Family Law Archives - Goldman Law

21 January 2025in Family Law

Family Court Confirms the Need for Clear Terms in Property Consent Orders which Particularise Parties’ Intentions

Key Words

Property settlement; consent orders; interpreting consent orders; construction of consent orders; consent orders evincing an intention; interpreting a contract.

The case of Dace & The Estate of the Late A Dace [2015] FamCAFC 215 (12 November 2015) was a Family Court of Australia (“FCA”) appeal heard by Judge May. In this case, the Appellant Husband appealed to the FCA asking it to reverse an earlier decision made by the Federal Circuit Court of Australia (“FCC”).

Background

The Husband and Wife separated and on 23 December 2010, the Wife commenced proceedings for property settlement orders in the FCC. The parties came to an agreement for the settlement of property by way of consent orders which were made on 26 September 2011.

The parties agreed that their net assets which included a number of parcels of land came to $2,000,000. Out of this, the Wife would be entitled to 48% being $960,000 and the Husband 52% being $1,040,000. The Wife was to receive an initial payment of $75,000 from the Husband and the remaining settlement was to be paid to the Wife upon sale of the various parcels of land. If the land sold for less than expected the Husband was to make up any shortfall so the Wife would receive $960,000.

In late 2011 the Wife passed away and thereafter the property settlement was to be paid to the Wife’s Estate. The Estate was paid various sums of money but was left short by $245,198. On 27 October 2013, the Estate started enforcement proceedings against the Husband to recover the outstanding balance.

The Husband opposed the enforcement application on the grounds that he had incurred costs for outgoings relating to the land. The Husband argued these costs should be split between himself and the Estate.

Evincing an Intention against Joint Liability for Costs

The Court considered the case of Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 where it was found that a right of contrition would normally apply so that parties would be jointly liable for costs. However, in reviewing the parties’ consent orders the Court found that while they did not explicitly say who would be liable for costs they did evince an intention that the Husband was liable.

In the case of Coulls v, Bagot’s Executor & Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460 the Court found that where parties’ evince an intention to change the default position of joint liabilities it should be interpreted as such.

The court stated the intention to change the default joint liability in the consent orders could be found by:

The use of the term “net assets” which signified that the settlement amount was after the payment of liabilities.
The consent orders stated the Wife was to receive “assets” but not “assets and liabilities”.
The condition that if the land sold for less than expected the Wife would still receive the same settlement amount.

The Judge found for the Estate and the Husband was ordered to pay the outstanding balance.

Appeal

The Husband appealed to the FCA stating that the FCC Judge had made orders that were not just and equitable, had made a mistake as to the facts and law, and had applied the wrong legal principles.

The Husband argued that the consent orders did not say he was liable for the costs of outgoings.

Interpreting Consent Orders

The Appellate Court looked at the case of I Limited & Chester (2010) FLC 93-456 which considered authorities dealing with consent orders interpretation. The authorities stated that consent orders should be interpreted by considering the surrounding circumstances but not the intentions of the parties. The Appellate Court then considered the High Court case of Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors [2004] HCA 52; (2004) 219 CLR 165 as authority that the terms of a contractual document are interpreted by “what a reasonable person would have understood them to mean”.

Appellate Court’s Findings

The Appellate Court agreed with the FCC decision. The correct and proper interpretation of the consent orders showed an intention by the parties that the Wife would not be liable for costs.

Conclusion

In this case, the Husband and Wife entered into consent orders for the division of property between them. Part of the settlement was to be paid after the sale of land. The consent orders did not explicitly say who was liable for costs relating to the land or what should happen if the land took longer to sell than expected. The Husband incurred considerable costs relating to the land before all of the lands were sold.

The court has interpreted the consent orders found they evinced an intention that the Husband was liable for costs. This case shows the importance of ensuring consent orders are precise, clear, considering contingencies, and particularise a party’s full intentions.

21 January 2025in Family Law

Mother’s Appeal Against the Return of Her Child to Norway Dismissed Despite her Anxiety and Depression

Key Words

Children – Hague Convention – grave risk – mother’s anxiety – depression – abduction

Introduction

In Hilton & Department of Family and Community Services [2015] FamCAFC 223 (26 November 2015), the Full Court heard the mother’s appeal against an order that was made earlier by McClelland J to return her son to Norway pursuant to the Family Law (Child Abduction Convention) Regulations 1986. At first instance, the mother argued that if her son was returned to Norway, he would be exposed to a great risk of physical harm and psychological harm due to her anxiety and depression which was supported by psychological reports that showed her treatment of depression and suicidal thoughts.

Although McClelland J was satisfied that there was a risk of psychological harm to the child as a result of the mother’s mental illness, he was not satisfied that the risk was sufficiently grave enough to invoke a regulation 16(3)(b) defence to the return of the child and as such, an order to return the child was made.

