Procedure – Wife deposed that she had received advice as to having good prospects of obtaining a settlement of at least 50% – No waiver of legal professional privilege as her deposition was an inadvertent and unintentional mistake

In Pickford [2023] FedCFamC1F 1087 (15 December 2023), Altobelli J heard an argument as to legal professional privilege in matrimonial property and parenting litigation that was part-heard.

The wife filed an affidavit that read “I have been advised that: I have a strong prima facie case and good prospects of obtaining a final property settlement of at least 50% of the non-superannuation net asset pool” and that “the amount I will ultimately receive by way of property settlement will be more than sufficient to cover the amount now sought by me for interim costs” ([2]).

The husband said that the wife had waived legal professional privilege in relation to the advice referred to in her sworn material and asked that it be produced. The wife said that she had mistakenly sworn a draft version of her affidavit, with a subsequent version of the draft deleting the paragraph that referred to her legal advice ([12]).

The Court referred to s 118 of the Evidence Act 1995 (Cth) (as to legal professional privilege) and s 122 of that Act (as to the loss of such privilege) and said (from [7]):

“The Full Court in Morris & Morris (No 3) [2023] FedCFamC1F 927 has recently summarised the relevant law …

[8] [In that case, the] … primary judge identified … the applicable legal principles by reference to the authorities, including the two leading High Court authorities of Mann v Carnell [1999] HCA 66 … and Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46 …

[9] The High Court described the applicable principles in Mann v Carnell as follows:

28. … It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …

29. Waiver may be express or implied. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

[10] In Expense Reduction, the High Court described the applicable principles as follows:

30. According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right (or privilege) by acting in a manner inconsistent with that right (or privilege). It may be express or implied. In most cases concerning waiver, the area of dispute is whether it is to be implied. In some cases waiver will be imputed by the law with the consequence that a privilege is lost, even though that consequence was not intended by the party losing the privilege. The courts will impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect.

31. In Craine v Colonial Mutual Fire Insurance Co Ltd, it was explained that “‘[w]aiver’ is a doctrine of some arbitrariness introduced by the law to prevent a man in certain circumstances from taking up two inconsistent positions … It is a conclusion of law when the necessary facts are established. It looks, however, chiefly to the conduct and position of the person who is said to have waived, in order to see whether he has ‘approbated’ so as to prevent him from ‘reprobating’”. In Mann v Carnell, it was said that it is considerations of fairness which inform the court’s view about an inconsistency which may be seen between the conduct of a party and the maintenance of confidentiality, though “not some overriding principle of fairness operating at large”.

( … )

[13] When the totality of the evidence put before the Court is examined, the Court is satisfied that s 122(3) of the Evidence Act does not apply, that is that the wife did not knowingly and voluntarily, expressly or impliedly, waive the privilege that attached to the advice that she referred to. It was not an intentional act with that knowledge: Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64 … ; Commonwealth of Australia v Verwayen [1990] HCA 39. It was an inadvertent and unintentional mistake, and the wife’s solicitors acted quickly, and reasonably, to protect confidentiality. The Court also accepts that the mistake must have been obvious and apparent to the husband, and on that basis, and in the circumstances of this case, the privilege should not be lost: Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd [1997] FCA 545 … per Goldberg J.

[14] The Court is … not satisfied that the production of the advice and supporting materials in question would have such probative value that it would justify the extraordinary private and public cost and inconvenience consequent upon the inevitable delay of the conclusion of a hearing that is already in day eight and has two more days of hearing listed in January 2024.”

The Court dismissed the husband’s claim that the wife had waived legal  professional privilege.

Property – Enforcement of orders that split overseas pension interests – Court declined the appointment of an assessor pursuant to r 7.34 where it would likely need to intervene and adjudicate every stage of such an appointment

In Gresham (No 4) [2023] FedCFamC1F 1090 (19 December 2023), Altobelli J heard an enforcement application in respect of property orders that required the parties to do all acts and things (including issuing legal proceedings in “Country Q”) to cause a husband’s overseas pension interests to be split, so that the wife received the equivalent of 30% of the value of the husband’s interest in the pension, at the time of the split ([3]).

The orders sought to be enforced were made in Gresham (No 2) [2023] FedCFamC1F 51, where expert evidence opined that the Court could make an order that split the Country Q pension, which could then be registered in Country Q and bind the trustee. The Court considered the interest as property or otherwise divisible via an in personam order against the husband. Separately, it considered another English pension interest of the husband was a financial resource, where the associated rules only permitted sharing if a party was domiciled in England.

The husband sought enforcement orders that the wife sign and post to “RR Pension” certified documents, including her passport and details as to her address and tax file number. The husband presented correspondence from “RR Pension” confirming that they could make a transfer to a pension plan in the name of the wife and provide her with options as to the newly created interest, but they were yet to hear from the wife ([22]).

The wife sought orders that varied the original order as to the pension, directing the husband to facilitate payment to her of $1,300,000 by way of a lump sum ([4]).

The Court said (from [9]):

“ … [T]he Court found that the husband will not voluntarily retire before the age of 60 … [T]he Court confirmed that the relevant values of the pension funds will be that at the date of splitting. Also … the Court expressly recognised that the values identified by the parties in relation to their assets and resources may fluctuate by the time of realisation of the same. Moreover, the Court observed that the parties had multiple opportunities to apply for leave to adduce fresh evidence about valuation but declined to do so… [T]he Court found that the husband’s interest in the Country Q pension funds constitutes property and … that the V Pension UK pension is a financial resource available to the husband… [T]he Court explained that since the V Pension is a financial resource, it cannot be affected by an order altering property interests …

( … )

[23] The husband indicates that … RR Pension provided him with the paperwork required to set up an account in the wife’s name, which provide the wife with a choice of two retirement schemes … As far as he is aware, the wife has not responded to RR Pension’s communication or engaged with them regarding the available options and the completion of documents.

