Chan and Wiu

[2010] FamCA 615

FAMILY COURT OF AUSTRALIA

CHAN & WIU [2010] FamCA 615

FAMILY LAW – CONTRAVENTION – Children
FAMILY LAW – ENFORCEMENT – Costs

Family Law Act 1975 (Cth)
Federal Magistrates Act 1989 (Cth)

Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 118 ALR 248
Gould and Gould; Swire Investments Limited (1993) FLC 92-434
Ibbotson and Wincen (1994) FLC 92-496
Kohan (1993) FLC 92-340
McClintock and Levier (200) FLC 93-401
Yunghanns (2000) FLC 93-029

APPLICANT: Ms Chan

RESPONDENT: Mr Wiu

FILE NUMBER: MLC 6614 of 2009

DATE DELIVERED: 21 JULY 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 14 JULY 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR PUCKEY

SOLICITOR FOR THE APPLICANT: WESTMINSTER LAWYERS

THE RESPONDENT: NO APPEARANCE

Orders

1. That the allegations of the wife filed in the application of 11 March 2010 are found proved.

2. That the said allegations are established pursuant to sub-division E of Division 13A of Part VII of the Family Law Act 1975 (Cth) (“the Act”).

3. That paragraph 15 of the orders made 9 September 2009 is varied until further order by providing that the husband deliver the children to the wife in Australia at her residence or such other place as she may nominate for the wife to spend a period of ten weeks with them from 26 July 2010.

4. That until further order, the husband be restrained by injunction from transferring, selling, further encumbering or otherwise dealing with the real property at D.

5. That by 1 August 2010, the husband pay to the wife:

   (a)$50,000 by way of security for the husband’s future compliance with the parenting orders made on 9 September 2009 (as amended by these orders) and that the wife be at liberty to use those funds held on her behalf by her solicitors to pursue:

   (i)any future enforcement/contravention proceedings in any Australia court arising out of the orders of 9 September 2009; or

   (ii)enforcement of the orders in any Taiwanese court;

   (b)the sum of $1080 by way of reimbursement for the wife’s airfares to Taiwan in December 2009;

   (c)$1215 by way of reimbursement for the wife’s airfares to Taiwan of 15 June 2010;

   (d)$1200 being legal costs for the proceedings in the Taiwan Shihlin District Court;

   (e)$7570 for the wife’s costs of the divorce proceedings as ordered by Riley FM on 4 June 2010; and

   (f)$12,800 being costs thrown away in respect of these contravention proceedings.

6. That if the husband fails to make the payments to the wife by 1 August 2010 referred to in paragraph (5) above then a registrar of the Court sign all such documents as may be required in the name of the husband to transfer the interest of the husband in the D property upon a trust for sale and the wife thereafter forthwith sell the said property and upon the settlement of the sale, the proceeds be distributed as follows:

   (a)      first, to pay all costs, commission and expenses of the sale;

   (b)      secondly, to discharge the mortgage secured over the property;

   (c)thirdly, to pay the amount due to the wife pursuant to these orders; and

   (d)      fourthly, to pay the balance to the husband.

7. That the husband have liberty to apply to set aside these orders on appropriate notice to the wife and upon condition that he files an application in this Court explaining why he has failed to attend the proceedings.

IT IS CERTIFIED:

1. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

2. That pursuant to s.65DA(2) and s.62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

3. That the contravention application filed 11 March 2010 be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Chan & Wiu is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6614  of 2009

MS CHAN

Applicant

And

MR WIU

Respondent

REASONS FOR JUDGMENT

1. These reasons relate to the enforcement of an order made under the Family Law Act 1975 (Cth) (“the Act”) and the extent to which there are territorial limitations where the children are living in Taiwan.

2. On 11 March 2010, Ms Chan (“the wife”) filed a contravention application in the Federal Magistrates Court of Australia against Mr Wiu (“the husband”) alleging a breach of the final parenting orders made on 9 September 2009.  On 4 June 2010, Riley FM transferred the proceedings to this Court under s 39 of the Federal Magistrates Act 1989 (Cth) and reserved the applicant’s costs.  A notation to the order reads:

   The reason for the transfer of the proceedings to the Family Court of Australia is that the case gives rise to complex questions of jurisdiction given that:

   i.         the father and the children are not present in Australia; and

   ii.        the alleged contravention occurred in Taiwan.

3. It is disputed that the contravention occurred in Taiwan.

4. On 13 April 2010, the matter was before Riley FM whereupon her Honour adjourned it to the date just mentioned.  In the course of those proceedings, her Honour ordered service of documents on the husband by a variety of service methods.  Importantly, her Honour ordered:

   Personal service of the contravention application filed on 11 March 2010 be dispensed with.

