April 2019 Family Law Case Watch

In relation to spending time with your child:

  1. Has an order been made for you to spend supervised time with your child?
  2. Are you seeking that an order be made for the other parent to spend supervised time with your child?
  3. What does an order for supervised time mean?
  4. In what circumstances will an order for supervised time be made?

Is a Court order for a child to spend time with a parent “in the presence of” for example, a sibling, grandparent, aunty, uncle or trusted friend, the same as an order for “supervised time” by a professional contact supervision centre, or materially different?

What an order for a child to spend supervised time with a parent means was recently considered in the case of Elias & Elias [2019] FamCAFC (“Elias & Elias”). Ultimately, it was found that an order for time “in the presence of” a third party is one and the same as an order for a child to spend “supervised time” with a parent. Understanding the background facts to this case assists considerably in understanding why this is.

Background

Final Parenting Orders were made in Elias & Elias on 20 April 2019 by a Judge of the Family Court of Australia that the child of the marriage was to live with the mother who was to have sole parental responsibility for him.

For a period of three (3) months after the Orders were made, the child was to spend supervised time with the father at a professional contact centre for six (6) hours each alternate Sunday. Thereafter, the child was to spend time with the father on alternate Sundays and on other specified days with “all time to be supervised by a professional contact supervision service or the father’s sister, or a combination of both”.

These Orders were made based on the Independent Children’s Lawyer’s (“ICL”) proposed orders which were supported by the mother’s submissions. The key issues raised by the mother in her submissions included family violence, the father’s mental state and the mother’s extreme anxiety. Albeit not all of the contentions made by the mother were accepted by the primary Judge.

The father appealed against the Orders on the basis that the primary judge erred having made Orders that failed to give effect to his findings that the father’s time after three (3) months’ supervisions should occur “in the company of” the father’s sister or the professional contact supervision service. The Orders provided that such time should be “supervised”.

“Supervised time” and time “in the presence of”

The father argued that “supervised time” and time “in the presence of” mean different things in the context of parenting orders in Family Law proceedings and that the primary Judge erred in not recognising and acting on that distinction. The father contended that the Orders wrongly imposed a requirement of constant supervision as opposed to a less stringent requirement of having somebody present and permitting the father to be alone with the child for periods of time.

Senior Counsel for the father highlighted the orders proposed by the ICL which included a proposal that the father’s time be “supervised” by a professional contact centre for a period before allowing the father to spend time with the child “in the company of” the father’s sister. It was argued that there must be a difference between the two phrases due to the difference in wording adopted by the ICL.

Further, the father submitted that the single expert psychiatrist’s evidence was not considered by the primary Judge which suggested that “time in the presence of” meant something less than supervision, meaning constant monitoring including being within sight or earshot. The expert said that the father’s time with the child need not be “strictly supervised” in that they do not need to be “within sight or earshot the whole time”. She suggested it would be better for contact to be as much as possible involving the father’s family or his partner. The expert further stated:

I don’t know that I would say… that he can never be alone with the child – not that level of supervision… It would need to be a slowly graded time spending with [the child] and as much as possible in a family setting or with his partner present.”

On Appeal

The Full Court of the Family Court of Australia found that there is no difference, in the context of parenting orders in Family Law, between the word “supervised” and the phrase “in the presence of”. Therefore, the phrase “in the presence of” does not mean a lesser form of supervision which would allow, as submitted by the father, the child to be left alone with the father particularly for long periods of time.

It was found that “supervised time”, time “in the presence of” and time “in the company of”, all connote constant presence. The primary judge clearly understood this to be the case and used the words interchangeably. This, contrary to the father’s submissions, does not indicate an error or “loose thinking” on the part of the primary Judge. The Full Court of the Family Court said, “it is an arid exercise of semantics to seek to find a difference of substance in the primary Judge’s choice of words, let alone one which demonstrates appealable error.”

The Full Court of the Family Court accepted the submissions of the mother and the ICL that “supervise” is a word commonly applied to professional supervision bodies because that is effectively what they do and the phrase “in the presence of” more suitably applies to individuals, such as family members. In any event, the Full Court accepted that there is no difference in substance.

In respect of the expert’s evidence, it was accepted that family supervision would be preferred as a long-term solution as opposed to commercial supervision however the Full Court did not accept that the expert was suggesting that a family member need not be continually present, at least in the immediate term. The Full Court focused on the expert’s evidence that progression of supervised contact in this case should be slow and it would be preferable for the father’s time with the child to be in a family setting or with his partner present.

Conclusion

We hope our April 2019 Case Watch has clarified this issue about the meaning of “supervised time”. Supervised time is a common order made by the Family Court in parenting matters where there is a risk of harm and a need to protect the child. The way in which supervised time will be implemented depends on the particular circumstances of a case however, as a result of Elias & Elias, supervised time will be defined on a case by case basis, and not by the particular phrase adopted by the Court.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss your matter in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional family lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

March 2019 Family Law Case Watch

Our March 2019 Family Law case, Stradford & Stradford [2019] FamCAFC 25 focuses on the approach taken by the Family Court in respect of the husband’s failure to provide full and frank disclosure which resulted in his imprisonment.

