PAVLEK & SPICE - [2016] FamCAFC 8

FAMILY COURT OF AUSTRALIA

PAVLEK & SPICE

[2016] FamCAFC 8

FAMILY LAW – APPEAL – PROPERTY – Where the parties’ major asset is a shareholding in a company – Where the trial judge ordered that the shares be sold and the proceeds divided in the proportions of 65 per cent to the husband and 35 per cent to the wife – Where the wife seeks a transfer of the shareholding to her – Where the wife challenges the percentage division arrived at by the trial judge – Whether the trial judge ought to have made a greater adjustment in the wife’s favour in recognition of her greater share of child care responsibilities – Where the trial judge found that the husband would be liable to repay several large loans – Where the wife contends that the husband will not be required to repay the loans and will therefore receive a greater percentage share of the property settlement than the trial judge anticipated – Where it was open on the evidence for the trial judge to make the findings she did – Appeal in relation to property dismissed.

FAMILY LAW – APPEAL – CHILDREN – Where the father alleges the child made a disclosure that the maternal grandfather touched her inappropriately – Where the JIRT investigation found there was no risk of harm – Where the mother agreed not to leave the children in the unsupervised care of the maternal grandfather but admitted to doing so on occasion – Where the trial judge found that the mother would not comply with an undertaking not to leave the children in the care of the maternal grandfather and made an order restraining her from doing so – Where there was insufficient evidence to make any finding as to the risk posed by the maternal grandfather – Where the trial judge provided no reasons to support the making of the injunction – Appeal in relation to parenting order allowed.

FAMILY LAW – APPEAL – Application to adduce further evidence – Where the evidence sought to be adduced was solely relevant to the form of orders available to the Full Court on any re-exercise of the trial judge’s discretion – Where there is no basis for appellate intervention and thus no basis for admitting the evidence – Application dismissed.

Children and Young Persons (Care and Protection) Act1998 (NSW) s 73

Family Law Act 1975 (Cth) s 90SM

Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343
Fox v Percy (2003) 214 CLR 118
Gronow v Gronow (1979) 144 CLR 513

APPELLANT:

Ms Pavlek

RESPONDENT:

Mr Spice

FILE NUMBER:

NCC

366

2011

APPEAL NUMBER:

180

2013

DATE DELIVERED:

4 February 2016

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Finn, Ainslie-Wallace & Austin JJ

HEARING DATE:

31 August 2015

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

14 November 2013

LOWER COURT MNC:

[2013] FamCA 885

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Graham

SOLICITOR FOR THE APPELLANT:

Braye Cragg Solicitors

THE RESPONDENT:

In person

Orders

The appeal against Order 5 made by the Honourable Justice Cleary on

14 November 2013 is allowed and the balance of the appeal against the orders of the Honourable Justice Cleary of that date is dismissed.
Order 5 made by the Honourable Justice Cleary on 14 November 2013 is set aside.
The application to adduce further evidence is dismissed.
There is no order as to costs.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Pavlek & Spice has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 180 of 2013
File Number: NCC 366 of 2011

Ms Pavlek

Appellant

And

Mr Spice

Respondent

REASONS FOR JUDGMENT

Finn J

This is an appeal by Ms Pavlek against orders made by Cleary J on

14 November 2013 in parenting and property proceedings under the

Family Law Act 1975
(Cth) between Ms Pavlek and her former de facto partner, Mr Spice, who is the respondent to the appeal.
In response to our requests to counsel for the appellant at the commencement of the hearing of the appeal for clarification as to precisely what grounds of appeal were being pursued (given that there was an application before us for the appellant to be permitted to rely on a further amended notice of appeal), counsel informed us that, “in simple terms”, there were the following

