CAMOES & BLIZZARD
[2017] FamCA 8
•18 January 2017
FAMILY COURT OF AUSTRALIA
| CAMOES & BLIZZARD | [2017] FamCA 8 |
| FAMILY LAW – Urgent injunction restraining entitlement already ordered under a property settlement where application to vary orders is now pending – Injunction granted. |
| Family Law Act 1975 (Cth) |
| Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 Australian Broadcasting Corporation v O’ Neill (2006) 227 CLR 57; [2006] HCA 46 Baker v R [2004] HCA 45; (2004) 223 CLR 513 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Jackson and Sterling Industries Limited [1987] HCA 23; (1987) 162 CLR 612 Keane & Keane [2013] FamCA 332; 50 Fam LR 120 R v Kelly (Edward) [1999] UKHL 4; [2000] QB 198 |
| APPLICANT: | Mr Camoes |
| RESPONDENT: | Ms Blizzard |
| INDEPENDENT CHILDREN’S LAWYER: |
| FILE NUMBER: | MLC | 8891 | of | 2013 |
| DATE DELIVERED: | 18 January 2017 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 23 December 2016 |
REPRESENTATION
SOLICITOR FOR THE APPLICANT: | Mr Berger, Berger Kordos Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Swart |
| SOLICITOR FOR THE RESPONDENT: | Robinson Gill |
| INDEPENDENT CHILDREN’S LAWYER: | Ms Lonergan, Victoria Legal Aid |
Orders
That until further order the mother is restrained by injunction from instructing her solicitors Robinson Gill in their capacity as the solicitors responsible for the conveyancing of the sale of D Street, Suburb E to pay to her from the proceeds of such sale the sum of $110,000.
That the said solicitors are deemed by the court to be trustees for the wife in respect of the said $110,000 which sum shall be held in an interest bearing account and the said solicitors are restrained by injunction from releasing any of those funds without written agreement by the father or without further order of the court.
Paragraphs 4, 5 and 7 of the interim application contained in the response filed 22 December 2016 are dismissed.
That paragraph 6 of the said response is adjourned to 9.00am on 3 February 2017.
That the question of any costs of either party arising out of this application are adjourned to the return date of 3 February 2017.
That the reasons for these orders be published as soon as practicable.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Camoes & Blizzard has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 8891 of 2013
| Mr Camoes |
Applicant
And
| Ms Blizzard |
Respondent
INDEPENDENT CHILDREN’S LAWYER
REASONS FOR JUDGMENT
An urgent application was filed 22 December 2016 by Mr Camoes (the father) made returnable on 23 December 2016 seeking a variety of orders that affect the rights of Ms Blizzard (the mother).
After hearing from the respective practitioners and the Independent Children’s Lawyer, I made the orders that are set out at the beginning of these reasons. I indicated I would give reasons as quickly as I could, bearing in mind the Christmas period. These are those reasons.
In essence, the urgency arose because the parties’ house has been sold and the settlement of the sale was to occur on 6 January 2017. Thus, the focus of the hearing was largely about what was to happen to the proceeds of that settlement.
The application of the father sought orders that may be summarised as follows:
· That the proceeds of the sale of the home be “injuncted from being disbursed” pending the application to set aside previous property orders;
· The proceeds of sale be held in the father’s solicitors’ trust account;
· The mother pay the father’s costs “of and incidental to these proceedings and all other proceedings in Australia, Country I or any other country necessary to return the children” to Australia;
· Alternatively, the mother pay $80,000 as security for his costs;
· The assessment of child support be stayed until further order;
· The children be placed on the “Watchlist”.
That brief synopsis of the orders indicates there are a number of issues involved, the determination of which was not simple. The mother’s solicitors only received notice of the application on the day before the hearing and although counsel was briefed and telephone instructions had been obtained from the mother who is currently in Country I, there was insufficient time to prepare documents in reply to the father’s application. Because of the time of year, and the closing of the Court, it was imperative to make some orders immediately. By way of background, the mother and father lived in a de facto relationship and have two children; a boy aged 8 and a girl aged 5. Those children are currently in Country I. They are subject to extant orders of this court.
In August and September 2015, Stevenson J heard the parties’ respective parenting and property alteration applications, made orders and delivered reasons for judgment on 8 December 2015. Relevantly, under those orders, the parenting arrangements were:
· The parties will have equal shared parental responsibility for the children;
· The children will live with the mother;
· The children will spend time with the father inter alia each alternate weekend from the conclusion of school on Thursday until the commencement of school on (the following) Tuesday.
Stevenson J also set out other holiday and special occasion arrangements that
I do not need to detail.
