Fowles and Fowles (No 2)
[2019] FamCA 1027
•23 December 2019
FAMILY COURT OF AUSTRALIA
| FOWLES & FOWLES (NO. 2) | [2019] FamCA 1027 |
| FAMILY LAW – INJUNCTIONS – where husband seeks to dissolve restraint against him leaving the jurisdiction prior to the completion of his cross examination in final property proceedings – very prolonged hearing of property proceedings – relevant principles to uphold the integrity of the court’s hearing process – no significant security offered – injunction dissolved temporarily to permit husband to travel for his father’s funeral. FAMILY LAW – PARENTING ORDER – where husband seeks to take 16 year old child of the marriage out of Australia to attend the funeral of the child’s grandfather in Country U and a commemorative service in the United States of America – where child’s view is that he is prepared to attend his grandfather’s service in the United States of America but not in Country U – applicability of best interest principles – appropriateness of s 60CC factors, in particular, additional considerations – consideration of matters which form the exercise of the court’s discretion to allow the child to travel, where travel not considered to be in the child’s best interests due to father’s unpredictable and unsatisfactory behaviour and failure to allow child any financial autonomy whilst absent from Australia. |
| Bankruptcy Act 1966 (Cth) Convention of 25 October 1980 on the Civil Aspects of International Child Abduction Family Law Act 1975 (Cth) International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171 (entered into force 23 March 1976) |
| Antis & Antis (2000) FLR 93-013 Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314 Bayer AG v. Winter and Others [1986] 1 WLR 497 Brown & Brown (2007) FLC 93-316 Fowles & Fowles (No.5) [2018] FamCA 929 Kuebler & Kuebler [1978] FamCA 26 Line and Line (1997) FLC 92-729 Minister for Immigration and Ethic Affairs v Teoh (1995) 183 CLR 273 Portelli & Wymer [2019] FamCA 428 Rahman and Rahman [2013] FamCAFC 162 Talacko v Talacko [2010] FCA 193 Vellers & Vellers [2019] FamCA 412 Weiss v Offıcial Trustee in Bankruptcy (1983) 1 FCR 40 Xuen & Chao (injunction in aid of enforcement) [2014] FamCA 798 |
| APPLICANT: | Ms Fowles |
| RESPONDENT: | Mr Fowles |
| INDEPENDENT CHILDREN’S LAWYER: | Ms Mary Lonergan |
| FILE NUMBER: | MLC | 8587 | of | 2015 |
| DATE DELIVERED: | 23 December 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 9 & 12 December 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms M Smallwood SC |
| SOLICITOR FOR THE APPLICANT: | Lander & Rogers |
| COUNSEL FOR THE RESPONDENT: | Mr T North SC |
| SOLICITOR FOR THE RESPONDENT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr C Arnold |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Victoria Legal Aid |
Orders
IT IS ORDERED THAT:
Subject to compliance with paragraphs 6 and 7 of this Order, paragraphs 2 of the Order made on 16 November 2018 be suspended to allow the husband to travel from the Commonwealth of Australia to the United States of America and to Country U for the purposes of attending his father’s funeral, visiting his ailing mother, and spending time with his family in the period between 12 December 2019 and 31 January 2020.
The husband return to Australia by not later than 11.50 pm on 31 January 2020.
Paragraph 2 of the Order made on 5 July 2018 and paragraph 3 of the Order made on 16 November 2018 be and are hereby discharged and the husband’s passports be forthwith released to the husband’s solicitors to be held by those solicitors (and not to be released to the husband) unless and until the husband has complied with paragraphs 6 and 7 of this Order.
Upon compliance by the husband with paragraphs 6 and 7 of this Order, the husband’s passport be released to him by his lawyers.
The husband deliver his passports to the Melbourne Registry of the Family Court of Australia within 7 (seven) days of the date of his return to the Commonwealth of Australia.
By way of security only pending the husband’s compliance with paragraph 2 and 4 above, and without reference to the pending proceedings pursuant to Section 79 of the Family Law Act 1975 (Cth) before this Honourable Court:
(a) the husband forthwith execute a Client Authorisation for the Conveyancing Transaction (“Client Authorisation”) for the transfer of his right, title and interest in the property situate at and known as X Street, Melbourne in the State of Victoria certificate of title Volume … folio .. (“X Street”).
(b) the Client Authorisation referred to in paragraph 6(a) hereof be held in escrow by the husband’s solicitors pending the husband’s compliance with paragraphs 2 and 5 hereof or order of the Court;
(c) if the husband wilfully fails to comply with paragraphs 2 and 5 hereof, the wife be at liberty to make an application for the husband’s solicitors to complete a Transfer of Land for the transfer of the X Street property and to execute the Transfer of Land as the transferee of the property or in the alternative, to cause X Street to be sold and have the proceeds dealt with in accordance with the further order of the Court;
(d) the husband forthwith do all things and sign all documents necessary to have the wife appointed a director of T Inc and himself resign as a director, with such appointment and resignation to take effect on a date to be specified by further order of the Court;
(e) all documents executed in accordance with (d) hereof be held in escrow by the husband’s solicitors pending the husband’s compliance with paragraph 3 and 4 hereof or order of the Court;
(f) if the husband wilfully fails to comply with paragraphs 2 and 5 hereof the wife is at liberty to make application for delivery to her of the documents referred to in (e) hereof.