“three aspects of the appeal”:
·first, the percentage division (being a 65 per cent / 35 per cent division in favour of the respondent) which the Court applied to the principal asset of the parties;
·secondly, the treatment of the loans from the respondent’s parents, including uncollected rent as well as capital advances; and
·thirdly, the restraint placed on the appellant from having the three children of the parties’ relationship in the sole care of the appellant’s father (“the maternal grandfather”).
The orders made by her Honour, which are the subject of the appeal, reflect these three issues to which the appeal is directed, and provide as follows:
·
first, that the respondent arrange for the sale by D Pty Ltd

(the corporate trustee of a family discretionary trust) of its 22 percent shareholding in a company known as P Pty Ltd for not less than $5.5 million (or at the best price attainable if the shares remained unsold after twelve months), with the proceeds of sale to be divided 65 per cent to the respondent and 35 per cent to the appellant (Orders 1, 2 and 3);
·secondly, for the respondent to be responsible for the payment of all debts outstanding to his father, and for the respondent to indemnify the appellant in respect of any claims made against her in respect of those debts (Order 4); and
·thirdly, for the appellant to be restrained from leaving the parties’ three children in the sole care of the maternal grandfather (Order 5).
The factual background to this appeal as well as the overall content of the trial judge’s reasons are canvassed in some detail in the reasons for judgment of Ainslie-Wallace and Austin JJ and need not be repeated by me.
Their Honours have also explained the arguments put on behalf of the appellant in support of her first challenge, which is to the 65 per cent / 35 per cent division of the parties’ main asset (being the shares held by their family discretionary trust). Having regard to those arguments, and to the matters relied on by the trial judge in reaching her conclusion that she should make such a percentage division, I too am unpersuaded that appellate interference would be justified with that discretionary division.
In relation to the second area of complaint by the appellant, and again as Ainslie-Wallace and Austin JJ explain, the trial judge found that the respondent’s father did expect repayment of the loans (including uncollected rent) which he had made to support the parties’ business; these were liabilities of the respondent which were then taken into account by her Honour when she determined what, in her opinion, would be a just and equitable division of the parties’ main asset. I agree with their Honours that it was open to her Honour on the evidence to make the findings which she did about the loans, and also to treat these liabilities of the respondent in the way in which she did in her discretionary division of the parties’ property.
Accordingly, I would dismiss the appeal in so far as it is directed to the orders with respect to the property constituted by the trust shareholding.
It is relevant to mention at this point, that there was also before us at the hearing of the appeal, an application by the appellant to adduce further evidence, being evidence of a change in the constitution of the company,

P Pty Ltd, which would permit a person with a smaller shareholding than was permitted at the time of the hearing before the trial judge, to retain a seat on the board of that company. This change would permit a division of the trust’s shareholding in the company between the parties, and thus avoid the need for a sale of the shareholding.
My understanding of the submissions of counsel for the appellant was that the further evidence would only be relied on in the event that having found substance in the grounds of appeal, we were prepared to re-determine the matter. I am fortified in this understanding by the statement in [19] of the affidavit of the appellant’s solicitor in support of the further evidence application, that the amendment to the company’s constitution meant that the orders sought by the appellant in the further amended notice of appeal, could be implemented without having any effect on the respondent’s ability to maintain a seat on the relevant company board.
However, given that no merit has been found by this Court in the grounds of appeal directed to the property orders, the issue of the admission of the further evidence for the purpose of a redetermination by us of the property proceedings cannot arise.
On balance, I am also in agreement with Ainslie-Wallace and Austin JJ that the appeal against the order restraining the appellant mother from leaving the children in the care of the maternal grandfather should be allowed and that that order should be set aside.
There was, as their Honours point out, a paucity of evidence to support such an order, particularly in circumstances where the appellant mother and children were living in the maternal grandparents’ home and the order was unlimited as to time.
I also agree with their Honours that there should be no order for costs in relation to this appeal.

