24 January 2025 - Goldman Law

24 January 2025in Family Law

Court Determines Health Issues Only a Factor in Property Proceedings when Life Expectancy Determinable

Keywords: property; future needs; spousal maintenance; section 75(2); illness; life expectancy; renal failure; diabetes.

The case of Fontana & Fontana [2016] FamCAFC 11 (9 February 2016), was an appeal to the Full Court of the Family Court of Australia by the husband from an earlier hearing of the Family Court of Australia.

In the earlier hearing heard by Judge Collier (“trial judge”), his Honour made findings on 23 July 2013 that the property of the marriage be divided in the wife’s favour, with the wife receiving 56.4% and the husband 43.6%. The trial judge took into account the husband’s illnesses as a factor affecting his life expectancy. This resulted in an adjustment in the wife’s favour as she would have greater future needs as she would live longer than the husband. The husband appealed on various grounds including that his life expectancy could not be determined at the present time. The Court upheld the appeal deciding that the trial judge erred in making an adjustment to the asset pool in the Wife’s favour based on the evidence available about the husband’s life expectancy.

Background

At the time of the trial hearing, the husband was 49 years of age and the wife was 43 years of age. The parties commenced cohabitation and married in 1993. They separated in 2008. There was one child from the marriage who was 15 years of age.

Since the parties’ separation, the child was primarily in the mother’s care. It was determined that the child would go to boarding school and that there would be an equalisation of parenting and financial responsibility for the child, but as the father had poor health there would be a greater burden on the mother in the future.

The wife was earning approximately $200,000.00 per annum and previously the husband was earning approximately $250,000.00 per annum.

Husband’s Health Issues

The husband had a number of complex health issues including renal failure and diabetes. The husband was receiving income protection insurance at the rate of $150,000.00 per annum. Expert evidence from doctors indicated that if the husband did not manage his diabetes he would have a significantly shorter life expectancy but with proper management, he could live for a long time. Further, the husband was waiting for a liver transplant. It was submitted that if the husband had the liver transplant he could live anywhere from 8 to 20 years, or possibly longer. Without the liver transplant, it was unlikely the husband would be able to return to work.

Trial Judge’s Findings

In determining the matter, the trial judge found that the husband’s life expectancy would be effected by his illnesses. The grounds for this finding was under section 75(2) of the Family Law Act which allows the Court to make an adjustment to contributions taking into account a number of factors. The trial judge found the husband was in “poor health”, that no variation should be made based on the disparity in the parties’ income earning capacity; that no variation should be made for the care of the parties’ child except with regard to the decline in the husband’s health and that the husband’s lack of full and frank disclosure should be taken into account.

The trial judge concluded that the husband’s life expectancy was less than the wife’s life expectancy and that an adjustment should be made on these grounds. The trial judge ruled that the wife receive 56.4% of the asset pool and the husband receive 43.6%.

Grounds of Appeal

The husband appealed on a number of grounds including that the trial judge erred in his finding that there should be no adjustment in the husband’s favour due to the wife’s superior income earning capacity, and on the basis that the trial judge could not conclude that the husband would not receive a liver transplant which would increase the husband’s income-earning capacity.

Appellate Judgement

The Appellate Court was made up of Judge Strickland, Judge Murphy and Judge Watts. The Court considered the trial judge’s decision and focused particularly on his determination that the husband would have a shorter life expectancy due to illness.

The Court considered the case of Lawrie and Lawrie (1981) FLC 91-102 where that Court had to determine a matter where a party had terminal cancer and would only live a further 6 months. This case included comments “by the way” that an adjustment should only be made where life expectancy was determinable, otherwise it would “open the flood gates” as to the future life expectancy of parties.

The Court next considered the unreported case of S & P of the Family Court of Australia (22 April 1997) which dealt with a husband who had HIV and was thought to have a life expectancy of 5 years. That court considered Lawrie , and stated that the principles from Lawrie were correct but ultimately a judge could use their discretion with regard to health issues.

The Court turned its attention to the trial judge’s conclusion that on the evidence the husband’s life expectancy could not be determined with any accuracy. Despite this, the trial judge made an adjustment in the wife’s favour because the husband was likely to have a shorter life expectancy. The Court found the trial judge was in error in making this finding without being able to provide a measurable period of life expectancy for the husband.

