In 2017–18, judges of the Family Court of Australia handed down judgments at both first instance and appellate levels. The decisions reflect the Court’s expansive jurisdiction, the wide variety of issues that it addresses and its position as a superior specialist federal court that deals with the most complex and serious family law cases.

A selection of significant and noteworthy judgments are published in this report.

The Court recognises that the accessibility of its judgments to the public is important. It commits the resources required to ensure that every final judgment delivered is anonymised and published consistent with s 121 of the Family Law Act 1975 (Cth) (‘the Act’). This policy has enabled the Court to better respond to community interest and concerns about particular cases highlighted in the media and demonstrates the commitment of the Court to being open and accountable for its decisions.

Virtually all judgments, after anonymisation, are published in full text on the Australasian Legal Information Institute (AustLII) website. There is a link to the AustLII site from the Court’s website (www.familycourt.gov.au).

The Court’s website provides links to recent decisions: links to Full Court decisions are provided for two months and links to first instance decisions are provided for one month. In 2017–18, the Court published links to 1170 first instance and 262 Full Court judgments.

Anson & Meek

[2017] FamCAFC 257 (Murphy, Aldridge & Cleary JJ)

Appeal—Short marriages—Property

The parties were married for five years, between April 2008 and March 2013. There were no children of the relationship. The primary asset was a farming property that the husband purchased for just over $1 million shortly before their marriage. The value of the property had increased significantly during their marriage and was valued at over $1.7 million at trial. The husband had other assets overseas which he kept separate, and, while taken into account, were not assessed in relation to the respective contributions of the parties. At the commencement of the relationship, the husband held 96.5 per cent of the property of the parties, and the wife 3.5 per cent. The nature of the parties’ respective interests did not change during their relationship.

While the parties had made equal contributions during their relationship, the trial judge found that the initial contribution in favour of the husband resulted in an overall split of the property with 80 per cent to the husband and 20 per cent to the wife. The trial judge then made an adjustment of 20 per cent in favour of the wife for s 75(2) factors, because of the significant impact the marriage had had on the wife’s earning capacity. Thus the property orders overall reflected a 60–40 split.

The husband appealed on the basis that the assessment was outside an acceptable range, given the short period of cohabitation and the overwhelming financial contribution of the husband. The husband also contended that the trial judge had erred in attributing the increased value of the property to their joint contributions during the short relationship, and further challenged the findings relating to the wife’s earning capacity.

Murphy J noted that the trial judge was entitled to take into account the increased value of the major asset, the farm, and the contributions of all types during the period of that increase. However, Murphy J noted that the trial judge only took into account the equal contributions that each party made during their relationship, but failed to take into account other relevant considerations. These relevant considerations included:

  1. The contributions (both towards the property and more broadly) of the parties post-separation, a period that amounted to a third of the period between the marriage and the trial. The contributions to the value of the property post-separation greatly favoured the husband.
  2. The role of market value, as the increased value was almost entirely attributable to the per hectare value of the land and not to any improvements on the land or to the house. Murphy J noted that it was the husband’s capital that permitted entry into the market, whose forces permitted the increase in value.

Thus the trial judge did make an error in identification of contributions.

Murphy J, in assessing s 75(2) factors, held that the trial judge was correct in finding that the marriage had a dramatic impact on the wife’s earning capacity. She had given up a well-paid position to move to East Asia and then again to return to Melbourne. The wife has been unable to find such a good position since. However, Murphy J found that the trial judge fell into error in linking the findings about the effect on the wife’s earning capacity to calculations made in an attempt to quantify the s 75(2) factors. These calculations were a ‘cross-check’ rather than a calculation of compensation but risked being mistaken as such. Murphy J found that there were errors in the calculation itself but that, more broadly, the approach was flawed in that it attributes a dollar value to the loss and then uses that dollar value as a central part of the determination [94].

In examining whether the assessment of contributions fell outside of an acceptable range, Murphy J then analysed the ‘short marriage cases’ that the Court had been referred to. He emphasised that there is no error in failing to determine the case or its assessments by reference to comparable cases but that what was decided in these cases required consideration. While the trial judge referred to those cases and highlighted distinguishing characteristics, there was no further analysis of their similarities. Murphy J determined that failure to undertake a more thorough analysis was a failure to take account of relevant considerations.

