamCA 767 (‘Bakhtiari’)];  and

(b) when considering whether to state a case, the court should explore all the options and weigh all the advantages and disadvantages in a particular case; and

(c) the exercise of the discretion in determining to state a case must be reasonable [Bakhtiari; Paul & Paul [2011] FamCA 672].”

The Court continued (from [12]):

“There are no provisions of the [Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021] which relate specifically to proceedings, commenced in the previously prescribed original jurisdiction of this Court before 1 September 2021, which have not been finalised by 1 September 2021.

( … )

[14] Reference to the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Rules 2021 (Cth) (‘the Transitional Provisions Rules’) reveals that r 7 of the same provides as follows:

7 Proceedings before the Family Court of Australia before 1 September 2021

(1) This section applies in relation to a proceeding if:

(a) immediately before 1 September 2021, the proceeding, or part of the proceeding, was in the Family Court of Australia; and

(b) the proceeding had not been determined before that day.

(2) For the purposes of the FCFCAA …, on and after 1 September 2021, that proceeding is taken to be a proceeding in the Federal Circuit and Family Court of Australia (Division 1).

[16] It seems to me that a number of issues arise in the consideration of whether this Court now has original jurisdiction to hear and determine proceedings which were commenced in it (then known as the Family Court of Australia) before 1 September 2021 and that these include (but are not restricted to):

(a) whether, as a consequence of the application of the amendments to the FLA [ed. full citation Family Law Act 1975 (Cth)] (which removed the jurisdiction previously conferred on it by the now repealed s 31 of the FLA) and the application of the provisions of the FCFCAA to proceedings ‘commenced before, on or after the commencement day’, this Court now has original jurisdiction to hear and determine such proceedings; and

(b) whether, despite the clear terms of s 25 of the FCFCAA and the absence of any provision in the Transitional Provisions Act [ed. full citation Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Act 2021 (Cth)] (in contrast to the situation regarding appeals) specifically stating that this Court retains original jurisdiction in relation to proceedings pending in it as at 1 September 2021, r 7 of the Transitional Provisions Rules ensures that this Court now has the original jurisdiction to hear and determine such proceedings; and

(c) whether the Chief Justice of the Federal Circuit and Family Court of Australia (Division 1) has the jurisdiction to transfer such proceedings to the Federal Circuit and Family Court of Australia (Division 2) so as to enable the transfer back of the same from that court to this court for the purpose of satisfying the legislative requirements imposed by s 25 of the FCFCAA for the conferral of original jurisdiction.”

Children – Court erred in finding that the children would “rarely see” their father (as father had contended) if they were to relocate with the mother to France – Case remitted for rehearing

In Bergmann [2022] FedCFamC1A 38 (21 March 2022) the Full Court (Austin, Tree and Strum JJ) heard a mother’s appeal from a decision of Henderson J ordering the two children of the relationship, aged 10 and 12 years, to live with the father in Australia and spend time with the mother in France.

After separation in 2015, the mother’s principal place of residence became France, during which time the children remained living in Sydney with the father. The parties had an equal time arrangement from 2016, with the mother travelling overseas when the children were not living with her. By May 2019, the mother confirmed she would live permanently in France.

At first instance, the mother sought orders for the children to live with her in France and spend as much time with the father as possible given his residence in Sydney and work commitments.

The trial took place in April 2021, with final orders providing for the children to live with the father in Australia pronounced in August 2021.

The mother appealed, arguing that the trial judge made “mistaken findings”.

The Full Court said (from [60]):

“This ground contends findings made by the primary judge … to the effect the children would rarely see the father if they lived with the mother in France, were ‘against the weight of the evidence (and unavailable having regard to further evidence)’. …

( … )

[64] … [T]he primary judge said different things at different points, including:

(a) the father is apparently unable to travel to [France] at all … , even when quarantine restrictions are lifted … );

(b) the father asserts it is unlikely he can travel to [France] at all … );

(c) at best, the father may only be able to visit the children in France once each year while quarantine restrictions exist … ; and

(d) it is not possible for the father to travel to [France] more than once per year at any point in the future, regardless of international travel restrictions, due to his work commitments …

[65] The mother capably demonstrated none of those findings accurately tallied with the evidence …

( … )

[74] The primary judge … fell into error by finding, contrary to the available evidence, the father could not travel to France at all, or alternatively, could at best only do so once per year for a short period, regardless of whether or not pandemic travel restrictions were in place.