Ainslie-Wallace & Austin JJ

By Further Amended Notice of Appeal filed on 14 August 2015, Ms Pavlek (“the wife”) appeals against property and parenting orders made by

Justice Cleary on 14 November 2013 as between her and Mr Spice (“the husband”) pursuant to the Family Law Act 1975 (Cth) (“the Act”).
Relevantly her Honour ordered:
(1)That the Respondent [Mr Spice] shall forthwith do all things necessary to cause the company “[D] Pty Limited” (“[D Company]”) to sell for not less than $5.5 million (the minimum price) its shareholding in [P] Pty Limited (“[P Company]”).
(2)In the event that the shares remain unsold at the minimum price after a period of 12 months from the date of these orders then the Respondent shall cause [D Company] to sell the shares at the best price then attainable.
(3)The proceeds of sale of the shareholding shall be paid as follows:
(a) to the Respondent, 65 per cent;
(b) to the Applicant, 35 per cent.
(4)The Respondent shall be responsible for payment of all debts outstanding to his father, [Mr Spice Snr] and shall indemnify the Applicant in respect of any claims made against her in respect of those liabilities.
Parenting:
(5)The Applicant Mother is restrained from leaving the children [S] born … 2004, [M] born … 2006 and [T] born … 2008 in the sole care of the maternal grandfather.
On 27 June 2014 the wife filed an Amended Notice of Appeal against the orders of Cleary J. On 14 August 2015, the wife filed an Application in an Appeal to extend time in which to file a Further Amended Notice of Appeal and to adduce further evidence. The wife was given leave to rely on her Further Amended Notice of Appeal and an amended summary of argument. At the hearing we indicated that judgment in relation to the application to adduce further evidence would be reserved and accordingly we deal with it below.

Background

So as to give context to this appeal it is necessary to set out some uncontentious backgrounds facts.
The wife was born in 1975 and the husband was born in 1973. The parties met in 1999, began living together in 2000 and separated in March 2009. They have three daughters who are now aged eleven, nine and seven.
During the relationship the parties owned and developed a number of different companies.
At the commencement of the relationship, the husband owned and operated a business called W Pty Ltd (“W Company”). The wife came to work in that business doing design and marketing. She also performed freelance design work for other companies. Both parties contributed to the operation of W Company until approximately 2004. In 2005 W Company ceased operating as an advertising business and is currently named C Pty Ltd (“C Company”).
However, the principal asset of the parties is shares in a company, P Pty Ltd (“P Company”), which is a business that acquires communications products and licenses them to other businesses. The parties’ shareholding has an agreed value of $5.5 million. The husband and another present director of P Company conceived of the idea of licensing communications products. At the time of the hearing before the trial judge, there were five directors of P Company including the husband.
The shares in P Company are held in the Spice Investment Trust, of which a company, D Pty Ltd (“D Company”), is the corporate trustee. The beneficiaries of the Trust are the husband, the wife, their children and the husband’s parents,

Mr Spice Snr and Mrs Spice. The husband is the appointer of the trust and he is the sole director and shareholder of D Company. The husband also has a seat on the board of P Company resulting from the size of D Company’s shareholding being more than the necessary minimum 20 per cent shareholding. At the date of the hearing before the trial judge, the husband held some 22 per cent of the shares in P Company (Wife’s affidavit