Background

The parties had property settlement proceedings listed for Hearing before the primary judge on 10 August 2018. Both parties were unrepresented. The primary judge was not satisfied with the husband’s financial disclosure material and adjourned the matter to 26 November 2018 for Mention and directed the husband to provide particular documents to the wife by 5 November 2018 and file an Affidavit setting out what documents were provided.

In making Directions on 10 August 2018, the primary Judge made Notations that if the husband failed to provide full and frank disclosure in accordance with the Orders, he should be dealt with for contempt.

Law

Section 17 of the Federal Circuit Court of Australia Act 1999 (Cth) (“the FCC Act”) provides the Federal Circuit Court of Australia the power to punish a contempt of its authority. However, that authority may only be utilised to punish contempt committed in the face or hearing of the Court. The Family Law Act 1975 (CTH) (“the FLA”) makes a distinction between contempt (Part XIIIB) and sanctions for parties’ failure to comply with orders (Part XIIIA).Contempt is defined in the legislation as a contravention of an order which involves a “flagrant challenge to the authority of the Court”. A person will have contravened an order where the person is bound by the order and they have “intentionally failed to comply with the order or made no reasonable attempt to comply”.

The legislation provides that contempt must be established on the criminal standard of proof, i.e. beyond reasonable doubt. As contempt is considered a crime, a breach of orders should be considered as being contempt only in exceptional circumstances.

Rule 19.02 of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) contains provisions for who may make an application to the Court for a person to be dealt with for contempt and the mandatory requirements to be followed in such an application. All of those provisions reflect the basic principles of natural justice where liberty is potentially at risk. For example, rule 19.02(7) provides that after hearing evidence in support of an allegation of contempt, the Court may, if it decides there is a prima facie case, invite the person to state their defence and, after hearing the defence, determine the charge. Only if the charge is proved, may the Court make an order for the punishment of the person (rule 19.02(8)).

The sanctions that are available to be imposed by the Court include fines, bonds, particular orders and imprisonment (112AD of the FLA).

Application

The primary judge in this case determined that the matter should proceed as a contempt rather than a contravention in the event that the husband breached the orders. This decision was made in advance of any breach made by the husband and prior to any application being filed for contempt or a breach of the orders. The primary Judge stated:

“…believe me, if there isn’t full disclosure there will be consequences, because that’s what I do. If people don’t comply with my orders there’s only one place they go. Okay. And I don’t have any hesitation in jailing people for not complying with my orders.”

The statements made by the primary Judge in this case clearly indicated prejudgement by declaring that any breach would be dealt with as a contempt and that the husband would be sentenced to imprisonment.

When the proceedings came before another Judge for Mention on 26 November 2018, evidence had been filed by the husband that some disclosure had been provided however argued that other documents were not in his possession, power or control. The wife contended that the husband omitted documents that he would have been able to obtain.

The Judge on that occasion, did not adjudicate on that dispute nor did she resolve any question as to whether or not the husband had failed to comply with the Orders made on 10 August 2018. The matter was adjourned to 6 December 2018 for hearing of the contempt application before the primary Judge.

The matter was returned to the primary Judge on 6 December 2018. The Judge did not accept the husband’s evidence that he tried in good faith to provide every aspect of the requested financial documents.

During this Hearing, the wife stated that all she wanted was to achieve a fair property settlement. She emphasised to the Court that she and the husband had children together so she did not want the husband to be charged with contempt. She said, “…we have kids together that I have to think about as well… this affects the kids for the rest of their lives”.

The Judge replied to these statements:

I can see that that’s not what you particularly want… you don’t want him to be going to jail unnecessarily, because that’s exactly where he is going to be going… I’m the one who sends him to jail, not you… I don’t want you to have that guilt”.

The Judge sentenced the husband to prison and had a warrant issued for his immediate transfer to gaol.

In conclusion, on Appeal

On Appeal, it was found that there was no feature in this case which warranted, in the broader interests of justice, any departure from the requirements of rule 19.02. According to the Appeals Court, the husband’s evidence was not given proper weight nor was he provided a fair opportunity to explain his evidence or defend himself against any charge of contempt laid. In addition, the wife’s wishes for the husband not to be sentenced to imprisonment were not taken into account. It was said that:

“It is difficult to envisage a more profound or disturbing example of pre-judgment and denial of procedural fairness to a party on any prospective orders, much less contempt, and much less contempt where a sentence of imprisonment was, apparently, pre-determined as the appropriate remedy.”

The Court of Appeal concluded that the primary judge appeared to be unaware that breaches and contraventions of orders made in family law proceedings must be ordinarily dealt with under the Act as a “contravention of proceedings”. The Act makes clear that contempt involves proof of different matters to those of this case. The Court of Appeal stated that it would be difficult to think of circumstances where a failure to comply with orders for disclosure could warrant a party being dealt with for contempt.

In any event, the strict rules of procedural fairness reflected in the Rules of the Court apply to either sanction and were not applied by the Judge in this case.

On Appeal it was also noted that a Court should not sentence a person to imprisonment unless the Court is satisfied that, in all of the circumstances of the case, no other sanction of the wide range available would be appropriate.