5. To the extent that it is necessary for me to so find, I have read the relevant affidavit material indicating that the orders made on 13 April 2010 in respect of service have been complied with.

6. The case came into the Judicial Duty List on 14 July 2010.  Mr Puckey of counsel appeared on behalf of the applicant wife.  The husband was called and did not attend nor did any representative appear on his behalf.  According to Mr Puckey, nothing had been indicated by the husband that he had a desire to participate.

7. It is clear in this case that the husband is living with the two children of the marriage in Taiwan.

8. The husband’s absence overseas and the desire of the wife to enforce the parenting orders gives rise to not only the complications of how the orders can be implemented but also whether the Act has a territorial jurisdictional reach which enables the orders to be made at all. In my view, whilst the tyranny of international distance complicates the practicalities of enforcement, there is no basis to say that the Act does not apply.

9. By way of background, both parties were born in Taiwan.  The husband came to Australia in 1995. 

10. The wife is a nurse and the husband is involved in the information technology industry.

11. The parties commenced to live together in 1998 and married in August 2001.  K was born in January 2006 and M in January 2008. 

12. The relationship broke down between the parties in January 2009 and they separated under the one roof but physically and finally separated in September 2009. 

13. On 9 September 2009 noting that that was the time that the parties physically separated, each of them consented to parenting orders in the Federal Magistrates Court of Australia.  The importance of those orders is that each party anticipated that the children would be moving to live with the husband in Taiwan.  In that context, the husband and the wife agreed to an order for equal shared parental responsibility and an equal sharing of time until relocation to Taiwan of the children was to occur. 

14. The September orders provided that after the relocation had occurred, the wife was to spend ten weeks each year with the children at times nominated by her upon giving 28 days notice.  Those holidays under the orders, were to coincide with the Taiwanese school holidays. 

15. In addition to the personal contact, the wife was to communicate with the children by Skype on two occasions per week.

16. There can be no doubt about what the parties intended but it will be seen also from the orders that the wife was seeking some reinforcement of her rights to have contact to the children because there was a provision that the orders of a mirror nature be also made in the appropriate court in Taiwan.  As it transpires, at least the wife misunderstood the complications associated with making such an order in Taiwan and to date, that seems not to have occurred.  Despite that, there have been proceedings in the Taiwanese courts.

17. On 15 October 2009, the husband went to Taiwan with the children who were then left with his parents. 

18. In her affidavit filed 11 March 2010 and a subsequent affidavit filed 7 July 2010, the wife set out a litany of problems associated with not only telephoning the children but also getting to see them.  Apart from difficulties with the husband, she encountered difficulties with his parents.  In December 2009, the wife gave the appropriate notice under the September orders indicating she wanted to spend time with the children.  At that stage, the solicitors who had acted for the husband in Australia were still on the record.  Their written response to the wife’s request for time with the children under the orders was acknowledged and they clearly had instructions that the husband agreed.  Despite that agreement, the contact did not occur.

19. The wife’s evidence was that when she endeavoured to meet with the children, she was told by her husband’s father that she either took the children permanently or not at all.  Having regard to the nature of the orders, bargaining with a child under those circumstances was totally inappropriate.  That brings in the question of why these orders were made in the first place if the husband intended to have the children cared for by his parents.

20. The wife’s evidence which I accept and which was unchallenged, was that there were certain cultural reasons in Taiwan under which children were cared for in an extended family environment.  There are other explanations given but importantly, the wife indicated that she had to work and was unable to care for the children and hence agreed to the husband taking them knowing that he was going to go back to Taiwan.  All of those matters are irrelevant because this is a contravention application. 

21. On 11 March 2010, the wife filed an application alleging the following contraventions.  She said that the first was on 17 January 2009 in Taiwan where the husband refused to make the children available to spend time with her having regard to the notice she had given as required by the September orders.  Breaches were also alleged in relation to telephone communication throughout October and November of 2009 (albeit that the contravention document showed 2010). 

22. A breach was alleged to have occurred on 18 January 2010 in that the husband refused to provide the wife with his residential address as was required by paragraph 17 of the orders.

23. Other breaches were alleged but for the purposes of these reasons and the orders I propose to make, they are not significant.