10 October 2012, paragraph 27).
The adjustment of the parties’ interests in the shareholding was significantly contested at trial and now forms the major thrust of the wife’s appeal.
At trial the wife sought that part of the shareholding of D Company in P Company be transferred to her. The husband opposed the transfer of shares to the wife and claimed that as a minority shareholder in P Company, he was already at a disadvantage from the other directors who may act to dilute the value of his shares. He thus argued that if an order was made which caused the shares to be divided in specie between him and the wife, that disadvantage would be exacerbated because he would not be able to hold the position of director which, he said, allowed him to act protectively in case the other directors sought to improperly diminish or dilute D Company’s shareholding. Thus he contended before the trial judge that the shares should be sold and the resulting proceeds divided.
This is the course that was adopted by the trial judge who found that, as P Company required a 20 per cent shareholding to retain a seat on the board, any division of shares as between the parties would result in the husband’s shareholding falling below the required 20 per cent and therefore the loss of his seat on the board [17].
On appeal, the wife sought to adduce further evidence to the effect that the P Company constitution had been amended to remove the requirement that a director of the board must hold a minimum shareholding of 20 per cent. It was argued that this evidence, if accepted, would inform the orders made by the Full Court on any re-exercise of the trial judge’s discretion. This application will be dealt with later in these reasons.
As we have said, her Honour accepted the husband’s contention that if he did not have a seat on the board of P Company then he could not protect the shareholding of D Company against any improper conduct by the other directors if the shareholding was reduced below 20 per cent. Her Honour ordered that the shares be sold for not less than the minimum agreed price of $5.5 million and the proceeds of the sale be paid in the proportions of 65 per cent to the husband and 35 per cent to the wife.
The trial judge found that the parties had incurred certain debts to the husband’s parents, however, her Honour’s orders required all of those debts to be met by the husband from his share of the proceeds of sale of the shares.

The Appeal

Though there were 14 grounds of appeal in the wife’s Further Amended Notice of Appeal, at the appeal hearing counsel for the wife argued them under three broad headings without express connection to any particular ground of appeal, but intending to encompass all of the grounds of appeal. We will consider the grounds in the same way.

The percentage division of the sale of the shares

The first challenge to her Honour’s orders related to the sale of the shares and the percentage division of the proceeds of 65 per cent to the husband and

35 per cent to the wife.
Her Honour determined that at the commencement of the relationship, the parties each worked in the husband’s business of W Company and later in C Company. She found that the parties’ skills were “clearly complimentary [sic]” and that they worked well together. She further found that after the birth of the parties’ second child and thereafter, the wife became progressively less involved in the business [41]. Her Honour found that the wife sought to distance herself from the risks associated with repaying debts whilst seeking to share equally in the benefits gained for acquiring their assets [97]. She further found that the wife worked less in the business from 2004 and had ceased working in the business by 2006 as her care of the children increased [100].
However, the trial judge found that it was the husband who had made a significantly greater financial contribution under s 90SM(4)(a) than the wife by working in the businesses and by taking on debt to finance the necessary contributions of capital [99]. These debts included:
·$50,000 from the husband’s parents, borrowed in September 2004. Although the husband contended that he offered his parents 30 per cent of his shareholding in return for the loan, he agreed that no such transfer had ever taken place; and
·$200,000 from Bendigo Bank which was borrowed by the husband in November 2004 and was secured over his parents’ property at Suburb B. By 2007 the husband was unable to maintain repayments on the loan so his parents sold the land at Suburb B and discharged the loan of $255,000 then owing to Bendigo Bank. The husband then entered into a loan agreement with his parents for $255,000, on which six payments totalling about $11,000 have been made and on which interest of $124,152 has accrued.
Her Honour further took into account the fact that the husband’s parents had made a property available to the parties in which to live. There was a dispute as to whether the parties’ occupation of that property was subject to an obligation to pay rent but the payment of which was deferred, as the husband contended, or whether it was rent free, as the wife contended. Her Honour found at [67] that there was an agreement between the husband and his parents that he and the wife could live in the property for a rental payment of $300 per week but that the payment of rent was to be deferred until “you get back on your feet”. Her Honour accepted that the unpaid rent was owing to the husband’s parents and took it into account as a debt of the parties to be repaid [81].
Her Honour said:
70. The situation was that the parties were without income and in debt. The [Spices] paid out their loan to Bendigo Bank and provided them with accommodation. It was a significant contribution.
71. However the expectation of repayment is real and documented. Interest on debt will likely be a matter of negotiation between the respondent and his father when and if the parties’ asset proves to be valuable.
Thus her Honour assessed the parties’ contributions as being reflected in an adjustment of 65 per cent in the husband’s favour.
After considering the matters to which s 90SF(3) refers, her Honour concluded no further adjustments ought to be made to the parties’ percentage entitlements. In coming to this conclusion her Honour said:
123. The respondent has had the sole responsibility for running the company and managing the shareholding through his seat on the board of [P Company].
124. The applicant has had the greater share of the care and supervision of the children with the assistance of her family especially by their provision of accommodation in the [Pavlek] family home.
125. Balancing the obligation of the respondent to repay debts to his parents against the greater share of parenting undertaken now and in the future by the applicant I conclude that no further adjustment is required to the assessment of contributions.

