Procedure – Joinder – Appeal from order joining a party to proceedings prohibited by s 26 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) – Husband’s brother’s appeal against an order that joined him as a party summarily dismissed

In Genesalio [2023] FedCFamC1A 109 (6 July 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia,  heard an appeal from a decision of Johns J where a wife had successfully sought that her husband’s brother be joined as a party to property adjustment proceedings, and orders compelling the brother to assist with a single expert valuation of real and other personal property.

The brother filed a Notice of Appeal against those orders. The appeal registrar listed the proceedings so that the brother could be heard as to “the apparent incompetence of the proposed appeal” and why “it should not be summarily dismissed” ([8]) where appeals “from orders joining a party to proceedings are prohibited by the terms of s 26(2)(b)(i) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCA Act’)” ([17]).

The appeal registrar summarily dismissed the appeal and the brother appealed that decision.

Austin J said (from [22]):

“The substantive proceeding pending before the primary judge is plainly within the jurisdiction afforded by Pt VIII of the Act, within which matrimonial cause the wife asserts that she or the husband enjoys existing proprietary interest in certain assets over which the applicant claims exclusive ownership. The primary judge’s first task at trial will be to establish the spouses’ existing legal and equitable property interests (Stanford v Stanford [2012] HCA 52 at [37] and [50]; Hsiao v Fazarri [2020] HCA 35 … at [50] and [66]; Reg v Ross Jones; Ex parte Beaumont [1979] HCA 5 … at 511 and 517). In accomplishing that task, the primary judge is empowered to declare the nature and extent of the spouses’ existing property rights (s 78) and, in making property settlement orders between the spouses (s 79), the primary judge is empowered to make ancillary orders and injunctions which bind third parties, like the applicant (s 90AE and s 90AF).

[23] In circumstances where the [husband’s brother] … asserts his exclusive proprietary interest in assets which the wife will contend belong, either exclusively or partially, to either she or the husband, the [husband’s brother] … is entitled to be heard in rebuttal of the wife’s case. In fact, he would be denied procedural fairness if not afforded the chance to make good on such rebuttal.

( … )

[26] This proposed challenge has no reasonable prospects of success because, as was open, the primary judge accepted the wife’s contention that the proprietary interest allegedly enjoyed by her or the husband in such assets is a ‘triable’ issue … That was all the primary judge needed to find. At the interlocutory hearing, it was only necessary for the primary judge to be satisfied that the wife’s claims against the applicant had sufficient likelihood of success to justify making the procedural orders she sought (Australian Broadcasting Commission v O’Neill [2006] HCA 46 … at [65] and [69]). If the relevant assets are arguably owned (either exclusively or partially) by the husband or the wife, then they are at least capable of forming part of the pool of matrimonial property amenable to division between the spouses by discretionary order made under Pt VIII of the Act.

[27] Whether or not the husband or wife actually do enjoy any legal or equitable proprietary interest in such assets will be determined after all relevant evidence is tested at trial. But once the wife demonstrated a reasonably arguable issue, rationally capable of being determined in her favour against the [husband’s brother’s] … interests, he necessarily became an interested party in the proceedings and the principles of procedural fairness demanded that he have the opportunity to refute the wife’s case at trial.

( … )

[29] The corollary of the [husband’s brother’s] … submissions is this: he could not be properly joined as a party to the proceedings unless and until the primary judge was satisfied as to the merit of the wife’s claims, because only then is there any trespass upon his rights. That proposition is rejected. The substantive dispute between the parties over legal and equitable ownership of certain property could not be determined by the primary judge at an interlocutory hearing. Her Honour was not obliged to accept the [husband’s brother’s] unilateral assurance that he alone owns the assets in question, which was the implicit tenor of his position.

( … )

[34] The [husband’s brother] fails to demonstrate his proposed appeal enjoys any reasonable prospect of success and so his application for leave to appeal should be summarily dismissed …”

The appeal registrar’s order to dismiss the appeal was left undisturbed. The husband’s brother was ordered to pay the wife’s fixed costs of $3,000.

Children – Father sought limited increase in time via judicial review of Senior Judicial Registrar’s order – No error in Court ordering a change of primary care upon review and on the papers

In Abbey & Cyris [2023] FedCFamC1A 103 (29 June 2023), Austin J heard a mother’s appeal from interim orders made in respect of an 8 year old child. The parties were the mother, the father, a paternal aunt and the independent children’s lawyer (“ICL”).

During the parents’ relationship, the child had been the subject of child welfare orders obtained under the Children and Young Persons (Care and Protection) Act 1998 (NSW), which initially granted the State Minister parental responsibility for the child for 6 months and thereafter each parent was to have parental responsibility subject to supervision ([6]). The parents separated and the father sought recovery orders when the mother unilaterally relocated from Sydney.

After the paternal aunt intervened, a Senior Judicial Registrar made interim orders that the child live with the mother and spend time with the father and paternal aunt. The father filed a review and the father and paternal aunt sought an increase of the father’s time.

The Court directed that the review occur by written submissions to be determined on the papers. An oral hearing would not occur unless otherwise advised by the Court ([15]).

The Court ordered a reversal of care, that the child live with the paternal aunt. The mother appealed, saying she had been denied procedural fairness, where the father and paternal aunt had only sought orders for an expansion of the father’s time via review, not orders for a change of primary care.