The reasoning at First Instance

It was found that although the mother was depressed, she did not exhibit symptoms of being acutely suicidal. Although she suffered from thoughts about death every day, she did not have a serious psychotic illness or was clinically depressed.

The reasoning at the Appeal

The Full Court stated that McClelland J made an error on the summary of the law. His Honour used the case of Director-General, Department of Families, Youth and Community Care & Bennett in order to conclude that regulation 16(3)(b) was to be narrowly construed. As such, the exception that a child does not need to be returned to a country that Australia has entered into the Child Abduction Convention with can only be used if a ‘grave risk’ of harm to the child is present.

However, the ‘narrow construction’ of this exception was rejected by the High Court in DP v Commonwealth Central Authority [2001] HCA 39; (2001) 206 LR 401. Although there must be ‘grave risk’ associated with the defence listed in regulation 16(3)(b), the assessment of this requires some prediction of what may happen if the child was returned. In this prediction, certainty is not required. This means that the risk that is relevant is not only limited to harm that will actually occur, but also to a risk that the return would expose the child. Despite the prediction, the Court will still need clear and compelling evidence that this is likely to happen. Once a risk is found to exist, the risk must be assessed as to whether it warrants the qualitative description ‘grave’.

In the appeal, the Full Court took into account whether the mother’s evidence had been excluded as a result of a ‘narrow construction’ of regulation 16(3)(b). In doing so, it heard the argument that McClelland J failed to consider the risk that would be subjected to the child if the mother were to take her own life. Although the risk was slight, the consequences for the child would be grave. However, the Court did not find evidence to support that this was remotely possible. As such, McClelland J made no error in failing to consider what was merely speculation. Furthermore, His Honour took into consideration the fact that the mother would continue to have access to appropriate health services in Norway to treat her depression.

The decision of the Full Court

As such, the Full Court held that McClelland J was correct in his finding that the mother had failed to establish that there was a grave risk of psychological harm to the child on a return to Norway, which was entirely supported by evidence.

Although His Honour incorrectly referred to authorities that supported his approach, the Full Court was not satisfied that he followed it. As a result, the appeal was subsequently dismissed.

21 January 2025in Family Law

Court Considers Late Lodgement of Tax Returns Bars Departure from Child Support Obligations

Key Words: Child Support; Child Support (Assessment) Act 1989; administrative assessment; departure order; child support liability; failure to lodge tax returns; deemed income

The case of Dalton & Munro & Anor [2015] FCCA 2945 (24 June 2015) was a Federal Circuit Court of Australia case heard by Judge Scarlett. In this case, the Applicant Father asked the Court for a departure order to reduce the Child Support Agency’s administrative assessment of his child support liability.

As the Applicant had not lodged 3 years’ worth of tax returns, the administrative assessment was based on a deemed (estimated) income. After the Applicant lodged his tax returns it was determined that his taxable income was lower than the deemed income used to calculate the administrative assessment. Had the Applicant lodged his tax returns on time his child support liability would have been less. For the reasons that follow, the Court denied the Applicant’s request for a reduction in his child support liability.

Background

The Applicant’s child support liability commenced in 1997 at the time of the birth of the Applicant’s son. The son was in the mother’s care and the Applicant was assessed to pay child support. In September 2010 the mother contacted the Child Support Agency and asked them to commence collection of child support payments on her behalf.

The Applicant claimed that he was never contacted by the Child Support Agency and was unaware of the requirement to pay child support. As the Applicant did not lodge tax returns for the financial years 2011, 2012, and 2013 the Child Support Agency under section 58 of the Child Support Actcalculated a deemed income for the administrative assessment based on the Applicant’s last available tax assessment.

Child Support Commenced Proceedings

As the Child Support Agency was unable to collect child support from the Applicant for the period 10 October 2012 to 19 June 2014 a debt accumulated for $27,394.53. After continued attempts to contact the Applicant without success, the Child Support Agency commenced court proceedings to enforce payment of the debt owed.

Application Seeking Departure Order

After the Applicant received notice of the Child Support Agency’s enforcement action, the Applicant submitted an Application to the Court seeking a stay of the Child Support Agency’s enforcement action and a departure order under Part 6A of the Child Support Actto retrospectively reduce the child support assessment for the period 10 October 2012 to 19 June 2014.

In his Application, the Applicant claimed that he was not aware the Child Support Agency was seeking child support payments. Further, the Applicant explained that he had not submitted his tax returns because his bookkeeper had left and he had difficulty finding a suitable replacement.

Upon submitting his tax returns for the 2011, 2012, and 2013 financial years the Applicant’s taxable income was less than the deemed income that was used for his administrative assessment. Had the Applicant submitted his tax returns in a timely manner his administrative assessment would have been less?