The imprisonment of the husband in the current case was described as a “gross miscarriage of justice”.

The appeal by the husband was allowed and the husband was granted a costs certificate authorising a payment to the husband from the Attorney-General in respect of the costs incurred by him in relation to the Appeal.

We hope that the issue explored in our March 2019 Family Law Case Watch was of interest to you as it reveals a rare and profound denial of procedural fairness to a party rightfully reversed on Appeal. It also highlights the importance of financial disclosure in Family Law matters and the need to comply with the obligation to provide full and frank disclosure.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss your matter in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional family lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

February 2019 Family Law Case Watch

Our February 2019 Family Law case, Wakeley & Wakeley [2018] FCCA 3707 explores  two(2) common themes and issues that often arise in Family Law matters including the:

  1. Approach taken by the Family Court in determining property proceedings; and
  2. Admissibility of affidavit evidence of a witness.

Background

In this case, the husband was born in 1951 and was 67 years of age at the time of the making of the Orders.

The wife was born in 1958 and was 60 years of age at the time of the making of this Judgement.

The parties married in 1987 and at the time of the Hearing had adult children.

At the beginning of the parties’ relationship and during the course of their marriage, each party made significant contributions to the marriage. The husband owned a number of properties and businesses and the wife held a half interest in her mother’s property and received a loan from her brother. Upon the passing of the wife’s mother, the remaining half of that property was transferred to the wife. The husband and wife also commenced a business together.

The parties initially separated in the late 1990s and Consent Orders were made on 30 January 1998. The parties sought fresh property adjustment orders and Judge Harper subsequently set aside the 1998 Orders by consent.

The wife proposed that the total net asset pool of the marriage, as asserted by her, be divided as between the parties, 80% to herself and 20% to the husband.

The husband, on the other hand, sought that the total net asset pool of the marriage, as asserted by him, be divided as between the parties, 47% to himself and 53% to the wife.

Judge Harper noted that on the asset pool, as found by him, if no adjustment was made, the wife would retain 97% of the assets and the husband would retain 3%.

Law – Property Orders

Part VIII of the Family Law Act 1975 (Cth) contains the provisions in relation to property orders. Section 79 gives the Court power to make orders for the alteration of property interests as it considers appropriate. The Court may only make an order in respect of property proceedings if it is satisfied that it would be just and equitable in all of the circumstances (s79(2)). Various factors are taken into account in considering what order should be made. These factors are set out in sections 79(4) and 75(2) of the Family Law Act.

In deciding this case, Judge Harper considered the well-established line of Family Law authorities that provide the relevant considerations for the determination of property proceedings.

The case of Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395 initially set out the “4 step process” in the determination of an application under section 79. This process is as follows:

  1. Identify and value, the parties’ property, liabilities and financial resources at the date of the hearing;
  2. Identify and assess the contributions of the parties as referred to in section 79 of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach;
  3. Identify and assess the other factors relevant including, the matters referred to in section 75 of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
  4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.

The High Court in Stanford & Stanford [2012] HCA 52 subsequently highlighted that the just and equitable requirement set out in section 79(2) should not be a discretionary determination by the Court. Rather, the Court must:

  1. Consider the current existing legal and equitable interests of the parties to the relationship;
  1. Ask whether those rights and interests should be altered pursuant to section 79(4) considerations and not assume that the parties’ rights to or interests in marital property are or should be different from those that then exist; and
  1. Determine whether an order adjusting property interests would be just and equitable in all of the circumstances of the particular case.

Further cases including Bevan & Bevan [2013] FamCAFC 116 and Chapman & Chapman [2014] FamCAFC 91 support the approach outlined above and solidify the process to be adopted by Family Law Courts in property proceedings.

Application

By the end of the Hearing, the parties in Wakeley & Wakeley, were not in dispute about what assets existed nor were they in dispute about the value of any asset.  The contention for determination was with regard to the parties’ liabilities.

In terms of initial contributions, the parties each entered the marriage with $30,000 in savings and jointly owned a property. The husband however owned another property, had a half interest share in a business and a motor vehicle.

With respect to financial contributions during the marriage, amongst other things, the:

  1. Parties were both employed;
  2. The husband sold a property and contributed the money to the joint use of the parties;
  3. The parties bought two properties by using a combination of savings;
  4. The parties lived with the wife’s parents which allowed them to save money, the wife’s family contributed to renovations for one of the properties;
  5. The wife contributed a significant sum of money to the business including a gift received from her aunt of $35,000;
  6. The husband paid over $735,000 into the bank of the wife; and
  7. The wife made the greater contribution as parent and homemaker.

In considering the above factors, Harper J assessed the wife’s contribution entitlement at 65% and the husband’s at 35%.

Judge Harper then went on to consider section 75(2), which sets out matters to be taken into account in making an order for property adjustment, and found both parties were of good health generally, both parties worked and had capacity for gainful employment. However the husband’s employment was inconsistent and he had a modest earning capacity, and whilst the wife was making mortgage repayments, the husband was renting.

