Keywords: children; sick; cancer; brain tumour; medical treatment; medical intervention; alternative therapies; naturopathy; parental power; parent’s wishes; parens patriae; best interests of a child; Marion’s case; good prospect of long term cure; palliative care; airport watch list.

The highly publicised case of Director Clinical Services, Child & Adolescent Health Services and Kisko & Anor [2016] FCWA 19 (24 March 2016) was heard in the Family Court of Western Australia.

The matter was heard by Chief Judge Thackray on an urgent basis, and revolved around a sick child (“Oshin”) who had a brain tumour.  With standard medical intervention the child had a 50% chance of survival after 5 years.  Without treatment it was certain that he would die in a matter of months. The parents, however, objected to treatment based on an underlying belief that the child would suffer.  The Princess Margaret Hospital believed it was in the best interests of the child that he have the standard treatment and applied to the Court to make this order.

Background

5 year old Oshin became ill sometime in November 2015.  The parents took Oshin to the doctors on several occasions and were referred to the Princess Margaret Hospital (“PMH”).  Oshin was severely ill and medical tests revealed that he had a brain tumour.

The medical advice to the parents was that Oshin required urgent surgery to attempt to remove the brain tumour.  The parents accepted this advice and consented to surgery.  On 3 December 2015 Oshin underwent surgery to remove the brain tumour.  The surgery removed the bulk of the brain tumour but there were side effects.  The parent’s found the side effects and impact of the surgery on Oshin to be very troubling and they had concerns about the amount of time it took for Oshin to recover.

Parents Refusal for Standard Treatment

During Oshin’s recovery from the surgery, it was recommended that he receive treatment including both chemotherapy and radiotherapy.  However, Oshin’s parents disagreed with this course of action based on Oshin’s reaction to the surgery.  The PMH referred the matter to an Ethics Committee for further consideration and direction.

The Ethics Committee advised that its decision had to reflect what was in the best interests of the child.  It concluded that at times it might be necessary to limit parental autonomy to act in the best interests of the child.   To assist in considering what was in the best interest of a child, the committee proposed that decisions should be based on the burdens and benefits of treatment to the child.

On 16 February 2016 and 17 March 2016 Oshin underwent medical resonant imaging.  The observations from these procedures revealed that the brain tumour was proceeding in a linear path rather than spreading in an explosive like pattern.  Based on this information, the doctors involved in Oshin’s treatment concluded a standard approach to treatment was appropriate rather than a palliative approach. Without this treatment, the Committee thought that Oshin would die.

Based on this advice and the parents continuing refusal to consent for Oshin to receive treatment, the PMH commenced proceedings for a court to determine what is in the best interests of the Oshin.

Court’s Jurisdiction

In order to decide upon the matter before it, the court must have jurisdiction.  Oshin’s parents were not married and were in a de facto relationship.  In the WA jurisdiction, de facto matters are dealt with under the Family Court Act 1997 (the “Act”) of Western Australia and not the Commonwealth Family Law Act 1975.

Section 132 of the Act provides that a court has jurisdiction under the Act to make orders relating to the welfare of the child and that regard must be had to the best interests of the child as the paramount consideration.  The judge continued on to say these provision confer the parens patriae (parent of the nation) jurisdiction of the Western Australia Supreme Court on the Family Court of Western Australia.

Who Make Bring an Action in the Best Interests of a Child?

According to section 185(2) of the Act the following people may apply to the court for it to exercise its jurisdiction to act in the best interests of the child:

  1. either or both parents;
  2. the child;
  3. a grandparent; or
  4. any other person concerned with the care, welfare or development of the child.

Court’s Approach to Order Treatment for Child with Life Threatening Cancer

The evidence provided to the court based on expert medical opinion was that Oshin’s chances of survival if immediate curative treatment was provided could be:

  1. If only chemotherapy was provided, 30% after five years; and
  2. If both chemotherapy and radiotherapy were provided, 50% after five years.

The Court referred to the High Court case of Department of Health and Community Services v JWB and SMB (1992) 175 CLR 218 (“Marion’s case”) for assistance in its determination.  This case found that parents have an implicit power to consent to medical treatment for a child incapable of providing consent.

The Court also referred to the case of Minister for Health v AS (2004) 29 WAR 517, and the decision in that case that “protection of the child should be evaluated above all other interests, although those other interests should not be disregarded” and that the court’s power should be exercised “with great caution”.

