In 2011–12, 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 the significant and noteworthy Full Court judgments is published here.
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). 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). Recent decisions are also published on the Court's website for a period of two months. 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 judgments.
The Full Court of the Family Court (Bryant CJ, May and Moncrieff JJ) sitting at Perth was asked to consider an appeal from orders of a magistrate that raised the question of whether, and if so, in what circumstances, the Court should make an order for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) ('the Act') where a marriage is still intact but where a physical separation has been forced upon the parties by reason of one of the parties' health. The parties were both aged and the wife was required to be in a high-care nursing home because of her frailty, both physical and mental. The husband wished to remain in the matrimonial home, which was within his ability. The wife's family sought orders that the matrimonial home be sold so that money could be spent on her care.
The magistrate dealt with the case in two discrete parts, determining first whether the Court had jurisdiction to hear and determine the matter, and second whether the Court should exercise the jurisdiction, having regard to the fact that aside from the forced separation, the marriage was still intact. The learned magistrate answered both questions in the affirmative and made final property orders. Those orders then became the subject of appeal before the Full Court.
In determining the appeal, the Full Court emphasised that the question is not whether the Court will exercise its jurisdiction as some preliminary question, but whether it is just and equitable to make an order.
Once the Court has established that it has jurisdiction to make an order, it must proceed to consider the relevant matters under s 79, including the matters under s 79(4) and s 75(2), when determining whether or not to make a particular order, or whether to dismiss the application making no order at all. The Full Court noted that in this case, one of the matters relevant to the exercise of discretion under s 75(2)(o) is the fact that the parties' marriage had not come to an end. Relevant too was a consideration of the overall justice and equity of making an order in favour of one of the parties. Section 79 gives the Court power to make "such order as it considers appropriate", including "altering the interests of the parties to the marriage in the property".
The Full Court noted that what is just and equitable having regard to the matters in s 79(4) and s 75(2) may include, for example, the fact that the parties are not separated other than in a physical sense. Those facts may be important in a particular case, under the wide rubric of what is "just and equitable".
The Full Court noted this reasoning is consistent with the decision of the majority in Sterling & Sterling2 [2000] FamCA 1150, and agreed with Kay J's formulation (at [28]) that the specific issue is:
whether within the provisions of s 79(1) it is appropriate to make an order where the marriage has not broken down, especially where such an order could not be seen to be for the benefit of the party who seeks the making of the order. A subsidiary question that needs to be asked is whether it is in all the circumstances just and equitable to make the order. (original emphasis)
The Full Court noted it must also be remembered that the Court, if not finally determining a property application, has power to make an interim order under s 80 and can also make a maintenance order, either periodic or lump sum, rather than a final order if that is thought to be appropriate.
The Full Court also found the magistrate's findings were against the evidence and the weight of the evidence and that it was difficult to ascertain the reason why the magistrate came to her conclusion given that the wife did not have a need for a property settlement, as such, and that her reasonable needs could be met in other ways, particularly by maintenance. In considering what was just and equitable under s 79 and s 75(2), the magistrate was required to consider the effect of these orders on the husband and the fact that it was an intact marriage.
Other than the forced separation of the parties by virtue of the wife being in a nursing home, the husband wished to remain in the home that had been the parties' home for in excess of 35 years. The Full Court observed there were many aspects of the application that did not require immediately making a final order to permanently alter the interests of the parties in their property, particularly where such final order would require the husband to leave the home in which he was still residing.
As the Full Court determined to allow the appeal, and in light of the possible necessity of a re-hearing, their Honours were reluctant to comment at length in relation to the grounds of appeal and associated submissions, save as to convey that the rights of each party remain, including the right that property held by them be divided pursuant to the provisions of the Act.
Having determined the appeal should succeed on a number of grounds, the Full Court set aside certain orders made by the magistrate and granted the parties cost certificates.
The Full Court made some important concluding observations, including that, as Kay J observed in Sterling, the Court will be required to deal with cases such as this with increasing frequency. The Full Court expressed the view that it is necessary for such applications to be considered fully having regard to the matters in s 79 and s 75(2) and without any predetermination as to whether or not the Court would exercise its discretion at all. The Full Court emphasised, too, that there is no requirement in such cases that the Court make final orders for property settlement that would permanently alter the financial interests of the parties, especially when the marriage itself is not at an end. Instead, if the justice and equity of the case requires it, there are a number of provisions in the Act which give the Court power to make interim orders, to make orders for maintenance and to adjourn the proceedings rather than to determine them on a final basis.
Camden provides guidance on the legal test for habitual residence under the Family Law (Child Abduction Convention) Regulations 1986 (Cth) ("the regulations"). Factually, the issue in this case was whether the parties had taken up habitual residence in the United Kingdom ("UK"), given that they had only emigrated from Australia a mere ten months earlier.
