Kanelos and Kanelos and Ors - [2018] FamCA 524

FAMILY COURT OF AUSTRALIA

KANELOS & KANELOS & ORS

[2018] FamCA 524

FAMILY LAW – CHILDREN – Parenting – Undefended final hearing – Where the mother seeks sole parental responsibility, for the children to live with her, and to spend time with the husband as agreed in writing between the parties – Where the wife seeks an order enabling her to apply for passports for the children without consent of the husband and to retain the children’s passports – Where the husband has disengaged from spending time with the children for various periods and communication between parents is difficult – Where the Court has concern about the husband’s capacity to provide for the children’s needs – Presumption of equal shared parental responsibility should not be applied – Orders made for the wife to have sole parental responsibility, for the children to live with her and to spend time with the husband as agreed in writing between the parties.

FAMILY LAW – PROPERTY – Undefended final hearing – Adjustment of property – Where the respondent is the Trustee in Bankrupcty – Where the husband and the wife jointly contributed to maintaining their household during the marriage and are jointly responsible for the mortgages on the former matrimonial home – Where the husband failed to comply with orders in respect to paying spousal maintenance – Where ordering the husband to transfer his share of properties owned jointly with his parents and sister to the wife would be futile – Where a caveat is registered on the former matrimonial home and the wife sought to have it removed – Court finds it is just and equitable to make an order altering the parties property interests – Order made for the Trustee in Bankruptcy to transfer his interest in the former matrimonial home to the wife.

Bankruptcy Act 1966 (Cth) s. 58, 131, 132, 156A
Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth)
Child Support (Assessment) Act 1989 (Cth) s. 79(4)
Evidence Act 1995 (Cth) s. 50
Family Law Act 1975 (Cth) s. 4(1), 4AB, 60B, 60B, 60CA, 60CC, 61DA, 65DA, 65DAA, 65DAC, 65Y(2), 75, 79, 90AF
Family Law Rules 2004 – rr. 11.02, 13.01, 13.04

AM and MM [2005] FamCA 443
Biltoft and Biltoft (1995) FamCA 45
Bircher & Bircher and Anor [2016] FamCAFC 123
Briese and Briese (1986) FLC 91-713
Chorn & Hopkins (2004) FLC 93-204
Graf-Salzmann and Graf [2015] FCWA 68
Kanelos & Kanelos & Ors [2017] FamCA 1026
Kowaliw & Kowaliw (1981) FLC 91-092
Livesey and Jenkins (1985) 1 All ER 106
Luxton v Vines (1952) 85 CLR 352
Mazorski & Albright (2007) 37 Fam LR 518

Petruski & Balewa [2013] FamCAFC 15
Pierce & Pierce (1999) FLC 92-844
Quaresmini & Quaresmini [1999] FamCA 1314
Re Francis; Ex parte Official Trustee (1988) 82 ALR 335.

Residential Housing Corporation v Esber & Ors (2011) 80 NSWLR 69
Richard Evans & Co. Ltd. v. Astley [1911] AC 674
Rodgers & Rodgers (No. 2) (2016) FLC 93-712

Sigley v Evor (2011)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FamCA 524
Decision Date: 13 June 2018

CaseChat Overview and Summary

This case concerned parenting and property disputes between a wife and her husband, who was a bankrupt, and involved the Trustee in Bankruptcy as a respondent. The wife sought sole parental responsibility for the parties' two children, orders for the children to live with her, and for the children to spend time with the husband as agreed in writing. She also sought orders to enable her to apply for and retain the children's passports without the husband's consent. In relation to property, the wife sought an adjustment of interests in the former matrimonial home, which was jointly owned with the husband, and where a caveat was registered. The husband had disengaged from spending time with the children, communication between the parents was difficult, and the court had concerns about the husband's capacity to provide for the children's needs.