Austin J said (from [25]):

“The child’s interim residence with the mother was established by the orders made [by the Senior Judicial Registrar] … Only the father sought to review those orders and his review was confined to the orders regulating the amount of time the child should spend with him. Neither he nor the paternal aunt sought to disturb the interim order establishing the child’s residence with the mother. For the review hearing conducted on the papers, the father and the paternal aunt uniformly made submissions confined to the time the child should spend with the father. They did not contemplate that the child’s residence with the mother was again in contest, as it had been until that issue was settled by the orders made …

( … )

[27] Procedural fairness is a practical concept and, in general terms, requires that a party knows what case the opposing party seeks to make, how the opposing party seeks to make it, and is afforded a reasonable opportunity to meet it …

[28] The mother was accorded such procedural fairness in the circumstances of this case because the review hearing before the primary judge entailed an original hearing of the competing applications entertained by the registrar, which broad dispute encompassed a contest over the child’s residence. Although the father and the paternal aunt did not seek to upset the child’s residence with the mother upon judicial review, the ICL certainly did and the paternal aunt acquiesced. From the written submissions filed and served by the ICL in the review hearing, the mother knew the ICL was making a case to change the child’s residence, she knew the reasons why the ICL was proposing the change of residence, she had the chance to meet the ICL’s case, and she actually took the chance by making submissions directly opposing any variation of the child’s residence with her.

( … )

[36] … The review application filed by the father required the primary judge to conduct an original hearing of the competing underlying applications determined by the registrar in the exercise of delegated power (r 14.07(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)).

[37] Although the father and the paternal aunt only sought to change the registrar’s orders in a limited way, the mother and the ICL envisaged a more expansive review of the orders. The ICL was entitled to prosecute a wider case than the father chose to do so in the review hearing because it was an original hearing without regard to the decision made by the registrar. No error by the registrar had to be demonstrated as the pre-condition to interference with the registrar’s orders. That is the meaning of a de novo hearing (Fox v Percy [2003] HCA 22 … ; Allesch v Maunz [2000] HCA 40 … ; Coal & Allied Operations Pty Ltd v AIRC [2000] HCA 47 … ; Harris v Caladine [1991] HCA 9 … ).

[38] In Harris v Caladine, the High Court said this (at 124):

… An order made by a Registrar is reviewable by way of a hearing de novo. That means that the court reviewing the order begins afresh and exercises for itself any discretion exercised below by the Registrar. The parties commence the application again, subject to any restrictions in the rules upon the calling of evidence or provisions relating to the use before the court of evidence called before the Registrar. A hearing de novo involves the exercise of the original jurisdiction and ‘the informant or complainant starts again and has to make out his case and call his witnesses’. …

(Emphasis added)

[39] As required, the primary judge heard the dispute afresh, including adjudication of the enlivened applications concerning the child’s residence … ”

The mother’s appeal was dismissed. There was no order as to costs.

Property – Court failed adequately to explain or provide procedural fairness as to its two pool approach, when it divided non-superannuation pool 65:35 without any adjustment to the super pool

In Petrellis [2023] FedCFamC1A 104 (30 June 2023), McClelland DCJ heard a wife’s appeal against a decision of Judge Jenkins in respect of an 18 year marriage that produced two children (aged 16 and 14). Both children lived with the wife and spent no time with the husband.

At first instance, the Court adopted a two pool approach and found that the non-superannuation pool was $14,060,433 and the superannuation pool was $1,023,785.

After taking into account gifts from the wife’s parents “in excess of $2.5 million” ([79]), the Court assessed the parties’ contributions in respect of the non-superannuation pool as 57.5 per cent in favour of the wife; and made a 5 per cent adjustment to her for s 75(2), such that the overall division was 62.5 per cent to the wife and 37.5 per cent to the husband.

The parties’ interests in superannuation were not adjusted. The husband retained $653,600 and the wife $370,185, resulting in a division of the superannuation pool 63.8 per cent to the husband and 36.2 per cent to the wife ([6]). The wife appealed. She said the Court failed to explain its approach to superannuation.

McClelland DCJ said (from [21]):

“No criticism can be levelled at the primary judge for taking the approach whereby she made orders that have the effect of adjusting the parties’ non-superannuation property and superannuation entitlements according to different proportions. Taking that course was one that was reasonably open to her … Equally, there was ‘no demand upon the primary judge to treat the parties’ contributions to superannuation interests separately from their other contributions’ …

( … )

[26] However … whereas the primary judge adopted a global approach to the assessment of the parties’ contributions, she applied a two pool approach to the apportionment of their non-superannuation property on the one hand and their superannuation interests, on the other, without providing an adequate explanation as to why she took that course.

( … )

[30] It is self-evident that the primary judge adopted what is commonly known as a ‘two pool’ approach in her adjustment of the parties’ assets. That is, the primary judge treated the parties’ superannuation interests as separate from their non-superannuation interests for the purpose of determining the proportions in which the parties’ superannuation interests on the one hand and the non-superannuation assets on the other are to be divided. …

( … )

[32] Any possible doubt that such a two pool approach was taken by the primary judge is dispelled by the fact that the primary judge applied the s 75(2) adjustment to only the non-superannuation pool, not the total pool …

( … )

[38] … The difference in outcomes between the primary judge adjusting the parties’ property on the basis of a global pool, as opposed to a two pool approach, would have been … equivalent to the amount of $269,681 …

[39] In those circumstances, procedural fairness required the primary judge to notify the parties of her intended approach, if only to afford the appellant the opportunity of pointing out that potential disparity in outcomes to the primary judge. As a related matter, the appellant should have been afforded the opportunity of addressing the primary judge as to the outcome, in dollar terms, of applying the s 75(2) adjustment to only the parties’ non-superannuation pool, as opposed to the higher dollar amount which would necessarily have been the result if the s 75(2) adjustment had been applied to the total pool.

( … )

[42] Moreover … there was a deficiency in the reasoning of the primary judge in concluding that it was appropriate for her to adopt a two pool approach because ‘it is agreed that each party will retain their member entitlements in the self-managed super fund’ …

[43] It was certainly the case that the parties had so agreed to retain their existing superannuation interests. However, the fact that both parties sought that outcome did not necessitate that a two pool approach was required for that outcome to be achieved.