The mother was an Australian citizen by birth and the father a permanent resident, having moved to Australia from the UK. In April 2006, the parties were wed in Australia, where they remained for a further four years. The two children of the marriage were born in Australia during this time. On 20 July 2010, the family migrated to the UK so that the children could get to know the father's parents and extended family. The first instance judge found that the mother had difficulties after the move and it was doubtful the mother had integrated into life in the UK. Her Honour also found that the family had trouble establishing a stable financial foothold in their new country. On Monday 9 May 2011, the father revealed that he wanted a divorce. Three days later, on Thursday 12 May 2011, the mother left for Australia with the children. The father, via the State Central Authority, sought the return of the children to the UK for the purposes of having the parenting dispute resolved in that country.
The first instance judge held that the parties had not established habitual residence in the UK, and therefore the regulations did not require the return of the children because their removal to Australia was not wrongful. The State Central Authority appealed.
On appeal, the Full Court of the Family Court (Finn, Strickland and Forrest JJ) observed that the High Court authoritatively settled the principles governing an assessment of habitual residence in the decision of LK v Director-General, Department of Community Services (2009) FLC 93-397. The Full Court clarified that Zotkiewicz & Commissioner of Police (No 2) (2011) FLC 93-472 did not establish a new, two-limbed test in place of that enunciated in LK, and to the extent that Zotkiewicz applied a "twofold" analysis, it was an analytical methodology factually confined to that case only (at [53]). What LK required was a "broad factual enquiry" (at [57]) directed to whether there is a connection between the children and the alleged country of habitual residence (at [22]).
As the judge had approached the question of habitual residence in two stages, the Full Court held that her Honour had fallen into error. The Full Court found that after making the "very significant" finding that the parties had a settled, shared intention to make a new life in the UK, her Honour then focussed "in an apparently singularly determinative manner" on the mother's social integration and the couple's financial viability in the UK (at [54]). In this way, her Honour erred in attributing excess weight to two discrete factors and insufficient weight to other relevant findings, such as the shared intention, the mother's full-time employment in the UK and the purchase of a car and household goods for the parties' UK residence. The Full Court allowed the appeal and remitted the matter for rehearing.
In Martin & Newton, the appellant husband was sole director and shareholder of a company involved in medical research and the provision of medical services. The company assets, valued at $2,796,026, were constituted by philanthropic and pharmaceutical industry grants in support of the company's internationally-renowned research. One of the issues considered by the Full Court of the Family Court was whether the company assets should be treated as property within the marital pool, given that the husband had a "moral obligation" to direct those funds towards the company's research.
At first instance, the judge found that the company assets were at the disposal of the husband and within his control, that the husband was under no specific legal obligation to use the funds in any way other than as he elected, and that there could be no third party claim against the funds recognisable at law. His Honour went on to conclude that the company assets formed part of the husband's personal assets, in part because of the mingling by the husband of company and personal finances.
In total, the husband's assets were found to amount to $4,271,977 (inclusive of $1,084,709 superannuation). The wife's assets were worth $2,028,740 (inclusive of $45,919 superannuation). His Honour subtracted the superannuation from each of the individual pools and combined the residual amounts to form a collective pool of $5,170,089. This final pool was distributed 37.5 per cent to the husband and 62.5 per cent to the wife on the basis that contributions were equal but the wife was entitled to a s 75(2) spousal maintenance adjustment of 12.5 per cent. Each of the parties retained their own superannuation, this having been factored in as part of the s 75(2) adjustment.
On appeal, the husband argued, inter alia, that the company assets should not have been deemed to form part of his personal asset pool available for distribution between the parties. He asserted that he was under a legal and/or moral obligation to direct those funds to his company's research activities.
In their joint judgment, Bryant CJ and Thackray J accepted the premise that "the legislative scheme… is cast sufficiently widely to allow the court to take account of moral obligations... [where] we use 'moral' in its normative, rather than its descriptive sense" (at [226]). Their Honours went on to say at [227] that:
... it would offend justice and equity if funds provided by a third party for a public benevolent purpose were to be regarded as available for distribution in a settlement between a husband and wife merely because the donor had not ensured the donation was accompanied by sufficient legal safeguards to guarantee it was expended on the intended purpose.
This means that where a party has a moral obligation to utilise funds in a certain way, even absent a legal obligation, those funds might be cordoned off from the parties' collective assets. However, the bare existence of a moral obligation will not be sufficient to ensure that the funds will be withheld from distribution. The court must look to the "probability of the [party] carrying out [their] stated intention" of using the funds in accordance with their moral obligation (at [224]). Their Honours opined that where funds would not be directed to their intended purpose, those funds "could properly be treated in the same way as any other assets" (at [228]).
Bryant CJ and Thackray J found that while the first instance judge had accepted the existence of a moral obligation to use the funds for research, his Honour had not gone on to assess the probability that the husband would actually deploy them for this purpose (at [229]). Their Honours acknowledged that "it might be suggested it was implicit in the trial Judge's reasons that he had formed such a poor view of the husband that he did not accept the … company money would be spent on research". However, their Honours were ultimately unable to conclude that the necessary finding had been made (at [244]). In their Honours' view, it appeared that the judge's decision to coalesce company funds into the matrimonial pool was based entirely on "rejection of the proposition that the husband had a contractual obligation to spend the money on research" (at [244]). In their Honours' opinion, this constituted appellable error.
