Johannes Schmidt

Barrister-at-Law & Accredited Mediator

Who Gets the Dog?

26 June 2024 /

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In this episode, I discuss how the family law courts determine who gets to keep the family pet when a married or de facto couple separates.

Overview

Australia has very high pet-ownership rates.  The RSPCA’s website cites statistics from Animal Medicines Australia which showed that, in 2022, 69% of Australian households have a pet.  The most common pets are dogs, which are found in 48% of Australian households, followed by cats at 33%.

Those of us who have pets often consider them to be part of the family.  People have strong emotional attachments to their pets, and many people treat them as if they were their children.

However, pets are not children as far as the law is concerned.  

The Full Court in the 2022 decision of Grunseth & Wighton said:

As much as it will pain pet lovers, animals are property and are to be treated as such. Questions of attachment are not relevant and the Court is not, in effect, to undertake a parenting case in respect to them.

Chattels

So the family pet is, in the eyes of the law, just another chattel.

In most cases, the pet is unlikely to have great monetary value, so it is, rather sadly, akin to a household item like the TV or washing machine.

Can the Court make an order for shared custody?

Given that a family pet is an item of property, the “clean break” principle found in sections 81 and 90ST applies.

In Davenport & Davenport (No 2), Judge Tonkin observed that the Court has no jurisdiction under Part VIII of the Family Law Act to make an order for “shared custody” of a dog.

In the recent decision of Arena & Arena (No 4), a father in a parenting proceeding sought orders that the family pet move between the parties with the child, contending that the pet provided therapeutic value to the child, who had special needs.

Final property orders had already been made between the parents, and they provided for ownership of the pet.

Curran J, with reference to Grunseth & Wighton and Davenport, determined that the Court did not have jurisdiction to deal with the pet in parenting proceedings.

How Does the Court Decide Who Gets the Pet?

Chattels are more often than not disregarded when tabulating the property available for adjustment between parties, because it’s not cost-effective to have an expert value them.

The determination as to who gets to keep a chattel – including a family pet – is ultimately a discretionary one.

A reasonably recent example of a family law pet dispute is Judge Boymal’s 2022 decision in Barrese & Arrico.

The matter involved a modest property pool of about $147 k and a dog which the parties had acquired around the halfway mark of a short relationship of around 4 or 5 years.

Following separation, the dog remained in the wife’s care.  The husband tried at least a couple of times to take the dog from the wife.  One of those occasions involved breaking into the wife’s home, for which husband was arrested, an ultimately served a prison sentence.

There was no agreed monetary value for the dog, but on either party’s view the value was modest.  Her Honour determined not to include the dog in the asset pool.

Judge Boymal referred to the wife’s evidence that she had purchased the dog, and that she had paid for veterinary services (including de-sexing), registration, food and toys.

The husband disputed this, asserting that he had purchased the dog.

Her Honour held that:

While there is a dispute about who paid for the dog and how much the dog cost those details are of little consequence. The circumstances of the purchase of the dog is [sic] not, in itself, determinative of ownership, nor does it determine the future ownership of him. Both parties have a sentimental attachment to the dog but that is also not determinative of who should retain him. The husband’s tenacity in endeavouring to have the dog in his care in my view does not determine that he has a better entitlement to the dog than the wife.

Her Honour found that the wife had made significantly greater financial contributions to the dog, had cared for the dog, and was the registered owner of the dog.

Her Honour held that

Given the wife’s financial expenditure on the dog and her maintenance and care of him the orders include that she shall retain the dog.

The Full Court in Grunseth & Wighton suggested an alternative approach, which I imagine would be taken by many animal lovers as an affront.  It suggested:

If the ownership is contested, there is much to be said for each party making a blind bid for the pet, with the highest offer accepted and taken into account in dividing the property.

Conclusion

All in all, the family law landscape in relation to pets is likely to be an upsetting one for many parties.  The Family Law Act makes no specific provision for pets, and they are given no higher status than whitegoods or couches.

Whilst each matter will be determined by the Court on a discretionary basis, the published cases suggest that factual matters such as registered ownership, and financial contributions to the upkeep of pets, can be important factors in determining who ultimately gets ownership of a pet.

Shams & Alkaios (No 2) [2024] FedCFamC2F 620

1 June 2024 /

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In this episode, I discuss the judgment of Judge Glass in Shams & Alkaios (No 2), which is the first published parenting case determined on the basis of the 2023 amendments to Part VII of the Family Law Act.

Overview

As everyone who has anything to do with family law knows, the parliament passed the Family Law Amendment Act 2023 last year, which had a particular focus on Part VII of the Family Law Act 1975.

Since the first Exposure Draft of the bill was released, there has been much discussion about the effects of the amendments.

I was on the record early with a view that the amendments were, for the most part, a simplification and rewording of the same concepts, aimed at making the provisions easier to understand for self-represented litigants, rather than a massive upheaval.  Whether I was right or wrong, my views will forever be freely available online to haunt me in a TEN Fireside Chat with Jacky Campbell.

The amendments took effect on 6 May 2024.  That day, Judge Glass of the Federal Circuit and Family Court of Australia (Division 2) in Melbourne commenced a 3-day parenting trial.  

No doubt many other judges did the same, but Judge Glass has the distinction of delivering the first published judgment applying the amended provisions.

His Honour delivered judgment in Shams & Alkaios (No 2) on 20 May 2024.

It was a fairly straightforward relocation matter where the children had been living with the father in Melbourne, and the mother sought a change of residence for the children to live with her in Queensland.

There’s nothing extraordinary about the facts of the case, but it is the first (and at the time of writing only) published decision based on the freshly amended Part VII.

So, how did Judge Glass consider and apply the new provisions?

Are there drastic impacts as a result of the new simplified objects of Part VII?  

Does the absence of a presumption in favour of equal shared parental responsibility mean that sole decision-making orders will be the new normal?

Have the section 60CC best-interests considerations changed everything?

Decision-Making

The first thing one sees when looking at the judgment is order 1, which reads:

The parties make joint decisions in relation to all major long-term issues in relation of the Children…

This is the new equivalent to the old order for equal shared parental responsibility, but in language which makes it absolutely clear that the order is about decision-making, and nothing else which might have been read into the term “parental responsibility”.