[75] The materiality of that error could hardly be in doubt. The father conceded the materiality … The dispute was determined in the fallacious context of the father’s virtual elimination from the children’s lives if they live with the mother in [France] and he is required to quarantine and/or isolate during the pandemic restrictions.

[76] In the ultimately dispositive paragraphs of the reasons for judgment …, the mistake of fact critically fed into the exercise of discretion, causing it to miscarry. The primary judge traded-off, on the one hand, the mistaken finding about the father’s practical inability to travel and the consequential deleterious effect upon the children of their separation from him and, on the other hand, the children’s closer emotional attachment to the mother and her enhanced ability to help the children adapt to changes …”

The appeal was allowed and the proceedings remitted to Division 1 of the Court for rehearing by another judge. The father was ordered to pay the mother’s costs in the sum of $20,000, and both parents were required to contribute to the ICL’s costs fixed in the sum of $3,960.

Property – Evidence – Leave granted to adduce evidence from an adversarial expert – Court erred by considering $11 million difference between valuations in isolation

In Neales [2022] FedCFamC1A 41 (28 March 2022) the Full Court (Aldridge, Tree and Schonell JJ) heard a husband’s appeal from orders of Gill J dismissing his application to discharge the single expert or in the alternative, for leave to adduce evidence from an adversarial expert.

The husband was a shareholder of a number of entities which owned real estate in City X, the majority of which were subject to established leases. The parties jointly instructed Mr B as single expert to value the properties. He valued the properties at between $33.835 million and $34.190 million.

The husband engaged Mr D to comment on Mr B’s valuation and provide his own valuation of the properties. Mr D valued the properties at $22.465 million.

The husband’s application to discharge the single expert/leave to rely upon Mr D’s expert evidence also sought a conference of experts.

The husband appealed the dismissal, arguing that Gill J failed to give sufficient reasons and failed to properly consider the arguments advanced ([14]).

The Full Court said (from [24]):

“The husband … contended that the difference of approximately $11 million in value between the single expert and the husband’s expert, justified in part, the appointment of another expert, and that the husband’s expert was in possession of a substantial body of opinion contrary to that of the single expert.

( … )

[25] The primary judge concluded that contrary to the submissions of the husband, there was not a substantial body of contrary opinion, but rather an alternate opinion.

( … )

[27] … [I]t was contended that there existed a special reason due to the difference in value between the two experts. The primary judge observed that to permit another expert just because of a divergence in value, even if substantial, was inconsistent with the purpose of the [Rules] and having so concluded dismissed the husband’s application.”

The Full Court continued (from [41]):

“The husband argued before us that the following matters, which taken collectively, satisfied as another special reason:

(1) that the single expert and Mr D adopted alternative methodologies as found by the primary judge at [50];

(2) that matters were known to Mr D that were not known to the single expert.

( … )

(3) that whilst recognising that the significant difference in value of over $11 million does not of itself warrant another expert, if it arises as a result of a difference in methodology and information, it warrants consideration as another special reason; and

(4) in circumstances where the husband is a minority shareholder in the entities that hold the real estate, and given that the wife seeks a cash payment, it is the husband who will be left with the consequences of the findings as to value, such that given the substantial difference between the two positions, it constituted another special reason for the appointment of another expert.

[42] We agree with the husband’s submission … We are satisfied that the primary judge did not consider these matters in aggregate … but rather confined his consideration to the issue of differences in value. In doing so, the primary judge fell into error.”

The Full Court granted leave for the husband to rely on his adversarial expert and costs certificates were ordered.

Property – Respondent died after commencement of case – Application for leave to proceed out of time dismissed for want of jurisdiction

In Radney [2022] FedCFamC2F 53 (28 January 2022) Judge Monahan considered a matter where 76 year old parties had separated in the 80’s and  were divorced in March 2000, where the wife filed an initiating application in June 2020. Her application did not seek leave to proceed out of time as she said she was unaware of the divorce.