Strickland J also sat on the Full Court in this matter. His Honour arrived at the same result as Bryant CJ and Thackray J, but for different reasons. On the prospect of moral obligations informing the identification of matrimonial property, his Honour was in firm dissent: "For my part once a conclusion is made that the assets are the property of the husband and he can use those funds as he pleases, that is the end of the matter" (at [353]). Thus, as the husband held both legal and beneficial interest in the company assets, "the question of whether a moral obligation exists and whether or not that obligation is likely to be carried out cannot prevent a finding that the … assets were property available for distribution between the parties" (at [358]). His Honour opined that the proper time for evaluating the husband's moral obligations, and the likelihood of those obligations being fulfilled, was as part of a s 75(2)(o) analysis, as a fact or circumstance which the justice of the case requires to be taken into account (at [365]).
The appeal was unanimously allowed and the matter remitted for rehearing.
In McGregor, the Full Court of the Family Court (Bryant CJ, Faulks DCJ and Ainslie-Wallace J) upheld the appeal of the appellant father against parenting and property orders made in the Federal Magistrates Court. In respect of the parenting orders, the appeal turned on the use of academic literature by the federal magistrate at first instance. His Honour had relied heavily upon academic articles examining parental alienation, or "alienation by one parent of the other from their children", as a basis for concluding that the matter before his Honour was "a classic case of parental alienation perpetuated by the husband against the wife" (first instance judgment, at [38] and [41]).
The Full Court recognised that his Honour's findings of fact regarding behaviours that the father encouraged in the parties' three children were, in the main, not impugned on appeal. However, his Honour had then gone on to evaluate those findings against criteria for the "bona fide identification of parental alienation", as described in a particular academic work (first instance judgment, at [39]). That academic work, and others referred to by his Honour, were not the subject of evidence before the Court. The Full Court found that this academic literature underpinned his Honour's finding that the father had alienated the children from the mother. The Full Court held that the father had been denied procedural fairness because the academic materials were not properly admitted into evidence, depriving the father of the opportunity to make submissions in reply.
Having thus observed that his Honour did not adopt the academic materials as evidence in an appropriate way, the Full Court offered guidance on the proper approach to incorporating published literature as extrinsic evidence in a parenting case.
Their Honours first observed that such materials would rarely constitute information capable of being admitted by way of judicial notice pursuant to s 144 of the Evidence Act 1995 (Cth) ("the Evidence Act"), despite the "common misapplication" of the section by parties in pursuit of this end. Section 144 is usually inapplicable in respect of "social sciences issues in parenting proceedings" because they are typically the subject of "various credible schools of thought" (at [68], [70]). That was indeed the situation in this case, where the family report writer had opined that recent research findings on parental alienation appeared to diverge from those articulated by his Honour. Importantly, their Honours noted that even if s 144 is used as a basis to admit evidence as incontrovertible, it does not abrogate the need to afford procedural fairness to the parties. By s 144(4), a judge must still allow parties to make submissions and refer to relevant information in such a way as to ensure that the parties are not unfairly prejudiced by adoption of the evidence.
In general, their Honours explained, the correct approach to adopting academic literature is as opinion evidence grounded in specialised knowledge (following s 79 of the Evidence Act). However, in childrelated proceedings, s 69ZT(1) of Division 12A of the Family Law Act 1975 (Cth) ("the Act") excludes the operation of the opinion evidence provisions in the Evidence Act, including s 79. This gives rise to the "confusing" result that, in child-related proceedings, "an opinion can be admitted to prove the existence of a fact, and there is no requirement that the opinion-giver have any specialised knowledge or expertise" (at [85], [86]). Consequently, if "evidence of an opinion is to sought to be tendered, a judge must carefully address the admission of such opinion evidence and the weight to be afforded it" (at [88]). This means that the judge must first satisfy him or herself that the opinion evidence sought to be tendered is both relevant and not unfairly prejudicial, pursuant to ss 55 and 135 of the Evidence Act (which are not excluded under s 69ZT(1), and which therefore remain applicable). If the evidence is thus found to be admissible, the judge must then evaluate the appropriate weight to give it. In this case, the Full Court held at [118] that:
The article..., if tendered as opinion evidence under s 69ZT(1), would have required his Honour to consider whether to exclude the evidence under either s 55 or s 135, and if not, to consider what weight to give it. However, as no attempt was made to tender the... article, none of the above matters was considered by his Honour and, most importantly for the purpose of this appeal, his Honour failed to give the other party the opportunity to make submissions about receiving it and, if received, what weight to accord it.
As the Full Court allowed the appeal, the matter was remitted for rehearing by another federal magistrate.
2The High Court has granted special leave appeal.