[24] He lists … what steps the wife needs to take in order to facilitate compliance with [the order] … and indicates that thereafter RR Pension will be able to facilitate the wife receiving her 30 per cent … [H]e outlines what needs to occur after the wife completes the necessary steps, including a valuation for all three pensions at the time of the splitting …

( … )

[25] The wife’s case was that … the orders are impracticable based on the advice she received from a financial advisor she was instructed to work with … Mr BR from O Company.

( … )

[27] The wife indicated that she would not sign any of the documents sent to her by RR Pension because Mr BR instructed her not to sign them due to various issues such as ‘tax contamination’, ‘jurisdictional  issues’ and the fact that there is no ‘recognising fund’ in Australia who will allow access to a pension fund at age 50 … Mr BR calls the husband’s new proposal from BQ Company ‘dangerous’ and later says that she should ‘not sign anything until you have had tax and legal sign off’ …

( … )

[34] The differences in the expert advice purportedly given to each party is problematic, but not necessarily surprising given some of the complex issues involved. The Court has specifically considered its power to appoint an assessor pursuant to section 102B of the Act, ‘to help it in the hearing and determination of the proceedings, or any part of them, or any matter arising under them’. Rule 7.34(3) of the Rules states that the Court can only appoint an assessor on its own initiative if the parties have been notified and given a reasonable opportunity to be heard in relation to the appointment. That has not taken place. As it turns out, the Court does not believe that, on the facts of this case, it would resolve the differences in expert opinion without disproportionate delay and cost. The long litigious history of this matter leads this Court to conclude that the Court would need to intervene and adjudicate on almost every stage of the process of appointing an assessor. As r 7.34(2) of the Rules identifies, issues include the name of the proposed assessor, the issue about which assistance is sought, and the assessor’s qualifications skill and experience to give the assistance. Each of these issues would provide the parties to the present litigation with further opportunities to disagree. The Court foresees significant obstacles in reaching agreement about what evidence should be placed before the assessor.

[35] The reality is that all the orders sought by the wife seek, in substance and effect, to vary the final orders made by this Court. There is no extant application under s 79A of the Act before the Court, so the Court lacks jurisdiction to make these orders. The wife’s Application – Enforcement filed 22 November 2023 must, therefore, be dismissed.

( … )

[39] The Court concludes that, based on the evidence before it, the best chance of enforcing [the order] … is to make the orders proposed by the husband …

[40] Orders will be made in accordance with the husband’s proposed orders … including the wife providing RR Pension with her address, passport and Australian Taxation number, electing an RR Pension retirement scheme and starting the completion of the applicable forms, posting to RR Pension all signed and certified documentation required by them to set up the elected retirement scheme, and the parties agreeing in writing to a splitting date.”

Children – Senior Judicial Registrar’s order for interim supervised time set aside on review – Mother who previously agreed to orders for unsupervised time could not have genuine concerns about the children spending unsupervised time with the father

In Snow & Curran (No 2) [2023] FedCFamC1F 1120 (20 December 2023), Baumann J heard an application for review of orders made by a Senior Judicial Registrar in respect of the parties’ 11 and 9 year old daughters.

A number of previous interim orders as to time had been made in the proceedings, the first providing for paternal supervised time in circumstances where the mother’s daughter of a previous relationship had made disclosure to a counsellor regarding sexualised behaviour that presented a potential welfare risk.

Following a police interview that found the alleged risk was unsubstantiated and a family report, interim orders were made for unsupervised paternal time that graduated to alternate weekends.

In mid-2023, the mother withheld the children, based on new allegations of welfare risk. In August 2023, she agreed to interim consent orders that provided for unsupervised paternal time for daytime visits. Despite that order, a Senior Judicial Registrar ordered that the daytime visits be supervised.

The Court said (from [3]):

“ … I make it clear that I have not read the Reasons of the Senior Judicial Registrar, as this is not an appeal but a hearing de novo. As both parents were legally represented … they understood that a Review Application is a hearing de novo. And the hearing proceeded on that basis of the approach to be adopted for any interim hearing of a parenting matter, guided by the Full Court decisions such as Goode & Goode [2006] FamCAFC 1346 and Banks & Banks [2015] FamCAFC 36 …

( … )

[14] The competing positions … came before a Judicial Registrar on 28 August 2023. As the transcript of the hearing before me demonstrates, I regarded this interim order as very insignificant.

[15] Both parties were legally represented, and the orders by consent were made before the mother had filed a Response to the Application in a Proceeding …

[16] … [N]o supervision for daytime visits with the father was ordered, although … there was a restraint about lying in the bed with the children…

[17] … [I]t is significant, in my view, and at that stage, the mother was not raising a concern such that she was seeking orders for supervised time. At some stage during the hearing before me when I raised this curiosity, I was told that I should see the consent order made before the Judicial Registrar on 28 August 2023 as a ‘holding order’. It makes no sense to me, however, that if there is a ‘holding order for unsupervised time’ that there should, therefore, be any argument about supervision at some later stage unless some new evidence arose. As I say, it follows logically, unless the mother is acting disingenuously, that … the mother could not have seriously been concerned about the children spending unsupervised time with the father (at least during the day).

[18] I say ‘unless acting disingenuously’ because in submissions made by the father’s solicitor … , she points to the concerns raised by Ms G about the mother’s presentation and the opinion she expresses about the mother’s capacity to support the father’s relationship with the girls. This is certainly a triable issue. The mother is clearly on notice, both from the report of Ms G and the father embracing a desire for, at least, equal time, that her role as the primary (almost exclusive parent) is under some challenge by the father … ”

After considering a police interview with the eldest child and the Department of Child Welfare’s notes, the Court continued (from [25]):

“The current evidence of the [police is that they] … did not take any action after the section 93A interviews and as a result, the Department has not investigated the matter further. It does not appear as if the father has ever been investigated by or interviewed by either the department or the police.

