Procedure – Solicitor sent subpoenaed documents to client notwithstanding “view only” access and undertaking to not release the documents – Referral to Legal Services Commission

In Samaras & Allen (No 3) [2023] FedCFamC1F 787 (13 September 2023) Brasch J heard a case relating to subpoenaed material.

The mother’s solicitor filed a subpoena to the Australian Federal Police (“AFP”). A Notice of Request to Inspect was filed and leave was granted to view the material produced by the AFP ([5]). The firm gave an undertaking prior to being granted access to the subpoenaed material ([19]). The mother’s solicitor subsequently received four documents relevant to the subpoena from the Australian Government Solicitor (“AGS”), the solicitor for the AFP. Neither the Independent Children’s Lawyer (“ICL”) nor the father’s lawyer was copied into that correspondence ([8]).  The following day, those documents were sent to the mother.

Brasch J said (from [15]):

“ … [I]t is a mystery why the AGS sent the documents directly to a party. … The documents subject to the subpoena ought have been produced to the Court, and the Court alone.

[16] The AGS’ actions do not however absolve the solicitor from her actions thereafter.

[17] At this point the solicitor ignored or otherwise did not turn her mind to the following:

(1) the documents were not accessed via the court, but had come from the AGS directly;

(2) the other parties had not been included in that communication from the AGS;

(3) the court had granted view only access;

(4) whether the firm had given an undertaking in relation to the release of the AFP documents.

[18] On that last point, the firm had indeed given an undertaking dated 25 July 2023. That is only a month prior to the solicitor receiving the documents and sending them on to the client. …

( … )

[20] … [T]he undertaking was plainly breached. The documents were provided to the client. That was not in dispute. So that adds:

(5) the solicitor sent the documents to the client despite the undertaking;

[21] … [I]t seems that the subject solicitor only became alert to the undertaking after she sent the documents to the client and was then advised of the undertaking by the solicitor who had given it. That does not speak to a sound and systemic process in place to avoid such non-compliance in the first place.

[22] Undertakings with respect to subpoenaed documents have been in place at least since Covid forced the electronic communication of subpoenaed documents. The form of the undertaking given to the court is hardly anything new or novel. …

[23] … [I]t is clear from the solicitor’s affidavits that she took no steps to inform herself whether an undertaking had been given. It also must be that she took no steps to inform herself that the court had given view only access to the AFP documents. ( … )

( … )

[26] … [I]t took the solicitor a week to advise the court of the breach of undertaking. The undertaking given by the firm required immediate notification but that did not occur. It should have. I accept it may have been ‘only three business days’ for the notification to be given, but that still does not explain why the Registrar was not immediately notified. …

( … )

[28] The firm in which the solicitor works is a big firm. The solicitor is not the only person working on that file. That means:

(6) it was an error for the solicitor to wait a week, or call it three business days, to advise the court contrary to the terms of the undertaking given for immediate notification.

[29] … [T]he email of 30 August 2023 is, in my assessment, glib and does not address the gravity of what had happened. Indeed, the email to the court has a sense to my mind of trying to ‘fly under the radar’, or ‘nothing to see here’. This is inadequate and left more questions than answers. It was certainly cold as was submitted but does not include any apology or acknowledgement of contrition; so that is:

(7) the email notifying the court was inadequate in its explanation

[30] The inadequacy of the email was further compounded by:

(8) neither the ICL or the father’s representatives were included in that communication to the court, contrary to the protocol for doing so.

[31] Not including the other parties adds to my view that the communication to the court was an attempt to make little of the issue. I also do not accept the solicitor’s explanation that she did not think her communication to the Registrar’s chambers was a communication to chambers covered by the Federal Circuit and Family Court of Australia ‘Communicating with Chambers Guidelines’. That proposition just has to be stated to reveal its inadequacy. ( … )

( … )

[38] … I accept that everybody makes mistakes. However as enumerated above, this was not just one error, but a series of serious errors of judgement.

[39] Judicial officers must be able to trust the words and actions of all officers of the court. Judicial officers must be able to rely upon undertakings being complied with. Equally, officers of the court must also be able to trust the words and actions of other officers of the court and their compliance with undertakings proffered.

( … )

[45] It is not for me to determine whether the solicitor’s conduct amounts to unsatisfactory professional conduct. This state has a statutory body to consider what has happened in this matter and whether such a conclusion is warranted.

[46] I will therefore refer the papers to the Legal Services Commission. … ”

Procedure – Financial agreements – Wife unsuccessfully seeks disclosure of documents detailing the financial position of the parties as the date of the agreement – Documents to be disclosed were those relevant to the making and performance of the agreement

In Whittle [2023] FedCFamC1F 771 (7 September 2023) McGuire J heard a wife’s interim application for disclosure as part of her application for property adjustment orders.

The wife’s initiating application sought property orders but did not address the parties’ financial agreement ([2]-[4]). The husband sought that the wife’s application be dismissed or alternatively, a declaration that the financial agreement was binding ([5]).

McGuire J said (from [15]):

“The applicant concedes the existence of the financial agreement dated 31 May 2021 but says, and it appears to be common ground, that the agreement is not a Binding Financial Agreement because of non-compliance with the provisions of section 90G(1)(b), (c) and/or (ca) hence the applicant seeking orders under section 79 of the Act.

[16] Broadly, the applicant argues that the Court can only make an informed judgment as to the ‘unjust and inequitable’ provision of section 90G(1A)(c) if it is fully informed as to the detailed financial position of the parties on the date the agreement was entered into.

[17] The applicant argues there to be an obligation to make full and proper disclosure pursuant to Rule 6.01 and 6.06 of the Rules ( … )

( … )

[23]… [T]he respondent himself seeks discovery (by request rather than application) but only to the relevant issue which he says is the circumstance of the making of the agreement rather than the material relied upon in reaching that agreement and with emphasis on the fundamental philosophy of Part VIII that parties be able to opt out of the ‘justice and equity’ requirements of section 79 of the Act.