In respect of property issues, relevantly, her Honour made the following orders:
· That both parties effect the sale of D Street, Suburb E and to distribute the net proceeds of such sale:
(a)in payment of an amount equal to 69 per cent of the balance then remaining to the (mother); and
(b)the balance to the (father).
Her Honour also dealt with a superannuation splitting order but that too is not presently relevant.
In 2016, despite a number of court hearings, the house remained unsold.
As earlier indicated, it has now been sold and settlement takes place on
6 January 2017.
Of the 2016 proceedings:
· On 17 March 2016, Bryant CJ suspended the December 2015 parenting orders (para 6 above) and permitted the mother supervised day time contact with the children;
· On 8 April 2016, Senior Registrar FitzGibbon discharged the suspension and, subject to a variety of conditions, the children resumed time with the mother;
· On 8 September 2016, Senior Registrar FitzGibbon dealt with an application for the mother to travel to Europe with the children and permitted her to travel. Consequently, what followed was that the parties reached agreement about other orders and sought that their agreement be reflected in consent orders. The relevant orders were that if the mother became hospitalised because of mental illness or the mother failed to return to Australia on their return flight, then she was to make the children and their passports available so that they could return to Australia.
The September 2016 orders also had some specific provisions which included that the children were to be returned by no later than 28 October 2016. Another order, which was similar to that set out above was as follows:
That in the event that the mother:
(a)Is hospitalised for mental health concerns whilst out of Australia during September and October 2016; or
(b) Is not able to or fails to return the children to Australia herself;
then the father may collect the children and the children shall live with him until further order. (My emphasis)
The question that immediately arises is whether that order altered the orders of December 2015 and if so, what power was exercised? Did the father have to “collect” the children first? What happens to the children after they are “collected” and it is as simple as the mother making an application for time with the children for a resumption of the otherwise extant orders?
In the December 2015 final parenting proceedings, the mother had sought that not only should the children live with her but that she be permitted to live with them in Country I. Stevenson J rejected the mother’s relocation request and, in respect of the parents, made the following observations:
[45]I am comfortably satisfied that there is no need to protect the children from abuse, neglect or family violence. It is well evident that the children currently enjoy and benefit from a meaningful relationship with each of their parents.
[50]In terms of the proposed relocation, I accept entirely that the mother and her family would make proper arrangements to meet the children’s day-to-day needs. The mother and children could live in the home of the maternal grandparents, until she is able to arrange independent accommodation. The mother and her parents have made enquiries concerning schools for the children. I have no concerns in relation to the physical environment which would be offered to the children in Country I.
[51]The proposed relocation to Country I, however, would impose very significant changes to the children’s lives and require major adjustments on their part. They have lived in Australia for the whole of their lives and know of no other lifestyle. They have never so much as had a holiday in Country I or any other European country.
[57]The mother has not lived in her home town of R since 1992. For the past 23 years she has lived elsewhere in Country I or, since 2007, in Australia.
[64]It may be that, with a resolution of the parenting and property issues, the parties will be able to achieve that aim and the father will be able to offer support to the mother.
[79]I accept that the mother would be happier in Country I, at least in the short term, but I share the concerns of the Family Consultant as to the likely impact upon the father and the children of the proposed relocation. The children have an established lifestyle in Australia, from which they will be entirely uprooted on the mother’s proposal. That outcome would most likely place the children and the father in a very unsettled state, with only the mother having a sense of an improved lifestyle. I accept that the mother will be likely to experience difficulties, at least in the short term, in coming to terms with an outcome whereby the children remain in Australia. I have no doubt that she will remain in this country with the children, for whom she wishes to retain primary care.
A number of conclusions can be drawn from those observations and findings. First, there were concerns about the mental health of the mother but that she would not leave the children. Secondly, there was a good and supportive relationship between the father and the children. Thirdly, it was not in the best interests of the children that they live in Country I.
A mental health episode seems to have been the impetus for the orders of Bryant CJ but that problem was overcome and her Honour’s restrictive orders later removed.
The mother’s desire to go to Country I did not go away after the final hearing. On 23 March 2016, she filed another application through her solicitors seeking to discharge the 2015 orders, give her sole parental responsibility and that she be permitted to relocate to Country I with the children. The father did not file a formal response until 22 December 2016 but in the meantime, various other hearings took place.
In November 2016, an application by the father came before Thornton J primarily about the father having access to the mother’s money entitlement so that he could engage lawyers in Country I because as at that date, the mother had failed to return as required by the orders of Senior Registrar FitzGibbon. Thornton J refused the application indicating that the evidence did not support such orders but there was a consensual provision that enabled the father to have access to $10,000 to pay for effective recovery expenses from Country I. Unfortunately, that money was still tied up in the unsold house. But so too, were significant legal fees of both the father and the mother. Neither solicitor had been paid; I need to return to that below.