Of course, absent from the judgment is any discussion of a presumption, as none exists anymore.

Decision-making is now just another aspect of the discretionary assessment of best-interests considerations.

However, in determining the allocation of decision-making (after analysis of the best-interests considerations, which I discuss below), Judge Glass referred to the “encouragement” prescribed by section 61CA, which provides:

If it is safe to do so, and subject to any court orders, the parents of a child who is not yet 18 are encouraged: 

(a) to consult each other about major long-term issues in relation to the child; and 

(b) in doing so, to have regard to the best interests of the child as the paramount consideration. 

New s 60B – Objects of Part VII

Judge Glass noted that he was guided by the objects of Part VII, as found in section 60B, but did not otherwise refer to them.

Section 60CC Factors

The new section 60CC is much shorter and simpler than the old one.

The old language of protecting children from harm has been replaced by a focus on the safety of not only the child, but also the child’s carers.

Section 60CC(2)(a) – Arrangements which would promote the safety of the child and carers

Under this factor, Judge Glass traversed the history of the parenting arrangements, what his Honour termed as “generalised assertions” by the mother about the father in relation to abuse and controlling behaviour, allegations of physical violence, and other allegations of family violence.

His Honour also included in this part of the judgment discussion about what in this case was a lack of family violence orders.

On my reading, there was nothing novel in the discussion.  It encompassed the matters which his Honour would have discussed pursuant to the old s 60CC(2)(b) and 3(j) and (k).

His Honour was ultimately not satisfied that the father had caused harm to the children, and was therefore not satisfied that a change of residence was necessary to promote their safety.

Section 60CC(2)(b) – Views expressed by the child

In the familiar way, his Honour discussed the children’s views as relayed by the family consultant.

This is unsurprising, as the wording of the new s 60CC(2)(b) is a truncated version of the old s 60CC(3)(a).

Section 60CC(2)(c) – Developmental, psychological, emotional and cultural needs of the child

Here, his Honour’s discussion turned to the family consultant’s opinions about the care provided to the children in their primary residence, and the support the children received at home and school.

His Honour also referred to the family consultant’s evidence about potential emotional distress which would be occasioned on the children by a move from their familiar environment and community to a new life in Queensland.

Section 60CC(2)(d) – capacity of each person who has, or is proposed to have, parental responsibility for the child to provide for the child’s developmental, psychological, emotional and cultural needs

Judge Glass’s discussion of this factor is reflective of the discussion one would have expected in relation to the old s 60CC(3)(f).

It has the usual themes of parental capacity and insight, child-focus and support of the children’s relationships with the other parent.

Section 60CC(2)(e) – Benefit to the child of being able to have a relationship with the child’s parents and other people who are significant to the child, where it is safe to do so

Here, his Honour considered the nature of the children’s relationships with each of the parents and other significant adults, ultimately determining that the children had strong and sound relationships with each parent, which could be sustained despite the geographical distances between them.

Having found earlier that there was no risk to safety, the last seven words of paragraph (e), being “where it is safe to do so” had no work to do in this case.

In the absence of safety concerns, the new s 60CC(2)(d) appears to reflect the old s 60CC(2)(a) and (3)(b), (c) and (d).

Section 60CC(2)(f) – Anything else relevant to the particular circumstances of the child

This new version of the old s 60CC(3)(m) catch-all provision.

His Honour did not discuss any relevant matters.

Conclusion

No doubt, we will see more and more judgments in the coming months, which will show us how various judges in all three Court – Division 1, Division 2, and Family Court of Western Australia, are applying the new provisions.  

In time, we will get further clarification from the Full Court and eventually the High Court.

Based on this first published judgment, though, it looks like we may all be able to relax a little bit about the amendments, as nothing much seems to have changed.  

Contempt

22 May 2024 /

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In this episode, I discuss contempt in family law, including types of contempt, the relevant tests, and how contempt interacts with Division 13A contravention proceedings.

Power to Punish Contempts

Section 45(1) of the Federal Circuit and Family Court of Australia Act 2021 provides:

The Federal Circuit and Family Court of Australia (Division 1) has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court. 

Section 142(1) provides the mirror provision for Division 2.

Section 112AP of the Family Law Act

Section 112AP of the Family Law Act 1975 makes up the entirety of Part XIIIB – Contempt of Court. 

Application of s 112AP

Section 112AP(1) sets out the required elements for a finding of contempt under the Act:

Subject to subsection (1A), this section applies to a contempt of a court that: 

(a)          does not constitute a contravention of an order under this Act; or 

(b)          constitutes a contravention of an order under this Act and involves a flagrant challenge to the authority of the court.

Contempt other than Contravention

Section 112AP(1)(a) needs little explanation.  It relates to conduct which falls within the ordinary meaning of the word “contempt”. 

Some neat examples of such conduct arose in Medapati & Revanka (No. 3), where the husband:

  • “told the Court many times during the hearing that the proceedings were ‘moot’ and that they did not matter to him”;
  • “sought to intimidate [the judge], seemingly believing … that he might be able to intimidate [the judge]into finding in his favour”; and
  • “insincerely said to [the judge] at one point ‘I forgive you for your ignorance’” and then “blatantly lied to the Court when he was asked to confirm that is what he said”.

Forrest J was “quite satisfied that the husband [had] contemptuous feelings towards” his Honour and the Court.

Beyond Reasonable Doubt

The Full Court in Tate held that an application that a person be dealt with for contempt is “properly characterised” as “a proceeding for an offence” and that,  

Accordingly, the proceedings are criminal proceedings as defined in the Evidence Act and thus the standard of proof to be applied is as set out in s 141(1) of that Act, namely proof beyond reasonable doubt.

Elements

Aldridge J in Ganem & Ganem (No. 2) summarised the elements of a contempt as follows:

  • The respondent knew the terms of the orders.
  • The respondent deliberately did an act. The act must be wilful and deliberate as opposed to accidental or inadvertent.
  • The act must be intentional. This is not to say that the respondent must intend that the act was in breach of the order, which would make the respondent’s actions contumacious, but the respondent must have intended to do the act which is alleged to be the contempt. 
  • The act must involve a flagrant challenge to the authority of the court. …

What Constitutes a Flagrant Challenge to the Authority of the Court

The alleged contemnor must have known both the contents of the contravened order, and what the order meant.[3]

Johns J has put it as follows:

In order to establish a contempt, I need be satisfied that there has been a deliberate defiance of a court order, as distinct from a breach of a court order.