Court’s Refusal to Depart from the Administrative Assessment

The Court refused the Applicant’s application to reduce the Child Support Agency’s administrative assessment. When a court considers a departure order from an administrative assessment it must be satisfied under section 117 of the Child Support Act that there are grounds to do so. These grounds include consideration of whether either parent’s capacity to provide financial support is significantly reduced because of:

(i) their duty to maintain any other child or another person;

(ii) their duty to maintain any other child or another person that has special needs; or

(iii) their need to support themselves.

The Applicant did not provide any evidence that would meet the section 117 test for a departure order. Further, consideration of the mother’s circumstance revealed that she was only receiving a disability support pension and that she had been deprived of financial support with raising the son by the Applicant not paying child support.

The Court also considered the Applicant’s reason for not lodging his tax returns and decided the reason was inadequate. Judge Scarlett cited the case of Registrar & Rawlings [2013] FCCA 730 as grounds that “repeated and continuing failure to lodge income tax returns will lead to adverse consequences, for which parties can expect to receive little sympathy from the Court”. Further Judge Scarlett cited the case of Harcherl & Berrios [2010] FMCA fam 668 stating that if a payer of child support does not lodge tax returns and comes to the court without reasonable excuse the payer would not be granted relief.

Judge Scarlett also considered the timing of the Applicant’s application for a departure order. As the application for a departure order was only made after the Child Support Agency’s commencement of enforcement proceedings it was considered “highly undesirable” to allow the departure order citing the case of Bauer & Becker [2009] FMCA fam 480.

Conclusion

In this case, the Applicant’s father was unable to provide evidence that would have allowed the Court to grant a departure order from his child support administrative assessment. There was evidence to the contrary that to do so would put the mother in further hardship.

The Court also considered that had the Applicant lodged his tax return in a timely manner he could have avoided the deemed (estimated) rate of child support and the higher debt that accumulated because of the deemed rate. The Court considered that as the Applicant did not provide reasonable grounds for late lodgment of 3 years’ worth of tax return the Applicant would not be granted any relief.

21 January 2025in Family Law

Counseling Sessions Revealing Possible Child Abuse and Family Violence Deemed Admissible Evidence By Family Court

The case of Douglas & Mauldon [2015] FCCA 2217 (17 August 2015) was a Federal Circuit Court of Australia case about parenting matters between the Applicant wife and Respondent husband. The case involved objections to documents requested by way of subpoena. The subpoena requested information from The Benevolent Society about counselling services that they provided to the wife and children. Both The Benevolent Society and the wife objected to the documents and information being made available to the husband.

Relative Law

Family Law Act 1975 (Cth) (“Act”)

Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”)

Evidence Act 1995 (NSW) (“NSW Evidence Act”)

Evidence Act 1995 (Cth) (“CTH Evidence Act”)

Background

The wife was seeking sole parental responsibility for the couple’s two children and for the children to have no contact with the husband. The husband had been convicted of criminal offences and jailed. These offences included crimes against children below the age of 16 years. Some of the offences were perpetrated against the couple’s children. As a result of the husband’s crimes, the Department of Immigration revoked his residency visa. When the husband was released from jail he was placed into immigration detention.

Subpoena of Information

An Independent Children’s Lawyer (“ICL”) was assigned to represent the children’s best interests under section 68L of the Family Law Act 1975 (Cth) (the “Act”). The subpoena originated from the ICL and was directed towards The Benevolent Society. The subpoena requested information about counselling services that the Benevolent Society provided to the wife and children and included a request for information about what was discussed during counselling.

Objections to Subpoena

Both the wife and The Benevolent Society had objected to the subpoena. The Benevolent Society objected on the grounds that the counselling for the wife and children was made in confidence and was for child welfare services. The wife objected on the grounds that the documents produced were likely to contain allegations made against the husband which were made in confidence. The wife asked that the documents not be shown to the husband or the husband’s legal representative as this would affect the well-being of the wife and children.

Subpoena Rules and Objections

In considering the objections the Court looked at the Federal Circuit Court Rules (“FCC Rules”), Part 15A relating to subpoenas. Rule 15A.13(2) provides that a person must object to a subpoena under rule 15A.14 by the date the subpoenaed information is due. The objections to the ICL’s subpoena were made within the time limit. The Court stated it could set aside a subpoena or part of a subpoena under rule 15A.09 subject to the rules of evidence and due process.

The Court noted that there were no grounds for a claim of privilege under section 126A of the NSW Evidence Act for professional confidential relationship privilege. The Court then looked at the duties owed by the parties to make the information requested by subpoena available to the Court.