Conclusion

In this matter, the husband had diabetes and renal failure resulting in the possibility that the husband would have a shorter life expectancy compared to the wife. Under section 75(2) of the Act, when considering spousal maintenance, a court may take into account a shorter life expectancy of a party and how this will affect the future needs of the parties.

In this case, the trial judge concluded that he could not determine the husband’s life expectancy based on the evidence, but he still found that the husband was likely to have a shorter life expectancy. The Appellate Court found the trial judge erred and that life expectancy should be taken into account only when a determination as to the likely period of life expectancy can be made.

24 January 2025in Family Law

Adjustment in Favour of Wife in Property Proceedings Notwithstanding the Husband’s Significant Financial Contributions

Key Words: property proceedings; contributions; section 75(2) of the Family Law Act;

In the recent Family Court of Western Australia case of Telfer [2016] FCWA 2 (4 January 2016), Walters J had to consider a seven-year marriage where there was two children (aged 6 and 8) and $4.25 million in assets. The wife had made an initial contribution of $168,000 and the husband’s contribution was $960,000. Post-separation contributions were also included.

The husband was a registered builder at the time the parties separated and the wife was a part-time teacher. The husband’s income had been assessed at $585,358, with the wife’s income being $32,926.The value of what the parties contributed financially at the start of the relationship was not in dispute. According to the Court: “Clearly, the husband’s financial contributions at the commencement of cohabitation and during the course of the relationship far outweighed those of the wife. That is not to say, of course, that the wife did not make direct and indirect financial contributions to the acquisition, conservation and improvement of the parties’ property.”

In considering the parties’ contributions with a view to determining a just and equitable distribution of the parties’ property, the Court was of the view that: “[T]he parties’ relationship was not too short to enable the ‘myriad of other contributions made by the wife to offset, dilute or erode the significance of the initial financial contributions made by the husband. In my opinion, however, the husband’s initial financial contributions remain an important consideration, to which appropriate weight must be given.”

The Court ultimately arrived at a settlement which favoured the husband due to his significant financial contribution going into, and during the relationship: “In all the circumstances (including the seven-year period of cohabitation and the period between separation and the date of trial), I conclude that between 60% and 65% of the overall property pool should be awarded to the husband on the basis of his contributions from the commencement of cohabitation to the date of trial, and the balance to the wife on the same basis. As it would be intellectually dishonest of me to choose either the higher or lower figure within the range I have specified, I shall fix the midpoint – being 62.5% – as being appropriate.”
As to factors in section 75(2) of the Family Law Act that the Court can draw upon to adjust the level of contributions the parties made, the Court considered that the husband and the wife were 50 and 47, that the husband’s earning capacity was “very substantial”, that the children were living with the wife and that the wife was working as a teacher. An adjustment of 7.5% was made under s 75(2) in favour of the wife, producing an overall division of 55:45 in favour of the husband.

24 January 2025in Family Law

Mother Allowed To Relocate After Considering 11-Year-Old Daughter’s Best Interests

Keywords: Best interests of the child; relocation

In Timms & Payton [2015] FCCA 3324 (18 December 2015) Judge Altobelli heard the applicant mother’s request to relocate with the parties’ 11-year-old daughter (“X”) from one location in New South Wales to another location in New South Wales “in excess of two hours drive south of where the family presently lives”. The mother also had a 17-year-old child from another relationship.

The parents previously entered into consent orders which provided for joint parental responsibility; the child to live with the mother; and for the father to spend alternate weekends and some school holiday time, subject to his roster. The father and the ICL opposed the proposed relocation, while the mother contended that she would relocate with or without the child.
According to the Court, child X did not want to move and was sad that her mother had purchased a property away from the area in which she has always lived. X wanted to complete her primary education at the primary school where she was currently attending. The father was committed to spending time with X if the relocation was permitted, but preferred that the mother not move. If the mother was to move, the father’s preference was for the child to live with him and continue attending her school as normal.
[8] This is a difficult decision to make. X clearly doesn’t want to go. Her mother is committed to moving, in any event. The father is committed to spending time with X, should relocation be permitted. However, his preference is that the mother does not move with X, but that if she does, X should live with him and spend time with her mother.”
Inciting the importance parenting cases of Goode [2006] FamCA 1346 and MRR v GR [2010] HCA 4, the Court found that:

“ … The father’s candidature to become the primary carer for X was not a strong one.

