NOTICEBOARD

Family LawCase NotesFebruary-July 2012

Robert Giade-Wright Author and Editor The Family Law Book

CHILDREN• Unborn ex-nuptial child• No jurisdiction to restrain

mother from terminating pregnancy

In Talbot & Norman [2012] FamCA 96 (24 February 2012) the applicant applied for an injunction restraining the respondent from terminating her pregnancy. Murphy J dismissed the application, having regard to the respondent’s sworn evidence that she was about 13 weeks pregnant but did not intend to terminate the pregnancy. Murphy J also examined the court’s jurisdiction at paras 21-24, 29-34, concluding at para 41:

“ ... I am of the view that this Court does not have jurisdiction to make orders with respect to an ex-nuptial child in circumstances where the orders are directed toward a foetus. That is, in my view the jurisdiction of this Court in respect of ex-nuptial children extends only to ex-nuptial children once born.”

PROPERTY• Entire equity in husband’s

post-separation property bought with new wife included in pool

• Share options and rightsIn Nielson [2012] FamCA 70 (24 February 2012) the husband submitted that only one half of the equity in a property bought by him after separation with his new wife (Ms F) (for $3.1 m funded by a $2+m mortgage and capital of $1+m from the husband and $50,000 from Ms F) should be included in the asset pool. His former wife (W) argued that the entire equity should be included. Loughnan J agreed with W but for different reasons (set out at paras

66-69) The parties also disagreed as to whether the husband’s share options and rights arising out of his employment were to be treated as property or as a financial resource (the value of which was agreed at the mid point between two competing valuations). Loughnan J, for the reasons set out at paras 77-81, included the share options and rights in the pool as “property”.

PROPERTY• Company valuations• Historical valuation of real

estateIn Kirk & Kane [2012] FamCA 115 (13 March 2012) Fowler J examined divergent valuations of company assets (forming part of the parties’ $6m asset pool) adduced by each party, outlining at paras 35-38 and 48-66 why the wife’s expert was to be preferred. The husband also disputed that expert’s historical valuation of another commercial property as at commencement of cohabitation, arguing that it ignored the cost of his $250,000 renovation. Fowler J at paras 68-79 again preferred the evidence of the wife’s expert who used a net rental method of valuation and was of the view that the husband’s improvements would not have affected the valuation.

CHILDREN• Interim order allowed father

to begin overnight time with child aged 23 months

In Cook & Aiken [2011] FMCAfam 1465 (21 September 2011) the parties could not agree whether their 23 month old daughter’s time with her father should extend overnight. The mother argued for a cautious approach, it being “too early to experiment” with overnight time. Scarlett FM, noting that it was an interim hearing, said at paras 25-27 that it was not in issue that

the child had been closely involved with both parents, had been in day care from eight months, settled with a bottle and 15 times had been left in the father’s care. Scarlett FM at paras 42-45 reviewed s 65DAA(3)(b) which “must clearly be applicable to overnight time when one is dealing with a child as young as this child is”. An interim order was made for overnight time once a week with several hours on three other days, the parties to attend a further reportable child dispute conference with a family consultant under s 11F FLA for a review of the child’s adjustment to spending overnight time after the child had spent at least two nights in the care of the father.

CHILDREN• Appointment of psychiatrist

as court expert to assess parties and 9 year old child

In Sewell & Jacobs [2011] FMCAfam 1377 (11 November 2011) Neville FM, upon a review of relevant legislation and case law, appointed a psychiatrist under Division 15.2 of the Federal Magistrates Court Rules to assess the parties and a nine year old child and report as to concerns expressed by the mother and the ICL. In doing so, Neville FM at para 24 referred to Golden Eagle International trading Pty Ltd v Zhang [2007] HCA 15 where Gummow, Callinan and Crennan JJ of the High Court of Australia said: “An aspect of the rule is that courts should act upon the least speculative and most current admissible evidence available”.

CHILDREN• Mother’s proposal for

Catholic schooling at her own expense preferred to father’s government school

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proposalIn Dawson [2012] FMCAfam 94 (2 February 2012) the parties had in the past agreed to a Catholic upbringing for their children (who were attending a Catholic primary school) but since separation they disagreed. The fathersaid he could not afford their private secondary education. The mother was willing to pay the children’s school fees herself if she had to, in preference to the government schooling the father was proposing. Allowing the mother’s proposal, Bender FM applied the Full Court’s judgment in Re G: Children’s Schooling [2000] FamCA 462 as to a child’s best interests being the determining issue in the context of ss 60B, 60CA and 60CC of the FLA.