[24] … [W]here the issue is the breadth of the obligation to make discovery with reference to the preliminary dispute of the status of the agreement of 31 May 2021 the Respondent argues a narrower interpretation of the obligation of discovery referenced towards ‘unjust and inequitable’. The applicant seeks broader discovery as to the ‘justice and equity’ of the agreement itself in respect to the circumstances surrounding the parties reaching agreement. At its most abstract therefore, as with many issues or challenges to discovery, is the question of relevance.

[25] The leading authority on this issue, and specifically as to the consideration of ‘unjust and inequitable’ in the context of section 90G(1A)(c) remains the majority (Strickland and Ainslie‑Wallace JJ) in Hoult & Hoult [2013] FamCAFC 109 (“Hoult”).

[26] Their Honours confirmed that the operation of section 90G(1A) is not confined to technical breaches …

[27] Further their Honours recognised that the discretion at section 90G(1B) is a broad one informed by the pre-conditions of section 90G(1A)(a)-(e) being established and where a court exercising that discretion must inquire into the ‘facts and circumstances’ surrounding the agreement in order to exercise that discretion.

( … )

[29] It follows, as their Honours then determined, that it is only the facts and circumstances relevant to the making and performance of the agreement that are to be considered …

[30] To allow otherwise a consideration of the materials that informed the parties’ agreement sits uncomfortably, or indeed offends, the notion of Part VIIIA sitting separately from the section 79 obligations of justice and equity in the making of property orders (and the similar requirements of the former section 87 in respect of Deeds). Notably, the remedial section itself at section 90G(1A)(c) specifically references ‘unjust and inequitable’ as disregarding any change in circumstances from the time the agreement was made with emphasis on the ‘opting out’ nature of Part VIIIA agreements where parties are able to reach agreement outside of the normal requirements of justice and equity …

( … )

[31] It must follow, therefore, that that the drafters of the legislation purposely distinguish the phrases ‘unjust and inequitable’ in section 90G(1A)(c) from the common usage of ‘just and equitable’ in section 79. ( … )

[32] Consequently, as I find, that it is not open, or intended by the section, to conflate the ‘justice and equity’ of the agreement at the time of its making with ‘unjust and inequitable’ in the remedial section which references only the circumstances of the making of the agreement or its then operation but limited only to the list of factors identified by their Honours in Hoult being:

  • The terms of the section, the nature of a financial agreement as a creature of the Act, and the place of Part VIIIA within the overall scheme of the Act.
  • The nature and extent of the non-compliance with the requirements of s 90G(1).
  • The facts and circumstances surrounding the making of the agreement including, in particular, if one of the parties has complied with all of the mandatory requirements necessary to render the agreement binding.
  • How the parties have acted subsequently in relation to the agreement (bearing in mind that changes of circumstances cannot be considered).

( … )

[34] … I therefore accept the Respondent’s argument that it is Rule 6.03 which here provides the obligation for discovery on the basis of relevance with this not being a ‘financial proceeding’ of the type captured by Rule 6.06.”

The wife’s application for disclosure was dismissed.

 

Property – Accrued jurisdiction – De facto husband’s application to join claim for defamation to the parties’ property proceedings dismissed as matters were “separate and distinct” – Defamation claim statute barred

In Caughey & Peckham (No 3) [2023] FedCFamC1F 618 (27 July 2023) Christie J heard an application where by way of amended response, a de facto husband (“the respondent”) pleaded a cause of action in defamation against the applicant de facto wife (“the applicant”). The question of any accrued jurisdiction to hear the claim was determined as a preliminary issue.

The defamation claim was pleaded to arise when on the day of the parties’ separation, the applicant said by conversation and e-mail to other persons, that she had seen the respondent in bed with his daughter ([19]). The respondent was a qualified professional and claimed defamatory imputations from the communications that included incest ([19]). He sought damages, including aggravated damages.

After citing Warby & Warby [2001] FamCA 1469, Christie J said (from [10]):

“To the extent that the jurisprudence uses the expression ‘matter’ it is important to understand that ‘matter’ does not mean a proceeding but the whole of the justiciable controversy between the parties.

[11] In F Firm & Ruane [2014] FamCAFC 189 … the Full Court referred to the judgment of Gummow and Hayne JJ in Re Wakim [1999] HCA 27 … in which their Honours noted at [140]:

What is a single controversy ‘depends on what the parties have done the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships’. There is but a single matter, if different claims arise out of ‘common transactions and facts’, or a ‘common substratum of facts’, notwithstanding that the facts upon which the claims depend ‘do not wholly coincide’. So too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely claims, which are ‘completely disparate’, ‘completely separate and distinct’ or ‘distinct and unrelated’ are not part of the same matter.

(Footnotes omitted).

[12] … [The respondent’s] pleadings concerning alleged publication(s) of the alleged defamatory statement(s) do not contend publication outside NSW. In NSW an action on a cause of action for defamation is subject to a limitation period. Section 14B of the Limitation Act 1969 (NSW) (“Limitation Act”) provides that such action is not maintainable if brought after the end of a limitation period of one year, running from the date of publication of the matter complained of.

( … )

[16] The federal matter relates to property adjustment between the parties after a short de facto relationship. The matters that will be taken into account are:

(a) The direct and indirect financial contributions of each party;

(b) The non-financial contributions of each party;

(c) Any matters arising under s 90SF(3) as they relate to the present and future financial circumstances of the parties; and

(d) The justice and equity of any property adjustment order.

( … )

[20] Put simply, the respondent says that on 4 January 2019 the applicant said that she had seen the respondent in bed with his daughter. It is said she repeated this on unspecified subsequent occasions and this constitutes publication.

( … )

[26] The respondent submitted that ‘whether or not the alleged incest [the respondent’s expression] occurred …is plainly relevant to the defamation proceedings’. That much is true. The question for this Court is whether it is relevant to or sufficiently connected to the property proceedings so as to be part of the same matter.