[26] Although I accept authorities like the police and the Department have onerous statutory obligations that they must fulfil, their investigative powers are extensive and directed to a different threshold test they are required to apply. I accept that the police are required to consider whether there is sufficient evidence to launch a prosecution. The Department are exercising a child protective overview. However, the Court is not entitled to ignore that both the department and the police have taken no action to proceed further on the evidence available to them.

( … )

[29] Even if I accept – which on an interim basis I am almost bound to do – that the mother did not know about some of the comments recorded by the children’s counsellor when she consented to the orders of 28 August 2023 (with the benefit of legal advice) I am sufficiently concerned about a number of comments made by the children that could only have come from the mother…

( … )

[32] I have carefully considered the current available evidence with the limitations that are apparent in any truncated hearing where no findings should be made unless absolutely clear. However, I have formed the view that I can not accept that the children are at risk in spending unsupervised time with the father including, in my view, overnight time, provided some conditions that I intend to impose are complied with as follows, and I ask that the Independent Children’s Lawyer make a note of these conditions:

(a) The father shall not lie with or sleep in a bed with the children. Although I accept many children enjoy and seek out a cuddle with a parent, for girls of this age, the father should not do so and expose himself to further allegations by allowing physical contact on a bed to occur.

(b) Neither parent shall physically discipline the children.”

All previous orders were discharged and interim parenting orders made that included orders for equal shared parental responsibility and unsupervised paternal time.

Property – Valuations of rural acreage differed by $4,900,000 – Leave granted to adduce adversarial evidence where single expert applied comparative sales method and adversarial expert adopted a summation method – Order made for a conference of the experts for clarification of outstanding issues

In Henschel & Sartre (No. 3) [2023] FedCFamC1F 1081 (15 December 2023), Berman J heard countervailing interim applications in respect of valuation issues that had caused an adjournment of the parties’ trial.

A single expert (“Mr LL”) had valued an interest in rural acreage (“the Town O property”) via a comparative sales method at $7,750,000. The husband had engaged an adversarial expert (“Mr MM”) who adopted a “summation method” which “focused on differing land types and the dollar value per hectare” and said that the property was worth $12,650,000 ([48] & [58]). The husband sought leave to adduce the adversarial report as evidence, which was opposed by the wife.

The wife sought orders that the single expert update valuations for two separate properties – the former matrimonial home and “the Suburb J property”. The Suburb J property had been valued by the single expert valuer at $9,725,000, but the single expert had not inspected the property and there were bank valuations obtained under subpoena, which valued the property at $20,450,000, once construction had finished on that property. The husband opposed updated valuations.

As to the adversarial evidence and the Town O property, Berman J said (from [15]):

“Separate adversarial evidence can only be called with the Court’s permission subject to three exceptions to the tendering of further evidence from another expert witness on an issue already addressed by a single expert witness, namely:

  • If there is a substantial body of opinion contrary to any opinion given by the single expert witness and that the contrary opinion is or may be necessary for determining the issue.
  • If another expert witness knows of matters not known to the single expert witness that may be necessary for determining the issue.
  • If there is another special reason for adducing evidence from another expert witness.

[16] A difficulty arises in respect of how ‘the substantial body of contrary opinion’ (r 7.08(2)(a) of the Rules) is established before the Court. It cannot be the evidence of the second expert (which is what the application is seeking leave to adduce) and so requires more than information and belief such as a pool of other experts or other foundation research intended to establish the bona fides of the contrary opinion.

( … )

[19] It is not suggested that Mr MM provides his valuation report on the basis of a substantial body of opinion contrary to the opinion given by Mr LL.

( … )

[21] If leave is to be given, then it is either because there are matters not known to Mr LL or that there is another special reason for adducing the evidence.

( … )

[51] Mr MM considered that there was shortage of sales of comparable properties and as such he relied upon open market transactions of smaller holdings. Of particular note, was the focus by Mr MM on ‘sales evidence [that] has been divided into [production] and Grazing sales to correspond with the respective country types’…

[52] Mr MM used the comparison sales to determine the following dollar rate per hectare for different country types: …

– Open to Light [tree cover] Grazing ([N Property]) – $ 45,000 per ha;

– Open to Light [tree cover] Lifestyle/Grazing ([AA Property]) – $ 50,000 per ha;

– Former Grazing with Light Regrowth – $ 25,000 per ha;( … )

[53] The application of the summation method allows an assessment of the individual components of the property with a separate consideration of building improvements that add value to the land.

( … )

[55] Leave to call a separate adversarial witness should only be given in limited circumstances and with caution.

( … )

[58] It is readily expected that whilst there are a number of different valuation methodologies that can be applied, in the exercise of valuing the Town O property Mr LL considered that a comparison or comparable sales methodology was best suited to the exercise, whilst Mr MM had less confidence in the comparison methodology and adopted a summation method which focused on differing land types and the dollar value per hectare with the addition of an amount for improvements.

[59] The result is that two appropriately qualified experts have each considered the valuation approach differently and have given emphasis to alternate valuation methodologies, resulting in a difference of $4,900,000.

[60] The application of the Rules in respect of the focus on the appointment of a single expert has, at its core, a focus on case management and the efficient and expeditious determination of matters…

[61] It is axiomatic that significant emphasis and weight must be given to case management however, as it was acknowledged by the High Court in Aon Risk Services Ltd v Australian National University [2009] HCA 27, there is an overarching consideration that considerations of case management with the further corollary that the application of the Rules relating to single expert evidence must be subservient to the interests of justice.

[62] Bringing to account the different approaches adopted by each of the valuers and the outcome representing a substantial difference both in terms of a proportion of the Town O property but also in terms of the likely property of the parties, it is appropriate that leave be given to the husband to call separate adversarial evidence from Mr MM.”