In reality, this is not a case where the meaningful relationship that X has with either of her parents would be affected by any order that the Court makes. Whether X lives with her mother on (omitted), or with her father in (omitted), she will always enjoy a meaningful relationship with both of her parents, both of whom, it would seem, is ready, willing, and able to continue to facilitate that relationship. …
X appears to have a good relationship with both of her parents, but the evidence leaves the Court in no doubt that the mother has historically been X’s primary carer. … hitherto the father’s time with X has been very much dependent on a coincidence of X’s availability and his being rostered off. … The father’s own evidence is that, if X came into his care, he would be dependent on the assistance of others to get her up each morning and off to school and care for her after school. …

While the Court was concerned about the mother’s statement that should relocate regardless of whether or not the Court ordered that X go with her, and found that the father to be committed to X, it ultimately found that the mother remains the primary carer. According to the Court:

“X’s father is an unknown quantity in terms of being a primary carer, and the proposals that he advances for caring for X whilst he is at work are highly problematic, to say the least. X’s views are, of course, important but in the circumstances of this case, the Court decides that it is more important for her to continue to have the benefit of her mother as her primary carer, even if that means she cannot have what she wants. The important relationship that she has with her father will not be lost because of the frequency of the time that she will spend with her father.”

The Court made interim orders facilitating the relocation, with the father to spend time with the child each alternate weekend with changeovers to occur at a nominated McDonald’s Restaurant.

24 January 2025in Family Law

Failure to Provide Full Disclosure Confirmed as a Ground for Setting Aside Property Consent Orders

Keywords: Consent orders; full and frank disclosure; informed consent; miscarriage of justice; section 79A; property orders; disclosure.

The case of Pearce & Pearce [2016] FamCAFC 14 (11 February 2016) was an appeal brought by the husband against the orders of Justice Dawe (“trial judge”) of the Family Court of Australia made 12 December 2014. The appeal was dismissed by the Court and costs were awarded against the husband.

Background

In July 2005 the husband and wife both signed consent orders to settle property proceedings between them in the Family Court of Australia (“Family Court”). The consent orders provided that the wife receive payment of $185,000 and one property and the husband receive two properties and his share in an unprofitable business.

The consent orders also contained a notation that the husband was negotiating to obtain a 50% share in a company (“E”) and the value of the acquisition if successful would be $200,000. In the parties’ joint application for consent orders, it stated E made a profit of $50,408 in 2004 and there was no expectation of a significant increase in income over the next few years. Around the time of signing the consent orders, the husband was finalising his purchase of a 50% share in E, with the estimated value in fact being $500,000. This was not disclosed to the wife. Further, it transpired that E had earnings of $757,144 and a net profit of $623,000 for the financial year up to 31 January 2005. This was not disclosed to the wife.

The parties did not have any professional valuations completed on their properties and they both agreed upon estimates. Around the time of signing the consent orders, the husband estimated the value of a property “D” at $550,000. However, he also made separate representations when seeking finance that property D was worth $700,000. This was not disclosed to the wife.

The trial judge concluded that the husband failed to disclose significant information concerning the negotiations and acquisition of company E and he failed to disclose that he had made representations that property D was worth $700,000. As a result, the trial judge found there was a miscarriage of justice under section 79A of the Family Law Act 1975. Section 79A allows a court to set aside previous orders where there has been a miscarriage of justice. The trial judge found that had the wife been aware of the information about property D and company E she would have made further inquiries as to their true value. As a result, a miscarriage of justice occurred and the trial judge made an award in the wife’s favour.