( … )

[29] I accept that there is a connection between the two claims in so far as:

(a) They are between the same parties;

(b) They arise out of events on the date of the parties’ separation.

( … )

[38] I accept that it may be some part of the applicant’s case at the hearing that she either suffers from and/or has suffered ill health and specifically from post-traumatic stress, depending upon the evidence before the court, at that time, the court would be interested in diagnosis, prognosis, and the financial consequences of any diagnosis, rather than causation.

…

[39] The respondent faintly argued that the defamation claim may be relevant to the assessment of the pool available for division. However, if the claim is pursued successfully then the applicant would be obliged to meet any damages from her funds (and not the parties’ funds). Similarly, if the claim is pursued unsuccessfully the respondent would be obliged to meet any costs order from his funds. It follows that this submission does not support the existence of accrued jurisdiction.

…

[40] It follows that I do not accept that the non-federal claim forms a part of the matter. It is distinct and severable and arises from events on the day of separation (and perhaps if the pleadings are amended at a later date).

[41] I can determine the federal claim without determining the defamation action. The factual issues which go to each claim are separate and distinct. …

( … )

[43] … I accept that as currently pleaded the limitation period does seem to be an absolute bar to the relief, sought by the respondent and accordingly if I had been of the view that I had accrued jurisdiction, it would have been necessary for me on the basis of the material before the court at this stage to find that I could not accrue jurisdiction to hear and determine proceedings which were statute barred. …”

The respondent’s application to join a claim for defamation against the applicant was refused and costs were adjourned.

Property – Loan to husband was a “handshake deal with a mate”,  secured by second mortgage post-separation – Not just and equitable to hold wife liable for any part of the loan – Unsecured creditors and personal guarantees of failed business also excluded

In Ursino & Baratos [2023] FedCFamC2F 933 (28 July 2023) Judge Forbes heard competing property applications where the husband was a company director specialising in trades supplies. The wife was a health care worker.

The wife said the net asset pool was $1,506,010 while the husband said the net asset pool was a deficit value of more than $4.7 million. The husband’s asset pool included a loan from an employee (“Mr J”) of $550,000, advanced prior to separation for the expansion of the husband’s business (“K Company”), which had been secured by second mortgage over the former matrimonial home (“Suburb G”) after separation.

The husband’s negative asset pool also included unsecured creditors of K Company (which was placed in liquidation after separation) and personal guarantees given by the husband to K Company’s creditors.

The wife denied that there was any loan agreement with Mr J. She said the dealing was “part of a post-separation sham” ([41]).

The Court said (from [94]):

“The upshot of the above is that the wife claims that there is a net equity in the asset pool of just over approximately $1m. The husband contends that the matrimonial pool is in a negative asset position with net liabilities of approximately $4m. … The difference between the parties is nearly $6m.

( … )

[103] The Federal Circuit and Family Court of Australia Rules 2021 … (the Rules) require parties to make full and frank disclosure of all relevant financial circumstances in financial proceedings … Apart from requiring each party in financial proceedings to file a Financial Statement, the Rules also require the timely production and supply of relevant documentation. …

( … )

[105] The importance of the obligation for parties to make full and frank disclosure of financial information cannot be overstated. …

( … )

[111] [In respect of the loan from Mr J, the] … husband contends that the amount agreed in the informal ‘hand shake’ agreement was deposited in two tranches. … There is evidence of [$550,000 in deposits] … made into the husband and wife’s joint NAB account. However, under cross-examination the husband conceded that nothing in those bank statement entries identified the deposits as a loan advanced by Mr J …

[112] The husband confirmed that over the course of the following two months he made a number of withdrawals from the parties’ joint bank account, each of which was recorded as ‘loan to [Baratos]’ or similar …

[113] … Mr J conceded that at the time of the ‘loan’ there was no documentation and that he simply took the respondent husband ‘at his word’, identifying it as a ‘handshake deal with a mate’…

( … )

[117] The husband alleged that due to the default in repayments for the informal loan, in August 2018, a formal Loan Agreement and Mortgage Form was executed between himself and Mr J. There was no evidence prior to these documents that Mr J had ever demanded payment. The formal loan agreement provided for Mr J to take a second mortgage over the Suburb G property. In his evidence the husband relied on an undated copy of the Loan Agreement which was signed only by the husband …

[118] Despite the ongoing obligation on parties in family law proceedings to provide full and frank disclosure, it was only on the final day of trial that counsel for the husband produced an executed copy of the formal loan agreement between Mr J and Mr Baratos signed by both parties. The revelation of this document came as a complete surprise to the applicant’s counsel and to the Court. …

[119] These proceedings have been on foot for more than two years. The Mr J loan has been a central contentious issue all along. …

( … )

[123] In my view, the ‘handshake between mates’ informality of this arrangement tends against there being any terms or conditions agreed at the outset. The evidence leads to the conclusion that it was an informal unsecured advance and I am not persuaded that there was any agreement regarding security. …

( … )

[125] It seems to me that the 2018 loan agreement converted what was an unsecured loan to either the business or Mr Baratos personally into a secured arrangement against a matrimonial asset. I do not accept the evidence that the 2018 loan agreement merely documented the terms of the oral handshake in 2016. The better view is that loan agreement was in fact a new agreement, made post-separation and without knowledge of the wife, whereby the husband agreed to a second mortgage upon the matrimonial home, for which he is the sole registered owner. …

[126] The monies advanced by Mr J in 2016 should properly be regarded as an unsecured loan to the failed business. …

[127] The agreement of the husband to give Mr J a second mortgage security occurred post separation and in the knowledge of the wife’s equitable interest in the matrimonial home. I accept the wife’s submission that the 2018 arrangement between Mr Baratos and Mr J was intended to diminish the wife’s claims in this proceeding.

[128] … [I]n the circumstances, it is not just and equitable to hold the wife liable for any part of the so-called Mr J loan and it should not be regarded as a liability of the marriage.”

