S and S
[2007] FMCAfam 272
•3 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| S & S | [2007] FMCAfam 272 |
| FAMILY LAW – Overseas travel with children- binding financial agreement – application under s.90K to set aside – particulars – manner in which proceedings should be conducted – parallels between ss.79 and 79A, and 90K and 90KA – set down as discrete issue. |
| Family Law Act 1975, ss.79, 79A, 90K, 90KA |
| Osborne & Osborne [2007] FMCAfam 206 |
| Applicant: | S |
| Respondent: | S |
| File Number: | SYC1308 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing date: | 20 April 2007 |
| Date of Last Submission: | 20 April 2007 |
| Delivered at: | Sydney |
| Delivered on: | 3 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Schonell |
| Solicitors for the Applicant: | Broun Abrahams Burreket |
| Counsel for the Respondent: | Mr Lloyd |
| Solicitors for the Respondent: | Barkus Edwards Doolan |
ORDERS
THE COURT ORDERS PENDING FURTHER ORDER BY CONSENT THAT:
The husband and wife have equal shared parental responsibility for:
(a)T S born 12 October 2001; and
(b)V S born 5 December 2005 (“the children”).
That the children live with the husband as follows:
(a)During school term each alternate weekend from 9.00am Saturday until the commencement of school on Monday morning;
(b)During school term in relation to the child T, for one additional night during the week, as agreed between the parties and failing agreement from after school on Wednesday until the commencement of school on Thursday;
(c)For one half of each school holiday at the conclusion of Term 1 and 3 as agreed between the parties and failing agreement for the first half of each period in even numbered years and the second half of each period in odd numbered years;
(d)For one week immediately prior to commencement of the new school year, with such period to end at 6.00pm on the day before school resumes.
That the Children shall live with the wife at all times they are not living with the husband pursuant to Order 2.
That the husband shall have sole parental responsibility for the children’s day to day welfare and development when they are living with him.
That the wife shall have sole responsibility for the children’s day to day care, welfare and development when they are living with her.
The wife provide to the husband, within 28 days, particulars of her claim under s.90K of the Family Law Act. The husband is entitled to request further particulars of the wife’s claim within 21 days of receipt of such particulars.
THE COURT ORDERS PENDING FURTHER ORDER THAT:
The wife is permitted to take the Children out of the Commonwealth of Australia to visit Switzerland for a period not exceeding 21 days.
The wife and the children are to return to Australia no later than Sunday 15th July 2007.
During the time that the Children are outside of Australia in accordance with these orders any existing order that provides for the children to spend time with their father is suspended.
While the children are outside of Australia in accordance with these orders, the mother shall do all things necessary to ensure that the Children communicate with their father by telephone, email or other age appropriate forms of communication not less than once each week.
The wife’s application under s.90K of the Family Law Act to set aside the Binding Financial Agreement signed by the husband and the wife on 15 April 2002 is adjourned to 1 November 2007 for a hearing not exceeding two days to be heard together with any outstanding parenting matters.
The wife file and serve all affidavits on which she intends to rely at hearing by no later than 4.00pm on 31 August 2007.
The husband file and serve all affidavits on which he intends to rely at hearing by no later than 4.00pm on 28 September 2007.
The Applicant pay the hearing fee or obtain a waiver of that fee at least by 28 September 2007.
No later than two working days prior to hearing each party forward to my Associate a document setting out:
(a)The affidavits on which the party will rely at hearing;
(b)The orders sought at hearing
The parties have liberty to apply on seven days notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC1308 of 2007
| S |
Applicant
And
| S |
Respondent
REASONS FOR JUDGMENT
Background
This matter comes before me principally for directions and case management, but also for the purposes of determining some specific issues.
Consent Orders
Firstly, I am asked to make orders by consent in relation to the two children of the marriage, T S and V S. The orders that I am invited to make by consent in relation to T and V are contained in the Minute of Order provided by the husband. They are described as orders 1.1 – 1.5 inclusive, with the exception of 1.2(c). I make those orders by consent and I note that it is not necessary for me to adjudicate in relation to 1.2(c), as the matter should be heard well before 2008.
Travel to Switzerland
The second issue is whether, and if so on what terms, the mother should be permitted to travel to Switzerland with T and V. In her response filed 5 April 2007, interim orders 11-14 relate to her travelling to Switzerland from 31 May 2007 to 13 July 2007, a period of approximately six weeks. Both the father and the mother in these proceedings have sworn affidavits on which their respective counsel relied as regards the application for permission to travel. The father seeks to restrain the children travelling, and indeed, asks for an airport watch list order.