7.The husband pay to the wife’s solicitors the sum of $75,585 on account of the wife’s entitlement pursuant to paragraph 7 of the Order made on 5 July 2018, such payment:
(a) to be deemed to have been made only when the funds have cleared in the account of the husband’s solicitors or the wife’s solicitors;
(b) if paid via the husband’s solicitors, be exempt from the operation of paragraph 7 of the Order made 5 July 2018;
(c) is received by the wife without prejudice to her entitlement to argue subsequently that the current shortfall in payments made to her solicitors pursuant to paragraph 7 of the Order made 5 July 2018 exceeds $75,585.
The husband’s application for the child E born … 2003 to be allowed to travel with him from 13 to 23 December 2019 or otherwise, be and is hereby, dismissed.
IT IS DIRECTED that, as and when convenient and following the publication of my reasons for decision, the independent children’s lawyer explain the outcome of the proceedings to D including, but not limited to, the basis on which the husband’s application for D to travel with him was refused.
The husband forthwith deliver to the wife, via their respective solicitors, the child’s recently issued Australian passport and the wife hold such passport safely.
The husband’s Application in a Case filed on 29 November 2019 is otherwise dismissed save as to costs.
Paragraph 3 of the Orders Sought by the wife in her Response to the Application in a Case filed on 4 December 2019 be adjourned for argument and determination on 4 February 2020 at 9:00 a.m. (estimated to take not more than 2 hours) and the balance of the wife’s Response be otherwise dismissed save as to costs.
In relation to the hearing on 4 February 2020:
(a) the independent children’s lawyer be and is hereby excused from participating in the hearing;
(b) liberty is reserved to the husband and the wife to jointly seek an administrative adjournment of the hearing on 4 February 2020 and to do so through my Associate – email …. Communication by one party’s solicitor will be deemed to be a communication by the solicitors for both the husband and the wife;
(c) if the matter is resolved and a minute of orders sought by consent of both parties is submitted to Chambers prior to 4 February 2020, the husband, wife and their respective solicitors are excused from appearing on 4 February 2020.
Any party wishing to make an application for costs of an incidental to the husband’s Application in a Case filed on 29 November 2019 and the wife’s Response to the Application in a Case filed on 4 December 2019, do so by Tuesday 28 January 2020. Without limiting the basis upon which costs may be sought, any application for costs be supported by an itemised bill of costs drawn in accordance with Schedule 3 to the Family Law Rules 2004.
AND THE COURT NOTES
The husband’s father, Mr Fowles Snr, passed away in the United States of America on … 2019 and the husband has given evidence that the memorial service will take place in … on …December 2019 and a burial will take place in … in Country U on …January 2020.
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 Fowles & Fowles 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 8587 of 2015
| MS FOWLES |
Applicant
And
| MR FOWLES |
Respondent
And
INDEPENDENT CHILDREN’S LAWYER
REASONS FOR JUDGMENT
In one way or another the husband has been restricted from departing Australia since 27 March 2018. During that time the husband has wanted to travel to the United States of America, his country of origin, for various reasons. The husband’s father died in late 2019 following a car accident. He was cremated in late 2019. The husband seeks that any restrictions on his travel be lifted so that he can travel from Australia returning by 31 January 2020. In addition, he seeks to take their son with him. Particular events to be attended by both are a Sunday Mass and memorial service for the paternal grandfather in the USA in December 2019 and a burial service in Country U in January 2019. The scheduling of the memorial service this weekend has meant that the husband’s application was listed almost immediately and the hearing of it fitted in around other court commitments of counsel and myself over two days concluding at 8:45 p.m. on 12 December 2019.
D was born in 2003. He is 16 years old and a student at M School. In these proceedings, he has variously been referred to. No one seems to call him by his full name. I will adopt the diminutive name “D” in line with the Independent Children’s Lawyer.
My reasons for decision in relation to the injunction requiring the husband to deliver his various passports into the safekeeping of the Registry and restraining him from travelling outside Australia, can be found under the case neutral citation [2018] FamCA 929.
Applications
The husband’s Application in a Case was filed on Friday 29 November 2019 and sought an urgent hearing. It was listed for mention on Monday 2 December 2019 when directions were made for the wife to file any responding material on which she wished to rely and for me to hear the matter on Monday 9 December 2019 for one hour. The Independent Children’s Lawyer was included in the mention. All parties were directed to file written submissions specifically as to the appropriate use of the Court’s power to continue to restrain the father from leaving Australia.
By his Application in a Case, the husband seeks the discharge of paragraph 2 of my Order made on 27 March 2018 restraining the husband from leaving Australia. He seeks that all of his passports held by the Court, pursuant to my Order made 5 July 2018, be returned to him immediately. The husband is seeking that D’s passports be returned to D and that D be permitted to travel with the husband without restriction. The husband says that in the alternative, D’s passports be available to the husband and that the husband and D both be permitted to travel to the US immediately and return 31 January 2020. The husband’s other alternative is that his own passport be returned to him and that he alone be permitted to travel to the US and return 31 January 2020.
The wife filed a Response to an Application in a Case on 6 December 2019. The wife seeks that the husband’s Application in a Case filed 29 November 2019 be dismissed. The wife seeks alternatively that, if the husband is permitted to travel that such leave be conditional. She seeks that he pay her solicitor’s $2,000,000 by way of security to be held on trust until further Order. She seeks that he also pay the required amount to discharge the entirety of the liability to Westpac pursuant to all facilities secured by the registered mortgage on the X Street property in the approximate sum of $500,000. The wife seeks that the husband pay $1,000,000 for security for future lump sum spousal maintenance, child support and D’s school fees at M School. She seeks that the husband pay any amounts owing pursuant to orders made by Judge Hartnett (as her Honour then was) on 5 October 2015 for the husband to pay the wife maintenance and child support and be responsible for payments in respect of encumbrances and related costs on the X Street property in which she and D reside and life insurance. The wife seeks pursuant to the Order made on 5 July 2018 by me, that the husband pay any amounts owing in relation to the sum of $2,200 per calendar month to the wife, M School fees, and an amount equivalent to 30 cents in the dollar of any monies paid to the husband’s solicitors be paid to the wife’s solicitors. In addition to this, the wife seeks that the husband pay from the funds held on trust by his lawyers, the amount of $55,225.53 due by way of spousal maintenance pursuant to the 2015 October Order, $28,074.08 pursuant to the 30 cents in the dollar order made by me on 5 July 2018 and any amounts owing in relation to child support that are yet to be particularised.