The majority judgment of Aldridge and Cleary JJ agreed with Murphy J that the trial judge erred in failing to take into account the relevant matters of the parties’ respective post-separation contributions and the contributions made by the husband to the increase in value of the farm, and by taking into account irrelevant matters, such as the ‘cross-check’ and erroneous calculation of the wife’s projected loss of income. Their Honours did not, however, find any error in the trial judge’s approach to comparable cases. They confirmed that while comparable cases could be looked at to derive consistency in the application of principles of law, they were not helpful to the exercise of the Court’s discretion when making orders for property settlement. Aldridge and Cleary JJ considered the framing of the grounds to be wrong, in referring to an ‘acceptable range’, noting that it is in reality a complaint that the result is unreasonable or plainly unjust. Their Honours, in having regard to principles evident in comparable cases and general ideas of fairness, found that the result was disproportionate to the facts and the award made by the trial judge so unreasonable as to infer that the discretion miscarried and there was an error in the application of principle.

Calvin & McTier

[2017] FamCAFC 125 (Bryant CJ, Ryan & Aldridge JJ)

Appeal—Property—Post-separation inheritance

This case focused on an inheritance received post-separation. The parties were married in 2002, separated in 2010, divorced in 2011 and had one child together. Following separation, the child had spent equal time with the parties. The wife commenced the relationship with nominal assets, whereas the husband had more substantial assets including owning two real properties.

In 2014, the husband received a significant inheritance, $430,686 of which remained at trial and which made up approximately 32 per cent of the parties’ assets. The wife sought to include the inheritance in the pool for division but the husband wanted the inheritance excluded.

The trial judge divided the pool, including the inheritance, with 35 per cent to the wife and 65 per cent to the husband. The husband appealed on the basis that there was a lack of connection between the inheritance and the marriage, as the inheritance had been received four years after the relationship ended.

The Full Court noted that the Court does have the power to divide the inheritance [20] as the Court is entitled to make orders it considers appropriate in relation to all the property held by the parties at the time of the hearing before the Court.

Counsel for the husband relied upon Stanford v Stanford [2012] HCA 52 (‘Stanford’), and in particular the High Court’s statement in that case that the Court must have ‘a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage’ to argue that the Court would have to be satisfied that there is a sufficient nexus between particular items of after-acquired property and the parties’ marriage before that property could be included for division between the parties [29]. The Full Court disagreed, noting that Stanford was concerned with the conditions to be satisfied before the Court should consider altering the parties’ interests in their property (i.e. to determine that it is just and equitable to do so). Stanford was concerned about whether there should be an order for property division at all, not with the nature of the actual order. Stanford does not require there be a principled reason to interfere with individual assets.

The Full Court dismissed the argument that there must be a separate and specific consideration for the inclusion of after-acquired property, instead stating that the Court is not obliged to include or to treat it separately, but retains a discretion as to how to approach its treatment. The Court confirmed that there is no requirement for a nexus between any specific asset owned by one of the parties and the marriage.

Re: Kelvin

[2017] FamCAFC 258 (Thackray, Strickland, Ainslie-Wallace, Ryan & Murphy JJ)

Case stated—Children—Gender dysphoria

The case concerns an application by the father of ‘Kelvin’ concerning administration of stage two medical treatment for gender dysphoria. Gender dysphoria is where the incongruence between the person’s gender identity and their sex assigned at birth causes significant distress. Stage one treatment involves puberty blocking treatment and stage two treatment involves gender affirming hormone treatment. Stage one is reversible when used for a limited time but stage two has some irreversible effects. Kelvin was assigned female at birth in 2000. Since he was nine years old, Kelvin has experienced all aspects of the criteria for diagnosis with gender dysphoria and has suffered significant anxiety, depression and self-harming behaviour. Kelvin’s parents support the commencement of stage two treatment for gender dysphoria, and the application was supported by his psychologist, psychiatrist and endocrinologist.