The Court considered that while parents almost always act in the best interests of a child, that they may face great difficulty is seeing beyond the immediate circumstances of the child to the long term future especially when faced with such difficult circumstances.

In this case, Oshin faced certain death if he did not receive treatment.  If he did receive treatment he had a 50% chance of surviving past 5 years and potentially being cured.  The Court determined that it would be in the best interests for Oshin that he undertake the standard curative approach of treatment.  The Court found that “the prospect of the long-term cure is the matter that must most heavily weigh in the decision”.

In Vincent & Anor [2016] FCCA 227 (12 February 2016) Judge Riethmuller dealt with a situation where after an 11 year marriage the wife applied for a property order after the husband was made bankrupt.

The wife sought to pursue her claim against the bankrupt estate. The bankrupt estate consisted of $659,704, including superannuation with unsecured creditors of $667,847. The intervenor in the case sought leave to continue to participate in the proceedings in circumstances where the trustee in bankruptcy expressed no intention to pursue or defend the wife’s application.  In other words, the intervenor was endeavouring to stop the wife’s family law property application against the husband’s estate.
The Court said (at para 13):

“In the interests of avoiding a multiplicity of suits, and consistent with the princip[al] function of a trust of separating beneficiaries from the task of managing property, the trustee is generally the proper party to sue or be sued with respect to a trust estate. ( … ) The remedies available to beneficiaries at equity, allowing beneficiaries standing where the Court grants leave to sue or defend suits to protect the trust estate, if the trustee fails to do so. Ordinarily the trustee in bankruptcy is the appropriate person to bring or defend proceedings. It is open to the court to direct the trustee to do so. However, there is a practical problem if the trustee is not in funds and the creditors cannot fund the suit. In such a situation it would be unjust to the creditors not to allow them to represent themselves and pursue the suit for the benefit of the trust estate (indirectly for their even benefit). Whilst such an exercise is unusual, it is open if the justice of a particular case demands. To hold otherwise would allow impecuniosity (potentially caused by the bankrupt) to deny a significant creditor a remedy.”

The Court was ultimately satisfied that on the material the intervenor had a prima facie case that the husband’s property or part thereof should not be settled on the wife under s 79 of the Family Law Act 1975. Significantly, this is not a case where the intervenor is pursuing a claim, rather she is now defending the bankrupt estate against a claim by the Wife.

The Court granted leave to the intervenor to defend the bankrupt estate. The husband remained a party “to enable him to defend [his significant unvested] superannuation] interests” . The Court also ordered that if either the husband or intervenor sought to make a claim against either spouse so as to augment the bankrupt estate they should seek leave and file and serve a Statement of Claim particularising this claim.

In the recent decision of the Full Court of the Family Court in Nevill [2016] FamCAFC 41 (17 March 2016) May, Ryan & Murphy JJ upheld an order made by Kent J staying the wife’s property proceedings, initially brought in the Federal Circuit Court in Australia. Kent J imposed the stay due to holding, on the facts, that the High Court of New Zealand was “the more appropriate court” for the purposes of s 19 of the Trans-Tasman Proceedings Act 2010 (Cth) (“the TTP Act”).

Section 17 of the TTP Act relevantly provides that:  “(1) A defendant in a civil proceeding in an Australian court may apply to the court for an order staying the proceeding on the grounds that a New Zealand court is the more appropriate court to determine the matters in issue”. Section 19(1) provides: “on application under section 17, the Australian court may, by order, stay the proceeding if it is satisfied that a New Zealand court:

(a) has jurisdiction to determine the matters in issue between the parties to the proceeding; and

(b) is the more appropriate court to determine those matters.”

Section 19(2) provides n determining whether a New Zealand court is the more appropriate court to determine those matters, the Australian court must take into account matters, including:

(c) the place where the subject matter of the proceeding is situated;

(e) the law that it would be most appropriate to apply in the proceeding;

(f) whether a related or similar proceeding has been commenced against the defendant or another person in a court in New Zealand;

(g) the financial circumstances of the parties, so far as the Australian court is aware of them;

(i) any other matter that the Australian court considers relevant;
and must not take into account the fact that the proceeding was commenced in Australia.