[44] … [T]hat outcome could have been achieved, as is often the case, by adopting a one pool approach to both superannuation and non-superannuation assets and treating the parties’ respective superannuation member entitlements as property already in their possession.”

Re-exercising its discretion, the Court cited Coghlan [2005] FamCA 429 as to the approach to assessing the parties’ respective contributions to superannuation. McClelland DCJ said ([75]):

“The difficulty in treating the parties’ superannuation interests separately from their non-superannuation interests is apparent when it is observed that the primary judge did not make a finding in respect to a foundational issue for such an analysis to be undertaken, being the value of the appellant’s superannuation interest as at the commencement of the parties’ relationship.”

Upon considering the strength of the wife’s contributions and the gifts from the wife’s parents, the Court cited Pierce [1998] FamCA 74 and Cabbell [2009] FamCAFC 205 and said (from [92]):

“Where there is a substantial increase in the value of real property that arises other than from the efforts of the parties, including external market forces, authorities point to the increase being categorised as a contribution by both parties and not necessarily the party who contributed the greater proportion of funds to acquire that property …

[93] … [W]hile the capital contributions by the [wife’s] family to the [wife], which were applied to the acquisition and improvement of the parties’ primary asset, are unquestionably a significant contribution that requires appropriate weight, it is not the sole reason for the substantial increase in the value of the parties’ former matrimonial home, which has now significantly increased in value due to market forces, not simply due to the improvements made by the parties.

[94] Having regard to all of those factors … I am nonetheless satisfied that the adjustment determined to be appropriate, just and equitable by the primary judge, being the amount of 7.5 percent as a result of those capital contributions, is appropriate.

( … )

[96] … [U]nlike the approach taken at first instance by the primary judge, that adjustment should … be applied to the totality of the parties’ property and not simply the parties’ non-superannuation assets.”

The Court also agreed with a 5 per cent adjustment for s 75(2) factors, such that the overall division was 62.5:37.5 in favour of the wife, but across both pools.

Procedure – Whether proceedings were properly commenced by litigation guardian as manager of the applicant’s affairs when the validity of power of attorney was the subject of litigation before the Supreme Court – Death of applicant prior to appointment of litigation guardian

In Holden [2023] FedCFamC1F 331 (3 May 2023), Jarrett J heard an application for a litigation guardian to be appointed for the wife in property settlement proceedings.

The parties were married for almost 55 years and lived together until late 2021. At that time, the wife began living with her family and then in respite care. The wife’s case was that her failing health was partly attributable to poor care by the husband and that brought about separation. The husband’s case was that the wife’s failing health was a natural result of her age.

On 24 February 2022, the wife revoked her power of attorney which appointed the husband attorney and executed a new power of attorney that appointed her brothers, Mr C and Mr D. The wife commenced property adjustment proceedings on 18 August 2022 via those attorneys. As the husband asserted that the wife’s legal capacity was failing prior to separation, the validity of the wife’s revocation and powers of attorney were the subject of proceedings in the Supreme Court of Queensland.

The wife died after proceedings were issued. It was agreed that on 18 August 2022, the wife required a litigation guardian. The husband argued that as the power of attorney was invalid, Mr C was not the wife’s “manager of affairs” and therefore could not be appointed her litigation guardian under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.

Jarrett J said (from [9]):

“ … It is uncontroversial that [the wife] was a person who needed a litigation guardian when these proceedings were filed in August, 2022.

( … )

[13] FLR 3.15 deals with two concepts. The first is the appointment of a litigation guardian. The second is when a person becomes a litigation guardian. In the context of subrules 3.15(1) and 3.15(2) it is clear that the appointment referred to in subrule 3.15(3) is an appointment that occurs under subrule (2) – that is to say, an appointment by the court. But a person who has secured such an order is not the litigation guardian for the relevant party without more. An appointment does not take effect unless and until the person appointed consents to the appointment. In practice, the consent to the appointment is usually signified at the time the application for the appointment is made. Upon the making of an order for appointment and the giving of consent in the way required by the FLR, the person appointed becomes the litigation guardian for the person in need.

( … )

[16] According to FLR 3.16(5), for a person to become a litigation guardian of a party two things must occur. First, the person must be the manager of the affairs of the relevant party and second, they must file an affidavit of consent in relation to the relevant party. No appointment by the order of the court is necessary to make an appointment … The rule is satisfied upon the filing of the consent a person who meets the description manager of the affairs of the relevant party. The precursor to this rule has been construed in this way (Price & Underwood [2008] FamCA 267 … ) and described as operating as a ‘deeming provision’: Danine & Drew [2008] FamCA 1169 …

( … )

[19] The respondent concedes that if Mr C was the duly appointed attorney for the applicant, his affidavit filed 18 August, 2022 constituted an affidavit of consent and he would be qualified for appointment as the applicant’s litigation guardian at the commencement of the proceedings. The proceedings would in those circumstances be ‘commenced’ and no order appointing him litigation guardian is necessary.

[20] At the time the present proceedings were commenced, Mr C was the manager of the affairs of Ms Holden (or one of them). Upon the filing of an affidavit of consent by him to becoming her litigation guardian, he became her litigation guardian for the proceedings. ... His appointment is presumed valid until declared otherwise: s 111A of the Powers of Attorney Act, however, if the enduring power of attorney is declared invalid, it is ‘void from the start’: s 114 of the Powers of Attorney Act.