Admissibility of Evidence and Disclosure Requirements

The Court was concerned that the wife and The Benevolent Society were attempting to withhold information that revealed allegations of child abuse or family violence. These allegations could meet the definition of the section 4 interpretation of child abuse and section 4AB definition of family violence under the Act. Following on from this are sections 67Z and 67BA of the Act which apply if an interested person makes allegations of child abuse. In such a case the interested person must file a Notice of Risk to the Court under Part 22A of the FCC Rules. In such a case the Court must abide by section 67ZBB of the Act. This section requires the Court to consider making interim or procedural orders to enable evidence about allegations of abuse or family violence to be gathered and to protect the child.

The Court stated that the wife has obligations under the FCC Rules, the Act and common law to provide evidence about allegations of child abuse or family violence. The wife’s objection to the production of the subpoenaed information was contrary to her obligations.

The Court then looked at the confidentiality protection provisions for family counselling available under section 10D of the Act. The Court found that the counselling provided by The Benevolent Society did not meet the definition of family counselling under the Act.

The Court considered that the information subject to the subpoena was directly relevant to the question of the risk of child abuse or family violence. It was therefore relevant evidence under section 55(1) of the Commonwealth’s Evidence Act and was admissible to the proceeding.

Based on the above considerations the Court found that the subpoenaed information should be made available to all parties involved in the case. However, the objections as far as the information that would disclose the location of the wife or children or any other identifying information was upheld. As such the Court allowed the redaction of any identifying information before the husband could view The Benevolent Societies’ documents.

Conclusion

This case shows that parties may subpoena relevant evidence which relates to either child abuse or family violence. Unless subpoenaed information is covered by legal professional privilege, or there is an exception under applicable legislation (including the Act), the subpoenaed information is admissible. This can include confidential information such as in this case relating to counselling services and what was discussed during counselling.

21 January 2025in Family Law

Family Court Eases Injunction Against Wife Using Husband’s Business Funds

Introduction

The case of Cao & Hong [2015] Fam CA 884 (22 October 2015) was heard by Forrest J regarding an application by the wife to various injunctions that were made by Judge Coates. The parties’ assets totaled at least $200 million, their wealth was being held from numerous structures in Australia and overseas. The wife managed the Australian investments while the husband managed their assets overseas.

Issue

In the current matter, the wife sought to vary the existing restraints because every payment that was made in the management of the Australian companies over $1000 required consent from the husband.

Reasoning

Evidence was accepted to the effect that the wife had considerable difficulty getting the husband to even consider her requests, let alone pay for her personal expenses. Furthermore, the Australian companies had regular monthly payments in the ordinary course of business expenses that well exceeded the $1000 limit.

Counsel for the husband submitted that the wife’s entitlement to access the funds was to be determined pursuant to the spousal maintenance provisions of the Family Law Act (Cth) (‘the Act’). The main issue was that the wife did not meet the threshold of establishing that she was unable to support herself adequately and that she was not truthful when she deposed to not being able to meet her household expenses without reasonable access to the Australian companies’ accounts.

The power to grant the injunctions that Judge Coates put in place is sourced from section 114(3) of the Act and is granted on the premise to protect the property of the parties, pending finalisation of the substantive property adjustment proceedings between the parties.

Conclusion

In considering whether the injunction is ‘just or convenient’, Forrest J did not consider it as a case where the wife is seeking orders that the husband pays her spousal maintenance or the access to funds to pay her reasonable legal fees. Forrest J ultimately held that the injunctions that were imposed by Judge Coates imposed consequences upon the wife that were neither just nor convenient.

As such, Forrest J varied the injunction to enable the wife to withdraw funds from any personal accounts or accounts of the Australian companies in excess of $10,000 as opposed to the much smaller sum of $1000 without the consent of the other party. Exceptions were also put in place where the wife is allowed to withdraw personal and household expenses of up to $15,000 per month and for legal fees with a limit of $200,000.

21 January 2025in Family Law

Appeal Court Confirms Family Reports Do Not Need To Be Written By A “Family Consultant”

The case of Mullaly & Beddoe [2015] FamCA 891 (23 October 2015) was a Family Court of Australia application in a case in relation to parenting and property matters between a separated husband and wife.

The wife wanted to relocate with the parties’ child to the United States of America. The husband asked the Court to issue an order restraining the wife from taking the child out of Australia.

During the initial proceedings, Judge Jarrett made orders that the parties obtain a Family Report to assist the Court in evaluating the circumstances. The Family Report was completed by a psychologist who was elected by the parties. The Family Report recommended that the child remains in Australia.

The wife disagreed with the Family Report and submitted an Application in a Case (an application in relation to an existing family law case) to have the Family Report struck out or that another person is engaged to prepare a further Family Report. This proceeding was before Judge Hogan and determined whether the Family Report should be struck out and a further report produced.

Background

The husband and wife married in 2008 and separated permanently on 27 January 2010. They had a child together in 2007. After separation, the child lived with the wife but had contact with the husband 5 nights each fortnight.