Two arguments were advanced by the wife in challenge to her Honour’s finding as to the contributions.
First, it was submitted that her Honour’s consideration that the wife’s future responsibility for the children was, in effect, “cancelled out” by the husband’s liability to repay debts to his parents was an error as it failed to take into account the length of time in which the wife would be responsible for the quite young children of the parties. Thus it was argued that her Honour ought to have made a further adjustment in favour of the wife in recognition of this greater share of caring responsibilities and her relatively limited income. It was suggested that such an adjustment would have been in the order of a further 5 per cent in the wife’s favour.
In support of this argument, counsel for the wife made the following submissions:
·That her Honour had failed to adequately take into account the wife’s contribution to the building of the parties’ business in the form of her skill and experience as a designer, a contribution which was not disputed by the husband;
·That the wife also contributed to the day to day running of the business, with the consequence that she abandoned the pursuit of other career paths outside the parties’ business;
·That the loans provided by the husband’s parents had been given too much weight as they were required to be repaid with interest;
·
That the wife had provided a further financial contribution by way of her parents allowing her to live, with the three children, in their home

rent-free from 2009 onwards; and
·That her Honour failed to adequately consider the wife’s homemaking and parenting contributions. It was unchallenged that she was the primary carer of the parties’ three young daughters and undertook the majority of the household tasks. It was argued that this contribution ought to have been given greater weight when assessing the parties’ percentage entitlements based on contribution as well as in the consideration of whether any further adjustment was appropriate.
In summary, counsel for the wife argued that the resulting differential of 30 per cent between the parties’ entitlements was so significant that it amounted to an error in the exercise of the trial judge’s discretion.
The further adjustment sought by the wife is 5 per cent. It was argued that given the large value of the shareholding in P Company, an extra 5 per cent adjustment in the wife’s favour would have a significant impact in monetary terms. Simply put, the wife’s argument is that a 35 per cent adjustment in her favour, as opposed to a 40 per cent adjustment, for which she contended, was outside the “reasonable range” and therefore constitutes an appealable error.
The husband contended that her Honour’s finding of 65 per cent in his favour based on contributions was reasonable as he was responsible for continually raising the funds for the capital contributions in the early years of the business. Further, he was responsible for locating and dealing with corporate advisors, purchasing products and launching the business.
The law governing an appeal from a discretionary judgment is well settled.
As Stephen J stated in Gronow v Gronow (1979) 144 CLR 513 at 519:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion…
Nothing put to us persuades us that her Honour’s determination that the wife’s entitlement was reflected in a 35 per cent adjustment of the property was outside “the generous ambit in which reasonable disagreement is possible” (see Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343 at 345 per Asquith LJ).
The trial judge found that the wife did work in the parties’ business early in the relationship [89], that in 2003 both parties “worked to capacity with the business and in outside employment” [92] and that that from 2006 the wife had taken on the greater share of the care of the children [100]. Having made those findings, the weight to be given to them in the assessment of both contributions and future need is quintessentially a matter for the trial judge and no error has been established.
Secondly, it was contended that the occupation of the wife and children in the wife’s parents’ home rent-free ought to have been taken into account as a