As to the guarantees and unsecured creditors in respect of K Company, the Court said (from [131]):

“… [T]he husband gave evidence that he had ‘signed’ guarantees as a director of the company. In response to that evidence, counsel for the wife called for production of the documents, a call which I consider was entirely appropriate having regard to the husband’s claim that company liabilities should be included on the matrimonial balance sheet. Suffice to say, there was no response to the call for production by the end of the proceeding and there is no evidence before the Court of any such signed guarantees in favour of any supplier or creditor.

( … )

[133] Due to the paucity of evidence before the Court, I do not accept that the alleged guarantees have been given by the husband or that any asserted liability arising therefrom should be regarded as a matrimonial liability.

( … )

[140] Unsecured creditors of the company are not creditors of the parties, in the absence of enforceable guarantees against one or other or both of them. Notwithstanding the evidence of the respondent husband, the Court is not satisfied that such guarantees exist and therefore the unsecured creditors of K Company are not to be regarded as liabilities of the marriage.”

The Court found the net asset pool to be $1,441,810 and ordered a property adjustment of 60:40 in favour of the wife, which was achieved by each party retaining the real estate registered in their respective names.

Financial agreements – Agreement not binding as both lawyers falsely witnessed their client’s signatures – Wife’s application that agreement be declared binding pursuant to s 90G(1A) dismissed where she sought equity without clean hands

In Pagani [2023] FedCFamC2F 805 (30 June 2023) Judge Myers heard competing applications regarding a s 90B financial agreement. The wife said that the agreement was binding, while the husband said it was not binding or should be set aside.

The husband said he had not received independent legal advice, that the agreement was void for uncertainty, that the parties had abandoned the agreement after it was signed and that there had been non-disclosure of a material matter ([5]-[6]).

During the parties’ relationship but before the agreement was signed, the wife owned “significant assets” while the husband had purchased a property for $530,000 (“D Street”).

The Court said (from [26]):

“This decision relates to … the preparation and execution of a Financial Agreement … being the subject of the dispute where the Husband’s solicitor acting on the financial agreement transaction failed to deliver to the Husband legal services competently and diligently (as is required by Rule 4.1.3 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015) and where both the solicitor for the Husband and the solicitor for the Wife it would appear engaged in conduct of a type that falls within the category of unsatisfactory professional conduct …

[27] Tendered in the proceedings and forming exhibit “A” was an unsworn statement of [the husband’s] solicitor Mr F. …

[28] Some of the matters that Mr F referred to in the statement demonstrated to the Court Mr F’s lack of recall and otherwise the fact that he did not hold a copy of the fully executed financial agreement … For instance at paragraph 6 of Mr F’s statement he set out that that he did not recall speaking with the Husband on the phone. Mr F then suggested in cross examination that he had spoken to the Husband on the phone … and provided the Husband with advice on the draft including advice as to the advantages and disadvantages of signing the agreement. …

( … )

[35] … Extraordinary evidence was given in the proceedings by Mr F where he advised the Court that he had executed the agreement as having witnessed the Husband’s signature despite not actually seeing the Husband sign the agreement. …

[36] A solicitors [sic] falsely witnessing a documents [sic] is a serious matter. In NSW Legal Services Commissioner v Zou [2021] NSWCATOD 139 … [it was] found [that] a solicitor falsely witnessing an affidavit amounted to unsatisfactory professional conduct. …

[37] Compounding the issue of Mr F having falsely witnessed the Husband’s signature was the evidence the Husband gave where he advised the Court he had no recollection of actually signing the Agreement given during cross examination …

[43] Mr F could have spoken with the Husband and given legal advice on the final form of the Agreement. Mr F should have spoken with the Husband and given him legal advice on the final form of the Agreement. Had Mr F prudently done so it would have been obvious to Mr F the Agreement was incomplete and left blank Schedule 1 and Schedule 3 that were referred to at paragraphs 1.3.1 and 1.3.3 of the Agreement and that should have included the Husband’s assets and liabilities. … Instead Mr F did not speak to the Husband and did not provide him legal advice of any sort on the final form of the Agreement. Instead Mr F just signed three things on the Agreement that he knew to be false being he witnessed the Husband’s signature, executed (but failed to date) the certificate of legal advice and also falsely witnessed the Husband’s signature on the Receipt contained at the last page of the Agreement that provided that after the Agreement had been had signed the Husband had been provided a copy of the Agreement.

[44] Despite submission by Counsel for the Wife … Mr F’s failure was not a technicality. Mr F’s failure was a dereliction of his duty to deliver to the Husband legal services competently and diligently and protect his client’s rights.

[45] Section 90G(1)(b) is a safeguard. Section 90G(1)(b) was not complied with where before signing the Agreement the Husband was not provided with independent legal advice from a legal practitioner about the effect of the Agreement on the rights of the Husband about the advantages and disadvantages, at the time that the advice was provided, to the Husband of making the Agreement.

( … )

[50] Section 90G(1A) requires the Court to consider and determine whether it is satisfied it would be unjust and inequitable if the Agreement were not binding on the parties.

[51] When considering the Wife’s claim for equitable relief pursuant to section 90G(1A) it is appropriate the Court consider the ‘clean hands’ doctrine that is based on the maxim of equity which provides that one who comes to equity must come with clean hands.