24. Section 69E of the Act provides that proceedings may be instituted under the Act only if certain conditions are met. One of the conditions is that a parent of the child is an Australian citizen on the day on which the application is filed. In a divorce application filed in the Federal Magistrates Court on 8 February 2010 by the husband, he asserted that both he and the wife were Australian citizens by grant of Australian citizenship. Although the response of the wife opposed the order, she did not disagree with that jurisdictional point. I am satisfied therefore that the wife has the entitlement to bring the application for the purposes of s 69E.

25. The notice to the husband in relation to the time with the children was given to him in Australia through the agency of his solicitors. In my view, however, where the contravention occurs or how it arises, is irrelevant. Section 31 of the Act provides that jurisdiction is conferred on the Court with respect of matters arising under the Act. Section 69H(1) provides that jurisdiction is conferred on the Family Court in relation to matters under Part VII. Division 13A falls within Part VII. The division deals with the powers that a court with jurisdiction under the Act has to enforce compliance with orders made under the Act, affecting children.

26. Section 31(2) of the Act provides:

    Subject to such restrictions and conditions (if any) as are contained in s 111AA, the regulations or the standard rules of court, the jurisdiction of the Family Court may be exercised in relation to persons or things outside Australia and the Territories.

27. A note to s 31(2) provides that Division 4 of Part XIIIAA (International protection of children) may affect the jurisdiction of the Court.

28. Part XIIIAA relates to the international protection of children as distinct from the Convention in relation to the abduction of children.

29. Section 111CC sets out that the provisions of Part XIIIAA and specifically sub-division B only apply if an issue arises as to whether or not the Court has jurisdiction to take measures “directed to the protection of the person of a child”. This particular part of the Act draws attention to the child protection convention referred to in s 111CA. That convention is defined to mean the convention on jurisdiction, applicable law, recognition, enforcement and cooperation in respect of “parental responsibility” and “measure for the protection of children”. The convention was signed on 19 October 1996 and Australia was a signatory to it. Taiwan is not.

30. Schedule 1 to the Act provides the English translation of the convention. It is clearly directed to the protection of children.

31. Section 111CC is not relevant in this case because there is no measure under the Act directed to the protection of a child. These are not proceedings involving a country which is a signatory to the convention but more importantly, these are not proceedings that fall within Division 9 of Part VII.

32. The question remains whether s 31(2) is as wide as it would seem. Counsel for the wife drew my attention to the Full Court decision in Ibbotson and Wincen (1994) FLC 92-496. That was a case involving an application before the Family Court of Australia to have a husband dealt with for contempt on the basis that he had overheld children in circumstances where he was outside of Australian territorial waters when the overholding occurred. His argument was that the breach was beyond the power of the Court to deal with.

33. The Full Court (Fogarty, Baker and McGovern JJ) found it was unnecessary to explore the territorial issue because it was not suggested that there were any restrictions and conditions in any rules of court or any regulations that would have precluded the case being heard.  Importantly, the Full Court looked at questions of policy indicating that it would be “alarming” if someone could orchestrate a breach of an order simply by making it occur beyond Australia. 

34. Parliament chose to provide the Court with the extra-territorial jurisdiction and as was pointed out in Gould and Gould; Swire Investments Limited (1993) FLC 92-434 the language used was not just for the purposes of enabling service of documents outside of the jurisdiction. There is no reason to restrict the meaning of the plain words of the section.

35. The provisions of Division 13A of the Act apply to contraventions.

36. Section 70NAA(1) says:

    (1)      This Division deals with the powers that a court with jurisdiction under this Act has to make orders to enforce compliance with orders under this Act affecting children

37. Section 70NAC provides:

    A person is taken for the purposes of this Division to have contravened an order under this Act affecting children if, and only if:

    (a)      where the person is bound by the order--he or she has:

    (i)       intentionally failed to comply with the order; or

    (ii)made no reasonable attempt to comply with the order; or

    (b)      otherwise--he or she has:

    (i)intentionally prevented compliance with the order by a person who is bound by it; or

    (ii)aided or abetted a contravention of the order by a person who is bound by it.

38. Section 70NAD reads:

    For the purposes of this Division:

    …

    (b)a parenting order that deals with whom a child is to spend time with is taken to include a requirement that people act in accordance with section 65N in relation to the order; and

    …

39. That in turn directs attention to s 65N which reads:

    (1)      This section applies to a parenting order that is in force in relation to a child to the extent to which the order deals with whom the child is to spend time with.

    (2)      A person must not:

    (a)hinder or prevent a person and the child from spending time together in accordance with the order; or

    (b)interfere with a person and the child benefiting from spending time with each other under the order.

40. In the orders made on 9 September 2009, paragraph 23 reads:

    That pursuant to Sections 65DA(2) and 62B the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and those particulars are included in these orders.