[21] But what if he was not Ms Holden’s duly appointed attorney as the respondent contends in other proceedings? In oral submissions, King’s Counsel for the respondent submitted that having a validly appointed litigation guardian is a condition precedent to commencing proceedings and if Mr C’s appointment as Ms Holden’s attorney fails, that condition precedent was not fulfilled and the principal proceedings in this court were not properly commenced and are not valid. … [T]he respondent contends that where there is no person who may be described as a manager of the affairs of the prospective applicant who is willing to act, there must first be an order appointing a person to be the litigation guardian for that person before any proposed proceeding for relief under the Act is filed.

( … )

[29] … I reject the respondent’s submission that assuming Mr C does not satisfy rule 3.16 it was necessary for him to apply for an order appointing him litigation guardian for Ms Holden before he could commence proceedings for her.

( … )

[32] … [A]ssuming that FLR 3.16(5) has no application, I do not accept the respondent’s argument that the principal proceedings have not been ‘commenced’ and are not valid. The failure to commence proceedings by a litigation guardian or next friend where one is needed is a procedural defect and a mere irregularity which can be cured.

( … )

[36] … Aside from the issue of Mr C’s appointment, it was not suggested that the proceedings were not apt to engage the jurisdiction of the court. A long line of authority establishes that the failure to commence proceedings by a next friend (or a litigation guardian) where one is needed is an irregularity only, usually capable of cure. The proceedings are not considered a nullity, but, where the irregularity is not taken to have been waived for example, the proceedings are stayed until the irregularity is cured …

( … )

[39] The application to appoint Mr C as litigation guardian has never been determined and Ms Holden has since died. … There are statements in some of the (Cth) authorities suggestive that this may present a difficulty …

[40] However, the requirement for a litigation guardian is a procedural matter and not a matter that goes to jurisdiction. In such a case, a procedural difficulty can usually be cured nunc pro tunc: Emanuele v Australian Securities Commission [1997] HCA 20 … ”

His Honour concluded (at [44]):

“I answer the two questions reserved for consideration as follows:

(a) subject to the answer to the issue identified in [46] of these reasons, no order is necessary for the appointment of Mr C as the litigation guardian for the applicant in these proceedings, unless and until the enduring power of attorney executed by the deceased on 24 February, 2022 is set aside; and

(b) the proceedings commenced by the filing of an Initiating Application in 18 August, 2022 have been commenced and are valid unless and until the enduring power of attorney executed by the deceased on 24 February, 2022 is set aside.”

Costs were reserved.

Child Support – Applicant’s 14 year delay between obtaining informal DNA test and s 107 application (not to be assessed in respect of costs of child) – Insufficient explanation for delay not dispositive – Rigid application of legal principles in error

In Kashmiri & Ashwell [2023] FedCFamC1A 55 (1 May 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, considered an unsuccessful application under s107 of the Child Support (Assessment) Act 1999 (Cth) where the applicant said he should not be assessed to pay child support for the subject child.

The parties had a sexual relationship in mid-2005. The child was born on 7 April 2006 and the respondent mother told the applicant he was the father. The parties reconciled after the child was born, during which time the applicant signed an acknowledgement that he was the biological father ([6]). The mother lodged an application for administrative assessment of child support and the child support liability began on 5 October 2006.

In 2007, the applicant used a DNA test that he ordered online, the results of which excluded him as the biological father of the child ([10]). He told the mother about this result and did not spend any time with the child nor communicate with the mother from 2008 ([11]).

The applicant first initiated proceedings in 2012. After the mother could not be served and proceedings were initially adjourned, the proceedings were dismissed in December 2014 for want of prosecution ([13]). In 2021, the applicant was granted legal aid and pursued an application with the view to rescind the child support assessment and recover money paid. At trial, he had paid $10,000 child support and owed $6,967 ([14]).

The primary judge dismissed the application for leave to proceed out of time and the applicant appealed.

Austin J said (from [20]):

“His Honour identified that, to succeed with the interlocutory application, the appellant had to provide adequate reasons for the very long delay in bringing the proceedings and establish there was a substantial issue to be raised in the proceedings (at [6]).

[21] The primary judge was not satisfied that adequate reasons for the delay were offered … but his Honour made no specific finding on the second question of whether a substantial issue was raised in the proceedings, despite acknowledging how refusal of the application to extend time would cause ‘serious injustice’ to the appellant …

[22] … [T]he primary judge discussed the quality of the unchallenged evidence advanced by the appellant about the lack of his paternity of the child. But his Honour’s observations entail inconsistent remarks about the soundness of the evidence, on the one hand, and its lack of probative value on the other. ( … )”

Austin J continued (from [29]):

“Appealable error is established. That conclusion follows essentially for three reasons. First, the legal principles which apply to interlocutory applications to extend time to bring proceedings are not as rigid as the primary judge stated and so material considerations were overlooked. Secondly, his Honour misapplied such principles by incorrectly conflating the need for the appellant to demonstrate the ultimate success of the substantive application with the need for him to only demonstrate a reasonably arguable case for relief. Thirdly, His Honour wrongly depreciated the probative value of the unchallenged evidence led by the appellant.

( … )

[34] In any application to extend time, the merit of the proposed substantive application is not argued as elaborately as if the substantive application was actually then being heard and it need only be shown to be reasonably arguable (Jackamarra v Krakouer [1998] HCA 27 … ).

( … )

[36] … [H]is Honour focussed upon and gave primacy, if not paramountcy, to the insufficiency of the explanation offered for the long delay in bringing the proceedings. His Honour’s lack of satisfaction about the sufficiency of the explanation for delay was effectively treated as being dispositive. …

[37] His Honour gave no consideration at all to the separate question of what, if any, hardship or prejudice which might flow to the respondent by granting the application to extend time, in which event a material consideration was not taken into account. The respondent was told long ago in 2007 that the appellant disputed his paternity of the child and she was given a copy of the informal DNA test report to verify his denial of paternity. She was served with process but elected not to contest the application before the primary judge. …

[38] It is difficult to see how the grant of an extension of time to the appellant to bring his substantive application would occasion any material hardship or prejudice to the respondent. … If the appellant is truly not the child’s biological father, then the declaration sought by him and the rectification of the child’s birth certificate should almost inevitably follow. The grant of leave for the substantive application to be brought out of time will not necessarily mean the appellant will succeed with his subsidiary application for recovery of $10,000 in child support paid to the respondent long ago.