The Appeal

Judges Murphy, Aldridge, and Forrest from the Family Court heard the appeal. The husband appealed on 21 grounds. The primary grounds of appeal were that:

the retrospective valuation of the properties was erroneous and any difference in value did not result in a miscarriage of justice;
evidence of the retrospective valuation of company E was carried out by a person lacking expertise;
the value of company E did not amount to a miscarriage of justice and any other decision was an error of discretion, fact and principle; and
there was no miscarriage of justice.

Retrospective Valuation of Properties

The husband claimed that the difference between the values used in 2005 and the retrospective valuation of the properties did not amount to a miscarriage of justice. In the trial proceedings, the trial judge decided that had the wife been aware of the husband’s representations that D property was worth $700,000 and not the claimed $500,000 she would have made further inquiries and this was a miscarriage of justice under section 79A of the Act.

The Court upheld the trial judge’s decision on grounds that the wife’s consent was not fully informed, stating consent orders demand full and frank disclosure.

Company E Shareholdings

The husband claimed the retrospective valuation of company E was unreliable as the accountant who valued the company lacked skill. The Court found that the trial judge’s decision was not about the value of the company in 2005 but the lack of disclosure of the negotiations and proposals for the husband’s acquisition of 50% of the company. This amounted to a miscarriage of justice as the wife is aware of the true circumstances could have made inquiries into the actual value of the company. The Court dismissed this part of the husband’s appeal.

Miscarriage of Justice

The husband claimed there was no miscarriage of justice as he did not have knowledge of the value of the D property nor was he sure about the future income from E company.

In considering miscarriage of justice under section 79A of the Act, the Court stated that a miscarriage of justice comes about because a party’s consent is not free or informed. This can occur where another party fails to disclose relevant information.

The Court considered that based on the evidence, the husband knew of the possibility that the value of the D property was higher than the value used by the wife. In considering the E company, the Court found that the husband knew that it was likely his income from the company would increase significantly around the time he signed the consent orders and he did not disclose this to the wife. As a result, the Court found there was a miscarriage of justice. The Court dismissed the husband’s appeal and awarded costs against the husband.

Conclusion

In this case the husband knew information about a joint property and a business he was negotiating to acquire which would have been relevant if disclosed to the wife about the value of the property and business. Had the wife known about the information she would have made further inquiries revealing a higher value.

A key requirement of the Act in relation to property settlement is that parties provide full and frank disclosure. Full and frank disclosure includes information that would suggest an asset, business, or income is a different value from prior representations. Where full and frank disclosure does not occur it may amount to a miscarriage of justice. Where miscarriage of justice does occur a Court may vary a previous property settlement under section 79A of the Family Law Act 1975 to take into account relevant information that was not disclosed.

24 January 2025in Family Law

Family Court Upholds an Appeal That Children Were Habitually Resident in Finland and Should Be Returned

The case of Commonwealth Central Authority & Cavanaugh [2015] FamCAFC 233 (11 December 2015) was an appeal brought by the Commonwealth Central Authority against the orders of Deputy Chief Justice Faulks (“trial judge”) of the Family Court of Australia.

The trial judge had to determine whether children should be returned to Finland under international child abduction laws. The key question was whether the children were habitually resident in Finland or not. If they were, they would need to be returned to Finland, otherwise, they would remain in Australia. The trial judge found the children were not habitually resident in Finland.

On appeal, the Court overturned the trial judge’s decision and found the children were habitually resident in Finland and should be returned to Finland.

Background

The mother in this matter was a dual citizen of both Australia and Finland. The father was an Australian citizen. They had 3 children together between the ages of 14 and 8. The parties married in 1996 and moved to the United Kingdom and stayed there for 8 years. In 2002 they moved to Finland for two months and then from November 2002 they lived in Australia. On 16 June 2014 the family traveled to Finland to live for a year. In March 2015 they temporarily returned to Australia for a wedding. While in Australia the father and mother separated. The children stayed with the mother. The father took the children’s passports and refused to let the children return to Finland.

Opposing Applications for Child Recovery and Parental Responsibility of the Children

On 31 March 2015, the father filed an application with the Federal Circuit Court of Australia to have the children placed on the Airport Watch List. Further, on 8 April 2015, the father sought a recovery order for the children and had the proceedings transferred to the Family Court of Australia.