Judge Harper determined that the husband should receive an adjustment of 3% in his favour for considerations under section 75(2) as set out above. Therefore, the assets of the parties would be divided as to 62% to the wife and 38% to the husband.

Judge Harper determined that leaving the assets as to 97% to the wife and 3% to the husband would not be just and equitable having regard to the above. His Honour noted the force of the husband’s submission that “any outcome, after 27 years of marriage and both parties close to or at retirement age, which left either greatly impoverished would not be just and equitable”.

(See paragraph 271 for an outline of the precise distribution of the various assets and liabilities of the marriage.)

Issue – Affidavits of witnesses

The evidence of two of the wife’s witnesses in the present case caused the judge concern. In many parts, their evidence was identical. Furthermore, one of the witnesses in cross examination conceded that her Affidavit was prepared by the wife’s solicitor and she had not told the solicitor what to write. The witness agreed that the wife arranged for the Affidavit to be prepared by her solicitor and for her to then sign it. Judge Harper stated that these considerations revealed deficiencies in the preparation of the evidence of the two witnesses.

Law – Affidavits of witnesses

Judge Palmer in the Macquarie Developments Pty Ltd and Anor v Forrester and Anor [2005] NSWSC 67 has indicated that such circumstances devalue the evidence of witnesses, even if it may not render it worthless. Judge Palmer stated in that case that:

“…affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both of the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason.”

This reasoning was reiterated by Judge Ward in Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40 and Judge Black in In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789. Judge Black relevantly expressed the view that it does not matter if identical paragraphs in Affidavit evidence is the result of collusion between the witnesses themselves or of one adopting evidence that had been copied from the other, “each substantially devalues” both witnesses’ Affidavit evidence where no explanation has been given of what occurred. Judge Black commented that the Court could not be satisfied that the witness’ evidence in such cases reflects a genuine recollection of events.

Application

Judge Harper approached the evidence of the witnesses in the present case with caution and was weary in placing weight on particular aspects of the evidence.

Conclusion

Issue 1 –

The approach taken by the Family Court in determining property proceedings is clear and well established requiring a consideration of a number of factors to accommodate for the endless range of circumstances that can arise in Family Law matters. When making a property settlement order and considering what is just and equitable in a matter, the Court should not begin with an assumption that a property adjustment should occur but the Court’s power is exercised by following legal principles solidified by legislation and subsequent case law.

Issue 2 –

The importance of witness evidence being independent and confidential is often underestimated. Affidavit evidence of witnesses can be crucial to the determination of a case and this should not be risked being “thrown out”. Collusion between witnesses and/or a party, even if undertaken with benevolent intention, may be the undoing of a case.

We hope that our February 2019 Case Watch has provided you with some clarity about these two (2) common themes and issues that often arise in Family Law matters.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss your matter in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional family lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

How Much Does A Divorce Cost?

Wanting to know what a divorce will cost?

Concerned about the fees a family lawyers will charge?

Interested in understanding how the costs of family lawyers can be minimised?

If so then read on…

Unless you qualify for a waiver or reduction in the court’s filing fee you’re going to spend a minimum of $900 on the filing fee charged by the court – go onto the court’s portal and take a look.

Your costs to get a divorce can end there – you can complete the application yourself, even get your ex to join in if you were to do it jointly – no more costs for you and hey presto… it’s done.

“D-day” arrives and it’s ended up hugely cheaper than the wedding and contrary to recent bad press about the exorbitant costs of divorce lawyers, quite possibly cheaper than the costs of the last birthday party you hosted for one of your children!

You may end up paying a much greater price though down the track if along the way you don’t get expert family law advice.

BEWARE – Getting a Divorce triggers consequences that you may not be aware of… it also does not necessarily achieve some of the things that you thought it would –

Some simple facts :-

  1. Once a divorce order is made, you only have twelve (12) months from the date it becomes absolute to make an application for the court to deal with your property and financial affairs. This matters.  If you cannot persuade the court that it should exercise its power after 1 year has passed you may be left in a financial position that is not ideal.
  1. A divorce does not equate to a financial settlement. The informal deal you jotted down “on the back of the envelope” is not binding.  You still must get your financial arrangements sorted and settled.
  1. Getting a divorce does not protect your estate from a claim by your ex. Your ex-spouse is still eligible to make a claim against your estate once you die.  Do you really want to leave your executors, possibly your adult children, having to deal with such a situation?  Probably not and time and again couples that separate simply overlook this fact.  So again, beware because when it rains, it pours.  On the flip side it can be resolved, relatively easily, you just need to ask.

Professional services are not cheap – if they were you should be concerned.  A family lawyer making promises that are too good to be true – most likely are – “Pay Peanuts, Get Monkeys” as the saying goes.

But, you are entitled to feel and in fact should receive value for your investment.  You need to ask “Are the fees that are being contemplated worth it?”; what “value added?” is being offered.

Nothing is a substitute for expertise and experience…

You must however ensure that your relationship with your family lawyers is strong – if you don’t get what they are saying or you get a sense that they’re not really listening, pushing their own agenda or simply going through the motions, then any experience or expertise that they have is unlikely to be able to be applied to benefit you in your family law matter.