As the words “flagrant challenge” are not defined in the Act, the Court has adopted the dictionary definition: “glaring, notorious or scandalous”.

The Full Court in Kendling approved the following passage from English:

it must be established that the respondent knew of the undertaking or order and that his act or omission in breach of that order or undertaking was a wilful, that is, a deliberate act by him as distinct from accidental or inadvertent.  It is not necessary in addition to establish that the conduct was contumacious; that is, it is unnecessary to show that the act or omission was done with a deliberate intention to break or disregard the undertaking or order. 

The Full Court in Kendling held that a lack of adverse consequences to the other party to the proceeding does not absolve the contemnor.  The Court there said that there were at least two reasons:

the consequences of the most flagrant challenges to the authority of the Court could be avoided by the rectification of the breaches of the orders at any time prior to the imposition of sentence. There would be a clear incentive in those circumstances for parties to flagrantly challenge the authority of the Court in the hope that the other party would not incur the expense of bringing the application pursuant to s 112AP, safe in the knowledge that if and when that was successfully undertaken, remedying the breaches of the orders would obviate the imposition of sanctions pursuant to the section

where rectification of breaches of court orders can be achieved by financial transactions or payments, is that it has the potential to elevate the wealthy to a level of impunity not enjoyed by those less affluent.

Sentencing

Kent J, in Cluny & Skinner (No 2), conveniently summarised “general principles or guidelines” with respect to sanctions for contempt.  Essentially:

  • Section 112AP provides the code for dealing with sentencing.  State and federal sentencing laws have no application. 
  • The sentencing judge has a wide discretion, which is to be exercised transparently.
  • Review of punishments in other cases is of limited assistance, as each case turns on its own facts.
  • As the section provides no maximum term of imprisonment, the exercise of the discretion is particularly difficult.
  • Whilst the purpose of contempt proceedings is normally to coerce compliance with orders, another purpose may be punishment, for the purposes of individual and general deterrence, and for retribution.  Retribution may be called for because effective administration of justice requires demonstration that the court’s orders will be enforced.

Who can Apply?

Am application for a person to be dealt with for contempt may be made by:

  • a party to the proceeding, if the contempt is in connection with a proceeding;
  • the Marshal, or another officer, of the Court;
  • an officer or staff member of the Australian Federal Police; or
  • a member of a state or territory police force.

This is set out in r 11.71(3).

Rule 11.71 sets out the requirements and processes for contempt applications.  As a contempt proceeding is quasi-criminal, strict compliance with the Rules and legislation is required, so be sure to peruse r 11.71 before making an application.

Contempt vs Division 13A Contravention Proceedings

A party aggrieved by way of contravention of a parenting order may elect to seek that the offending party be dealt with for contempt (if the requisite flagrant challenge exists), in addition to, or rather than, seeking that the offending party be dealt with under Division 13A of Part VII.

In Wylie, Forrest J held (with my emphasis added):

Section 112AP(2) of the Act expressly empowers the Court to punish a person for contempt of the Court “[i]n spite of any other law”. I consider that provision confers power on the Court to hear and determine contempt proceedings against a party regardless of whether proceedings have or are being brought against the alleged contemnor pursuant to Division 13A of Part VII of the Act or a provision of any other State or Commonwealth legislation, such as the Queensland Criminal Code. As Coleman J went on to say in McClintock & Levier:

In my view it is not without significance that the legislation does not exclude from the operation of s 112AP breaches of parenting orders. Nor does Division 13A of the Act purport to exclude any breaches of parenting orders from the operation of s 112AP. That state of affairs cannot have eventuated through inadvertence. I thus perceive there to be two kinds of proceedings with respect to breaches of parenting orders.

Where the Contravention Constitutes a Crime

Where a person chooses to prosecute a contempt based on an alleged contravention of a parenting order, but without prosecuting a contravention under Division 13A, the obligation under s 70NDB to either adjourn or dismiss the contravention proceeding where the alleged contravener is subject of criminal proceedings arising out of the contravention is not mandated.

However, the Full Court in Sahari and Sahari (1976) FLC 90-086 said (my emphasis added):

Where the alleged facts constituting the contempt also constitute a crime the court has a careful and considered discretion to exercise. In some cases protection of the applicant will demand urgent action. In others the applicant’s protection can be left to the processes of the criminal law. Where only the affront to the court’s authority is involved and the same facts constitute a crime, the criminal processes should first be allowed to take their course. When they are concluded the court may then turn to the question whether the disobedience of its order merits further punishment in the public interest.

Conclusion

As you can see, an application for someone to be dealt with for contempt under the Family Law Act should not be made lightly.


Great care needs to be taken to comply strictly with the legislation and the Rules, and, of course, the standard of proof required is higher than what we are normally used to in family law, because it’s the criminal standard of proof beyond a reasonable doubt.

Asset Preservation Orders with Robert Heath KC

1 May 2024 /

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In this episode, I am joined by Robert Heath KC, for a discussion about asset preservation orders.

Transcript

Johannes: 

Welcome to Divorce is Schmidt: A Family Law Series.

In this episode, I’m joined by a special guest.  Rob Heath KC is a leading commercial silk at the Victorian Bar.  In addition to his busy, and broad, advocacy practice, Rob is a highly sought-after mediator and arbitrator, both in Australia and overseas.

I had the privilege of being led by Rob in a matter in the Major Complex Financial Proceedings list in 2023, Rob’s first foray into family law.

That included a two-day interlocutory stoush, primarily about our topic of discussion in this episode: asset preservation orders.

Rob, what is an asset preservation order, and what is it for?

Rob:

The purpose of granting an asset preservation order is to prevent the frustration or inhibition of the court’s process, by seeking to meet a danger that a prospective judgment of the court will be wholly or partly unsatisfied.

Johannes:

And how does an asset preservation order operate?

Rob:

Asset preservation orders operate to prevent the party against which they are made from divesting or dissipating assets.

They’re intended to prevent the abuse or frustration of the processes of the court by preventing the respondents from dissipating their assets, or disposing of their assets, so as to deprive applicants of the fruits of any judgment obtained in the proceedings.