PROPERTY• Valuation of minority

shareholding in private company

In Eaton [2012] FMCAfam 9 (17 January 2012) expert evidence adduced by each party differed as to the discount to be applied to the $1.2m basic or face value of the husband’s shares in a private company (operated by three families since 1954, the husband being the general manager of its business) to account for his minority shareholding. Jarrett FM examined the company’s share structure, its articles restricting the sale of shares, voting rights and was satisfied that the husband did not have “a controlling shareholding in the company” (para 20). Jarrett FM proceeded at paras 26-44 to review the competing expert evidence as to the discount to be applied and the case law as to the court’s approach to the valuation of minority interests, concluding on the facts of the case that an appropriate discount was 35% of the asset based value of the shares so that “Mr Eaton’s shares should be seen as having a value of $230.65 per share - a total asset value of $782,364.80”.

NULLITY• “Marriage of convenience ”

not an adequate groundIn Marquis [2012] FamCA 137 (16 March 2012) Rees J dismissed the husband’s application for a decree of nullity, rejecting evidence of the wife’s ulterior motive in getting

married as a ground on which the marriage was void under s 23B of the Marriage Act. Editor’s note - See also Hyun & Namgung [2012] FamCA 146 (13 February 2012) where Rees J made a decree of nullity on the ground that at the time of the marriage the respondent was lawfully married to another person. The papers were referred to the Attorney-General. Also see Mehra & Bose [2012] FamCA 164 (12 March 2012) (remarriage in Australia, where parties married in India, held not valid).

PROPERTY• Competing business

valuationsIn Spencer [2012] FamCA 138 (16 March 2012) Rees J at paras 39­45 resolved competing valuations of the parties’ service industry business by choosing the one that was not based on understated income.

CHILDREN• “Reas onable excus e ” for

contravention of parenting order

In Saldo & Tindall [2012] FamCA 194 (3 April 2012) Austin J reviewed “reasonable excuse” for the contravention of a parenting order within the meaning of s 70NAE(5) FLA.

PROPERTY• Single expert valuation• Wife not allowed to adduce

other evidenceIn Royce & Donovan [2012] FamCA 168 (23 March 2012) where a chartered accountant (Mr M) had been appointed as a single expert to value the assets of four companies Kent J dismissed the wife’s application under FLR 15.49 to adduce other expert evidence. Kent J took into account, inter alia, that “ ... Mr C’s report ... was in response to the terms of his own retainer but did not form part of the joint instructions to Mr M (para 20); that there was “no evidence ... that the answers to [66] questions provided by the single expert witness, Mr M ... ha[d] been provided to Mr C to determine whether or not those answers resolve[d] some or all of the issues raised in Mr C’s report (para 30); and that the “contention of Mr C ... that the single expert had insufficient information to make [a

particular] assessment [could not] in the context of the relevant rule, ... amount to a ‘substantial body of [contrary] opinion’”(para 52).

PROPERTY• Big money case• Substantial initial

contributionIn Garwin [2012] FamCA 296 (4 April 2012) the husband (67) and wife (44) had been married for 14 years, cohabiting for another two years before marriage. They had three children (the husband also having two adult children from a previous marriage). Of their $13m asset pool, the husband’s initial contribution was about $5.66m. Assessing contributions, Loughnan J concluded at para 100:

“In my view the appropriate finding is one whereby the husband made 65% of the contributions and the wife, 35%. That puts the husband’s contribution at nearly twice that of the wife. Such a finding would reflect a difference between the parties of about $3.9 million.”

An adjustment of 2.5% ($323,636) was made in favour of the wife (paras 140-142) for s 75(2) factors, including the wife’s lack of formal qualifications and her 18 years out of the paid workforce.

CHILD SUPPORT• No “exceptional

circumstances ” for setting aside child support agreement

In Brash [2012] FCWAM 13 (7 February 2012) Kaeser AM examined the meaning of “exceptional circumstances” required by s 136(2) CSAA for a child support agreement to be set aside.

CHILDREN• No time allowed• Unacceptable risk of sexual

abuseIn Tate & Ralph [2012] FMCAfam 279 (4 May 2012) Bender FM made orders that the mother have sole parental responsibility for a child, that the child live with the mother and spend no time with nor communicate with the father due to an unacceptable risk of sexual abuse, having regard to a history of abuse, including “his denial of such

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abuse in the face of court conviction and disclosures by his own sister, his lack of insight into the impact of his behaviours on others and the poor role model he presents to [X]”. Bender FM (para 139) made no order for supervision “given the lack of suitable supervisors and the impact of such an order on [X]’s primary care giver, the mother”.

