Re Sherburn
[2021] FedCFamC1F 162
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Re Sherburn [2021] FedCFamC1F 162
File number(s): BRC 13085 of 2021 Judgment of:
JARRETT J
Date of judgment:
26 October 2021
Catchwords:
FAMILY LAW – CHILD WELFARE – The Family
Law Act 1975 (Cth) and related legislation – Hague Convention on Jurisdiction, Applicable Law – Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children 1996 (the Child Protection Convention 1996) – The power to make orders to appoint a guardian for property of a child and deciding the powers of such guardian
Legislation: Family Law Act 1975 (Cth) ss. 66G, 66J(1), 66J(3), 66J(4), 111CA, 111CK
Trusts Act 1973 (Qld) ss. 60, 61(1), 62(1)
Cases cited: Field v Moore, Field v Brown (1855) 7 De GM & G 691
In Re Stayte [1997] 1 QdR 99
LK v Director-General, Department of Community Services (2009) 237 CLR 582
Division: Division 1 First Instance Number of paragraphs:
36
Date of last submission
20 October 2021
Date of hearing:
22 October 2021
Place:
Brisbane
ORDERS
BRC 13085 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
IN THE MATTER OF THE HAGUE CONVENTION OF 19 OCTOBER 1996 ON JURISDICTION, APPLICABLE LAW, RECOGNITION, ENFORCEMENT AND COOPERATION IN RESPECT OF PARENTAL RESPONSIBILITY AND MEASURES FOR THE PROTECTION OF CHILDREN
AND IN THE MATTER OF AN APPLICATION PURSUANT TO S 111CK OF THE
FAMILY LAW ACT 1975 (CTH) BYMR SHERBURN
First Applicant
MS SHERBURN
Second Applicant
ORDER MADE BY: JARRETT J DATE OF ORDER: 26 OCTOBER 2021
THE COURT ORDERS THAT:
1.By way of property protection measure pursuant to s 111CK of the Family Law Act 1975 (Cth), Mr Sherburn and Ms Sherburn are appointed as the legal guardians of the property of X born … 2013 in respect of all of her interest in the property located in the French Republic at B Street, C Town;
2.By way of property protection measure pursuant to s 111CK of the Family Law Act 1975 (Cth), Mr Sherburn and Ms Sherburn are appointed as the legal guardians of the property of Y born … 2013 in respect of all of her interest in the property located in the French Republic at B Street, C Town;
3.Pursuant to s 111CK of the Family Law Act 1975 (Cth) and by way of property protection measure, the guardians appointed pursuant to orders 1 and 2 hereof are empowered to sell in the name and on behalf of the children, the undivided rights belonging to each of them in the property located in the French Republic at B Street, C Town;
4.Upon the sale of the children’s interests in the property located in the French Republic at B Street, C Town the guardians shall:
(a)receive and hold the sum due to each child in trust, with the guardians being trustee and each respective child being the beneficiary of that child’s share;
(b)pay to each such child the capital and accumulated interest in respect of that trust upon the beneficiary child attaining the age of eighteen years;
(c)administer each such trust in accordance with the Trusts Act 1973 (Qld).
5.The guardians shall be at liberty to apply to this Court for further orders in respect of their powers in regard to one or other of the trusts, such leave to expire six months after each child attains the age of eighteen years.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sherburn has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Jarrett J:
X and Y are the children of the applicants, Mr Sherburn and Ms Sherburn. There are no respondents to the application.
X and Y are German citizens, but both reside in Australia with the applicants. They are part owners of real property in C Town in the French Republic. The other co-owners of the C Town property are an adult child of Mr Sherburn (the children’s half-brother) and the children’s cousins. One of the owners has now reached their majority. There is a consensus that the C Town property should be sold.
Each of the present owners acquired their interest in the C Town property as beneficiaries under the will of their paternal grandmother, Ms D. Ms D’s will is not in evidence. It is governed by German law. There is no evidence before me about the nature of the bequest to the children of their interest in the C Town property. That their interest seems to be in their name suggests that the bequest was not made to an executor or trustee (as known to the common law) to hold the interest on trust for the children. The way in which they hold their property interests in France is likely to be a function of French law or perhaps a combination of German testamentary law and French land law. But there is no evidence of any of those matters before me.