The relationship between a separated person and their family lawyer is a sophisticated and very important one, so –

  1. Don’t be shy to ask the hard questions
  2. Trust your gut
  3. Shop around

Bizarrely it’s a bit like tinder (or at least my understanding of what tinder is from the accounts of third parties!!).

Your family lawyer must be :-

  1. Smart
  2. Brave
  3. Committed – they work for you

Your family lawyer must not be :-

  1. Your friend
  2. A salesperson, or
  3. Too busy

Your family law matter counts and if you start thinking in this way the costs that you actually pay for the work your family lawyer does for you following your separation will be appreciated for a very long time.  In short you will no longer be googling “how much does a divorce cost?” because you will just be thankful that you engaged the right family lawyers.

Engaging the right family lawyer is also important if you hit a roadblock obtaining a Divorce Order.

Whilst an Application for Divorce is often a straightforward process, extra work is sometimes required to satisfy the court that it is proper for the Divorce Order to be made.

When can this happen?

3 common roadblocks that arise when making an application for divorce include:-

  1. Providing the court with sufficient evidence to satisfy itself that it has jurisdiction to make the order because you have legal standing or are entitled to be an applicant. Proof of citizenship or evidence of your domicile may be necessary.
  2. Satisfying the court that you are really separated in circumstances where you continue to live with your ex under the same roof. If this applies to you then you must file an additional affidavit setting out the circumstance of your living arrangements with your ex.  An extra affidavit from a 3rd party is also required to corroborate your version of the facts.
  3. Asking the court to make an order to substitute the service of the application on your ex if he or she is being evasive or uncooperative or cannot be found. In these cases extra evidence must be given to the court to satisfy itself that you have exhausted all realistic possibilities and it is probable that the application has come to the attention of your ex even if he/she is avoiding service.

Our family lawyers help each day with these matters.  We are trained to overcome these roadblocks in your Divorce Application and assist you finalise financial and parenting matters following your separation.

Doolan Wagner Family Lawyers offer specialist family law advice in St Leonards on Sydney’s North Shore.  If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquires@familylawyersdw.com.au to discuss your matter in complete confidence.  We have a team of experienced and caring professional family lawyers available to help you in this difficult time.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

January 2019 Family Law Case Watch

Can a trust be included in the matrimonial pool of assets where one party argues that it did not exist in the first place?

A trust can be created in a variety of ways not limited to only express creation. The recent case of Tamaris & Tamaris [2018] FCCA 3696 explores the circumstances in which a trust was said to be formed without the clear intention of one party and excluded from the matrimonial pool of assets. The relevant issue in this case was whether the particular trust was in fact constituted by the husband and wife in favour of their daughter for the purpose of her tertiary education.

Background

The husband and wife in this case were married for 31 years and had one (1) daughter of their marriage.

The husband asserted that in the course of the marriage he and his wife agreed to create a trust to set aside money to meet the costs of their daughter’s tertiary education. Following that agreement, he said he opened an account and then deposited significant sums of money into the account and thereafter retained those funds as trust funds that he said should be set outside of the assets that existed for Family Law property division in the Family Court proceedings.

The husband’s evidence about his and his wife’s intention to create a trust was however not very detailed. He asserted that he and his wife had discussed their daughter’s education needs and the fact of tertiary education being expensive. The husband further said that it was after these discussions that they decided to make provision for their daughter’s education and following these discussions the husband then opened an account, described as a custody account, into which he progressively paid sums of money from the joint income earned by himself and his wife.  At the time of trial, the balance in the particular account was $275,000.

The wife agreed that there was a bank account that held the above sum however denied the existence of any trust. She contended that there was no written agreement that proved any intention to create the supposed trust.

The wife said that her relationship with the daughter was strained and in any event had no recollection of a discussion with the husband about a proposal to create an education fund for the daughter. She said that if the father was “so keen” for their daughter to study at a tertiary level, he could pay for that education from his share of the proceeds after the division of matrimonial assets was made in their Family Law case.

Law

The High Court in the case of Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) held that a trust exists where the holder has either a legal or equitable interest in property and holds that property for the benefit of others and perhaps themselves.

The fact that a trust was intended may be deduced from the conduct of parties (Scott on Trusts, fourth edition, at paragraph 23). A presumed/implied trust may arise from the circumstances of a case where the law may presume that a trust was intended (James v Holmes). A trust formed in this way may also be referred to as a “resulting trust” where property is held by the trustee for a particular purpose and, once the purpose is fulfilled and a surplus remains, the surplus is held on trust for the creator of the trust or his representatives.

The law does not require an express agreement, that is, the use of formal words in writing or in a verbal exchange, as an appropriate expression of an intention to create a trust could be enough (Re Armstrong (deceased) [1960], JW Broomhead (Vic) Pty Ltd) (in liquidation) v JW Broomhead Pty Ltd [1985] and Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993)).

As such the intention to establish a trust is found after considering the entirety of the evidence available, including the surrounding circumstances (Swain v The Law Society [1982], Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988), Byrnes v Kendle (2011), and Korda v Australia Executor Trustees (SA) Ltd [2015]).