The court was required to determine whether the presumption of equal shared parental responsibility should apply, and if not, what orders were just and equitable regarding the children's living arrangements and time spent with each parent. Furthermore, the court had to consider the impact of the husband's bankruptcy on the property settlement and determine how to adjust the parties' property interests, including the former matrimonial home, in a just and equitable manner, particularly given the husband's failure to comply with previous spousal maintenance orders and the futility of ordering him to transfer other properties. The court also needed to address the wife's application concerning the children's passports and international travel.

In its reasoning, the court found that the presumption of equal shared parental responsibility should not be applied due to the husband's disengagement and concerns about his capacity to meet the children's needs. The court determined that it was just and equitable to make orders altering the parties' property interests, considering their joint contributions to the household and the need to sever their financial relationship. The court applied principles from cases such as *Stanford* and *Bevan* regarding the identification of legal and equitable interests in property proceedings. The court also considered the provisions of the *Bankruptcy Act 1966* (Cth) and the *Family Law Act 1975* (Cth) in making its property orders.

The court ordered that the wife have sole parental responsibility for the children, that the children live with her, and spend time with the husband as agreed in writing. The wife was permitted to apply for and retain the children's passports and travel internationally with them, subject to providing notice to the husband. In relation to property, the Trustee in Bankruptcy was ordered to transfer his interest in the former matrimonial home to the wife, with the wife indemnifying the husband and Trustee in respect of liabilities associated with that property. The wife was to retain sole ownership of other property in her name and indemnify the husband regarding certain debts, while the husband was to remain solely liable for debts in his name.

Orders

Orders of the court

Property

That within 28 days of the date of these orders, the husband or if he remains subject to the existing bankruptcy, the Trustee and the wife, shall do all acts and pay all such monies necessary to cause the following to occur simultaneously:

1.1. Transfer of the property situated at and known as B Street, Suburb C in the state of New South Wales (“the Suburb C property”) to the sole name of the wife at the wife's cost, such that the husband, or if he remains subject to the existing bankruptcy, the Trustee, shall sign all documents presented to him by the wife and the wife shall do all other things necessary for such transfer to occur; and

1.2. Discharge of all mortgages and encumbrances including the Trustee’s caveat presently registered over the Suburb C property at the cost of the wife, such that the husband, or if he remains subject to the existing bankruptcy, the Trustee, shall sign all documents presented to him by the wife and the wife shall do all other things necessary to cause such discharge; and

1.3. The wife shall thereafter indemnify and keep indemnified the husband and the Trustee in respect of all liabilities in relation to the property, whenever and however arising.

That subject to the Orders above, that the wife shall retain sole legal and beneficial ownership of:

2.1. All personal property in her respective possession or control;

2.2. All real property in her names;

2.3. All shares, debentures, units in unit trust, accounts held at any bank, building society, credit union or financial institution standing in her sole name respectively; and

2.4. Any interest in any life insurance policy or superannuation policy fund standing in her sole name respectively.

That the wife shall indemnity and keep indemnified the husband in respect of:

3.1. The $100,000 owed by the parties to the Wife's parents;

3.2. E's outstanding school fees; and

3.3. S's outstanding school fees.

That the wife shall remain solely liable for all debts standing in her sole name and the wife shall indemnify, keep indemnified and hold harmless the husband from any liability in relation thereto howsoever arising.

That the husband shall remain solely liable for all debts standing in his sole name and the husband shall indemnify, keep indemnified and hold harmless the wife from any liability in relation thereto howsoever arising.

That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

Parenting

Parental Responsibility

That the wife have sole parental responsibility for:

7.1. E, born … 2001; and

7.2. S, born … 2003.

(herein collectively referred to as 'the children'.)

Lives with / spends time with

That the children live with the wife.

That the children spend time with the husband as agreed between the parties in writing. That:

9.1. The husband be at liberty to telephone the children at any reasonable time when they are with the wife; and

9.2. Each of the children be at liberty to telephone the husband at any reasonable time.

Travel

10.

That E's Passport presently held by the Family Court of Australia be released to the wife forthwith.

11.