The Family Report

The Family Report was completed by a qualified psychologist (“Ms. E”). Ms. E interviewed the wife, husband, and child. Having done this she produced a Family Report making recommendations that

the current parenting arrangements remain in place. Ms. E concluded that it was in the child’s best interest to maintain a relationship with both parents and this would be best achieved if the child remained in Australia.

The wife disagreed and asked the Court to strike out Ms. E’s Family Report. Instead, the wife argued that a second psychologist (“Ms. F”) be granted leave by the Court to produce a further Family Report under rule 15.52 of the Family Law Rules 2004. Rule 15.52 provides rules about applications for the use of expert witnesses.

In objecting to Ms. E’s Family Report the wife put forward the following objections:

1. Ms. E was not a Family Consultant under regulation 7 of the Family Law Regulations 1984;

2. Ms. E failed to address questions put to her by the parties and failed to set out the findings that she relied on in the Family Report;

3. Ms. E’s opinions were not based on specialized knowledge; and

4. Ms. E had stepped outside of her area of expertise and taken irrelevant considerations into account and not considered relevant matters.

No Requirement that Family Consultants Produce Family Reports

The wife’s counsel argued that Ms. E was not appointed as a Family Consultant under regulation 7 of the Family Law Regulations. The wife’s counsel then argued that as a result Ms. E could not perform the duties of a Family Consultant as defined by section 11A of the Family Law Act 1975 (the “Act”) or produce Family Reports under section 62G of the Act.

Judge Hogan considered these arguments and considered section 11B of the Act which states a family consultant is a person:

(a) appointed under section 38N of the Act;

(b) appointed in relation to the Federal Circuit Court of Australia under the Federal Circuit Court of Australia Act 1999;

(d) appointed to a Family Court of a State under state law.

While section 11B of the Act would apply in regard to a Family Consultant, Judge Hogan found that there was no order made that the parties engage a Family Consultant to produce the Family Report. Neither was an order made under section 11F of the Act requiring parties to attend an appointment with a Family Consultant. Finally, no order was made under section 62G of the Act for a report to be produced by a Family Consultant.

Judge Hogan found that there was no requirement under the Act that a Family Report is produced by a Family Consultant. The parties elected the appointment of a single expert witness under rule 15.44 of the Family Law Rules to help them resolve a substantial issue in a case and prepare a Family Report. Just because a party did not like the outcome of the Family Report was not grounds to dismiss the expert witness nor the evidence adduced by the expert witness.

The wife’s application in a case relating to the Family Report was dismissed.

21 January 2025in Family Law

Family Law Property Decision Does Not Need To Express Mention It Provides For A “Just And Equitable” Distribution

The case of Hearne v Hearne [2015] FamCAFC 178 (16 September 2015) was an appeal by the husband to the Full Court of the Family Court of Australia from a decision by Judge Harman of the Federal Circuit Court of Australia.

The matter involved the settlement of property after a husband and wife permanently separated. The Trial Judge’s decision was that the property is divided with 65% going to the wife and 35% going to the husband.

The ground of appeal by the husband considered here was that the Trial Judge had not stated that it was just and equitable to make an order altering property interests under section 79(2) of the Family Law Act 1975 (Cth) (“the Act”).

Background

At the time of the hearing, the appellant-husband and respondent-wife were both aged 44 years of age. They had commenced their relationship in 1994 and began cohabitating in 1996. They married in 1997 and separated permanently in 2010. There were three children of the relationship born in 1999, 2001, and 2003.

The Parties’ Property and Assets

The Trial Judge found that the parties’ initial pool of property and assets was $922,548. In addition to this the wife’s superannuation was added and a mortgage over the husband’s property was subtracted. Add backs for the wife’s legal fees and the sale of some of the husband’s assets were included in the property pool.

The Trial Judge then looked at the contributions the parties brought with them to the relationship.

The husband had nominal contributions whereas the wife had $50,000 in savings, superannuation, accumulated service with her employer, and shares.

In addition to the contributions brought to the relationship, the wife asked the Court for a 10% adjustment in her favour for a redundancy payment received during the relationship from service accumulated to the employer before the parties’ relationship, the provision of care for the children during the relationship, income contributions and for the maternal grandmother providing home care of the children.

In making the property division Order the Trial Judge found that there were matters to be taken into account for spousal maintenance under section 75(2) of the Act. However, the wife and husband’s factors balanced each other out.

This meant that the primary consideration before the Court was whether there should be an alteration of property interests under section 79 of the Act.

Requirements for Altering Property Interests under Section 79 of the Family Law Act 1975

Section 79(2) of the Act states that a court must not make an order for the alteration of property interests unless it is just and equitable to do so.

The husband’s case was that the Trial Judge had a duty to directly express whether the property division was just and equitable and this was not done. The husband put forward that this rule was found in the High Court case of Stanford v Stanford (2012) 247 CLR 108 (“Stanford”).