41. Attached to the order and obviously by reference to paragraph 23 of it, the following appears:

    Your legal obligations

    ·You must do everything a parenting order says. In doing so, you cannot be merely passive but must take positive action and this positive obligation includes taking all reasonable steps to ensure that the order is put into effect. You must also positively encourage your children to comply with the orders. For example where the order states your children are to spend time with another party, you must not only ensure that the children are available but must also positively encourage them to go and do so. There are agencies in the community that can help you and your family adjust to and comply with the order (see details on page 1).

    ·The order remains in force until a new parenting order or parenting plan changes it in some way.

    ·Even if the needs or circumstances of you, the child or the other party change, the court order applies until it is formally changed by a court or, in some situations, you enter into a parenting plan with the other party.

    ·Sometimes people talk to each other about changing arrangements set out in a parenting order. These talks do not change the order.

    If you and the other party agree to change the arrangements, you may enter into a parenting plan or apply for consent orders that vary the existing orders. For more information about consent orders, go to call 1300 352 000 or visit a family law registry near you.

    If you want to change a parenting order and the other party does not agree, family dispute resolution can help you and the other party work through your disagreement. Resolving issues this way is less formal than going to court and should cost less in money, time and emotion. If an agreement cannot be reached, you may consider applying to a court for orders.

42. I am satisfied that the husband was bound by the order.  He consented to it.  He reaffirmed it by his agent and solicitor confirming that he would comply with it.  Furthermore, when the husband filed his application for divorce on 8 February 2010, at paragraph 21, he acknowledged the existence of the order made on 9 September 2009.  He referred in that application to the fact that “these orders also provide for the wife to spend time with the children”. 

43. On the basis of the evidence of the wife, I am satisfied that the husband has intentionally failed to comply with the order or, to the extent that it might be necessary to so find, his parents have aided or abetted the contravention by the husband who was bound by the order.

1. A “defence” to a contravention can arise in s 70NAE(2) which reads:

   (2)      A person (the respondent) is taken to have had a reasonable excuse for contravening an order under this Act affecting children if:

   (a)the respondent contravened the order because, or substantially because, he or she did not, at the time of the contravention, understand the obligations imposed by the order on the person who was bound by it; and

   (b)the court is satisfied that the respondent ought to be excused in respect of the contravention.

2. The onus of proving a reasonable excuse exists falls upon the person wishing to rely upon it.  As such, if s 70NAE(2) is to be relied upon, the respondent bears the onus of proving that he or she did not understand, at the time of the contravention, the obligations imposed by the order.  Sections 70NAE(5) and (6) provide a “defence” if the husband could show that contact or communication was denied because it was necessary to protect the health or safety of the children.

3. The husband has not attended the proceedings nor given any written or oral explanation as to why he has conducted himself in such a way as might be seen to have given rise to this defence.  On that basis, I find the husband has breached the order.

4. Counsel for the wife did not assert that I should treat the matter other than as one in which the provisions of s 70NEA apply.  That section provides that the sub-division is applicable in circumstances where there is a contravention found to have been without reasonable excuse.  That leads then to the powers of the Court.  The options are set out in s 70NEB(1).  Counsel for the wife urged me to make an order compensating the wife financially for that which she had lost as a result of endeavouring to fulfil her part of the September 2009 order.  He urged me to also make an order that the husband having been found to have committed the current contravention, pay some or all of the costs of the wife.

5. The wife set out in her affidavit filed 7 July 2010 that she incurred approximately $1200 in lawyers in Taiwan for advice relating to the obtaining of the mirror orders because the husband had not done what he was required to do by paragraph 21 of the orders of September 2009.  Although to some extent, that was a separate order to those which related to the contravention, I find that they are integral to the wife’s attempt to enforce the orders and see no reason why she should not have those costs met by the husband in the circumstances.  The wife incurred airfares of $1215 in May 2010, $1080 in December 2009 and she has the costs of these proceedings.  In addition, Riley FM on 4 June 2010 dismissed the husband’s application for divorce and ordered that the husband pay the wife $7570.  Albeit that that is a separate proceeding, the wife sought by her affidavit to make the oral application to include those costs be also paid by the husband as part of the general enforcement process.  I propose to treat that as an oral application for enforcement of those costs as part of these proceedings.

6. Exercising any of the other provisions of 70NEB than those immediately above would otherwise appear to be pointless having regard to the absence of the husband in these proceedings and the fact that he is in Taiwan. 