The existence of an intention to create a trust, howsoever established is not the only requirement. The essential elements of a valid trust further include certainty as to the object of the trust, the beneficiaries and the extent of the benefit. In circumstances where there is uncertainty, the trust fails and the trustee holds the property as a resulting trust (Sprange v Barnard (1789)).

Application

In the present case the husband asserted that he and his wife expressly agreed to establish a fund for their daughter’s education whereas the wife said she had no recollection of any such agreement.

The Family Court was therefore required to consider whether in the circumstances, the language or conduct of the parties during the marriage showed a sufficiently clear intention to create a trust.

In this case, the wife’s evidence was clear that during the entirety of the marriage she either agreed to or accepted that the husband would deal with the financial matters. The Court found that on the balance of probabilities, if the discussion occurred in the way the husband said, the wife may not have understood its significance as she would not have focused on the nature of the discussion pertaining to financial aspects and left it to the husband.

The judge in this Family Law case stated that the wife’s “inability to recall the conversation about the creation of the trust did not amount to denial. It was more probable than not that she abandoned any involvement in joint financial affairs as she was content for the husband to attend to them”.

Based on this analysis, the judge found that a valid express trust had been created for the sole benefit of the daughter.

The judge went on to consider the possibility of being incorrect in his finding however determined that a trust was definitely created, if not expressly, then in the form of an implied or resulting trust.

Conclusion

Having determined that a trust existed in the present case for the sole benefit of the daughter of the marriage, the funds held in the account managed by the trust were not considered as assets to be divided between the parties in the Family Law property proceedings.

We hope that our January 2019 Family Law Case Watch has provided you with some clarity about the complexities of trusts and in what circumstances such trusts will be included in identifying and valuing the matrimonial pool of assets in Family Law matters.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss your matter in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional family lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

October 2018 Family Law Case Watch

The case of Choat & Grendel [2018] FamCA 579 highlights a question often asked by family law clients in circumstances where counselling notes are requested to be produced. That is whether the confidentiality of the therapist/patient communications should be protected or excluded from production in Family Law proceedings. In this particular case, the Court considered whether it is appropriate to exclude certain parts of such material in a family law case and provided some clarification as to when such an outcome would be appropriate.

In this case the father and Independent Children’s Lawyer sought to obtain evidence relating to the mother’s mental health by way of issuing subpoena for the mother’s counselling notes. The father alleged that the mother had alienated the child from him and wished to learn more about the mother’s past to understand her mental status. The subpoena was issued in anticipation of a Final Hearing to determine parenting proceedings regarding a 12 year old child. The mother alleged that she was the victim of family violence and cybercrime perpetrated by the father. The mother feared that the father might harm her after reading the subpoenaed documents, or otherwise use the information against her. The mother objected to the release of the subpoenaed documents on two grounds, namely:

  1. That communications with her psychologist were confidential; and
  2. That the details of the trauma suffered by members of her family, incidents that occurred in high school and her residential address and telephone number were irrelevant and inadmissible as evidence.

Earlier cases have addressed the issue of confidentiality of communications between parties and their health professionals and have established that they are not ordinarily protected in legal proceedings, despite being inherently confidential. The differing views adopted in these cases were considered in the case of Choat & Grendel.

As his Honour, Judge Watts, notes, “there is no doubt that the communication between the mother and her therapist is confidential”. This assertion is commonly known by people in the community and is true of all health professional/patient type communications. Most information that is shared with health professionals will be confidential and is prohibited by law from being shared with anyone, except in limited cases where there is a greater need to protect the safety of the patient or another member of the community.

When considering confidential information not attracting any protection in legal proceedings, there is always the discussion of whether such communications should attract “public interest immunity” and therefore be inadmissible in legal proceedings (R v Young [1999]; Feinster & Feinster and Anor [2006]). That is the community or public interest in protecting such information outweighs the benefit of it being released.

Two significant and contrasting views were highlighted by his Honour Watts J in this case when considering the question of “public interest immunity” as a reason to protect private counselling notes from being admitted as evidence in a family law parenting matter.

The first was that of Spigelman CJ in R  v Young, a criminal case, where the Court found that communications between a sexual assault victim and a therapist did not attract public interest immunity. Spigelman CJ held that, in order to establish public interest immunity, the “requisite level of community acceptance” must be achieved “… entitling treatment that differs from other confidential relationships”.In that case, Spiegelman CJ determined that the requisite level of community acceptance had not been achieved such that those communications would be treated differently. The Legislature has since provided for protection of such communications, although there is no corresponding law in family law proceedings.

In the matter of Merrill & Burt [2015] Cronin J indicated that communications between a mother and her therapist that improved her ability to parent her children could be capable of attracting public interest immunity for the primary purpose of the best interests of the children. Cronin J suggested that unless evidence is produced to show that “children are at risk such that their best interests would be served by breaking the confidentiality of the therapeutic relationship”, the information should attract public interest immunity.

In the present case of Choat & Grendel, Watts J adopted the view expressed in R v Young focusing on community acceptance and evidentiary material as opposed to the centralised view expressed by Cronin J relying on the best interests of the children.