PROPERTY• Final order set aside after

reconciliation• Intermingling of finances• Implied consent under s

79A(1A)In Ozick [2012] FMCAfam 310 (16 March 2012) the parties reconciled, resuming cohabitation for a further 18 years, after the making of a final property order in 1988. When they finally separated the wife applied for an order that that order be set aside under s 79A(1A) FLA and a new division of property made. Coakes FM reviewed the evidence and granted the application, saying at para 61 that the “subsequent intermingling of the parties’ financial affairs” (para 15) led to "an irresistible inference [and] a clear intention by both parties to no longer be bound by the property orders of 1 July 1988”.

CHILDREN• Father’s “concerns” as to

mother’s mental health• Overnight time for two year

old childIn Dixon [2012] FMCAfam 119 (10 February 2012) the father issued parenting proceedings, having assumed the care of the parties’ child of nearly two years of age when the mother became ill, and allowed the mother “supervised visits”. Brown FM examined the evidence and the case for each party, finding (para 85) that the mother had been the “main provider of care”, that the father’s assertion of an unacceptable risk of harm “as a result of the mother’s potential to suffer psychiatric illness” was not supported by her treating psychiatrist who considered that the mother had dealt with recent stressful circumstances “without suffering a relapse of her illness” (paras 86-87). Brown FM also took into account that the father had “acquiesced” in the child being in the mother’s care when the parties

separated, adding at para 89:

“The mother’s case is that the father has opportunistically seized upon her illness to justify his unilateral assumption of [X]’s care because of his perhaps understandable disappointment that there is no possibility of the parties resuming their relationship together. I am not in a position to positively resolve this issue at this stage. However, given the obvious emotions released by these proceedings, nor can I positively rule it out.”

An interim order was made that the child live with the mother and spend two overnight periods per week (each for 24 hours) with the father.

CHILDREN• Alleged “alienation”• Courts’ approach to

published researchIn McGregor [2012] FamCAFC 69 (28 May 2012) the father appealed to the Full Court (Bryant CJ, Faulks DCJ and Ainslie-Wallace J) from a parenting order. The order, that the parties’ children (who had been living with the father) live with the mother and spend time with the father, was made by O’Dwyer FM after his Honour had relied on published research as to “parental alienation” when finding “that the father had embarked on a deliberate course designed to alienate the children from their mother” (para 4). Allowing the appeal, the Full Court discussed the approach by courts to the use of such research, saying at para 108:

“In this case, his Honour was referred to, and in our view clearly relied on, an article written by apparently well- known and well-credentialed academics (Fidler and Bala). Because the article was not admitted into evidence there was no consideration by his Honour of the opinion and its context within the article; the probative value of the opinion given that the authors were not going to be called to give evidence; how the parties might be afforded procedural fairness given the above; and

vitally, as we have indicated, how the opinion was to be used.”

PROPERTY• Initial contribution• Section 75(2) factorsIn Kroll [2012] FamCA 200 (27 March 2012) an 11 year marriage with five years of pre-marital cohabitation produced two children and net assets of $1,3m. Prior to their cohabitation the husband had bought a house for $345,000 which was later sold for $449,000 and contributed other properties during the marriage, bought in his own name. Bell J assessed the husband’s contributions at 70 per cent. That assessment was adjusted under 75(2) for disparity of income and earning capacity by 15 per cent in favour of the wife.

FINANCIAL AGREEMENT• Non-binding agreement held

binding under s 90G(1A) at second hearing

In Hoult [2012] FamCA 367 (22 May 2012) a s 90B financial agreement had been declared not binding under s 90G at an earlier hearing due to the “complete failure in the giving of the advice by a legal practitioner” (Hoult [2011] FamCA 1023). The parties were permitted to file further submissions as to whethers 90G(1 A) and (1B) should apply. Murphy J discussed Senior & Anderson [2011] FamCAFC 129 and his Honour’s judgment in the later decision of the Full Court in Parker [2012] FamCAFC 33 (as to the discretion in s 90G(1A)(c) to render an agreement binding not being restricted “to technicality or otherwise”). Murphy J concluded at para 63 “that the Court should find that it is unjust and inequitable if the financial agreement between the parties was not binding on the spouse parties to the agreement” as a number of drafts of the agreement had been prepared; the husband had gone through the penultimate one with the wife “paragraph by paragraph”; the wife’s denials of having seen the document had been rejected; the parties acted for some years “on the basis that the agreement was fully effective” (the wife receiving benefits under the agreement during the relationship); and the agreement was not challenged

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until four years after it was signed (paras 19-27). Murphy J at paras 57-59 set out some factors for consideration in relation to “the enquiry required of s 9QG(1A)(c)”.