7. Importantly however, s 70NBA provides that regardless of whether the contravention is found to have been proved, a court having jurisdiction under the Act can make an order varying a primary order if there are proceedings in relation to the primary order before the court. That may be construed as meaning that in addition to a contravention application, a party must also file a formal application however s 70NAA(2) provides that the court always has power to vary the order.  There can be no doubt in this case that the wife was not only seeking enforcement but that the original orders be varied to the extent that the wife sought an order that the husband deliver the children to the court and that she spend time with them in accordance with the September orders.

8. The purpose of Division 13A is to ensure compliance with orders. It is coercive rather than punitive (see McClintock and Levier (200) FLC 93-401).  In the circumstances, the September 2009 orders should be varied to make the husband deliver the children to Australia to ensure that the initial intention be implemented.

9. The wife then sought an order for costs.  In addition, she sought an order for security for costs having regard to the husband’s adopted position of not only ignoring the order but ignoring the proceedings before the Court.

10. Section 117 of the Act provides that each party in proceedings shall bear his or her own costs. However, s 117(2) provides as follows:

    If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

11. It is to the costs and security of costs arguments that the wife turns. 

12. In respect of s 117(2A), I have read the financial statements of the parties filed before the Court. The purpose of that exercise is to determine whether or not an order for costs can be justified having regard to the financial circumstances of each of them. Having regard to the assets of the parties, there can be no suggestion that the husband is not in a position to pay costs.

13. There has been no suggestion in this case that the wife is a recipient of legal aid.

14. There can be no doubt also in this case that the Court is justified in making an order for costs on the basis of the husband’s conduct alone.  He has declined to comply with the court orders whilst at the same time presenting to the Federal Magistrates Court in a divorce application, a position of acknowledging the existence of the orders. 

15. Before turning to cost issues generally, the wife sought an order for costs on an indemnity basis.

16. Costs being ordered on an indemnity basis is an exception in this Court rather than the rule (see Kohan (1993) FLC 92-340 and Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 118 ALR 248).

17. Chapter 19 of the Rules makes clear that costs to be paid by parties to their lawyers should be within the range set out by the schedules unless the parties knowingly contract out of the rules.

18. Where a party applies for an order for costs on an indemnity basis, the Court must be informed if the party is bound by a Costs Agreement in relation to those costs, and if so the terms of the Costs Agreement. I am satisfied those requirements have been met. 

19. In Yunghanns (2000) FLC 93-029 the Full Court said that the categories of circumstances that might give rise to an indemnity order are not closed. The Court said at 87,471:

    …and it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.  All that is required is that the Court asked to exercise the discretion be satisfied that some ‘particular facts and circumstances of the case in question warrant the making of an order for repayment of costs other than on a party/party basis’.

20. Indemnity costs orders in a parenting case should be reserved for cases where the conduct of a party is anything but child-focussed, is calculated to cause emotional harm to the other parent or conducted in circumstances where there could be no justification for the orders sought or for the conduct of the litigation itself. The husband’s behaviour here causes me concern such that there are circumstances warranting an order. I find there are special and indeed unusual matters or facts in this case. 

21. Section 117(2A) also provides that it is important for the Court to consider whether the proceedings before it were necessitated by the failure of a party to comply with previous orders. That is exactly what has happened here and to that extent, having regard to the fact that there is a “defence” not proposed by the husband and to which I have referred above, it must be said that the husband has been wholly unsuccessful.

22. Section 117(2A)(g) provides that the Court may take other matters into consideration as it considers relevant. The wife’s position is simple. There is no incentive for the husband to comply with the orders providing he remains in Taiwan with his family. The wife may be able to take proceedings in Taiwan but there are obvious difficulties because of the jurisdictional differences. However, the wife points to the fact that there are assets in Australia owned by the husband over which, orders could be made as an enticement for him to comply with the orders or in the alternative, giving the wife access to sufficient funds to enable her to travel to Taiwan in due course to carry out what was intended by the orders of September 2009. That is the purpose of a security for costs order.

23. The evidence of the wife is that the husband has an interest in the house at D. She proposes that an order be made that the husband pay to her $50,000 by way of security for his future compliance with the parenting orders and she be at liberty to use those funds if he fails. Compliance could then follow by way of a sale of D property and in the meantime, the husband be restrained from disposing of that property until the issue is properly resolved. In the circumstances, this is an appropriate case to exercise the discretion and make an order for security for costs in the terms sought by the wife. The order cannot be open-ended however because of the amount involved but having regard to the provisions of s 117 and s 70NEB(1)(e) and (f), it is an appropriate order to make.

I certify that the preceding Sixty Six (66) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  21 July 2010