The Court rejected the wife’s application to update the valuation for the former matrimonial home, finding that beyond an argument that it had been three months since the property was valued (which would be five months as at trial), there was no evidence that supported the wife’s application.

The Court granted the wife’s application to update the Suburb J property valuation. After considering the subpoenaed documents and the valuations therein, the Court continued (from [82]):

“The issue is not that there is a valuation obtained by the bank for its own purposes that places a higher value on the property than assessed by Mr LL …

[83] The issue … is whether matters raised in the subpoenaed documents … raise any aspect that would properly support a further valuation of the Suburb J property taking into account the costs involved of that exercise.

[84] At the conclusion of submissions, I was not satisfied that there was agreement as to the state of the construction and development of the commercial premises situate on the Suburb J property.

( … )

[86] It should be a matter of ready resolution however the level of controversy is such that I consider it is appropriate for Mr LL to reconsider the valuation of the Suburb J property.”

The Court granted leave to adduce evidence from the adversarial expert and directed a conference of experts prior to trial pursuant to r 7.31 of the Rules.

Property – De facto thresholds – Parties lived separated but under one roof as de facto wife was too fearful to deny the de facto husband entry – Separation found to have occurred in 2016 and leave to proceed out of time refused – De facto husband’s evidence inconsistent with Centrelink and bankruptcy documents

In Brenna & Kolby [2023] FedCFamC2F 1523 (29 November 2023) Judge Cope heard a de facto husband’s application for property adjustment where he said the parties separated in 2016 but reconciled, before finally separating in 2020. The de facto wife said final separation occurred in 2016 and save for a brief reconciliation in 2018, the parties remained separated.

The parties had two children, aged 10 and 8. The asset pool was primarily comprised by a property purchased in 2018 (on the de facto husband’s case, purchased during the de facto relationship and on the de facto wife’s case, bought after separation in her sole name) ([6]). It was accepted that when the de facto husband stayed in the property, he slept in a separate room.

The Court said (from [5]):

“[The de facto wife gave evidence] … of a relationship characterised by violence and threats. Her evidence is that post separation she was too fearful of the applicant to deny him entry to her home or to refuse to go on family outings with him.

( … )

[31] … [W]hether [the de facto husband] … viewed himself to be in a de facto relationship and whether it was in reality a de facto relationship in terms of the legislation may well be two very different matters.

( … )

[34] It beggars belief that the applicant did not move heaven and earth to obtain documentary evidence about his claims of financial and non-financial contributions. Rather he produces only one Westpac receipt reflecting one mortgage repayment, and only one receipt reflecting payment of rates to support his contention of regular and ongoing payments.

( … )

[44] There is no dispute that a de facto relationship existed. What is in dispute is when that ended.

( … )

[48] The respondent … produced many texts that gave evidence contrary to [the de facto husband’s evidence as to separation] … supporting her evidence of separation in 2016. The majority of those texts were to and from an unnamed third person. The respondent advised that these texts were retrieved from a lost device which had just that week been found.

( … )

[50] The applicant’s earlier and repeated evidence as to the dates of separation and resumption of cohabitation was, on his own evidence, wrong. I am asked by the respondent to place little weight on his more recent evidence as a consequence of this inconsistency.

[51] During the lengthy cross examination, and despite the changes to his evidence, the applicant did not concede that the parties had not lived together in a de facto relationship after 23 March 2016 …

[52] He did however concede that at times he claimed Centrelink benefits as a single person when in between jobs …

[53] I also considered that on the Bankruptcy Notice dated late 2019 the applicant’s address is listed as E Street, Suburb F. This is at a time when the applicant alleges he lived with the respondent and nowhere else, yet even on his own evidence to an independent third party that was not the case.

( … )

[56] The respondent’s evidence is that the parties separated on a final basis in 2016 and that any communication or time spent after that was not a continuation of or reinstatement of the de facto relationship save for a brief reconciliation in 2018. Rather her evidence was that she was too afraid to say no to the [respondent] when he sought to stay in her home or, in the case of the trip to Country H, unwilling to turn down a once in a lifetime opportunity.

( … )

[65] The applicant concedes that when they were living under the one roof in the Town C property that he slept in a separate room – variously giving evidence that this was due to his snoring, because he started work early and because a child liked to get into bed.

[66] However, the Bankruptcy Notice dated late 2019 does not support that…

( … )

[73] The applicant’s understanding seems to be that if they had sex then they recommenced a de facto relationship – for example at his party in late 2017 he gives evidence of ‘rekindling’ the relationship. However, under cross examination he gave evidence that on some unnamed date in mid-2018 as they were going to daycare to collect the children the respondent turned to him and said, ‘why don’t we give it another go’. That evidence suggests that he accepts that at that stage they were not in a relationship which directly contradicts his own evidence.

( … )

[75] I accept the respondent’s evidence that the applicant constantly sought to persuade her to resume the relationship and that he interpreted every kindness, politeness or concession as a resumption of the relationship.

( … )

[80] The applicant provided only two documents supporting his evidence of financial contributions. …

( … )

[95] It is hard to accept that intimidation walks hand in hand with an overseas holiday. The respondent’s position was that this was her dream destination and that his organisation paid rather than the applicant. She also denied that they were there as a couple but conceded that she wore the engagement ring because she was told to do so by the applicant. It was a trip that even on the applicant’s evidence was undertaken at short notice.

( … )

[98] There is no evidence of any mutual plans for a joint future or for the children that is persuasive of the degree of commitment suggested by the applicant. That he wished there to be is clear enough, but it takes more than one person to form a de facto relationship.

( … )

[110] People can be in a relationship of some sort without it being a de facto relationship. They date, they have casual relationships, and they may, as alleged by the respondent in this case, be in a forced relationship or forced proximity due to fear or coercion.