If the husband should fail to return to the Jurisdiction, the wife seeks that she be at liberty to access, for her own benefit, the $2,000,000 in security and the amount to discharge the Westpac liability on the X St property being approximately $500,000. She seeks liberty to continue the proceedings on an undefended basis and that all extant costs applications be payable by the husband. She finally seeks that the husband pay her costs in relation to her Response to this Application.
The arrears of spousal maintenance owing under the Order of 5 October 2015 and the husband’s compliance with my 30 cents in the dollar order of 5 July 2018, are contentious issues between the husband and the wife. In the course of this hearing, I heard submissions and full argument in relation to the ‘30 cents in the dollar’ issue. My previous preliminary view is that my Order of 5 July 2018 requires the husband’s solicitors to divide each dollar which they receive from the husband by way of costs and disbursements, as to 70 cents to themselves and as to 30 cents to the solicitors for the wife. However, the solicitors for the husband and the husband have interpreted the order as requiring that, for every dollar that the husband pays his solicitors, the husband pays 30 cents to the wife’s solicitors. I determined that the husband’s construction is wrong and by virtue of the misconstruction, the wife has not been paid 30 cents in the dollar in respect of the payments received by her. The solicitors for the husband conceded that, based on the construction that I confirmed, the amount of $75,585 is owing to the wife. The wife says the grossed up figure owing to her is $83,061, but is prepared to adopt the $75,585 amount as monies immediately payable to her providing that she can argue subsequently for the greater amount.
The wife seeks today that the 30 cents in the dollar order made on 5 July 2018 be varied to allow her to apply those monies to costs other than the reduction of the owners’ corporation liability, body corporate fees, mortgage repayments or other outgoings in relation to the X St property. She seeks to apply such monies she has received to costs associated with the X Street property including body corporate fees and mortgage payments, her RateSetter loan advances to date, counsel’s fees in respect of this Application, outstanding disbursement costs, legal fees and agreed costs in relation to the joinder application of Banker Trust of South Dakota. It was not appropriate to extend the afterhours court sitting to accommodate this issue and I will adjourn it to 4 February 2020, with some flexibility as to that date if it is mutually unsuitable to practitioners. It is a simple enough proposition which I hope the husband and wife (or their advisers) can resolve by agreement and submit minutes for consideration by me without the need for an appearance.
An Outline was filed by the husband on 4 December 2019. The wife filed Submissions on 6 December 2019. The Independent Children’s Lawyer emailed Submissions on 6 December 2019, to my Associate. The Outline of the husband and the Submission of the wife identifies the documents upon which each relies and I have had regard to those documents.
Restraint on husband’s entitlement to travel
A restraint on the husband’s ability to leave Australia is an injunction under Section 114(3) of the Family Law Act 1975 (Cth) (“the FLA”), which provides that the court may make such order or grant such injunction in any case in which it appears to be just and convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate. Senior counsel for the husband submits, correctly in my view, that s 34 of the FLA is also a potential source of power. In submission, he referred to the helpful summary of authorities in that regard cited by Deputy Chief Justice McClelland in Vellers & Vellers [2019] FamCA 412 at [7] including Tree J’s review of relevant cases in Xuen & Chao (injunction in aid of enforcement) [2014] FamCA 798.
There is no dispute about the court’s jurisdiction and power to restrain the husband’s freedom of movement. The dispute is whether the power should be exercised and on what basis.
There are a few general principles that I will state about the exercise of the court’s power to interfere with a litigant’s freedom to leave the jurisdiction. Some derive from cases to which I was helpfully referred to by Mr North SC and some flow from the concept of what is just and convenient in this case. In no particular order of importance I state the following;
·The relief is discretionary.
·By virtue of Australia’s execution in 1972 and ratification in 1980 of the International Covenant on Civil and Political Rights[1], a person’s freedom of movement is “certainly a relevant consideration when making an order pursuant to s 114 retraining a person from leaving Australia” (Minister for Immigration and Ethic Affairs v Teoh (1995) 183 CLR 27 at [286-288]). However, the rights protected by Article 12 must be taken into account by reference to the plain terms of relevant municipal law and balanced against a competing principle relating to the likelihood that a party applying for the order will be denied a remedy if the respondent’s freedom to leave the jurisdiction is not restrained (Rahman and Rahman [2013] FamCAFC 162 at [55] and [57]).
·Restraining a litigant’s freedom of movement is not a power that should be exercised punitively.
·Restraining a litigant’s freedom of movement should not take on the character of a free standing enforcement procedure and should be in the nature of a short term restraint (Brown & Brown (2007) FLC 93-316 at [192] - [195]).
·The onus of proving that the party applying for the order would be denied a remedy if the respondent’s freedom to leave the jurisdiction is not limited or suspended is a “heavy onus” (Rahman and Rahman [2013] FamCAFC 162, at [65]). The onus on the applicant for the order, is to establish that he or she ‘will not’, not ‘may not’, be denied a remedy which the proceedings are otherwise likely to provide (Xuen & Chao (injunction in aid of enforcement) per Tree J quoting from Antis & Antis (2000) FLR 93-013 at [38]).