( … )

[53] The Court considers the Wife did not come to this Court seeking equity with clean hands. The Agreement signed by the Wife and her solicitor … was executed at a time when the Agreement was incomplete and failed to set out the Husband’s assets and liabilities including the home the Husband owned. Schedule 1 and Schedule 3 were left blank. The Wife was in a relationship with the Husband and would have known he purchased and owned the home at D Street … Schedule 1 and Schedule 3 of the Agreement should not have been left blank. It is the Courts position that Ms Q knew full well that the Husband needed to provide his statement of assets and liabilities. …

[54] Feigning ignorance or taking advantage of the Husband’s position where the firm of solicitors acting on his behalf were clearly mistaken when they suggested in their letter to Ms Q early 2011 that he did not own any property is not sufficient. …

[55] The solicitor’s for the Wife should have forwarded the amended Agreement to Mr F for review after they had made amendments to it. Instead the solicitor for the Wife sent the Agreement to the Wife for execution … and the Wife just gave it to the Husband…

( … )

[58] … [T]he Wife and her solicitor adopted an attitude that in the view of the Court was one of ‘that’ll do’ or ‘near enough is good enough’. Near enough is not good enough and the Wife does not come to this Court with clean hands. The circumstances of the execution of the Agreement by the parties and their solicitors acting as witnesses is nothing short of diabolical. The Wife comes to the proceedings seeking equity with well less than clean hands. Any suggestion the Wife has a claim to the benefit of paragraph 90G(1A) is rejected.”

Children – Father restrained from attending children’s school (and extra-curricular events that occur) during maternal time

In Dalby & Jemmet (No 2) [2023] FedCFamC2F 800 (4 July 2023) Judge McGinn heard a mother’s application for injunctions against the father in respect of children (“X” and “Y”) who were “both born in 2013” ([1]).

Final orders had already been made in respect of the children’s care. The children spent 7 nights per fortnight with each parent (via a 2:5 night arrangement each week).

The mother sought injunctions that the father be restrained from attending the children’s school grounds during her time, while the father sought a restraint that the parties not approach or communicate with each other during school events or the children’s extra-curricular activities, should both parents attend.

The Court said (from [14]):

“In giving her evidence as to the effect of the father’s attendance at her home, the mother’s presentation was strongly suggestive of her having been distressed on that occasion and appeared genuine.

( … )

[31] The father has a particular interest in sporting activities which he shares with the children.

[32] The father has a clearance from the Department of Human Services (South Australia) which he obtained for the purposes of being able to assist with the children’s school excursions. The mother expressed surprise that the father was able to obtain such a clearance given that in 2014 the father assaulted the wife’s husband for which a conviction was recorded.

( … )

[35] The father meets the children’s schooling expenses and expenses associated with all but one of the children’s extracurricular activities.

( … )

[45] The father is an involved parent when it comes to the children’s schooling and extracurricular activities and this includes times when X played sports …

( … )

[48] The father attended the majority, if not all, of X’s sports games and trainings while X was both in his care and in the mother’s care.

( … )

[263] The children’s perceptions and feelings about their parents being at events together were disclosed in the course of the Family Assessment Report interviews to Ms B. …

[264] I accept Ms B’s evidence that the children were generally concerned with not disappointing their father.

( … )

[272] I find that when the children are with their father there is a continuous process of inculcating in them views and attitudes displayed and practiced by the father. I also find that some of these views and attitudes are antithetical in respect of the mother … giving rise to the views that the children have genuinely expressed to Ms B about their father’s attendance and what the children experience at events.

[273] This enables the children to form the view that their father ‘hates’ and is ‘annoyed’ by their mother …

( … )

[276] The father has a view firmly held by him that his parenting of the children and, in particular, his attendance at extracurricular events serves the children’s interests and there is no price paid in terms of the children’s emotional well-being as a result of his attendance.

[277] The evidence considered as a whole indicates otherwise.

( … )

[279] Ms B said in her evidence that the parties are in chronic conflict in terms of their relationship as parents. …

[280] The father’s expressions of disdain for the mother, her parenting capacities and her household were in Ms B’s view extraordinary in their firmness and intensity. Ms B’s opinion in this regard is a matter of some weight.

( … )

[286] Ms B’s unexceptional evidence that children should be able to attend extracurricular and school activities without having to worry about their parents is to be accepted. Ms B pointed out, correctly in my view, that X and Y firstly, have a need (which I regard is the responsibility of their parents to provide) to be able to undertake their activities in an atmosphere of safety and respect. Secondly, the children should be able to have an equivalent relationship with each of their parents whereby the children are able to spend time with their father without interference from their mother and vice versa. …

[287] The evidence considered as a whole demonstrates that any awkwardness that the children are said to experience at events at which both their parents attend is not a mere or transitionary aspect of their wellbeing but part of their emotional landscape that makes up their lives. I consider that it is not in their interests that this should regularly be so.”

Injunctions were made pursuant to s 68B that the father not attend school grounds while the children were not in his care (save for presentations, end of year assemblies, concerts, school excursions and parent-teacher interviews) and that he not attend extra-curricular activities of the children while they were not in his care (save for end of year presentations) without the written consent of the mother.

Spousal maintenance – De facto wife’s $1.8 million savings resulted in dismissal of her application for interim maintenance, but her application for interim property distribution was granted

In Beeston & Quint [2023] FedCFamC1F 658 (9 August 2023) Smith J heard an application by the de facto wife (“the applicant”) for review of a registrar’s dismissal of her application for interim maintenance, child support and what she described as “litigation funding”.

The respondent de facto husband (“the respondent”) was 42 and “a manager in the financial services industry on a substantial income” ([4]). The applicant was 41 and, while she had a degree, she had ceased work primarily to care for the parties’ 3 year old child. She said she was unable to return to full-time work until the child was at least in primary school ([20]).

The parties agreed that they had been in a de facto relationship and acquired property together, although had only lived together for 18 months.

The applicant estimated the net asset pool at about $11.2 million and the respondent said it totalled about $10.2 million ([27]).

It was agreed that the applicant had received over $2.3 million in interim property distributions sourced from the sale of the former relationship home. She had spent $450,000 of that amount (including $120,000 on legal fees) and retained $1,835,000 in term deposits ([31]). Of the sale proceeds, $700,000 remained held in trust, pending further order or agreement.

A registrar had dismissed the applicant’s interim application. Determining her application for review, Smith J said (from [34]):

“The significant question in argument was whether or not the [applicant’s] possession of $1.8 million cash means that she does not meet the criteria in s 90SF(1)(b) that the obligation arises ‘only if’ she is ‘unable to support … herself adequately’ taking into account the considerations in subsection (3).