[111] The applicant points to a series of events over about a five-year period after March 2016 as evidence of an ongoing de facto relationship together with his evidence of financial contributions which are largely unsupported by documentary evidence. The respondent concedes those social events but argues that she had no choice but to comply with the applicant’s invitations due to her fear of him and her concern for the children in his sole care. I accept her evidence about those social outings. While I am troubled about the trip to Country H, as noted earlier, those concerns are well and truly outweighed by my views of the applicant in the witness box as to his determination and strength of purpose. I formed the view that it would be hard indeed to deny the applicant what he wanted.

( … )

[114] Having weighed all the above matters I am of the view the weight of the evidence supports the respondent’s evidence that the de facto relationship ended in 2016. Although there was a short reconciliation occurring in 2018, I am not satisfied that what occurred was sufficient to amount to a resumption of a de facto relationship.”

The Court declared that a de facto relationship existed between 2008 and May 2016 and dismissed the application for leave to proceed out of time, finding that it was brought five years and four months after separation.

The Court held (at [129]):

“The reason given for the delay was the applicant’s alleged belief that the parties remained in a de facto relationship up until late 2020. I do not accept that was a reasonable belief in all the circumstances of this case. The fact that the applicant wanted to be in a de facto relationship with the respondent is not sufficient to make it so.”

Divorce – Wife’s application for rescission of divorce order dismissed – Wife’s submissions as to husband’s emotional distress did not discharge thresholds for rescission at sections 57 and 58 of the Family Law Act

In Moreau (No. 4) [2023] FedCFamC2F 1473 (21 November 2023) Judge Carty heard a wife’s application to rescind a divorce order.

The parties had been married for 48 years. A divorce application was filed by the husband that was granted after a contested hearing in which the wife alleged that the parties had not separated under one roof and had not lived separately and apart for 12 months.

Following the divorce order, the wife filed an application in a proceeding seeking that the order be rescinded and that the parties attend counselling, the Court noting that the effect of the wife’s application was such that the divorce order was yet to take effect ([19]).

Prior to determining the application to rescind, the Court directed the parties to attend counselling, after which the wife maintained that reconciliation was possible, while the husband said he was “more satisfied than ever” that there was no chance of reconciliation ([13]).

The wife’s evidence and submissions included that due to the husband’s “adverse childhood experiences” that he responds in “a reactive manner when he is afraid” ([23]), that the husband had a false belief that the wife was having an affair ([25]), that the husband’s “expressions of love for her” demonstrated possibility of reconciliation ([29]) and that the husband had not received the “support and guidance he needs to deal with the situation” ([29]).

The Court said (from [16]):

“There are two circumstances in which a court may rescind a Divorce Order before it takes effect.

[17] Pursuant to s.57 of the Act the Court may rescind a Divorce Order if the parties have become reconciled.

[18] Pursuant to s.58 of the Act the Court may rescind a Divorce Order if satisfied that the order was made because of a ‘miscarriage of justice’ by reason of fraud, perjury, suppression of evidence or any other circumstance.

( … )

[36] I am unable to find that the parties have become reconciled, even in the sense of having restored ‘friendly relations.’ … After an extended period of counselling … the husband maintains his position … and I accept that the recent family counselling has further cemented his position, which has remained consistent throughout the entire course of the proceedings to date.

[37] I accept the wife’s submission that the husband was under the misapprehension that the Divorce Order came into effect in mid-2023. I have already noted that the wife’s application to rescind the order has, by operation of s.55(3) of the Act, automatically extended the date upon which the divorce order will take effect.

[38] I do not accept the wife’s submission that the husband’s misapprehension materially affected his attitude to the counselling. The husband has consistently expressed his opposition to being ordered to engage in counselling or mediation with the wife, and the wife’s assertion that the husband’s attitude to reconciliation was affected is mere conjecture…

[39] I am not satisfied that the divorce order ought to be rescinded under s.57 of the Act.”

As to whether there had been a miscarriage of justice by reason of fraud, perjury, suppression of evidence or any other circumstance, the Court said (from [42]):

“The wife has provided no evidence that either party in this matter has done anything intentionally dishonest. Further the wife has provided no cogent evidence in support of her contention that the husband was advised by his lawyers to omit information about his alleged childhood trauma, with the purpose of deceiving the Court.

( … )

[46] The wife has provided no cogent evidence that there has been any perjury in the divorce hearing.

( … )

[51] … The Court was always alive to the possibility that the wife’s cross examination of the husband may have elicited from him a concession that there was a prospect of reconciliation, in which case the Court would properly have dismissed his application for divorce. But the husband’s evidence was not shaken in cross examination …

( … )

[53] … [T]he husband… bore the onus of proving the facts required to be proven before the Court may grant a divorce. It was relevant to consider whether the husband’s evidence was credible, and the Court found that it was.

[54] The Court has had no reason at all to question the wife’s integrity or her honesty. There is no doubt that she is a very genuine person… She is desperate to avoid a divorce, and during the divorce hearing she begged the Court to dismiss the husband’s application.

[55] The Court is not able to find that either party has committed perjury in the divorce proceedings. There has been no miscarriage of justice due to perjury.

( … )

[62] In the current rescission application it appears that the wife considers that the Court should simply infer that the alleged adverse childhood experiences of the husband impacts on his capacity to deal with issues that have arisen in the parties’ marriage, and that the Court should infer that the husband lacks capacity to make proper decisions …

[63] The wife presents herself as the only person in the marriage who has capacity to make a sound decision and she says that she is ‘doing all she can to advocate for the husband and his needs.’ … She commented to the Court that she does not know whether the husband has had any agency in these proceedings, and she accuses the husband’s lawyers of failing to provide him with proper advice and guidance … The wife is not able to know what legal advice the husband has received, so her criticisms of his lawyers are without proper foundation. There is no cogent evidence before the Court of any impairment in the husband’s capacity … The wife invites the Court to find that it is only she who knows what is good for the husband … The Court is not persuaded by any evidence before it that such a finding would be soundly based.