However, as one can imagine, all of the arrangements for the sale of the property were made according to the laws of France. A document known as a “Promise to Buy” was first entered into between the proposed purchasers (known as promisors) and the owners of the C Town property, setting out the arrangements for the sale and the price of €124,100. The evidence is that all of the owners of the property wish to accept the purchase offer.
The applicants have executed the Promise to Buy on behalf of X and Y. If the sale completes, X and Y will each receive €27,922.50. At an exchange rate of A$1 =
€0.63535, the proceeds equate to approximately A$43,951 each.
The initial Promise to Buy was valid until 10 January, 2021. However, this deadline has been the subject of several extensions, evidenced by what are described as “extension documents” in the material. The current extension is until 30 October, 2021.
LAND TRANSFER IN FRANCE
According to the evidence before me, French law provides that the legal administration of children’s property belongs to the children’s parents. However, the legal administration does not allow parents to perform serious acts such as disposing of their children’s property. Relevantly, according to Article 387 - 1 of the (French) Civil Code, the applicants must obtain the authorisation of a Guardianship Judge, who will issue an order authorising the sale of the children’s property.
Presumably, because of these legal requirements, the first extension document included an express condition precedent requiring the applicants’ to obtain authorisation from the German Family Court to sell in the name and on behalf of their children. However, the German Family Court has refused to make an order and concluded that the relevant court in Australia is the appropriate court to make the necessary order.
THE CONVENTION
The Commonwealth of Australia, the Federal Republic of Germany and the French Republic are parties to the Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children signed at The Hague on 19 October, 1996. Relevantly, the Convention provides that:
(a)by Article 1, the objects of the Convention are, amongst other things, to determine the State whose authorities have jurisdiction to take measures directed to the protection of the person or property of the child, to determine which law is to be applied by such authorities in exercising their jurisdiction and to provide for the recognition and enforcement of such measures of protection in all Contracting States;
(b)by Article 3, the measures referred to in Article 1 of the Convention may deal in particular with the administration, conservation or disposal of the child’s property;
(c)by Article 5, the judicial and administrative authorities of the child’s habitual residence have jurisdiction to take measures directed to the protection of the child’s person and property;
(d)by Article 15-1, when exercising the jurisdiction conferred by the Convention, a Contracting State is at first instance to apply their law; and
(e)by Article 15-2 a Contracting State may, in exceptional circumstances, apply or take into consideration the law of another state with which the situation has a substantial connection.
HABITUAL RESIDENCE
Habitual residence is not defined in the Convention.
The facts demonstrate that:
(a)X has been residing in Australia since 1 July, 2015 when she travelled to Australia with her parents;
(b)X is in year 3 at a Brisbane school. She attends sport lessons and has previously attended sport lessons;
(c)Y was born in Australia and continues to reside here;
(d)Y is cared for by the applicants when they are working at home and does not attend daycare. Y attends art classes;
(e)the applicant, Ms Sherburn currently holds an international student visa;
(f)Ms Sherburn works F University and is seeking admission to a postgraduate program;
(g)the applicant, Mr Sherburn and the children also hold visas as part of Ms Sherburn’s family unit;
(h)the applicants conduct a business of designing and distributing materials. The business operates in both Australia and Germany;
(i)the applicants wish to remain living in Australia permanently;
There is no authority on the meaning of habitual residence for the purposes of the Convention relevant to this case. However, there is much authority on the meaning of that phrase as it is used in the 1980 Hague Convention on the Civil Aspects of International Child Abduction. Counsel for the applicants referred me to LK v Director-General, Department of Community Services (2009) 237 CLR 582. That case dealt with habitual residence in the context of the Child Abduction Convention. Counsel submitted that determining a child’s habitual residence involves a broad factual enquiry: LK at [22], [26] - [28], [34] and [44].