[39] The approach taken by the primary judge to the assessment of whether the appellant had a reasonably arguable case was altogether erroneous. Instead of just determining whether or not the unopposed evidence led by the appellant established a reasonably arguable case for the relief sought, the primary judge dismissed the application for leave to proceed out of time on the basis that the evidence then adduced lacked the necessary probative value to conclusively establish entitlement to the ultimate remedy.

( … )

[45] The appellant seemingly had a reasonably arguable case for at least the declaration he sought under s 107 of the Assessment Act on account of him not being the child’s biological father. It is difficult to understand how the primary judge could have correctly found on the available evidence the appellant did not have a sufficient likelihood of success to justify the extension of time but his Honour wrongly required him to establish actual entitlement to the remedy.

[46] In respect of the evidence led by the appellant, his Honour conceded the informal DNA test was ‘significant’ and ‘powerful evidence’ … yet not apparently probative enough because his Honour could not be satisfied the appellant genuinely took a DNA sample from the child … The primary judge was thereby clearly doubting the reliability of the appellant’s unchallenged evidence, but his Honour contradictorily said he was not suggesting the appellant’s evidence was untrue … Such observations about the quality and acceptance of the evidence seem plainly incompatible. The appellant’s unchallenged evidence could not have been legitimately rejected as it was not inherently improbable. It should have been accepted at its highest for the purpose of determining the uncontested interlocutory application to extend time.”

The appeal was allowed and the case remitted for rehearing.

Children – Consent orders were ultra vires as they permitted mother to reopen proceedings subject to her obtaining a psychiatric assessment and purported to exclude the operation of Rice & Asplund

In Halloran & Keats [2023] FedCFamC1A 56 (2 May 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard a mother’s appeal against a decision of Judge Neville, that dismissed her application to vary parenting orders.

The orders were made in 2018 by consent. They provided for the parties’ three children to live with the father and spend supervised time with the mother ([4]). They also gave the parties liberty to apply to vary the orders upon the mother submitting to an independent psychiatric assessment and provision of a written report ([5]).

A notation purported to exclude the application of Rice & Asplund [1978] FamCA 84 in part. The notation said that once the mother had obtained the psychiatric report, she could seek to vary all orders, save that to vary the parental responsibility and residence order she would still need to establish a significant change in circumstances ([6], [7]).

On 16 August 2022, the mother filed an initiating application seeking the discharge of the 2018 orders; that she have sole parental responsibility; and that the children live with her and spend time with the father ([9]). The father sought the dismissal of her application ([10]). The mother subsequently amended her application to only seek changes to the arrangements for the children spending time with her ([13]).

Judge Neville dismissed the mother’s applications on the basis she didn’t meet the test in Rice & Asplund ([15]). The mother appealed.

Austin J said (from [20]):

“The validity of Orders 20–22 made in June 2018 was not questioned in the hearing conducted before the primary judge … but an anterior question arises as to the validity of those orders for two reasons. First, the source of power to make the orders is quite unclear and, without any source of power, they are ultra vires and hence invalid. Secondly, the orders are irreconcilable with the guideline legal principles espoused in Rice v Asplund, which principles require the demonstration of materially changed circumstances whenever any application is made under s 65D(2) of the Act to vary existing parenting orders.

[21] Section 64B(2)(g) of the Act defines a parenting order to include one which prescribes the conditions which must be fulfilled before an application is made to change parenting orders. …

[22] … [T]he meaning of s 64B(2)(g) is shaped by the provisions of s 64B(4A) of the Act …

[23] Section 64B(4A) expressly states it does not limit the meaning of s 64B(2)(g) of the Act, but that does not mean the latter sub-section can be read so broadly as to empower the making of any condition imaginable to hinder a litigant’s right to re-contest parenting orders. There must be some proscription on the width of the sub-section, even if its limitations must be implied (Oberlin & Infeld [2021] FamCAFC 66 … ).

[24] The exercise of statutory power to make an order either shutting out or restricting a litigant’s right to litigate is serious and must be exercised with due care …

[25] While Orders 20–22 stipulate the steps the mother must take if she wants to apply to vary the original orders regulating the time which the children spend with her, thereby broadly meeting the requirements of s 64B(2)(g) of the Act, the conditions imposed by the orders are not simply confined to the way in which she must first attempt to mediate the potential dispute before embarking on further litigation, in the manner envisaged by s 64B(4A) of the Act. Rather, the orders require her to obtain an independent psychiatric assessment, which the primary judge interpreted to mean a professional opinion which, of itself, would vindicate the variation application brought by the mother.

( … )

[27] Whether Orders 20–22 are construed generously to be substantive parenting orders made under s 64B(2)(g) of the Act or more conservatively as being merely procedural orders, it is hardly conceivable they can validly defeat or proscribe the application of established substantive legal principles, such as those promulgated in Rice v Asplund. The orders purport to eliminate the operation of such legal principles in certain circumstances.

[28] Section 65D(2) of the Act expressly envisages the need to vary parenting orders but, whenever any litigant applies to vary a parenting order, he or she must first demonstrate a material change in circumstances to warrant the variation application being entertained … Such obligations imposed by law cannot be relieved by an order, whether merely procedural or purportedly made in the guise of a substantive parenting order. Orders are made by courts to fulfil the law, not to undermine or circumvent it.