The case sought the opinion of the Full Court concerning the effect of its previous decision in Re: Jamie (2013) FLC 93-547 (‘Re Jamie’) and the role of the Court more generally in relation to stage two medical treatment for gender dysphoria and the determination of Gillick competence (Gillick v West Norfolk and Wisbech Area Health Authority [1986] AC 112).

The key questions for the Court were:

  1. Does the Full Court confirm its decision in Re Jamie that stage two treatment requires the Court’s authorisation pursuant to s 67ZC of the Act unless the child is Gillick competent to give informed consent?
  2. Is it mandatory to apply to the Court for a determination that the child is Gillick competent when stage two treatment is proposed, the child consents to the treatment, the treating medical practitioners agree that the child is Gillick competent and the parents do not object?

A number of further questions were dependent upon the answer to the second question and the Court did not ultimately need to consider them.

To answer the first question, the majority (Thackray, Strickland and Murphy JJ) first looked at whether there were any principles emerging from the decision of the High Court in Secretary, Department of Health and Community Services v JWB and SMB (1992) 175 CLR 218 (‘Marion’s Case’) that bound the Court in Re Jamie and the present Court. Marion’s Case examined the circumstances where medical treatment was taken outside the normal realm of parental consent for non-Gillick competent children and thus the treatment required court authorisation. Marion’s Case drew the distinction between therapeutic and non-therapeutic treatment and concerned non-therapeutic sterilisation. The majority found that it was not bound by Marion’s Case as treatment for gender dysphoria is therapeutic but noted that the obiter is still persuasive, including the need to weigh up the therapeutic benefits of the treatment against the risks where there is a significant risk of making a wrong decision and the consequences of a wrong decision are particularly grave.

The majority examined the decision in Re Jamie and the background to the case, including noting that it was an appeal and thus limited to the grounds of appeal, and was the first Full Court decision on the matter. In deciding to depart from Re Jamie, the Court noted that the generally accepted factual understanding, particularly in relation to medical knowledge, has changed since the decision in Re Jamie. A new addition of the Diagnostic and Statistical Manual of Mental Disorders was released that changed the diagnosis of those struggling with their gender identity from a disorder focused on the gender identity itself to a disorder concerned with the distress surrounding this identity. Standards of care for treatment of gender dysphoria have been developed and there is increased knowledge of the risks associated with not treating young people with gender dysphoria. Thus the Court found that the development in treatment and understanding of gender dysphoria allowed it to depart from the previous decision.

The Court held that ‘the risks involved and the consequences which arise out of the treatment being at least in some respects irreversible, can no longer be said to outweigh the therapeutic benefits of the treatment and court authorisation is not required’ [162] and that ‘the treatment can no longer be considered a medical procedure for which consent lies outside the bounds of parental authority and requires the imprimatur of the Court’ [164]. In deciding to depart from Re Jamie, the Court did not find that Re Jamie was ‘plainly wrong’ but that the new circumstances and a new factual understanding made a new rule desirable.

In Re Jamie the Court held that, as court authorisation is required where there is a significant risk of making the wrong decision and the consequences of a wrong decision are particularly grave, it was also necessary for the Court to determine whether the child was Gillick competent. As the Court had now determined that the nature of the treatment no longer requires court authorisation, it flowed that there is also no longer a basis for the Court to determine Gillick competence. Thus the answer to the second question was also no.

Ainslie-Wallace and Ryan JJ agreed that a child who is Gillick competent can consent to treatment without court authorisation and that, where a child is not Gillick competent, those with parental responsibility may provide consent without court authorisation. Marion’s Case concerned non-therapeutic sterilisation for a child who did not and would never have the capacity to consent and found that those circumstances were outside of the parental power to consent because of the invasive and irreversible nature of the surgery, the significant risk of making the wrong decision and the grave consequences of a wrong decision. By contrast, treatment of gender dysphoria is therapeutic, and ‘Marion’s Case does not stand for the proposition that consent to a therapeutic procedure which has grave or irreversible consequences is outside the scope of parental power or outside the consent of a competent child. Nor does it erect a free standing obligation to obtain a court finding that a child is Gillick competent before his or her consent can be given effect’ [189]. As such, Re Jamie misapplied the principles in Marion’s Case and thus Re Jamie was, in that respect, plainly wrong and should not be followed.