[35] The essence of the [applicant’s] case is that the mere possession of $1.8 million in cash does not allow her to ‘adequately support herself’, maintain the parties’ child, or pay for legal representation, as she will need to use all of this money to have any chance of purchasing a property ‘in the [Suburb B] area’ … Given that Suburb B is notoriously one of the most expensive suburbs in Australia, I proceed on the basis that this is likely correct.

[36] The [applicant] submitted that her need to live near her family means that the applicable authorities are those that state that a party with limited capital is not, or should not be, required to use up that capital for their maintenance.

[37] The essence of the [respondent’s] case is that the [applicant] is not entitled to live in one of the most expensive suburbs in Australia merely because her parents and two, of her three, siblings are health professionals whose earning capacity means they can afford to. He submitted that $1.8 million in cash is not limited capital. He submitted that the [applicant] does not meet the statutory criteria, as illuminated by the authorities, for the making of any of the orders sought on an interim basis.

( … )

[39] For the purpose of these interim proceedings I accept that the [applicant] has no current earning capacity and is unlikely to have any prior to the final hearing by reason of her parenting obligations and her mental health.

[40] The [respondent] says he has no capacity to make any payments of spouse maintenance. Given his income, his extensive assets and most importantly the substantial sum of cash available to the parties in the controlled monies account, I do not accept that submission.

( … )

[42] I am not satisfied, taking into account the parties’ relationship history and property pool, that the need for a reasonable standard of living or the concept of adequate support requires the [applicant] to be able to purchase outright a property in or about Suburb B. I do not accept the [applicant’s] submission that her $1.8 million in cash is to be treated as effectively unavailable and so not a relevant factor when considering the ‘property … of each of the parties’.

[43] While there is clear authority that a party with limited capital should not be required to expend it in their own support, I do not consider that the $1.8 million in cash available to the [applicant] brings this case within that category of cases so that the principle should be applied for the benefit of the [applicant] in this application.

[44] To the extent to which the [applicant] says that the [respondent] effectively forced her to take over $2.3 million dollars in cash, rather than smaller sums which could have entitled her to claim ongoing spousal maintenance, so forcing her to use the money she says is the capital she needs for the housing she wants, the trial judge at the final hearing will have a broad discretion concerning the treatment of add-backs for interim distributions, and the expenditure of costs, taking into all relevant matters to make final orders that are just and equitable.

( … )

[57] I calculate 5% of the total property pool, adopting [the respondent’s] balance sheet net figure … That $2,609,940 less the paid sum of $2,337,545 = $272,395. So on the [respondent’s] response … he told the Court that the [applicant] was entitled to a further $272,395, which is a small fraction of the overall pool and a small part of the monies in the controlled monies account.

( … )

[60] On the [respondent’s] pleading a payment of $272,395 is the appropriate sum for the [applicant] to receive leading to the final resolution of the property proceedings.

( … )

[63] The [respondent] submitted that given the [applicant] has $1.8 million in cash, his concession that she is entitled to a further distribution and the fact that the money is in a controlled monies account is not a sufficient basis to justify a further payment. In many cases that would be a compelling submission and my initial inclination was to dismiss the [applicant’s] application entirely and to leave the matter to a final hearing.

[64] However, each case is to be determined on its own unique facts.

[65] The history of the litigation, including, the distributions and the [respondent’s] pleading, together with all of the other material before me, satisfy me that on balance it is just and equitable to make an order that the sum of $272,395 conceded by the [respondent] on his pleadings … be paid to the [applicant] as a further interim property distribution.”

The application for interim orders was dismissed, except that it was ordered that the parties release to the applicant $272,395 from the sale proceeds.

Property – Husband unilaterally sold former matrimonial home and gambled sale proceeds – Sale of home not set aside pursuant to s 106B as wife failed to adduce evidence of its value at date of hearing

In Vedders & Gittens [2023] FedCFamC1A 138 (21 August 2023) McClelland DCJ heard the wife’s appeal against the dismissal of her s 106B application, in which she sought to set aside the husband’s sale of the former matrimonial home (“the Suburb F property”) to bona fide third party purchasers for $735,000.

The sale price reflected a single expert valuation that had been prepared six months earlier ([8]).

Prior to the sale, the husband and wife had entered into consent orders where he was ordered to pay her $250 per week pending further order and for the former matrimonial home to be sold and any arrears paid to the wife in default of the husband’s payments.

Within three weeks of those orders, the husband sold the property. He received $443,441 from the sale and in cross-examination as to that money, said “it’s all gone” and that he spent it on gambling ([8]).

The effect of the dealings was that the asset pool remaining between the parties “now only consist of some relatively minor and low value items” ([9]).

The wife’s s 106B application was dismissed at first instance as she “had not satisfied the primary judge that, if the sale was set aside … there would be sufficient funds left over after refunding the purchase price to the purchasers, such that it justified the detriment that would be suffered by the purchasers” ([5]).

McClelland DCJ said (from [16]):

“ … [R]eference was made to the decision of the Full Court in VC & GC and Ors [2010] FamCAFC 62 … wherein it was stated that, generally, it is preferable to consider an application pursuant to s 106B at final hearing. This is because, as noted by the Full Court at [159]:

… if either basis enabling the instrument to be set aside is established, it will rarely, at best, be open to conclude, on a discrete hearing, that the court would not, in the exercise of its discretion, set aside the instrument. This is because of the prospect that all factors bearing upon the discretion may not be identified until the completion of the final hearing.

[17] While, no doubt, setting out wise and appropriate guidance, the case is not authority for the proposition that an application to set aside an instrument pursuant to s 106B can never be heard and determined in a discrete hearing … The Court has power to set a matter down for the hearing and determination of a discrete issue at any stage of the proceedings …

[18] While it is relatively rarely done, it is clear that the primary judge had power to set the matter down for hearing for the purpose of determining the single issue of the wife’s application to set aside the sale of the Suburb F property pursuant to s 106B of the Act.