( … )

[73] I am not satisfied that any of the circumstances set out in s.58 of the Act have been proven, and therefore the wife has not discharged the onus of proving that the divorce order made in mid‑2023 should be rescinded on the basis that there has been a miscarriage of justice, and I find that that there is no circumstance which would justify a rescission of the divorce order.”

The wife’s application was dismissed. She was ordered to pay costs fixed at $1,100.

Property – Husband’s failure to repay his parents within timeframe required by order was not a default, nor was the wife a “person affected” by that order – Wife fails to set aside order pursuant to s 79A(1)(c)

In Benito & Emmanouel [2023] FedCFamC1F 1023 (30 November 2023) Rees J heard a wife’s application to set aside consent orders made in September 2020, to which the husband’s parents were parties.

The orders declared a debt owing by the husband to his parents of $1,365,000 and that the wife would transfer her interest in a particular property (the “Suburb D” property) to the husband in exchange for $65,000, that property and two others to be charged with the debt to the parents.

The orders required the husband to repay his parents by 31 March 2021 and in default, he was to sell all three properties and also pay interest.

The husband failed to pay the debt by 31 March 2021, sold two of the three properties and ultimately repaid the debt with interest in November 2023.

The wife argued the orders should be set aside pursuant to s 79A(1)(c) (i.e. a person has defaulted in carrying out an obligation and in the circumstances that have arisen as a result of that default, it is just and equitable to vary or set aside the order) with a varied settlement so that she receive 57.5 per cent ([3]).

The husband argued that the wife was “not a ‘person affected’ for the purpose of s 79A(1) and therefore she cannot invoke the provisions of s 79A(1)(c)” ([11]). The husband’s parents opposed the application and sought indemnity costs.

The Court said (from [12]):

“The wife, in these proceedings, bears the onus of proving, by admissible evidence, that,

  • there has been a default, and
  • as a result of that default it is just and equitable to set the orders aside.

…

[13] It is not in dispute that the wife has received all that to which she was entitled pursuant to the orders…

( … )

[15] The only persons affected by those orders are the husband and the second and third respondents.

[16] I do not accept that, in these proceedings, the wife is a person affected by the relevant orders.

( … )

[25] While I accept that the husband was required to sell the Suburb E property after March 2021 if the debt remained unpaid, the orders do not specify a date by which the sale was to be completed and Order 9 makes provision for the payment of interest on the amount outstanding after 31 March 2021.

[26] I am not satisfied on the available evidence that the husband’s conduct of the sale of Suburb E constitutes default.

[27] Order 13 provides that, in the event that any part of the debt to the husband’s parents remains outstanding by 31 August 2021, the Suburb D property is to be sold and the proceeds used to repay the debt.

[28] The husband deposed that the property was to be auctioned in late 2023.

[29] The husband’s parents and the husband were living in the Suburb D property. The husband’s father deposed that, by 31 March 2021, the market was depressed and,

… as my wife and I had no other place to live, if we forced [the husband] to sell his properties, including [Suburb D], we would have no place to live. It suited me and my wife to stay in [Suburb D] and not force [the husband] to sell until we had a place ready to buy and move to. My wife also did not want to move more than once, something that I agreed with.

As such, my wife and I decided not to press the repayment when it came due …

( … )

[32] Again, I am not convinced that the husband’s delay in selling the Suburb D property, in circumstances where the persons entitled to enforce the sale consented, constitutes a default.

( … )

[38] The wife bears the onus of proving, to the standard required by s 142(2) of the Evidence Act (1995) Cth, the facts which base a submission that it would be just and equitable to set aside the 2020 orders.

[39] I am not satisfied that the fact that the properties which were to be sold pursuant to the orders were sold for a greater sum than that which was jointly agreed to be their value at the time that the orders were made is sufficient. Using the same logic, the husband would not be able to set the order aside if the properties had sold for a lesser value than the agreed values. The vicissitudes of the market must have been in the contemplation of each of them.

[40] I am not satisfied on the evidence before me that the division of property effected by the 2020 orders should be set aside or that the result would be different if the matter were re-litigated.”

The application was dismissed. The parties were directed to file written submissions as to costs.

Spousal maintenance – No error in exclusion of compulsory expenses associated with non-income producing real estate – Contractual or unavoidable expenses validly excluded if they are unreasonable

In Herczog [2023] FedCFamC1A 219 (7 December 2023), Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard a husband’s appeal against an order of the Magistrates Court of Western Australia that he pay $1,647 per week by way of interim spousal maintenance to the wife.

When making the order, the Court also ordered the husband to pay the wife a partial property settlement of $60,000, finding that the net asset pool had an “approximate total value of $2,329,688” ([9]).

The Court found that the husband controlled a family trust, business entities and “various real estate” interests; that he controlled how much he was paid as income (including dividends); that his disposable income was “not clear”; that his income was at least $2,770 per week via rental income and a further $6,942 per week of non-rental income; and that the companies under his control earned profits of $1.6 million in 2022 and $800,000 until May 2023 in that financial year ([11]).

The Court said (from [13]):

“Three of the properties owned by the applicant did not generate any income. One was said to be a vacant block of land, another was a derelict and condemned house. The third was a property in which the paternal grandmother lived and who held a 75 per cent registered interest. She made, as far as can be seen, no contribution to its outgoings.