·It is not appropriate to hold someone hostage or conduct a trial by ordeal.
·The power is to be exercised having regard to what is just and convenient. It is a balancing exercise. If the reason to travel is strong then the legitimate risks associated with the litigant leaving the jurisdiction will need to be stronger, before the court interferes with the liberty of a litigant.
·The restriction on a person’s ability to travel out of the jurisdiction should be of limited duration. It does not need to be limited in time but such a restriction should not be imposed for longer than is necessary which, in this case, means longer than is necessary to protect the integrity of the court’s processes.
[1] International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171 (entered into force 23 March 1976).
In Talacko v Talacko [2010] FCA 193, Dodds-Streeton J summarised the issues as follows:-
45.As the authorities recognise, curial restraint and caution must be exercised in relation to curtailing or interfering with a person’s travel and freedom of movement, even in a bankruptcy context.
46. In Weiss v Offıcial Trustee in Bankruptcy (1983) 1 FCR 40 at 43, Bowen CJ stated:
I am conscious of the fact that the evidence revealed in his public examination suggests that he has committed various offences against the Bankruptcy Act 1966 (Cth) which have characteristics involving nondisclosure and concealment. However, these are matters to be litigated at the proper time. It is a basic principle that a resident of Australia is entitled to expect that he may travel freely notwithstanding the fact that he is a bankrupt provided it will not lead to his staying overseas in order to defeat or delay his creditors and provided it will not interfere with the due administration of his bankrupt estate (see Tyndall’s case at 15). It is to secure the proper administration of bankrupt estates that bankrupts are required by the Bankruptcy Act 1966 (Cth) to give their passports to the trustee (par 77(a)) and to obtain the permission of the trustee before travelling overseas (par 272(c)). This interference with the travel of bankrupts is not for the purpose of punishing or expressing disapproval of them for offences or alleged offences against the Bankruptcy Act 1966 (Cth).
47. Finkelstein J, in Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314 at 320 made observations to similar effect in relation to an application to order a director to remain in Australia to assist in ASIC investigations. His Honour stated:
In my view the power to restrain a person from leaving the jurisdiction or requiring a person to deliver up his passport, which would have the same effect, is a power that should be exercised with great caution. I regard any restriction on a person’s individual freedom of movement from one country to another as being a sufficiently serious interference with that person’s personal rights and liberties that the power to impose the restriction should be exercised only in the most clear case. Thus, in circumstances such as the present where the orders are sought for the purposes of assisting a current investigation that is being conducted by the ASIC, unless it is shown that the investigation cannot properly or effectively be conducted in the absence of the person, the orders should not be made.
48.Finkelstein J concluded that the appropriate course was to seek undertakings from the respondent’s solicitor as to the control of the respondent’s passport, which was currently in the solicitor’s possession.
49. Section 50 of the Act is aimed at facilitating the preservation and protection of the debtor’s property, so that in the event of sequestration, it will be available for equitable distribution to creditors. The considerations relevant to making an order thereunder differ from those relevant to the enforcement of a judgment and the present application differs from those recently made before the Supreme Court of Victoria.
There is no evidence about how an order, which provides the wife with an entitlement or award to extra territorial property, can or cannot be enforceable in the other jurisdiction. That includes an absence of evidence about any bilateral or other arrangement between this federal jurisdiction and the relevant state jurisdiction(s) in the United States or elsewhere. Indeed, submissions from both sides are silent as to enforceability of orders between Australia and the United States. However, only one party, the wife, bears an onus of proving that she will be denied a remedy, award or entitlement which these proceedings are otherwise likely to provide.
Leaving to one side the $75,585 which the husband concedes is owing to the wife by virtue of his underpayments on the 30 cents in the dollar order, a final order has not been made altering property interests between the husband and the wife. The wife is not seeing orders in aid of enforcement or to protect an award or an entitlement as were the applicants for orders in Rahman case, Vellers case and Xuen & Chao. The wife is not invoking a statutory restraint such as that available under the Bankruptcy Act and considered by the Federal Court in Talacko. Here, the wife seeks to continue the injunction on an interlocutory basis, where any entitlement or award is not yet known and nor is it identifiable as being outside the jurisdiction.
In Bayer AG v. Winter and Others [1986] 1 WLR 497 the Court of Appeal (UK) considered search and seizure powers in aid of interlocutory discovery and observed:
[…] that the law in relation to the grant of injunctive relief for the protection of a litigant’s rights pending the hearing of an action has been transformed over the past 10 years by the Anton Pillar and Mareva relief which has greatly extended the law on this topic as previously understood, so as to meet the needs of justice.
Further, the Court of Appeal (UK) considered that the restrictions which are sought to be imposed, should be necessary and reasonable orders which are ancillary to the due performance of the court’s function. The restraint should be of limited duration and no longer than is necessary to enable the applicants for the injunction to serve the orders and obtain the information.
The extant Orders of 27 March and 5 July 2018, which operate to restrict the husband’s freedom of movement, were made for the purpose of protecting the integrity of the court’s process, in particular, to secure the continued attendance of the husband whilst his evidence was tested by cross examination and otherwise. It should be apparent from my reasons for decision on 16 November 2018 that the husband’s evidence gave cause for concern vis a vis his intention to divest himself of offices within entities and power over certain assets, his compliance with orders was being criticised but, most importantly, he did not have any firm proposal to travel or pressing reason to travel.