In considering the husband’s argument the Full Court found that the principles in Stanford created three propositions, being that a court:

1. must identify the existing legal and equitable property interests of the parties;

2. make a decision under section 79 of the Act as to whether the parties’ property rights and interests should be altered; and

3. in determining whether a decision is just and equitable, the Court need not depend only on those factors that a court must consider under section 79(4) of the Act.

In considering Stanford the Court determined that a judge must have a principled reason for interfering in the parties’ property interests. The Court agreed with the decision in Chapman v Champman (2014) FLC 93-592 at 22 that a principled reason under section 79(2) of the Act could be inferred from the issues joined and not joined between the parties. The Court determined that the Trial Judge’s principled reason, in this case, could be found by “necessary implication from the totality of the trial judge’s reasons for judgment”. As such the Husband’s ground of appeal was dismissed.

Conclusion

The Family Law Act 1975 requires that when a court alters property interests under section 79 of the Act a court has a duty under section 79(2) to be satisfied that it is just and equitable to do so. To determine this a court has a duty to identify the property interests and rights of the parties.

Section 79(4) specifically requires a court to identify and take into account certain contributions and matters affecting the parties. But matters and contributions not covered by section 79(4) can also be taken into account.

Importantly, this case rejected the notion that section 79(2) of the Act created a specific requirement for orders directly mentioning section 79(2) of the Act to be included in a court’s orders. However, a threshold of principled reason which shows it is just and equitable to alter property interest is required from the entirety of a court’s reasoning. The threshold of what constitutes principled reason was determined in Stanford to include relevant section 79(4) matters in the Act and other relevant matters put forward before a court by the parties.

20 January 2025in Family Law

Court Determines Validity of De Facto Cohabitation Agreement Where No Certificate of Independent Legal Advice Produced

The case of Franklin v Ennis [2015] FCCA 2099 (6 August 2015) was an application to the Federal Circuit Court of Australia for settlement of financial matters between an estranged de facto couple. The Respondent claimed that the couple had entered into a cohabitation agreement under state legislation in 1997. She claimed this estopped property settlement matters under the agreement from being heard by the Court.

The Court had to determine if the cohabitation agreement was valid. If the agreement was valid, the court then had to determine if it would preclude the Applicant from bringing de facto property settlement proceedings under Part VIIIAB of the Family Law Act 1975 (Cth) (the “Act”).

Background

At the time of the hearing, the male Applicant was aged 70 years of age. The female Respondent was aged 61 years of age. They had commenced their de facto relationship together in 1995. At this time the Applicant moved into the Respondent’s home and remained there for the duration of the relationship. The couple separated sometime between October and December 2013.

The Respondent claimed that in May 1997 the couple had entered into a cohabitation agreement under the Property (Relationships) Act 1984 (NSW). The effect of the terms in the agreement was that upon separation all property in each party’s name is retained by that party and all joint assets are divided equally between the parties.

While the Applicant submitted his signed cohabitation agreement to the Court the Respondent could not find her signed copy of the agreement.

De Facto Relationships and the Family Law Act 1975

Prior to 1 March 2009 de facto relationships involving disputes over property and financial matters were governed by state and territory legislation. By a referral of powers, most states and territories referred de facto powers to the Commonwealth Government (the only not referring state is now Western Australia). The Commonwealth Government passed the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008. This allowed de facto disputes involving property and financial matters to be resolved under the Act.

Under Schedule 1, section 88 of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 de facto agreements made before 1 March 2009 under a preserved law of a state become Part VIIIAB financial agreements under the Act. However, any agreement must meet the requirements of the preserved state legislation.

Was the Cohabitation Agreement Valid?

As the cohabitation agreement was made in 1997 it had to meet the requirements of section 47 of the Property (Relationships) Act 1984 (NSW). If it was valid under this legislation the agreement would become a section 90UC agreement under the Act. This would prevent the Court from making an order against the terms of the agreement.

Section 47(1) of the Property (Relationships) Act 1984 (NSW) requires that an agreement:

be in writing;
signed by the party against whom the agreement is being enforced; and
that the party who seeks the protection of the agreement has a valid certificate of independent legal advice signed by a solicitor.

The Respondent was able to provide through the Applicant a written and signed copy of the cohabitation agreement. However, the Respondent could not produce a certificate of independent legal advice.

To find the agreement enforceable the Court had to be satisfied with the Respondent’s oral evidence that she had a certificate of independent legal advice. However, inconsistencies were found in the Respondent’s affidavits referring to her alleged copy of the cohabitation agreement. The Court was not satisfied that the Respondent’s certificate of independent legal advice actually existed. As a result, the cohabitation agreement was not binding on the Parties.

Conclusion

In this case the Applicant and Respondent were in a de facto relationship. The Respondent attempted to stop the Applicant from bringing a property settlement claim against her by relying on a cohabitation agreement.