By way of background, the issue of travelling to Switzerland is but one of the issues that are raised in the husband’s application and the wife’s response filed in these proceedings. In the wife’s response for example, she not only raises further issues in relation to parenting, but applies to set aside the Binding Financial Agreement entered into between the parties, pursuant to s.90K of the Family Law Act. If that is successful she seeks an order under s.79 of the Act. She also seeks spousal maintenance, departure from a Child Support Assessment, as well as interim costs. The proceedings are substantial. I am informed by her counsel, and have no reason to doubt, that the proceedings are commenced in good faith, and have merit.
Counsel for the husband submitted to me that what he himself described as “full scale” litigation before me would cause me to be concerned about whether the Mother would return from Switzerland. My view, however, is that the wife’s interest in the “full scale” litigation before me is, in fact, precisely the reason why she will return. Mr Lloyd submitted that the wife had very strong connections with Switzerland, that her reason for return to Switzerland with the children was not cogent, that the period that she was seeking to travel was far too long having regard to the age of the children, and that in any event the litigation itself had little prospect of success.
Mr Lloyd urged that if I was minded to allow the children to travel, I would impose a requirement for substantial security that would cause no prejudice to the wife because of her financial circumstances, as evidenced by the Financial Statement she filed in these proceedings. Mr Lloyd urged on me the genuineness of his client’s concern that the children would depart and not return and that I needed to be mindful of the welfare of the children, but otherwise adopt a common sense approach.
Mr Schonell for the wife in submissions attacked the genuineness of any fear held by the father and emphasised that the wife told the husband of the proposed travel on 18 January, that he has clearly known details since the 24 January and that he was both strangely inactive in commencing these proceedings, and then somewhat selective in providing information to the Court in relation to the matter. He emphasised the wife has travelled to Switzerland since separation, and that she has strong connections to Australia, particularly the proceedings under s.90K and if successful, under s. 79 of the Family Law Act. He submitted that having regard to the long distance, six weeks was justifiable in order to make the travel worthwhile.
The applicable law governing such an application was discussed by Phipps FM in Osborne & Osborne [2007] FMCAfam 206 at paragraphs 8 and 9:
The considerations the court must take into account in this type of application have been considered by the Family Court in Kuebler v Kuebler (1978) FLC 90 434. The matters to be considered amongst others are the length of the proposed stay, the bona fides of the application, the effect on the child of not having contact with the other parent, any threats to the welfare of the child by the circumstances of the proposed environment, and the degree of satisfaction of the court that a promise to return will be honoured.
Then in addition in Line v Line (1997) FLC 92 729 these matters were referred to: the proposal for the offer of a security and the purpose of that security; that is, to procure the return and to allow the other party to take action to return, the degree of risk that the departed parent will not return, whether the country of travel is a signatory to the Hague Convention on child abduction, what risk there is of deviation to a non‑convention country and the financial circumstances of both parties.
Having regard to the material that has been filed by the parties to date, the terms of the Binding Financial Agreement which was exhibit A1 in the proceedings, the orders that I am invited to make by consent, and the submissions made by Mr Lloyd and Mr Schonell, counsel for both parties, I am satisfied that there is no real risk that the mother will not return to Australia with the children. It is apparent from all the evidence that the wife’s claims of a financial nature are being advanced assiduously. It would be remarkable in the extreme if they were a mere smoke screen to lull both the husband and the court into a false sense of security that she will prosecute the proceedings and then travel to Switzerland never to return again.
The father invites me to made orders by consent that he and the mother have equal shared parental responsibility, the children live with him at defined times, and otherwise live with the mother. With great respect, this is hardly consistent with the actions of a parent who was concerned that the children are travelling to Switzerland never to return to him. As is apparent from the affidavit evidence, the past course of conduct of these parties indicates to me that there is nothing extraordinary about the mother’s proposal to travel to Switzerland. I am satisfied that she will return.
I am more concerned about the duration of the proposed travel and its impact on the relationship between T and V and their father, than I am concerned about the risk of them not returning to Australia. T is five and V is one. The parents have invited me to make an order by consent that means that the Children live with the Father each alternate weekend from 9am Saturday until the commencement of school on Monday morning, and also provides for T to spend one additional night during the week as agreed between the parties, and failing agreement on Wednesday evenings. I note that the gazetted NSW school term ends on 29 June 2007. This means that T would otherwise be going to school for the first four weeks of the period when the mother proposes to take her to Switzerland. At her age, that does not concern me. What does concern me, however, is that the orders provide that during the school term she would be seeing her father four nights per fortnight (that is Saturday night, Sunday night and two Wednesday nights). On the mother’s proposal she would be missing at least eight nights, possibly more depending upon how the pattern of time coincides with the departure date. Interestingly however, the orders do not provide for the children to spend time with their father during the mid year school holiday in 2007, which means that this is a period when the children would not be spending time with their father in any event. Whilst I am concerned about the potential impact on T of spending up to six weeks away from her father in one block period, I am even more concerned about such impact on V. Having regard to her age, I take judicial notice of the social science research indicating the need for her to have regular time with her father. The longer the period that elapses between V spending time with her father the more difficult attachment issues will become. [1]
[1] The social science research on this issue, and some of the debates in relation to this research are discussed in Altobelli, T, “Rethinking contact arrangements involving young children” (2005) 19 Australian Journal of Family Law 29.