post-separation contribution by the wife and that her Honour failed to do so. Counsel for the wife conceded that this submission was not made at trial. We find it difficult to see how her Honour erred by not taking this into account when the submission was never put to her.
In our view, for those reasons the ground is not made out.
A further difficulty attends this challenge to her Honour’s orders. At the outset of the appeal, counsel for the wife made what was said to be an “open offer” to the husband, namely that the wife would compromise both the appeal and the proceedings generally by accepting a transfer to her of 35 per cent of the shares held by D Company. Obviously that offer was not taken up by the husband and the appeal proceeded.
However, at the conclusion of the appeal, counsel for the wife amended the orders sought on the appeal to include an order that the husband transfer to the wife 35 per cent of the shareholding of D Company in P Company, being the percentage entitlement to which her Honour came. That the wife would accept 35 per cent of the shareholding, but not 35 per cent of the proceeds of the sale of those same shares, must be an end to the argument about her Honour’s exercise of discretion.
This challenge is not made out.

The treatment of the loan from the husband’s parents

The second challenge to her Honour’s orders related to her Honour’s findings and treatment of the husband’s liability, if any, to repay various debts to his parents and whether the loans in question attracted interest.
Her Honour found at [63] that that the husband’s father, Mr Spice Snr, did expect repayment of the loans he made to support the husband’s business ventures and her Honour accordingly took that into account when determining the percentage division.
In relation to the loan of $255,000, counsel for the wife contended that there was insufficient evidence to establish that the husband would be required to repay that amount and relied on the following exchange during cross-examination of Mr Spice Snr:
[Counsel for the wife]: Well, you’ve never bothered to collect this, have you?
[Mr Spice Snr]: No, but I hold him responsible for it.
[Counsel for the wife]: … You’ve never bothered to…?
[Mr Spice Snr]: No, I’ve never tried to collect it.
[Counsel for the wife]: No. You’re a debt collector?
[Mr Spice Snr]: Yes.
[Counsel for the wife]: You have the wherewithal to collect these moneys, haven’t you?
[Mr Spice Snr]: Yes.
[Counsel for the wife]: But you’ve chosen not to do it?
[Mr Spice Snr]: That's correct.
[Counsel for the wife]: And the fact of the matter is that once these proceedings have finished, you’re never going to collect this money, are you?
[Mr Spice Snr]: I will press that money.
[Counsel for the wife]: I didn’t ask you about pressing, I asked you whether you’re going to collect; you’re not going to collect, are you?
[Mr Spice Snr]: I don’t know. I will endeavour…
(Transcript 4 April 2013, p. 232, line 21-39)
Counsel for the wife submitted that this exchange left open the possibility that the husband’s parents would not require the husband to repay the loan. If it eventuated that the husband was not liable to repay either the $255,000 loan or any interest on it, it would result in his portion of the sale proceeds of the shares being far greater than her Honour anticipated in coming to her findings.
It was further submitted that although the husband asserted he was liable to his father for unpaid rent on the property occupied by him and the wife in the amount of $46,800, her Honour was in error to find that the money was owed and liable to be repaid. Although this was an issue in dispute between the parties, there was evidence before her Honour on which she could find that the debt was owed and liable to be repaid.
For this ground to be made out, the wife must establish that it was not open to her Honour to find that the loans from the husband’s parents will be repaid.
Her Honour accepted the evidence of the husband’s father that he intended to seek repayment of the money lent to the husband together with interest. That was a finding open to her on the evidence. Further, at [71] her Honour found that “the expectation of repayment is real and documented” and that interest on the debts would “likely be a matter of negotiation between the respondent and his father…”.
It thus devolves to an argument that her Honour ought to have dealt with the evidence differently than she did. In Fox v Percy (2003) 214 CLR 118, Gleeson CJ, Gummow and Kirby JJ said at 128:
… [T]he mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case . In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
The above has not been demonstrated and it was open for her Honour to make the findings in respect of the loans that she did.
Finally, counsel for the wife contended that her Honour’s reasons for judgment did not adequately reveal how she came to the conclusion that, having found that the husband was responsible for the repayment of these debts, his obligation to repay them could be offset or counter-balanced against the wife’s greater share of parenting now and in the future.
The passages of her Honour’s judgment extracted here and a reading of her reasons as a whole provide a clear path of reasoning and we do not accept that her finding was unsupported by reasons.
This ground is not made out.