The Orders of 27 March and 5 July 2018 were made on the seventh and thirteenth day of the trial respectively, when the husband was in his second and eleventh day in the witness box. My reasons for decision were handed down on 16 November 2018 which was between the fourteenth and fifteenth day of the trial which, excluding this application, is now in its twenty fifth day. The husband has stepped into the witness box on 21 days of the hearing, albeit sometimes not for long and frequently not productively.
I will give attention to the extent to which the circumstances upon which the Orders of 27 March and 5 July 2018 were based have changed, and whether that is to such an extent that the restriction can no longer be justified by such pre-existing circumstances as remain or other circumstances which have since arisen. Senior Counsel for the wife submits that there has been no change of circumstances and if circumstances have changed, the changes render the husband more of a flight risk than ever. I cannot accept that submission.
In 2018, the husband had no specific reasons to travel. He sat in the witness box, weeping, and saying that he wanted to take a “break” from the proceedings. He had given curious and concerning evidence about resigning his office in entities. He could not explain himself. I cannot say that the curiosity and concern over his evidence has abated much in the ensuing court days. However, he now has a cogent and legitimate reason to travel. That is a change in circumstance.
Senior counsel for the husband submits, correctly, that counsel for the wife has said that he is very nearly finished his cross examination of the husband. Against that proposition is the fact that counsel for the wife has said words to that effect on a number of occasions and the statement has proved to be incorrect. Senior counsel for the husband submits that I should not infer inaccuracy in what counsel for the wife has said about how much more cross examination he has. However, on the last day of the hearing, 7 November 2019 (Day 24 of the hearing), senior counsel for the husband sought to make an oral application for cross examination of his client to cease. The reason, it was later said, was because the husband did not want to “be vexed”, from which I infer that senior counsel for the husband could not have thought that the end of cross examination was all that imminent. At the time, the husband indicated that he simply could not be cross examined further. When I indicated that the cross examination of the husband would be adjourned instead of terminated, the husband said that he preferred to go back into the witness box. He did not do so because his two counsel assessed him as not being able to give evidence.
It is not possible for me to say for how much longer Mr Sheales will want to cross examine the husband, but I am hoping it is measurable in minutes and hours rather than in days.
A relevant change in circumstances is the husband has now (Day 25) been much more extensively cross examined than he had been on 27 March (Day 7) and/or 5 July 2018 (Day 13). It follows that the wife has had a greater opportunity than previously to make out her case and target assets held extra territorially and to identify that which she says has not been disclosed.
Conditions on the husband’s travel
The husband offers security or pre-conditions to his travel. These are set out as paragraph 5 to the Minute of Proposed Orders for Hearing on 9 December 2019 (Exhibit “H10”). The day, 9 December 2019, was the date of the first mention of this matter before me but the Minute was not tendered until the hearing on 12 December 2019. I have annotated the exhibit extensively in handwriting as a consequence of not having been provided with a mark-up copy for my use; only the typed words constitute the exhibit.
Given that I must balance the risks to the wife of not restricting the husband’s freedom to leave Australia against the hardship to the husband of not doing so, the exercise of my discretion should have regard to all relevant facts and circumstances including the extent to which the husband, through Senior Counsel, offers to make his travel conditional.
In sum, the husband offers to execute a number of documents, to be held by his solicitor in escrow, which would facilitate:
a)The former matrimonial home at X Street, Melbourne being transferred from the husband to the wife;
b)The husband’s resignation as a director in, and the wife’s appointment as a director of, T Inc. –
in the event that the husband wilfully fails or neglects to return to Australia by 31 January 2020 and this Court orders such transfer, resignation and/or appointment.
Senior counsel for the wife submits that the proposed execution of documents does no more than the wife could reasonably expect to achieve in the event that the husband failed to return and she sought relief under Part VIII – Enforcement of decrees, including an order under s 106A (Execution of Instruments by Order of the Court). There is merit in Ms Smallwood’s submission.
Senior counsel for the wife referred to the benefit of the wife replacing the husband as director of T Inc. as being of questionable value, given the husband’s evidence that: [2]
[2] Husband’s affidavit sworn 28 November 2019.
35. I say my comments at the time were made in response to what I say are inaccurate expert valuations of the companies which were produced for the court, and to demonstrate that the companies would be worthless if I decided to resign.
36. The emails sent on 25 March 2018 were not an authentic or genuine intent to resign. It was an attempt to make the point that FSA is dependent on me, and if I were not running the companies they would fail. It depends on me because I had experience as a research analyst on Wall Street, and I write a monthly research report called the Relative Value Model. Clients come to FSA for my research and the performance of the RVM.
37. FSA is dependent on the research report that I write and the performance of the Relative Value Model. Clients come to T Inc because of my advice. T Inc advisors only sell my advice. Without me FSA would have to be wound up, which would be expensive
38.T Inc is not worth its net cash because the cash in T Inc is pre-tax money in a C-corp, and T Inc has a long history of regulatory issues. Nobody would buy a (pre-tax) cash box with regulatory issues. New entrants to the industry would start up a new entity and apply for FINRA membership, rather than take over an existing entity where there are skeletons in the closet. There would also be significant legal costs to wind up T Inc.
[…]
42. The T Inc Relative Value Model portfolio performance is failing because I have not been able to go to the US to do research. It shows the dramatic fall in performance of the portfolio. […]
43. I say that the performance of the Relative Value Model is a future indicator of commission revenue at T Inc.
44. If commission revenue falls in line with my expectations, there will be no money left to pay lawyers to continue this trial to its conclusion.
45. For 25 years I have travelled to the United States approximately 4 times per year to do research on the US stock market. T Inc is dependent on the performance of the Relative Value Model, and the Relative Value Model performance is dependent on my travel to the United States to do research.