Johannes:

Okay, so an asset preservation order is a species of interlocutory injunction.  In the family law context, we’re looking at section 114(3) of the Family Law Act.  Now, that section provides that the court may grant an injunction if it appears to the court to be just and convenient to do so.

How does the court work out whether it’s just and convenient to grant an injunction, generally?

Rob:

In ABC and O’Neill, the High Court explained the organising principles relating to interlocutory injunctions.

According to these principles, on such applications, the court must make two inquiries.

The first inquiry is whether the applicant has demonstrated a sufficient likelihood of success to justify in the circumstances the preservation of status quo pending trial.

And the second inquiry is whether the balance of convenience favours the granting of the injunction sought.

Johannes:

I’m guessing, Rob, that the first limb there is quite important in general civil litigation, where a plaintiff or applicant needs to make out a cause of action.

In the context of family law property proceedings, that will virtually always be satisfied, won’t it?

Rob:

Yes, I think so.

Johannes:

And how does the court determine the balance of convenience in the second limb of that test?

Rob:

In order to succeed in obtaining an asset preservation order, an applicant must demonstrate the following.

First, a sufficient probability that they will obtain a favourable judgment, which, as we’ve just touched, on is usually a given in a family law property case.

And, second, the risk that, if not restrained by order of the court, the respondent will do something that brings about an unjustifiable dissipation of assets under the respondent’s control, with the consequence, Johannes, that this will interfere with the due administration of justice.

And, third, as a matter of discretion, the order ought be made.

Johannes:

So the real meat is in the second limb there, isn’t it?  A risk of unjustifiable dissipation of assets under the respondent’s control.

How does the applicant for the asset preservation order show that?

Rob:

The applicant will discharge that burden if they can show that there’s a real risk that a judgment will go unsatisfied, in the sense of a real risk that unless restrained by injunction the respondent will unjustifiably dissipate, or dispose of, their assets, other than in the ordinary course of business.

Second, unless the respondent is restrained by injunction, assets are likely to be dealt with in a way such as to make enforcement of any judgment more difficult, unless those dealings can be justified for normal and proper business purposes.

Johannes:

Okay, and what’s the level of evidence required to demonstrate a real danger of judgment frustration?

Rob:

The applicant must show by evidence, and not by assertion, that there’s a real danger of dissipation of assets such as to render the judgement wholly or partly ineffective.

The applicant must prove facts from which a “prudent, sensible commercial” person can “properly infer a danger of default if assets are removed from the jurisdiction” or dissipated.

Johannes:

So it can’t just be a fear or speculation on the part of the applicant that the respondent might do something dodgy, and a prudent person needs to be able to draw an inference of default from the evidence.

What if conflicting inferences are open on the evidence?

Rob:

In 1952, the High Court in Luxton and Vines held that courts cannot draw the “appropriate inference” if the admissible evidence gives rise to “conflicting inferences of equal degrees of probability so that the choice between them is mere matter of [speculation or] conjecture”.

Johannes:

And you said earlier that the third limb of the test is whether, in the court’s discretion, the order ought to be made.  What does the court consider there?

Rob:

Courts must consider the customary discretionary calculus.

Johannes:

What does that involve?

Rob:

First and foremost, analysing the first and second considerations together and doing so with an appreciation of both the underlying purpose of the rule and the relative risks of granting or withholding relief.

Second, considering other matters, such as the breadth of the orders sought and the likely impact of those orders upon the person against whom it’s made, and also upon third parties.

Johannes:

Okay, and is there any remedy for the respondent, or third parties, if they suffer losses because of the asset preservation order being made?

Rob:

Yes.  On the assumption that it should not have been made as things turn out, courts look back to an undertaking as to damages, which the applicant may have had to have provided.  And the authorities make it clear that, ordinarily, an application for an asset preservation order should be coupled with the giving of an undertaking as to damages by the applicant.

In exercising the discretion at the final steps, courts have regard to the likely difficulties associated with the quantification and recovery of damages pursuant to the usual undertaking, if it should turn out that the order should not have been granted, and the likely problems for the identification of events which would trigger that entitlement to damages at the end of the whole process.

Johannes:

Thanks, Rob.

So what are the key takeaways for our listeners here?

Rob:

First, there needs to be a real risk of unjustifiable dissipation of assets – not justifiable dissipation; it has to be unjustifiable.

Second, there needs to be a risk that such dissipation will undermine the administration of justice.

And, third, there must be evidence of the risk.  Not mere speculation or conjecture, and not assertion.  That won’t cut it.

Johannes:

So, actual evidence.

Rob, a lot of the authorities on asset preservation orders come from outside the family law sphere.  For the people listening to this who, like me, are mere family lawyers, where can they find all of the citations of the principles that you’ve spoken about today?

Rob:

Mercifully, Johannes, they’re all set out in our article in issue 1 of volume 33 of the Australian Family Lawyer, which is published by the Family Law Section of the Law Council of Australia.

Johannes:

Rob, thank you so much for joining me, and for your insights on asset preservation orders.

Rob:

My pleasure. Thanks for having me.

Johannes:

This is Robert Heath KC.  I’m Johannes Schmidt.  Thank you for listening.

Are communications with litigation funders privileged?

10 April 2024 /

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In this episode, I discuss privilege issues related to litigation funders, and whether communications between litigation funders, lawyers, and parties, are subject to discovery or subpoenas.

Overview

It appears to be increasingly common that clients who have good prospects of obtaining a property settlement in a family law proceeding are unable to afford legal fees upfront.

At the same time, it is less and less common for lawyers to be prepared to run family law litigation on the promise of payment at the end of the matter.

Litigation funders are often the answer to filling that gap.  

Litigation funders assess the merits and prospects of a property case, necessarily with input from the client and the solicitors, and then agree to lend funds to cover the legal fees, typically with some security provided by the client.

The information sought by litigation funders from solicitors largely mirrors the sort of information which a solicitor might provide to a client when advising on the merits of their case.

When it comes to actually disbursing funds, the usual process is that the solicitors provide copies of their invoices to the litigation funder, and the funder pays the solicitors directly.  Those bills often contain detailed narrations which may reveal strategy or steps about to be taken by the client.