The divorce file contained evidence that the wife was served ([4]) such that the wife sought leave to proceed out of time.

The husband died in August 2020, his response seeking that the wife’s application be dismissed, with orders sought in the alternative for a property adjustment, in the event that leave was granted ([2]).

Following the husband’s death, the husband’s personal legal representative sought dismissal of the wife’s application for want of jurisdiction.

The Court said (from [37]):

“In the … case of Simonds (deceased) and Coyle [2019] FamCAFC 47, the Full Court considered whether this Court had jurisdiction to consider an application by a de facto spouse for leave to commence property proceedings, where the other party had died after the application was filed but before leave had been granted. The Court … found that the trial judge had erred in law by assuming he had jurisdiction to determine the leave application in circumstances where one of the parties had died before the application had been determined.

[38] In his judgment, Murphy J (with Kent J agreeing) stated at paragraphs 53 to 58:

In Slater and Slater [1985] FamCA 45, just such an argument was raised in respect of the analogous s 79(8) applicable to marriages. In rejecting that argument, Ellis J said:

Adopting a broad and liberal interpretation, it cannot, however, be said that proceedings brought pursuant to sec. 44(3) for leave to institute proceedings of a kind referred to in para. (ca) of the definition of “matrimonial cause” in sec. 4(1) are proceedings with respect to the property of the parties to a marriage. Such proceedings are proceedings with respect to leave to institute proceedings with respect to property of the parties to the marriage or either of them.

Slater was followed in Phillips and Phillips [1985] FamCA 19 … and Rampling and Rampling [1987] FamCA 48 …

There is no material difference between the principle there set out and that which is applicable to s 90SM(8). … [T]he separate definition of ‘property settlement proceedings’ to which reference has earlier been made, which is directly referable to the s 90SM power, might be seen to reinforce that principle.

The Amended Initiating Application, filed by the de facto wife after the death of the deceased, instituted proceedings different to the s 90SM proceedings commenced by her Initiating Application; that Amended Initiating Application instituted ‘proceedings with respect to leave to institute proceedings with respect to property of the parties to the marriage or either of them’. The Court’s jurisdiction depends upon the terms of any legislative grant of jurisdiction. There is no statutory grant of jurisdiction which provides for an application for leave to institute proceedings to be excluded from the principle that the deceased’s death prevented those proceedings being instituted.

Without that specific grant of jurisdiction and power, an application invoking s 44(6) after the death of the deceased could not be made. Without that application and an order accordingly pursuant to s 44(6), the application for a s 90SM order could not be made; the Court had no such power unless and until a s 44(6) order was made.

His Honour did not have the jurisdiction to make the order which he did. The application for leave to appeal must be granted, the appeal allowed and the order set aside.

( … )

[40] Consequently, there is no specific provision under the Act for leave proceedings under section 44(3) to continue after the death of one of the parties.

( … )

[52] The Court finds itself dealing with a difficult and unfortunate set of circumstances. That said, the law, as outlined earlier in these reasons, is clear and the unfortunate passing of the husband, prior to the hearing of the question of leave being granted for the wife’s property application to proceed, means that the Court no longer has jurisdiction to determine the question of leave.

[53] The wife’s application for leave to bring property proceedings ‘out of time’ therefore fails for want of jurisdiction.”

All applications were dismissed.

Children – Order for vaccination of child against Covid-19 – Evidence of public health researcher preferred – World Health Organisation brochures given no weight

In Palange & Kalhoun [2022] FedCFamC2F 149 (16 February 2022) Judge B Smith heard an application where the only matter in issue was whether the parties’ 10 year old child should be vaccinated against Covid-19, the mother seeking orders for vaccination; the father opposing vaccination “until any possible long term side-effects” were known ([2]).

The Court directed each parent to file any expert evidence that they sought to rely upon. The mother filed an affidavit of “Dr E”, a public health researcher in the area of vaccination, who had a PhD in public health amongst other qualifications. There was no other expert evidence (and no evidence from a general practitioner for the child), the father arguing he could not be expected to provide expert evidence as to unknown side effects.

Dr E’s evidence included a “comparison table” as to the risk of Covid-19 infection of children in vaccinated children compared to unvaccinated children, concluding “While COVID-19 illness is frequently mild in children, the risks associated with infection far outweigh the risks associated with vaccination” ([57]).