Having regard to those submissions and the evidence that shows that X has lived in Australia for six years and Y since her birth; they are living in Australia with the agreement of their parents; they go to school, socialise and live with their parents in Australia
I am comfortably satisfied and I find that the children were habitually resident in Australia, at the time the application was filed up to and including the day of the hearing of this application before me.
I accept, therefore, that Australia, as a Contracting State to the Convention has jurisdiction and only a competent Australian authority can authorise the applicants to sell X’s and Y’s interests in the C Town property. This court is a competent Australian authority. The evidence shows that this is why the German Family Court declined to exercise jurisdiction notwithstanding that the relevant will is governed by German law.
THE APPLICABLE LAW OF AUSTRALIA
Australia’s obligations under the 1996 Hague Convention are, amongst other Acts, enacted in the Family Law Act 1975 (Cth): Part XIIIAA, Division 4.
This Court is invested with federal jurisdiction with respect to matters arising under the Family Law Act in respect of which proceedings are instituted under Division 4 of Part XIIIAA of the Act: s 39(5)(da). Section 111CA provides that a Commonwealth property protection measure relating to a child means a measure (within the meaning of the Child Protection Convention) under the Act for appointing or deciding the powers of, a guardian of the child’s property.
Section 111CK of the Act (found within Division 4 of Part XIIIAA of the Act) empowers this Court to exercise jurisdiction for a Commonwealth property protection measure, only where the facts and circumstances of the case satisfies the description in at least one of ss 111CK(1)(a)
– (e). One such case is where the child who will be the object of the Commonwealth property protection measure is habitually resident in Australia: s 111CK(1)(a) of the Act.
I find that X and Y are habitually resident in Australia for the purposes of s 111CK(1)(a) of the Act.
Subsection 111CR(2) of the Act requires the Court to apply the law of Australia in exercising its jurisdiction, unless there are exceptional circumstances which could permit the Court to take into account the law of another country with which the child has a substantial connection or where a child’s property is substantially connected.
Counsel for the applicants referred me to s 136 of the Land Title Act 1994 (Qld) which sets out the legal requirements where a minor is the registered proprietor of land in Queensland and it is proposed to deal with that land. Where no person has authority under the Land Title Act or
another Act to act for the minor, a person “suitably authorised by a court of competent jurisdiction may act for the [minor] for that act”. Counsel pointed out that prior to an amendment to s 136 in or about 2005, the section covered cases where a registered proprietor appeared to the court to be incapable of managing the person’s own affairs because of, for example, age or mental or intellectual incapacity. The Land Title Act was amended so that s 136 now only deals with minors and s 137 deals with other persons lacking capacity.
Counsel referred me to In Re Stayte [1997] 1 QdR 99, where Demack J considered an application under the earlier formulation of s 136 to authorise a person to act for the registered proprietor to deal with real property. The registered proprietor had been seriously injured in a motor vehicle accident. Demack J reviewed the proposed dealing with the land and the person proposed to act on behalf of the registered proprietor. His Honour determined the person proposed, who was the husband of the registered proprietor, was a fit and proper person to act for his incapacitated spouse.
I am urged to take a similar approach. Applying this test, it is argued that the Court must be satisfied that the applicants are fit and proper persons to act as guardians for X and Y to carry out their obligations to effect the sale of the property and to receive the sale proceeds on their behalf.
However, I do not think it is necessary to have recourse to such matters to determine that it is appropriate to make the orders appointing them as guardians of the property of the children as sought by the applicants.
As parents of X and Y, the applicants have all of the duties, powers, responsibilities and authority which, by law, parents have in relation to children: ss 61C(1) and 61B of the Family Law Act. To the extent, then, that the concept of guardianship comprises the ability to exercise all of the duties, powers, responsibilities and authority which, by law, parents have in relation to children, the applicants can be described as the children’s guardians. It is appropriate to make an order which formalises that position.
The applicants seek orders that upon the sale of the French property they should receive each child’s share of the proceeds of sale of property on behalf of each child.
They seek a further order in these terms:
That the guardians shall invest the funds received by the children pursuant to paragraph 2 above of these orders, for each child in separate accounts and utilise the funds
received towards the children’s education, both formal education and extracurricular activities engaged in by the children and if not applied towards the children’s education and extracurricular curricular activities, to be applied to assist the children establish themselves into adulthood.