Pursuant to section 11(1)(b) of the Australian Passports Act 2005 (Cth) (or any Act replacing that Act and making like or similar provision) the wife be permitted to apply for and have issued to her an Australian passport for each of the children, or renew any such passport in the absence of consent or otherwise of the husband and the wife thereafter retain the children's passports, and it is requested that the Department of Foreign Affairs and Trade provide whatever assistance is necessary in relation to the issue or renewal of any such passport.

12.

That pursuant to section 65Y(2) of the Family Law Act, the wife be permitted to travel interstate or overseas with the children, provided that she gives the husband written notice of the proposed travel at least thirty (30) days in advance of any travel commencing, including providing details of where the children will be travelling to, details of flights, accommodation, contact telephone numbers and the like.

13.

That the wife retains the children's passports.

General

14.

That both parents are restrained from:

14.1. Denigrating the other parent or members of the other parent's family in the presence or hearing of the children.

14.2. Discussing these proceedings, including any matters associated with the proceedings or the outcome or consequences of the proceedings, with the children, in the presence or hearing of the children, or showing the children any document connected with these proceedings, including telling the children that the parent wants more time with the child.

14.3. Passing information or messages through the children to the other party.

15.

That both parents do all things necessary and sign all documents to ensure that any medical or allied health professional attended on by the children is authorised to provide both parents with information about issues relating to the children's health and treatment.

16.

That both parents shall immediately notify the other party of any significant illness or medical condition or injury that would involve the children requiring medical intervention.

17.

That each party shall do all things necessary including providing all consents to give effect to these orders in the time periods prescribed in these orders.

18.

That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

19.

The parties have liberty to apply on 48 hours’ notice to the court and other parties in respect to the issue of costs of the proceedings.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

Schedule 1, Part 1, Clause 6 of the Family Law Rules relevantly provides:(6) At all stages during the pre-action negotiations and, if a case is started, during the conduct of the case itself, the parties must have regard to:…(i) the duty to make full and frank disclosure of all material facts, documents and other information relevant to the disputeNote: The duty of disclosure extends to the requirement to disclose any significant changes (see clause 4 of this Part). (Emphasis added) It is also significant that the obligation of disclosure includes an obligation to disclose “any disposal of property” that may “affect, defeat or deplete a claim” (rule 13.04 (g)). The fact that the obligation of disclosure exists as a duty to the court as well as the other party is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute” not simply one that attaches to the production of documents. In this matter the first, second and third respondents have disengaged from the proceedings. As will be discussed there is a significant issue of inadequate disclosure by the first, second and third respondents. As noted by Walters J in Graf-Salzmann and Graf [2015] FCWA 68:…a judge is entitled to take a "robust view" in relation to findings regarding a party's financial position (including party's capacity to meet any proposed order) where that party has failed to make full and frank disclosure of his /her financial position: see Chang v Su [(2002) FLC 93-117] at [71] and [72] It is just and equitable to make an order altering the parties property interests for the following reasons;·There is currently one property in which the wife and the Trustee have a joint interest. That property is the former matrimonial home.·The Trustee has an interest in three other properties as a result of property of the husband vesting in him. ·The husband and the wife are jointly responsible for the mortgages on the former matrimonial home. ·During the course of their marriage the husband and the wife jointly contributed to maintaining their household and that is no longer the case.·With the breakdown of the party’s marriage it is appropriate that there be a severing of their financial relationship.·It is appropriate for the parties to be in a position where they can move on with their lives.·It is appropriate that the wife has some financial security for herself and the children. Having determined that it is just and equitable to make orders pursuant to s 79, the High Court in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) and the Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) confirmed that the starting point for the Court in any property proceedings is the identification of the legal and equitable interests of the parties in assets, liabilities, superannuation and financial resources as at the date of hearing. As noted, the first task of the Court is to identify the existing property interests of the parties. Significantly, in the property aspect of this case, the parties are the wife and the Trustee in bankruptcy, not the wife and the husband.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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