The mother also sought to rely upon brochures/documents published by the World Health Organisation and the Center for Disease Control Prevention.

The Court said (from [61]):

“Broadly speaking the Evidence Act is designed to ensure: that evidence is adduced and admitted in a manner which is fair; and, that evidence which is relevant is admitted and that evidence that is not relevant is not admitted (ss 55 and 56 Evidence Act); and, that evidence which does not reach a specified standard of reliability is generally not to be admitted.

( … )

[68] It is clear that each party has given evidence of what various bodies have said, and what is contained in the pamphlets provided, to seek to prove the truth of those statements. Further, much of their evidence is their summary of what they understand, and not a direct repetition of the statements made.

[69] The hearsay exclusion applies to the parties’ evidence of what they say various public health bodies have said, and to the contents of the two pamphlets or articles annexed to the mother’s affidavit.

( … )

[72] … [I]t is clear that the evidence each party has given about COVID-19 infection and COVID-19 vaccination is opinion evidence given for the purpose of proving the existence of a fact about the effects of COVID-19 infection or vaccinations on children, and in particular the relative risks and benefits. These are opinions which would prima facie be excluded by s 76 Evidence Act.

( … )

[79] Neither the mother nor the father suggested that they had the training, study or experience to give them specialised knowledge or make them experts in any aspect of medicine or public health so that they could give opinion evidence on issues relating to COVID-19 infection or vaccination. …

( … )

[81] Dr E, on the other hand, has a PhD on the topic on which she has given her opinion. She currently works in the field in which she has given her opinion and her role is to study the area on which she gave an opinion. There was no challenge to Dr E’s expertise. She has set out the material on which she relied on. Dr E was not cross examined on her opinion evidence.

( … )

[83] Although very concise, having considered her opinion I am satisfied that Dr E’s opinion evidence sufficiently satisfies the criteria for admissibility pursuant to s.79 Evidence Act …

[84] Thus, unlike the parties opinion evidence, Dr E’s opinion evidence is admissible pursuant to the Evidence Act. …

( … )

[103] … [W]hilst admission into evidence is required before the Court may consider evidence, the question of what weight is to be given to evidence once admitted is a separate step. That step takes on particular significance where, as here, evidence which is admitted only by operation of s 69ZT(1) may, by subsection (2), be given ‘such weight (if any) as [the Court] thinks fit’.

( … )

[109] In the absence of any relevant qualifications of either party to give opinion evidence about this complex issue I do not consider it appropriate to give any weight to either of their opinions on the medical and public health issues associated with COVID-19 infection or vaccination.

( … )

[111] Noting what was said in McGregor [ed. full citation: McGregor & McGregor [2012] FamCAFC 69], about reliance on articles, and that the authors of the pamphlets were not available to be cross examined, I also give no weight to the pamphlets tendered by the mother.

[112] On the other hand, I give substantial weight to the unchallenged and uncontested evidence of Dr E who is a highly qualified expert. Those opinion were admissible pursuant to s.79 Evidence Act and who provided a summary of the relative risks of COVID-19 vaccination as against COVID-19 for children 5-11.

( … )

[147] The unchallenged expert evidence establishes that there is a clear health benefit to a child of age 10, such as the child, from being vaccinated against COVID-19, compared with the status quo position of the child remaining unvaccinated.

( … )

[153] There is no risk free option.

[154] My role is to consider and weigh the relative risks as best I can, taking into account the evidence before me, and considering the individual circumstances of the child, to make a decision as to what course of action I believe is in his best interests. It is a difficult task.

[155] Having considered all of the matters set out above, and noting that I both understand and respect the father’s concerns, balancing these competing factors I am satisfied that it is in the child’s best interests to be vaccinated against COVID-19 with the Pfizer children’s vaccine now in order to reduce the known existing risks which, though small, include potentially significant health impacts up to death, rather than to delay and expose the child to the risks of COVID-19 for an unspecified period of time waiting to see whether or not any currently unidentified adverse health side effects arise.”

The Court ordered the child to be vaccinated with the Pfizer paediatric vaccine.