Tomaras & Tomaras and Anor and Commissioner of Taxation

[2017] FamCAFC 216 (Thackray, Strickland and Aldridge JJ)

Appeal—Property—Whether s 90AE(1)-(2) of the Family Law Act 1975 (Cth) confers power to make an order substituting one party to a marriage for the other party in relation to a taxation debt

The parties married in 1992 and separated in 2009. During the marriage, the Commissioner of Taxation issued assessments against the wife with respect to income tax and Medicare levies and obtained default judgment against her in November 2009. In November 2013, the husband became bankrupt. The wife commenced proceedings in the Federal Circuit Court in December 2013, seeking an order for alteration of property interests under s 79 of the Act.

The wife sought to substitute her husband as the debtor for her tax liability so that he would be solely liable to the Commissioner under s 90AE(1)(b) of the Act. Under s 90AE(1), the Court may make an order that is binding on a third party, including to order a creditor of one party to the marriage to substitute the other party for that party in relation to the debt.

The Commissioner was granted leave to intervene in the proceedings in February 2016 and the matter was transferred to the Family Court and the Full Court was asked to consider whether or not the Court has the power to make an order under s 90AE that is binding on the Crown.

The Commissioner of Taxation argued that, in accordance with Bropho v State of Western Australia (1990) 171 CLR 1, it should be presumed that s 90AE does not apply to the Crown as the section is expressed in general terms. Thackray and Strickland JJ found that the presumption does not apply as the section does not impose an obligation or a restraint on the Commissioner. The reasons that it could be argued s 90AE can only impose a benefit on the Crown are:

  • instead of an impecunious taxpayer being responsible for a tax liability, his or her more wealthy spouse may be made solely responsible pursuant to s 90AE(1)(a), thereby increasing the prospects of recovery
  • instead of one spouse being responsible for a tax liability, both spouses may be made liable pursuant to s 90AE(1)(b), thereby providing a remedy for recovery that otherwise would have been unavailable
  • while an order might be made leaving the less wealthy spouse to meet a tax debt, such an order could not be made if it was foreseeable that the order would result in the debt not being paid (s 90AE(3)(b)), and
  • the legislation permits the Court to make such order as it considers just for the payment of the reasonable expenses of the creditor incurred as a necessary result of the order (s 90AJ(2)). [17]

The Commissioner had made a number of other arguments on the basis that the presumption did apply, including that:

  • a substitution order would not be reasonably necessary or appropriate and adapted to effect a property order, as required by s 90AE, where the debt was not associated with a specific item of property
  • there is alternate provision in the Act to respond to circumstances where it is appropriate that one spouse be responsible for a tax liability incurred by the other, and
  • the transfer of tax debts could not operate to transfer the rights of objection, review and appeal and would thus create absurdities.

Thackray and Strickland JJ considered these, dismissing the first argument on the basis that there was no sound basis for construing the section so narrowly [27] and that it would always be open to the Commissioner to argue against a proposed order in a particular case on that basis [28].

In relation to the third argument, Thackray and Strickland JJ noted that s 14ZL of the Taxation Administration Act 1953 (Cth) confers the right of objection on ‘a person who is dissatisfied with an assessment, determination, notice or decisions’. Given this, Thackray and Strickland JJ rejected the Commissioner’s argument as the wide range of people who have the right of objection means there is no restriction on the substituted spouse exercising those rights.

Aldridge J agreed with the majority on the outcome but considered that s 90AE does change the right of the Commissioner of Taxation at law and does potentially hinder the Crown. Further, Aldridge J was of the opinion that a substituted spouse may not be able to exercise all the rights of objection, review and appeal as s 175A of the Income Tax Assessment Act 1936 (Cth) confers those rights on the ‘taxpayer’, which is defined in s 6 of the same as ‘a person deriving income or deriving profits or gains of a capital nature’. Aldridge J found that as this identifies the person with the right to object as the earner of the income, it does not include a substituted spouse.

Special leave to appeal to the High Court of Australia was granted on 23 March 2018.