So what happens if the other party to the litigation demands discovery of communications with the litigation funder, or issues a subpoena to produce documents, directed to the litigation funder?

Litigation Privilege

Let’s first look at the law of litigation privilege.  

To avoid any confusion, I want to be clear that family law in Australia is a federal law, and so the Evidence Act 1995 (Cth) is the legislation which applies, rather than any state or territory Evidence Act.

Division 1 of Part 3.10 of the Evidence Act relates to Client Legal Privilege.  At common law, this concept is known as legal professional privilege.

Personally, I prefer the term client legal privilege, because the privilege belongs to the client, not to the legal practitioner.

Evidence Act s 119 relates to a particular kind of Client Legal Privilege known as litigation privilege.

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: 

  1. (a)  a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or 
  2. (b)  the contents of a confidential document (whether delivered or not) that was prepared; 

for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. 

For the purposes of this discussion, where we are talking about production of documents in an Australia family law proceeding, we are really just interest in 2 aspects of s 119:

  • whether the document in question is a confidential communication; and
  • whether the document was prepared for the dominant purpose of the client being provided with professional legal services.

Confidential Document

The term “confidential communication” is defined in s 117, which contains the definitions relevant to Division 1 of Part 3.10:

confidential communication means a communication made in such circumstances that, when it was made: 

(a) the person who made it; or 

(b) the person to whom it was made; 

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law. 

 Lawyers are obviously under both legal and ethical confidentiality obligations.

But are documents prepared for the purpose of obtaining litigation funding prepared for the dominant purpose of the client being provided with professional services?

There are two leading Australian authorities on this issue, both decided in 2006:

In Rickard Constructions, Bergin J held that the dominant purpose of confidential communications with the litigation funder

was to ensure the overall capacity of the plaintiff to have funding and to ensure that such funding would be forthcoming for the continued funding of the litigation.

The Court concluded that the documents were privileged pursuant to s 119 of the Evidence Act 1995 (NSW), which is in identical terms to s 119 of the commonwealth Act.

Spotless was determined on the basis of common law legal professional privilege, as Victoria had not yet enacted its current Evidence Act (which largely mirrors the Commonwealth Act).  

Chernov J pointed out:

It is common ground that the original communication, namely, the legal advice that was provided to the respondent, was subject to legal professional privilege. And it was that communication — that advice — that was passed on to the third parties. That the re-communication was in written form is, as I have said, irrelevant to this issue. What is of relevance is that, on its proper characterisation, the communication that was made to the third parties, effectively by the respondent, was the legal advice which it had received and to which privilege attached.

In the family law arena, in the 2007 case of Blue & Blue [2007] FamCA 1444, Carmody J, after considering Rickard Constructions, Spotless, and other authorities,  found not only that the litigation privilege applies to communications between solicitors and litigation funders, but also that the principle was “concomitant with public policy”, in that it was in the public interest for litigants to be able to access litigation funding.

So the answer is clear: communications with litigation funders are covered by client legal privilege.

Stella & Stella [2023] FedCFamC1F 1092

27 March 2024 /

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In this episode, I discuss Strum J’s recent judgment in Stella & Stella, which involved Stanford arguments, multiple pools and late inheritances.

Overview

Stella & Stella was a matter heard by Strum J in the Major Complex Financial Proceedings list.

Each of the husband and wife was in their early- to mid-50s. They had 3 adult children together.

The total value of the non-superannuation property of the parties, or either of them, was around $16 M.  There was controversy about add-backs and treatment of contingent tax issues. Around $10.5 M worth of the non-superannuation property had been obtained by the parties by way of inter vivos gifts or inheritances received from the husband’s late grandmother, or by distributions from a trust associated with her.

It’s important to note at the outset that those property interests were variously received by each of the parties, not only by the husband.

The crux of the case was how those gifts, inheritances and distributions to each of the parties were to be treated.

Positions

The husband’s position was that it was not just and equitable for there to be any property adjustment at all.  He was running what family lawyers often call a Stanford argument.

The wife contended for a 2-pool approach:

  • Pool A consisting of so-called “non-inherited interests”
  • Pool B consisting of the property interests derived from the husband’s late grandmother.

She contended that it was just and equitable for there to be property adjustment with respect to Pool A, but not with respect to Pool B. In other words, she was running a Stanford argument only in relation to Pool B.

Legal Principles

His Honour traversed the authorities in relation subsection 79(2), being the subsection which requires the Court to assess whether it is just and equitable to make a property adjustment order.

His Honour referred to the observation by the Full Court in Bevan & Bevan that subsection 79(2) is unlikely to impact most cases, as the just & equitable requirement will readily be satisfied by virtue of the parties no longer living together, and there is no longer the common use of property.

Importantly, his Honour discussed the 2017 Full Court decision in Zaruba, where it was held that, whilst in the vast majority of cases the justice & equity question is appropriately addressed without making distinctions between individual assets, “the position is likely to be different in circumstances where … the characteristics of the property and the circumstances of its acquisition, improvement and the like can be seen to differ significantly…”

In relation inheritances, Strum J considered the two 2017 Full Court decisions, Holland and Calvin & McTier, which in turn referred to well-known authorities like Bonnici, and Farmer & Bramley.

The upshot is that the Court has a discretion as to how to treat late inheritances, including whether to include them in a global pool or deal with them separately, and how much weight to give to contributions made directly to the inheritance as opposed to global contributions in the relationship.

Strum J also, of course, discussed the principles arising from Gosper and Kessey, and how Chisholm J in 1997 discussed those principles in Pellegrino.

At paragraph 87 of his judgment, Strum J summarised the principles arising from the authorities.  I highly recommend that you read that paragraph in full.  

Some key points relevant to my discussion here are the following:

(q)          Whilst, in the vast majority of cases, it will be appropriate to address the s 79(2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets, the position is likely to be different in circumstances where the characteristics of the property and the circumstances of its acquisition, conservation and improvement can be seen to differ significantly and where the parties’ relationship has taken on quite different characteristics during the period to which the s 79 enquiry is directed.

(r)          The expression “any property of the parties to a marriage or either of them” in s 79(4)(a)–(b) is sufficient to encompass both the entirety of their property and their individual assets, such that if the parties’ interests in specific items of property differ, or they have made differing contributions, justice and equity may best be served by proceeding upon an asset by asset basis in the division of the property between them.