The order in respect of the maternal grandfather

The final challenge relates to Order 5 made by her Honour which is as follows:
(5)The Applicant Mother is restrained from leaving the children [S] born … 2004, [M] born … 2006 and [T] born … 2008 in the sole care of the maternal grandfather.
Counsel for the wife submitted that her Honour erred in failing to provide adequate reasons for Order 5, in circumstances where no finding of unacceptable risk was made.
The facts underpinning the making of this order are uncontested. On

16 October 2009, the husband alleged that the parties’ second daughter, M, disclosed to him that the maternal grandfather touched her inappropriately. This was reported and as a result there was a Joint Investigative Response Team (JIRT) investigation during which M denied that her grandfather touched her and denied any other touching. The Department of Human Services found that there was “no risk of harm” to the child and requested that the wife refrain from leaving the child alone with the grandfather, which she agreed to do [137]. The wife was not asked to provide any written or signed undertaking to the Department.
Her Honour set out the finding of the Department of Human Services:
137. Under the heading Likelihood of Harm or Risk continuing there are these comments:
Harm or risk of harm is not substantiated. However [M’s] mother has agreed to ensure that her children are not left alone in the care of the maternal grandfather. This will:
a) assist in protecting [M] from harm if something has occurred with the maternal grandfather, or
b) protect the paternal (sic) grandfather from further allegations if this allegation is malicious.
Though the husband had sought an injunction restraining the wife from leaving the children in the care of the maternal grandfather in his Amended Response to the wife’s Amended Initiating Application, filed on 12 October 2012, he gave no evidence in support of this order in his affidavit.
The wife was however cross-examined on the issue. She said that on “infrequent” occasions the child was left in the presence of the grandfather, for example if the maternal grandmother, who was normally with the grandfather, was called away for brief periods of time. She said that she believed the allegation was false and that in the future, if she had no choice, she would leave the children in the care of their grandfather (Transcript 2 April 2013, p. 31, lines 21-23).
In closing submissions before her Honour, counsel for the husband submitted that, based on the wife’s evidence, she would be unlikely to comply with an undertaking not to leave the children in the care of the grandfather and that therefore an order restraining her from doing so ought to be made (Transcript 11 April 2013, p. 11, line 45; p. 12 lines 1-2).
Her Honour referred to the brief hearing before her on 27 October 2011 on this point and said:
139. The mother said that she had not understood until that hearing, “It was not made aware to me”, that she was bound by any undertaking. I consider that this was the mother drawing a distinction between the words “Undertaking” and “Agreement.” There is a difference. However I have no doubt that the mother knew with certainty that she had made a commitment to the Caseworker not to leave the children alone with her father. She says she honoured that commitment.
140.The outcome of the short hearing was that, given there was an undertaking in place with the Department, there was no need for further orders to be made by this Court. The mother said that she did understand about the Undertaking after the short hearing…
After referring to the wife’s evidence as set out above concerning occasionally leaving the children with her father, her Honour said that the wife had chosen not to comply with the undertaking. She noted that the wife had not sought that the Department of Human Services release her from the undertaking.