Around this November hearing, the father activated the convention relating to the abduction of children through the Attorney-General’s Department. That has been activated (although there is some doubt about which one). In addition, the department has raised the question of whether some other form of recovery of the children can be pursued based on the orders mentioned above. Nonetheless, nothing is immediately clear about the return of the children.
As the mother remains in Country I, her counsel said that she had “instructions” presumably by telephone. Counsel said that the mother was not intending to return to Australia. That was later qualified by a statement that if the German courts order the return of the children, she will consider her position then.
Counsel was pressed to indicate what proposition the mother was putting to the German courts to “defend” any return application. As articulated by counsel, the mother’s probable position is:
·She cannot return (to Australia) because if she does so, she will be financially reliant on government benefits;
·She has been “in and out” of psychiatric wards this year;
·The situation of the children is that in Australia, they would be reliant on benefits (and their standards of living would not be good).
Against that is the fact that the father would be caring for the children if they return to Australia because of the order mentioned above and to which the mother consented. Thus, whilst the mother may be impecunious, that could not be said to seriously affect the children if they were to be in the care of the father. Under the previous orders to which she had consented, because there was no provision for any time between the children and their mother, one would imagine that her impecuniosity would not affect them as they would be the financial responsibility of the father.
However, the father has also based part of his immediate application on the fact that his circumstances have changed since December 2015 and he too will be living on limited means. Thus, the financial future for these children is not looking bright.
Counsel for the mother submitted that the father’s application was the same as that heard by Thornton J in November but I reject that as there is now a much clearer picture of what jurisdiction he is seeking to activate and what consequential power is involved having filed his application for substantive orders on 22 December 2016. Thornton J dismissed the November interlocutory application because of the paucity of the father’s evidence. Having read that material, I too would have dismissed it but on the basis that there was no extant substantive cause of action.
The current substantive causes of action are as follows:
·By the mother, not just a change of the parenting orders but also where the children will live;
·By the father, that the children live with him (although those words are not formally used);
·By the father that the property orders of 2015 be set aside and that after mortgage payments and expenses are paid from the sale of the home, he be paid the balance. He also seeks that the mother pays his costs.
The substantive orders give rise to a basis to consider the injunctive relief sought by the father and opposed by the mother.
The stated basis for setting aside the 2015 orders (which would include the superannuation splitting order) is s 90SN(1)(d) of the Family Law Act (Cth) (“the Act”). That specific provisions says:
If, on application by a person affected by an order made by a court under section 90SM in property settlement proceedings, the court is satisfied that:
…
(d)in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the de facto relationship, the child or, where the applicant has caring responsibility for the child (as defined in subsection (3)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order
Section 90SN(3) referred to in (d) above provides:
For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a)the person is a parent of the child with whom the child lives; or
(b)a parenting order provides that:
(i)the child is to live with the person; or
(ii)the person has parental responsibility for the child.
Thus, it is said that the father will argue that he fits within the statutory provision because the children will live with him under the September 2016 orders. He also intends to argue that the circumstances relating to the children since December 2015 are of an exceptional nature relating to their care, welfare and development (on the basis that they will be in his care by virtue of the orders subsequent to the 2015 final orders) and he will suffer hardship if those orders are not varied.
It is hard to see how the “defence” articulated by counsel for the mother could succeed having regard to the consent orders of the mother that her failure to return the children meant they went into the father’s care without further argument.
If the children are sent back to Australia, the success of the father’s application relating to the financial injunctions depends on whether the various aspects of s 90SN are satisfied.
To obtain an injunction based on a substantive application for final relief,
I have considered what was said in Australian Broadcasting Corporation v
O’ Neill (2006) 227 CLR 57; [2006] HCA 46 at [65]. There, Gummow and Hayne JJ said:The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted. (My emphasis)
In the context here, prima facie must mean that there is a case that the other litigant is called upon to answer and that absent some answer, the applicant should or could succeed. However, depending upon the nature of the relief sought, if there is such a case to answer, is there justification for an order to preserve property pending trial?
The first step is to look at what basis there is to accept that there is a pending substantive application and whether an assessment can be made as to its likelihood of success. To do that, I have to return to the judgment of Stevenson J.
In respect of property, the judgment of Stevenson J reflects that the parties had contributed equally to their assets but what justified a 20 per cent adjustment in favour of the mother was the following:
[103]The (mother) is aged 45 and suffers from mental health problems, …I consider it likely that she will address these issues in a constructive manner, once the outcome of these proceedings is known to her.