I have been troubled by this order. In the absence of any evidence about the nature of the bequest under their grandmother’s will and given that the French property is seemingly in the children’s names, it appears to me contrary to the children’s entitlements as owners of their individual interests in the French property for any proceeds of sale of those interests to be able to be utilised by those holding the proceeds on behalf the children. The duties, powers, responsibilities and authority which by law parents have in relation to children does not extend to permitting a parent to alienate an infant’s interest in real estate: Field v Moore, Field v Brown (1855) 7 De GM & G 691 at 709.
It was argued that by reason of a parent’s obligation to support their child, a parent could utilise the child’s resources to assist the parent to discharge that obligation. Thus, in the present case, it was argued that the applicants ought to be able to draw upon the children’s capital to assist with their support and advancement. However, this is not a compelling argument. Whilst it is true, for example, that a court called upon to make a child maintenance order under s 66G of the Act must take into account the income, earning capacity, property and financial resources of the child, the focus upon those matters is really upon the capacity of any financial resources available to the child to produce income (s 66J(3) of the Act) although it is not limited to that matter (s 66G(4)). Moreover, the resources available to a child are only one matter to be taken into consideration. The resources of the parents are also relevant. I have no evidence of the applicants resources here.
The receipt of the sale proceeds of the French land by the applicant’s will necessarily mean that they hold each child’s share on trust for each of the children (according to their respective entitlements). That is to say, the applicants will occupy the position of trustees of the respective funds for each of their daughters.
The Trusts Act 1973 (Qld) will apply to the trusts so established. The provisions of Part 5 of the Trusts Act apply whether or not a contrary intention is expressed in the instrument (if any) that creates the trust. By s.61 of that Act (my emphasis):
(1) When any property is held by trustees in trust, whether absolutely or contingently for a beneficiary who is an infant, the trustee may, at the trustee’s absolute discretion, pay to the infant’s parent or guardian (if any) or otherwise apply for or towards the infant’s maintenance, education (including past maintenance or
education) advancement or benefit, the income of that property or any part thereof, whether there is any other fund applicable to the same purpose, or any person bound by law to provide for the infant’s maintenance or education or not.
The position with respect to the application of capital is slightly different. In that respect, s.62(1) of the Trusts Act provides:
(1) Where under a trust a person is entitled to the capital of the trust property or any share thereof, the trustee, in such manner as the trustee in the trustee’s absolute discretion thinks fit, may from time to time out of that capital pay or apply for the maintenance, education (including past maintenance or education), advancement or benefit of that person, an amount not exceeding in all $2,000 or one-half that capital (whichever is the greater) or with the consent of the court an amount greater than that amount.
These provisions can be seen to be consistent with the approach under the Family Law Act which places emphasis upon income and the use of it to support a child, rather than the capital from which the income might be generated. They permit of the utilisation of capital to support a child but in a constrained way.
I do not think that the order sought by the applicants to permit them to utilise the funds they receive on behalf of the daughters is consistent with the obligations cast upon trustees in such circumstances by the Trusts Act. The provisions of Part 5 of the Trust Act apply whether or not a contrary intention is expressed in the instrument creating the trust: s.60 of the Trusts Act.
The preferable order, I think, is one which reflects the duties that are cast upon trustees in such circumstances. In that respect, counsel referred me to Flemming [2012] Fam CA 985 where orders were made appointing a legal guardian in respect of certain payments to be made to children pursuant to a life insurance policy. The form of the order made clear that the funds were to be held on trust for the subject children and subject to the relevant Trusts Act of the state in which they lived.
CONCLUSION
I am satisfied that the applicants should be appointed guardians of the property of X and Y. To the extent that it is necessary to express a conclusion about this matter, I am satisfied that the property is being sold at its fair value (indeed in excess of its fair value). I am satisfied that the sale is in the children’s interests.
Otherwise, I make the orders set out at the commencement of these reasons.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett Associate:
Dated: 26 October 2021
0
1
0