[14] As explained in submissions, written and oral, it was submitted that her Honour erred in that:

The property expenses were contractual and not discretionary and it was an error of law to exclude them …

( … )

[17] The applicant’s point, essentially, is that the expenses for the properties were compulsory and therefore should not have been excluded. Yet unreasonable discretionary expenses may also be compulsory, if they are the subject of a contract. It is clear from the reasons in [Mee and Ferguson [1986] FamCA 3] … that what is meant to be included are unavoidable commitments such as taxation, Medibank levy, compulsory superannuation, and the like and necessary living expenses, but not all expenses the subject of a contractual obligation.

[18] The principle to be drawn from Mee is that when considering an application for child maintenance the Court may determine to exclude what it regards as unnecessary expense even though such expenses might fall short of being described as clearly unreasonable, extravagant or inappropriate.

[19] So, understood, it does not assist the applicant unless the expenses of the properties could be categorised as necessary living expenses.

[20] That decision was in relation to child maintenance pursuant to the then s 73 of the Family Law Act 1975 (Cth) (“the Act”) which required parties to a marriage to maintain their children ‘according to their respective financial resources’.

[21] Section 72(1) of the Act, dealing with spousal maintenance, states that a party to a marriage is liable to maintain the other ‘to the extent that the first-mentioned party is reasonably able to do so’. If s 72 is engaged the Court may ‘make such an order as it considers proper’ (s 74). In doing so, the Court must take into account ‘the income, property and financial resources of each of the parties’ (s 75(2)(b)).

[22] Thus, whilst spousal maintenance applications are often determined by looking at income only, the remit of the Court is not so limited.

[23] The use of the word ‘reasonably’ incorporates concepts similar to those identified in Mee. As the statute directs, the Court is not limited to looking at income. In DJM v JLM [1998] FamCA 97 … the Full Court confirmed that what is reasonable depends on the circumstances …

( … )

[27] Her Honour applied the above principles and found that it was not reasonable to include the property expenses which included significant amounts for properties which were not earning an income, so that they should not be prioritised over the obligation to support one’s spouse.

[28] The applicant’s identification of the test, namely that all expenses that are contractual, unavoidable, compulsory or longstanding must be taken into account ignores the statutory requirement of reasonableness and the obligation to make such order as is proper.

[29] I consider that the magistrate did not err by applying the incorrect test. The findings were open on the evidence. …

[30] In the circumstances where it was found without challenge that the exact amount of the applicant’s income was not clear and that he had the capacity to control his income and that it was not reasonable, in the circumstances, for the applicant  to prioritise the retention of non-income earning properties the outcome cannot be described as unreasonable or plainly unjust. … ”

The appeal was dismissed. The husband was ordered to pay costs as agreed or assessed.

Appeal – Application to extend time to file draft index to appeal book filed 1 hour before deadline – Appeal deemed abandoned under FLR 13.14(3) despite the filing of that application – Appeal reinstated and security for costs ordered (in the sum of $100,000) – Respondent’s estimate of her appeal costs as $600,000 was “rank avarice”

In Fowles [2023] FedCFamC1A 238 (20 December 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard an appeal against the appeal registrar’s refusal to file an Amended Notice of Appeal, an Application in an Appeal and an affidavit in support.

After an 18 year marriage that produced one (adult) child and a 43 day trial heard over 3 years, Bennett J made orders dividing a $7 million asset pool 60:40 in favour of the wife ([6]). The husband filed a Notice of Appeal against that order within time, but later failed to file a draft index to the appeal book within the 28 day time limit (per r 13.14). Rather, via his Application in an Appeal, he sought to extend the time limit by 2 months (from 1 December to 31 January).

The appeal registrar rejected the husband’s documents, explaining that where they were filed about an hour before r 13.14(3) deemed the appeal to be abandoned, the application seeking an extension of time could not be listed, served and determined before the appeal would be deemed abandoned under the rules ([15]).

The husband appealed the appeal registrar’s decision and also filed an application seeking to reinstate the appeal.

The Court said (from [23]):

“The applicant had the right to file the Amended Notice of Appeal (r 13.10(1)).

[24] The applicant also had the right to file the Application in an Appeal prior to the appeal being deemed abandoned. However, the applicant is mistaken to assume that the acceptance and filing of that Application, wherein he sought relief by an extension of time within which to file the draft appeal book index, would have then or would now suspend the progression of the time period within which the draft appeal book index had to be filed until the application for the extension of time was heard and determined. It was the applicant’s problem that he left the Court with insufficient time within which to list, hear and determine his application for an extension of time before the appeal was deemed abandoned.

[25] The appeal was deemed abandoned by operation of r 13.14(2)(a)(i) of the Rules at 4.30 pm on 1 December 2023. The discretionary power to extend the time within which the applicant had to file the draft appeal book index (r 13.14(2)(b)) could arguably not have been exercised after 4.30 pm on 1 December 2023 because, by then, the appeal was deemed abandoned and appellate jurisdiction was exhausted …

( … )

[29] The application to extend the time for filing the draft appeal book index is extended to 31 January 2024, as sought. An extension of time is not unreasonable in light of the length of the trial and the volume of documents adduced in evidence … With the intervening Christmas period and the closure of legal offices, extending the time until the end of January 2024 is reasonable.

( … )

[40] The principles which govern applications to re-instate appeals are not in doubt. In Allan & Ors & Allan & Ors [2014] FamCAFC 162 … the Full Court said:

The discretion to re-instate an abandoned appeal is not exercised in an unstructured or unprincipled way, but rather in accordance with the established legal principles set out within Gallo v Dawson [1990] HCA 30 … (see Haykal & Krawiec & Anor [2014] FamCAFC 110 … ; Bemert & Swallow [2010] FamCAFC 100 … ). As was made plain in Gallo v Dawson, the discretion may only be exercised in favour of the applicant upon proof that strict compliance with the Rules will “work an injustice upon the applicant”.

[41] In accordance with those principles, the application to re-instate the appeal is granted. The appeal is re-instated in the form of the Amended Notice of Appeal now accepted as being filed on 1 December 2023.