[104]The (father) is aged 42 and suffers from the residual effects of his scooter accident. He is able to engage in full-time employment, however, and earned a gross weekly salary of $1,438 at the time of the trial.
[105]Pursuant to the parenting orders which I will make, the (mother) will retain greater responsibility for the care of the children. Her opportunity to engage in paid employment must necessarily be inferior to that of the (father) for that reason. (My emphasis)
[106]The (father) is likely to continue to engage in full-time employment. He will have the opportunity to augment his superannuation benefits in the future.
[112]In my view, the most significant section 90SF(3) factor is the (mother’s) greater responsibility to care for the children. I am not of the view that this factor prevents her from engaging in paid employment, particularly once [C] commences her formal education. I consider that the (father’s) opportunity to generate income is greater than that of the (mother) because of her responsibilities in this regard. This factor is one element of the inequality in the respective financial strengths of the parties.
[114]In my view, it is clear that an adjustment in favour of the (mother) is warranted on account of section 90SF(3) factors. In a situation where the value of the net pool of assets is $455,923, a relatively large percentage adjustment is required if the (mother) is to receive any practical benefit. I assess that the (mother) should receive an adjustment of 20 per cent of the value of the net pool of assets.
The father points to those specific findings to show that the care of the children in so far as it impacted upon earning capacity, was significant. He now provides evidence to show that his employment situation has changed and he has limited income. If the children are returned to Australia, he will immediately have the responsibility for providing them with care. The mother on the other hand would have a prospect of employment on the basis of what Stevenson J found.
The other difficult financial question lies in the amount of property that there is to divide. It is now common ground that when converted to real dollars, the house sale will produce something in the vicinity of $374,000 for the mother and $168,000 to the father. It seems that all of the father’s entitlement has been committed to legal costs as he currently owes more than he will receive. It is now known that the mother’s current debt to her lawyers is around $250,000 and hence, even if the orders of Stevenson were implemented, there will be limited money left for the mother after she pays her costs. Thus, the father’s application is based on hardship factoring in that he will have no capital and indeed debt, if the orders are not altered.
It must not be overlooked that the father has to show that there are extraordinary circumstances to enable the court to revisit the 2015 orders. As I understand his case, it is to be argued that, unlike cases where children move from one parent to another after property orders, in this case, the circumstances are most unusual. There is the “self-executing” order (if that is what it is) made in September 2016 and there is the defiance of the mother (if that is what it is) in over-holding the children in Country I. It may be however that she has a defence to the application of the Central Authority in Country I but if not, the father will argue that this case is extraordinary and therefore exceptional. His practitioner also submitted that in addition to those circumstances, there is the fact that all of the proceedings culminating in the over-holding in Country I are such that the father has incurred extra costs and expenses which is an unusual circumstance.
In Keane & Keane [2013] FamCA 332; 50 Fam LR 120, Watts J quoted with apparent approval a statement of the Honourable Stephen O’Ryan in respect of s 79A(1)(d) in which Mr Ryan QC said that the change in caring arrangements had to be so exceptional as to take it out of the normal vicissitudes of life. If a court found that what has happened since 2015 was so much outside of what one might normally expect in children after final orders, then that may justify a restructuring of the parties’ interests in property. That is particularly so where Stevenson J balanced the financial futures of the parties and made a significant adjustment in favour of the mother because the mother was expected to retain greater responsibility for the care of the children. Stevenson J also went on to conclude the adjustment issue by saying that because of the size of the “pool”, a large adjustment in favour of the mother was warranted. If that was intended to be a reference to the modest assets, the future position will be even more precarious because of the respective costs having eaten up virtually all of the parties’ equity.
In R v Kelly (Edward) [1999] UKHL 4; [2000] QB 198 at 208 Lord Bingham of Cornhill CJ said "We must construe 'exceptional' as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered." In a case involving the words “special reasons” used in NSW sentencing legislation, Callinan J in Baker v R [2004] HCA 45; (2004) 223 CLR 513, said "special reasons" shared the characteristics to which Lord Bingham of Cornhill referred.
Accepting that “exceptional circumstances” is not a term of art but rather, means something out of the ordinary course, or unusual, or special, or uncommon, on a prima facie basis, I consider that what has happened in this family and in particular, to these two children, is very uncommon and not routinely encountered.
The father’s claim for hardship depends upon how a court views the situation at the time but at least for the purposes of an injunction, I consider there is a prima facie case in the context of the words I earlier used.