( … )

[33] The absence of evidence as to the value of the property as at the date of the hearing was clearly a matter of concern to the primary judge, who momentarily adjourned the proceedings to permit counsel for the wife to obtain instructions and ‘contemplate the hiatus’ in the wife’s case … Indeed, so concerned was the primary judge regarding that hiatus in evidence, his Honour indicated to counsel for the wife that he would entertain an application for an adjournment for the purpose of the wife obtaining an updated valuation of the property. That opportunity was not taken by the wife.

( … )

[38] … [T]he primary judge was unable to assess the utility of making the orders sought by the wife to set aside the sale of the Suburb F property. This was because the evidence did not permit an assessment to be made as to whether the net proceeds of such sale, after refunding the purchase price paid by the purchasers, justified the Court making orders to the detriment of the purchasers. That is, the primary judge was not in a position to assess what, if any, was the likely benefit to be gained by the wife in the event of the s 106B order being made.

[39] In those circumstances the primary judge … determined that the wife had failed to discharge the persuasive burden of establishing that the balance of convenience favoured making orders sought by her in the context of the acknowledged detriment that would have been suffered by the purchasers.”

The wife’s appeal was dismissed. No order was made as to costs.

Financial agreements – Trial judge set aside an agreement, finding husband’s lawyer negligent – Husband’s appeal against the judge’s reference in the order to s 90K(1) dismissed – Court not required to reiterate in the order which paragraph of that section motivated its use of power under that section

In Daily (No 2) [2023] FedCFamC1A 122 (3 August 2023) the Full Court (Austin, Tree & Christie JJ) heard the husband’s appeal from an order of Berman J setting aside a financial agreement “pursuant to s 90K(1)(d) and/or s 90KA” of the Family Law Act (“the Act”) ([6]) on the ground that the reference in the order to s 90K(1)(d) (where the wife had established “hardship” pursuant to that paragraph) should be deleted ([2]).

The lawyer who had prepared the agreement for the husband was the second respondent and had been found by Berman J to have been negligent (the question of damages being adjourned for submissions).

On appeal the husband did not challenge the agreement being set aside, but contended that the order setting the agreement aside should be said to be pursuant to s 90K(1)(b) i.e. that the agreement is void for uncertainty, which Berman J did find but did not refer to s 90K(1)(b) in the order ([28]-[31]), not s 90K(1)(d) i.e. that since the agreement a material change of circumstances had occurred relating to the care, welfare and development of a child of the marriage, such that a party would suffer hardship if the agreement were not set aside – which would favour the second respondent on the question of damages ([18]).

The husband also submitted that the order should not specify s 90K at all. The second respondents filed a notice of contention that the reference to s 90K(1)(d) in the order should be retained.

The Full Court said (from [17]):

“His Honour has not yet made orders to finally determine the next financial cause between the spouses … under Pt VIII of the Act, or the common law causes of action between the husband and the second respondent, but inevitably, the findings made to this point in time will later be deployed to determine such causes.

[18] The second respondent contends for its standing to be heard in the appeal because the text of the appealed order expressly refers to s 90K(1)(d) of the Act and indirectly affects the causes of action pursued against it by the husband. It postulates the case in this way: if the financial agreement is set aside for uncertainty (s 90K(1)(b)), for which outcome the husband contends, the finding will assist him prosecute his tort and contract claims against the second respondent because it was engaged to draft a coherent and binding financial agreement, whereas if the financial agreement is instead set aside due to material change in child-related circumstances which will cause hardship if the agreement is not set aside (s 90K(1)(d)), for which alternate outcome it contends, then the manner in which it drafted the financial agreement cannot be causally related to any financial loss sustained by the husband having his property interests instead determined by the Court under Pt VIII of the Act.

[19] In the appeal, the husband seeks to challenge the existing finding of the wife’s ‘hardship’ – the objective being the removal of any justification for the financial agreement being set aside under s 90K(1)(d) of the Act. … Conversely, the second respondent wants to argue for the validity and retention of the ‘hardship’ finding and ought be permitted to do so. …

( … )

[32] Three observations are pertinent.

[33] First, the reference to s 90KA of the Act in the order was an error as that provision is not a source of statutory power for the appealed order. Rather, that provision affirms the Court’s entitlement to resort to legal and equitable principles when determining whether a financial or termination agreement is valid, enforceable or effective and, if determined it is not, empowers deployment of legal or equitable remedies to save it from that consequence. Conversely, the statutory power to set aside such an agreement emanates exclusively from s 90K(1) of the Act. The mistaken reference within the declaration to s 90KA should be erased.

[34] Secondly, the reference to s 90K(1)(d) of the Act within the text of the appealed order was unnecessary. Neither its inclusion within, nor its omission from, the text of the order makes any difference to the validity of the order. The power to make the order setting aside the financial agreement derives from s 90K(1) of the Act, the various sub-sections of which specify the discrete grounds upon which the power afforded by s 90K(1) may be wielded. The particular sub-section which motivates the use of power to make the order setting aside the financial agreement is exposed by the reasons for judgment. Had there been no reference at all to s 90K(1)(d) within the text of the declaration there would have been no appeal.

[35] Thirdly, not only was the reference to s 90K(1)(d) of the Act within the text of the appealed order unnecessary, it was mistaken. The reasons for judgment make clear beyond doubt the financial agreement was set aside because it is void for uncertainty (s 90K(1)(b)) but, even if otherwise capable of certain construction, it would have been set aside due to hardship which would be endured by the wife if it were not set aside (s 90K(1)(d)). The order expressly represents it is made pursuant to s 90K(1)(d) of the Act when the reasons reveal it plainly was not. It was instead made in reliance upon s 90K(1)(b) of the Act. The text of the order does not match the reasons given for making it and so should be corrected by the erasure of the mistaken reference to s 90K(1)(d) of the Act. That result could have been achieved by inviting the primary judge to employ the slip rule. An appeal was unnecessary.