[29] If Orders 20–22 made in June 2018 were ultra vires … then the primary judge fell into appealable error by assuming they were valid and by purporting to deploy them to govern the outcome of the dispute in November 2022. The validity of those orders – as distinct from their meaning and effect – was not the express focus of the appeal, but in an appeal by re-hearing, such as this, any identified error must be corrected (Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 …). …

[37] Regardless of the way in which the primary judge chose to construe the June 2018 orders, they were still used to globally dismiss both aspects of the mother’s dual application without differentiation. The primary judge inferentially found Dr B’s report was unsupportive of her primary application, but no separate consideration was either explicitly or implicitly given to whether the evidence was arguably supportive of the mother’s much more modest fall-back position.

( … )

[39] Orders 20–22 made in June 2018 are most probably not valid parenting orders or injunctions. Nor could they be properly regarded as valid procedural orders. … Those orders should be set aside, for otherwise s 138 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”) requires that they be treated as efficacious. The fact those orders were neither appealed at the time nor the subject of this appeal does not preclude their discharge. The power to do so exists in ss 36(1)(b) and 36(5) of the FCFCA Act.”

The appeal was allowed and the proceedings remitted for rehearing. Costs certificates were granted.

Property – Final hearing proceeds as undefended – Court’s failure to allow self-represented wife (who had been refused an adjournment) to make submissions was a denial of procedural fairness

In Saso [2023] FedCFamC1A 65 (11 May 2023) Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard a wife’s appeal from final property orders made on an undefended basis.

The final hearing took place in September 2022. The wife filed a response in April 2021 but otherwise failed to comply with procedural directions ([6]). An order was made pursuant to s 102NA for the wife to receive legal aid. She engaged four different firms but parted ways with all four. At the hearing, she had counsel and a solicitor acting solely to seek an adjournment of the final hearing ([9]). The adjournment application was refused and the wife’s lawyer was given leave to withdraw. The wife was joined to the Microsoft Teams link, and the trial judge said ([16)] that he would proceed to hear the case undefended, advising the wife that she was ‘’free to stay on the line or depart, because I’m hearing this undefended” ([17]).

The wife appealed. The issues in the appeal were whether the wife was afforded procedural fairness in proceeding on an undefended basis, the effect of which was that she was unable to cross-examine witnesses other than the husband and to make submissions; and whether the trial judge erred in treating three debts owed by companies as the husband’s debts ([3]).

Aldridge J said (from 18]):

“The question of whether the matter should be adjourned and the course of the hearing thereafter were quite separate matters. The refusal of the adjournment did not compel the matter to proceed on an undefended basis, whatever that ultimately means which was not explored in submissions. ( … )

[19] As Austin J explained in Morgan & Valverde [[2022] FedCFamC1A 133 (‘Morgan & Valverde’)], there are a number of options available where the participation of a party is to be limited by reason of a default with procedural orders and normally that would involve allowing the defaulting party to cross-examine … possibly to tender documents and to make submissions … [T]he primary judge did not consider these options.

[20] … Senior counsel for the appellant … accepted that it was open to the primary judge to have made an order that the hearing proceed undefended. Rather, the point was that before making the determination as to how the hearing would proceed the primary judge should have sought submissions from the appellant and that this failure was a denial of procedural fairness.

[21] His Honour announced that the matter would proceed as if undefended in his reasons for refusing the adjournment and shortly thereafter informed the appellant that she could not participate further and could stay in the Microsoft Teams link or not, as she pleased. At no time was the appellant given the opportunity to make relevant submissions even though she attempted to do so, but was cut off by his Honour.

[22] I do not accept that the casual references to an undefended hearing which took place early in the hearing … constituted an invitation for submissions on this point to be made … The appellant’s counsel … only made submissions on the adjournment application.

[23] It is to be recalled that other than for having counsel bring an adjournment application on her behalf at the hearing, the appellant was acting for herself. The application of the principle set out in Re F: Litigants in Person Guidelines [2001] FamCA 348 … would have seen the various options available under r 1.33 explained to the appellant by the primary judge and her submissions on them sought.

[24] It is well-established that procedural fairness requires a party to be given a reasonable opportunity to present his or her case and it matters not whether that opportunity is taken up (Kioa v West [1985] HCA 81 … ). The respondent submitted that the appellant was afforded the opportunity but did not take it up because she did not file a Case Outline or an affidavit in chief. That however, was the failure to take up the opportunity to prepare for the hearing, and that failure was the basis for the application of r 1.33(2) of the Rule. It was not the opportunity to be heard as to what the consequences of that failure should be.

( … )

[27] An appeal court can dismiss an appeal where there has been a denial of natural justice, but no miscarriage of justice, however, it must be satisfied that the denial has no bearing on the outcome (Stead v State Government Insurance Commission [1986] HCA 54 … )

[28] That is not the case here.

[29] It is a drastic step to prevent a litigant from participating in a hearing at all, especially when other options were available. Both parties should have been given the opportunity to address the Court on that issue. The failure to give the appellant that opportunity was a material lack of procedural fairness.”

The appeal was allowed, the order of 26 September 2022 was set aside and the case was remitted for rehearing. Costs certificates were ordered.

Property – Kennon – Court erred by failing to explain how the husband’s acts of violence led to wife’s non-financial contributions being made difficult, distressing and more arduous

In Martell [2023] FedCFamC1A 71 (15 May 2023) Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, heard a husband’s appeal from a 60:40 property division in favour of the wife, after a relationship of about 17 years. The asset pool was $1,975,570.

The trial judge found that financial and non-financial contributions were equal, save for the wife being subjected to family violence ([6]). The trial judge found that several incidents of family violence occurred, including the husband hitting the wife over the head with a pillow several times and pouring a bottle of soft drink over her; pushing her hard and her head hitting the window of the car; and punching her in the face which resulted in her face bleeding ([14]).