In summary therefore, there is now an application for substantive relief before the court which was not present in the proceedings before Thornton J. There is at least a prima facie case favouring the father.
The balance of convenience is an issue to be considered as to whether an injunction is proper or just and reasonable. It amounts to an assessment as to the prejudice one way or the other. It was submitted on behalf of the father that if the money was disbursed to the mother, it would be gone and that might render any substantive application nugatory. Much then depends upon what to make of the mother’s counsel’s statement that the mother would not return to Australia but if the overseas court ordered the return of the children, she would consider her position. Examining the reasons of Stevenson J, there is no indication of any other assets that the mother has and as such, it is conceivable that her current absence from Australia (and her refusal to immediately return) must mean that any entitlement to the proceeds of sale of the house would have to be sent to her beyond jurisdiction. By an injunction, the only inconvenience to the mother would be that the funds are quarantined for the time pending trial. It is hard to see how that is inconvenient to her bearing in mind that a whole year has gone by without her having access to those funds and yet she managed to take two children overseas and has somehow supported them.
Counsel for the mother submitted that even if the mother was in defiance of this court’s orders, she still had to support the children. There is no merit in that argument because she could return them to Australia and they would have the benefit of being cared for by the father under the existing orders. It is worthy of note that in addition to Stevenson J finding that the father was an appropriate parent, there is no current allegation of any sort relating to impropriety against him made by the mother. All of the “defence” to the recovery proceedings in Country I relates to financial problems in Australia.
There is no argument here that jurisdiction is available to the Court. The power in the Act to make the interlocutory restraining orders lies in s 114(3) given that there are now extant proceedings to set aside the property orders and on the matters to which I have referred, there is a prima facie case and the balance of convenience supports protection of the assets (see Cardile v LED Builders Pty Ltd (1999) 198 CLR 380).
The purpose of that power is to prevent the abuse or frustration of the processes of the Court (Jackson and Sterling Industries Limited [1987] HCA 23; (1987) 162 CLR 612 at 617, 623 and Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 at [60]). That same point has been canvassed under the consideration about balance of convenience above.
Asset preservation type orders should not be lightly made and I am satisfied here that there is a justification for the order which has limited inconvenience for the mother but may render the father’s application nugatory if not made.
The next issue however concerned the extent of the order. As can be seen, the father sought to restrain the disposal of settlement proceeds indefinitely. The dilemma is that the solicitors for the mother obtained a charge over the mother’s entitlement and accordingly lodged a caveat. Their position (which may have conflicted with the mother’s interests) was that they would not withdraw the caveat without being paid in full and that may very well have thwarted the settlement and the sale. The father conceded that the sale was important and agreed to an order that the mother’s solicitors could be paid. Against that however is the prospect that if the orders are set aside in the future, the mother’s entitlement will not have been as the orders currently stand and the solicitors may have to disgorge money that does not belong to the mother but retained by them towards their costs.
To overcome various problems, it was agreed for the purposes of this application that the sum of $110,000 be quarantined. As I understand the father’s position, that agreement is not a concession that the solicitors are entitled to the whole of the money they are taking at settlement. The same solicitors are also the conveyancing lawyers and as such, trustees of any money received at settlement on behalf of both parties. Counsel did not oppose an injunction (for their protection) being made against the solicitors from disposing of those quarantined funds on instructions of the mother who should also be restrained from giving such instructions.
The father also sought an order for security of costs in the alternative in the sum of $80,000. Because the mother may still be successful in Country I or indeed in Australia if she returns to prosecute her parenting application filed in March 2016, I consider it inappropriate to make a security for costs order. Such applications still need to establish circumstances to justify a departure from
s 117 of the Act and I am not in a position to make any such finding at this stage because of the matters just mentioned.
A similar position must be said of the father’s application that the court order that the costs of the proceedings be paid by the mother. Of the various applications in 2016, some had no orders for costs made and others were reserved. I do not know why that occurred. The same applies in respect of an appeal which the mother abandoned. The costs associated with proceedings outside of Australia do not seem to me to fit within s 117. I dismissed that part of the application.
The father also sought child support stay orders but the application had not been served on the agency and it was sought that I adjourn that part of the application until a return date in February when I will conduct a directions hearing to set the substantive proceedings down for trial.
There is also an application for Watchlist orders. The children are not in Australia and if returned, the provisions of the September order will mean that the children will be in the father’s absolute care to the exclusion of the mother. The basis for a Watchlist order is not obvious.
The only other matter related to costs of this application and it was agreed that that would wait until the return date.
I certify that the preceding Fifty Five (55) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 18 January 2017.
Associate:
Date: 18 January 2017
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