In considering the relevant provisions of the TTP Act and the facts, the Full Court commented that: “We are unable to see any uncertainty, ambiguity or difficulty in the text of the TTP Act. It sits within a broader context of seeking to streamline and simplify the law and processes applicable to disputes with a trans-Tasman element … The TTP Act seeks to harmonise the test for establishing whether a court in New Zealand or Australia should be the forum for determining civil proceedings as defined. The means by which the TTP Act does so is equally unremarkable; it accords to the Australian court a broad discretion exercised within, but not confined to, mandatory considerations.”

Further, the Full Court said:

“Stripped to its bare essentials, the submission made before his Honour, mirrored in the assertion of error before us, is that there was a juridical disadvantage for the wife in proceeding in New Zealand which his Honour did not take into account in considering s 19(2)(e) of the TPP Act … That juridical advantage is said to derive from the different system in New Zealand by which settlements of property consequent upon breakdown of marriage are decided, which, in turn, the wife contends might result in her receiving less by way of settlement of property than what she might receive from an Australian court.

His Honour determined that the requisite question should be answered not by reference to juridical advantage … but to the connecting factors with the law of New Zealand as compared to the law of Australia.
[40] Legitimate juridical advantage, gained absent statutory provision by filing regularly in the forum, is specifically excluded by s 19(2) of the TTP Act. Neither s 19(2)(e), nor s 19(2) more broadly, make mention of ‘juridical advantage’ (or, indeed, ‘juridical disadvantage’) as a factor which must be considered in the exercise of discretion. What s 19(2)(e) requires is an assessment of the ‘law that it would be most appropriate to apply’ – a concept plainly consistent with the overall test of the most appropriate forum.

His Honour determined that question by reference to what might conveniently be called ‘connecting factors’ with the law of each forum. We consider his Honour was entirely correct in doing so.”

Accordingly, the wife’s appeal was dismissed with costs.

Keywords: property; settlement; de facto; section 75(2); section 79; initial contribution; financial contribution; other factors.

The case of Marks & Xander [2016] FCCA 282 (15 February 2016), was a property settlement matter between separated de facto parties which was heard by the Federal Circuit Court of Australia.

Background

The parties met about March 2000 and entered into a de facto relationship.  They remained together for about 13 and a half years after which they separated.  The parties did not have any children together.  At the time of the hearing both parties were 54 years of age.

At the time of entering into the relationship the de facto wife had little in the way of assets to contribute.  The de facto husband had an unencumbered house (“C Property”) which was worth about $175,000.00 and which both the parties moved into at the time of commencing their relationship.

Ineffective Financial Agreement

The parties entered into an agreement stating that if they separated the de facto wife would not attempt to pursue the de facto husband’s interest in the C Property.

The Court considered the agreement and found that it was not a valid Binding Financial Agreement under the Family Law Act and therefore the financial agreement would not prevent the Court from taking the C Property into account in the property settlement.  However, the Court stated that the intention behind the financial agreement would still be a factor that needs to be considered.

Contributions during Relationship

The Court considered each party’s contributions during the relationship and the terms of the relationship.  This included that that the parties had lived together from the outset in the de facto husband’s unencumbered property.  The parties had a close relationship which included socialising together; spending time with the de facto husband’s parents who lived nearby, plus the de facto wife had taken the de facto husband’s parents on holiday and had assisted with their care as they were advanced in age.

The de facto wife had worked both causal and part time jobs during the relationship and had made some financial contributions to the standing of the relationship.  Since 2011 the de facto wife had not worked which she claimed was due to illness.  However, there appeared to be a lack of evidence supporting these grounds.  The de facto wife was assessed as having a short working life ahead of her as she was 54 years of age.

The de facto husband was working on a full time basis earning about $47,000.00 per annum in secure employment.  The Court considered that the employment involved manual labour and this would affect the de factor husband’s ability to continue working.

It was accepted that the de facto wife did most of the domestic duties and cleaning during the relationship.  Both parties contributed to the upkeep and care of their pets.

Assessment of Contributions

Section 79 of the Act allows the Court to alter property interests of parties as the Court sees fit, but under section 79(2) a court can only do so where it is satisfied that the outcome is just and equitable.

In assessing contributions for the purpose of determining a just and equitable settlement, the Court outlined the principes outlined in the case of Aleksovski v Aleksovski 135 FLR 131; [1996] FLC 92-705 that:

  1. In a short relationship, significant weight should be given to initial contributions.
  2. In a long relationship, many factors assume significance and “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety…”
  3. Early capital contribution is diminished by subsequent events in the relationship.