I accept the submission of senior counsel for the wife that the husband, is not offering anything that the wife does not already have or would likely get in the event of the husband’s default, he is not offering much at all by way of security. However, the extent to which it is appropriate to extract security from the husband at this juncture and for his own travel is, to my mind, doubtful on the authorities. I will make the order sought by the husband in paragraph 5 on his Minute (Exhibit “H10”).
Aside from “security” as offered, I will require the husband to make good the conceded underpayment by him to the wife under the 30 cents in the dollar order. That $75,585 is to paid and, absent prior written agreement between the parties’ solicitors, be cleared through the trust account of the husband’s solicitors or the wife’s solicitors.
Whilst I have only this evening found that the sum of at least $75,585 is owing to the wife by the husband, I am satisfied that it is reasonable that the husband make this payment to the wife in clear funds before he boards a flight for the United States on 13 December 2019. I am so satisfied because:
a)It is amount which is conceded by the husband’s lawyers to be owing;
b)The calculation of the amount is based on a plain reading of the relevant order;
c)The husband’s evidence and instructions to senior counsel about the amount and location of funds which are accessible to him has been inconsistent (as I discuss later in these reasons in relation to security for D to travel).
Conclusion about the husband travelling
Weighing all relevant matters, I conclude that the restriction on the husband’s travel which has been in place since 26 March 2018 has served its purpose, that is, to protect the integrity of the court process by keeping the husband in Australia for cross examination. The restrictions have operated to allow the wife to have the (in the words of Mr North SC) “opportunity to present and prosecute the case they have before the Court”. Cross examination has not concluded but it is much more extensive than when the restrictions were imposed by me in 2018.
I am satisfied that current circumstances are quite different from the circumstances which prevailed when I restricted the husband from travelling. I am satisfied that it is now just and convenient, within the meaning of s 114(3) of the FLA, for the husband to travel outside Australia for the purposes he has specified and providing he first pays the monies owing to the wife.
Restraint on D’s travel
An order for D to travel is a parenting order which is preconditioned on D’s best interests. Section 60CA of the FLA provides that a court must regard the best interests of a child as the paramount, but not the only, consideration. A parent’s desire to travel internationally with a child particularly for the purposes of a holiday, which one would presume could benefit a child, is a matter warranting consideration. Where there is a conflict between the interests of one or both parents as against the best interests of a child, the latter will prevail by virtue of the paramountcy of the child’s best interests.
The two primary considerations in s 60CC(2) are of some assistance in this case. It is conceded by the wife that D should have a meaningful relationship with the husband providing it is safe for D to do so. Safety in this context relates primarily to D’s emotional wellbeing which, in turn, includes an assessment of whether the child will be able to deal with certain difficult or undesirable personality traits of the father if, or when, they emerge and absent any immediate support from the wife.
Eleven of the thirteen additional considerations in s 60CC(3) of the FLA are of little assistance.
Section 60CC(3)(m) of the FLA permits me to have regard to any other fact or circumstance that is relevant. The security, or lack thereof, offered by the husband for D’s return is relevant.
Section 60CC(3)(a) of the FLA requires a court to consider any views expressed by D. Section 60CD(2)(b) of the FLA recognises the role of the Independent Children’s Lawyer in informing the court of the views expressed by the child. Ms Mary Lonergan is the Independent children’s lawyer for D, she has been for some years now and I am informed that she spoke to him last week about the husband’s proposal.
The Independent Children’s Lawyer’s submissions dated 6 December 2019, includes the following which is said to reflect the single telephone conversation which Ms Lonergan had with D:
The Independent Children’s Lawyer does not specifically have a view in relation to the Father travelling to the USA insofar as it relates only to the Father.
The Independent Children’s Lawyer’s view however is to support the application made by the Father for the return of Father’s and child’s D born … 2003 (“D”) passports on a temporary basis to enable D to go to the USA with his father for a period of up to two weeks.
D has expressed his desire to go to the US with his father, to support his father and extended family over this period. He feels comfortable with his extended family in the US, and as he has stated, he has been there many times.
He is content to fly to the US with his father and be in his father’s care over this period. He has of late spent extended time with his father, in particular over school holidays. The ICL notes the parents dispute which holidays D spent the extensive time.
D wishes to attend his paternal grandfather’s memorial and has indicated that he return to Australia prior to Christmas Day so he can spend Christmas in Australia with family and friends.
A period of 10 days to two weeks would enable this to occur depending on the date of the orders.
If the court is not mindful to allow D to go with his father, consideration should be given to D flying to the US with the father, his mother to also go to the US in this period. This will enable D to be with his father but provide an additional support for him in light of possible concerns regarding the Father’s ability to support D over this period. The costs of this should be borne by the Father.
D is now 16 and has recently completed his Year 10 exams. Consideration should be given to his wishes in light of his age and maturity. He has expressed clearly his desire to go for a short period to support his father and return prior to Christmas Day (s.60CC3(a)).
There are historical allegations of family violence made by both parents. There has also been a period of time where D did not spend any time with his father, and clearly expressed his wishes not to spend time with the Father (Family report Ms C dated 24 November 2017).
He has however re-commenced spending time with his father and it would seem that this has occurred as agreed, taking into account D’s wishes.
Concerns are raised particularly in relation to the Father’s health at this stage, and his overall lack of insight into his parenting role and his ability to effectively parent D.
D however is of mature years and in a position to self protect. He has indicated that he is comfortable in his father’s presence (s.60CC2(b) and s.60CC3(f)).
D should also retain his passport at all times whilst overseas.