Having regard to all of these matters, the orders that I make will enable the mother to travel with the Children to Switzerland for a period no longer than three weeks, two weeks of which must coincide with the gazetted NSW mid year school holiday period. This means that the children are only away from their father for a period of approximately one week, at a time when they would otherwise be having some time with him. Whilst I will order the mother and children to return to Australia no later than 15 July 2007, the day before the commencement of term three, I will not otherwise impose restrictions on her travel.
Conduct of proceedings involving s.90K application
The further discrete issue that arose in this matter related to the manner in which proceedings such as these ought to be conducted. For the husband, Mr Lloyd submitted that the application under s.90K to set aside the Binding Financial Agreement should be treated as a discrete issue and that therefore this matter should be heard before and separate to any other proceedings, the foundation of which depend upon the s.90K application. Mr Schonell on behalf of the wife, disagreed, submitting to me that the issues raised in an s.90K application were very much interlinked with the substantive issues that might arise if the Binding Financial Agreement was set aside. He submitted that in the same way as a s.79A application is often dealt with at the same time as a s 79 application (even though the latter is dependent on the success of the former) the same should apply in relation to s.90K.
Section 90K (1)-(3) provides:
90K Circumstances in which court may set aside a financial agreement or termination agreement
(1) A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a) the agreement was obtained by fraud (including non‑disclosure of a material matter); or
(aa) either party to the agreement entered into the agreement:
(i) for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii) with reckless disregard of the interests of a creditor or creditors of the party; or
(b) the agreement is void, voidable or unenforceable; or
(c) in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; or
(d) since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or
(e) in respect of the making of a financial agreement–a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or
(f) a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or
(g) the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.
(1A) For the purposes of paragraph (1)(aa), creditor, in relation to a party to the agreement, includes a person who could reasonably have been foreseen by the party as being reasonably likely to become a creditor of the party.
(2) For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a) the person is a parent of the child with whom the child lives; or
(b) a parenting order provides that:
(i) the child is to live with the person; or
(ii) the person has parental responsibility for the child.
(3) A court may, on an application by a person who was a party to the financial agreement that has been set aside, or by any other interested person, make such order or orders (including an order for the transfer of property) as it considers just and equitable for the purpose of preserving or adjusting the rights of persons who were parties to that financial agreement and any other interested persons.
Section 90KA is also relevant in this regard, and it provides:
90KA Validity, enforceability and effect of financial agreements and termination agreements
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a) subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b) has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c) in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
By way of contrast section 79A(1) provides as follows:
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e) a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
I do not know the basis upon which the attack on the validity on the Binding Financial Agreement will be made. Indeed the husband complains that he does not know either and another order that I am asked to make by consent is one requiring the wife to provide particulars of the basis of her claim for setting aside the agreement. Notwithstanding this, there are some essential differences between s.79A and s.90K that lead me to conclude that the section 90K application should be dealt with as a discrete issue. The focus of s.90K is on a private agreement entered into between the parties, the purpose of which was to exclude the operation of Part VIII of the Family Law Act. Its essential foundation and basis is in contract and private rights. Section 79A, however, has its essential basis in an order of the court, and whether miscarriage of justice has been caused by various circumstances, or there has been, in the broad sense, an abuse of process such that the exercise of the court’s discretion in making the order has been in some way tainted, vitiated, or affected. In this sense, public rights are effected. Even though the grounds for setting aside an order under s.79A(1) and setting aside a Binding Financial Agreement under s.90K(1) have some similarity, the essential nature of these sections is entirely different.
This essential difference is demonstrated by fact that there is no equivalent of s.90KA as regards section s.79A. The other significant difference is that the concluding words of s.79A(1) (in bold, above) expressly provides that if the court does vary or set aside the order under s.79A “if it considers appropriate” the court may “make another order under s.79 in substitution for the order so set aside.” It is quite possible that the concluding words to s.79A(1) explain the practice that did develop in the Family Court for the s.79A application to be dealt with at the same time as a s.79 application, assuming the former was successful.
However, there is no parallel in this regard with s.90K. If the application is successful, the parties are left with an invalid, unenforceable or ineffective agreement and there is no express statutory power as exists in s.79A to enable a court to exercise s.79 jurisdiction. In this regard s.90K(3) is silent as to the source of the power to make the orders referred to there, and the link between the power to make ancillary orders, and the substantive proceedings to set aside the agreement is not clearly articulated as it is in s.79A(1).
Accordingly, having regard to the matters set out above the hearing of the s.90K application will be dealt with as a discrete issue.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Lisa Molloy
Date: 3 May 2007