(s)          The nature of a particular interest or interests in property, and when and how it was acquired, conserved, improved, or used, may be very relevant to whether a s 79 order should be made at all; whether contributions should be assessed globally or asset by assets or by reference to two or more pools; and what is the nature and extent of each party’s contributions. This calls for the exercise of discretion, to be exercised not by reference to whether property might conveniently be described as “an inheritance” or “after-acquired” but, rather, by reference to the nature, form and characteristics of the property in question and the nature, form and extent of the parties’ contributions of all types across the entirety of their relationship. However, there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest.

(t)          Whilst it might be convenient to describe property by reference to a characteristic (for example, as an “inheritance” or “post-separation” or “after-acquired” property), its place within the ambit of s 79 is determined by the fact that it exists as a legal or equitable interest of the parties to the marriage or either of them and that the nature, form and characteristics of it and the contributions of all types made by the party suggest that it should be treated in a particular way.

(u)          A party cannot be regarded as contributing significantly to an inheritance received very late in the relationship or after it has terminated, except in very unusual circumstances, including the care of the testator prior to death.

(x)          Where a relative of one of the parties to a marriage gifts property to both of the parties, dependent upon the circumstances of the case, it is open to the Court in such a case to look at the actuality and treat that as a “financial contribution made directly … on behalf of” the party related to the donor. In many such cases, that gift was only made because of that relationship and, in reality, as a means of benefiting that relative in the marriage. In other cases, the evidence, including evidence that the donor intended to benefit both spouse parties, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.

On the facts of the case, his Honour determined that it was just and equitable to make a property adjustment order with respect to Pool A – the property which was not derived by way of inter vivos gifts or inheritances from the husband’s grandmother.

Without going into the detail, essentially, there was, irrespective of the husband’s initial contribution, jointly owned property, and no express consideration by the parties of how their property interests should be arranged.

In relation to the inter vivos gifts, Strum J held that there was insufficient evidence of the late grandmother’s intentions to find that the gifts to the wife were intended to specifically benefit her, rather than the parties jointly or the husband. 

This was despite his Honour finding that the wife and the husband’s grandmother had had a close relationship.

In relation to the inheritances, particularly the inheritance received by the wife, Strum J considered the fact that there were separate bequests to the husband and the wife (among many others).  His Honour gave significant weight to the language of the late grandmother’s will, including a reference to her “granddaughter-in-law”, as opposed to a term such as “my grandson’s wife”. 

His Honour found that the evidence established a clear intention on behalf of the grandmother to separately benefit each of the husband and the wife by her separate bequests to each of them.

On that basis, his Honour determined that it would not be just and equitable to make an adjusting order with respect to the parties’ respective inheritances from the husband’s late grandmother.

However, the same could not be said of the inter vivos gifts, which his Honour grouped with the Pool A assets, and which were therefore subject to adjustment.

Forum Disputes in Family Law

13 March 2024 /

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In this episode, I discuss how forum disputes are determined in family law, and how the process can differ depending on the subject matter of the proceedings.

Overview

A forum dispute arises when two different Courts are asked to determine the same subject matter.

In the family law context, this generally means a forum dispute between the Federal Circuit and Family Court of Australia (Division 1 or Division 2), and a Court in another country.

Tests

Most Australian lawyers will be at least vaguely aware that the usual test to be applied to a forum dispute is whether the Australian Court is a clearly inappropriate forum.

We were taught a bit about that concept in law school.  We all have vague memories of authorities like Voth v Manildra Flour Mills.

However, like many other legal concepts, family law does things a bit differently.

Family Law Approach

In 1994, the High Court in ZP v PS, determined that the rule in Voth applied to all matrimonial proceeding except parenting matters.

Since then, the Full Court of the Family Court has repeatedly confirmed the approach to be taken in relation to forum disputes in family law.  

The correct test to be applied depends upon whether the forum dispute involves parenting issues. 

If parenting is in play, then it depends on whether the dispute is solely about parenting, or is about parenting amongst other matters.

In essence, if the forum dispute is solely about parenting, then the clearly inappropriate forum concept does not apply.  

In those cases, it is the usual question of the child’s best interests which will determine whether the parenting dispute is to be decided in Australia or in the other jurisdiction.

If the forum dispute involves issues other than parenting, then the clearly inappropriate forum test applies.

Interestingly, where more than parenting is involved, it is open to the Court to split the forum question, such that the forum dispute about parenting is determined separately on the basis of the child’s best interests, and the forum dispute about the balance of the issues is determined according to the clearly inappropriate forum test.

Best Interests

If the forum dispute is to be determined on the child’s best interests, those interests are assessed by the Court in the usual way.

Clearly Inappropriate Forum Test

If the clearly inappropriate forum test applies, there is guidance to be found in several Full Court decision as to what matters ought to be considered, in addition to the non-exhaustive list of considerations set out in Voth.

The matters to be addressed and considered with respect to each of the competing jurisdictions include:

  • Whether each competing Court has jurisdiction to deal with the dispute.  This is usually a given by the time the FCFCOA is asked to determine a forum dispute
  • Convenience, expense and location of witnesses.  If most of the relevant witnesses are in the foreign jurisdiction, then that would weigh in favour of Australia being a clearly inappropriate forum
  • Each party’s ability to participate in the proceedings (which can include things like language, and whether a person is required to personally attend the relevant Court)
  • Connection to jurisdictions, and issues upon which relief may depend
  • Whether each jurisdiction will recognise the other’s orders and decrees – this is an important factor when parenting is involved but the clearly inappropriate forum test applies, I’ll have more to say about this factor shortly
  •  Which forum may provide for effectively for a complete resolution of the parties’ controversy
  • The order in which competing proceedings were instituted, and costs which have been incurred
  • The governing law of the dispute
  • The place of residence of the parties
  • Availability of each forum, which includes issues like how long parties have to wait for a final hearing in each jurisdiction
  • Any legitimate juridical advantage to litigation in either jurisdiction

Recognition of orders by of other jurisdiction

The Full Court in the 2017 decision of Kent held on this point that:

If the orders of the foreign court will not be recognised in Australia, that will ordinarily dispose of any suggestion that the local proceedings should not continue.