[42] The applicant moved with commendable haste to re-instate the appeal after its deemed abandonment. No prejudice could accrue to the [wife] by the appeal’s re-instatement after such a short interlude of abandonment. Her submissions about the weakness of the appeal are not so obviously correct as to militate against the appeal’s re-instatement. The asserted demerit of the appeal is not so important a consideration when the appeal was lodged within time and the default … concerns the failure to meet a time limit within the appeal, as distinct from when an application is made to extend time within which to bring the appeal in the first place …”

The Court considered the wife’s application for security for costs and said (from [55]):

“… On the primary judge’s calculations, the property to be retained by the husband should be worth $2,760,336 … but the bulk of such equity exists in the real property due to be transferred to the [wife] and an American corporation the husband controls. Under the appealed orders … the [wife] is due to obtain the assets of the American corporation, but executing those orders in Country FF may well prove so expensive and time consuming as to be futile. There is good reason to anticipate any costs order made in the [wife’s] favour would go unsatisfied unless security is granted.

( … )

[58] … The [wife’s] giddy estimate of her costs of the appeal being $600,000 defies rational explanation and is preposterous. Making an order for the [husband’s] payment of any sum remotely approaching that amount by way of security for costs would be tantamount to the Court’s endorsement of and complicity in the lawyers’ practice of rank avarice. The practice should be condemned, not encouraged.

[59] Despite the expanse of the trial, the amended appeal comprises 16 relatively confined grounds … The [wife’s] counsel addressed each of the grounds individually within the written submissions filed on 14 December 2023 for the purpose of this interlocutory hearing, so why it would cost $600,000 to meet the appeal is anyone’s guess, particularly when the respondent’s counsel repeatedly submitted to me ‘this is a very simple case’. On the other hand, the appeal book is likely to be expansive and the Summary of Argument will probably be intricate. The sum of $100,000 recommends itself.

[60] The sum need not be paid until the draft appeal book index is filed on 31 January 2024 because, failure to do so shall mean the appeal is again abandoned. If the security is not paid to the respondent’s lawyers by 4.30 pm on 1 February 2024, the appeal stands dismissed by self-executing order.”

Spousal maintenance – Court erred by finding that de facto wife could adequately support herself as she had cut down her expenses prior to the hearing – A reasonable standard of living under s 90SF(3)(g) does not mean subsistence – De facto husband’s insistence upon invoices to prove expenses “not to be encouraged” at an interim hearing

In Qin & Donato  [2023] FedCFamC1A 223 (11 December 2023), Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia heard an appeal against Judge Jenkins’ dismissal of a de facto wife’s application for interim periodic maintenance.

The wife’s application for interim maintenance was unsuccessful in all respects when first heard by a Senior Judicial Registrar. Upon review, Judge Jenkins dismissed her application save that a lump sum maintenance of $8,408.40 was ordered to assist her buy a car ([14]).

On appeal, the Court noted that the appeal book spanned 1,951 pages, including 648 pages of invoices, in response to the de facto husband “taking issue with the costs of the appellant’s claimed household supplies, clothing, shoes, cleaning and other necessary commitments” ([4]).

As to the invoices, the Court said (from [6]):

“In hearing interim spousal maintenance, the Court does not conduct an audit of the parties’ expenses or require extensive proof of every expense. Such a course would place an intolerable burden on those seeking maintenance, who after all, are doing so because they assert they are unable to support themselves adequately.

[7] Of course, the applicant must prove his or her case. However, long standing and widely accepted authority states the Court conducts ‘not perhaps as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ (Williamson and Williamson [1978] FamCA 57 … ). This was quoted with approval by the Full Court in Redman and Redman [1987] FamCA 2 … where the Full Court added:

The evidence need not be so extensive and the findings not so precise.

( … )

[10] The approach of the parties, particularly it seems the respondent, in requiring precise proof of many ordinary everyday expenses when his expenses for the same were over four times as high, does not appear to be in accordance with their obligation under s 67 and s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCA Act”) to conduct the proceedings according to law and as quickly, inexpensively and as efficiently as possible. The evidence in what is supposed to be a summary procedure was more extensive than in some final property hearings. This approach is not to be encouraged.”

As to the dismissal of periodic maintenance, the Court said (from [21]):

“After finding that the appellant’s expenses exceeded her income by $586 per week, the primary judge noted that the appellant was able to support herself without increasing her liabilities since 2 February 2022 (at [27]).

( … )

[23] This led to the finding that ‘the [appellant] appears to have been able to adequately support herself without additional support since February 2022’ (at [29]).

[24] There are a number of difficulties with these passages.

[25] First, the primary judge is asking whether the appellant could adequately support herself at the time of the hearing. The answer to that question was ‘no’, because of the finding that her income, at the time of the hearing, fell well short of her expenses, none of which was rejected as unreasonable. How she had been able to manage previously was only indirectly relevant, if at all, particularly when the primary judge accepted that the appellant had reduced her expenses.

( … )

[27] Secondly … the section focuses on the needs of the applicant for spousal maintenance. Whilst adequate needs can often be inferred from a person’s expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has needs.

[28] Thirdly, what are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. This was confirmed in Brown and Brown [2007] FamCA 151 …

( … )

[30] Whilst the primary judge correctly identified the task as falling short of ‘ensuring’ that the previous standard of living was maintained, that standard remained relevant, albeit not determinative, to the consideration of reasonable needs. The appellant’s standard of living, as disclosed by her evidence, fell well short of that which was enjoyed during the relationship. That consideration was not undertaken at all.

[31] Fourthly, the only sensible reading … is that the appellant failed because she had not hit subsistence level. Reasonable means reasonable in all of the circumstances, not subsistence …”

Leave to appeal was granted. The appeal was allowed and the case remitted for re-hearing. The de facto husband was ordered to pay the costs of the appeal fixed at $17,000.