The cohabitation agreement was entered into under state legislation before de facto relationships were governed by the Family Law Act 1975 (Cth). As a result, the agreement had to meet state legislation requirements. While the Respondent met most requirements including providing a written agreement signed by the other party, she could not provide a certificate of independent legal advice. The Court was not satisfied that one existed and as a result, the agreement was unenforceable.

This case shows the importance of ensuring financial agreements meet strict legislative requirements. It shows that those entering into financial agreements must be able to fulfill the evidentiary burden of proving that a valid agreement exists. This requirement continues for the life of an agreement.

20 January 2025in Family Law

Family Court Lifts Injunction Allowing Husband To Use Law Firm That Lawyer From Wife’s Firm Had Joined

In Osferatu [2015] FamCAFC 177 (15 September 2015), the husband appealed an injunction that restrained Barkus Doolan from acting for him, where a solicitor (“Mr. F”) joined that firm having previously worked for the wife’s solicitors, Watts McCray.

It was common ground that Mr. F did not have any direct dealings with the wife whilst he was a member of the firm instructed by her. Furthermore, upon joining Barksu Doolan, Mr. F had made an undertaking to the wife that he would not speak, disclose or convey any information he may have had concerning the wife to anyone at Barkus Doolan nor involve himself in the wife’s matter.

In February 2015, the husband filed an Application in a Case applying for the case to be relisted. An e-mail from the wife has stated that she had ‘no issue’ with the husband re-engaging Barkus Doolan as his solicitor. However, upon doing so, the wife objected and filed an Application in a Case seeking an injunction restraining the firm from acting on the husband’s behalf.

Court’s Reasoning

The court stated that there are three established categories in which a solicitor may be restrained from acting against their client or former client:

Breach of confidence
Breach of fiduciary duty
Inherent jurisdiction of a court over its officers and to control its process.

The category that concerned the court, in this case, was number one, ‘breach of confidence,’ specifically the risk of the misuse of confidential information.

Frederico J in Thevenaz & Thevenaz (1986) FLC 91-748 explained the manner in which a client’s confidential information is to be protected in family law proceedings which were adopted by the court:

‘A practitioner who wishes to cease acting for one party and continue to act for the other party will be restrained from doing so by the court if there is any evidence that confidential communications have been made to him by the party for whom he is ceasing to act. In such a case the court will not weigh conflicting evidence as to confidence. It will act upon the evidence of the client who swears that he has made the confidential communication’.

Furthermore, Lindenmayer J in Stewart & Stewart (unreported, Family Court of Australia, Lindenmayer J, 17 April 1997) said:

‘… All that is necessary is that the wife swears that she has conveyed confidential information to the solicitors and that she believes, not unreasonably, that that information may be used against her, or at least to her disadvantage, in these current proceedings…’

The three stages that need to be considered, as Goldberg J said in PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905:

Whether the firm is in possession of information which is confidential to the former client;
Whether the information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client;
Whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.

The burden of establishing the first two propositions is upon the former client to establish.

The third proposition is for the firm to establish once the first two propositions have been established. As such the law requires the applicant, the wife, to seek to restrain a solicitor from acting to establish the confidential information and risk of the misuse of that information in the circumstances.

In the current scenario, the wife never spoke to or provided instructions to Mr. F. Furthermore, there was no capable evidence to support the trial judge’s findings that Mr. F engaged in the detailed discussion of the wife’s case. Mr. F left Watts McCray in February 2012. The wife should have identified the nature of the information received or likely to have been received by Mr. F between 24 June 2011 and February 2012 that is not, or could now be, relevant to current proceedings. The wife did not do so but merely stated that any information at all received by Mr. F could have been relevant.

As such, it was held that the trial judge erred in not taking such matters into account. Furthermore, the court below erred for giving no reasons as to why the wife’s email waiving the objection did not carry any significant weight.

The appeal was allowed, the injunction by the wife was set aside and the wife was ordered to pay the husband’s cost.

20 January 2025in Family Law

Full Court Increases Wife’s Contribution During Marriage as Trial Judge Overstated Her Earning Capacity During Marriage

Keywords:

Property; contributions; contribution assessment; section 75(2) adjustment; adjustment from nil to 7.5 per cent;

Abstract:

In Wah & Golay [2016] FamCAFC 67 (7 April 2016) the Full Court of the Family Court heard the wife’s appeal against the trial judge’s decision concerning a $3.9 million pool and an 8 year marriage. Importantly, the husband had supported the wife for a further three years after separation through paying outgoings for the former matrimonial home in which the wife continued to reside.