Following consideration of Kennon [1997] FamCA 27 (“Kennon”), the trial judge found that the husband was controlling and aggressive and that the husband’s violence made the wife’s contributions to the family more arduous ([16]-[17]).  The husband appealed, arguing that the trial judge applied the wrong test when considering the family violence and that she also failed to consider the materiality of the family violence ([11]).

Aldridge J said (from [23]):

“In Kennon, the principle was identified as follows:

… [W]here there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or … to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79.

[24] … [T]he words ‘significantly’ and ‘more arduous’ are not to be read as coterminous with ‘exceptional’. Rather, they arise from the basis of the principle itself which focuses on contributions. If the nature and extent of a person’s contributions are made more difficult or harder so that they should be accorded greater weight, such that they should be taken into account in the determining of the outcome, they have therefore been ‘significantly impacted’ or made ‘more arduous’. …

[25] The threshold for recognition is therefore met by conduct which has a discernible effect on the contributions of the other party such that it should be recognised in determining the respective contributions of the parties.

( … )

[29] … [H]er Honour said ‘the wife’s non-financial contributions were impacted and made more difficult and distressing’ … and ‘more arduous’ … . They were found to be of such a nature so as to require consideration.

( … )

[31] The difficulty … is … that the primary judge did not explain how the acts of violence of the husband led to the non-financial contributions of the wife being made difficult, distressing and more arduous. …

( … )

[35] … Whilst the events described by the wife were no doubt distressing, the evidence and the findings did not deal with the magnitude and extent of its effect. Whilst matters can certainly be inferred, that inference must be properly based on the evidence before the court.

( … )

[37] Here … the violence is at a lower end of the spectrum. The wife did not give any evidence of the effect of it on her other than to say she was scared at the time, could not eat for a few days after being punched in the face and once stayed the night away from the matrimonial home. The description of the events themselves can only give rise to an inference that the adverse impact on contributions was also at a lower end of the spectrum.”

His Honour concluded (from [74]):

“The issue of the violence and its impact is more difficult. Had this been the only error in the reasons, as discussed earlier, consideration would need to be given to its materiality given the other matters taken into consideration. It is not, however …

( … )

[75] It follows that the appeal will be allowed and the orders set aside.

[76] … I do not see any basis for remittal … the discretion to re-exercise the power under s 79 must be based on the circumstances that exist at the time of the re-exercise. Therefore, there will be directions as to the provision of updating evidence as to matters that have occurred since the hearing and as to current circumstances and submissions in writing. Subject to objection from the parties, the matter will be finalised on those papers.”

Property – Leave to proceed sought seven years out of time – Court erred by finding a mortgage debt of $430,000 and failed to consider appellant’s disability and limited employment opportunities

In Dimmick & Harrison (No 3) [2023] FedCFamC1A 81 (25 May 2023) Schonell J heard a de facto husband’s appeal from the dismissal of his application for leave to proceed, brought seven years out of time.

The parties were in a de facto relationship from 2000 to 2012. The only asset of significance was a property (“the Suburb B property”), which the respondent purchased 20 years earlier for $747,000, subject to a mortgage ([8], [12]). The respondent’s financial statement described $430,000 cash at bank, but the trial judge concluded that this was a typographical error and rather that there was a mortgage on the Suburb B property for that amount ([8]).

The trial judge dismissed the application for leave to proceed out of time as the evidence did not support a finding that the de facto husband would suffer hardship if leave were not granted ([12]). On appeal, he argued that the trial judge failed to consider and evaluate whether he had a prima facie case worth pursuing; erred in her consideration of hardship; and provided inadequate reasons ([14]).

Schonell J said (from [25]):

“The appellant … submitted that the primary judge was in error in concluding that the typographical error established that the reference to $430,000 should be construed as evidence of the mortgage balance … The respondent’s counsel conceded that there was no evidence of the mortgage balance other than what it was in 2014. He submitted … that the primary judge’s finding … that ‘[a] reasonable conclusion is that $430,000- represents the negative of the mortgage rather than an asset’ was open on the evidence. …

[26] … It was clearly open to find … that it was typographical error and that the respondent did not have a bank account with a balance of that amount as it was consistent with the way that the case was conducted. However, that process of deduction or inference does not permit or lead to the alternative conclusion that it was evidence of something else, namely the mortgage balance. …

[27] The primary judge advances no reasons for how she came to that conclusion … While the Court could safely conclude that there was a mortgage secured against the property as that was the evidence of the respondent, there was simply no evidence from which it could conclude that it had a value of $430,000 or any other amount.

( … )

[35] … [H]ere the primary judge specifically referenced … the factors that she had regard to in determining whether the appellant had a prima facie case. Her Honour erroneously included the mortgage balance for the Suburb B property when there was no evidence to found same, made no reference to the appellant’s liabilities of $19,000 … and considered only the appellant’s ‘limited direct and indirect financial contributions’ … The primary judge did not consider his non-financial and homemaker contributions or the fact that he was in poor health, he had a disability, he was on government benefits and he had limited employment opportunities.

[36] … [I]n light of the primary judge’s earlier findings the determination is incongruent. Such incongruence can only be explained by a failure of the primary judge to consider the appellant’s non-financial and homemaker contributions, issues about his health, and his earning capacity in the context of a consideration of whether the appellant had a prima facie case and consequentially the issue of hardship. This is compounded by the primary judge’s erroneous finding that the appellant had no liabilities in circumstances where he had a credit card debt of about $19,000. In the context of the appellant’s already parlous financial position, the quantum of this debt looms large in the consideration of hardship. …

( … )

[44] The appellant in this case is left wondering why it is that his health issues and limited earning capacity were not considered by the primary judge in determining he would not suffer hardship. A failure to do so amounts to an error of law.”