Watts J did not find in the case of Choat & Grendel that there was the necessary level of community acceptance surrounding the matter nor was there sufficient evidence to render the counselling notes inadmissible in their entirety. It was held that the mother’s counselling notes should not be excluded from the proceedings simply because they were of a confidential nature.

It is important to note that the primary consideration in parenting matters is the best interests of the child. It is a distinct principle of family law and it would be considered in all parenting matters in addition to other general principles adopted.

Notwithstanding the decision of Watts J regarding the issue of public interest immunity for the release of the whole subpoenaed document, his Honour found that certain parts of the material were not relevant to the parenting concerns at hand and the mother was therefore allowed to redact certain notes in the material.

Evidence such as counselling notes must be relevant to the issues presented before the Court in order to be admissible. If the evidence cannot “rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding” it would not be relevant to the case (s55 Evidence Act 1995 (Cth)).

Despite the evidence being relevant, the judge does have the power to deny evidence being admitted if its significance to the case is outweighed by a prejudicial impact to a party (s135 Evidence act 1995 (Cth).

Those parts of the counselling notes relating to the mother’s experiences in high school and the mother’s family members were not relevant to any issue in the proceedings in relation to the mother’s ability to care for her child. As such, the mother was allowed to remove those parts and was also allowed to redact any reference to her mother’s current address and telephone number.

This recent family law case provides that information being legally confidential will not suffice in protecting it from being exposed in family law proceedings. Family law courts are flexible in accepting evidentiary material in order to understand and successfully resolve parenting matters involving children. In fact, the court is willing to assist a party in protecting particular aspects of evidentiary material in order to render the remaining relevant material admissible.

We hope that our October 2018 Case Watch has provided you with some clarity about this vexed question.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss your matter in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional family lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

May 2018 Family Law Case Watch

Who bears the costs in Family Law proceedings?

Understandably, many Family Law litigants consider it to be unjust when they are either forced to initiate or respond to Family Law proceedings at significant cost. As a result, Family Law solicitors are frequently asked whether a Costs Application can be brought against an opposing party.

Pursuant to Section 117 of the Family Law Act 1975 (“the Act”), each party to proceedings under the Act shall bear his or her own costs. Unfair as it may seem, successful Costs Applications in Family Law matters are the exception not the rule. Accordingly, litigants should be warned not to conduct their matters with the hope of relying on a Costs Application.

The recent Family Court case of Jenkins & Jenkins however, is an example of a successful Costs Application brought by a Wife against her Husband. This case provides invaluable insight into how the Court exercises its discretion when applying the exceptions to the general principle that parties shall bear their own costs in Family Law proceedings.

The breadth of the Court’s discretion includes making Costs Orders that it “considers just” and “relevant,” in addition to considering:

1.      The financial circumstances of each of the parties;

2.      The conduct of the parties in relation to the proceedings;

3.      Whether any party to the proceedings has been wholly unsuccessful in the proceedings; and

4.      Whether either party to the proceedings has made an offer in writing to the other party to settle the proceedings and the terms of any such offer.

The facts in this matter relevant to the Costs Application concerned the Wife who was seeking that her Husband pay her costs of and incidental to, an Application in a Case seeking interim spousal maintenance and other financial orders relating to a Family Trust. The Husband in his Response document, sought to have the Wife’s Application for spousal maintenance dismissed and he did not propose paying her any other amount by way of spousal maintenance. He also sought to have that part of the Wife’s Application dealing with the Family Trust dismissed and he did not propose any alternate orders in relation to Trust administration matters.

The matter was allocated a date for Hearing and both parties attended Court. Prior to entering the Court room, the parties participated in negotiations and an agreement was ultimately reached. The parties accordingly requested that the Judge formally make the Orders contained in the agreement they reached outside the Court room.

The agreement reached provided that the Husband pay the Wife spousal maintenance in the amount of $457 per week. In respect of the Family Trust, orders were made including: that outstanding tax returns be lodged, that the 2015 trust income be distributed equally between the parties, and that the 2016 and 2017 trust income be distributed totally to the husband (with some limitation as to the Husband’s ability to draw on that income for the 2017 financial year and any future years pending the finalisation of the parties’ property settlement). The orders also required the Trust income to be paid into the bank account of the Family Trust as opposed to the Husband’s personal bank account. There was an additional order included that had not appeared in the Wife’s original Application, namely, that the Husband pay the amount of $2,169.50 for the repair of the boundary fence at the former matrimonial home.

The Wife’s original Application had envisaged that the Husband pay her spousal maintenance in the amount of $689.14 per week and she ultimately received $457 per week. In addition, the Wife conceded in the agreement that the Husband receive the income from the Family Trust for the 2016 financial years onwards (in accordance with the above-mentioned conditions.

The solicitor for the Husband, when making submissions in respect of the Wife’s Costs Application, made the assertion that the Husband, while not wholly successful, was also not wholly unsuccessful and therefore each party should bear their own costs in respect of the compromised agreement that was reached at Court.