( … )

[39] The appeal is dismissed.

[40] The Notice of Contention is also dismissed. The operative order need not specify the particular sub-section of s 90K(1) of the Act upon which the primary judge relied to make it, though the second respondent’s former contrary belief apparently underpinned the Notice of Contention. Presumably that is why the second respondent did not press it. The reasons expose how his Honour relied upon findings that the financial agreement should be set aside for uncertainty, but otherwise would have been set aside on grounds of hardship, so the reference to s 90K(1)(d) within the order is mistaken for the reasons already given.”

The appellant was ordered to pay costs fixed at $15,000 to each of the respondents.

Children – Restraints to prevent a 6 year old participating or attending shooting activities until she is 12 and hunting activities with a gun until she is 14

In Hutching & Noyer [2023] FedCFamC2F 788 (23 June 2023) parenting arrangements for the parties’ 6 year old daughter were considered by Judge Taglieri. Final orders made were by consent, save that a discrete, limited hearing occurred as to the child “being exposed to the father’s hunting and shooting activities” ([2]).

The father sought orders that permitted the child to be present in gun-related activities, with restraints as to the child being supervised and not touching guns. The mother sought restraints that prevented the child’s presence at such activities at all until she was 14 ([3]).

The child’s paediatrician (“Mr C”) gave evidence that the child had attention deficit hyperactivity disorder and even while treated, she was “more vulnerable to a range of activities carrying various degrees of risk of either physical or emotional harm” ([7]). The Court found the child was “at greater than the typical risks of harm than a child of her developmental age” ([7]).

The father spent four nights per fortnight with the child and “there was no specific concern held by the mother about the father’s capacity to provide day-to-day care and supervision to an acceptably safe standard in an ordinary household context” ([9]).

The Court said (from [10]):

“… [T]he father made extensive open concessions about the extent to which he has allowed his older child to use knives and guns from age 6 or 7 years. In the case of gun use, this was contrary to the provisions of s 68 of the Firearms Act 1996 (Tas). Further, the father’s evidence about his prior criminal convictions, ranging from speeding, mobile phone use, seatbelt offences, to non-compliance with helmet use and hunting and fishing infringements, demonstrates a clear trend of unacceptable permissiveness or, alternatively, thoughtlessness or carelessness to:

(a) the potential danger and physical harm from certain activities; and

(b) disregard to laws which, in my view, exist for valid policy reasons to protect humans from physical and emotional harm; protect fisheries; or promote humane animal practices.

[11] I have no doubt that the father genuinely cares for the child and, in everyday life, has capacity, in routine, controlled daily activities, to make appropriate judgments and take appropriate actions for the child’s safety, including her emotional and physical wellbeing. However, the totality of his evidence demonstrates a relaxed, if not flippant and careless, attitude to risks associated with equipment, machinery or tools which have capacity to cause extreme injury, for example, chainsaws and vehicles.

[12] Collectively, the father’s evidence leads me to the conclusion that he is likely to be unacceptably permissive, not vigilant and unsatisfactorily attuned to risks of harm associated with dangerous activities, including gun-related activities. This finding accords with the Court Child Expert’s views of the father’s approach to parenting and that he places too much weight on the child’s preferences and views given her age …

( … )

[14] There was no specific evidence put before the Court about the nature or potential for psychological harm to a child from gun use in the hunting or target shooting context. However, in view of Mr C’s evidence about the nature and rate of neurological development of a child’s brain, it is logical and obvious to find, and I do find, that children are less emotionally equipped to deal with accidents, injury and suffering of injured persons or animals than adults. Accordingly, they are at greater risk of emotional harm if exposed to this. Further, I can infer from the ages specified in the Firearms Act 1996 (Tas), for eligibility for a minor’s permit, that there is likely to be scientific or policy reasons for prohibiting unsupervised use of guns by children until they are 12 years of age and have a permit.

( … )

[16] The father admits that there is a need to protect the child from risk of harm resulting from improper use of firearms …

( … )

[18] I agree that the father’s family traditions, extending from hunting to preparation of animals for meals and cooking the meat are of some importance and weight to the evaluation of what is in the child’s best interests.[11] The paddock to plate notion that his counsel have made submissions about in closing has been considered. However, there is no reason why the child could not be involved in preparation of the animal and cooking it after the hunting has ended. …

[19] … [W]hen concentrating on hunting, it is unlikely that the father can pay adequate attention to safety of the child. Further, the fact that there have not been any injuries in the past to the father as a child or to the child herself when around guns is not, in my view, a reliable predictor of the chance or magnitude of risk to the child if she participates in gun-related activities because there have been restraints about this in parenting plans since the child was aged three years of age.

[20] … I do not accept … that the Court can be satisfied that the father or his partner will, at all relevant times, take steps necessary to ensure the child’s safety during gun‑related activities …

( … )

[22] [C]onsiderable weight was placed, in the father’s case, on the importance of the child’s wishes to participate in hunting and shooting and the importance of the child’s emotional wellbeing and self-esteem to ensure that she is not portrayed as impaired or excluded. In this regard, the father’s case place too much weight on these considerations.

( … )

[28] … [T]here will be some restraint orders made, but the terms of those restraints will recognise the differential risk that I have assessed exists between gun use in a more controlled environment, such as shooting, as opposed to less controlled use of guns in a hunting situation.

[29] By way of further explanation, it might be envisaged that, after the child obtains a minor’s firearms permit, she might be in the company of persons who are engaging in activities with guns but not herself engaging in that activity. … ”

The injunctions made restrained the parents from allowing the child to use chainsaws, machetes, pocket/flick knives and hunting knives. On the condition that the child must also have a minor’s firearms permit and supervision in accordance with the Firearms Act 1996 (Tas), the parents were restrained from enabling the child to participate or attend shooting events until she was 12 and hunting activities with a gun until she was 14.