The appeal was allowed and the proceedings remitted for rehearing. Costs certificates were ordered.

Property – Order requiring husband to pay lump sum to acquire wife’s interest in parties’ company set aside – Failure to consider husband’s capacity to pay – Inadequate reasons given for rejecting husband’s proposal for sale of the company – Full Court disagreed with judge’s statement that “it’s not [the court’s] job to draft the orders; it’s the representatives’ jobs”

In Aitken [2023] FedCFamC1A 69 (12 May 2023), the Full Court (McClelland DCJ, Austin and Altobelli JJ) heard a husband’s appeal from three decisions of Wilson J that ultimately required the husband to pay the wife a fixed sum in exchange for her holding in D Pty Ltd.

After their 28 year marriage, the parties divorced in 2020. The husband and wife were directors and shareholders of D Pty Ltd which conducted the manufacture and repair of equipment. The asset pool was about $80 million ([4]).

On 15 July 2022, Wilson J delivered reasons for judgment after the final hearing of the substantive proceedings. His Honour required that the parties “bring in a minute that gives effect to these reasons” by 27 July 2022 ([6]). The parties could not agree on a minute and the proceedings were relisted.

After handing down his second reasons for judgment on 7 September 2022, his Honour ordered that the parties “bring in a minute giving effect to these reasons” by 28 September 2022 ([14]). The parties remained unable to reach agreement as to a joint minute.

On 8 November 2022, after giving his third reasons, his Honour ordered that the parties “bring in a final minute to reflect the orders made herein” ([20]).

The husband appealed the substantive orders. He argued that the Court failed to give adequate reasons and that his incapacity to pay the wife had not been considered, when his proposal for the sale of D Pty Ltd was rejected ([38], [39]).

Regarding the minutes, the Full Court said (from [28]):

“The approach of the primary judge in delivering multiple sets of reasons before making final orders was problematic. The three sets of reasons … all run to many pages in length and … cloud rather than clarify his reasoning process.

[29] From the start of the trial in March 2022, the parties were in agreement that their net assets should be divided between them in equal shares. …

[30] The essential issues for the primary judge were the identification and valuation of the parties’ assets and liabilities and, in the adjustment process, whether D Pty Ltd (or its assets) should be sold or, instead, acquired by the husband from the wife. … [H]is Honour determined that the husband should buy-out the wife’s shareholding in D Pty Ltd.

[31] The transcript of proceedings on 16 November 2022 reflects an unfortunate tension between counsel and the primary judge. Senior counsel for the wife contended that the primary judge had discharged his judicial function and was functus officio, despite not having made final orders. Senior counsel for the husband … voiced concern that the primary judge had failed to discharge his judicial function by delegating the responsibility of drafting orders that reflected his initial decision to the parties. This was in circumstances where the husband contended that compliance with the orders was beyond his capacity and … potentially exposed the husband to bankruptcy proceedings or even a possible finding of contempt.

[32] There was … merit to the concerns expressed to the primary judge … about his Honour’s insistence upon having the parties agree upon the property settlement orders that should be made.

[33] The ‘judgment’ required of his Honour was that embodied in the orders made to determine the cause of action under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”), not the multiple sets of reasons published to explain findings made about contentious issues (Driclad Pty Ltd v Federal Commissioner of Taxation [1968] HCA 91 … ; Commonwealth v Bank of NSW [1949] HCA 47 … ).

[34] … [H]is Honour was bound to make orders that were appropriate, just and equitable to adjust the parties’ property interests and, as far as was practicable, finally end their financial relationships: ss 79 and 81 of the Act. To achieve that end, the primary judge was already equipped with the amended suites of orders proposed by the parties within the context of an agreement that they should share their wealth equally.

[35] Repeatedly delegating responsibility to the parties to conceive the nature and form of the orders required to quell the controversy between them arguably amounted to an abdication of judicial duty. … [W]e respectfully disagree with the statement made by the primary judge during the course of the proceedings that ‘it’s not [his Honour’s] job to draft the orders; it’s the representatives’ jobs’.

[36] Other than in limited and exceptional circumstances, we caution against the practice of delegating to parties the responsibility to agree upon the nature and form of orders required to give effect to views expressed by a trial judge in reasons for judgment. … ”

The Full Court continued (from [57]):

“We are … satisfied that the husband did draw the attention of the primary judge to his contention that he lacked the ability to pay the lump sum amount to the wife in order to acquire her interest in D Pty Ltd. It was clearly an issue of significance in the proceedings that required consideration by the primary judge. …

( … )

[62] Nowhere did the primary judge find that the husband had assets, in his sole name, available to satisfy the requirement … that he pay the wife the sum of $26,751,023 within 60 days of the date of the final orders.

( … )

[64] … [T]he evidence was that, as at the date of the orders, the husband had insufficient property in his own name that would enable him to comply with the orders without access to property in which he did not enjoy exclusive title …

( … )

[68] …  [W]e are satisfied that the capacity of the husband to pay the lump sum amount to the wife within the specified 60 day time period was a ‘fundamental and obvious’ issue that required, but did not receive, adequate consideration in the proceedings …

( … )

[84] … [T]he primary judge had an obligation to clearly explain why, despite the submission by the husband that he lacked the capacity to pay the required sum to the wife, the primary judge made Order 23 which required the husband to do just that. … [T]he primary judge also had a corresponding obligation to explain why he rejected the husband’s submission that, as an alternative to the wife’s proposal, an order be made for D Pty Ltd to be sold in order to raise sufficient funds to pay the wife the amount of $26,751,023. The primary judge did not provide reasons addressing the capacity to pay issue in that context.”

The appeal was allowed and the proceedings remitted for re-hearing. No cost orders were made given that the parties were “well resourced” ([90]).