Meanwhile, on 3 April 2015, the mother filed proceedings in the Helsinki District Court of Finland to have an order made in her favour for interim sole custody (parental responsibility) of the children.

Return of Children to Finland

Having received the mother’s application for interim sole custody, the Finnish Authorities made a request on 12 May 2015 to the Commonwealth Central Authority for the children to be returned to Finland. The Commonwealth Central Authority brought proceedings against the father. The matter proceeded to trial for determination.

Trial Proceedings

On 6 July 2015, the trial judge considered whether the children should be returned to Finland under The Hague Convention on the Civil Aspects of International Child Abduction (“Hague Child Abduction Convention”). The Hague Child Abduction Convention applies in Australia through the Family Law (Child Abduction Convention) Regulations 1986 (Cth) (“Child Abduction Convention Regulations”).

The primary consideration was regulation 16 of the Child Abduction Convention Regulations. This regulation provides that a return order can be made where the removal or retention of a child was wrongful, the child is 16 years of age, the parent has a right to custody and the child was habitually resident in a Hague Child Abduction Convention country immediately before removal. In his deliberation, the trial judge found the parent’s agreement to remain in Finland for 1 year amounted did not amount to habitual residence. As a result, the return order application failed.

Appellate Proceedings

The Commonwealth Central Authority appealed on three grounds being:

the trial judge did not give sufficient weight to regulation 1A(2)(a) and (b) of the Child Abduction Convention Regulations;
the trial judge gave:
1. too much weight to the absence of a settled common intention to live in Finland for more than 1 year; and
2. too little weight to the settled common intention of the parents to remain in Finland for at least 1 year.
the trial judge failed to take into account all of the circumstances of the parents and children’s ties to Finland.

The Court determined that the primary consideration is whether the parents have a shared common intention that the children live in a particular place. After this, a broad-based inquiry of all other relevant circumstances should be made. The Court determined that the regulations favour a determination of habitual residence as opposed to a finding of no habitual residence. Where there is no finding of habitual residence then no child abduction protection exists under the Child Abduction Convention Regulations.

Based on this information the Court determined the grounds of appeal of the Commonwealth Central Authority as follows:

The trial judge gave too much weight to the absence of a settled common intention for the children to live in Finland. The Court considered that the children were in school in Finland, the mother was employed, the parents had established a residence, the children had relatives in Finland and the mother and father were receiving benefits from the central government including health benefits.
The trial judge made an error in his determination that a common settled intention to live in Finland for 1 year did not amount to habitual residence. A common intention to reside in a country for less than 12 months can amount to habitual residence.
The Court found that there was no evidence that the trial judge ignored the circumstances of the parent’s and children’s ties to Finland. The trial judge made a thorough investigation.

As the Court found the first two grounds of the Appeal proven, it found that the children were habitually resident in Finland. As such regulation 16 of the Child Abduction Convention Regulations applied and the return order for the children to be returned to Finland was granted.

Conclusion

In this case, the parents and children left Australia to live in Finland for a year. They returned to Australia after 9 months for a wedding. After the parents separated while in Australia, the father refused to allow the children to return to Finland. The Finnish Authorities requested the children be returned to Finland under the Hague Child Abduction Convention.

The primary determination was under regulation 16 of the Child Abduction Convention Regulations which requires that children be habitually resident in a country before they can be returned to that country. The primary consideration in answering these questions is whether the parents have or had a shared common intention to live in the country. Having considered this, the secondary consideration includes all other relevant matters that show ties to the country of claimed habitual residence. While a finding of no habitual residence can be made, Courts will prefer a finding that habitual residence does exist between country members to the Hague Child Abduction Convention; otherwise, no child abduction protection may be available.

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Daily Archives: 24 January 2025

Background

Husband’s Health Issues

Trial Judge’s Findings

Grounds of Appeal

Appellate Judgement

Conclusion

Background

The Appeal

Retrospective Valuation of Properties

Company E Shareholdings

Miscarriage of Justice

Conclusion

Background

Opposing Applications for Child Recovery and Parental Responsibility of the Children

Return of Children to Finland

Trial Proceedings

Appellate Proceedings

Conclusion

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