Counsel for the Independent Children’s Lawyer informed the court that following the mention on 9 December 2019, Ms Lonergan telephoned D to advise that the issue of his travel was yet to be decided but that a passport would be obtained for him in the interim so that he could fly if permitted. Ms Lonergan could not speak to D, she left a detailed message for D but D did not contact her in response. The father holds D’s Australian passport.
The father is not having regular time with D. Orders providing for regular time were suspended or discharged some years ago because D did not want to spend time with his father, for what then appeared to be valid reasons. The husband deposes that in the last six months D has spent 11 days during the July 2019 school term holidays with him and 4 to 5 hours last Father’s Day. The father deposes that, “D said he intends to spend the majority of this summer holiday at our house in the USA”.
The mother’s evidence about D’s expectation of any trip to the United States is that [45]:
More recently, D has again been expressing his desire to me to let him go to the US with his father prior to Christmas. D tells me that his father has said they will go skiing, and he has asked me if he can take his ski jacket but his father would rent him the ski equipment.
Senior counsel for the father presented his client’s case as seeking that D accompany the father to America and Country U and return to Australia on 31 January 2020. Only after counsel for the Independent Children’s Lawyer reiterated that D wanted to return to Australia by Christmas did the husband modify his application to return D by 24 December 2019. In the process of doing so, senior counsel for the husband informed the court, and I paraphrase, that the husband does not accept that D’s current view is that he wants to return to Australia for Christmas and that, in any event, D will not necessarily be of that view once he travels to the United States. I will return to this statement later in these reasons.
In Line and Line (1997) FLC 92-729 some factors relevant for consideration in an international travel case were said to be:
a)The existence or otherwise of continuing ties between the departing parent and Australia (such as the ownership of real estate, the existence of business interests or the residence of close family or friends here);
b)The existence and strength of possible motives not to return (including the level of conflict between the parents, particularly over child related issues); and
c)The existence and strength of possible motives to remain in the other nominated country (such as the ownership of real estate, the existence of business interests or the residence of close family and/or personal friends there); and
d)Whether the country of travel was a signatory to the Hague Convention.
Here, the husband has described his links to Australia in the following terms:
I will return to Australia because my son is here, my life is here, my lacrosse club, my friends are here my career is here. I have also prepaid D’s school fees for next year.[3]
Of the matters deposed to by the husband, the residence of D in Australia is the most significant connection to this jurisdiction. However, it is not persuasive where the husband seeks to remove D from the jurisdiction.
[3] Affidavit of Mr Fowles sworn 4 December 2019 [21].
I accept that there is some motivation for the husband to retain D out of the jurisdiction due to his perception that the wife has not been prepared to facilitate a meaningful relationship between himself and D. The husband has family and commercial interests in the United States of America. He has a girlfriend there. Presumably he also has personal friends in that jurisdiction. The Convention of 25 October 1980 on the Civil Aspects of International Child Abduction (the “1980 Convention”) is in force between the United States and Australia. However, it is of no assistance in this case as D is of an age where the 1980 Convention no longer applies to him. Article 4 of the Convention provides, inter alia, that the “Convention shall cease to apply when a child attains the age of 16 years”. There is an arrangement for the enforcement of orders between Australia and the United States under Part VII – Division 13 of the FLA, but that arrangement is largely preconditioned by best interest considerations, that is, the welfare of the child.
In Kuebler & Kuebler [1978] FamCA 26 (at 6), it was held that:
The considerations that should be given to an application which involves the custodial parent taking a child out of the jurisdiction, without being exhaustive, are:
a)The length of the proposed stay out of the jurisdiction;
b)The bona fides of the application;
c)The effect on the child of any deprivation of access;
d)Any threats to the welfare of the child by the circumstances of the environment;
e)The degree of satisfaction in which the Court based its assessment of the parties that a promise of a return to the jurisdiction would be honoured.
In this case, the applicant husband is not D’s the primary carer. I do not consider the environment, per se, to constitute any risk to D. He is not entering a war zone. The risk is that, once in the United States, the husband may pressure D to change his mind and detain him for longer than the agreed period. That, of itself, would be bad enough but I am more concerned that D would feel trapped in the United States without the wherewithal to extricate himself. The wife is not in a position to provide D with funds if the husband decides not to honour his commitment to return D or tries to suborn D into overstaying. In this respect, the submission of senior counsel for the husband, that the husband doubts that D will want to return to Australia before Christmas once he has commenced his visit in the United States, resonates strongly. Mr North followed this by conveying his instructions that the child would, nonetheless be returned, but the initial comments strike me as portentous.
I have had an extensive opportunity to assess the husband in and out of the witness box in various emotional states including when he appears self-importance, frustrated, angry and distraught. I have seen the husband be flippant, dismissive, arrogant, to sob, groan and weep. Most recently there appears to be a correlation between the husband’s distress and his ability to walk. When the husband is vexed he has a very pronounced limp and, at the last day he was due to be cross examined, he could not walk unaided. He made his way around the court room by clinging to the back of chairs. Senior counsel for the husband agreed that the husband has, at times, comported himself in a way which a teenager in D’s situation would find distressing.
In Portelli & Wymer [2019] FamCA 428 consideration was given to the risk of the travelling parent failing to return the child to Australia, as a risk that objectively exists, such that it is not addressed by the offer and provision of security. Considerations of the risk include whether the child has been accustomed to travelling domestically and internationally with either one or both parents, whether during any such travel the relationship with the other parent suffered detriment, and whether the travelling parent has any substantial connections outside of the jurisdiction such as family, business or property connections.