PROPERTY• $7m pool originated from

wife’s inheritance and gifts from father

• Ass essment of the parties ’ contributions

In Sinclair [2012] FamCA 388 (25 May 2012) the parties’ 50 year marriage produced two children and an asset pool of $7.3m, being the present value of assets the wife during the marriage had received from her father and inherited from his estate after his death. After reviewing the inheritance cases at paras 15-24, Cronin J found at para 100 that “about three- quarters” of the pool was unrelated to the direct contributions of the parties who “otherwise contributed equally to about the remaining one quarter”. The husband’s contributions were assessed at “about half of that or 12.5 per cent [i.e.j $912,000”. Section 75(2) factors were assessed at a further $200,000 in the husband’s favour.

PROPERTY• Significant difference

between experts as to valuation of company’s assets

• Experts to confer and provide a joint statement

In Mason [2012] FamCA 224 (2 May 2012) a single expert was appointed to value the assets of companies. The husband applied under FLR 15.49 for permission to adduce adversarial expert evidence from two other experts (a forensic accountant and a remuneration expert - an expertise not shared by the single expert). Ryan J dismissed the application due to the husband’s non­compliance with trial directions, lateness, lack of notice and prejudice to the wife, but granted the husband an adjournment of the trial for directions as to the introduction of that evidence, awarding costs against him. Ryan J noted a “significant difference in the opinions of the valuers” (para 9) and that although the Rules do not require a conference of experts “as a procedural pre-condition to

an application for permission to adduce evidence from another expert” (para 16) “the rationale for imposing such a step as a matter of discretion [was] ... apparent” to “narrow the issues and significantly reduce the amount of trial time”.

EVIDENCE• Recorded Skype

conversations held to be inadmissible

In Kawada and Ors [2012] FamCA 659 (19 July 2012) O’Reilly J held that s 8 of the Evidence Act 1995 (Cth) operates so that s 63 of the Telecommunications (Interception and Access) Act 1979 (Cth) (prohibiting the use of intercepted communications) prevails over s 138 of the Evidence Act (discretion to admit evidence obtained improperly or illegally), so that any transcript of Skype communications between the husband and the second respondent intercepted by the wife was inadmissible in the trial.

PROPERTY• Declaration of resulting

trust as to assetstransferred to husband byhis parents

• Presumption of advancement rebutted

In Kawada and Ors [2012] FamCA 273 (1 May 2012) O’Reilly J granted the application by the second respondents, the husband’s parents (appearing in person via telelink in Japan), for a declaration that a Goid Coast property and a car of which the husband was registered owner and $190,000 paid by them to him were held by the husband by way of resulting trust beneficially for his parents. O’Reilly J reviewed case law as to “the competing presumptions of resulting trusts arid advancement” at paras 32-39 and the evidence of the parties in respect of each item of property.

PROPERTY• Valuer’s “drop in value” of

two farms ($10m) could be reduced within two years

• Three year adjournment set aside on appeal

In Pratt [2012] FamCAFC 81 (13 June 2012) the Full Court (Finn, Ainslie-Wallace and Ryan JJ) set aside a three year adjournment granted by Bell J. The parties

were graziers. The wife had sought the adjournment under s 79(5) FLA to enable a just and equitable property settlement where a valuer had deposed to a $10m “drop in value” of the parties’ two cattle stations and to “an increase in beast area values [to be] reasonably expected over a two year timeframe”. The husband had opposed the adjournment, arguing that the parties’ debts exceeded their assets and that he could not meet the interest owed to the bank. The Full Court referred to s 79(5) which allows an adjournment where “a significant change” in financial circumstances is likely and is “more likely to do justice” than an immediate order. The Full Court at para 40 accepted the husband’s argument:

“ ... that his Honour’sdetermination of ‘significant change’ was flawed In that he did not take into account the evidence of the cost of maintaining an increasing debt through interest on the loan facility or the cost of running the properties in assessing whether an increase in value of the property wouid amount to a ‘significant change’”.

SPOUSAL MAINTENANCE • Compliance with prior

order is no bar to a further maintenance order

In Vault & Isle [2012] FamCAFC 93 (2 July 2012) the wife appealed against the dismissal of her maintenance application by Kaeser AM (Magistrates Court of WA) who had held that an earlier order for maintenance was “fatal to the wife’s application” (para 2). The husband had complied with a 2004 order that he pay $28,000 in spousal maintenance to the wife by instalments of $1,450 per fortnight. In 2011 the wife re-applied for maintenance, seeking $1,850 per fortnight. As the parties had not divorced the time limit under s 44(3) FLA was not relevant. Allowing the appeal, Thackray J held at paras 29-30 that his Honour had overlooked s 80(2) FLA (the making of any order under Part VIII does not prevent a court from making a subsequent spousal maintenance order).

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