Article:

At first instance, Rees J assessed property contributions for the purposes of the Family Law Act 1975 (the “Act”) as 87.5/ 12.5 in the husband’s favour. According to the court at first instance, the wife’s contributions amounted to “not more than $280,000”, while the husband’s contributions were $2.4 million. Rees J made no adjustment to this percentage split applying section 75(2) of the Act (which lists a number of different factors that the court can take into account in determining both eligibility for spousal maintenance as well as in distribution of property proceedings), holding that the wife’s earning capacity was unaffected by the relationship. In determining contributions to a relationship’s pool of property in order to arrive at a ultimate settlement, section 79(4) allows the Court to take into account the factors in section 75(2) of the Act.

The trial judge took into account that the husband was a self-funded retiree and 71 years of age; as well as that the wife was 59 years old, her English was very poor, and that she was unlikely to obtain paid employment.

On appeal, Murphy J (with whom Ryan and Aldridge JJ agreed) commented that:

[26] The wife had, as her Honour found, little if any prospect of gainful employment. The fact that the husband was 71 at trial, and the wife 59, was very important in the consideration of that comparison. As an instance of that, the section requires, in particular, a consideration of the respective ‘commitments of each of the parties … necessary to enable’ … them to support themselves. While, in the context of a broad assessment referrable to s 79(4)(e), that may not require a dollar-for- dollar comparison assessment as might be required, for example, in a spouse maintenance case, I am unable to see where her Honour has given any consideration to this important requirement stipulated by s 75(2)(d).

[27] As a related matter, it was submitted before her Honour, it seems uncontroversially, that the wife was in receipt of sickness benefit at the date of trial, a consideration the specific subject of s 75(2)(f). Again, I am unable to see where her Honour has considered that factor. Separate from the requirement to consider, where relevant, the issue of capacity to earn income, s 75(2)(k) obliged her Honour to consider, if relevant, the ‘duration of the marriage and the extent to which it has affected the earning capacity of the other party’.

Further, at paragraph [30] of the appeal judgment:

“While, of course, the wife was some 10 years older than she was at the commencement of the relationship and while the wife was, as revealed in the medical evidence before her Honour, suffering from health issues, I am respectfully unable to see how her Honour’s finding that the wife’s earning capacity was unaffected by the relationship was open to her on the evidence before her.”[31] In a similar vein, there can be no doubt that the parties enjoyed a very good standard of living during their relationship; much of that, of course, emanated from the husband’s assets with which he entered the relationship, including what was able to be purchased from his substantial cash reserves and the income derived from them and otherwise by the husband. However, the contrast between that standard of living and the comparative standards of living reasonably open to the parties post orders is nevertheless a relevant matter, and one which, in my view, was not at all considered by her Honour.”

Further, in deciding to make an adjustment, applying section 79(4) of the Act, to the contribution made by the wife during the marriage, Murphy J commented that:

“The respective asset positions of the parties consequent upon an 87.5 per cent/12.5 per cent assessment of contributions [results in] a very significant disparity between the parties. The husband funds his retirement from his assets and resources which remain considerable. There is no suggestion that there will be any change to that in the future. They are the assets, resources and income of a man who is now 72. He lives in a $1.2 million home, has available to him a valuable piece of real property that he uses as a holiday home, and owns a unit subject to a debt, from which he receives income.

… I consider that an adjustment of 7.5 per cent is appropriate. That equates to approximately $294,000. That adjustment would see the wife receiving 20 per cent of the parties’ interests in property and superannuation, or in dollar terms, approximately $786,000. The husband will need to source and pay approximately $663,000.

.. The disparity between the parties’ respective positions of 60 per cent represents, in dollar terms, about $2.35 million. The husband will retain his three pieces of real property, his three cars, his $50,000 worth of furniture, and have cash and superannuation – which is effectively cash – of slightly more than $1 million. The wife is currently in receipt of sickness benefit, has not worked remuneratively for some years and, in all likelihood, will not in the future. She has a number of health issues. It is not contended that the husband has any such issues.

… I consider that the relationship has had a detrimental impact on her capacity to earn income. Her current standard of living is markedly poorer than the husband’s and markedly poorer than that enjoyed by the parties during their relationship. All but about $18,000 of the property retained by the wife is in cash. Thus, from an amount of about $750,000 in cash that she will receive, she will need to re-house and otherwise support herself in the absence of remunerative income. In that respect, I note her age by comparison to the husband’s age.

Accordingly, the appeal court made the adjustment to the property settlement, a result advantageous to the wife.

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Family Law

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Evincing an Intention against Joint Liability for Costs

Appeal

Interpreting Consent Orders

Appellate Court’s Findings

Conclusion

Introduction

The reasoning at First Instance

The reasoning at the Appeal

The decision of the Full Court

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Child Support Commenced Proceedings

Application Seeking Departure Order

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Issue

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The Family Report

No Requirement that Family Consultants Produce Family Reports

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The Parties’ Property and Assets

Requirements for Altering Property Interests under Section 79 of the Family Law Act 1975

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