If the matter involves parenting issues, this can be determinative of the forum dispute, so it is essential to research whether an order of the competing foreign jurisdiction will be recognised in Australia.  

We need to look s 70G of the FLA provides for the registration of “overseas child orders”.

The term “overseas child order” is defined in s 4(1) of the Act.  It means “an order made by a court of a prescribed overseas jurisdiction that…”

So what does that mean? We turn to the Family Law Regulations 1984, at regulation 14.

Sub-regulation (a) points us to Schedule 1A, and says that each country, or part of a country, set out in column 2 of that schedule is a prescribed overseas jurisdiction.

If the country, or part of the country, in which the competing court sits is not there, then the overseas child order will not be recognised in Australia.

For financial matters, the question is less clear. There is no equivalent provision to section 70G in relation to overseas property Orders.

There is, however, authority in relation to enforcement of overseas property orders.  A recent example is the 2022 decision of the FCFCOA (Div 1) sitting the Apellate Jurisdiction in the case of Yadu and Orjit, where the Full Court held that the enforcement of an overseas property order fell within a matrimonial cause for the purposes of section 114(3).

In that case, the foreign Court had made orders about property in Australia.

In my experience, it can be necessary for parties to obtain Orders in both jurisdictions.  

For example, a few years ago I was involved in a matter where the parties had property in Australia and mainland China. The parties had never lived in Australia prior to separation.

After separation, the husband had removed something like three quarters of a million dollars in matrimonial funds from China to buy real property in Australia with his new partner.

A Court in China made Orders about property owned by the parties there, but declined to make Orders about Australian property. Subsequently, my client, the wife, who had never lived in Australia, applied for property adjustment order here.

My client adduced expert evidence from her Chinese lawyer as to the inability of the Chinese Court to deal with Australian property.

The Court in Australia determined that it was appropriate for it to deal with the adjustment of the Australian property. 

These are issues which, in my view, need to be investigated and assessed in each case and in relation to each jurisdiction.

In my view, the question of the recognition by each competing jurisdiction of the other’s decrees is not likely to be determinative in property-only proceedings.  

Family Law Amendment Bill 2023 – Initial Thoughts on proposed amendments to sections 60CC, 61DA and 65DAA

30 January 2023 /

The Federal Government has published an Exposure Draft of the Family Law Amendment Bill 2023 (“Bill”).  

If enacted, the Bill would, amongst other things, significantly amend section 60CC of the Family Law Act 1975 (“Act”) (which section sets out the factors which the Court is required to consider when determining the best interests of a child).

The Bill would also repeal s 61DA (the presumption that it is in a child’s best interests for both of their parents to have equal shared parental responsibility), and section 65DAA (the requirement to consider making an order for equal time or substantial and significant time when the Court makes an order for equal shared parental responsibility).

Whilst I have not had time to fully consider those aspects of the Bill, I have spent a bit of time reading them and comparing them to what they would amend.

I have not yet taken the time to read the other parts of the Bill.

Section 60CC Amendments

Section 60CC sets out the factors which a Court must consider when determining the best interests of a child.

What does it say now?

In its current form, section 60CC is unwieldy.  

It contains two “primary considerations” and 14 “additional considerations” (including a catch-all factor which allows the Court to take into consideration whatever it considers appropriate), many of which overlap, many of which are not applicable to many families, but all of which the Court must consider when determining what Orders are in a child’s best interests.

One of the factors applies only if the child is an Aboriginal or Torres Strait Islander child: the child’s right to enjoy their Aboriginal or Torres Strait Islander culture, and the impact of any proposed parenting order on that right.   It is the 9th factor in the list of the 14 “additional considerations”.

Due to the overlap between many of them, I routinely group the section 60CC factors when making submissions in Court as follows:

  • the child’s relationships (4 overlapping factors);[1]
  • the risk of harm (3 overlapping factors);[2]
  • the child’s views;[3]
  • parental capacity, responsibility and involvement (4 overlapping factors);[4] and
  • orders least likely to lead to further proceedings.[5]

I note that the above list does not include the factor which applies only if the child is an Aboriginal or Torres Strait Islander child.  For whatever reasons, I have worked on very few matters where this factor was relevant, so it is not something I deal with routinely.

I have worked exclusively in family law for over 11 years (about half that time as a solicitor, and the other half as a barrister).  I find it better and easier to simplify the many factors into 5 essential categories (and, if I recall correctly, I lifted those categories from a judgment many years ago, so I am not the only one who does this).

I can only imagine how difficult it must be for self-represented litigants to understand, and engage with, s 60CC in its current form.

What would the Bill change?

The Bill would dramatically simplify s 60CC, with only 6 factors applying to all children.  

The existing factor which applies only if the child is an Aboriginal or Torres Strait Islander child remains in place, but is set out separately from the other factors, which will make it easier to find (and its existence more obvious) for cases where it’s relevant, and which will make it easier to skip where it doesn’t apply.

The generally applicable factors are:

  • what arrangements would best promote the safety of the child and each carer of the child;
  • the child’s views;
  • the developmental, psychological and emotional needs of the child;
  • the capacity of each proposed carer to provide for the child’s developmental, psychological and emotional needs, with particular regard to the willingness of the carer to seek assistance and support in relation to those matters;
  • the benefit to the child of maintaining relationships with both parents, and other people significant to the child where it is safe to do so; and
  • a catch-all.

Almost all of the existing factors are essentially covered (with the notable exception of a requirement in the Bill to expressly consider making orders least likely to lead to further proceedings), but the proposed wording is far simpler and more accessible.

There appears to be an increased focus on safety, but, in my opinion, the change is marginal.  The existing section already requires the Court, when weighing the two “primary considerations”, to give greater weight to the need to protect a child from harm than to the benefit to the child of having a meaningful relationship with each parent.  Same concept, different language.

My gut reaction

In essence, the approach to determining best interests would remain much the same, but the section would become much easier and simpler to understand and apply.

Given the horrific rate of family violence in Australia, any increase in focus on the safety of children and the adults in their lives (however small it may be) can only be a good thing.

On balance, these amendments seem pretty good to me.

Section 61DA Repealed

The Bill would repeal s 61DA.