The position of the Independent Children’s Lawyer is that D must be given financial the means to make his own way back to Melbourne in the event of an emergency and unassisted by the father. Mr Arnold specified that that would include the means for D to get himself to the airport, as well as the cost of his return flight. I suggested a Commonwealth Bank Travel Card loaded with $2,000 but, in spite of Mr North seeking instructions on a few occasions, no offer was made for any sum of money.
It appears that in the last 12 months or so, the husband has spent in excess of $800,000 on legal fees for these proceedings. Apparently, the husband has also caused an entity that the wife sought to join to these proceedings to pay $90,000 to lawyers to become involved in the proceedings and oppose the joinder. He claimed to have a “kitty” of $150,000 in Australia to support himself and D during the proposed trip in case he did not receive income whilst he is out of the country. I will revisit the $150,000 below. However, Mr North said that, if the husband receives income whilst abroad, he will then have a surplus of cash on return. In this context, the husband’s refusal to put D in funds to the extent of $2,000 is of concern. It is consistent with, but not determinative of, the husband wanting to exert complete control over D. In the course of these proceedings, the husband has demonstrated behaviour which is variously grandiose, obsequious, stubborn, wilful, posturing and self-sabotaging. These are traits which are largely irrelevant to the financial proceedings but, if directed to D, could prove extremely challenging for him, particularly in the absence of D having financial autonomy in a foreign country.
Senior counsel for the wife referred me to the report of Dr B, psychologist, dated 12 December 2016, who was an expert witness in the parenting proceedings. Dr B assessed the husband and included the following in his description of the husband [2-3]:
He presented a picture of a person with narcissistic personality traits and his presentation raised questions about his ability to be empathetic in relation to others. He was highly competitive in the cognitive evaluation and presents as extremely determined to get what he wants. He presents as a determined person who is used to having interpersonal influence and appears to use a variety of methods to attempt to manipulate situations for his own purposes. He is extremely systematic in his approach cognitively.
Mr Fowles was circumspect and gave the impression that he was providing the examiner with selective pieces of information about his life.
The husband’s behaviour before me substantiates Dr B’s assessment. The father’ demeanour and attitude suggests strongly that, given the opportunity and motivation, the husband would have little difficulty substituting his own preferences for obligations cast upon him by an order of this court, no doubt in the belief that his preferences are more valid and carry more weight than any imposed upon him by an outside agency such as the court or, indeed, D’s mother.
Conditions precedent to D’s travel
The husband offers no further “security” for D’s return than he offers for his own return.
At the mention on 9 December 2019, Mr North sought and obtained instructions that the husband had a total of $150,000 cash available to him. At this hearing, Mr North clarified that the $150,000 was available to him in cash in Australia and there were other funds which could not be transmitted to Australia in time. Mr North described the funds as the husband’s “kitty” and included Mr North’s fees to appear. When pressed for detail, the husband said that $150,000 was not in Australia, it was in the United States and part of an investment of US$300,000 some of which was required to be held to meet corporate regulatory requirements. None of us was spared Mr North’s irritation at receiving conflicting instructions. Moreover, it appeared that extracting instructions from the husband was like pulling teeth. Finally, the husband’s instructions were confirmed to be that the $150,000 is in a stock broker’s account in the United States. In particular, it is an account held by T Inc. with Mr CC, in which the unallocated funds at the husband’s disposal approximate $180,000.
The instructions conveyed by Mr North do not necessarily sit comfortably with paragraph 28 of the husband’s affidavit sworn 28 November 2019 and file in support of this application that, in June 2019:
Mr DD noted that I had $245,315 of remaining cash available to me, whether in the companies or my personal accounts. However, Mr DD has recently informed me that these fuds are pre-tax, and any attempt to withdraw those monies will have significant tax consequences.
I should also mention that, in spite of bringing an urgent application to travel out of the jurisdiction with D, the husband was personally unprepared. He had not investigated flight availability. He required that seats be found by the solicitor instructing Mr North in a manner which was described, in my view charitably, as laissez faire. The husband’s demeanour smacked of his refusal to be scrutinised or held to account.
Conclusion about D travelling
I have lifted the restrictions on the husband’s travel because I do not consider that maintaining the restriction is justified on the test of what is just and convenient. However, I am not prepared to order that D can accompany the husband.
I am not satisfied that it is in D’s best interests for him to accompany the husband to the United States notwithstanding that he has said he would be comfortable and ready to do so. D is to be commended for wanting to comfort and support his father whilst his father in in the United States during this indisputably trying and sad time for the Fowles family. I acknowledge that everyone grieves in their own way. I do not assess the husband based on a few minutes of behaviour in court when he is grieving the loss of his father. The aspects of the husband’s personality, which I am ultimately satisfied do not make it emotionally safe for D to accompany him, are of long standing. They were identified by Dr B a considerable time ago. In the final analysis, the failure of the husband to give the child some financial autonomy whilst in the United States is a feature of the husband’s case that I cannot reconcile with D’s best interests. It is an omission on the husband’s part which I regard as ominous.
It is important that D understands why he did not go to the United States. I request that the Independent Children’s Lawyer tell D specifically why the husband’s application failed which, I hope, is evident from these reasons. The husband failure was not attributable as much to the wife’s arguments in opposition, but because of his behaviour and what he failed or neglected to provide by way of financial parachute for D whilst in the United States. That said, I regard the arguments of senior counsel for the wife to have been cogent and well presented but, absent the father’s bizarre behaviour, they would not have been sufficient to keep D here.
Costs
Any party wishing to make an application for costs should do so within 45 days supported by evidence including, but not limited to, a detailed memorandum of costs drawn in accordance with Schedule 3 to the Family Law Rules 2004.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 23 December 2019.
Associate:
Date: 23 December 2019
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