Based on the section 79 factors, the Court found a property division of 72.5/27.5 in the husband’s favour. The Court next considered the section 75(2) factors going toward spousal maintenance and the future needs of the parties.  The main factor to consider here was that the de facto wife was not working and it would be difficult for her to find employment as a person without any formal skills.  On government benefits she would receive about $14,000.00 per annum while the husband’s income was about $47,000.00 per annum.

Based on these factors, the Court made an adjustment and ordered a property division of 67.5/32.5 in favour of the de facto husband.

Conclusion

In this matter the de facto husband brought significant contributions to the relationship.  The parties had a close relationship and supported each other financially.  The de facto wife had worked on a casual or part time basis but ceased working in 2011.  The de facto husband had worked full time during the relationship and had made superior income contributions.  The de facto wife had made significant contributions to the domestic duties and looking after the de facto husband’s parents.

Based on these factors, the Court initially made a property division of 72.5/27.5 in the de facto husband’s favour.  Upon consideration of future needs, the Court made a 5% adjustment in the de facto wife’s favour as she was unemployed and would have difficulty finding employment.

Significantly, the Court outlined that a sizable initial contribution will be diminished significantly due to contributions during the relationship and especially where the relationship is of a long duration.

In the recent case of Martin & Wilson [2016] FCCA 235 (11 February 2016), Judge Phipps dealt with an 11 year de facto relationship where the respondent (Ms Wilson) withdrew $90,000 of superannuation at the commencement of the litigation but lost it as part of a failed business venture. The remaining asset pool included a block of land ($80,000) and Mr Martin’s superannuation ($50,000).

After citing case law, Judge Phipps considered in this case that …

“ … as a general rule funds reasonably expended on living expenses are not added back.

The applicant’s argument that the respondent’s withdrawal of her superannuation and spending on the establishment of a (business omitted) should be added back into the property pool is twofold. It is either premature distribution of a de facto relationship asset, or the money was lost through conduct of the respondent which was reckless, negligent or wanton.

The unrepresented respondent’s approach was that this was her money and she was entitled to use it. The arguments for her case are two. One is that, while at the time of separation superannuation was part of the property available for distribution as an asset of the de facto relationship, this was an attempt by her to establish for herself a means of earning an income and so it should be treated as analogous to reasonable living expenses. The other argument is that the court has the discretion to consider all the circumstances and that in all the circumstances it should not be added back.

… The respondent had no experience in running a (business omitted). On the other hand there is no evidence, one way or the other, about its likely prospects for success. For instance, there is no evidence about whether it was in a location where there would be a demand for (omitted). There is no evidence one way or the other about any attempts by the respondent to promote the (business omitted).

There is no evidence that the respondent embarked on a course of conduct which was designed to reduce or minimise the value of the de facto relationship property. She believed she could successfully conduct a (business omitted). She was attempting to enhance the value of her superannuation, not reduce it or minimise it.

The evidence does not show that the expenditure on the (business omitted) was reckless, negligent or wanton. The respondent may have been naïve in thinking that she could successfully conduct a (business omitted), but the evidence does not show that the success of the venture was impossible or even improbable. It may have been successful in which case the applicant would have benefited.
The Court assessed contributions as 60:40 in favour of Ms Wilson due to her initial contribution of $70,000. No adjustment was made under s 90SF(3) (matters to take into account when determining whether to grant maintenance). The Court noted that:

“ ( … ) Given the uncertainty about the respondent’s employment and that she is six years older a small adjustment in her favour, perhaps 5%, would be appropriate. However, I intend taking into account the loss of her superannuation as a circumstance which the justice of the case requires to be taken into account.

If the respondent had remained in her employment she would still have that income and would have $90,000 superannuation. If that was the case then no adjustment would be appropriate. Given that the applicant has more working years left than the respondent an adjustment to the superannuation would not have been appropriate.”

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 measureable 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.

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 wide 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.

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, the 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 not move with X, but that if she does, X should live with him and spend time with her mother.”
In citing 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, are 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 would 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 remain 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.

 

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 the 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 the company E and he failed to disclose that he had made representations that the 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 proposal’s for the husband’s acquisition of 50% of the company.  This amounted to a miscarriage of justice as the wife being 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.

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:

  1. the trial judge did not give sufficient weight to regulation 1A(2)(a) and (b) of the Child Abduction Convention Regulations;
  2. 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.
  3. 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:

  1. 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.
  2. 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.
  3. 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 this 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.