Her Honour concluded:
146. Without the evidence of the maternal grandfather I am unable to make any finding about possible risk to the children. I am not in a position to know the state of knowledge of the maternal grandparents about either the undertaking or the original allegation by [the child M]. The extent of that evidence is a reference in a letter from October 2009 written by the mother’s solicitors to the father as follows:
Our client and her father emphatically deny the allegations that have been raised by your client.
147.I cannot be sure whether the mother feels overborne by the situation of living in her parents’ home with such a restriction, but does entertain some private concern, or whether she is entirely satisfied that there was never any substance in the allegation and simply gave the promise she did to the Department to avoid further attention.
148.Clearly, no finding of unacceptable risk has been made. There is a real possibility that the maternal grandfather is entirely innocent of any misconduct. However an order restraining the mother from allowing the children to remain alone in the company of their maternal grandfather is appropriate in these unusual circumstances and has been made accordingly.
The first matter to note is that despite the husband’s submission to us on the appeal and the tendering of the documents produced by the Department of Human Services in the appeal hearing, no undertaking or formal agreement was ever given by the wife to the Department. We gave the husband leave to make further submissions on this point after having a further opportunity to consider the documents produced by the Department of Human Services. Nothing in his submission alters our view that the wife did not give such an “undertaking” as asserted. As her Honour herself indicated, there is a difference between an undertaking and an agreement. Certainly the wife entered into no undertaking with the Department as contemplated by s 73 of the Children and Young Persons (Care and Protection) Act1998 (NSW). The documents before

her Honour made that clear. It is however apparent that the mother agreed (in the commonly accepted use of the word) that she would not leave the children alone with her father and we have set out above her Honour’s extract from the Departmental records.
However, what follows from the extracted comments in the Departmental records is, in our opinion, relevant to the resolution of this issue. Under the heading “Safety and protective factors” it is noted that the child, her siblings and the wife live with her parents and up until that time the maternal grandmother had provided occasional care for the children. The report continues and notes that the wife agreed to ensure that another adult is always present with the grandfather and the children. It further observes that the child attends pre-school two days a week and that the pre-school is a mandatory reporter. Finally it notes that she sees her father every second weekend which would give the child an opportunity to make a disclosure if any incidents occurred.
It is significant that there was no evidence before her Honour of any further incident, complaint or report.
Counsel for the wife challenged this order on the basis that there was insufficient evidence to make a finding as to any risk posed by the grandfather nor was there any evidence from the husband regarding his concerns about the matter. It was further asserted that her Honour provided no reasons to support the making of an injunction that would continue to apply until all children had reached the age of 18.
In our view, this ground is made out. Her Honour gave no reasons for making the order, which was unlimited in its operation as to time. Although

her Honour refers to the circumstances as “unusual” she gives no reasons nor makes any findings for that characterisation. The paucity of evidence set against her Honour’s findings at [146] and [148] leads us to accept the submission that there was insufficient evidence on which her Honour could base her order. Thus both in relation to the challenge as to reasons and the evidentiary foundation for making the orders, this challenge will succeed and we will set aside her Honour’s Order 5.

The Application in an Appeal

The wife sought to adduce further evidence on the appeal. The evidence is contained in an affidavit sworn by her solicitor and filed on 14 August 2015 and comprises documents produced by P Company. In short, the documents demonstrate that on 12 August 2014 the constitution of P Company was amended to remove the requirement that directors hold a minimum of 20 per cent shareholding in the company and that directors are to be elected by the shareholders.

Counsel for the wife submitted that this evidence was solely relevant to the form of orders available to the Full Court on any re-exercise of the trial judge’s discretion. As we have found no basis for appellate intervention and the appeal will be dismissed, there is thus no basis for admitting the evidence.
But for the challenge to Order 5, the appeal will be dismissed.

Costs

As is customary, we sought submissions on the costs of the appeal at the conclusion of the hearing to save the parties the time, trouble and expense of returning to make submissions once the appeal was determined.
In the event that the appeal succeeded, the wife sought either an order for costs against the husband or the issue of a costs certificate. The wife’s appeal has been substantially unsuccessful and we do not consider it appropriate to either make an order for costs against the husband or to order a costs certificate.
The husband did not seek costs if the appeal was dismissed.
We will thus make no order as to costs.

I certify that the preceding eighty four (84) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Ainslie-Wallace & Austin JJ) delivered on 4 February 2016.

Associate:

Date: 4 February 2016