What is s 61DA?

Section 61DA provides that, when making a parenting order, the Court must apply a presumption that it is in the child’s best interests for the parents of the child to have equal shared parental responsibility (“ESPR”).

The presumption does not apply when there are reasonable grounds to believe that a parent, or another person who lives with that parent, has committed child abuse or family violence.

The presumption can, in any case, be rebutted by evidence which satisfies the Court that it would not be in the child’s best interests for the parents to have ESPR.

Parental Responsibility and Confusion

We have a bit of jargon in Australian family law.  It seems to confuse a lot of people.  

The Act uses terms like “live with”, “spend time with” and “parental responsibility”.  In the general parlance, people in Australia are more likely, in my experience, to talk about “custody” and “access”, terms which are outmoded in Australian family law.

In my experience, with both clients and self-represented litigants, the meaning of parental responsibility is not immediately obvious to most non-lawyers.  Clients are often surprised to learn that parental responsibility relates to making decisions about children, but has nothing directly to do with where a child lives or with whom a child spends time (or when, or how often, or how long for).

However, a lot of lay-people seem to have heard or read about the presumption.  They may have googled family law, and read something about it in a Facebook group or forum, or perhaps even stumbled across s 61DA on AustLII and read it without context or an understanding of what the terms meant.

A great many people seem to be under the false impression that this presumption they’ve heard about means that, by default, the Court will order that a child will have equal time with each of their parents.

What’s the effect of repealing it?

To my mind, repealing s 61DA will have little effect on the majority of families.

The existence of the presumption means that there is a default position, and the evidentiary onus falls on the person who wants to deviate from the default.

The absence of the presumption just means that there is no default position.   It doesn’t mean that there is a different default position.  It doesn’t mean that, say, mothers will have sole parental responsibility by default.

It just means that the Court starts with a clean slate, assesses the evidence, and makes a finding as to what allocation of parental responsibility (whether between parents or other adults) is in the child’s best interests.

That is precisely what the Court does now anyway if there is anyone agitating to deviate from equal shared parental responsibility.

I expect that, in the vast majority of families going through separation, both parents will want ESPR, and the Court will continue to order it.

All that changes is that, when there is a dispute about allocation of parental responsibility, there isn’t a party (whether parent or otherwise) who bears a greater evidentiary onus than another party.

In other words, repealing s 61DA would just mean that, when there is a dispute about parental responsibility, each party will be required to adduce evidence in support of their position (which, in practice, happens in most cases already).

My gut reaction

This change will likely affect only a minority of cases before the Court.  In those cases, the outcome may be no different, as the presumption might be rebutted anyway.

The small shift in onus might just ever-so-slightly tip the scales of some power imbalances.  For example, a victim survivor of coercive control may have a slightly less difficult time in escaping further exercise of control by the other party by way of decision-making about a child.

The biggest benefit, to my mind, of repealing s 61DA would be an absence of a widely-held misconception that there is a presumption of equal time.

On balance, I think repealing s 61DA is not a bad idea.

Section 65DAA Repealed

The Bill would repeal s 65DAA.

What is s 65DAA?

Section 65DAA makes it mandatory for the Court to consider certain time arrangements for a child if the Court orders ESPR. 

In particular, where ESPR is ordered, the Court must consider whether an order for equal time is both in the child’s best interests and reasonably practicable.

If, after considering that option, the Court decides not to order equal time, it must then consider whether an order for the child to spend “substantial and significant time” with each parent is both in the child’s best interests and reasonably practicable.

It must consider those options even if no party to the proceeding seeks orders for equal time.

All of this is within the existing framework of the Court being required to make parenting Orders which are in the child’s best interests, and s 60CC setting out the factors to be taken into account in determining those best interests.

In other words, s 65DAA says to the Court something like “you must make Orders in the child’s best interests, and s 60CC tells you what to look at, but in exercising your discretion, you must at least think about these particular options, even if nobody is asking for them”.

My gut reaction

I’ve always found s 65DAA a bit weird.

If a party seeks an equal time arrangement, the Court will necessarily consider it.  If nobody seeks equal time, why should the Court spend time and resources considering such an arrangement?

The Court is required to make Orders in the child’s best interests.  

I’m pretty sure that if, after assessing evidence and hearing submissions about an equal-time arrangement, the Court finds that an equal time arrangement is in the child’s best interests, and that it is reasonably practicable, it will order it, whether or not some section of the Act specifically tells the Court to think about that option.

Conversely, if the Court finds that it’s not in the child’s best interests, or that it is not practicable, it won’t order it.  No amount of mandated consideration is going to change that.

The same goes for “substantial and significant time”.

I’m in favour of s 65DAA being repealed.

[1] s 60CC(2)(a): The benefit to the child of having a meaningful relationship with both of the child’s parents.

s 60CC(3)(b): The nature of the relationship of the child with: (i) each of the child’s parents; and (ii) other persons (including any grandparent or other relative of the child).

s 60CC(3)(c): The extent to which each of the child’s parents has taken, or failed to take, the opportunity: (i) to participate in making decisions about major long-term issues in relation to the child; and (ii) to spend time with the child; and (iii) to communicate with the child.

s 60CC(3)(d): The likely effect of any changes in the child’s circumstance, including the likely effect on the child of any separation from: (i) either of his or her parents; or (ii) any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living.

[2] s 60CC(2)(b): The need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence

s 60CC(3)(j): Any family violence involving the child or a member of the child’s family.

s 60CC(3)(k):  If a family violence order applies, or has applied, to the child or a member of the child’s family-any relevant inferences that can be drawn from the order.

[3] s 60CC(3)(a): Any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the Court thinks are relevant to the weight it should give to the child’s views.

[4] s 60CC(3)(c): Extent to which each parent has taken, or failed to take, opportunities to participate in decision-making about, spend time with, and communicate with the child.

s 60CC(3)(f): The capacity of: (i) each of the child’s parents; and (ii) any other person (including any grandparent or other relative of the child); to provide for the needs of the child, including emotional and intellectual needs.

s 60CC(3)(ca): The extent to which each of the child’s parents has fulfilled, or failed to fulfil, the parent’s obligations to maintain the child.

s 60CC(3)(i): The attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents

[5] s 60CC(3)(l).

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