The Judge however, in considering the conduct of the matter leading up to the hearing and in particular, in reviewing the letters of offer and counter-offers exchanged between the parties, considered that the proceedings could have been resolved prior to the hearing had it not been for the unreasonable conditions proposed by the Husband. The Judge’s reasons included the fact that an agreement was reached on the day of the Hearing without any mention of such conditions previously and consistently required by the Husband.

The Judge was satisfied that although the Husband knew of the Wife’s need and his own capacity to contribute to her financial support, the Wife had to bring an Application in order to obtain the outcome that she ultimately obtained. The Judge opined that the Wife had been put to considerable expense by paying her solicitor to prepare and file the Application and in retaining Counsel to appear at the hearing. The Wife incurred further costs in paying for her solicitor to prepare and file the Costs Application and in retaining and instructing Counsel to appear at that Hearing.

The Judge was also satisfied with the evidence that the Husband was earning around $184,000 before tax per year and had approximately $51,000 in bank accounts. The Wife, in stark contrast, was earning $7,800 per year and had approximately $1,700 in her bank accounts.

The Judge was therefore satisfied that the circumstances justified an order for costs being made and ordered that the Husband pay to the Wife the sum of $6,000 towards her costs of and incidental to her Application in Case filed in July 2017.

We hope that our May 2018 Case Watch has provided you with clarity in respect of who bears the costs in Family Law proceedings and the matters that the Court may consider when applying their discretion to award a Costs Order.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@dev.elevatebusiness.com.au to discuss in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional Family Lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.

Family Law Case Watch: March 2018

Are you in the midst of property proceedings? Will you have sufficient funds to support yourself and your children until your matter has concluded?

In the recent Family Court decision of McLaren and Zerafa [2018] FamCA 154, the Court was asked to make urgent financial provision for a Mother and her children in such circumstances and this case provides a very helpful and easy to understand illustration of how the Court can intervene.

The facts of the case concerned the breakdown of a de facto relationship which commenced in 2010. The parties have two children, currently aged six and four respectively. Upon their separation in 2017, the Mother commenced proceedings in the Family Court of Australia. From the date of separation, the mother and children continued to reside in the former matrimonial home. As this asset comprised a significant source of the parties’ equity, they decided to enter into Consent Orders providing for the sale of same and that and upon settlement, that the Mother receive a distribution from the sale proceeds in the amount of $50,000. The Mother’s urgent Application subsequently arose in circumstances where the settlement of the home was due to occur on 23 February 2018 and the Orders provided that the Mother and children must vacate same by 16 February 2018. In her evidence, the Mother stated that she had relied on a belief that the Father would financially provide for her and the children after their home had sold until final hearing. The Father refuted this position in his Response. The Mother and the children were consequently left in a position where they were facing having nowhere to live and insufficient funds to secure alternative accommodation.

The Mother’s urgent Application was that the Father provide her with funds to secure alternative accommodation for her herself and the children. The matter was afforded a hearing in the Family Court before Her Honour Justice Rees the very next day after it was filed.

More particularly, the Mother sought Orders that either the Father secure the lease of a home for herself and the children, or alternatively, that pursuant to Section 90SG of the Family Law Act 1975 (Cth), the Father pay to her, lump sum maintenance which would be sufficient to cover one year’s rent for accommodation. The Mother also sought further Orders for spousal maintenance. In her evidence, the Mother asserted that she had entered into the Consent Orders providing for her to receive funds by way of interim payment upon settlement of the former matrimonial home, on the basis of a belief that the Father would ensure that she and the children would have somewhere to live pending settlement. Whilst the Father denied that this was a reasonable belief on the part of the Mother, it remained an urgent concern before the Court that as at 23 February 2018, the Mother and the parties’ two small children, would have nowhere to live and no source of funds to pay for alternate accommodation.

In making her decision, Her Honour took into account the fact that the parties had lived throughout their relationship in the Eastern Suburbs area of Sydney. They noted that the children were settled in that area and in particular, that the elder child attended school in the Eastern Suburbs. The Mother had made enquiries into the cost of suitable rental accommodation for herself and the children which was estimated at $2,800 per week. Justice Rees identified in her Reasons for Judgment that a person in the financial position of the Mother would not secure a rental premise in the vicinity of $3,000 per week without paying substantial funds in advance. Her Honour therefore made a maintenance Order pursuant to Section 90SG of the Family Law Act 1975 (Cth) that required payment to the Mother of an amount equivalent to twelve (12) month’s rent in advance from the proceeds of the sale of the former matrimonial home. Justice Rees did not elect to modify the Orders that had already been made in relation to spousal maintenance. Her Honour made an Order that provided for payment of $145,000 (being approximately 12 months’ worth of rent at $2,800 per week) with an immediate payment to the Mother the amount of $40,000 on 12 February 2018, as proposed by the Father and the payment of the balance of $105,000 from the proceeds of sale of the former matrimonial home, on the settlement of same.

This recent Family Law case provides a positive insight into the remedies that the Court will consider in order to assist a party requiring urgent financial assistance while their proceedings are yet to be finalised.

If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or enquiries@familylawyersdw.com.au to discuss in complete confidence. We are conveniently situated in St Leonards on Sydney’s Lower North Shore and have a team of experienced and caring professional Family Lawyers available to help you.

These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.